FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission file number 1-10122
Magma Copper Company
(Exact name of registrant as specified in its charter)
Delaware 86-0219794
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7400 N. Oracle Rd., Suite 200
Tucson, Arizona 85704
(Address of Principal executive offices) (Zip Code)
(602) 575-5600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
______ ______
Number of shares of common stock outstanding at June 30, 1994: 45,863,353
<PAGE>
MAGMA COPPER COMPANY
Form 10-Q
For the Quarter Ended June 30, 1994
INDEX
Page
Number
Part I - Financial Information
Item 1 - Financial Statements
Introduction to the Financial Statements 1
Consolidated Balance Sheets -
June 30, 1994 and December 31, 1993 2
Consolidated Statements of Operations-
Three months and six months ended
June 30, 1994 and 1993 3
Consolidated Statements of Cash Flows -
Six months ended June 30, 1994 and 1993 4
Notes to Consolidated Financial Statements 5
Report of Independent Public Accountants 9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results
of Operations 10
Part II - Other Information
Item 4 - Submission of Matters to a Vote of
Security Holders 16
Item 6 - Exhibits and Reports on Form 8-K 16
Signature 19
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The financial statements for the three months and the six months ended
June 30, 1994 and 1993 include, in the opinion of the Company, all
adjustments (which consist only of normal recurring adjustments) necessary to
present fairly the results of operations for such periods. Results of
operations for the three months and six months ended June 30, 1994, are not
necessarily indicative of results of operations which will be realized for
the year ending December 31, 1994. The financial statements should be read
in conjunction with the Company's Form 10-K, for the year ended December 31,
1993.
The financial statements included herein have been subjected to a
review, in accordance with the standards established by the American
Institute of Certified Public Accountants, by Arthur Andersen & Co., the
registrant's independent public accountants.
<PAGE>
<TABLE>
MAGMA COPPER COMPANY
Consolidated Balance Sheets
(In thousands)
<CAPTION>
June 30, December 31,
Assets 1994 1993
------ ---------- ------------
<S> <C> <C>
Current Assets:
Cash $ 117,502 $ 230,414
Marketable securities 191,222 108,890
Accounts receivable 57,959 51,090
Inventories:
Metals 76,628 53,676
Materials and supplies 25,088 25,045
Prepaid expenses 12,973 10,883
--------- ---------
Total current assets 481,372 479,998
--------- ---------
Net Property, Plant and Mine
Development 888,979 866,361
--------- ---------
Other 11,346 4,428
--------- ---------
Total Assets $1,381,697 $1,350,787
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
Accounts payable $ 17,362 $ 17,952
Accrued liabilities 102,796 89,208
Current portion of long-term debt 6,087 12,395
Income taxes payable 1,873 --
--------- ---------
Total current liabilities 128,118 119,555
--------- ---------
Accrued Pension, Retirement and
Other Liabilities 63,519 62,208
Deferred Income Taxes 97,980 96,592
Long-Term Debt 389,005 392,260
Commitments and Contingencies
Stockholders' Equity:
Cumulative convertible preferred
stock, Series D 20 20
Cumulative convertible preferred
stock, Series E 20 20
Common stock 459 457
Capital in excess of par value 623,299 620,282
Retained earnings 84,470 62,059
Unearned stock grant compensation (3,492) (2,666)
Unrealized loss on marketable
securities (1,701) --
--------- ---------
Total stockholders' equity 703,075 680,172
--------- ---------
Total Liabilities and
Stockholders' Equity $1,381,697 $1,350,787
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
</TABLE>
<TABLE>
MAGMA COPPER COMPANY
Consolidated Statements of Operations
(In thousands, except per share amounts)
<CAPTION>
Three Months Six Months
ended June 30, ended June 30,
------------------- -------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Sales $219,534 $190,150 $395,066 $384,755
Cost of sales:
Cost of products sold (159,565) (155,155) (299,789) (322,487)
Depreciation, depletion
and amortization (19,723) (14,861) (34,866) (29,711)
Selling, general and
administrative (5,789) (5,280) (10,937) (10,303)
Exploration, research
and development (3,111) (2,482) (6,349) (3,523)
------- ------- ------- -------
Income from operations 31,346 12,372 43,125 18,731
Other income (expense):
Interest expense (6,097) (9,446) (12,063) (19,143)
Interest income 3,257 1,911 6,877 4,469
Other (265) 1,530 729 2,683
------- ------- ------- -------
Income before income taxes,
extraordinary item 28,241 6,367 38,668 6,740
Income tax provision (7,631) (1,655) (10,447) (1,752)
------- ------- ------- -------
Income before cumulative effect
of accounting change 20,610 4,712 28,221 4,988
Cumulative effect of accounting
change, net of tax -- -- -- (888)
------- ------- ------- -------
Net income $ 20,610 $ 4,712 $ 28,221 $ 4,100
======= ======= ======= =======
Preferred stock dividends (2,906) -- (5,812) --
------- ------- ------- -------
Net income available for
common stock $ 17,704 $ 4,712 $ 22,409 $ 4,100
======= ======= ======= =======
Earnings per share of common
stock, primary:
Income before cumulative
effect of accounting
change $ .42 $ .10 $ .57 $ .10
Cumulative effect of
accounting change, net
of tax -- -- -- (.02)
------- ------- ------- -------
Net income $ .42 $ .10 $ .57 $ .08
======= ======= ======= =======
Preferred stock dividends (.06) -- (.11) --
------- ------- ------- -------
Earnings per share of common
stock $ .36 $ .10 $ .46 $ .08
======= ======= ======= =======
Average common shares
outstanding, primary 49,283 48,161 49,218 48,619
Earnings per share of common
stock, fully diluted:
Income before cumulative effect
of accounting change $ .33 $ .10 $ .45 $ .10
Cumulative effect of accounting
change, net of tax -- -- -- (.02)
------- ------- ------- -------
Net income $ .33 $ .10 $ .45 $ .08
======= ======= ======= =======
Average common shares outstanding,
fully diluted 63,368 48,161 63,368 48,619
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
MAGMA COPPER COMPANY
Consolidated Statements of Cash Flows
(In thousands)
<CAPTION>
Six months
ended June 30,
-------------------
1994 1993
-------- --------
<S> <C> <C>
Net income $ 28,221 $ 4,100
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Depreciation, depletion and amortization 34,866 29,711
Gain (loss) on sale of assets 45 (927)
Other 1,269 791
------- -------
64,401 33,675
------- -------
Change in certain assets and liabilities:
(Increase) decrease in:
Accounts receivable (6,868) (14,733)
Inventories (21,373) (15,374)
Prepaid expenses (2,090) 1,187
Increase (decrease) in:
Accounts payable and accrued expenses 12,997 (11,920)
Income taxes payable 2,502 (14,280)
Accrued pension, retirement
and other liabilities 1,311 4,747
Deferred income taxes 1,388 (3,708)
------- -------
Net change in certain assets and liabilities (12,133) (54,081)
------- -------
Net cash provided (used) by operating activities 52,268 (20,406)
------- -------
Cash flows from investing activities:
Capital expenditures (59,492) (53,777)
(Purchase)sale of marketable securities (84,662) 57,171
Proceeds from sale of assets 342 1,525
Other (6,727) (1,618)
------- -------
Net cash provided (used) by investing activities (150,539) 3,301
------- -------
Cash flows from financing activities:
Long-term debt repayment (6,951) (1,000)
Long-term lease financing (2,611) (1,336)
Debt issuance costs (402) (939)
Issuance of common stock under stock plans 295 278
Issuance of common stock from warrants exercised 925 181
Issuance of preferred stock (85) --
Preferred stock dividend (5,812) --
------- -------
Net cash used by financing activities (14,641) (2,816)
------- -------
Net decrease in cash (112,912) (19,921)
Cash at the beginning of the period 230,414 121,057
------- -------
Cash at the end of the period $117,502 $101,136
======= =======
Marketable securities 191,222 63,935
------- -------
Total cash and marketable securities $308,724 $165,071
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest, net of amounts capitalized $ 13,305 $ 18,822
Income taxes $ 6,300 $ 19,767
Supplemental schedule of non-cash investing
and financing activities:
Purchase of property financed by note
payable and leases $ -- $ 4,992
The accompanying notes are an integral part of these
consolidated financial statements.
</TABLE>
<PAGE>
MAGMA COPPER COMPANY
Notes to Consolidated Financial Statements
Note 1 -- Basis of Consolidation
The accompanying consolidated financial statements include the accounts
of Magma Copper Company and its wholly-owned subsidiaries ("Magma" or the
"Company"). All material intercompany activity has been eliminated. Certain
amounts previously reported have been reclassified to conform to the current
presentation in the accompanying consolidated financial statements.
Note 2 -- Inventories
The components of inventories are as follows (in thousands):
<TABLE>
<CAPTION>
June 30, December 31,
1994 1993
--------- ------------
<S> <C> <C>
Metals in process, net $ 57,226 $ 37,454
Finished goods 19,402 16,222
------- -------
Metals 76,628 53,676
Materials and supplies, net 25,088 25,045
------- -------
$101,716 $ 78,721
======= =======
</TABLE>
Note 3 -- Income Taxes
SFAS 109, "Accounting for Income Taxes", requires use of the liability
method for providing deferred income taxes, which generally records deferred
taxes for transactions reported in different years for financial reporting
and tax purposes.
In calculating income taxes, the Company has benefitted from deductions
for percentage depletion. In general, the Company's cumulative percentage
depletion deductions exceed cost basis of depletable properties, resulting in
current percentage depletion being treated as a permanent difference. The
effect of this permanent difference causes the effective tax rate to be
generally lower than the statutory tax rate.
The Company has recorded a provision for income taxes of $10,447,000 in
the first six months of 1994. The provision for income taxes differs from
the amounts computed by applying the federal statutory tax rate to the net
income before taxes, as follows:
<PAGE>
<TABLE>
<CAPTION>
For the six months ended
June 30, 1994
---------------------------
Dollars Tax Rate
(In millions) (percentage)
------------ -----------
<S> <C> <C>
Income tax provision
at federal
statutory rate $(13,536) (35)%
Percentage depletion 4,479 12
State tax (1,390) (4)
------- ---
Total provision $(10,447) (27)%
======= ===
</TABLE>
Note 4 -- Commitments and Contingencies
The Company is from time to time involved in various legal proceedings
of a character normally incident to its business, including various claims
and pending actions against the Company seeking damages in large amounts or
clarifications of legal rights. Although there can be no assurance in this
regard, the Company does not believe that adverse decisions in any pending or
threatened proceedings, or any amounts which it may be required to pay by
reason thereof, would have a material adverse effect on the financial
condition or results of operations of the Company.
Note 5 -- Capitalized Interest
During the first six months of 1994 and 1993, $9,217,000 and $2,084,000,
respectively, of interest cost was capitalized on certain long-term projects.
The total amount of interest cost incurred was $21,280,000 and $21,227,000
for the first six months of 1994 and 1993, respectively.
Note 6 -- Disclosure About Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the fair
value of each class of financial instruments for which it is practicable to
estimate that value:
Cash. The carrying amount approximates fair value.
Marketable Securities. In the first quarter of 1994 the Company adopted
SFAS 115, "Accounting for Certain Investments in Debt and Equity Securities".
Accordingly, certain of the Company's investments with an average maturity of
less than 2 years have been classified as available-for-sale securities and
are reported at their estimated fair value, based on quoted market prices for
those or similar investments.
<PAGE>
<TABLE>
<CAPTION>
June 30,
1994
(In Millions)
-----------
<S> <C>
Amortized cost basis $193.5
Unrealized holding gain .1
Unrealized holding loss (2.4)
-----
Fair market value $191.2
=====
</TABLE>
During the three month period ended June 30, 1994, the Company received
$18.2 million in proceeds from available-for-sale securities, including net
realized losses of $0.2 million. During the six month period ended June 30,
1994, the Company received $112.1 million in proceeds from available-for-sale
securities, including net realized gains of $0.7 million and net realized
losses of $0.2 million. The Company utilizes the specific identification
method in computing realized gains and losses. The net unrealized holding
loss, net of tax, for the three month and six month periods ended June 30,
1994 was $0.8 million and $1.7 million, respectively.
