1
Exhibit 10.4
CONFORMED COPY
DATED AS OF JUNE 25 1999
------------------------
HECLA MINING COMPANY
as Borrower
THE VARIOUS BANKS AND FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE
PAGES HERETO
as Initial Lenders
STANDARD BANK LONDON LIMITED
as Collateral Agent
and
STANDARD BANK LONDON LIMITED
as Administrative Agent
-----------------------------
SUBORDINATED LOAN AGREEMENT
-----------------------------
ASHURST XXXXXX XXXXX
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
TCW/627S00004/1197795
2
INDEX
1. DEFINITIONS; INTERPRETATION
1.1 Defined Terms
1.2 Use of Defined Terms
1.3 Accounting and Financial Determinations
1.4 Change in Accounting Principles
1.5 General Provisions as to Certificates and Opinions, etc.
1.6 Interpretation
2. COMMITMENTS AND PROCEDURES FOR MAKING LOANS; CONTINUATION
PROCEDURES
2.1 Commitments; Making Loans
2.2 Records
2.3 Funding
2.4 Obligations Several
3. PRINCIPAL PAYMENTS; INTEREST; COMMISSIONS
3.1 Principal Payments
3.1.1 Scheduled Repayments
3.1.2 Prepayments - Voluntary and Mandatory
3.1.3 Principal Payments Generally
3.2 Interest Payments
3.2.1 Rate
3.2.2 Post-Maturity Rate
3.2.3 Payment Dates; Calculation of Interest
3.2.4 Rate Determinations
3.2.5 Capitalization of Interest
3.2.6 Payments Subject to Subordination
3.3 Fees
3.3.1 Agents' Fees
4. INCREASED COSTS; TAXES; MARKET DISRUPTIONS; GENERAL PAYMENT
PROVISIONS
4.1 Dollars Unavailable
4.2 Increased Costs, etc.
4.3 Funding Losses
4.4 Increased Capital Costs
4.5 Illegality
4.6 Taxes
4.7 Mitigation
4.8 Payments, Computations, etc.
4.9 Proration of Payments
4.10 Set-off
4.11 Application of Proceeds
3
5. CONDITIONS PRECEDENT TO MAKING LOANS
5.1 Initial Loans
5.1.1 Resolutions, etc.
5.1.2 Credit Agreement, Nationsbank Subordination Agreement
5.1.3 Borrowing Notice
5.1.4 Closing Fees, Expenses, etc.
5.1.5 Compliance with Warranties, No Defaults, etc.
6. REPRESENTATIONS AND WARRANTIES
6.1 Organization, Power, Authority, etc.
6.2 Due Authorization; Non-Contravention
6.3 Validity, etc.
6.4 Legal Status
6.5 Financial Information
6.6 Absence of Default
6.7 Litigation, etc.
6.8 Materially Adverse Effect
6.9 Taxes and Other Payments
6.10 Subsidiaries
6.11 Environmental Warranties
6.12 ERISA Liabilities
7. COVENANTS
7.1 Informational and Financial Covenants
7.1.2 Defaults
7.1.3 Miscellaneous Information
7.1.4 Books and Records; Access
7.1.5 Accuracy of Information
7.2 Affirmative Covenants
7.2.1 Compliance with Laws, etc.
7.2.2 Maintenance of Corporate Existence
7.2.3 Payment of Taxes, etc.
7.3 Negative Covenants
7.3.1 Business Activities; Place of Business; Organic Documents;
Fiscal Year
7.3.2 Indebtedness
7.3.3 Liens
7.3.4 ERISA Plans
8. EVENTS OF DEFAULT
8.1 Events of Default
8.1.2 Non-Performance of Certain Covenants
8.1.3 Non-Performance of Other Obligations
8.1.4 Breach of Representation or Warranty
8.1.5 Default on other Indebtedness
4
8.1.6 Bankruptcy, Insolvency, etc.
8.1.8 Judgments
8.1.9 Change in Control
8.1.10 Materially Adverse Effect
8.2 Action if Bankruptcy
8.3 Action if Other Event of Default
9. THE AGENTS
9.1 Actions
9.2 Funding Reliance, etc.
9.3 Exculpation
9.4 Successors
9.5 Loans by Standard Bank
9.6 Standard Bank as Administrative Agent
9.7 Credit Decisions
9.8 Copies, etc
10. MISCELLANEOUS
10.1 Waivers, Amendments, etc
10.2 Notices
10.3 Costs and Expenses
10.4 Indemnification
10.5 Survival
10.6 Severability
10.7 Headings
10.8 Counterparts; Effectiveness
10.9 Governing Law; Entire Agreement
10.10 Successors and Assigns
10.11 Sale and Transfer of Loans; Participations in Loans
10.11.1 Assignments
10.11.2 Participations
10.12 Other Transactions
10.13 Forum Selection and Consent to Jurisdiction; Waiver of
Immunity
10.14 Waiver of Jury Trial
5
SCHEDULES AND EXHIBITS
SCHEDULE I Disclosure Schedule
SCHEDULE II Additional Costs Rate
EXHIBIT A Borrowing Notice
EXHIBIT B Lender Assignment Agreement
6
THIS CREDIT AGREEMENT is dated as of June 25, 1999 (this
"Agreement") AMONG:-
(1) HECLA MINING COMPANY, a Delaware corporation ("HECLA MINING"
or the "BORROWER");
(2) THE PARTIES LISTED ON THE SIGNATURE PAGES HERETO, as the
initial lenders (collectively, the "INITIAL LENDERS");
(3) STANDARD BANK LONDON LIMITED, a bank organized under the
laws of England ("STANDARD BANK"), in its capacity as the
collateral agent (in such capacity, the "COLLATERAL AGENT");
and
(4) STANDARD BANK LONDON LIMITED, in its capacity as the
administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT").
WITNESSETH:-
WHEREAS, Hecla Mining is active in the exploration and
development of precious metals and has entered into the Purchase
Agreement, dated of May 17, 1999 (the "ACQUISITION AGREEMENT"),
pursuant to which the Borrower intends to purchase or effect the
purchase from Monarch Resources Limited, a corporation organized
under the laws of Bermuda, of all of the issued and outstanding
share capital of Monarch Resources Investments Limited ("MRIL");
WHEREAS, MRIL owns all of the issued and outstanding share
capital of Monarch Minera Suramericana, C.A. ("MMS") and also of
Monarch Resources de Mexico, S.A. de C.V., a company organized
under the laws of Mexico ("MONARCH MEXICO");
WHEREAS, MMS owns the La Camorra underground gold mine in
Venezuela (the "PROJECT") and the Project is already engaging in
the commercial production and sale of Gold;
WHEREAS, immediately following completion of the Acquisition
Transaction, MMS intends to initiate certain capital improvements
and installations and to fund certain working capital
requirements at the Project;
7
WHEREAS, in order to finance its obligations under the
Acquisition Agreement, the Borrower has requested that Standard
Bank make funds available to it and Standard Bank is willing to
make such loans available to the Borrower on the terms and
subject to the conditions of this Agreement and the other Loan
Documents;
WHEREAS, MRIL has requested that the Lenders make additional
funds available to MRIL for the purposes of reimbursing moneys
spent by the Borrower in the Acquisition Transaction and also for
remitting funds to MMS to fund the improvements and working
capital requirements at the Project described in the previous
recital and the Lenders are willing to make such loans available
to MRIL, on the terms and subject to the conditions of the Credit
Agreement (capitalized and other terms used in this Agreement
used as defined in SECTION 1.1) and the other Loan Documents;
WHEREAS, as security for the Borrower's obligations under this
Agreement and for MRIL's obligations under the Credit Agreement:
(a) the Borrower is willing to grant a security interest over the
MRIL Shares and (b) MRIL is willing to grant a security interest
over the MMS Shares;
WHEREAS, as security for the Borrower's obligations under this
Agreement and for MRIL's obligations under the Credit Agreement,
MMS is willing: (a) to guarantee such obligations in favor of the
Lenders and (b) grant security interests over those of its assets
constituting the Project as more particularly set forth in the
Loan Agreements to which it is a party.
NOW, THEREFORE, for good and valuable consideration, the receipt
and adequacy whereof is hereby acknowledged by each party hereto,
the parties hereto hereby agree as follows:-
1. DEFINITIONS; INTERPRETATION
1.1 DEFINED TERMS
Terms used but not defined in this Agreement have the
meanings assigned to such terms in the Credit Agreement.
In addition, the following terms, when used in this
Agreement, including its preamble and recitals, shall have
the following meanings:
"ACQUISITION AGREEMENT" is defined in the FIRST RECITAL.
8
"ACQUISITION TRANSACTION" means the purchase by Hecla
Mining of the share capital of MRIL, MMS and Monarch
Mexico, as contemplated by the Acquisition Agreement.
"ADDITIONAL COSTS RATE" means for any funding period by
which the Administrative Agent measures and funds the Loans
hereunder, the applicable rate determined by Administrative
Agent and the relevant Lenders in accordance with SCHEDULE
II.
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"AFFILIATE" of any Person means any other Person which,
directly or indirectly, controls or is controlled by or
under common control with such Person (excluding any
trustee under, or any committee with responsibility for
administering, any compensation, welfare or similar plan).
A Person shall be deemed to be "controlled by" any other
Person if such other Person possesses, directly or
indirectly, power:
(a) to vote twenty percent (20%) or more of the securities
(on a fully diluted basis) having ordinary voting power
for the election of directors or managing general
partners of such Person; or
(b) to direct or cause the direction of the management and
policies of such Person, whether by contract or
otherwise.
"AGENTS" means, collectively, the Administrative Agent and
the Collateral Agent.
"AGGREGATE COMMITMENT AMOUNT" means U.S.$3,000,000, as may
be reduced pursuant to SECTION 2.1(d).
"AGREEMENT" is defined in the PREAMBLE.
"APPLICABLE LAW" means, with respect to any Person or
matter, any supranational, national, provincial, federal,
state, regional or local statute, law, rule, treaty,
convention, regulation, order, decree or other requirement
relating to such Person or matter and, where applicable,
any interpretation thereof by any Governmental Agency
having jurisdiction with respect thereto or charged with
the administration or interpretation thereof (in each case,
whether or not having the force of law, but if not having
the force of law, such statute, law, etc. being of the type
with which such Person would comply in the ordinary course
of business).
9
"APPROVAL" means each and every approval, authorization,
license, permit, consent, filing and registration by or
with any Governmental Agency or other Person necessary for
the execution, delivery or performance of this Agreement or
any other Loan Document or for the validity or
enforceability hereof or thereof, whether or not referred
to in ITEM 1 ("APPROVALS") of the Disclosure Schedule.
"ASSIGNEE LENDER" is defined in SECTION 10.11.1.
"ASSIGNOR LENDER" is defined in SECTION 10.11.1.
"AUTHORIZED REPRESENTATIVE" means those officers of the
Borrower whose signatures and incumbency shall have been
certified pursuant to SECTION 5.1.1.
"BANK LENDERS" means the banks and financial institutions
from time to time party to the Credit Agreement.
"BANK LENDERS LOANS" means the loans outstanding under the
Credit Agreement.
"BORROWER" is defined in the PREAMBLE.
"BORROWING DATE" means the Business Day on which Loans are
made pursuant to SECTION 2.1.
"BORROWING NOTICE" means a loan request and certificate
duly executed by an Authorized Representative of the
Borrower, substantially in the form of EXHIBIT A hereto.
"BUSINESS DAY" means:-
(a) any day which is not Saturday, Sunday, a legal holiday
or any other day on which banks are closed in London,
England or New York, New York; and
(b) relative to the making, continuing or the calculation
of the LIBO Rate, any day on which dealings in Dollars
are carried on in the London interbank market.
"CAPITALIZED LEASE LIABILITIES" means all monetary
obligations of any Person under any leasing or similar
arrangement which, in accordance with GAAP, would be
10
classified as capitalized leases, and, for the purposes of
this Agreement, 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 penalty.
"CHANGE IN CONTROL" means the occurrence of either of the
following events:-
(a) any Person or two or more Persons acting as a group
shall acquire beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Act of 1934, and
including holding proxies to vote for the election of
directors other than proxies held by the Borrower's
management or their designees to be voted in favor of
Persons nominated by the Borrower's Board of
Directors) of 25% or more of the outstanding voting
securities of Borrower, measured by voting power
(including both common stock and any preferred stock
or other equity securities entitling the holders
thereof to vote with the holders of common stock in
elections for directors of Borrower); or
(b) a majority of the directors of Borrower shall consist
of Persons not nominated by the Borrower's Board of
Directors (not including as Board nominees any
directors which the Board is obligated to nominate
pursuant to shareholders agreements, voting trust
arrangements or similar arrangements).
"COLLATERAL AGENT" is defined in the PREAMBLE.
"COLLECTED LENDERS" means collectively, the Lenders and the
Bank Lenders.
"COMMITMENT" means each Lender's obligation to make,
maintain and continue its Loans in an amount equal to its
Commitment Amount in each case pursuant to the terms and
subject to the conditions of this Agreement.
11
"COMMITMENT AMOUNT" means (a) relative to any Initial
Lender, the amount set forth opposite its name on the
signature pages hereto under the heading "COMMITMENT
AMOUNT" and (b) relative to any Assignee Lender, the amount
under the heading "COMMITMENT AMOUNT" assumed from the
Assignor Lender pursuant to the Lender Assignment Agreement
by which such Assignee Lender became a party to this
Agreement, in each case as such amount may be adjusted
pursuant to any Lender Assignment Agreement pursuant to
which such Assignor Lender or Assignee Lender, as the case
may be, is a party.
