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Exhibit 10.5
CONFORMED COPY
DATED AS OF June 25, 1999
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NATIONSBANK, N.A.
as Senior Creditor
STANDARD BANK LONDON LIMITED
as Subordinated Creditor
and
HECLA MINING COMPANY
as the Company
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NATIONSBANK SUBORDINATION
AGREEMENT
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ASHURST XXXXXX XXXXX
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Tel: 0000 000 0000
Fax: 0000 000 0000
TCW/627S00004/1259027.2
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NATIONSBANK SUBORDINATION AGREEMENT
THIS NATIONSBANK SUBORDINATION AGREEMENT is dated as of June 25,
1999 (this "Agreement")
AMONG:
(1) NATIONSBANK, N.A. ("NationsBank"), a United States national
banking association, individually and as agent under the
Senior Credit Agreement as such and other terms used as
defined and interpreted in accordance with ARTICLE 1 (in
such capacity, the "Senior Creditor");
(2) STANDARD BANK LONDON LIMITED ("Standard Bank"), a bank
organized under the laws of England and Wales, individually
and as agent under the Subordinated Credit Agreement (in
such capacity, the "Subordinated Creditor"); and
(3) HECLA MINING COMPANY, a Delaware corporation ("Hecla Mining"
or the "Company").
WITNESSETH:-
WHEREAS, two subsidiaries of Hecla Mining, Monarch Resources
Investments Limited ("MRIL") and Monarch Minera Suramericana,
C.A. ("MMS") have entered into the credit agreement, dated as of
June 25, 1999 (the "Project Credit Agreement") among (1) MRIL, as
borrower, (2) MMS, as an additional obligor, (3) the bank parties
thereto, (4) Standard Bank as Administrative Agent and (5)
Standard Bank as Collateral Agent, in order to fund the
acquisition and upgrade of the La Camorra underground gold mine
(the "Project") in Venezuela;
WHEREAS, Hecla Mining has entered into the credit agreement dated
as of June 25, 1999 (the "Subordinated Credit Agreement") among
(1) Hecla Mining, as borrower, (2) the bank parties thereto, (3)
Standard Bank as Administrative Agent and (4) Standard Bank as
Collateral Agent;
WHEREAS, Hecla Mining is party to the Restated Credit Agreement
dated as of May 7, 1999 (the "Senior Credit Agreement"), among
(1) Hecla Mining, as borrower, (2) certain subsidiaries of Hecla
Mining, (3) the banks party thereto, and (4) NationsBank, as
Agent;
WHEREAS, the execution and delivery by (a) MRIL and MMS of the
Project Credit Agreement will require the consent of the Senior
Creditor (acting on behalf of the Majority Senior Lenders) and
(b) Hecla Mining of the Subordinated Credit Agreement will
require the consent of the Senior Creditor (acting on behalf of
the Majority Senior Lenders) and also that the Subordinated
Creditor subordinates its rights under the Subordinated Credit
Agreement to the rights of the Senior Creditor under the Senior
Credit Agreement on terms satisfactory to the Senior Creditor;
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WHEREAS, the parties hereto have agreed to enter into this
Agreement in order to set out the arrangements described in the
previous recital; and
WHEREAS, this Agreement is the "NationsBank Subordination
Agreement" referred to in the Project Credit Agreement and the
Subordinated Credit Agreement and it is a condition precedent to
the effectiveness of both documents and to the making of the
loans thereunder that each of the parties hereto execute and
deliver this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged by the Senior
Creditor, each of the Subordinated Creditor and the Company
undertakes and agrees, for the benefit of the Senior Creditor, as
follows:
1 . DEFINITIONS; INTERPRETATION
1.1 DEFINITIONS. In this Agreement (including its preamble and
recitals), the following capitalized terms shall have the
following meanings:
"Agreement" is defined in the PREAMBLE.
"Acquisition Agreement" is defined in the Subordinated
Credit Agreement.
"Company" is defined in the PREAMBLE.