Long-Term Debt. The fair value of the Company's long-term debt is
estimated based on the quoted market prices for the same or similar issues or
on the current rates offered to the Company for debt of the same remaining
maturities.
Price Protection Contracts. From time to time the Company enters into
options and futures contracts or fixed price forward sales agreements as a
hedge against lower copper prices. The carrying amount of these contracts
reflects the cost of the option premium which will be amortized ratably as
the options expire. The fair value of these contracts is estimated based on
quotes from brokers and market prices at June 30, 1994.
The estimated fair values of the Company's financial instruments as of
June 30, 1994 are as follows (in thousands):
<TABLE>
<CAPTION>
Carrying Fair
Amount Value
-------- -------
<S> <C> <C>
Cash $117,502 $117,502
Marketable securities 191,222 191,222
Long-term debt (includes
current portion) 395,092 423,467
Copper price protection
contracts 13,073 ( 27,121)
</TABLE>
The fair value estimates are made at discrete points in time based on
relevant market information and information about the financial instruments.
These estimates may be subjective in nature and involve uncertainties and
significant judgment and therefore cannot be determined with precision.
Note 7 -- Revolving Credit Facility
On May 20, 1994, the Company renegotiated its revolving credit agreement
(the "Revolver"), increasing the available credit from $200 million to $300
million. The Revolver, which expires May 19, 1998, is provided by a
consortium of eleven banks and is available for general corporate purposes.
Amounts outstanding under the Revolver may bear interest at the London
InterBank Offered Rate (LIBOR), the Certificate of Deposit or the prime rate,
as defined, plus a margin which may vary depending on the credit rating of
the Company. Currently, borrowings would bear interest at the rate of LIBOR
plus 0.7%. An annual agency fee of $30,000 plus a commitment fee (which also
varies depending on the credit rating of the Company) of 1/4% per annum on
the unused portion of the Revolver is payable by the Company.
Under the terms of the Revolver, the Company must: (i) maintain a
consolidated net worth of not less than the sum of $450 million plus 50% of
consolidated net income for each fiscal year beginning with fiscal 1994 and
(ii) not permit the ratio of its consolidated debt to total capitalization
(debt and equity) to exceed 60%.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Magma Copper Company:
We have reviewed the accompanying condensed consolidated balance sheet
of MAGMA COPPER COMPANY (a Delaware corporation) and subsidiaries as of June
30, 1994, and the related condensed consolidated statements of operations for
the three-month and six-month periods ended June 30, 1994 and 1993 and the
condensed consolidated statements of cash flows for the six-month periods
ended June 30, 1994 and 1993. These financial statements are the
responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications
that should be made to the financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Magma Copper Company
and subsidiaries as of December 31, 1993, (not presented herein), and in our
report dated January 27, 1994, we expressed an unqualified opinion on that
balance sheet. In our opinion, the information set forth in the accompanying
condensed consolidated balance sheet as of December 31, 1993, is fairly
stated, in all material respects, in relation to the balance sheet from which
it has been derived.
Arthur Andersen & Co.
Tucson, Arizona,
July 14, 1994.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MATERIAL CHANGES IN FINANCIAL POSITION
Net income for the six months ended June 30, 1994 was $28.2 million
compared to $4.1 million for the same period in 1993. This increase was
primarily due to increased sales volume and lower unit costs in 1994, as well
as the effects of the extraordinary rains and flooding in Arizona during the
first quarter of 1993. The rains and flooding reduced pounds of copper sold
and increased production costs which reduced after-tax earnings for the first
six months of 1993 by $15.5 million.
Net cash provided from operating activities was $52 million during the
first six months of 1994 compared to net cash used of $20 million during the
same period in 1993. This difference was due to higher earnings and timing
differences in payments for copper purchases and income taxes.
The Company's cash position and cash flow from operations were used to
fund capital expenditures of $59 million for the six months ended June 30,
1994 as compared to $54 million for the same period in 1993.
Working capital at June 30, 1994 was $353 million (including $309
million in cash and marketable securities) compared to $360 million
(including $339 million in cash and marketable securities) at December 31,
1993.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Results of Operations for the Six Months Ended June 30, 1994
As Compared with the Six Months Ended June 30, 1993
Total sales increased 3% to $395 million in 1994 from $385 million in
1993. Sales of copper increased in 1994 to $353 million from $349 million in
1993 due to a 14 million pound increase in sales volume partly offset by
lower realized copper prices.
Sales of other metal by-products and acid increased $8 million as a
result of higher prices for gold, silver, molybdenum and acid. Treatment
tolls earned decreased $2 million as a result of less material being
processed on a toll basis.
Cost of products sold decreased by 7% to $300 million in 1994 from $322
million in 1993 due to improved unit production costs in 1994 and the effects
of the extraordinary rains and flooding in Arizona during the first quarter
of 1993. The lower overall unit production costs were partly offset by
increased sales volume of Magma source copper. The following table sets
forth the volume of copper sold in relation to the components that make up
cost of products sold:
<PAGE>
<TABLE>
<CAPTION>
Six months ended
June 30,
(In millions)
1994 1993
-------- --------
<S> <C> <C>
Pounds sold from:
Magma sources 298.1 261.8
Purchased 81.9 104.5
----- -----
Total pounds of copper sold 380.0 366.3
===== =====
Toll processing pounds 28.2 37.0
===== =====
Cost of Products Sold:
Magma sources $205.8 $208.1
Purchased 71.9 88.8
Tolling 5.8 6.3
Other 16.3 19.3
----- -----
Total cost of products sold $299.8 $322.5
===== =====
Per Pound Cost of Products Sold:
Magma Sources
Before credits $ .69 $ .79
Credits (1) (.11) (.08)
----- -----
Net $ .58 $ .71
===== =====
(1) Deductions for rod premiums, profit on by-products and custom
processing.
</TABLE>
Depreciation, depletion and amortization expense increased $5.2
million to $34.9 million in 1994 from 1993 as a result of increased sales
volume from Magma sources and depreciation of new assets.
Exploration, research and development costs increased $2.8 million as
a result of increased foreign and domestic exploration.
Interest expense decreased $7.1 million to $12.1 million in 1994 due
largely to interest capitalized on the Company's expansion projects.
Interest income increased $2.4 million to $6.9 million in 1994 as a
result of larger balances of cash and marketable securities than during the
same period in 1993.
Other income decreased $2.0 million to $0.7 million in 1994 due to
decreased townsite sales.
The Company's provision for income taxes of $10.4 million for 1994 and
$1.8 million for 1993 reflects higher income in the current period.
At December 31, 1993, the Company adopted SFAS 112, "Employers'
Accounting for Postemployment Benefits". The Company elected to adopt this
statement early and to record the entire cumulative adjustment in the year of
<PAGE>
adoption. Under SFAS 112, $0.9 million (after tax) was charged to first
quarter 1993 earnings.
Net income in 1994 was $28.2 million, or $.45 per share fully diluted,
compared to $4.1 million, or $.08 per share in 1993. After dividends on
preferred stock, $22.4 million in 1994 was available for common stockholders,
or $.46 per share, compared to $4.1 million or $.08 per common share in 1993.
Results of Operations for the Three Months Ended June 30, 1994
As Compared with the Three Months Ended June 30, 1993
Total sales increased 16% to $220 million in 1994 from $190 million
in 1993. Sales of copper increased in 1994 to $197 million, from $172
million in 1993 due to a 12 million pound increase in sales volume and higher
realized copper prices.
Sales of other metal by-products and acid increased $8 million as a
result of higher prices for gold, silver, molybdenum, and acid. Treatment
tolls earned decreased $3 million as a result of less material being
processed on a toll basis.
Cost of products sold increased by 3% to $160 million in 1994 due to
higher volume of copper sold largely offset by a reduction in unit production
costs. The following table sets forth the volume of copper sold in relation
to the components that make up cost of products sold:
<TABLE>
<CAPTION>
Three months ended
June 30,
(In millions)
1994 1993
------- -------
<S> <C> <C>
Pounds sold from:
Magma sources 158.5 133.1
Purchased 41.2 54.8
----- -----
Total pounds of copper sold 199.7 187.9
===== =====
Toll processing pounds (including
tolled to anode) 14.7 28.3
===== =====
Cost of Products Sold:
Magma sources $109.0 $ 97.7
Purchased 38.8 44.9
Tolling 2.9 4.1
Other 8.9 8.5
----- -----
Total cost of products sold $159.6 $155.2
===== =====
Per Pound Cost of Products Sold:
Magma Sources
Before credits $ .69 $ .74
Credits (1) (.11) (.08)
----- -----
Net $ .58 $ .66
===== =====
(1) Deductions for rod premiums, profit on by-products and custom
processing.
</TABLE>
<PAGE>
Depreciation, depletion and amortization expense increased $4.9
million to $19.7 million in 1994 as a result of increased sales volume from
Magma sources and depreciation of new assets.
Selling, general and administrative expenses increased $0.5 million
to $5.8 million as a result of legal costs and costs for outside services.
Exploration, research and development costs increased $0.6 million to
$3.1 million due to increased foreign and domestic exploration.
Interest expense decreased $3.3 million to $6.1 million as a result
of interest capitalized on the Company's expansion projects.
Other income (loss) decreased $1.8 million to $(.3) million in 1994
due to reduced sales of townsites and other property.
The Company's provision for income taxes of $7.6 million for 1994 and
$1.7 million for 1993 reflects higher income in the current period.
Net income in 1994 was $20.6 million or $.33 per share fully diluted,
compared to $4.7 million, or $.10 per share, in 1993. After dividends on
preferred stock, $17.7 million in 1994 was available for common stockholders,
or $.36 per share, compared to $4.7 million or $.10 per common share in 1993.
CAPITAL RESOURCES AND LIQUIDITY
The Company's earnings for the six months ended June 30, 1994 before
interest, taxes, depreciation, depletion and amortization ("EBITDA") were $79
million, compared to $51 million in 1993, primarily the result of lower
current production costs and the effects of the extraordinary rains in
Arizona during the first quarter of 1993, partly offset by lower realized
copper prices. Net cash provided by operating activities was approximately
$52 million and capital expenditures were $59 million. Cash and marketable
securities at June 30, 1994 were $309 million.
Beginning in 1993, Magma commenced a strategic growth program which
will require more than $500 million in capital to complete over the next two
years. A smelter expansion was completed in the first quarter of 1994 and
has resulted in increased production, lower costs and improved environmental
performance. The Company is continuing the development of its Lower
Kalamazoo orebody and the permitting of the Robinson Mining District. The
Robinson and Kalamazoo projects increased Magma's ore reserves by 50% since
the beginning of 1993, and when in operation, will be major sources of lower
cost copper production. The Company anticipates that permitting for the
Robinson project could be achieved as early as September 1994 and production
could begin in the first quarter of 1996.
To the extent undertaken, the Company intends to finance these
projects with internal cash flow and current cash balances. The decision to
undertake or complete these projects is subject to a variety of factors,
which may include (depending on the project) the completion of favorable
feasibility studies and permitting. There can be no assurance that the
Company will undertake all of these opportunities or that, if undertaken,
they will prove successful.
Since the beginning of 1993, Magma has maintained a copper price
protection program to ensure adequate cash flow to complete these projects.
In this regard, Magma has put in place a copper price protection program for
<PAGE>
1994 and 1995 which ensures that it can complete these projects using its
existing cash balances and operating cash flow without the need for any
additional external financing.
During the second quarter, Magma extended its copper price protection
program through 1995 with the purchase of copper price put options which
create a copper price realization floor of 85 cents per pound for all of its
1995 production. This program consists of forward sales covering 9% of
production and copper price put options covering 91% of production which
retain all the upside potential of higher copper prices. The Company had
previously sold forward 120 million pounds of copper, or approximately 40% of
its production for the second half of 1994 at 82 cents per pound. These
forward sales, combined with copper price put options for the remainder of
1994 production, create a copper price floor of 77 cents per pound for the
second half of 1994.