"COMMITMENT TERMINATION DATE" means the earliest to occur
of the following:-
(a) July 31, 1999;
(b) the occurrence of any Enforcement Event;
(c) the Borrowing Date on which the Loans shall have been
made pursuant to SECTION 2.1; and
(d) the termination of the Commitments pursuant to SECTION
2.1(d).
"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 indebtedness, obligation or any other
liability of any other Person (other than by endorsements
of instruments in the course of collection), or guarantees
the payment of dividends or other distributions upon the
shares of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to
any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount,
if larger) of the debt, obligation or other liability
guaranteed thereby.
"CONTRACTUAL OBLIGATION" means, relative to any Person, any
provision of any security issued by such Person or of any
Instrument or undertaking to which such Person is a party
or by which it or any of its property is bound.
12
"CREDIT AGREEMENT" means the Credit Agreement of even date
herewith executed by (1) MRIL, as borrower, (2) MMS, as an
additional Obligor, (3) the various banks and financial
institutions named therein and (4) the Administrative Agent
and the Collateral Agent.
"DEFAULT" means any Event of Default or any condition or
event which, after notice, lapse of time, the making of any
required determination or any combination of the foregoing,
would constitute an Event of Default.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule
attached hereto as SCHEDULE I.
"DOLLAR" and the sign "U.S.$" mean lawful money of the
United States.
"EFFECTIVE DATE" is defined in SECTION 10.8.
"ENFORCEMENT EVENT" means either:-
(a) an Insolvency Event; or
(b) the occurrence of any other Event of Default and the
acceleration of the Obligations pursuant to SECTION
8.3.
"ERISA" means the Employee Retirement Income Security Act
of 1974.
"ERISA AFFILIATE" means the Borrower and all members of a
controlled group of corporations and all trades or business
(whether or not incorporated) under common control that,
together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
"ERISA PLAN" means any employee pension benefit plan
subject to Title IV or ERISA maintained by any ERISA
Affiliate with respect to which any Related Person has a
fixed or contingent liability.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
"FACILITY" means the Loans and the financial accommodations
made to the Borrower in connection therewith.
13
"FINANCE PARTIES" means, collectively, the Lenders and the
Agents.
"FISCAL QUARTER" means any quarter of a Fiscal Year.
"FISCAL YEAR" means any period of twelve consecutive
calendar months ending on December 31.
"FIXED RATE" means __ percent (__%) PER ANNUM.
"F.R.S. BOARD" means the Board of Governors of the FEDERAL
RESERVE SYSTEM.
"INCREASED RATE" means ? percent (?%) PER ANNUM.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or
metals (including Gold) and all obligations evidenced
by bonds, debentures, notes, or other similar
Instruments on which interest charges are customarily
paid;
(b) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit, whether or
not drawn, and bankers' acceptances and similar
instruments, in each such case issued for the account
of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP,
recorded as Capitalized Lease Liabilities;
(d) net payment liabilities of such Person under all Hedging
Obligations;
(e) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the
deferred purchase price of property or services, and
indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased
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; and
14
(f) all Contingent Liabilities of such Person in respect of
any of the foregoing items which are the obligations of
any other Person.
"INDEMNIFIED LIABILITIES" is defined in SECTION 10.4.
"INDEMNIFIED PARTIES" is defined in SECTION 10.4.
"INITIAL LENDERS" is defined in the PREAMBLE.
"INSOLVENCY EVENT" means the occurrence of any Default
described in SECTION 8.1.6.
"INTEREST PAYMENT DATE" is defined in SECTION 3.2.5(b).
"LENDER ASSIGNMENT AGREEMENT" means an Assignment
Agreement, duly executed by an Assignor Lender and an
Assignee Lender, substantially in the form of EXHIBIT B
hereto.
"LENDERS" means, collectively, the Initial Lenders and the
Assignee Lenders.
"LENDING OFFICE" means (a) with respect to each Initial
Lender, the office of such Initial Lender designated as
such below its signature hereto or such other office of
such Initial Lender as may be designated from time to time
by notice from such Initial Lender to the Administrative
Agent and the Borrower, (b) with respect to each Assignee
Lender, the office of such Assignee Lender designated as
such in the Lender Assignment Agreement pursuant to which
it became a Lender or as may be designated from time to
time by notice from such Assignee Lender to the
Administrative Agent and the Borrower and (c) with respect
to the Administrative Agent, the office of the
Administrative Agent designated as such from time to time
by notice to the Borrower and each Lender.
"LOAN" means any Lender's loans under this Agreement,
whatever outstanding or to be made.
"LOAN DOCUMENTS" means, collectively, this Agreement, the
Collateral Agreements, the Credit Agreement, the Account
Agreement, the Intercompany Subordination Agreement, the
MMS Guaranty and each other Instrument executed by the
15
Borrower or any Affiliate of any thereof evidencing any
obligation (monetary or otherwise) in connection with and
pursuant to this Agreement and the transactions
contemplated hereby and representing obligations incurred
to any of the Finance Parties.
"MATERIALLY ADVERSE EFFECT" means an effect, resulting from
any occurrence of whatever nature (including any adverse
determination in any labor controversy, litigation,
arbitration or governmental investigation or proceeding),
which is materially adverse to the ability of the Borrower
to make any payment or perform any other material
obligation required under any Loan Document to which it is
a party.
"MATURITY" means, relative to the Loans, any date on which
the Loans are stated to be due and payable, in whole or in
part, whether by required repayment, prepayment,
declaration or otherwise.
"MATURITY DATE" means June 30, 2004.
"MMS" is defined in the PREAMBLE and means, subject to the
Credit Agreement, such entity to be operating under the
name of Minera Hecla Venezolana, C.A.
"MMS SHARES" means the 24,500 Class A Shares and the 25,500
Class B Shares, each in capital stock of MMS.
"MONARCH MEXICO" is defined in the SECOND RECITAL and
includes any successor by name change.
"MONARCH MEXICO SHARES" means the 8,464,676 shares of
capital stock of Monarch Mexico.
"MRIL " is defined in the PREAMBLE and means, subject to
the Credit Agreement, such entity to be operating under the
name of Hecla Resources Investments Limited.
"MRIL Shares" means the 7,500,000 shares of capital stock
of MRIL.
"OBLIGATIONS" means all obligations of the Borrower with
respect to the repayment or performance of all obligations
(monetary or otherwise) arising under or in connection with
the Facility.
16
"OBLIGORS" means, collectively, the Borrower, MMS and MRIL.
"ORGANIC DOCUMENT" means the certificate of incorporation
and by-laws of the Borrower and all shareholder agreements,
voting trusts and similar arrangements applicable to any of
its authorized shares of capital stock or other equity
interests.
"PARTICIPANT" is defined in SECTION 10.11.2.
"PERCENTAGE" means, relative to any Lender and at any time,
the ratio (expressed as a percentage) of (i) the Principal
Amount of such Lender's Loans at such time to (ii) the
Principal Amount of all the Lenders' Loans at such time.
"PERMITTED LIENS" means the Liens permitted pursuant to
SECTION 7.3.3.
"PERSON" means any natural person, corporation,
partnership, firm, association, trust, government,
governmental agency or any other entity, whether acting in
an individual, fiduciary or other capacity.
"PRINCIPAL AMOUNT" means the principal amount of any Loan,
which shall include for the avoidance of doubt any interest
and other amounts accruing thereon and capitalized pursuant
to SECTION 3.2.5.
"PRINCIPAL OUTSTANDINGS" means at any time the Principal
Amount of all outstanding Loans at such time.
"PROJECT" is defined in the THIRD RECITAL.
"REGULATORY CHANGE" means the occurrence after the
Effective Date of any change in or
abrogation of, or introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of any:-
(a) statute, law, rule, or regulation applicable to any
Finance Party, or
(b) guideline, interpretation, directive, consent decree,
administrative order, request or determination (whether
or not having the force of law but, if not having the
force of law, such guideline, etc. being of the type
17
with which such Finance Party would comply in the
ordinary course of business) applicable to such Finance
Party of any court, central bank or governmental or
regulatory authority charged with the interpretation or
administration of any statute, law, rule or regulation
referred to in CLAUSE (a) or of any fiscal, monetary,
or other authority having jurisdiction over such
Finance Party.
"RELATED PERSON" means any of the Borrower and each
Obligor.
"REQUIRED COLLECTED LENDERS" means, at any time, Collected
Lenders having, in the aggregate, a percentage of more than
sixty-six and two thirds (66 2/3%), computed by reference
to the ratio of:-
(a) the sum of (i) the principal amount of such Collected
Lenders' Bank Lenders' Loans at such time PLUS (ii)
the Principal Amount of such Collected Lenders' Loans
at such time; to
(b) the sum of (i) the principal amount of all the
Collected Lenders' Bank Lenders' Loans at such time
PLUS (ii) the Principal Amount of all the Collected
Lenders' Loans at such time.
For the purposes of this definition, all Gold Loans under
the Credit Agreement shall be calculated at their Original
Dollar Equivalent.
"REQUIRED LENDERS" means, at any time, Lenders having, in
the aggregate, a Percentage of more than sixty-six and two-
thirds (66 - 2/3%).
"REQUIREMENT OF LAW" means, as to any Person, its Organic
Documents and any Applicable Law or Contractual Obligation
binding on or applying to such Person.
"RESTATED CREDIT AGREEMENT" means the Restated Credit
Agreement, dated May 7, 1999, between Hecla Mining,
Nationsbank, N.A. as Agent and the lenders party thereto.
"STANDARD BANK" is defined in the PREAMBLE.
"TAX CREDIT" is defined in SECTION 4.7(b).
18
"TAX PAYMENT" is defined in SECTION 4.7(b).
"TAXES" means any present or future income, franchise,
excise, stamp or other taxes, fees, duties, withholdings or
other charges of any nature imposed by any taxing authority
of any jurisdiction.
"TERMINATION EVENT" means (a) the occurrence with respect
to any ERISA Plan of (i) a reportable event described in
Sections 4043(b)(5) or (6) of ERISA or (ii) any other
reportable event described in Section 4043(b) of ERISA
other than a reportable event not subject to the provision
for 30-day notice to the Pension Benefit Guaranty
Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any
ERISA Affiliate from an ERISA Plan during a plan year in
which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, or (c) the filing of a notice of
intent to terminate any ERISA Plan or the treatment of any
ERISA Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate
any ERISA Plan by the Pension Benefit Guaranty Corporation
under Section 4042 of ERISA, or (3) any other event or
condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a
trustee to administer, any ERISA Plan.
"U.S. GAAP" is defined in SECTION 1.3.
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 this Agreement and
each notice and other communication delivered from time to
time in connection therewith.
1.3 ACCOUNTING AND FINANCIAL DETERMINATIONS
Unless otherwise specified, all accounting terms used
herein or in any other Loan Document shall be interpreted,
all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements
required to be delivered hereunder or thereunder shall be
prepared in accordance with, generally accepted accounting
principles in the U.S. ("U.S. GAAP").
19
1.4 CHANGE IN ACCOUNTING PRINCIPLES
If, after the Effective Date, there shall be any material
change to the Borrower's Fiscal Year, or in the application
of the accounting principles used in the preparation of the
financial statements referred to in SECTION 6.5 as a result
of the promulgation of rules, regulations, pronouncements
or opinions by agencies having jurisdiction over financial
reporting and accounting standards which changes result in
a change in the method of calculation of, or have an
adverse impact on, financial covenants, standards, or terms
applicable to the Borrower found in this Agreement or any
other Loan Document, the Borrower and the Administrative
Agent agree promptly to enter into negotiations in order to
amend such financial covenants, standards or terms so as to
reflect equitably such changes with the desired result that
the evaluations of the Borrower's financial condition shall
be the same after such changes as if such changes had not
been made; PROVIDED, HOWEVER, that until the Required
Lenders have given their consent (such consent not to be
unreasonably withheld, conditioned or delayed) to the
Administrative Agent to such amendments, such Borrower's
financial condition shall continue to be evaluated on the
same principles as those used in the preparation of the
financial statements of the Borrower referred to in SECTION
6.5.
1.5 GENERAL PROVISIONS AS TO CERTIFICATES AND OPINIONS, ETC.
Whenever the delivery of a certificate is a condition
precedent to the taking of any action by either Agent or
any Lender hereunder, the truth and accuracy of the facts
and the diligent and good faith determination of the
opinions stated in such certificate shall in each case be
conditions precedent to the right of the Borrower to have
such action taken, and any certificate executed by the
Borrower shall be deemed to represent and warrant that the
facts stated in such certificate are true and accurate as
of the date stated.