"Default" means, as the context may require, a Default under
(and as defined in) the Senior Credit Agreement and/or the
Subordinated Credit Agreement.
"Default Notice" is defined in SECTION 4.1.
"Hecla Mining" is defined in the PREAMBLE.
"Insolvency Proceeding" means, with respect to any Person,
any voluntary or involuntary liquidation, dissolution, sale
of all or substantially all of such Person's assets,
marshaling of assets or liabilities, receivership,
conservatorship, assignment for the benefit of creditors,
insolvency, bankruptcy, reorganization, arrangement or
composition of such person or entity (whether or not
pursuant to bankruptcy, insolvency or other similar laws)
and any other proceeding under laws for the protection of
debtors involving such Person or any of its assets.
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"Liabilities" means all indebtedness and obligations of
Hecla Mining, howsoever created, arising or evidenced,
whether created directly or acquired by assignment or
otherwise whether direct or indirect, absolute or contingent
or now or hereafter existing, or due or to become due,
whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, and whether
for principal, interest, fees, expenses or otherwise.
"Lien" means, with respect to any property or assets, any
right or interest therein of a creditor to secure
indebtedness owed to it or any other arrangement with such
creditor which provides for the payment of such indebtedness
out of such property or assets or which allows such creditor
to have such indebtedness satisfied out of such property or
assets prior to the general creditors of any owner thereof,
including any lien, mortgage, security interest, pledge,
deposit, production payment, rights of a vendor under any
title retention or conditional sale agreement or lease
substantially equivalent thereto, tax lien, mechanic's or
materialman's lien, or any other charge or encumbrance for
security purposes, whether arising by law or agreement or
otherwise, but excluding any right of offset which arises
without agreement in the ordinary course of business.
"Lien" also means any filed financing statement, any
registration of a pledge (such as with an issuer of
uncertificated securities), or any other arrangement or
action which would serve to perfect a Lien described in the
preceding sentence, regardless of whether such financing
statement is filed, such registration is made, or such
arrangement or action is undertaken before or after such
Lien exists.
"Majority Senior Lenders" means the Majority Lenders under
(and as defined in) the Senior Credit Agreement.
"MMS" is defined in the PREAMBLE.
"MRIL" is defined in the PREAMBLE.
"NationsBank" is defined in the PREAMBLE.
"Person" means an individual, corporation, partnership,
association, joint stock company, trust or trustee thereof,
estate or executor thereof, unincorporated organization or
joint venture, court or governmental unit or any agency or
subdivision thereof, or any other legally recognizable
entity.
"Project" is defined in the FIRST RECITAL.
"Project Credit Agreement" is defined in the FIRST RECITAL.
"Senior Credit Agreement" is defined in the THIRD RECITAL.
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"Senior Creditor" is defined in the PREAMBLE and shall mean
NationsBank in its individual capacity and in its capacity
as agent for all lenders (howsoever denominated) party from
time to time to the Senior Credit Agreement.
"Senior Liabilities" means all Liabilities owing from Hecla
Mining to the Senior Creditor and all other lenders party
from time to time to the Senior Credit Agreement arising
under the Senior Credit Agreement and all other Senior Loan
Documents executed and delivered by the Company and/or any
of its subsidiaries. "Senior Liabilities" shall include all
amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. 263(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. 502(b) and 506(b) and any other similar
provisions arising under applicable law and shall include
interest accruing after the commencement of any Insolvency
Proceeding whether or not such interest is an allowed claim
enforceable in such Insolvency Proceeding.
"Senior Loan Documents" means the Senior Credit Agreement
and all documents and instruments delivered pursuant thereto
or in connection therewith.
"Standard Bank" is defined in the PREAMBLE.
"Subordinated Credit Agreement" is defined in the SECOND
RECITAL.
"Subordinated Creditor" is defined in the PREAMBLE and shall
mean Standard Bank in its individual capacity and in its
capacity as agent for all lenders (howsoever denominated)
party from time to time to the Subordinated Credit
Agreement.