In April 1994 the Company filed a Form S-3 Registration Statement for
up to $300 million in debt and/or equity securities which may be issued from
time to time.
During the first half of 1993 the Company's Pinto Valley and Superior
Mining Divisions were adversely affected by significant rainfalls which
caused flooding, water containment structural failures and operating
difficulties, as well as technical violations of various permitting
conditions and state surface water quality standards. The Company agreed to
enter into a consent decree with appropriate regulatory authorities to settle
all claims relating to this matter. The consent decree is expected to be
executed by the Company and its governmental counterparts during the third
quarter of 1994. Under the settlement, the Company would pay fines totalling
$625,000, and contribute monies towards or perform several supplemental
environmental projects costing approximately $200,000. In addition, the
Company expects to spend $8 million during 1994 and 1995 to upgrade and
expand its tailings and water containment facilities at these divisions;
these costs are being capitalized and will be amortized over the remaining
mine life.
On May 10, 1994, the Federal Mine Safety and Health Administration
issued 45 citations totaling $1.55 million against Magma Copper Company,
Superior Division, arising out of the August 10, 1993 accident in which four
miners were fatally injured. The citations address four broad categories:
training, safe use of explosives, inspection and installation of the 865 Ore
Pass in which the accident occurred. Magma is currently discussing the
citations with the Mine Safety and Health Administration, but no final
resolution has been reached. In any event the impact is not expected to be
material to the financial condition or results of operations of the Company.
On May 20, 1994, the Company renegotiated its revolving credit
agreement (the "Revolver"), increasing the available credit from $200 million
to $300 million. The Revolver, which expires May 19, 1998, is provided by a
consortium of eleven banks and is available for general corporate purposes.
Amounts outstanding under the Revolver may bear interest at the London
InterBank Offered Rate (LIBOR), the Certificate of Deposit or the prime rate,
as defined, plus a margin which may vary depending on the credit rating of
the Company. Currently, borrowings would bear interest at the rate of LIBOR
plus 0.7%. An annual agency fee of $30,000 plus a commitment fee (which also
varies depending on the credit rating of the Company) of 1/4% per annum on
the unused portion of the Revolver is payable by the Company.
Under the terms of the Revolver, the Company must: (i) maintain a
consolidated net worth of not less than the sum of $450 million plus 50% of
consolidated net income for each fiscal year beginning with fiscal 1994 and
(ii) not permit the ratio of its consolidated debt to total capitalization
(debt and equity) to exceed 60%
<PAGE>
PART II - OTHER INFORMATION
- - ---------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At its Annual Meeting of Stockholders on May 19, 1994, the
stockholders of the Company elected the following Class I Directors: Donald
J. Donahue (39,364,422 votes for and 74,864 against), Thomas W. Rollins
(39,367,923 votes for and 71,363 against), H. Wilson Sundt (39,367,528 votes
for and 71,758 against) and John L. Vogelstein (39,364,808 votes for and
74,478 against).
The Company also ratified the Board's selection of accountants for
1994 with 39,084,278 votes for, 78,596 against and 276,412 abstaining.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 10 - Revolving Credit Facility Agreement
Dated as of May 20, 1994
Exhibit 11 - Statement re computation of per share
earnings.
(b) Reports on Form 8-K:
The Company filed no reports on Form 8-K during the three
months ended June 30, 1994.
<PAGE>
Signature
---------
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MAGMA COPPER COMPANY
Date:
By: /s/ Douglas J. Purdom
-------------------------------
Douglas J. Purdom
Vice President and
Chief Financial Officer
(Principal Accounting
and Financial Officer)
<PAGE>
==========================================================
REVOLVING CREDIT FACILITY AGREEMENT
Dated as of May 20, 1994
among
MAGMA COPPER COMPANY,
THE LENDERS NAMED HEREIN,
and
CHEMICAL BANK, as Administrative Agent
and Issuing Bank,
and
NATIONAL WESTMINSTER BANK PLC,
as Co-Agent
=============================================================
<PAGE>
TABLE OF CONTENTS
Article Section Page
I. DEFINITIONS
1.01 Defined Terms . . . . . . . . . . . . . . 1
1.02 Terms Generally . . . . . . . . . . . . . 18
II. THE CREDITS
2.01 Commitments . . . . . . . . . . . . . . . 19
2.02 Loans . . . . . . . . . . . . . . . . . . 19
2.03 Notice of Borrowings. . . . . . . . . . . 21
2.04 Refinancings. . . . . . . . . . . . . . . 22
2.05 Fees. . . . . . . . . . . . . . . . . . . 22
2.06 Notes; Repayment of Loans . . . . . . . . 23
2.07 Interest on Loans . . . . . . . . . . . . 24
2.08 Default Interest. . . . . . . . . . . . . 24
2.09 Alternate Rate of Interest. . . . . . . . 25
2.10 Termination and Reduction
of Commitments . . . . . . . . . . . . 26
2.11 Conversion and Continuation
of Borrowings. . . . . . . . . . . . . 26
2.12 Prepayment. . . . . . . . . . . . . . . . 28
2.13 Reserve Requirements; Change in
Circumstances. . . . . . . . . . . . . 29
2.14 Change in Legality . . . . . . . . . . . 31
2.15 Indemnity. . . . . . . . . . . . . . . . 32
2.16 Pro Rata Treatment . . . . . . . . . . . 33
2.17 Sharing of Setoffs . . . . . . . . . . . 34
2.18 Payments . . . . . . . . . . . . . . . . 34
2.19 Taxes. . . . . . . . . . . . . . . . . . 35
2.20. Termination or Assignment of Commitments
Under Certain Circumstances. . . . . . 38
IIA. LETTERS OF CREDIT
2A.01 LC Commitment . . . . . . . . . . . . . 39
2A.02 Notice. . . . . . . . . . . . . . . . . 40
2A.03 LC Participations . . . . . . . . . . . 40
2A.04 Disbursement and Reimbursement. . . . . 41
<PAGE>
III. REPRESENTATIONS AND WARRANTIES
3.01 Organization; Corporate Powers, etc.. . . 43
3.02 Authorization, etc. . . . . . . . . . . . 44
3.03 Enforceability. . . . . . . . . . . . . . 44
3.04 Financial Condition and Information . . . 44
3.05 No Material Adverse Change. . . . . . . . 45
3.06 Litigation. . . . . . . . . . . . . . . . 45
3.07 Federal Reserve Regulations . . . . . . . 45
3.08 Investment Company Act. . . . . . . . . . 46
3.09 Public Utility Holding Company Act. . . . 46
3.10 Tax Returns . . . . . . . . . . . . . . . 46
3.11 ERISA . . . . . . . . . . . . . . . . . . 46
3.12 Title to Properties; Possessions. . . . . 46
3.13 Use of Proceeds . . . . . . . . . . . . . 46
3.14 Environmental and Safety Matters. . . . . 47
3.15 Subsidiaries. . . . . . . . . . . . . . . 47
IV. CONDITIONS OF LENDING
4.01 Credit Events . . . . . . . . . . . . . . 47
4.02 First Credit Event. . . . . . . . . . . . 48
V. AFFIRMATIVE COVENANTS
5.01 Corporate Existence . . . . . . . . . . . 49
5.02 Insurance . . . . . . . . . . . . . . . . 50
5.03 Taxes . . . . . . . . . . . . . . . . . . 50
5.04 Financial Statements; Reports, etc. . . . 51
5.05 Litigation and Other Notices. . . . . . . 53
5.06 Maintaining Records; Access to Premises
and Records. . . . . . . . . . . . . . 53
5.07 Use of Proceeds . . . . . . . . . . . . . 53
VI. NEGATIVE COVENANTS
6.01 Liens . . . . . . . . . . . . . . . . . . 54
6.02 Sale and Lease-Back Transactions. . . . . 55
6.03 Subsidiary Indebtedness . . . . . . . . . 55
6.04 Mergers, Consolidations, Sales of
Assets . . . . . . . . . . . . . . . . 56
6.05 Business of Borrower and Subsidiaries . . 57
6.06 ERISA Liabilities . . . . . . . . . . . . 57
6.07 Consolidated Net Worth. . . . . . . . . . 57
6.08 Consolidated Debt to Capitalization . . . 57
6.09 Subordinated Indebtedness . . . . . . . . 57
VII. EVENTS OF DEFAULT. . . . . . . . . . . . . . . 58
VIII. THE ADMINISTRATIVE AGENT . . . . . . . . . . . 62
IX. MISCELLANEOUS
9.01 Notices . . . . . . . . . . . . . . . . . 65
9.02 Survival of Agreement . . . . . . . . . . 66
9.03 Binding Effect. . . . . . . . . . . . . . 66
9.04 Successors and Assigns. . . . . . . . . . 67
9.05 Expenses; Indemnity . . . . . . . . . . . 71
9.06 Right of Setoff . . . . . . . . . . . . . 72
9.07 Applicable Law. . . . . . . . . . . . . . 72
9.08 Waivers; Amendment. . . . . . . . . . . . 73
9.09 Interest Rate Limitation. . . . . . . . . 74
9.10 Entire Agreement. . . . . . . . . . . . . 74
9.11 Waiver of Jury Trial. . . . . . . . . . . 74
9.12 Severability. . . . . . . . . . . . . . . 74
9.13 Counterparts. . . . . . . . . . . . . . . 75
9.14 Headings. . . . . . . . . . . . . . . . . 75
9.15 Jurisdiction; Consent to Service of
Process. . . . . . . . . . . . . . . . 75
9.16 Confidentiality . . . . . . . . . . . . . 76
Exhibit A Form of Note
Exhibit B Borrowing Notice
Exhibit C Form of Letter of Credit
Exhibit D-1 Form of Assignment and Acceptance
Exhibit D-2 Administrative Questionnaire
Exhibit E-1 Form of Opinion of Streich Lang
Exhibit E-2 Form of Opinion of Cravath,
Swaine & Moore
Schedule 2.01 Commitments
Schedule 3.15(a) Material Subsidiaries
Schedule 3.15(b) Material Divisions
Schedule 6.01 Existing Permitted Liens
<PAGE>
REVOLVING CREDIT FACILITY AGREEMENT dated as of May 20, 1994,
among MAGMA COPPER COMPANY, a Delaware corporation (the
"Borrower"), the lenders listed in Schedule 2.01 (the "Lenders"),
NATIONAL WESTMINSTER BANK PLC, as co-agent (the "Co-Agent") and
CHEMICAL BANK, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent") and as issuer of Letters of
Credit (in such capacity, the "Issuing Bank").
The Borrower, the Lenders, the Co-Agent, the Administrative
Agent and the Issuing Bank are parties to a Credit Agreement dated as of
May 5, 1993 (the "Existing Credit Agreement"). The Borrower has asked that
the Existing Credit Agreement be terminated and replaced with this
Agreement in order to (a) provide for the addition of certain Lenders as
parties to this Agreement and the adjustment of lending commitments of the
Lenders to provide for credit in an aggregate principal amount not in
excess of $300,000,000 at any time outstanding on a revolving credit basis
on and after the date hereof and at any time and from time to time prior to
the Maturity Date (as herein defined) and (b) amend certain other terms and
conditions of the Existing Credit Agreement, as provided in this Agreement.
The proceeds of such borrowings are to be used for general corporate
purposes of the Borrower. The Lenders are willing to extend such credit to
the Borrower on the terms and subject to the conditions herein set forth.
Accordingly, the Borrower, the Lenders, the Co-Agent and the
Administrative Agent agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Adjusted CD Rate" shall mean, with respect to any CD
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/1000 of 1%) equal to the sum of (a) a
rate per annum equal to the product of (i) the Fixed CD Rate in effect for
such Interest Period and (ii) Statutory Reserves, plus (b) the Assessment
Rate. For purposes hereof, the term "Fixed CD Rate" shall mean the average
rate in the secondary market for certificates of deposit approximately
equal in principal amount to the respective CD Borrowing and for a term
equal to the respective Interest Period, appearing on the display
designated as page "CDNY" on the Reuters System (or on such other display
on the Reuters System as shall then display rates for the purchase at face
value of certificates of deposit or equivalent instruments) at 10:00 a.m.,
New York City time, on such day; provided, that if no rates can be obtained
from page "CDNY" or an equivalent display on the Reuters System, the Fixed
CD Rate shall mean the arithmetic average (rounded upwards, if necessary,
to the next 1/1000 of 1%) of the prevailing rates per annum bid at or about
10:00 a.m., New York City time, to the Administrative Agent on the first
Business Day of the Interest Period applicable to such CD Borrowing by
three New York City negotiable certificate of deposit dealers of recognized
standing selected by the Administrative Agent for the purchase at face
value of negotiable certificates of deposit of major United States money
center banks in a principal amount approximately equal to the greater of
the Administrative Agent's portion of such CD Borrowing and $1,000,000 and
with a maturity comparable to such Interest Period.