1.6 INTERPRETATION
Unless a clear contrary intention appears, this Agreement
and each other Loan Document shall be construed and
interpreted in accordance with the provisions set forth
below:-
(a) the singular number includes the plural number and vice
versa;
20
(b) reference to any Person includes such Person's successors,
executors, administrators, substitutes and assigns but, if
applicable, only if such successors, executors, administrators,
substitutes and assigns are permitted by this Agreement or such
other Loan Document, and reference to a Person in a particular
capacity excludes such Person in any other capacity or
individually;
(c) reference to any gender includes any other gender;
(d) reference to any agreement, document or Instrument means
such agreement, document or Instrument as amended, supplemented,
novated, refinanced, replaced, waived, restated or modified, and
in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof;
(e) reference to any promissory note includes any promissory
note which is an extension or renewal thereof or a substitute or
replacement therefor;
(f) reference to any Applicable Law means such Applicable Law
as amended, modified, codified or re-enacted, in whole or in
part, and in effect from time to time, including rules and
regulations promulgated thereunder;
(g) "HEREUNDER", "HEREOF", "HERETO", "HEREIN" and words of
similar import shall be deemed references to this Agreement or
such other Loan Document, as the case may be, as a whole and not
to any particular Article, Section, clause or other provision
hereof or thereof;
(h) any reference to any particular Article, Section or clause
shall be to such Article, Section or clause of this Agreement or
such other Loan Document;
(i) "INCLUDING" means including without limiting the generality
of any description preceding such term;
(j) relative to the determination of any period of time, "FROM"
means "FROM (AND INCLUDING)" and "TO" means "TO (BUT EXCLUDING)";
(k) any reference to a time of day is a reference to London
time;
21
(l) reference to a "COMPANY" or "CORPORATION" shall be
construed as a reference to the analogous form of business entity
used in any relevant jurisdiction;
(m) when an expression is defined, another part of speech or
grammatical form of that expression has a corresponding meaning;
and
(n) any reference to the "knowledge" of the Borrower or its
Authorized Representative with respect to a certain matter means
either such Person's actual knowledge with respect to such matter
or that of which a Person, in the position of the Borrower or
Authorized Representative and acting reasonably, would be
expected to have knowledge.
2. COMMITMENTS AND PROCEDURES FOR MAKING LOANS; CONTINUATION
PROCEDURES
2.1 COMMITMENTS; MAKING LOANS
(a) Subject to the terms and on the conditions of this
Agreement, the Lenders agree that their Commitments consist of
obligations to make, maintain and continue Loans, in an amount
not to exceed the Aggregate Commitment Amount (for all the
Lenders) or each Lender's Commitment Amount. The Loans may be
made on a single Borrowing Date during the period from the
Effective Date to the Commitment Termination Date.
(b) By delivering a Borrowing Notice to the Administrative
Agent on or before 10:00 a.m., the Borrower may request on any
Business Day during the period described in CLAUSE (a), on not
less than three nor more than five Business Days' notice
(counting the date on which such notice is given), that Loans be
made by all Lenders on the Borrowing Date set forth in such
Borrowing Notice in a principal amount equal to the then
Aggregate Commitment Amount. Upon receipt of a Borrowing Notice
requesting Loans to be made, the Administrative Agent shall
promptly notify each Lender of the contents thereof, and such
Borrowing Notice shall not thereafter be revocable by the
Borrower.
22
(c) Subject to the terms and conditions of this Agreement, the
Loans requested to be made in the relevant Borrowing Notice shall
be made on the specified Borrowing Date. On such Borrowing Date
and subject to such terms and conditions, each Lender shall, on
or before 10:00 a.m., credit a specifically designated account of
the Administrative Agent at its Lending Office, with an amount of
Dollars equal to such Lender's Percentage of the aggregate
Principal Amount of the Loans requested to be made. To the
extent funds are received by the Administrative Agent from the
Lenders in respect of the Loans as requested pursuant to the
relevant Borrowing Notice, the Administrative Agent shall make
such funds available to the Borrower by crediting the Principal
Amount of such Loans to such account of the Borrower as it may
direct.
(d) The Borrower may, from time to time on any Business Day
prior to the Commitment Termination Date upon which there then
remains any portion of the Aggregate Commitment Amount,
voluntarily reduce the Aggregate Commitment Amount, as then in
effect, in whole or, if in part, in multiples of U.S.$1,000,000;
PROVIDED, HOWEVER, that the Borrower shall give the
Administrative Agent not less than three or nor more then five
Business Days prior written notice (counting the date on which
such notice is given) of any such reduction which notice shall be
irrevocable once given. On the Commitment Termination Date, the
Aggregate Commitment Amount (if still remaining) shall,
automatically, and without any action by any Person be reduced to
zero.
2.2 RECORDS
Each Lender's Loans shall be evidenced by loan accounts
maintained by such Lender. The Borrower hereby irrevocably
authorizes each Lender to make (or cause to be made)
appropriate account entries, which account entries, if
made, shall evidence INTER ALIA the date of, the Principal
Amount of, any repayments of, and the interest rate on, the
Loans then outstanding to such Lender. Any such account
entries indicating the outstanding Principal Amount of
Loans outstanding to such Lender shall be PRIMA FACIE
evidence of the Principal Amount thereof owing and unpaid,
but the failure to make any such entry shall not limit or
23
otherwise affect the obligations of the Borrower hereunder
to make payments of the amount of, or interest on, such
Loans when due. The Administrative Agent shall also
maintain records with respect to each of the matters set
forth in the first sentence of this Section and each other
party hereto agrees to deliver such information to the
Administrative Agent as it may reasonably request for the
purpose of maintaining such records. In case of any
discrepancy between the records of the Administrative Agent
and the records of any Lender with respect to any matter
referred to in this Section, the records of such Lender
shall be deemed to control.
2.3 FUNDING
Each Lender may, if it so elects, but subject to Applicable
Law, fulfil its obligation to make, maintain or continue
any portion of its Loans by causing an offshore branch,
Affiliate or banking facility of such Lender to make,
maintain or continue such Loans; PROVIDED, HOWEVER, that in
such event any Loans shall be deemed to have been made by
such Lender, and the obligation of the Borrower to repay
such Loan, and pay interest thereon, shall nevertheless be
to such Lender and shall be deemed to be held by it, to the
extent of such Loan, for the account of such foreign
branch, Affiliate or international banking facility; and
PROVIDED, FURTHER, HOWEVER, that the Borrower shall be
under no obligation to pay any amount to such Lender
pursuant to SECTION 4.1, 4.2, 4.3, 4.4, 4.5 or 4.6 which
arises solely as a consequence of an election made by such
Lender pursuant to this Section.
2.4 OBLIGATIONS SEVERAL
The obligations of the Lenders to make, maintain and
continue Loans under this Article are several. No Lender's
obligation under this Article shall be affected by any
other Lender' s failure to meet its obligations hereunder.
3. PRINCIPAL PAYMENTS; INTEREST; COMMISSIONS
3.1 PRINCIPAL PAYMENTS
3.1.1 SCHEDULED REPAYMENTS
(a) The Borrower shall repay the Loans in Principal Amounts of
U.S.$1,000,000 on each of June 30, 2003 and December 31, 2003.
24
(b) The Borrower shall repay the Principal Amount of the
Loans remaining outstanding in full on the Maturity
Date.
3.1.2 PREPAYMENTS - VOLUNTARY
In addition to its obligations under SECTION 3.1.1, the
Borrower may, from time to time on any Business Day
(subject to SECTION 4.3) make a voluntary prepayment, in
whole or in part, of the then outstanding Principal Amount
of all Loans; PROVIDED, HOWEVER, that:
(a) the Borrower shall give the Administrative Agent not
less than five Business Days' prior written notice
(counting the date on which such notice is given) of
any such voluntary prepayment, which notice, once
given, shall be irrevocable; and
(b) all such partial voluntary prepayments shall be in an
aggregate Principal Amount of multiples of U.S.$500,000.
3.1.3 PRINCIPAL PAYMENTS GENERALLY
(a) Each repayment or prepayment of any Loans made
pursuant to this Section shall be without premium or
payment of any other additional amount, except as may
be required pursuant to SECTION 4.3. Amounts repaid or
prepaid may not be re-borrowed. Except as set forth
in SECTION 3.2, any repayment or prepayment of the
Principal Amount of any Loans shall include accrued
interest on the date of repayment or prepayment on the
Principal Amount being repaid or prepaid.
(b) Loans required to be repaid or prepaid pursuant to
this Section shall be paid in Dollars. Any amount paid
pursuant to SECTION 3.1.2(a) shall be applied in
reducing the repayment installments under SECTION
3.1.1 in the inverse order of their maturities.
3.2 INTEREST PAYMENTS
The Borrower shall make payments of (or capitalize)
interest in accordance with this Section.
25
3.2.1 RATE
The Borrower shall pay interest on the Principal Amount of
the Loans outstanding from time to time (or interest shall
accrete thereon) at a rate PER ANNUM equal to the sum of
(i) the Fixed Rate plus (ii) the Additional Costs Rate, if
relevant.
3.2.2 POST-MATURITY RATE
After the Maturity of all or any portion of the Principal
Amount of the Loans or after any other Obligations shall
have become due and not been paid, the Borrower shall pay
interest (after as well as before judgment) on the Principal
Amount of each Loan so matured or on any such other
Obligations, at a rate PER ANNUM equal to the sum of (i) the
Increased Rate for such periods (of a minimum of three
months) as the Administrative Agent may from time to time
select plus (ii) the Additional Costs Rate (if relevant).
3.2.3 PAYMENT DATES; CALCULATION OF INTEREST
Interest accrued on each Loan shall, subject to SECTION
3.2.5, be payable on the Maturity Date. In addition,
interest accrued on each Loan after the Maturity thereof and
interest on other overdue amounts shall be payable upon
demand. The amount of accruing and accreting interest on
any Loans shall be calculated by the Administrative Agent on
the daily outstanding Principal Amount of such Loans. All
interest shall be computed on the basis of the actual number
of days (including the first day but excluding the last day)
during the period for which such interest is payable over a
year comprised of 360 days.
3.2.4 RATE DETERMINATIONS
All determinations by the Administrative Agent of the rate
of interest applicable to any Loan shall be conclusive
absent demonstrated error.
3.2.5 CAPITALIZATION OF INTEREST
(a) Notwithstanding the interest payment provisions
contained in this Section, until the date on which the
principal of, and interest on, the Loans shall become
26
payable in full, whether at the Maturity Date or by
reason of acceleration or if the Maturity of all or
any portion of the Principal Amount of the Loans or
after any Obligations shall have become due and not
been paid, the Borrower may capitalize interest as
provided in this Section.
(b) To the extent the Borrower shall not make any payment of
interest (including for the avoidance of doubt, the Additional
Costs Rate, if relevant) on the Loans in cash on each Payment
Date or when otherwise due (each, an "INTEREST PAYMENT DATE"), an
amount equal to the interest payable on such Interest Payment
Date but not paid in cash shall be added to the Principal Amount
payable hereunder and shall bear interest as provided herein.
(c) For the avoidance of doubt, the payment of each Principal
Amount described in SECTIONS 3.1.1(a) and SECTION 3.1.2 shall be
made without payment of any interest capitalized until such date.
All interest so capitalized shall, subject to this Agreement, be
added to the Principal Amount immediately outstanding after each
such payment and shall be paid in cash at the Maturity Date or on
any other date where interest is actually payable.
(d) To the extent the Borrower shall not make any payment of
interest on the Loans in cash on any Interest Payment Date
occurring after the Maturity of all or any portion of the
Principal Amount of the Loans or after any other Obligations
shall have become due and not been paid, an amount which bears
the same proportion to the total amount of interest which would
be payable on the remaining Principal Amount of the Loans if the
Loans bore interest at the Increased Rate for the period from the
immediately preceding Interest Payment Date until the then
current Interest Payment Date as (i) the amount of interest due
on the current Interest Payment Date at the Fixed Rate but not
paid in cash bears to (ii) the total amount of interest at the
Fixed Rate payable on such Interest Payment Date, shall be added
to the Principal Amount payable hereunder and shall bear interest
as provided herein.
3.2.6 PAYMENTS SUBJECT TO SUBORDINATION
All payments of principal and interest shall be subject to
the terms of the Nationsbank Subordination Agreement.
27
3.3 FEES
The Borrower shall make payments in respect of fees in
accordance with this Section.
3.3.1 AGENTS' FEES
The Borrower confirms and agrees that it will pay to the
Administrative Agent such underwriting, arrangement and
agency fees (in such amounts, on such dates and pursuant to
such terms) for the account of the Administrative Agent as
are described in a letter of even date herewith from the
Borrower to the Administrative Agent.
4. INCREASED COSTS; TAXES; MARKET DISRUPTIONS; GENERAL PAYMENT
PROVISIONS
4.1 DOLLARS UNAVAILABLE
(a) If, at any time that the Administrative Agent shall be
required to make any determination of the Fixed Rate for any
relevant period in which the Loans are to be outstanding and it
shall have determined or shall have been notified (for any reason
whatsoever) that in the case of any Loans outstanding or to be
outstanding during such period, either (x) Dollar certificates of
deposit or Dollar deposits, as the case may be, in the relevant
amount and for the relevant period are not available to the
Lenders in the London interbank market, or (y) by reason of
circumstances affecting the Lenders in the London interbank
market, adequate means do not exist for ascertaining the interest
rate applicable hereunder to such Loan, then the Administrative
Agent shall promptly give telephonic notice of such determination
confirmed in writing to the Borrower (which determination shall,
in the absence of demonstrated error, be conclusive and binding
on the Borrower).
(b) As soon as practicable following the giving of the notice
described in CLAUSE (a), the Administrative Agent, the affected
Lenders acting reasonably and the Borrower shall negotiate for a
period not exceeding 30 days with a view to agreeing to an
alternative basis for making or maintaining the Loans affected by
the circumstances described in CLAUSE (a). During such
28
period interest shall accrue on the principal amount of
each affected Lender's affected Loans at the rate
applicable to such Loans immediately prior to the
giving of such notice. If no such alternative basis is
agreed within such time period, each affected Lender's
affected Loans shall bear interest at a rate PER ANNUM
equal to the sum of (i) the cost to such Lender of
funding such Loans (as determined by such Lender which
determination shall, in the absence of demonstrated
error, be conclusive and binding on the Borrower), (ii)
an applicable margin agreed between the Lenders and the
Borrower PLUS (iii) the Additional Costs Rate as in
effect from time to time with respect to such Lender.