"Subordinated Liabilities" means all Liabilities from time
to time owing by Hecla Mining to the Subordinated Creditor
and all other lenders (howsoever denominated) party from
time to time to the Subordinated Credit Agreement arising
under the Subordinated Credit Agreement and all other
Subordinated Loan Documents executed and delivered by the
Company and/or any of its subsidiaries (other than MMS and
MRIL and any successor entities in connection with the
financial accommodation provided to and in connection with
the Project). "Subordinated Liabilities" shall include all
amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. 263(a) and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. 502(b) and 506(b) and any other similar
provisions arising under applicable law and shall include
interest accruing after the commencement of any Insolvency
Proceeding whether or not such interest is an allowed claim
enforceable in such Insolvency Proceeding.
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"Subordinated Loan Documents" means the Subordinated Credit
Agreement and all documents and instruments delivered
pursuant thereto or in connection therewith.
"Termination Date" means the earliest date after the date
hereof on which all Senior Liabilities have been paid in
cash and satisfied in full and neither the Senior Creditor
nor any lender (howsoever denominated) then party to the
Senior Credit Agreement has any outstanding commitment
(whether or not conditioned on the satisfaction of any
condition precedent) to lend money or otherwise extend
credit to Hecla Mining.
"Trigger Default" means (i) the failure of the Company or
any subsidiary of the Company to pay any component of any
Senior Liability when due and payable, whether at a date for
the payment of a fixed installment or as a contingent or
other payment becomes due and payable or as a result of
acceleration or otherwise, or (ii) the failure of the
Company or any subsidiary of the Company to duly observe,
perform or comply with the terms and provisions of Sections
7.1, 7.11, 7.12, or 7.13 of the Senior Credit Agreement.
1.2 INTERPRETATION
Unless the context otherwise requires or unless otherwise
provided herein, references in this Agreement to a
particular agreement, instrument or document also refer to
and include all renewals, extensions, amendments,
modifications, supplements or restatements of any, such
agreement, instrument or document (to the extent permitted
by the terms thereof); PROVIDED, HOWEVER, that nothing
contained in this Section shall be construed to authorize
any party hereto to execute or enter into any such renewal,
extension, amendment, modification, supplement or
restatement. The headings used herein are for purposes of
convenience only and shall not be used in construing the
provisions hereof. The words "this Agreement," "this
instrument," "herein," "hereof," "hereby" and words of
similar import refer to this Agreement as a whole and not to
any particular subdivision unless expressly so limited. The
word "or" is not exclusive, and the word "including" (in its
various forms) means "including without limitation."
Pronouns in masculine, feminine and neuter genders shall be
construed to include any other gender, and words in the
singular form shall be construed to include the plural and
vice versa, unless the context otherwise requires.
2. SUBORDINATION TERMS
2.1 SUBORDINATION OF LIABILITIES
(a) The Subordinated Creditor, individually and on behalf
of all lenders (howsoever denominated) party from time
to time to the Subordinated Credit Agreement, hereby
until the Termination Date (but subject to SECTION 2.3)
expressly and in all respects, subordinates and makes
junior and inferior;
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(i) all Subordinated Liabilities and the payment of
the Subordinated Liabilities, to
(ii) the Senior Liabilities and the payment of the
Senior Liabilities.
(b) Without the prior written consent of the Senior Creditor,
prior to the Termination Date (but subject to SECTION 2.3), the
Subordinated Creditor shall not accept, receive or collect (by
set-off or other manner) any payment or distribution on account
of, or ask for, demand or accelerate, directly or indirectly, any
Subordinated Liability, and Hecla Mining shall not make any such
payment, except that Hecla Mining may make principal payments of
(i) U.S. $1,000,000 to the Subordinated Creditor on June 30,
2003;
(ii) U.S.$1,000,000 to the Subordinated Creditor on December 31,
2003;
(iii) U.S.$1,000,000 to the Subordinated Creditor on June 30,
2004 (plus accrued and accreted interest until such time) on
June 30, 2004 (if the Senior Credit Agreement shall still be in
effect); and
(iv) All amounts owing under Sections 3.3.1, 4.2, 4.3, 4.4, 4.6
and 10.3 of the Subordinated Credit Agreement and in respect of
the "Additional Costs Rate" thereunder
so long as no Trigger Default has occurred and is
continuing at the time of such payment.