"Administrative Fees" shall have the meaning assigned to such
term in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit D-2 hereto.
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control
with the person specified.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate
in effect on such day plus 1% and (c) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" shall
mean the rate of interest per annum publicly announced from time to time by
the Administrative Agent as its prime rate in effect at its principal
office in New York City; each change in the Prime Rate shall be effective
on the date such change is publicly announced as effective. "Base CD Rate"
shall mean the sum of (a) the product of (i) the Three-Month Secondary CD
Rate and (ii) Statutory Reserves and (b) the Assessment Rate. "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day
(or, if such day shall not be a Business Day, the next preceding Business
Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current
practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate
shall not be so reported on such day or such next preceding Business Day,
the average of the secondary market quotations for three-month certificates
of deposit of major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if such day
shall not be a Business Day, on the next preceding Business Day) by the
Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it. "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized
standing selected by it. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate or both for any reason, including without limitation the
inability of the Administrative Agent to obtain sufficient quotations in
accordance with the terms thereof, the Alternate Base Rate shall be
determined without regard to clause (b) or (c), or both, of the first
sentence of this definition, as appropriate, until the circumstances giving
rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate
or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate, respectively.
"Applicable Commitment Fee Percentage" shall mean on any date
the applicable percentage set forth below based upon the ratings applicable
on such date to the Borrower's senior, unsecured, non-credit-enhanced
long-term indebtedness for borrowed money ("Index Debt"):
Percentage
CATEGORY 1 0.200%
Rating
BBB+ or above by S&P;
Baa1 or above by Moody's
CATEGORY 2 0.225%
Rating
BBB by S&P;
Baa2 by Moody's
CATEGORY 3 0.250%
Rating
BBB- by S&P;
Baa3 by Moody's
CATEGORY 4 0.300%
Rating
BB+ by S&P;
Ba1 by Moody's
CATEGORY 5 0.375%
Rating
BB or below by S&P;
Ba2 or below by Moody's
For purposes of the foregoing, (i) unless the ratings for Index Debt
established or deemed to have been established by both Moody's and S&P
shall fall within a single Category, the Applicable Commitment Fee
Percentage shall be determined by reference to the higher rating; (ii) if
either Moody's or S&P shall not have in effect a rating for Index Debt for
a reason related to the creditworthiness of the Borrower or to any act or
failure to act on the part of the Borrower, then the Applicable Commitment
Fee Percentage shall be determined by reference to the single rating that
shall be in effect or, if no rating shall be in effect, by reference to
Category 5; and (iii) if any rating established or deemed to have been
established by Moody's or S&P shall be changed (other than as a result of a
change in the rating system of Moody's or S&P), such change shall be
effective as of the date on which it is first announced by the applicable
rating agency. Each change in the Applicable Commitment Fee Percentage
shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of
the next such change. If the rating system of Moody's or S&P shall change,
or if either such rating agency shall no longer have in effect a rating for
Index Debt and clause (ii) above shall not be applicable, the Borrower and
the Lenders, acting through the Administrative Agent, shall negotiate in
good faith to amend the references to specific ratings in this definition
to reflect such changed rating system or the non-availability of ratings
from such rating agency.
"Applicable Margin" shall mean on any date, with respect to
the Loans comprising any Eurodollar Borrowing, CD Borrowing or ABR
Borrowing, as the case may be, the applicable spread set forth below based
upon the ratings applicable on such date to the Borrower's Index Debt:
EURODOLLAR CD LOAN ABR LOAN
LOAN SPREAD SPREAD SPREAD
CATEGORY 1 0.50% .625% 0
Rating
BBB+ or above by S&P;
Baa1 or above by
Moody's
CATEGORY 2 0.60% .725% 0
Rating
BBB by S&P;
Baa2 by Moody's
CATEGORY 3 0.70% .825% 0
Rating
BBB- by S&P;
Baa3 by Moody's
CATEGORY 4 0.875% 1.00% 0
Rating
BB+ by S&P;
Ba1 by Moody's
CATEGORY 5 1.00% 1.125% 0
Rating
BB or below by S&P;
Ba2 or below by Moody's
For purposes of the foregoing, (i) unless the ratings for Index Debt
established or deemed to have been established by both Moody's and S&P
shall fall within a single Category, the Applicable Margin shall be
determined by reference to the higher rating; (ii) if either Moody's or S&P
shall not have in effect a rating for Index Debt for a reason related to
the creditworthiness of the Borrower or to any act or failure to act on the
part of the Borrower, then the Applicable Margin shall be determined by
reference to the single rating that shall be in effect or, if no rating
shall be in effect, by reference to Category 5; and (iii) if any rating for
Index Debt established or deemed to have been established by Moody's or S&P
shall be changed (other than as a result of a change in the rating system
of Moody's or S&P), such change shall be effective as of the date on which
it is first announced by the applicable rating agency. Each change in the
Applicable Margin shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the
effective date of the next such change. If the rating system of Moody's or
S&P shall change, or if either such rating agency shall no longer have in
effect a rating for Index Debt and clause (ii) above shall not be
applicable, the Borrower and the Lenders, acting through the Administrative
Agent, shall negotiate in good faith to amend the references to specific
ratings in this definition to reflect such changed rating system or the
non-availability of ratings from such rating agency.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/1000 of 1%) most recently
determined by the Administrative Agent to be the then current net annual
assessment rate that will be employed in determining amounts payable by the
Administrative Agent to the Federal Deposit Insurance Corporation (or any
successor) for insurance by such Corporation (or such successor) of time
deposits made in dollars at the Administrative Agent's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit D-1.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrowing" shall mean a group of Loans of a single Type made
by the Lenders on a single date and as to which a single Interest Period is
in effect.
"Borrowing Notice" shall mean notice given pursuant to
Section 2.03.
"Business Day" shall mean any day (other than a day which is
a Saturday, Sunday or legal holiday in the State of New York or in London,
England) on which banks are open for business in New York City; provided,
however, that, when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Lease" means any lease of any property (whether
real, personal or mixed) required by GAAP to be accounted for as a capital
lease on the balance sheet of the lessee.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of
(or other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
person under GAAP and, for the purposes of this Agreement, the amount of
such obligations at any time shall be the capitalized amount thereof at
such time determined in accordance with GAAP.
"Capitalization" shall mean the sum of (i) Consolidated Debt
and (ii) Consolidated Net Worth.
"CD Borrowing" shall mean a Borrowing comprised of CD Loans.
"CD Loan" shall mean any revolving Loan bearing interest at a
rate determined by reference to the Adjusted CD Rate in accordance with the
provisions of Article II.
A "Change in Control" shall be deemed to have occurred if,
after the date hereof, (a) any person or group (within the meaning of
Rule 13d-3, as in effect on the date hereof, promulgated by the SEC under
the 1934 Act, shall acquire, directly or indirectly, beneficially or of
record, shares representing more than 50% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the
Borrower; (b) a majority of the seats (other than vacant seats) on the
board of directors become occupied by persons not members of said board on
the date hereof that were neither (i) nominated by the board of directors
of the Borrower, nor (ii) appointed by directors so nominated; or (c) any
person or group shall otherwise directly or indirectly Control the
Borrower.
"Closing Date" shall mean the date of the first Credit Event
hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as the
same may be amended from time to time.
"Commitment" shall mean, with respect to each Lender, the
revolving credit commitment of such Lender hereunder inclusive of the LC
Commitment of such Lender as set forth in Schedule 2.01 hereto, as such
Lender's Commitment may be permanently terminated or reduced from time to
time pursuant to Section 2.10 or 2.20. The Commitments shall automatically
and permanently terminate on the Maturity Date.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.05(a).
"Consolidated Debt" shall mean the total Debt of the Borrower
and the Subsidiaries, computed on a consolidated basis in accordance with
GAAP.
"Consolidated Net Income" shall mean, for any period, the
aggregate net income (or net deficit) of the Borrower and the Subsidiaries
for such period, computed on a consolidated basis in accordance with GAAP.
"Consolidated Net Worth" means, with respect to the Borrower
and its Subsidiaries, the excess of total assets over total liabilities,
each to be determined in accordance with GAAP consistent with those applied
in the preparation of the financial statements for the period ended
December 31, 1993; Consolidated Net Worth is currently identified as "Total
Stockholders' Equity" on the consolidated balance sheets provided by the
Borrower to the SEC.
"Control" shall mean the exercise of the power to direct or
cause the direction of the management or policies of a person, whether
through the exercise of rights of ownership under voting securities, under
contract or otherwise, and "Controlling" and "Controlled" shall have
meanings correlative thereto.
"Credit Event" shall have the meaning given such term in
Article IV.
"Debt" shall mean, as at the date as of which any
determination is being or is to be made thereof and in respect of any
person, without duplication and excluding intercorporate debt and other
intercorporate obligations solely among such person and its subsidiaries,
all (i) indebtedness of such person for borrowed money, (ii) obligations of
such person evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such person to pay the deferred purchase
price of property or services under conditional sale or other similar
agreements which provide for the deferral of the payment of the purchase
price for a period in excess of one year following the date of such
person's receipt and acceptance of the complete delivery of such property
and/or services, (iv) Capital Lease Obligations of such person and
(v) Guarantees by the Borrower and any of its Material Subsidiaries in
existence on the date hereof of Debt of third parties, provided, however,
that any Debt of the Borrower or any such Material Subsidiary not otherwise
reflected on the Borrower's or such Material Subsidiary's balance sheet
that arises with respect to Guarantees of the Debt of third parties shall
be in the amount of the Expected Contingent Liability of the Borrower or
such Material Subsidiary determined for all such Guarantees in the
aggregate, as calculated in good faith by the chief financial officer of
the Borrower as of the end of the most recently completed fiscal quarter of
the Borrower (which determination shall describe in reasonable detail the
method by which such amounts have been calculated and which determination
shall accompany the financial statements furnished to each Lender pursuant
to Sections 5.04(a) and 5.04(b) herein; provided that in the event the
Borrower shall fail to timely deliver any such calculation in substantial
compliance with Sections 5.04(a) and 5.04(b) herein, such amount shall be
the amount estimated in good faith by the Administrative Agent, which
estimate absent manifest error, shall be conclusive and binding on all
parties). Whenever any determination of the amount of Debt is required or
permitted to be, or is otherwise being or to be, made for any purpose under
this Agreement, the amount of any such debt denominated in any currency
other than U.S. dollars shall be calculated at the dollar equivalent of
such Debt as at the date as of which such determination of the amount of
Debt is being or to be made, except that, if all or any portion of the
principal amount of any such Debt which is payable in a currency other than
U.S. dollars is hedged into U.S. dollars, the principal amount of such
hedged Debt, or the hedged portion thereof, shall be deemed to be equal to
the amount of U.S. dollars specified in, or determined pursuant to, the
applicable hedging contract. Notwithstanding the above, Debt of the
Borrower shall exclude Capital Leases in an aggregate amount not to exceed
$60,000,000 which relate to property acquired by the Borrower or its
Subsidiaries after the Closing Date.
"Default" shall mean any event or condition which upon
notice, lapse of time or both would constitute an Event of Default.
"Designated Officer" shall mean any of the Chairman of the
Board, President, the Chief Financial Officer, the General Counsel, the
Secretary, the Treasurer and the Assistant Treasurer of the Borrower.