4.2 INCREASED COSTS, ETC.
(a) The Borrower agrees to reimburse each Lender for any
increase (other than as specifically covered in any other Section
of this Article) in the cost to such Lender of making, continuing
or maintaining (or of its obligation to make, continue or
maintain) any Loans, and for any reduction (other than as
specifically covered in any other Section of this Article) in the
amount of any sum receivable by such Lender hereunder in respect
of making, continuing or maintaining any portion of any such
Loans in either case, from time to time by reason of any
Regulatory Change (including, solely with respect to any Lender
that is a bank or commercial financial institution, with respect
to Regulation D of the F.R.S. Board but excluding the Additional
Costs Rate (if relevant)), then, in any such event, such Lender
shall promptly notify the Administrative Agent and the Borrower
thereof stating in reasonable detail the reasons therefor and the
additional amount required fully to compensate such Lender for
such increased cost or reduced amount. Such notice shall, in the
absence of demonstrated error, be conclusive and binding on the
Borrower.
(b) As soon as practicable following the giving of any notice
described in CLAUSE (a), the affected Lender, the Administrative
Agent and the Borrower shall negotiate for a period not exceeding
30 days with a view to avoiding or minimizing the circumstances
described in CLAUSE (a). If no steps mutually agreeable to the
affected Lender, the Administrative
29
Agent and the Borrower are decided within such 30 day
period, the Borrower may elect either to prepay the
principal amount of and interest on such affected
Lender's then outstanding Loans (subject, however, to
SECTION 4.3) or pay, within five days after the expiry
of such 30 day period, any additional amount required
fully to compensate such affected Lender for the
increased cost or reduced amount described in CLAUSE
(a).
4.3 FUNDING LOSSES
In the event that any Lender shall incur any loss or
expense (including any loss or expense incurred by reason
of the liquidation or reemployment of Dollar deposits or
other funds acquired by such Lender to make, continue or
maintain any portion of the Principal Amount of any Loan)
as a result of:-
(a) any payment or prepayment of the Principal Amount of Loans
on a date other than as and when required, whether pursuant to
SECTION 3.1 or otherwise; or
(b) any action of the Borrower resulting in any Loans not being
made, in accordance with the Borrowing Notice, as given therefor,
then, upon the request of such Lender to the Borrower (with
a copy to the Administrative Agent) the Borrower shall pay
to the Administrative Agent for the account of such Lender
such amount as will (in the reasonable determination of
such Lender) reimburse such Lender for such loss or
expense. A statement as to any such loss or expense
(including calculations thereof in reasonable detail) shall
be submitted by such Lender to the Administrative Agent and
the Borrower and shall, in the absence of demonstrated
error, be conclusive and binding on the Borrower.
30
4.4 INCREASED CAPITAL COSTS
(a) If any Regulatory Change affects or would affect the amount
of capital required to be maintained by any Lender which is a
bank or commercial financial institution or any Person
controlling such Lender, and such Lender determines (in its
reasonable discretion) that the rate of return on its or such
controlling Person's capital is reduced to a level below that
which such Lender or such controlling Person could have achieved
but for the occurrence of any such Regulatory Change, then, in
any such case upon notice from time to time by such Lender to the
Borrower, the Borrower may, at its option (i) within five days of
receipt of such notice, pay directly to such Lender additional
amounts sufficient to compensate such Lender or such controlling
Person for the portion of such reduction in rate of return which
is reasonably allocable to the Facility or (ii) prepay the
principal amount of and interest on such affected Lender's then
outstanding Loans (subject, however, to SECTION 4.3). A
statement of such Lender as to any such additional amount or
amounts (including calculations thereof in reasonable detail)
shall, in the absence of demonstrated error, be conclusive and
binding on the Borrower. In determining such amount, such Lender
may use any method of averaging and attribution that it (in its
reasonable discretion) shall deem applicable.
(b) Notwithstanding CLAUSE (a), the Borrower shall not be
obligated to pay any amount to any Lender in respect of any such
reduction in the rate of return or increased cost which arises as
a consequence of (i) any law or directive implementing the
proposals for international convergence of capital measurement
and capital standards published by the Basle Committee on Banking
Regulations and Supervisory Practices in July 1988 and/or (ii)
the Council of the European Communities Directive of April 17,
1989, on the own funds of credit institutions (89/299/EC) and the
Council of the European Communities Directive of December 18,
1989, on a solvency ratio for credit institutions (89/647/EC) to
the extent that the impact of any such law or directive can
reasonably be calculated at the Effective Date. In addition, no
Lender may make any claim for compensation in respect of any such
reduction in return or increased cost to
31
the extent that a notification of the event leading to
such reduction in the rate or return or increased cost
is not given to the Borrower within six months of such
Lender's obtaining knowledge thereof.
4.5 ILLEGALITY
(a) If, as the result of any Regulatory Change, any Lender
shall determine (which determination, in the absence of
demonstrated error, shall be conclusive and binding on the
Borrower) that it is unlawful for such Lender to make any Loan or
the obligations of such Lender to make such Loan shall, upon such
determination (and telephonic notice thereof confirmed in writing
to the Administrative Agent and the Borrower), forthwith be
suspended until such Lender shall become aware that the
circumstances causing such suspension no longer exist and shall
forthwith notify the Administrative Agent and the Borrower to
such effect, at which time the obligation of such Lender to make
such Loan shall be reinstated.
(b) If, as the result of any Regulatory Change, any Lender
shall determine (which determination, in the absence of
demonstrated error, shall be conclusive and binding on the
Borrower) that it is unlawful for such Lender to continue its
Loan, then, upon notice by such Lender to the Administrative
Agent and the Borrower, such Lender shall consult with the
Borrower and the Administrative Agent for a period of up to 30
days from the date of such notice, with a view to agreeing upon a
mutually acceptable alternative arrangement which will avoid or
minimize such illegality. If, no steps mutually agreeable to the
affected Lender, the Administrative Agent and the Borrower are
decided within such 30 day period, the Borrower may, at its
option, to the extent not prohibited from doing so by the
relevant illegality or unlawfulness, continue such Lender's then
outstanding Loans or prepay, within five days after the expiry of
such 30 day period (unless required to do so prior thereto) the
principal amount of and interest on such affected Lender's then
outstanding Loans (subject, however, to SECTION 4.3).
32
(c) If the relevant illegality or unlawfulness makes it
unlawful for a Lender to maintain its Loan, then upon
notice by such Lender to the Administrative Agent and
the Borrower, the Borrower shall, as soon as
practicable after receiving such notice, prepay the
Principal Amount of any interest on such affected
Lender's outstanding Loans (subject, however, to
SECTION 4.3)
4.6 TAXES
All payments by the Borrower of principal of, and interest
on, the Loans and all other amounts payable pursuant to the
relevant Finance Parties shall be made free and clear of,
and without deduction for any Taxes (other than franchise
taxes and taxes imposed on or measured by the recipient's
net income or receipts). In the event that any withholding
or deduction from any payment to be made by the Borrower
hereunder or under any other Loan Document is required in
respect of any such Taxes pursuant to any Applicable Law,
then the Borrower will:-
(a) pay directly to the relevant authority the full amount to
be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official
receipt or other documentation satisfactory to the Administrative
Agent evidencing such payment to such authority; and
(c) pay to the Administrative Agent for the account of each
Person entitled thereto such additional amount or amounts as is
necessary to ensure that the net amount actually received by such
Person will be equal to the full amount such Person would have
received had no such withholding or deduction been required.
Moreover, if any such Taxes are directly asserted against
any Finance Party with respect to any payment received by
such Finance Party, such Finance Party may pay such Taxes
and the Borrower will promptly pay such additional amounts
(including any penalties, interest or expenses) as is or
are necessary in order that the net amount received by such
Person after the payment of such Taxes (including any Taxes
on such additional amount) shall equal the amount such
Person would have received had such Taxes not been
asserted.
33
If the Borrower fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the
Administrative Agent, for its own account and/or, as the
case may be, the account of the relevant Finance Party, the
required receipts or other required documentary evidence,
the Borrower shall indemnify the Administrative Agent or
the relevant Finance Party, as the case may be, for any
incremental Taxes, interest or penalties that may become
payable by any such Person as a result of any such failure.
For the purposes of this Section, a distribution hereunder
or under any other Loan Document by the Administrative
Agent or any Finance Party, as the case may be, to or for
the account of any Finance Party shall be deemed a payment
by the Borrower.
The Finance Parties agree to co-operate with the Borrower
in completing and delivering or filing tax-related forms
which would reduce or eliminate any amount of the nature
referred to in this Section; PROVIDED, HOWEVER, that no
Finance Party shall be under any obligation to execute and
deliver any such form if, in the reasonable opinion of such
Finance Party, completion of any such form could result in
an adverse consequence with respect to the business or tax
position of such Finance Party.
4.7 MITIGATION
(a) In the event that the Borrower makes payment of any amount
pursuant to SECTION 4.4 or 4.6 or that any Lender seeks payment
of an amount pursuant to SECTION 4.4 or 4.6 or because of
circumstances resulting in the 30 day negotiation period
described in SECTION 4.1(b), 4.2(b) or 4.5(b), such affected
Lender agrees that it will take such reasonable steps as may
reasonably be open to it to mitigate the effects of the
circumstances described in the foregoing Sections (such steps to
include the transfer of such Lender's Lending Office to another
jurisdiction and the application for a Tax Credit); PROVIDED,
HOWEVER, that no Lender shall be obligated to (i) take any such
steps if, in its opinion, such steps would require it to achieve
less than its expected return with respect to the Facility or
would have an adverse effect upon its assets or financial
condition or (ii) achieve any particular result or incur any
liability to the Borrower by virtue of any such steps resulting
in less than complete mitigation of the relevant circumstances.
34
(b) If, pursuant to CLAUSE (a), any Lender effectively obtains
a refund of tax or credit (a "TAX CREDIT") against a payment made
by the Borrower pursuant to SECTION 4.6 (a "TAX PAYMENT"), and
such Lender is able to identify such Tax Credit as being
attributable to such Tax Payment, then such Lender, after actual
receipt of such Tax Credit, shall reimburse the Borrower for such
amount as such Lender shall reasonably determine to be the
proportion of such Tax Credit as shall be reasonably attributable
to such Tax Payment; PROVIDED, HOWEVER, that no Lender shall be
required to make any such reimbursement which would cause it to
lose the benefit of such Tax Credit or would otherwise adversely
affect any matter relating to such Lender in connection with the
assessment or payment of any Taxes. If any Lender shall claim any
Tax Credit pursuant to this Section, it shall have absolute
discretion in the extent, order and manner in which it does so.
No Lender shall be obligated to disclose information regarding
its tax affairs or computations to the Borrower.
4.8 PAYMENTS, COMPUTATIONS, ETC.
(a) All payments by the Borrower pursuant to this Agreement or
any other Loan Document shall be paid in Dollars, except as
specifically set forth therein. All payments under this Agreement
or any other Loan Document shall be made by the Borrower to the
Administrative Agent for the account of each Finance Party
entitled thereto.
(b) All payments under the Facility shall be made by the
Borrower to the Administrative Agent for the account of each
Finance Party entitled thereto, by delivery of Dollars in
immediately available funds to an account of the Administrative
Agent in New York City at the Administrative Agent's Lending
Office, which account shall be designated from time to time by
notice to the Borrower from the Administrative Agent, for the
account of each Finance Party entitled thereto and, if such
payment shall be of less than the amount of the relevant payment
Obligation then due and owing, for the PRO RATA benefit of each
Finance Party entitled to share in such payment in accordance
with its respective portion of the aggregate unpaid amount of
35
similar payment Obligations. All such payments shall be
made, without setoff, deduction, or counterclaim, not
later than 11:00 a.m., New York City time, on the date
when due. Any payments received hereunder after the
time and date specified in this Section shall be deemed
to have been received by the Administrative Agent on
the next following Business Day. The Administrative
Agent shall promptly remit to each Finance Party its
share (calculated as aforesaid), if any, of such
payments, in kind. Such remittance shall be to an
account designated by such Finance Party to the
Administrative Agent by notice from time to time and
maintained at its Lending Office.
4.9 PRORATION OF PAYMENTS
If any Lender shall obtain any payment or other recovery
(whether voluntary, involuntary, by application of setoff,
or otherwise) on account of the principal amount of or
interest on any Loan in excess of its PRO RATA share of
payments then or therewith obtained by all Lenders entitled
thereto upon the principal amount of and interest on all
Loans, such Lender shall purchase from the other Lenders
such participations in Loans held by them as shall be
necessary to cause such purchasing Lender to share the
excess payment or other recovery rateably with each of
them; PROVIDED, HOWEVER, that if all or any portion of the
excess payment or other recovery is thereafter recovered
from such purchasing holder, the purchase shall be
rescinded and the purchase price restored to the extent of
such recovery, but without interest. The Borrower agrees
that any Lender so purchasing a participation from another
Lender pursuant to this Section may, to the fullest extent
permitted by Applicable Law, exercise all its rights of
payment (including pursuant to SECTION 4.10) with respect
to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a
secured claim under the Facility in lieu of a setoff to
which this Section applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the
Lenders entitled under this Section to share in the benefit
of any recovery on such secured claim.