2.2 SUBORDINATION OF LIENS. Except for the right to set off
against the Subordinated Liabilities any balances, credit,
deposits accounts or moneys of Hecla Mining at the banks and
financial institutions that are parties to the Subordinated
Credit Agreement, any Liens granted by Hecla Mining or any
of its subsidiaries (other than those granted by Hecla
Mining, MRIL and MMS, and any successor entities, in the
share capital or assets of MRIL or MMS or such successor
entities, or in connection with the Acquisition Agreement,
in each case in connection with the financial accommodation
provided to and in connection with the Project) at any time
securing the Subordinated Liabilities are hereby made, and
will at all times prior to the Termination Date be, subject,
subordinate, junior and inferior in all respects to all
Liens securing the Senior Liabilities; provided that this
Section shall not be construed as a consent by Senior
Creditor to any Liens prohibited by the Senior Credit
Agreement or any other Loan Document.
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2.3 ASSETS WRONGLY RECEIVED. If the Subordinated Creditor
receives any payment or distribution of any kind (whether in
cash, securities or other property) in contravention of this
Agreement, it shall hold such payment or distribution in
trust for the Senior Creditor, shall segregate the same from
all other cash or assets it holds, and shall immediately
deliver the same to Senior Creditor for the benefit of
Senior Creditor in the form received by Subordinated
Creditor (together with any necessary endorsement) to be
applied to or, at Senior Creditor's option held as
collateral for, the payment or prepayment of the Senior
Liabilities.
2.4 NO ACCELERATION, INSTITUTION OF COLLECTION PROCEEDINGS OR
INTERFERENCE WITH SENIOR CREDITOR'S COLLATERAL. (a) Prior
to the Termination Date, the Subordinated Creditor shall not
accelerate or collect or attempt to collect any part of the
Subordinated Liabilities, whether through the commencement
or joinder of an action or proceeding (judicial or
otherwise) or an Insolvency Proceeding, the enforcement of
any rights against any property of Hecla Mining (including
any such enforcement by foreclosure, repossession or
sequestration proceedings), or otherwise except when Senior
Creditor shall either request that Subordinated Creditor
join it in bringing any such proceeding or request that
Subordinated Creditor file claims in connection with any
such proceeding. The restriction described in this clause
shall not apply to the Subordinated Creditor if:
(i) an Insolvency Proceeding with respect to Hecla
Mining is commenced by Persons other than
Subordinated Creditor; or
(ii) the Senior Creditor accelerates the Senior
Liabilities or enforces against the collateral
securing the Senior Liabilities; PROVIDED,
HOWEVER, that in no event shall the Subordinated
Creditor commence an Insolvency Proceeding against
Hecla Mining or any of its subsidiaries other than
MRIL and MMS and any of their successors.
(b) For the avoidance of doubt, any moneys received under
this Section shall be subject to the Subordinated
Creditor's obligations under SECTIONS 2.1, 2.3 and 2.5.
2.5 INSOLVENCY PROCEEDINGS.
(a) Upon any distribution of all or any of the assets of
Hecla Mining, upon the dissolution, winding up,
liquidation or reorganization of Hecla Mining (whether
or not in any Insolvency Proceeding), or upon an
assignment for the benefit of creditors or any other
marshaling of the assets and liabilities of Hecla
Mining, then any payment or distribution of any kind
(whether in cash,
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securities or other property) which otherwise would be
payable or deliverable upon or with respect to the
Subordinated Liabilities shall be paid and delivered
directly to the Senior Creditor to be applied to or, at
Senior Creditor's option held as collateral for, the
payment or prepayment of the Senior Liabilities.