"dollars" or "$" shall mean lawful money of the United States
of America.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether
or not incorporated) that is a member of a group of which the Borrower is a
member and which is treated as a single employer under Section 414 of the
Code.
"ERISA Liabilities" means at any time the minimum liability
with respect to Plans that would be required to be reflected at such time
as a liability on the consolidated balance sheet of the Borrower under
GAAP; ERISA Liabilities are currently identified as "Prepaid (Accrued)
Pension Cost" in the footnotes to the consolidated balance sheets provided
by the Borrower to the SEC.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Lending Office", with respect to any Lender (or
Transferee), the Issuing Bank or the Administrative Agent, shall mean such
office or branch as such Lender (or Transferee), the Issuing Bank or the
Administrative Agent has designated to the Borrower herein in Schedule 2.01
as the office or branch of such Lender (or Transferee), the Issuing Bank or
the Administrative Agent which shall constitute the Lending Office thereof
for Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such
term in Article VII.
"Expected Contingent Liability" of a person with respect to
the Guarantee of any Debt shall mean the net expected value of the amounts
(expressed in dollars) that the person may be required to fund directly or
indirectly for the payment of such Debt under the material facts and
circumstances pertaining to such Guarantee and such Debt at the time of
calculation. In calculating the Expected Contingent Liability of a person,
the party shall take into consideration all offsetting values to be
received by that person at the time of its funding of amounts for payment
of such Debt and the expected financial capacity of the primary obligors
and all other contingent obligors to pay the subject Debt or claims for
subrogation or contribution with respect thereto, and shall reduce the
Expected Contingent Liability otherwise calculated by the expected amount
of such offsets or recoveries, so as to calculate the net expected value of
the respective Guarantee liability. Such calculation (as made in good
faith) of the Expected Contingent Liability with regard to a given
Guarantee shall be calculated on the basis of (a) the probability-weighted,
aggregate net expected value for all potential outcomes, or in the exercise
of prudent business practices customary to the industry, if such
calculation is not practicable then (b) the net value of the most likely
outcome, in either case as projected in good faith and with reasonable
diligence by the party making such determination.
"Fee Letter" shall mean the Fee Letter dated April 7, 1994,
between the Borrower, the Administrative Agent and Chemical Securities Inc.
"Fees" shall mean the Commitment Fees, the Administrative
Fees, the LC Fees and the Issuing Bank Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer or Controller of
such corporation.
"GAAP" means generally accepted accounting principles in the
United States.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any person shall mean any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including
without limitation any obligation of such person, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or to purchase (or to advance or supply funds
for the purchase of) any security for the payment of such Indebtedness,
(b) to purchase property, securities or services for the purpose of
assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness; provided, however, that the term
Guarantee shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Indebtedness" of a person means each of the following
(without duplication) that, individually, is in excess of $1,000,000 in
outstanding amount (in U.S. dollars or the equivalent at market exchange
rates) on the date such obligation is incurred: (a) obligations of that
person to any other person for payment of borrowed money, (b) Capital Lease
Obligations, (c) notes and drafts drawn or accepted by that person payable
to any other person, whether or not representing obligations for borrowed
money (but without duplication of indebtedness for borrowed money), (d) any
obligation for the purchase price of property the payment of which is
deferred for more than one year or evidenced by a note or equivalent
instrument, (e) Guarantees of Indebtedness of third parties, and (f) a
recourse or non-recourse payment obligation of any other person that is
secured by a Lien on any property of the first person, whether or not
assumed by the first person, up to the fair market value (from time to
time) of such property (absent manifest evidence to the contrary, the fair
market value of such property shall be the amount determined under GAAP for
financial reporting purposes).
"Interest Payment Date" shall mean, with respect to any Loan,
the last day of the Interest Period applicable thereto and, in the case of
a Eurodollar Loan with an Interest Period of more than three months'
duration or a CD Loan with an Interest Period of more than 90 days'
duration, each day that would have been an Interest Payment Date for such
Loan had successive Interest Periods of three months' duration or 90 days
duration, as the case may be, been applicable to such Loan and, in
addition, the date of any refinancing or conversion of such Loan with or to
a Loan of a different Type, the date of prepayment of such Loan and the
Maturity Date.
"Interest Period" shall mean (a) as to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending
on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3,
6 or, subject to availability, 9 or 12 months thereafter, as the Borrower
may elect, (b) as to any CD Borrowing, a period of 30, 60, 90, 180 or,
subject to availability, 360 days' duration, as the Borrower may elect,
commencing on the date of such Borrowing and (c) as to any ABR Borrowing,
the period commencing on the date of such Borrowing and ending on the next
March 31, June 30, September 30 or December 31 or, if earlier, on the
Maturity Date, the date such Borrowing is converted to a Borrowing of a
different Type in accordance with Section 2.11 or the date of repayment or
prepayment of such Borrowing in accordance with Section 2.06 or 2.12;
provided, however, that if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless, in the case of Eurodollar Loans only, such
next succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding Business
Day. Interest shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.
"Issuing Bank Fees" shall have the meaning given such term in
Section 2.05(d).
"LC Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to acquire participations in Letters of Credit
hereunder as set forth in Schedule 2.01, as the same may be permanently
terminated or reduced from time to time pursuant to Section 2.10 or 2.20.
The LC Commitments shall automatically and permanently terminate on the
Maturity Date.
"LC Disbursement" shall mean any payment or disbursement made
by the Issuing Bank under or pursuant to a Letter of Credit.
"LC Exposure" shall mean, at any time, the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time
plus (b) the aggregate amount which has been drawn under Letters of Credit
but for which the Issuing Bank or the Lenders, as the case may be, have not
been reimbursed by the Borrower.
"LC Fee" shall have the meaning given such term in
Section 2.05(c).
"Lending Office", with respect to any Lender (or Transferee),
the Issuing Bank or the Administrative Agent, shall mean such office or
branch as such Lender (or Transferee), the Issuing Bank or the
Administrative Agent has designated to the Borrower herein as the office or
branch of that Lender (or Transferee), the Issuing Bank or the
Administrative Agent from which Loans are to be made.
"Letters of Credit" shall mean letters of credit issued by
the Issuing Bank for the account of the Borrower pursuant to Article IIA.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to (a) the composite
London interbank offered rate for dollar deposits approximately equal in
principal amount to such Eurodollar Borrowing and for a maturity comparable
to such Interest Period appearing on the display designated as page "LIBO"
on the Reuters System, or such other display as the Reuters System shall
from time to time use to present such London interbank offered rates, or if
such rates shall for any reason not be available on the Reuters System,
then (b) the arithmetic average of the rates at which dollar deposits
approximately equal in principal amount to the greater of the
Administrative Agent's portion of such Eurodollar Borrowing and $1,000,000
and for a maturity comparable to such Interest Period are offered to the
principal London office of the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
"Lien" means any mortgage, pledge, security interest or
similar lien.
"Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to Section 2.03. Each Loan shall be a Eurodollar
Loan, a CD Loan or an ABR Loan.
"Loan Documents" shall mean this Agreement, the Notes and the
Fee Letter.
"Major Capital Project" shall mean each of the Robinson
Project, the Smelter Expansion and the Lower Kalamazoo Project.
"Margin Stock" shall have the meaning given such term under
Regulation U.
"Material Division" means San Manuel Mining Division, Pinto
Valley Mining Division or any other division of the Borrower or a
Subsidiary which represents more than 30% of the consolidated assets of the
Borrower.
"Material Subsidiary" means any of Magma Metals Company,
Magma Nevada Mining Company, the Robinson Mining Limited Partnership or any
other Subsidiary which represents more than 30% of the consolidated assets
of the Borrower.
"Maturity Date" shall mean the day preceding the fourth
anniversary of the date hereof.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Section 414 of the Code) is making or accruing an
obligation to make contributions, or has within any of the preceding five
plan years made or accrued an obligation to make contributions.
"1934 Act" shall mean the United States Securities Exchange
Act of 1934, as amended.
"Note" shall mean a revolving credit note of the Borrower
executed and delivered as provided in Section 2.06.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Permitted Lien" shall mean a Lien permitted under
Section 6.01.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or
any agency or political subdivision thereof.
"Plan" shall mean any pension plan (other than a
Multiemployer Plan) that is (1) a qualified plan under Section 401(a) of
the Code, (ii) subject to the provisions of Title IV of ERISA or
Section 412 of the Code and (iii) maintained for employees of the Borrower
or any ERISA Affiliate.
"Register" shall have the meaning given such term in
Section 9.04(d).
"Regulation D" shall mean Regulation D of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation G" shall mean Regulation G of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations
thereunder or thereof.
"Reportable Event" shall mean any reportable event as defined
in Section 4043(b) of ERISA or the regulations issued thereunder with
respect to a Plan (other than a Plan maintained by an ERISA Affiliate which
is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Section 414 of the Code).
"Required Lenders" shall mean, at any time, Lenders having
Commitments representing at least 66-2/3% of the Total Commitment or, for
purposes of acceleration pursuant to clause (B) of Article VII (or if the
Commitments shall have been terminated in full and any Loans shall remain
outstanding), Lenders holding Loans representing at least 66-2/3% of the
aggregate principal amount of the Loans outstanding.
"Sale and Lease-Back Transaction" shall have the meaning
assigned to such term in Section 6.02.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate of the maximum reserve
percentages (including without limitation any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board
and any other banking authority to which the Administrative Agent is
subject for new negotiable nonpersonal time deposits in dollars of over
$100,000 with maturities approximately equal to (i) the applicable Interest
Period, in the case of the Adjusted CD Rate, and (ii) three months, in the
case of the Base CD Rate (as such term is used in the definition of
"Alternate Base Rate"). Statutory Reserves shall be adjusted automatically
on and as of the effective date of any change in any reserve percentage.
"Subordinated Indebtedness" shall mean all indebtedness of
the Borrower subordinated to payment of the principal of, premium, if any,
and interest on the obligations of the Borrower under the Loan Documents.
"subsidiary" of a person means any corporation, association
or other business entity of which more than 50% of the total voting power
of shares of stock entitled to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by that person, by one or more of the other Subsidiaries of
that person, or by any combination thereof.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Total Commitment" shall mean at any time the aggregate
amount of the Lenders' Commitments, as in effect at such time.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the
Loans comprising such Borrowing is determined. For purposes hereof, "Rate"
shall include the LIBO Rate, the Adjusted CD Rate and the Alternate Base
Rate.
SECTION 1.02. Terms Generally. The definitions in Section
1.01 shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time;
provided, however, that, for purposes of determining compliance with any
covenant set forth in Article VI, such terms shall be construed in
accordance with GAAP as in effect on the date of this Agreement applied on
a basis consistent with the application used in preparing the Borrower's
audited financial statements referred to in Section 3.04.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and
conditions herein set forth, each Lender agrees, severally and not jointly,
to make Loans to the Borrower, at any time and from time to time on and
after the date hereof and until the earlier of the Maturity Date and the
termination of the Commitment of such Lender, in an aggregate principal
amount at any time outstanding not to exceed such Lender's Commitment,
subject, however, to the conditions that (a) at no time shall (i) the
outstanding aggregate principal amount of all Loans made by all Lenders
exceed (ii) the Total Commitment minus the LC Exposure and (b) at all times
the outstanding aggregate principal amount of all Loans made by each Lender
shall equal the product of (i) the percentage which its Commitment
represents of the Total Commitment times (ii) the outstanding aggregate
principal amount of all Loans. Each Lender's Commitment is set forth
opposite its respective name in Schedule 2.01. Such Commitments may be
terminated or reduced from time to time pursuant to Sections 2.10 and 2.20.
Within the foregoing limits, the Borrower may borrow, pay or
prepay and reborrow hereunder, on and after the date hereof and prior to
the Maturity Date, subject to the terms, conditions and limitations set
forth herein.
SECTION 2.02. Loans. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their Commitments; provided, however, that the failure of
any Lender to make any Loan shall not in itself relieve any other Lender of
its obligation to lend hereunder (it being understood, however, that no
Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). The Loans comprising any
Borrowing shall be in an aggregate principal amount which is an integral
multiple of $500,000 and not less than $1,000,000 (or an aggregate
principal amount equal to the remaining balance of the available
Commitments).