36
4.10 SET-OFF
In addition to and not in limitation of any rights of any
of the Finance Parties under Applicable Law, each Finance
Party (or any branch thereof) shall, upon the occurrence of
any Enforcement Event, have the right to appropriate and
apply to the payment of the Obligations owing to it
(whether or not then due), any and all balances, credits,
deposits, accounts or moneys of the Borrower then or
thereafter maintained with such Finance Party in whatever
currency (and, as security for the Obligations owing to
each such Finance Party, but not to the exclusion of any
other rights such Finance Party may have, the Borrower
hereby grants to each such Finance Party a continuing
security interest in any and all balances, etc., as
aforesaid); PROVIDED, HOWEVER, that any such appropriation
and application shall be subject to the provisions of
SECTION 4.9.
4.11 APPLICATION OF PROCEEDS
(a) If at any time any amount (including any proceeds received
in respect of any sale of, collection from, or other realization
upon, all or any part of any collateral security subject of any
Collateral Agreement) received by either Agent is less than the
amount then due and payable pursuant to this Agreement or any
other Loan Document such amount may, in the discretion of the
Administrative Agent, be held by the Administrative Agent as
additional collateral security for, or then or at any time
thereafter be applied (after payment of any amounts payable to
the Agents pursuant to SECTIONS 10.3 and 10.4 and similar
provisions contained in the other Loan Documents) in whole or in
part by the Administrative Agent against, all or any part of the
Obligations in the following order:-
(i) first, to amounts owing to the Bank Lenders in the order
set forth in Section 5.12(a) of the Credit Agreement;
(ii) second, to amounts outstanding to the Finance Parties under
any Loan Document in respect of any amount other than interest
on, or the Principal Amount of, any Loan;
37
(iii)third, PRO RATA to amounts outstanding to the Finance
Parties under any Loan Document in respect of interest on any
Loan; and
(iv) fourth, PRO RATA to amounts outstanding to the Finance
Parties under any Loan Document in respect of the Principal
Amount of any Loan.
(b) Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full of all
the Obligations, and the termination of all Commitments (if not
then already terminated), shall be paid over to or to whomsoever
may be lawfully entitled to receive such surplus.
5. CONDITIONS PRECEDENT TO MAKING LOANS
5.1 INITIAL LOANS
The obligations of the Lenders to make the Loans shall be
subject to the prior or concurrent satisfaction of each of
the conditions precedent set forth in this Article. Unless
specifically stated to the contrary, each document,
certificate and other Instrument delivered pursuant to this
Section shall be dated on, or prior to, and shall be in full
force and effect on, the Borrowing Date with respect to the
Loans.
The Administrative Agent shall have received:
5.1.1 RESOLUTIONS, ETC.
(a) a certificate of an Authorized Representative to the
effect that (i) the representations of such Person set
forth in each Loan Document to which it is a party
shall be true and correct as at the Effective Date and
after giving effect to the initial Loan and (ii) no
Default shall have then occurred and be continuing; and
(b) a certificate of the Secretary or similar officer of
the Borrower as to:
(i) resolutions of its Board of Directors or similar body then
in force and effect authorizing the execution, delivery and
performance of each Loan Document and any other document to be
executed by it in connection with the transactions contemplated
thereby;
38
(ii) the incumbency and signatures of those of its officers
authorized to act with respect to each Loan Document and any
other document executed or to be executed by it; and
(iii)its Organic Documents as then in effect,
upon which certificate the Administrative Agent may
conclusively rely until it shall have received a further
certificate of the Secretary or similar officer of the
relevant Person cancelling or amending such prior
certificate.
5.1.2 CREDIT AGREEMENT, NATIONSBANK SUBORDINATION AGREEMENT
(a) counterparts of the Credit Agreement, duly executed by
MRIL, as borrower, MMS, as an additional Obligor, the
Bank Lenders, the Administrative Agent and the
Collateral Agent;
(b) evidence that all conditions precedent to the making of
the Bank Lenders Loans shall have been met;
(c) delivery of a borrowing request for the Bank Lenders
Loans pursuant to the Credit Agreement to take effect
on the proposed Borrowing Date hereunder; and
(d) counterparts of the Nationsbank Subordination
Agreement, duly executed by Nationsbank N.A., in its
capacity as agent under the Restated Credit Agreement,
Standard Bank, as subordinated creditor and an
Authorized Representative of Hecla Mining, together
with evidence satisfactory in form and substance to the
Administrative Agent, of the granting of consent by
Nationsbank N.A., as agent under the Restated Credit
Agreement, to the execution of the Loan Documents and
the consummation of the transactions contemplated
thereby.
5.1.3 BORROWING NOTICE
The Administrative Agent shall have received a Borrowing
Notice relating to the Loans, executed by an Authorized
Representative of the Borrower.
39
5.1.4 CLOSING FEES, EXPENSES, ETC.
The Administrative Agent shall have received (including, to
the extent necessary, from the proceeds of the Loans to be
made on the Borrowing Date) for the account of the Finance
Parties entitled thereto, all fees and expenses due
(including those of the Agent's advisors then invoked) and
payable on or prior to such Borrowing Date.
5.1.5 COMPLIANCE WITH WARRANTIES, NO DEFAULTS, ETC.
The representations and warranties of the Borrower set
forth in ARTICLE 6 and in all other Loan Documents shall be
true and correct as of the date initially made, and both
immediately before and after the making of the requested
Loans:
(a) such representations and warranties shall 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 as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
6. REPRESENTATIONS AND WARRANTIES
In order to induce the Finance Parties to enter into this
Agreement and to make, maintain and continue the Loans
hereunder, the Borrower, individually for itself and with
respect to matters hereinafter relating to it, represents
and warrants unto each of the Finance Parties, in each
case as set forth in this Article. The representations and
warranties set forth in this Article shall be made on the
Effective Date and upon the delivery of the Borrowing
Notice and shall be deemed to be made as at the Borrowing
Date.
6.1 ORGANIZATION, POWER, AUTHORITY, ETC.
(a) The Borrower is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware.
40
(b) The Borrower is qualified to do business and is in good
standing (where such concept is applicable) as a foreign company
in each jurisdiction where the nature of its business makes such
qualification necessary and has full power and authority, and
holds all requisite Approvals, to own and hold under lease its
property and to conduct its business substantially as currently
conducted by it. The Borrower has full power and authority to
enter into and perform its obligations under this Agreement and
the other Loan Documents executed or to be executed by it.
6.2 DUE AUTHORIZATION; NON-CONTRAVENTION
The execution and delivery by the Borrower of this
Agreement and each other Loan Document executed or to be
executed by it and the performance by the Borrower of its
obligations hereunder and thereunder, have been duly
authorized by all necessary corporate action on its part,
do not and will not require any Approval (other than the
filings, notarizations and registrations contemplated by
this Agreement in connection with the effectiveness,
perfection and priority of the Collateral Agreements to
which the Borrower is a party) do not and will not conflict
with, result in any violation of, or constitute any default
under, any provision of any Requirement of Law or Approval
binding on it, and will not result in or require the
creation or imposition of any Lien on any of its properties
pursuant to the provisions of any Contractual Obligation
(other than pursuant to this Agreement and the Collateral
Agreements to which the Borrower is a party).
6.3 VALIDITY, ETC.
(a) This Agreement constitutes, and each other Operative
Document executed or to be executed by the Borrower constitutes,
or on the due execution by each party thereto and delivery
thereof will constitute, the legal, valid and binding obligation
of the Borrower enforceable in accordance with its terms, subject
as to enforceability, to Applicable Laws relating to bankruptcy
and the enforceability of creditors' rights generally and by the
fact that the availability of equitable remedies is
discretionary.
41
(b) Each Collateral Agreement to which the Borrower is a party
will, upon the taking of the various actions described hereunder
and thereunder, create in favor of the stated beneficiary or
secured party (howsoever denominated) thereunder, a valid and
perfected first-priority Lien on all of the assets, properties
and rights purported to be covered thereby as security for the
relevant obligations expressed to be covered thereby, subject to
no Liens, except (i) Permitted Liens and (ii) for the specific
exceptions set forth in the legal opinions delivered pursuant to
this Agreement.
6.4 LEGAL STATUS
Neither the Borrower nor any of its properties or revenues
enjoys any right of immunity from suit, set off, attachment
prior to judgment or in aid of execution, or execution on a
judgment in respect of its obligations under any of the
Loan Documents to which it is a party.
6.5 FINANCIAL INFORMATION
All balance sheets and all other financial information of
the Borrower which have been furnished by it to the
Administrative Agent for the purposes of or in connection
with this Agreement or any transaction contemplated hereby,
including:-
(a) the consolidated balance sheet at December 31, 1998 and the
related consolidated statements of operations and cashflows, loss
and deficit and change in financial position for the Fiscal Year
then ended, of Hecla Mining and its Subsidiaries in respect of
which an opinion was given by PricewaterhouseCoopers LLC; and
(b) the consolidated balance sheet at March 31, 1999 and the
related consolidated statement of profit and loss and cashflows
for the Fiscal Quarter then ended, of Hecla Mining and its
Subsidiaries, certified by the principal financial or accounting
Authorized Representative of Hecla Mining,
42
have been prepared in accordance with GAAP consistently
applied throughout the periods involved (except as
disclosed therein) and do present fairly (subject in the
case of interim financial statements to year-end audit
adjustments) the financial position of the Borrower as at
the dates thereof and the results of its operations for the
periods then ended. The Borrower on the date hereof does
not have any material Contingent Liability or liability for
taxes, long-term leases or unusual forward or unusual
long-term commitments which are not reflected in its
financial statements described in this Section or in the
notes thereto.
6.6 ABSENCE OF DEFAULT
The Borrower is not in default in the payment of or in the
performance of any material obligation applicable to any
Indebtedness (subject to any applicable grace period), or
in default under any Requirement of Law or the terms or
conditions upon which any Approval has been granted.
6.7 LITIGATION, ETC.
Except as disclosed in ITEM 1 ("LITIGATION") of the
Disclosure Schedule, there is no pending or, to the
knowledge of the Borrower, threatened labor controversy,
litigation, arbitration or governmental investigation or
proceeding against the Borrower (including with respect to
the Acquisition Transaction) or to which any of its
business, operations, properties, assets or revenues is
subject as to which there is a reasonable likelihood of an
adverse outcome to the Borrower and which, if adversely
determined, would result in a Materially Adverse Effect
with respect to the Borrower. In the case of any
litigation described in ITEM 1 ("LITIGATION") of the
Disclosure Schedule, there has been no development in such
litigation which would result in a Materially Adverse
Effect with respect to the Borrower.
6.8 MATERIALLY ADVERSE EFFECT
Since the date of the most recent audited financial
statements referred to in SECTION 6.5 there have been no
occurrences which, individually or in the aggregate, would
result in a Materially Adverse Effect.
43
6.9 TAXES AND OTHER PAYMENTS
Except as disclosed in ITEM 2 ("TAXES") of the Disclosure
Schedule, the Borrower has filed all tax returns and
reports required by any Applicable Law to have been filed
by it and has paid all taxes and governmental charges
thereby shown to be owing and all claims for sums due for
labor, material, supplies, personal property and services
of every kind and character provided with respect to, or
used in connection with its business and no claim for the
same exists except as permitted hereunder, except (i) any
such taxes and governmental charges which are being
diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on the books of the
Borrower or (ii) in the case of any other claims, where
failure to make payment therefor would not result in a
Materially Adverse Effect with respect to the Borrower.
6.10 SUBSIDIARIES
All of the Subsidiaries of the Borrower as of the Effective
Date are listed in ITEM 3 ("SUBSIDIARIES") of the
Disclosure Schedule.
6.11 ENVIRONMENTAL WARRANTIES
Except as disclosed in ITEM 4 ("ENVIRONMENTAL MATTERS") of
the Disclosure Schedule or except where failure of any of
the following statements to be made would not reasonably be
expected to have a Materially Adverse Effect:-
(a) The Borrower is, and has at all times been, in compliance
with, or has fully remedied any non-compliance so as to be in
compliance with, all Environmental Laws in all material respects
and all material Approvals relating to Environmental Laws
necessary in connection with the ownership and operation of its
business and that of its subsidiaries are in full force and
effect. There are no acts, omissions, events, states of facts or
circumstances which may reasonably be expected to prevent or
interfere with the Borrower or any of its Subsidiaries being in
substantial compliance with any Environmental Laws, including
obtaining or being in substantial compliance with any material
Approvals relating to Environmental Laws in the future, and no
material investment is necessary to obtain or renew any material
Approval and that of its Subsidiaries relating to Environmental
Laws.
44
(b) There are no present or, to the Borrower's knowledge, past
acts, omissions, events, states of facts or circumstances which
have resulted in (or could result in) any third party (including
any regulatory authority) taking any action or making any
material claim against the Borrower under any Environmental Laws
including remedial action (in particular in relation to
contaminated land) or the revocation, suspension, variation or
non-renewal of any Approval under any Environmental Laws and the
Borrower has no notice of any complaints, demands, civil claims,
enforcement proceedings or of any action required by any
regulatory authority and there are no investigations pending or,
to the Borrower's knowledge, threatened in relation to the
failure of the Borrower to obtain any material Approval (other
than any Non-Material Approval) under, or comply with, any
Environmental Laws.