(b) During the pendency of any Insolvency Proceeding with
respect to Hecla Mining, Subordinated Creditor shall
promptly execute, deliver and file any documents and
instruments which Senior Creditor may from time to time
request in order to (i) file appropriate proofs of
claim in respect of the Subordinated Liabilities in
such Insolvency Proceeding, (ii) instruct any receiver,
trustee in bankruptcy, liquidating trustee, agent or
other Person making any payment or distribution in such
Insolvency Proceeding to make all payments which might
otherwise be payable or deliverable in respect of the
Subordinated Liabilities directly to Senior Creditor,
and (iii) otherwise effect the purposes of this
Agreement.
(c) Cumulative of the foregoing, Subordinated Creditor
hereby grants to Senior Creditor the express power and
authority (which power and authority are coupled with
an interest and shall be irrevocable) to do the
following until the Termination Date in the name of and
on behalf of Subordinated Creditor if Subordinated
Creditor fails to do so within ten (10) days after
written request therefor by Senior Creditor:
(i) to file appropriate claims (whether by proofs of
claim or otherwise) in any Insolvency Proceeding
and to take such other actions in such Insolvency
Proceeding as may be necessary or, in the
reasonable opinion of the Senior Creditor,
desirable to prevent the waiver or release of any
claims for Subordinated Liabilities or to enforce
the terms of this Agreement.
(ii) to prosecute and enforce such claims in such
Insolvency Proceeding, to initiate and participate
in other proceedings to enforce such Subordinated
Liabilities, and to collect and receive any and
all such cash or other assets which may be paid on
account of Subordinated Liabilities in such
Insolvency Proceeding or in any other proceeding.
Senior Creditor shall, however, have no duty to
Subordinated Creditor to exercise any of the foregoing
power and authority, and Senior Creditor may do so or
decline to do so in its sole and absolute discretion.
2.6 ASSIGNMENT AND MARKING OF SUBORDINATED LIABILITIES. Prior to
the Termination Date, Subordinated Creditor shall not without
the prior consent of Senior Creditor:
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(a) transfer, assign, pledge, encumber or otherwise dispose
of any right, claim or interest in all or any part of
the Subordinated Liabilities to any Person other than
the Senior Creditor; provided, however, that the
foregoing shall not apply to transfers and assignments
to lenders and other financial institutions
participating in the Subordinated Credit Agreement,
(b) subordinate any of the Subordinated Liabilities to any
Liabilities other than the Senior Liabilities.
The Subordinated Creditor shall cause each instrument to
which it is a party that evidences all or any part of the
Subordinated Liabilities to bear upon its face a conspicuous
statement or legend to the effect that such instrument and
the indebtedness evidenced thereby are subordinate to the
payment of all Senior Liabilities pursuant to this
Agreement.
2.7 WAIVER. The Subordinated Creditor hereby waives promptness,
diligence, notice of acceptance, and any notice (other than
as specifically provided in ARTICLE 4) with respect to any
of the Senior Liabilities and this Agreement, and any
requirement that the Senior Creditor exhaust any other right
or take any action against the Subordinated Creditor or any
other Person or any collateral.
2.8 SUBROGATION.
(a) No payment or distribution to the Senior Creditor
pursuant to the provisions of this Agreement shall
entitle the Subordinated Creditor to exercise any
rights of subrogation in respect thereof prior to the
Termination Date, and until such time the Subordinated
Creditor shall not have any right of subrogation to the
Senior Creditor on account of this Agreement.
(b) After the Termination Date, and provided that no
payments received by the Senior Creditor are voidable
or must otherwise be returned, the Subordinated
Creditor shall be subrogated to the rights of the
Senior Creditor to receive distributions applicable to
the Senior Liabilities to the extent that distributions
otherwise payable to the Subordinated Creditor have
been applied to the payment of the Senior Liabilities
owing to the Senior Creditor.