(b) Each Borrowing shall be comprised entirely of Eurodollar
Loans, CD Loans or ABR Loans, as the Borrower may request pursuant to
Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Borrower to repay such Loan in accordance with the terms
of this Agreement and the applicable Note. Borrowings of more than one
Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Borrowing which, if made,
would result in an aggregate of more than ten separate Loans of any Lender
being outstanding hereunder at any one time. For purposes of the
foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.04, each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to the Administrative Agent in New
York, New York, not later than 12:00 noon, New York City time, and the
Administrative Agent shall by 3:00 p.m., New York City time, credit the
amounts so received to the general deposit account of the Borrower with the
Administrative Agent (or such other account as the Borrower may designate)
or, if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders. Loans shall be made by the Lenders pro
rata in accordance with Section 2.16. Unless the Administrative Agent
shall have received notice from a Lender prior to the date of any Borrowing
that such Lender will not make available to the Administrative Agent such
Lender's portion of such Borrowing, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative
Agent on the date of such Borrowing in accordance with this paragraph (c)
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have made such portion available to
the Administrative Agent, such Lender and the Borrower severally agree to
repay to the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such
amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Effective Rate. If
such Lender shall repay to the Administrative Agent such corresponding
amount, such amount shall constitute such Lender's Loan as part of such
Borrowing for purposes of this Agreement.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request any Borrowing if the Interest
Period requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Notice of Borrowings. In order to request a
Borrowing, the Borrower shall give to the Administrative Agent written or
telecopy notice (or telephone notice promptly confirmed in writing or by
telecopy in the form of Exhibit B) (a "Borrowing Notice") (a) in the case
of a Eurodollar Borrowing, not later than 10:30 a.m., New York City time,
three Business Days before a proposed borrowing, (b) in the case of a CD
Borrowing, not later than 10:30 a.m., New York City time, two Business Days
before a proposed borrowing and (c) in the case of an ABR Borrowing, not
later than 10:30 a.m., New York City time, on the day of a proposed
borrowing. Such notice shall be irrevocable and shall in each case specify
(i) whether the Borrowing then being requested is to be a Eurodollar
Borrowing, a CD Borrowing or an ABR Borrowing; (ii) the date of such
Borrowing (which shall be a Business Day) and the amount thereof; (iii) if
such Borrowing is to be a Eurodollar Borrowing or CD Borrowing, the
Interest Period with respect thereto and (iv) if such Borrowing is to
refinance all or any part of any Borrowing, the identity and amount of such
Borrowing that the Borrower requests to be refinanced. If no election as
to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing or CD Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration, in the case of a Eurodollar Borrowing, or
30 days' duration, in the case of a CD Borrowing. Subject to Section 2.11,
if the Borrower shall not have given notice in accordance with this
Section 2.03 of its election to refinance a Borrowing prior to the end of
the Interest Period in effect for such Borrowing, then the Borrower shall
(unless such Borrowing is repaid at the end of such Interest Period) be
deemed to have given notice of an election to refinance such Borrowing with
an ABR Borrowing. The Administrative Agent shall promptly advise the
Lenders of any notice given pursuant to this Section 2.03 and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. Refinancings. The Borrower may refinance all
or any part of any Borrowing with a Borrowing of the same or a different
Type made pursuant to Section 2.03, subject to the conditions and
limitations set forth herein and elsewhere in this Agreement. Any
Borrowing or part thereof so refinanced shall be deemed to be repaid in
accordance with Section 2.06 with the proceeds of a new Borrowing hereunder
and the proceeds of the new Borrowing, to the extent they do not exceed the
principal amount of the Borrowing being refinanced, shall not be paid by
the Lenders to the Administrative Agent or by the Administrative Agent to
the Borrower pursuant to Section 2.02(c).
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, quarterly in arrears for the
calendar quarter ending each March 31, June 30, September 30 and
December 31 on a date not later than five Business Days after such calendar
quarter has ended and on the date on which the Commitment of such Lender
shall be terminated as provided herein, a commitment fee (a "Commitment
Fee") at a rate per annum equal to the Applicable Commitment Fee Percentage
from time to time in effect on the average daily unused amount of the
Commitment of such Lender (minus such Lender's average daily share, based
upon its LC Commitment, of the aggregate undrawn amount of outstanding
Letters of Credit) during the preceding calendar quarter (or shorter period
commencing with the date hereof or ending with the Maturity Date or any
date on which the Commitment of such Lender shall be terminated). All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Commitment Fee due to each Lender shall
commence to accrue on the date hereof and shall cease to accrue on the
earlier of the Maturity Date and the termination of the Commitment of such
Lender as provided herein.
(b) The Borrower agrees to pay the Administrative Agent, for
its own account, the fees provided for in the Fee Letter (the
"Administrative Fees") at the times provided therein.
(c) The Borrower agrees to pay to each Lender, through the
Administrative Agent, for the calendar quarter ending each March 31,
June 30, September 30 and December 31 on a date not later than five
Business Days after such calendar quarter has ended, and on the date on
which the Issuing Bank shall have no further obligation to issue Letters of
Credit hereunder and all outstanding Letters of Credit shall have been
drawn or expired, a letter of credit fee (an "LC Fee") equal to the
Applicable Margin for Eurodollar Loans on such Lender's pro rata share,
based upon its LC Commitment, of the average daily undrawn amount of
Letters of Credit outstanding during the preceding calendar quarter (or
shorter period commencing with the Closing Date or ending with the date on
which the Issuing Bank shall have no further obligation to issue Letters of
Credit hereunder and all outstanding Letters of Credit shall have been
drawn or expired). All LC Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days.
(d) The Borrower agrees to pay to the Issuing Bank, for its
own account, such fronting, issuance and drawing fees (the "Issuing Bank
Fees") as shall be agreed upon by the Borrower and the Issuing Bank from
time to time.
(e) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.06. Notes; Repayment of Loans. The Loans made by
each Lender shall be evidenced by a single Note duly executed on behalf of
the Borrower, dated the Closing Date, in substantially the form attached
hereto as Exhibit A with the blanks appropriately filled, payable to the
order of such Lender in a principal amount equal to the Commitment of such
Lender. The outstanding principal balance of each Loan, as evidenced by
the applicable Note, shall be payable on the last day of the Interest
Period applicable to such Loan and on the Maturity Date. Each Note shall
bear interest from the date thereof on the outstanding principal balance
thereof as set forth in Section 2.07. Each Lender shall, and is hereby
authorized by the Borrower to, endorse on the schedule attached to the Note
held by such Lender (or on a continuation of such schedule attached to each
such Note and made a part thereof), or otherwise to record in such Lender's
internal records, an appropriate notation evidencing the date and amount of
each Loan of such Lender, each payment or prepayment of principal of any
Loan and the other information provided for on such schedule; provided,
however, that the failure of any Lender to make such a notation or any
error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans made by such Lender in accordance with the terms of the
relevant Note.
SECTION 2.07. Interest on Loans. (a) Subject to the
provisions of Sections 2.08 and 2.09, the Loans comprising each Eurodollar
Borrowing shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to, in
the case of each Eurodollar Loan, the LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin. Interest on each
Eurodollar Borrowing shall be payable on each applicable Interest Payment
Date. The LIBO Rate for each Interest Period shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error. The Administrative Agent shall promptly advise the
Borrower and each Lender, as appropriate, of such determination.
(b) Subject to the provisions of Sections 2.08 and 2.09, the
Loans comprising each CD Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a
rate per annum equal to the Adjusted CD Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin. Interest on each CD
Borrowing shall be payable on each applicable Interest Payment Date. The
Adjusted CD Rate for each Interest Period shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error. The Administrative Agent shall promptly advise the
Borrower and each Lender, as appropriate, of such determination.
(c) Subject to the provisions of Sections 2.08 and 2.09, the
Loans comprising each ABR Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be, when determined by reference to the Prime Rate and over
a year of 360 days at all other times) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin. Interest on each ABR
Borrowing shall be payable on each applicable Interest Payment Date. The
Alternate Base Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error. The
Administrative Agent shall promptly advise the Borrower and each Lender of
such determination.
SECTION 2.08. Default Interest. If the Borrower shall
default in the payment of the principal of or interest on any Loan or any
other amount becoming due hereunder, whether by scheduled maturity, notice
of prepayment, acceleration or otherwise, the Borrower shall on demand from
time to time pay interest, to the extent permitted by law, on such
defaulted amount up to (but not including the date of actual payment (after
as well as before judgment) at a rate per annum (computed as provided in
Section 2.07(c)) equal to the Alternate Base Rate plus 2%.
SECTION 2.09. Alternate Rate of Interest. (a) In the
event, and on each occasion, that on the day two Business Days prior to the
commencement of any Interest Period for a Eurodollar Borrowing the
Administrative Agent shall have determined that dollar deposits in the
principal amounts of the Eurodollar Loans comprising such Borrowing are not
generally available in the London interbank market, or that the rates at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to any Lender of making or maintaining its Eurodollar Loan
during such Interest Period, or that reasonable means do not exist for
ascertaining the LIBO Rate, the Administrative Agent shall give immediate
telecopy notice of such determination to the Borrower and the Lenders. In
the event of any such determination, until the Administrative Agent shall
have advised the Borrower and the Lenders that the circumstances giving
rise to such notice no longer exist, any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to be a
request for an ABR Borrowing. The basis for each such determination by the
Administrative Agent hereunder shall be explained in reasonable detail in
the aforesaid notice to the Borrower and the Lenders and shall be
conclusive absent manifest error.
(b) In the event, and on each occasion, that on or before
the day on which the Adjusted CD Rate for a CD Borrowing is to be
determined the Administrative Agent shall have determined that such
Adjusted CD Rate cannot be determined for any reason, including without
limitation the inability of the Administrative Agent to obtain sufficient
bids in accordance with the terms of the definition of Fixed CD Rate, or
the Administrative Agent shall determine that the Adjusted CD Rate for such
CD Borrowing will not adequately and fairly reflect the cost to any Lender
of making or maintaining its CD Loan during such Interest Period, the
Administrative Agent shall give immediate telecopy notice of such
determination to the Borrower and the Lenders. In the event of any such
determination, any request by the Borrower for a CD Borrowing pursuant to
Section 2.03 shall, until the Administrative Agent shall have advised the
Borrower and the Lenders that the circumstances giving rise to such notice
no longer exist, be deemed to be a request for an ABR Borrowing. The basis
for each such determination by the Administrative Agent hereunder shall be
explained in reasonable detail in the aforesaid notice to the Borrower and
the Lenders shall be conclusive absent manifest error.
SECTION 2.10. Termination and Reduction of Commitments. (a)
The Commitments shall be automatically terminated on the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the Borrower may at
any time in whole permanently terminate, or from time to time in part
permanently reduce, (i) the Total Commitment or (ii) the LC Commitment,
except that the LC Commitment may at no time exceed the Total Commitment;
provided, however, that each partial reduction of the Total Commitment
shall be in an integral multiple of $1,000,000 and in a minimum principal
amount of $10,000,000; and provided further, that the Borrower shall not be
permitted to terminate or reduce the Total Commitment if, as a result, the
sum of (i) the aggregate principal amount of all Loans outstanding
hereunder and (ii) the LC Exposure would exceed the Total Commitment.
(c) Each reduction in the Commitments hereunder shall be
made ratably among the Lenders in accordance with their respective
Commitments. The Borrower shall pay to the Administrative Agent for the
account of the Lenders, on the date of each termination or reduction, the
Commitment Fees on the amount of the Commitments so terminated or reduced
accrued through the date of such termination or reduction.
SECTION 2.11. Conversion and Continuation of Borrowings.