6.12 ERISA LIABILITIES
All currently existing ERISA Plans are listed in ITEM 5
("ERISA PLANS") the Disclosure Schedule. Except as
disclosed in the Disclosure Schedule, no Termination Event
has occurred with respect to any ERISA Plan and the Related
Persons are in compliance with ERISA in all material
respects. No Related Person is required to contribute to,
or has any other absolute or contingent liability in
respect of, any "multiemployer plan" as defined in Section
4001 of ERISA. Except as set forth in the Disclosure
Schedule:-
(a) no "accumulated funding deficiency" (as defined in
Section 4.12(a) of the Internal Revenue Code) exists
with respect to any ERISA Plan, whether or not waived
by the Secretary of the Treasury or his delegate; and
(b) the current value of each ERISA Plan's benefits does
not exceed the current value of such ERISA Plan's
assets available for the payment of such benefits by
more than U.S.$500,000.
45
7. COVENANTS
7.1 INFORMATIONAL AND FINANCIAL COVENANTS
The Borrower agrees with each Finance Party that, until all
Commitments have terminated and all Obligations have been
paid and performed in full the Borrower will perform its
relevant obligations set forth in this Section.
7.1.1. FINANCIAL INFORMATION, ETC.
The Borrower will deliver to the Administrative Agent
copies of the following reports and information:-
(a) promptly when available, and in any event within 90 days
after the close of each of its Fiscal Years, its consolidated
balance sheet at the close of such Fiscal Year and related
consolidated statements of operations and cashflows, loss and
deficit, and changes in financial position, as may be relevant
(with comparable information at the close of and for the prior
Fiscal Year) and reported on without Impermissible Qualification
by an independent certified public or chartered accountant of
recognized international standing; and
(b) promptly when available, and in any event within 45 days
after the close of the first three Fiscal Quarters of each of its
Fiscal Years, its consolidated balance sheet at the close of such
Fiscal Quarter and related consolidated statements of operations
and cashflows, loss and deficit, and changes in financial
position, as may be relevant, for such Fiscal Quarter and for the
period in such Fiscal Year ending on the last day of such Fiscal
Quarter (with comparable information at the close of and for the
corresponding Fiscal Quarter of the prior Fiscal Year and for the
corresponding portion of such prior Fiscal Year) and certified by
its accounting or financial Authorized Representative.
7.1.2 DEFAULTS
As soon as practicable and in any event within three
Business Days after obtaining knowledge of the occurrence
of any Default relating to it, the Borrower will furnish to
the Administrative Agent a statement of its chief financial
Authorized Representative setting forth details of such
Default and the action which it has taken and proposes to
take with respect thereto.
46
7.1.3 MISCELLANEOUS INFORMATION
The Borrower will deliver to the Administrative Agent
copies of the following reports and information:-
(a) as soon as practicable details of any litigation,
arbitration or administrative proceedings, which if
resolved against the Borrower could result in the
Borrower suffering a loss in excess of U.S.$1,000,000
(or the equivalent thereof in any other currency); and
(b) all other information relating to its financial
condition, operations or assets the Administrative
Agent (or any Lender by notice to the Administrative
Agent, which notice shall be copied to the Borrower)
may from time to time reasonably request.
7.1.4 BOOKS AND RECORDS; ACCESS
The Borrower will keep financial records and statements
reflecting all of its business affairs and transactions in
accordance with GAAP.
7.1.5 ACCURACY OF INFORMATION
All factual information hereafter furnished by or on behalf
of the Borrower in writing to any of the Finance Parties
for the purposes of or in connection with this Agreement or
any transaction contemplated hereby will be true and
accurate in every material respect on the date as of which
such information is dated or certified and such information
shall not be incomplete by omitting to state any material
fact necessary to make such information not misleading.
7.2 AFFIRMATIVE COVENANTS
The Borrower agrees with each Finance Party that, until all
Commitments have terminated and all Obligations have been
paid and performed in full, the Borrower will perform its
relevant obligations set forth in this Section.
7.2.1 COMPLIANCE WITH LAWS, ETC.
The Borrower will comply (a) in all material respects with
all Applicable Laws and (b) the terms of any Loan Document
to which it is a party.
47
7.2.2 MAINTENANCE OF CORPORATE EXISTENCE
The Borrower will do and will cause to be done at all times
all things necessary to maintain and preserve its corporate
existence and to be duly qualified to do business and be in
good standing (where such concept is relevant) as a foreign
corporation in each jurisdiction where the nature of its
business requires it to be so qualified and where there is
a reasonable likelihood of a Material Adverse Effect if the
Borrower is not so qualified.
7.2.3 PAYMENT OF TAXES, ETC.
The Borrower will pay and discharge, as the same may become
due and payable, all taxes, assessments, fees and other
governmental charges or levies against it or on any of its
property, as well as claims of any kind or character
(including claims for sums due for labor, material,
supplies, personal property and services); PROVIDED,
HOWEVER, that the foregoing shall not require the Borrower
to pay or discharge any such tax, assessment, fee, charge
or levy so long as it shall be diligently contesting the
validity or amount thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate
reserves in accordance with GAAP with respect thereto or,
in the case of any such claims due, to claims where failure
to make payment therefor would not result in a Materially
Adverse Effect.
7.3 NEGATIVE COVENANTS
The Borrower agrees with each Finance Party that, until all
Commitments have terminated and all Obligations have been
paid and performed in full, the Borrower will perform its
relevant obligations set forth in this Section.
7.3.1 BUSINESS ACTIVITIES; PLACE OF BUSINESS; ORGANIC
DOCUMENTS; FISCAL YEAR
The Borrower shall not:-
(i) maintain any chief executive office or principal place of
business without first taking (to the satisfaction of the
Collateral Agent) all actions necessary to protect and perfect
the Liens granted pursuant to the relevant Collateral Agreements;
48
(ii) amend its Organic Documents in any material respect or
change its corporate name; or
(iii)change its Fiscal Year.
7.3.2 INDEBTEDNESS
The Borrower will not (and will not permit its Subsidiaries
to) create, incur, assume, or suffer to exist or otherwise
become or be liable in respect of any Indebtedness other
than (without duplication):-
(a) Indebtedness in respect of the Loans and other Obligations;
(b) Indebtedness in respect of taxes, assessments or
governmental charges, and Indebtedness in respect of claims for
labor, materials or supplies incurred in the ordinary course of
business to the extent that payment thereof shall not at the time
be required to be made in accordance with the provisions of
SECTION 7.2.3;
(c) Indebtedness in respect of judgments or awards, enforcement
of which has not been stayed by reason of a pending appeal or
otherwise, for a period of more than 21 days, which do not, in
the aggregate, exceed U.S.$50,000 (or the equivalent thereof in
any other currency) or the payment of which is not covered in
full by insurance (subject to any customary deductibles)
maintained with responsible insurance companies;
(d) any other Indebtedness disclosed in ITEM 6 ("INDEBTEDNESS")
of the Disclosure Schedule;
(e) Indebtedness in respect of the Restated Credit Agreement
and all Indebtedness permitted pursuant to Section 7.1(a) of the
Restated Credit Agreement; provided, however, the Borrower may
not increase the Maximum Credit Amount (as defined in the
Restated Credit Agreement) in excess of U.S.$82,500,000 without
the prior written consent of the Administrative Agent such
consent not to be unreasonably withheld or delayed. The Borrower
shall only be required to notify the Administrative Agent of any
increase in the Maximum Credit Amount which is not in excess of
U.S.$82,500,000;
49
(f) Indebtedness existing at the time of the purchase of any
asset or property in the ordinary course of business and/or
incurred only in connection with the acquisition, development and
improvement of such asset or property and without any recourse to
(or any other form of financial support) from the Borrower; and
(g) Indebtedness in respect of and otherwise permitted by the
Credit Agreement.
7.3.3 LIENS
The Borrower will not (and will not permit its Subsidiaries
to) create, incur, assume or suffer to exist any Lien upon
any of its properties, revenues or assets, whether now
owned or hereafter acquired, except:
(a) Liens in favor of any of the Finance Parties granted
pursuant to any Loan Document;
(b) Liens arising from mandatory provisions of Applicable
Law;
(c) Liens specifically permitted by the Collateral
Agreements and the Account Agreement;
(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or
thereafter payable without penalty or being contested
in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have
been set aside on its books or in the case of any other
claims, where failure to make payment therefor would
not be likely to result in a Materially Adverse Effect
with respect to the Borrower;
(e) Liens of carriers, warehousemen, mechanics,
materialmen, suppliers and landlords incurred in the
ordinary course of business for sums not overdue or
being contested in good faith by appropriate
proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its
books;
50
(f) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders,
statutory obligations, leases and contracts (other than
for borrowed money) entered into in the ordinary course
of business or to secure obligations on surety or
appeal bonds;
(g) judgment Liens (relating to judgments or awards which
do not in the aggregate, exceed U.S.$1,000,000 (or the
equivalent thereof in any other currency)) in existence
less than 21 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;
(h) any other Lien disclosed in ITEM 7 ("LIENS") of the
Disclosure Schedule;
(i) Liens arising under and permitted by the Credit Agreement;
(j) Liens under and permitted by the Restated Credit Agreement
and permitted by Section 7.1(b) of the Restated Credit Agreement;
and
(k) Liens securing Indebtedness described in SECTION 7.3.2 (f).
7.3.4 ERISA PLANS
No related Person will incur any obligation to contribute
to any "multiemployer plan" as defined in Section 4001 of
ERISA.
7.3.5NOTIFICATIONS UNDER RESTATED CREDIT AGREEMENT
The Borrower will not, without prior notice to the
Administrative Agent:
(a) amend any of Sections 7.1, 7.11, 7.12 or 7.13 of
the Restated Credit Agreement; or
51
(b) agree to or take any action which would postpone
the Maturity Date (as defined in the Restated Credit
Agreement) as in effect on the date hereof.
8. EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT
The term "EVENT OF DEFAULT" shall mean any of the events
set forth in this Section.
8.1.1NON-PAYMENT OF OBLIGATIONS
The Borrower:-
(a) shall default in the payment or prepayment when due of
any Principal Amount of; or
(b) shall default in the payment when due of any other
Obligation (and such default shall continue unremedied
for a period of two days).
8.1.2 NON-PERFORMANCE OF CERTAIN COVENANTS
The Borrower shall default in the due performance and
observance of any of its obligations under SECTION 7.2.3 or
7.3 (other than, to the extent such default shall have
arisen as a result of any action or event beyond the control
of the Borrower, SECTION 7.3.1 or 7.3.2).
8.1.3 NON-PERFORMANCE OF OTHER OBLIGATIONS
The Borrower shall default in the due performance or
observance of any term, condition, covenant or agreement,
whether contained herein or in any other Loan Document
executed by it (other than a default arising pursuant to
SECTION 8.1.1 or 8.1.2) and, if capable of cure or remedy,
such default shall continue unremedied for a period of 10
Business Days (or such longer period as the Administrative
Agent may agree, if the Administrative Agent determines
that such default is reasonably capable of being cured
within such longer period) after notice thereof shall have
been given to the Borrower by the Administrative Agent.
52
8.1.4 BREACH OF REPRESENTATION OR WARRANTY
Any representation or warranty of the Borrower hereunder or
in any other Loan Document executed by it or in any other
writing furnished by or on behalf of the Borrower to any
Finance Party for the purposes of or in connection with
this Agreement or any such Loan Document is or shall be
incorrect when made in any material respect.
8.1.5 DEFAULT ON OTHER INDEBTEDNESS
A default shall occur in the payment when due (subject to
any applicable grace period), whether by acceleration or
otherwise, by the Borrower under any Indebtedness
(excluding Indebtedness described in SECTION 8.1.1) of the
Borrower having a principal amount, individually or in the
aggregate, in excess of U.S.$1,000,000 (or the equivalent
of any of the foregoing in any other currency), or the
maturity of any such Indebtedness shall be accelerated.
8.1.6 BANKRUPTCY, INSOLVENCY, ETC.
The Borrower shall:-
(a) become insolvent or generally fail to pay, or admit in
writing its inability 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 such
Person, or any property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for such
Person or 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
hereby expressly authorizes the Administrative Agent to appear in
any court conducting any relevant proceeding during such 60-day
period to preserve, protect and defend the rights of the Finance
Parties under the Loan Documents;
53
(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 of
any Person and, if such case or proceeding is not commenced by
such Person, such case or proceeding shall be consented to or
acquiesced in by such Person or shall result in the entry of an
order for relief or shall remain for 60 days undismissed,
provided that the Borrower hereby expressly authorizes the
Administrative Agent to appear in any court conducting any
relevant proceeding during such 60-day period to preserve,
protect and defend the rights of the Finance Parties under the
Loan Documents;
(e) suffer any comparable event to any of the foregoing in any
jurisdiction; or
(f) take any corporate action authorizing, or in furtherance
of, any of the foregoing.
8.1.7IMPAIRMENT OF LOAN DOCUMENTS
This Agreement or any other Loan Document shall terminate
or cease in whole or part to be the legal, valid, binding
and enforceable obligation of the Borrower; the Borrower
shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability;
or any Lien securing any Obligation shall, in whole or in
part, cease to be a perfected Lien which, except as
permitted by SECTION 7.3.2, ranks first in priority.
8.1.8 JUDGMENTS
Any judgment or order for the payment of money in excess of
U.S.$1,000,000 (or the equivalent thereof in any other
currency) shall be rendered against the Borrower and
either:-
(a) enforcement proceedings shall have been commenced by
any creditor upon such judgment or order; or
(b) there shall be any period of 21 consecutive days during
which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not
be in effect, unless the payment of such judgment is
covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance
companies.