(c) Any distribution made pursuant to this Agreement to the
Senior Creditor on account of the Subordinated
Liabilities owing by Hecla Mining to the Subordinated
Creditor, shall not, as between such Persons, be
considered a payment of the Subordinated Liabilities.
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2.9 REINSTATEMENT. The Subordinated Creditor agrees that this
Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any payment (in whole or
in part) of any of the Senior Liabilities owing to it is
rescinded or must otherwise be restored by the Collateral
Agent, upon an Insolvency Proceeding or otherwise, all as
though such payment had not been made.
2.10 OBLIGATIONS HEREUNDER NOT AFFECTED. No action or inaction
of Senior Creditor or any other Person, and no change of law
or circumstances, shall release or diminish the obligations,
liabilities, agreements or duties hereunder of Subordinated
Creditor, affect this Agreement in any way, or afford any
Person any recourse against Senior Creditor. Without
limiting the generality of the foregoing, none of the
obligations, liabilities, agreements and duties of the
Subordinated Creditor under this Agreement shall be
released, diminished, impaired, reduced or affected by the
occurrence of any of the following at any time or from time
to time, even if occurring without notice to or without the
consent of the Subordinated Creditor (any right of the
Subordinated Creditor to be so notified or to require such
consent being hereby waived, except as set forth in
ARTICLE 5):
(a) the release (by operation of law or otherwise) of Hecla
Mining from its duty to pay any of the Senior
Liabilities.
(b) any invalidity, deficiency, illegality or
unenforceability of any of the Senior Liabilities or
the documents and instruments evidencing, governing or
securing the Senior Liabilities, in whole or in part,
any bar by any statute of limitations or other law to
recovery on any of the Senior Liabilities, or any
defense or excuse for failure to perform on account of
force majeure, act of God, casualty, impracticability
or other defense or excuse with respect to the Senior
Liabilities whatsoever.
(c) the taking or accepting by Senior Creditor of any
additional security for or subordination to any or all
of the Senior Liabilities.
(d) any release, discharge, surrender, exchange,
subordination, non-perfection, impairment, modification
or stay of actions or lien enforcement proceedings
against, or loss of any security at any time existing
with respect to, the Senior Liabilities.
(e) the modification or amendment of, or waiver of
compliance with, any terms of the documents and
instruments evidencing, governing or securing the
Senior Liabilities.
(f) the insolvency, bankruptcy or disability of the Company
or the filing or commencement of any Insolvency
Proceeding involving the Company or other proceeding
with respect thereto.
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(g) any increase or decrease in the amount of the Senior
Liabilities or in the time, manner or terms in
accordance with which the Senior Liabilities are to be
paid, or any adjustment, indulgence, forbearance,
waiver or compromise that may be granted or given with
respect to the Senior Liabilities.
(h) any neglect, delay, omission, failure or refusal of
Senior Creditor to take or prosecute any action for the
collection of the Senior Liabilities or to foreclose or
take or prosecute any action in connection with any
instrument or agreement evidencing or securing all or
part of the Senior Liabilities.
(i) any release of the proceeds of collateral which may
come into the possession of Senior Creditor or its
affiliates.
(j) any judgment, order or decree by any court or
governmental agency or authority that a payment or
distribution by Hecla Mining to Senior Creditor upon
the Senior Liabilities is a preference or fraudulent
transfer under applicable bankruptcy or similar laws
for the protection of creditors or is for any other
reason required to be refunded by Senior Creditor or
paid by Senior Creditor to any other Person.
(k) any modification of, or waiver of compliance with, any
terms of this Agreement with respect to any party
hereto.
(l) any neglect, delay, omission, failure or refusal of
Senior Creditor to take or prosecute any action against
any Person in connection with this Agreement.