The Borrower shall have the right at any time upon prior irrevocable notice
to the Administrative Agent (i) not later than 10:30 a.m., New York City
time, on the day of conversion, to convert any Eurodollar Borrowing or CD
Borrowing into an ABR Borrowing, (ii) not later than 10:30 a.m., New York
City time, two Business Days prior to conversion or continuation, to
convert any Eurodollar Borrowing or ABR Borrowing into a CD Borrowing or to
continue any CD Borrowing as a CD Borrowing for an additional Interest
Period, (iii) not later than 10:30 a.m., New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing or
CD Borrowing into a Eurodollar Borrowing or to continue any Eurodollar
Borrowing as a Eurodollar Borrowing for an additional Interest Period,
(iv) not later than 10:30 a.m., New York City time, three Business Days
prior to conversion, to convert the Interest Period with respect to any
Eurodollar Borrowing to another permissible Interest Period, and (v) not
later than 10:30 a.m., New York City time, two Business Days prior to
conversion, to convert the Interest Period with respect to any CD Borrowing
to another permissible Interest Period, subject in each case to the
following:
(a) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal
amounts of the Loans comprising the converted or continued Borrowing;
(b) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, the aggregate
principal amount of such Borrowing converted or continued shall
be an integral multiple of $1,000,000 and not less than
$5,000,000;
(c) each conversion shall be effected by each Lender by
applying the proceeds of the new Loan of such Lender resulting
from such conversion to the Loan (or portion thereof) of such
Lender being converted; accrued interest on a Loan (or portion
thereof) being converted shall be paid by the Borrower at the
time of conversion;
(d) any Eurodollar Borrowing or CD Borrowing may be converted
only at the end of the Interest Period applicable thereto;
(e) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or
continued as a Eurodollar Borrowing;
(f) any portion of a Borrowing maturing or required to be
repaid in less than 30 days may not be converted into or
continued as a CD Borrowing; and
(g) any portion of a Eurodollar Borrowing or CD Borrowing
which cannot be converted into or continued as a Eurodollar
Borrowing or a CD Borrowing by reason of clauses (e) and (f)
above shall be automatically converted at the end of the Interest
Period in effect for such Borrowing into an ABR Borrowing.
Each notice pursuant to this Section 2.11 shall be
irrevocable and shall refer to this Agreement and specify (i) the identity
and amount of the Borrowing that the Borrower requests be converted or
continued, (ii) whether such Borrowing is to be converted to or continued
as a Eurodollar Borrowing, a CD Borrowing or an ABR Borrowing, (iii) if
such notice requests a conversion, the date of such conversion (which shall
be a Business Day) and (iv) if such Borrowing is to be converted to or
continued as a Eurodollar Borrowing or CD Borrowing, the Interest Period
with respect thereto. If no Interest Period is specified in any such
notice with respect to any conversion to or continuation as a Eurodollar
Borrowing or CD Borrowing, the Borrower shall be deemed to have selected an
Interest Period of one month's duration, in the case of a Eurodollar
Borrowing, or 30 days' duration, in the case of a CD Borrowing. The
Administrative Agent shall advise the other Lenders of any notice given
pursuant to this Section 2.11 and of each Lender's portion of any converted
or continued Borrowing. If the Borrower shall not have given notice in
accordance with this Section 2.11 to continue any Borrowing into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this Section 2.11 to convert such Borrowing), such
Borrowing shall, at the end of the Interest Period applicable thereto
(unless repaid pursuant to the terms hereof), automatically be continued
into a new Interest Period as an ABR Borrowing.
SECTION 2.12. Prepayment. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole
or in part, upon one Business Day's written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent; provided, however, that each partial prepayment shall
be in an amount which is an integral multiple of $1,000,000 and not less
than $5,000,000.
(b) On the date of any termination or reduction of the
Commitments pursuant to Section 2.10 or 2.20, the Borrower shall pay or
prepay an amount of the Borrowings such that the sum of the aggregate
principal amount of the Loans outstanding and the LC Exposure will not
exceed the Total Commitment after giving effect to such termination or
reduction.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing (or portion thereof) to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein on the date
stated therein. All prepayments under this Section 2.12 shall be subject
to Section 2.15 but otherwise without premium or penalty. All prepayments
under this Section 2.12 shall be accompanied by accrued interest on the
principal amount being prepaid to the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation (either by way of
changes in existing laws or regulations or the introductions of new laws or
regulations) or in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof (whether or not having the force of law) shall change the basis of
taxation of payments to any Lender of the principal of or interest on any
Eurodollar Loan or CD Loan made by such Lender or any Letter of Credit
reimbursement obligations, Fees or other amounts payable hereunder (other
than changes in respect of taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal office or
by any political subdivision or taxing authority therein), or shall impose,
modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or
credit extended by such Lender, including without limitation any reserve
requirement that may be applicable to "eurocurrency liabilities" under and
as defined in Regulation D (except any such reserve requirement which is
reflected in the Adjusted CD Rate), or shall impose on such Lender or the
London interbank market any other condition affecting this Agreement or any
Eurodollar Loan or CD Loan made by such Lender, and the result of any of
the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan or CD Loan or to reduce the amount of any
sum received or receivable by such Lender hereunder or under the Notes (in
respect of CD Loans or Eurodollar Loans only), whether of principal,
interest or otherwise, by an amount deemed by such Lender in good faith to
be material, then, subject to Section 2.20, the Borrower will pay to such
Lender upon demand such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined
that the adoption after the date hereof of any law, rule, regulation or
guideline regarding capital adequacy, or any change after the date hereof
in any of the foregoing or in the interpretation or administration of any
of the foregoing by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or
compliance by any Lender (or any Lending Office of such Lender) or the
Issuing Bank or any Lender's or the Issuing Bank's holding company with any
request or directive promulgated after the date hereof regarding capital
adequacy (whether or not having the force of law) of any such Governmental
Authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on such Lender's or the Issuing Bank's
capital or on the capital of such Lender's or the Issuing Bank's holding
company, if any, as a consequence of this Agreement or the Loans made by
such Lender or the Letter of Credit issued by the Issuing Bank pursuant
hereto (or the participation of the Lenders therein) to a level below that
which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such
Lender or the Issuing Bank in good faith to be material, then, subject to
Section 2.20, from time to time the Borrower shall pay to such Lender or
the Issuing Bank such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting
forth such amount or amounts as shall be necessary to compensate such
Lender or the Issuing Bank or the holding company of either as specified in
paragraph (a) or (b) above, as the case may be, and setting forth in
reasonable detail the manner in which such amount or amounts shall have
been determined shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay each Lender or the Issuing
Bank the amount shown as due on any such certificate delivered by it within
10 days after its receipt of the same.
(d) Failure on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts
received or receivable or reduction in return on capital with respect to
any period shall not constitute a waiver of such Lender's or the Issuing
Bank's right to demand compensation with respect to such period or any
other period; provided that each Lender or the Issuing Bank will agree to
submit claims under this Section 2.13 only if it is the general policy of
such Lender or the Issuing Bank to make such claims under comparable
provisions of credit agreements with other similarly situated borrowers;
provided further that no Lender or the Issuing Bank shall be entitled to
compensation under this Section 2.13 for any costs incurred or reduction
suffered with respect to any date unless such Lender or the Issuing Bank
shall have notified the Borrower that it will demand compensation for such
costs or reduction under paragraph (c) above not more than 90 days after
the later of (i) such date and (ii) the date on which such Lender or the
Issuing Bank becomes aware or should have become aware in the exercise of
prudent banking practices of the event giving rise to such costs or
reduction. Notwithstanding any other provision of this Section 2.13, no
Lender shall demand compensation for any increased cost of reduction
referred to above if it shall not at the time be the general policy or
practice of such Lender to demand such compensation in similar
circumstances under comparable provisions of other credit agreements, if
any. The protection of this Section shall be available to each Lender and
the Issuing Bank regardless of any possible contention of the invalidity or
inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 2.13 shall survive the payment in full of the principal of and
interest on all Loans made hereunder.
SECTION 2.14. Change in Legality. (a) Notwithstanding any
other provision herein, if any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any
Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan,
then, subject to Section 2.20, by written notice to the Borrower and to the
Administrative Agent setting forth in reasonable detail the relevant
circumstances and the effect thereof, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made
by such Lender hereunder, whereupon any request by the Borrower
for a Eurodollar Borrowing shall, as to such Lender only, be
deemed a request for an ABR Loan unless such declaration shall be
subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it
be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the
effective date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above,
all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be
applied to repay the ABR Loans made by such Lender in lieu of, or resulting
from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan, if
lawful, on the last day of the Interest Period currently applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrower.
(c) Each Lender shall use its best efforts to give prompt
notification to the Administrative Agent and the Borrower of any event or
prospective event which will give rise to the operation of paragraph (a) of
this Section.
SECTION 2.15. Indemnity. The Borrower shall indemnify each
Lender on demand against any Redeployment Loss (defined below, which shall
not include lost profit) or expense which such Lender may sustain or incur
as a consequence of (a) any failure by the Borrower to fulfill on the date
of any Borrowing hereunder the applicable conditions set forth in
Article IV, (b) any failure by the Borrower to borrow or to refinance,
continue or convert any Loan hereunder after irrevocable notice of such
borrowing, refinancing, continuation or conversion has been given pursuant
to Section 2.03 or 2.11, as the case may be, (c) any payment, prepayment or
conversion of a Eurodollar Loan or CD Loan required by any other provision
of this Agreement or otherwise made or deemed made on a date other than the
last day of the Interest Period applicable thereto, (d) any default in
payment or prepayment of the principal amount of any Loan or any part
thereof or interest accrued thereon, as and when due and payable (at the
due date thereof, whether by scheduled maturity, acceleration, irrevocable
notice of prepayment or otherwise) or (e) the occurrence of any Default or
Event of Default, including without limitation, in each such case, any loss
or expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan or CD Loan.
"Redeployment Loss" shall mean, in each circumstance, the amount equal to
the excess, if any, as determined by such Lender in good faith, of (i) its
cost of obtaining the funds for the Loan being paid, prepaid, converted or
not borrowed (assumed to be the LIBO Rate or Adjusted CD Rate applicable
thereto) for the period from the date of such payment, prepayment or
failure to borrow to the last day of the Interest Period for such Loan (or,
in the case of a failure to borrow, the Interest Period for such Loan which
would have commenced on the date of such failure) over (ii) the amount of
interest (as reasonably determined by such Lender) that would be realized
by such Lender in reemploying the funds so paid, prepaid or not borrowed
for such period or Interest Period, as the case may be. A certificate of
any Lender setting forth in reasonable detail any amount or amounts which
such Lender is entitled to receive pursuant to this Section and setting
forth in reasonable detail the manner in which such amounts shall have been
determined shall be delivered to the Borrower and shall be conclusive
absent manifest error. Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations contained in
this Section 2.15 shall survive the payment in full of the principal of and
interest on all Loans made hereunder.
SECTION 2.16. Pro Rata Treatment. Except as required under
Section 2.14 or permitted by Section 2.20, each Borrowing, each payment or
prepayment of principal of any Borrowing, each payment of interest on the
Loans, each payment of the Commitment Fees, each reduction of the
Commitments and each refinancing of any Borrowing with a Borrowing of any
Type, shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or
been terminated, in accordance with the respective principal amounts of
their outstanding Loans). Each Lender agrees that in computing such
Lender's portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender's percentage of such
Borrowing to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that
if it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, obtain payment (voluntary or involuntary)
in respect of any Loan or Loans as a result of which the unpaid principal
portion of the Loans of such Lender shall be proportionately less than the
unpaid principal portion of the Loans of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face
value, and shall promptly pay to such other Lender the purchase price for,
a participation in the Loans of such other Lender, so that the aggregate
unpaid principal amount of the Loans and participations in the Loans held
by each Lender shall be in the same proportion to the aggregate unpaid
principal amount of all Loans then outstanding as the principal amount of
its Loans prior to such exercise of banker's lien, setoff or counterclaim
or other event was to the principal amount of all Loans outstanding prior
to such exercise of banker's lien, setoff or counterclaim or other event;
provided, however, that, if any such purchase or purchases or adjustments
shall be made pursuant to this Section 2.17 and the payment giving rise
thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the
purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that
any Lender holding a participation in a Loan deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to
such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrower in the amount of such participation.