54
8.1.9 CHANGE IN CONTROL
Any Change in Control shall occur.
8.1.10 MATERIALLY ADVERSE EFFECT
Any event (other than as enumerated in any other provision
of this Article) shall occur or condition shall exist which
constitutes a Materially Adverse Effect.
8.2 ACTION IF BANKRUPTCY
If an Insolvency Event shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate,
without notice, and the outstanding principal amount of all
outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable,
without notice or demand.
8.3 ACTION IF OTHER EVENT OF DEFAULT
If any Event of Default (other than an Insolvency Event)
shall occur for any reason, whether voluntary or
involuntary, and be continuing the Administrative Agent may
(acting with the consent of the Required Lenders), and upon
the direction of the Required Lenders, shall, upon notice
or demand to the Borrower, declare all or any portion of
the outstanding principal amount of the Loans to be due and
payable and any or all other 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 any and all other such 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, such
Commitments shall terminate.
9. THE AGENTS
9.1 ACTIONS
Each Lender authorizes the Collateral Agent and the
Administrative Agent to act in the relevant capacity on
behalf of such Lender under this Agreement and each other
Loan Document and, in the absence of other written
55
instructions from the Required Lenders received from time
to time by such Agent (with respect to which such Agent
agrees that it will, subject to the last paragraph of this
Section, comply in good faith except as otherwise advised
by counsel to the effect that any such compliance might
subject such Agent to any liability of whatsoever nature),
to exercise such powers hereunder and thereunder as are
specifically delegated to or required of such Agent by the
terms hereof and thereof, together with such powers as may
be reasonably incidental thereto.
Without limiting the generality of the foregoing, each
Lender hereby authorizes the Collateral Agent to act on
behalf of such Lender to execute and accept on its behalf
the Collateral Agreements and to take all such actions
thereunder necessary or appropriate with respect to
management or enforcement of the collateral security
provided by such Collateral Agreements and enforcement of
the rights of the Finance Parties thereunder.
Each Lender agrees (which agreement shall survive any
termination of this Agreement) to indemnify each Agent, PRO
RATA, according to such Lender's Percentage, from and
against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or
asserted against such Agent in any way relating to or
arising out of this Agreement or any other Loan Document,
including the reimbursement of each Agent for all
out-of-pocket expenses (including attorneys' fees and
expenses) incurred by such Agent hereunder or in connection
herewith or with any other Loan Document or in enforcing
the Obligations under this Agreement or any other Loan
Document (subject as aforesaid) in all cases as to which
such are not reimbursed by the Borrower; PROVIDED, HOWEVER,
that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or
disbursements determined by a court of competent
jurisdiction in a final proceeding to have resulted from
either Agent's gross negligence or wilful misconduct.
Neither Agent shall be required to take any action
hereunder or under any other Loan Document, or to prosecute
or defend any suit in respect of this Agreement or any
other Loan Document, unless it is indemnified to its
satisfaction by the relevant Lenders against loss, costs,
liability and expense. If any indemnity in favor of either
Agent shall become impaired, it may call for additional
indemnity and cease to do the acts indemnified against
until such additional indemnity is given.
56
9.2 FUNDING RELIANCE, ETC.
Unless the Administrative Agent shall have been notified by
telephone, confirmed in writing, by any Lender by 5:00 p.m.
on the day prior to the proposed Borrowing Date that such
Lender will not make available the amount which would
constitute its Percentage of the Loans to be made by all
the Lenders on such date, 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 the relevant Loans.
9.3 EXCULPATION
Neither Agent nor any of its directors, officers, employees
or agents shall be liable to any Finance Party for any
action taken or omitted to be taken by it under this
Agreement or any other Loan Document, or in connection
herewith or therewith, except for its own wilful misconduct
or gross negligence, or responsible for any recitals or
warranties herein or therein, or for the effectiveness,
enforceability, validity or due execution of this Agreement
or any other Loan Document, or to make any inquiry
respecting the performance by the Borrower of its
obligations hereunder or thereunder, or the validity,
genuineness, creation, perfection or priority of the Liens
created by any Loan Document, or the validity, genuineness,
enforceability, existence, value or sufficiency of any
collateral security. Each Agent shall be entitled to rely
upon advice of counsel concerning legal matters and upon
any notice, consent, certificate, statement, or writing
which it believes to be genuine and to have been presented
by a proper Person.
57
9.4 SUCCESSORS
Either Agent may resign as such at any time upon at least
30 days' prior notice to the Borrower and all the Lenders.
If either Agent at any time shall resign, the Required
Lenders may appoint another Lender as the relevant
successor Agent which shall thereupon become such Agent
hereunder. If no such successor Agent shall have been so
appointed as aforesaid, and shall have accepted such
appointment, within 30 days after such retiring Agent's
giving notice of resignation, then the retiring Agent may,
on behalf of the Required Lenders, appoint a relevant
successor Agent, which shall be one of the Lenders or a
commercial banking institution having a combined capital
and surplus of at least U.S.$500,000,000 (or the equivalent
thereof in another currency). Upon the acceptance of any
appointment as an Agent hereunder by any successor Agent,
such successor Agent shall be entitled to receive from the
relevant 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 relevant
retiring Agent and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and
each other Loan Document.
9.5 LOANS BY STANDARD BANK
Standard Bank shall have the same rights and powers with
respect to the Loans made by it or any of its Affiliates as
any Lender and may exercise the same as if it were not the
Administrative Agent or the Collateral Agent. Each of
Standard Bank and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of business
with the Borrower or any Affiliate of any thereof as if
Standard Bank were not an Agent.
9.6 STANDARD BANK AS ADMINISTRATIVE AGENT
In acting as Administrative Agent for the Lenders, Standard
Bank's banking division will be treated as a separate
entity from any other of its divisions (or similar unit of
the Administrative Agent in any subsequent re-organization)
or subsidiaries (the "OTHER DIVISIONS") and, in the event
that the Administrative Agent should act for the Borrower
or Affiliate thereof in a corporate finance or other
58
advisory capacity ("ADVISORY CAPACITY"), any information
given by such person to one of the Other Divisions is to be
treated as confidential and will not be available to any of
the Finance Parties without the consent of such persons
provided that:-
(a) the consent of the Borrower or Affiliate will not be
required in relation to any information which the
Administrative Agent in its discretion determines
relates to a Default or in respect of which the Lenders
have given a confidentiality undertaking in a form
satisfactory to the Administrative Agent and the
Borrower or Affiliate acting reasonably; and
(b) if representatives or employees of the Administrative
Agent receive information in relation to the Borrower
or Affiliate or while acting in an Advisory Capacity
they will not be obliged to disclose such information
to representatives or employees of the Administrative
Agent in their capacity as agent bank hereunder or to
any of the Lenders if to do so would breach any rule or
regulation or fiduciary duty imposed upon such Persons.
9.7 CREDIT DECISIONS
Each Lender acknowledges that, it has, independently of the
Agents and each other Lender, and based on the financial
and other information referred to in SECTION 6.5 and such
other documents, information and investigations as it has
deemed appropriate, made its own credit decision to
maintain its Commitments and participate in the Facility.
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 this Agreement or any other Loan Document.
9.8 COPIES, ETC
Each Agent shall give prompt notice to each Lender of each
notice or request required or permitted to be given to such
Agent by the Borrower pursuant to the terms of this
Agreement or any of the other Loan Documents. Each Agent
will distribute to the relevant Lenders each Instrument
59
received for its account (but excluding, for the avoidance
of doubt, any fee letter referred to in SECTION 3.3.1) and
copies of all other communications received by such Agent
from the Borrower for distribution to the Lenders by such
Agent in accordance with the terms of this Agreement or any
other of the Loan Documents.
10. MISCELLANEOUS
10.1 WAIVERS, AMENDMENTS, ETC
The provisions of this Agreement and of each other Loan
Document (except to the extent expressly otherwise set
forth in such Loan Document) may from time to time be
amended, modified or waived, if such amendment,
modification or waiver is in writing and consented to by
the Borrower (or any other relevant Obligor party to such
Loan Document), the Required Lenders (or, in the case of
the MMS Guaranty, the Account Agreement and the Collateral
Agreements, the Required Collected Lenders), the Collateral
Agent (but only if such provision involves the rights or
obligations of the Collateral Agent) and the Administrative
Agent (but only if the relevant provision involves the
rights or obligations of the Administrative Agent);
PROVIDED, HOWEVER, that no such amendment, modification or
waiver which would:-
(a) modify any requirement hereunder that any particular action
be taken or a determination be made by, or with the consent of or
in consultation with all the Lenders or the Collateral Lenders by
the Required Lenders or by the Required Collected Lenders shall
be effective unless consented to by each Lender;
(b) modify this Section, change the definition of "REQUIRED
LENDERS" or "REQUIRED COLLECTED LENDERS", increase the Aggregate
Commitment Amount, change the definition of "PERCENTAGE" with
respect to any Lender, or otherwise subject any Lender to any
additional obligation hereunder, shall be effective without the
consent of all the Lenders;
(c) extend the due date for, or reduce the amount of, any
payment or prepayment of principal of or interest on any Loan or
any commitment commission or any other amount payable hereunder
or under any other relevant Loan Document shall be made without
the consent of all the Lenders;
60
(d) reduce any fee described in SECTION 3.3.1 or affect the
interests, rights or obligations of either Agent QUA Agent shall
be made without the consent of such Agent; or
(e) except as specifically provided for in this Agreement or
any relevant Collateral Agreement, authorize or effect the
release of any material collateral which is the subject of any
Lien granted or purported to be granted pursuant to any such
Collateral Agreement shall be made without the consent of all the
Lenders or the Collected Lenders.
No failure or delay on the part of any Finance Parties in
exercising any power or right under this Agreement or any
other Loan Document to which it is a party shall operate as
a waiver thereof, nor shall any single or partial exercise
of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or
right. No notice to or demand on the Borrower in any case
shall entitle it to any notice or demand in similar or
other circumstances. No waiver or approval by any Finance
Party under this Agreement or any other Loan Document to
which it is a copy 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.
10.2 NOTICES
All notices and other communications provided to any party
hereto under this Agreement or any other Loan Document
shall be in writing or by telex or by facsimile and
addressed or delivered to it at the relevant address for
such party set forth below its signature hereto and
designated as its "ADDRESS FOR NOTICES" or at such other
address as may be designated by such party in the relevant
Loan Document or a notice to the other parties. Any
notice, if sent by hand delivery or courier delivery, shall
be deemed received on the Business Day when delivered and,
if transmitted by telex or facsimile, shall be deemed given
on the Business Day when transmitted (answerback confirmed
in the case of telexes and transmission confirmed by the
sending facsimile machine in the case of facsimiles).
61
10.3 COSTS AND EXPENSES
(a) Without prejudice to similar obligations of the Borrower
under any other Loan Document, the Borrower agrees to pay on
demand all, reasonable out-of-pocket expenses (inclusive of
United Kingdom Value Added Tax or any other similar tax) of each
Agent for the negotiation, preparation, execution and delivery of
this Agreement and each other Loan Document, including schedules
and exhibits, and any amendments, waivers, consents, supplements
or other modifications to this Agreement or any other Loan
Document as may from time to time hereafter be required
(including the reasonable fees and expenses of counsel and
designated local counsel to either Agent from time to time
incurred in connection therewith), whether or not the
transactions contemplated hereby are consummated, and all
expenses (inclusive as aforesaid) of the Agents (including
reasonable fees and expenses of counsel and designated local
counsel to either Agent and any stamp or other taxes) incurred in
connection with the preparation and review of the form of any
Instrument relevant to this Agreement or any other Loan Document,
the consideration of legal questions relevant hereto and thereto
and the filing, recording, refiling or re-recording of any Loan
Document and all amendments or supplements to any thereof and any
and all other documents or Instruments of further assurance
required to be filed or recorded or refiled or re-recorded by the
terms hereof or of any other Loan Document.
(b) The Borrower agrees to reimburse each Finance Party upon
demand for all reasonable out-of-pocket expenses (including
attorneys' fees and expenses and inclusive of United Kingdom
Value Added Tax or any other similar tax) incurred by such
Finance Party in connection with (i) the negotiation of any
restructuring or "work-out", whether or not consummated, of any
Obligations and (ii) the enforcement of any such Obligations.
10.4 INDEMNIFICATION
In consideration of the execution and delivery of this
Agreement by each Finance Party and the extension of the
Commitments, the Borrower (without prejudice to any similar
obligations of any of the Obligors pursuant to any
applicable Loan Document) hereby indemnifies, exonerates
62
and holds each Finance Party and each of such Finance
Party's Affiliates, officers, directors, shareholders,
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 in connection
therewith, in each case arising from the claims of third
parties including reasonable attorneys' fees and
disbursements (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 Loan;
(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties,
except for any such Indemnified Liabilities arising for the
account of a particular Indemnified Party by reason of the
relevant Indemnified Party's gross negligence or wilful
misconduct, and if and to the extent that the foregoing
undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified
Liabilities for which each is liable hereunder and which is
permissible under Applicable Law.
10.5 SURVIVAL
The obligations of the Borrower under SECTIONS 3.3, 4.2,
4.3, 4.4, 4.6, 10.3 and 10.4 and the obligations of the
relevant Lenders under SECTION 9.1, shall, in each case,
survive any termination of this Agreement. The
representations and warranties made by the Obligors in this
Agreement and in each other Loan Document to which it is a
party shall survive the execution and delivery of this
Agreement and each such other Loan Document.