3. AMENDMENTS TO DOCUMENTS
3.1 AMENDMENTS TO SUBORDINATED CREDIT AGREEMENT. Neither Hecla
Mining nor the Subordinated Creditor will, without the
prior written consent of the Senior Creditor:
(a) agree to or take any action which would increase the
rate of interest payable (or accreting) under the
Subordinated Credit Agreement or otherwise increase the
cost to Hecla Mining of the Subordinated Liabilities
other than as contemplated by the Subordinated Credit
Agreement as in effect at the date hereof;
(b) agree to or take any action which would postpone the
Maturity Date (as defined in the Subordinated Credit
Agreement) as in effect at the date hereof;
(c) agree to or take any action which would increase the
Aggregate Commitment Amount (as defined in the
Subordinated Credit Agreement) as in effect at the date
hereof;
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(d) agree to or take any action to amend the timings and
amounts of the payments of principal and interest in
respect of the Subordinated Liabilities as in effect at
the date hereof;
(e) agree to or take any action to amend any provisions of
the Subordinated Credit Agreement referred to in CLAUSE
2.1(B)(IV); and
(f) agree to or take any action to extend or create a lien
(howsoever denominated) over any property of Hecla
Mining or its subsidiaries which lien would secure or
purport to secure the Subordinated Liabilities, other
than as in effect at the date hereof and other than as
related to Hecla Mining's direct and indirect ownership
in the Project.
4. INFORMATION AND COOPERATION
4.1 DEFAULTS. Upon the Senior Creditor and/or the Subordinated
Creditor becoming aware of the occurrence of any relevant
Default, the Senior Creditor and/or the Subordinated Creditor
will use its best efforts to promptly notify the other in
writing thereof (a "Default Notice"); provided that the
failure to give a Default Notice shall not impair the
subordination made hereby in any manner or impose any
liability on Senior Creditor..
4.2 WAIVERS. Upon the waiver or remedy of any relevant Default,
the Senior Creditor and/or the Subordinated Creditor will
use its best efforts to promptly notify the other in writing
of such waiver or remedy; provided that the failure to give
such notice shall not impair the subordination made hereby
in any manner or impose any liability on Senior Creditor.
5. CONSENTS BY THE SENIOR CREDITOR
5.1 STATUS OF MMS AND MRIL. The Senior Creditor agrees that,
notwithstanding Section 6.14 of the Senior Credit Agreement,
none of MMS, MRIL, any successor entity of either of the
foregoing or any other subsidiary of Hecla Mining acquired
or incorporated solely in connection with the Project shall
be considered, or shall be required to become, a Subsidiary
Guarantor under (and as defined in) the Senior Credit
Agreement and shall not be bound by any provisions of the
Senior Credit Agreement (or any related document) relating
to any Person otherwise designated as a "Subsidiary
Guarantor".
5.2 CERTAIN WAIVERS. The Senior Creditor agrees to waive
Sections 7.1(a), 7.1(b), only with respect to setoff against
Hecla Mining as described in SECTION 2.2 and the Liens
granted by Hecla Mining, MRIL or MMS in the share capital or
assets of
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MRIL or MMS or their successors, or in connection with the
Acquisition Agreement, and Section 7.7 of the Senior Credit
Agreement insofar as such provisions relate to the execution
and delivery of the Subordinated Credit Agreement and the
performance by Hecla Mining of its obligations thereunder
subject to the limitations on investment in and loans to
MRIL and MMS set forth in the Senior Credit Agreement.
5.3 CONSENT BY SENIOR CREDITOR. The Senior Creditor consents to
the execution and delivery of the Subordinated Credit
Agreement and agrees that no Default under the Senior Credit
Agreement shall arise by reason of such execution and
delivery.
6. MISCELLANEOUS
6.1 WAIVERS, AMENDMENTS, ETC. The provisions of this Agreement
may from time to time be amended, modified or waived, if
such amendment, modification or waiver is in writing and
consented to by Hecla Mining, the Subordinated Creditor and
the Senior Creditor.
No failure or delay on the part of either the Senior
Creditor or the Subordinated Creditor in exercising any
power or right under this Agreement 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 either the Senior Creditor
or the Subordinated Creditor in any case shall entitle it to
any notice or demand in similar or other circumstances. No
waiver or approval by either the Senior Creditor or the
Subordinated Creditor under this Agreement 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.
6.2 NOTICES. All notices and other communications provided to
any party to this Agreement shall be in writing or by telex
or by facsimile and addressed or delivered to it at its
address 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 a notice to the other
parties. Any notice, if sent by hand delivery or courier
delivery, shall be deemed received when delivered and, if
transmitted by telex or facsimile, shall be deemed given
when transmitted (answerback confirmed in the case of
telexes and transmission confirmed by the sending facsimile
machine in the case of facsimiles).
15
6.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto (and,
in the case of each of the Senior Creditor and the
Subordinated Creditor, to the benefit of the respective
lenders and other financial institutions participating in
the Senior Credit Agreement and the Subordinated Credit
Agreement, respectively, and their respective successors and
assigns); PROVIDED, HOWEVER, that Hecla Mining may not
assign or transfer its rights or obligations hereunder
without the prior written consent of the Senior Creditor and
the Subordinated Creditor.
6.4 SEVERABILITY. Any provision of this Agreement 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 affecting the
validity or enforceability of such provision in any other
jurisdiction.
6.5 HEADINGS. The various headings of this Agreement are
inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or any
provisions hereof or thereof.
6.6 GOVERNING LAW; ENTIRE AGREEMENT.
(a) THIS AGREEMENT SHALL BE DEEMED A CONTRACT AND
INSTRUMENT MADE UNDER THE LAWS OF THE STATE OF TEXAS
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF SUCH STATE AND THE LAWS OF
THE UNITED STATES OF AMERICA, APPLICABLE THEREIN,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(b) This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject
matter hereof and supersedes any prior agreements,
written or oral, with respect thereto.
6.7 Waiver of Jury Trial. THE SENIOR CREDITOR, THE SUBORDINATED
CREDITOR AND HECLA MINING 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
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF THE SENIOR CREDITOR, THE
SUBORDINATED CREDITOR OR HECLA MINING.
6.8 COUNTERPARTS; FAX. This Agreement may be separately executed
in any number of counterparts, each of which when so
executed shall be deemed to constitute one and the same
agreement. This Agreement may be duly executed by facsimile
or other electronic transmission.
16
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.
NATIONSBANK, N.A.
in its capacity as the Senior
Creditor
By: /s/ Xxxxx X. Xxxxxxxxx
Title: Managing Director
Address for Notices:
NationsBank Plaza
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000, X.X.X.
Attn: Energy Lending Group
with a copy to:
Facsimile No.:
Attention:
NationsBank N.A.
Denver Energy Group
000 Xxxxxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000, X.X.X.
Facsimile No.:
Attention:
STANDARD BANK LONDON LIMITED
in its capacity as the Subordinated
Creditor
By: /s/ Xxxxxx Xxxxxx
Title: Assistant General Manager
By:
Title:
Address for Notices:
Xxxxxx Xxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
England
Facsimile No.: 00-000-000-0000
Attention: Mr. Xxxxxx Xxxxxx
17
ACKNOWLEDGEMENT AND AGREEMENT
The undersigned, Hecla Mining Company, hereby acknowledges
receipt of a copy of the foregoing Subordination Agreement,
waives notice of acceptance thereof by the Senior Creditor and
agrees to be bound by the terms and provisions thereof, to make
no payments or distributions contrary to the terms and provisions
thereof, and to do every other act and thing necessary or
appropriate to carry out such terms and provisions,
HECLA MINING COMPANY
By: /s/ Xxxx X. Xxxxxxxx
Title: Vice President - Chief
Financial Officer
Address for Notices:
Hecla Mining Company
0000 Xxxxxxx Xxxxx
Xxxxx x'Xxxxx, Xxxxx
00000-0000
Facsimile No.: 0-000-000-0000
Dated