10.6 SEVERABILITY
Any provision of this Agreement or any other Loan Document
which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or
such other Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
63
10.7 HEADINGS
The various headings of this Agreement and of each other
Loan Document are inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement
or such other Loan Document or any provisions hereof or
thereof.
10.8 COUNTERPARTS; EFFECTIVENESS
This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be executed by
the Borrower, the Collateral Agent and the Administrative
Agent and be deemed to be an original and all of which
shall constitute together but one and the same agreement.
This Agreement shall become effective on the date (the
"EFFECTIVE DATE") when counterparts hereof executed on
behalf of the Borrower, the Collateral Agent and each
Lender (or notice thereof satisfactory to the
Administrative Agent) shall have been received by the
Administrative Agent.
10.9 GOVERNING LAW; ENTIRE AGREEMENT
(a) THIS AGREEMENT AND, UNLESS OTHERWISE SPECIFIED THEREIN,
EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
(b) This Agreement and the other Loan Documents constitute
the entire understanding among the parties hereto with
respect to the subject matter hereof and thereof and
supersede any prior agreements, written or oral, or
document with respect thereto.
10.10SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that:
(a) the Borrower may not assign or transfer its rights or
obligations without the prior written consent of the
Administrative Agent, the Collateral Agent and all the
Lenders; and
(b) the rights of sale, assignment, and transfer of the
Lenders are subject to SECTION 10.11.
64
10.11SALE AND TRANSFER OF LOANS; PARTICIPATIONS IN LOANS
Each Lender may assign, or sell participations in, its
Loans and Commitments in accordance with this Section.
10.11.1 ASSIGNMENTS
Any Lender, with notice to the Borrower and the
Administrative Agent, may assign and delegate to any of its
Affiliates or to any other Lender or to one or more
commercial banks, as set forth in this Section. Each
Person described as being the Person from or to whom such
assignment and delegation is to be made, being hereinafter
referred to as an "ASSIGNOR LENDER" or "ASSIGNEE LENDER",
respectively.
Each Assignor Lender may assign and delegate all or any
fraction of such Assignor Lender's total Loans and
Commitments. Such assignment and delegation shall be of a
constant, and not a varying, percentage of all the Assignor
Lender's Loans and Commitments in a minimum aggregate
amount of U.S.$1,000,000; PROVIDED, HOWEVER, that any
transfer by any Lender of any Commitment shall require the
consent (not to be unreasonably withheld or delayed) of the
Administrative Agent; and PROVIDED, FURTHER, HOWEVER, that,
the Borrower and each Agent shall be entitled to continue
to deal solely and directly with the Assignor Lender in
connection with the interests so assigned and delegated to
an Assignee Lender until:
(a) written notice of such assignment and delegation,
together with payment instructions, addresses and
related information with respect to such Assignee
Lender, shall have been given to the Borrower and the
Administrative Agent by such Assignor Lender and such
Assignee Lender;
(b) such Assignee Lender shall have executed and delivered
to the Borrower and the Administrative Agent a Lender
Assignment Agreement, which shall have been accepted by
the Administrative Agent;
(c) the Administrative Agent shall have been provided with
such evidence as the Administrative Agent may
reasonably request in connection with any Approval
required or advisable in connection with such
assignment and delegation; and
(d) the processing fees (if any) described below shall have
been paid.
65
From and after the date that the Administrative Agent
accepts such Lender Assignment Agreement (which shall be
promptly after the delivery of the documentation referred
to above and after the Administrative Agent shall be
satisfied that the relevant assignment is in compliance
with the requirements of this Agreement and each other Loan
Document under which the assignment is being effected), (x)
the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the
extent that rights and obligations hereunder have been
assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall
have the rights and obligations of a Lender hereunder and
under the other Loan Documents, (y) the Assignor Lender, to
the extent that rights and obligations hereunder have been
assigned and delegated by it in connection with such Lender
Assignment Agreement, shall be released from its
obligations hereunder and under the other Loan Documents,
and (z) the Collateral Agreements which are expressed to be
governed by the laws of Venezuela shall be endorsed and
amended, and all necessary steps taken in relation thereto,
to reflect such assignment and delegation.
Accrued interest on that part of the Loans assigned to the
Assignee Lender, and accrued fees in respect thereof, shall
be paid as provided in the Lender Assignment Agreement.
Except in the case where any such Assignee Lender is an
Affiliate of such Assignor Lender, such Assignor Lender or
such Assignee Lender shall also pay a processing fee to the
Administrative Agent upon delivery of any Lender Assignment
Agreement in the amount of U.S.$1,500. Any attempted
assignment and delegation not made in accordance with this
Section shall be null and void.
In no event shall the Borrower be required to pay any
amount under SECTIONS 4.2, 4.3, 4.4, 4.5 and 4.6 existing
at the time of any proposed assignment to any Assignee
Lender hereunder which would otherwise be payable if such
assignment took place.
10.11.2 PARTICIPATIONS
Any Lender may at any time sell to one or more commercial
banks (excluding the Borrower or any Affiliate of the
Borrower) (each of such commercial banks and other Persons
being herein called a "PARTICIPANT") participating
interests in any of the Loans, Commitments or other
interests of such Lender; PROVIDED, HOWEVER, that:
66
(a) no participation contemplated in this Section shall
relieve such Lender from its Commitment or its other
obligations hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitment and such other
obligations;
(c) the Borrower and each Agent shall continue to deal
solely and directly with such Lender in connection with
such Lender's rights and obligations under this
Agreement and each of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate
of such Lender, or is itself a Lender, shall be
entitled to require such Lender to take or refrain from
taking any action hereunder or under any other Loan
Document, except that such Lender may agree with any
Participant that such Lender will not, without such
Participant's consent, take any actions of the type
described in SECTION 10.1(b) or (c); and
(e) the Borrower shall not be required to pay any amount
under SECTIONS 4.2, 4.3, 4.4, 4.5 and 4.6 that is
greater than the amount which it would have been
required to pay had no participating interest been
sold.
The Borrower acknowledges and agrees that each Participant,
for the purposes of SECTIONS 4.2, 4.3, 4.4, 4.5, 4.6, 4.7,
4.9, 4.10, 4.11, 10.3 and 10.4, shall be considered a
Lender.
10.12OTHER TRANSACTIONS
Without prejudice to the provisions of SECTION 9.5, nothing
contained herein shall preclude any Finance Party from
engaging in any transaction, in addition to those
contemplated by this Agreement or any other Loan Document,
with the Borrower or any of their Affiliates in which the
Borrower or such Affiliate is not restricted hereby from
engaging with any other Person.
67
10.13FORUM SELECTION AND CONSENT TO JURISDICTION; WAIVER OF
IMMUNITY
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR
IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
AGENTS, THE LENDERS OR THE BORROWER 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 AND IN ADDITION IN THE COURTS OF ANY JURISDICTION
WHERE ANY COLLATERAL OR OTHER PROPERTY OF THE BORROWER MAY
BE FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE
BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE BORROWER HEREBY IRREVOCABLY
APPOINTS THE PROCESS AGENT AS ITS AGENT FOR SERVICE OF
PROCESS IN NEW YORK. SERVICE OF PROCESS MAY BE MADE UPON
THE BORROWER BY MAILING OR DELIVERING A COPY OF SUCH
PROCESS TO IT IN CARE OF THE PROCESS AGENT AT THE PROCESS
AGENT'S ADDRESS AND THE BORROWER HEREBY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS IN ANY SUIT, ACTION OR
PROCEEDING IN NEW YORK ARISING OUT OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT BY THE MAILING OF COPIES OF SUCH
PROCESS TO IT AT ITS ADDRESS FOR NOTICES SET FORTH BELOW
ITS SIGNATURE HERETO. 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 SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
68
10.14WAIVER OF JURY TRIAL
THE AGENTS, THE LENDERS AND THE BORROWER HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE AGENTS, THE LENDERS OR THE
OBLIGORS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENTS AND THE LENDERS ENTERING INTO THIS AGREEMENT AND
EACH OTHER LOAN DOCUMENT.
69
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
as the Borrower
By: XXXX X. XXXXXXXX
Title: VICE PRESIDENT & CHIEF
FINANCIAL OFFICER
Address for Notices:
0000 Xxxxxxx Xxxxx
Xxxxx x'Xxxxx
Xxxxx 00000-0000
U.S.
Facsimile No.: 0-000-000-0000
Attention: Chief Operating
Officer
Commitment Amount : U.S.$3,000,000
STANDARD BANK LONDON LIMITED
as a Lender
By: XXXXXX X. XXXXXX
Title: ASSISTANT GENERAL MANAGER
By: X.X. XXXXXXX
Title: HEAD OF MINING FINANCE
Lending Office:
Address for Notices:
Standard Bank London Limited
Xxxxxx Xxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: 00-000-000-0000
Attention: Xxxxxx Xxxxxx
70
STANDARD BANK LONDON LIMITED
as Administrative Agent
By: XXXXXX X. XXXXXX
Title: ASSISTANT GENERAL MANAGER
By: X.X. XXXXXXX
Title: HEAD OF MINING FINANCE
Address for Notices:
Standard Bank London Limited
Xxxxxx Xxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: 00-000-000-0000
Attention: Xxxxxx Xxxxxx
STANDARD BANK LONDON LIMITED
as Collateral Agent
By: XXXXXX X. XXXXXX
Title: ASSISTANT GENERAL MANAGER
By: X.X. XXXXXXX
Title: HEAD OF MINING FINANCE
Address for Notices:
Standard Bank London Limited
Xxxxxx Xxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Facsimile No.: 00-000-000-0000
Attention: Xxxxxx Xxxxxx
71
SCHEDULE I
DISCLOSURE SCHEDULE
ITEM 1 - LITIGATION
As described in Hecla Mining Company's annual and quarterly
reports on Form 10-K and Form 10-Q for the 1998 Fiscal Year and
the Fiscal Quarter ending March 31, 1999, respectively.
ITEM 2 - TAXES
As described in Hecla Mining Company's annual and quarterly
reports on Form 10-K and Form 10-Q for the 1998 Fiscal Year and
the Fiscal Quarter ending March 31, 1999, respectively.
ITEM 3 - SUBSIDIARIES
As described in Hecla Mining Company's annual and quarterly
reports on Form 10-K and Form 10-Q for the 1998 Fiscal Year and
the Fiscal Quarter ending March 31, 1999, respectively.
ITEM 4 - ENVIRONMENTAL MATTERS
As described in Hecla Mining Company's annual and quarterly
reports on Form 10-K and Form 10-Q for the 1998 Fiscal Year and
the Fiscal Quarter ending March 31, 1999, respectively.
ITEM 5 - ERISA PLANS
As described in Hecla Mining Company's annual and quarterly
reports on Form 10-K and Form 10-Q for the 1998 Fiscal Year and
the Fiscal Quarter ending March 31, 1999, respectively.
ITEM 6 - INDEBTEDNESS
N/A
ITEM 7 - LIENS
N/A
72
SCHEDULE II
ADDITIONAL COSTS RATE
1. The Additional Costs Rate applicable to a funding period
shall be the rate determined by each relevant Lender (and
communicated to the Administrative Agent) to be equal to the
arithmetic mean (rounded upwards, if necessary, to four decimal
places) of the rates resulting from the application of the
following formula:
A x 0.01%
--------
300
where, in each case, on the day of application of that
formula by each relevant Lender:-
A is the rate of charge payable by each relevant Lender
to the Financial Services Authority under paragraph
2.02 or 2.03 (as the case may be) of the Fees
Regulations (but where, for this purpose, the figures
at paragraph 2.02(b) and 2.03(b) of the Fees
Regulations shall be deemed to be zero) and expressed
in pounds per 1 million (British pounds) of the Fee
Base of such Lender.
2. For the purposes of this Schedule:-
"ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
meanings given to those terms under the Bank of Xxxxxxx Xxx
0000 or by the Bank of England (as may be appropriate), on
the day of the application of the formula;
"FEE BASE" has the meaning given to that term for the
purposes of, and shall be calculated in accordance with, the
Fees Regulations;
"FEES REGULATIONS" means, as appropriate, either:-
(a) the Banking Supervision (Fees) Regulations 1998; or
(b) such regulations as from time to time may be in force
relating to the payment of fees for banking supervision
in respect of periods subsequent to 28 February 1999.
73
3. The Additional Costs Rate applicable to a Loan for a
funding period shall be calculated at or about 11.00 am on the
first day of that funding period and shall be payable on the date
on which interest is payable in respect of that Loan under this
Agreement.
4. Each relevant Lender shall determine the Additional Costs
Rate by application of the formula set out in paragraph 1 above
on the first day of each funding period.
5. If there is any change in applicable law or regulation, or
the interpretation thereof, by any governmental authority charged
with the administration thereof, or in the nature of any request
or requirement by the Financial Services Authority, the Bank of
England, or other applicable banking authority, the effect of
which is to impose, modify or deem applicable any fees or any
reserve, special deposit, liquidity or similar requirements
against assets held by, or deposits in, or for the account of, or
advances by such Lender, or in any other respect whatsoever, the
relevant Lender shall be entitled to vary the formula set out in
paragraph 1 above so as (but only so as) to restore such Lender's
position - in terms of overall return to the Lender - to that
which prevailed before that change became necessary. The Lender
shall notify the Borrower and the Administrative Agent of any
such necessary variation to the formula and the formula, as so
varied, shall be the formula for the purposes of this Agreement
with effect from the date of notification.