SECTION 2.18. Payments. (a) The Borrower shall make each
payment (including without limitation principal of or interest on any
Borrowing or any Fees or other amounts) hereunder and under any other Loan
Document not later than 12:00 noon, New York City time, on the date when
due in dollars to the Administrative Agent at its offices at 270 Park
Avenue, New York, New York, in immediately available funds.
(b) Whenever any payment (including without limitation
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder or under any other Loan Document shall become due, or otherwise
would occur, on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if
applicable.
SECTION 2.19. Taxes. (a) All payments by the Borrower
under this Agreement shall be made without setoff or counterclaim and in
such amounts as may be necessary in order that all such payments after
deduction or withholding for or on account of any present or future taxes,
levies, imposts, duties, withholdings or other charges of whatsoever nature
and all liabilities with respect thereto, other than any taxes on or
measured by the gross or net income of a Lender pursuant to (i) the income
and/or franchise tax laws of the jurisdictions in which such Lender is
incorporated or organized or in which the principal office of such Lender
or the branch that is a party to this Agreement of that Lender is located,
and (ii) the income and/or franchise tax laws of the jurisdictions in which
the Lending Office or the Eurodollar Lending Office of that Lender are then
located (all such nonexcluded taxes, levies, imposts, duties, withholdings
and liabilities being hereinafter referred to as "Taxes"), shall not be
less than the amounts otherwise specified to be paid by the Borrower to or
for the account of the Administrative Agent, Issuing Bank or Lender (or any
transferee or assignee (each, a "Transferee")) under this Agreement. Upon
request of the Borrower in writing, each Lender shall designate a different
Lending Office or Eurodollar Lending Office, as the case may be, if such
designation will avoid the imposition of Taxes and if such designation will
not, in the sole judgment of such Lender, be otherwise disadvantageous to
such Lender. With respect to each deduction or withholding for or on
account of any Taxes of the Administrative Agent, Issuing Bank or any
Lender (or Transferee), Borrower shall promptly (and in any event not later
than 45 days thereafter) furnish to such Administrative Agent, Issuing
Bank, Lender (or Transferee) a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as
"Stamp Taxes"). Each Lender that is organized outside the United States
represents and warrants that as of the Closing Date, it is not aware of any
Stamp Tax imposed by the jurisdiction in which it is incorporated that
applies to this Agreement or any payment made to such Lender hereunder.
(c) The Borrower will indemnify each Lender (or Transferee),
the Issuing Bank and the Administrative Agent for the full amount of Taxes
and Stamp Taxes (including without limitation any Taxes or Stamp Taxes
imposed by any jurisdiction on amounts payable under this Section 2.19)
paid by such Lender (or Transferee), the Issuing Bank or the Administrative
Agent, as the case may be, and any liability (including without limitation
penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Stamp Taxes were correctly or legally
asserted by the relevant taxing authority or other Governmental Authority.
Such indemnification shall be made within 30 days after the date any Lender
(or Transferee), the Issuing Bank or the Administrative Agent, as the case
may be, makes written demand therefor. If a Lender, as the result of any
Tax with respect to which the Borrower is required to make a payment
pursuant to Section 2.19 shall realize a tax credit or refund in its
country or other jurisdiction of incorporation or organization or in the
jurisdiction in which its principal office or Lending Office or Eurodollar
Lending Office is then located, which tax credit or refund would not have
been realized but for the Borrower's payment of such Tax, such Lender shall
pay to the Borrower an amount equal to such tax credit or refund (to the
extent of amounts that have been paid by the Borrower under Section 2.19
with respect to such credit or refund) net of all out-of-pocket expenses of
such Lender; provided that the Borrower, upon the request of the Lender,
agrees to return such credit or refund (plus penalties, interest or other
charges) to such Lender in the event such Lender is required to repay such
credit or refund to the relevant taxing authority. Any amount required to
be calculated pursuant to this Section 2.19(c) shall be calculated in good
faith by the Lender (or Transferee), the Issuing Bank or the Administrative
Agent, and such calculation shall be conclusive and binding upon the
parties hereto.
(d) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 2.19 shall survive the payment in full of the principal of and
interest on all Loans made hereunder.
(e) Each Lender (or Transferee) that is organized outside
the United States (i) on or before the date it becomes a party to this
Agreement and (ii) with respect to each Lending Office or Eurodollar
Lending Office located outside the United States of such Lender (or
Transferee), on or before the date such office or branch becomes a Lending
Office or Eurodollar Lending Office, shall deliver to the Borrower and the
Administrative Agent such certificates, documents or other evidence, as
required by the Code or Treasury Regulations issued pursuant thereto,
including Internal Revenue Service Form 1001 or Form 4224, properly
completed and duly executed by such Lender (or Transferee) establishing
that payments received hereunder are (i) not subject to withholding under
the Code because such payment is effectively connected with the conduct by
such Lender (or Transferee) of a trade or business in the United States or
(ii) totally exempt from United States Federal withholding tax under a
provision of an applicable tax treaty. In addition, each such Lender (or
Transferee) shall, if legally able to do so, thereafter deliver such
certificates, documents or other evidence from time to time establishing
that payments received hereunder are not subject to such withholding upon
receipt of a written request therefor from the Borrower or the
Administrative Agent. Unless the Borrower and the Administrative Agent
have received forms or other documents satisfactory to them indicating that
payments hereunder or under the Notes are not subject to United States
Federal withholding tax, the Borrower or the Administrative Agent shall
withhold such taxes from such payments at the applicable statutory rate.
(f) The Borrower shall not be required to pay any additional
amounts to any Lender (or Transferee), the Issuing Bank or the
Administrative Agent in respect of United States Federal withholding tax
pursuant to paragraph (a) above if the obligation to pay such additional
amounts would not have arisen but for a failure by such Lender (or
Transferee), the Issuing Bank or the Administrative Agent to deliver the
certificates, documents or other evidence specified in the preceding
paragraph (e) unless such failure is attributable to (i) a change in
applicable law, regulation or official interpretation thereof or (ii) an
amendment or modification to or a revocation of any applicable tax treaty
or a change in official position regarding the application or
interpretation thereof, in each case on or after the date such Lender (or
Transferee), the Issuing Bank or the Administrative Agent becomes a party
to this Agreement (or, if applicable, on or after the date a Lending Office
or Eurodollar Lending Office of such Lender (or Transferee), Issuing Bank
or Administrative Agent became a Lending Office or Eurodollar Lending
Office hereunder).
(g) Nothing contained in this Section 2.19 shall require any
Lender (or Transferee), the Issuing Bank or the Administrative Agent to
make available any of its tax returns (or any other information relating to
its taxes) which it deems to be confidential.
SECTION 2.20. Termination or Assignment of Commitments Under
Certain Circumstances. (a) If any Lender (or Transferee) or the
Administrative Agent claims any additional amounts payable pursuant to
Section 2.13 or Section 2.19 or exercises its rights under Section 2.14, it
shall (consistent with legal and regulatory restrictions) (i) promptly
notify the Borrower (through the Administrative Agent) of the circumstances
giving rise to such additional amounts or the exercise of such rights and
(ii) file any certificate or document requested by the Borrower or change
the jurisdiction of its applicable Lending Office or take any other action
if the making of such a filing or change or the taking of such action would
avoid the need for or reduce the amount of any such additional amounts
which may thereafter accrue or avoid the circumstances giving rise to such
exercise and would not, in the sole determination of such Lender (or
Transferee), be otherwise disadvantageous to such Lender (or Transferee).
(b) In the event that any Lender shall have delivered a
notice or certificate pursuant to Section 2.13 or 2.14, or the Borrower
shall be required to make additional payments to any Lender under
Section 2.19, the Borrower shall have the right, at its option and own
expense, upon notice to such Lender and the Administrative Agent, (i) in
the case of Sections 2.13 or 2.19 only, to terminate the Commitment of such
Lender or (ii) in all cases described in this paragraph, to require such
Lender to transfer and assign without recourse (in accordance with and
subject to the restrictions contained in Section 9.04) all its interests,
rights and obligations under this Agreement to another financial
institution reasonably acceptable to the Administrative Agent which shall
assume such obligations; provided that (i) no such termination or
assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the Borrower or the assignee, as the case
may be, shall pay to the affected Lender in immediately available funds on
the date of such termination or assignment the principal of and interest
accrued to the date of payment on the Loans made by it hereunder and all
other amounts accrued for its account or owed to it hereunder.
(c) Each Lender represents and warrants to the Borrower that
as of the date hereof it is not aware of any claims available to it under
Section 2.13 or 2.14 or any circumstances which it has determined will
enable it to make any such claims.
ARTICLE IIA
LETTERS OF CREDIT
SECTION 2A.01. LC Commitment. (a) Subject to the terms and
conditions herein set forth, and subject to agreement by the Borrower and
the Issuing Bank on the Issuing Bank Fees to be paid from time to time, the
Issuing Bank agrees, at any time and from time to time on or after the
Closing Date until the earlier of May 5, 1998, and the termination of the
LC Commitments in accordance with the terms hereof, to issue and deliver
Letters of Credit at the request and for the account of the Borrower,
provided that the aggregate undrawn amount thereof at any one time
outstanding, shall at no time cause the LC Exposure to exceed $25,000,000.
Each Letter of Credit (i) shall be (a) in the form of Exhibit C or (b) in a
form approved in writing by the Borrower, the Administrative Agent and the
Issuing Bank, (ii) shall be in a minimum principal amount of $1,000,000 and
(iii) shall permit drawings upon the presentation of one or more sight
drafts and such other documents as shall be specified by the Borrower in
the applicable notice delivered pursuant to Section 2A.02 below.
(b) Each Letter of Credit shall by its terms expire not
later than the earlier of (i) the first anniversary of the date of issuance
and (ii) the Maturity Date. Each Letter of Credit shall by its terms
provide for payment of drawings in dollars.
SECTION 2A.02. Notice. The Borrower shall give the Issuing
Bank written or telecopy notice not later than 10:00 a.m., New York City
time, five Business Days (or such shorter period as shall be acceptable to
the Issuing Bank and the Administrative Agent) prior to any proposed
issuance of a Letter of Credit. Each such notice shall refer to this
Agreement and shall specify (i) the date on which such Letter of Credit is
to be issued (which shall be a Business Day), the face amount of such
Letter of Credit (which shall be an amount in dollars), (ii) the name and
address of the beneficiary, (iii) whether such Letter of Credit shall
permit a single drawing or multiple drawings, (iv) the form of the sight
draft and any other documents required to be presented at the time of any
drawing (together with the exact wording of such documents or copies
thereof) and (v) the expiry date of such Letter of Credit (which shall
conform to the provisions of Section 2A.01(b) above). The Issuing Bank
shall give the Administrative Agent, which shall in turn give to each
Lender, prompt written or telecopy advice of any notice received from the
Borrower pursuant to this paragraph.
SECTION 2A.03. LC Participations. (a) By the issuance of a
Letter of Credit and without any further action on the part of the Issuing
Bank or the Lenders in respect thereof, the Issuing Bank hereby grants to
each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's pro rata
percentage, based upon the LC Commitments in effect at the time of any
drawing thereunder (or, if the Commitments shall have been terminated
pursuant to Article VII, the LC Commitments in effect immediately prior to
such termination), of the face amount of such Letter of Credit, effective
upon the issuance of such Letter of Credit; provided, however, that no
Lender shall be required to acquire participations in Letters of Credit
that would result in its pro rata percentage, based upon its LC Commitment,
of the LC Exposure exceeding its LC Commitment. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, in accordance with Section 2A.04 below, such Lender's
pro rata percentage of each unreimbursed LC Disbursement made by the
Issuing Bank.
(b) Each Lender acknowledges and agrees that its acquisition
of participations pursuant to paragraph (a) above in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including without limitation the occurrence and
continuance of any Default or Event of Default hereunder, and that each
such payment shall be made without any offset, abatement, withholding or
reduction whatsoever; provided that nothing herein shall constitute a
waiver of any rights a Lender may have by reason of the gross negligence or
wilful misconduct of the Issuing Bank.
SECTION 2A.04. Disbursement and Reimbursement.
(a) Promptly after it shall have ascertained that any draft and any
accompanying documents presented under a Letter of Credit appear to be in
conformity with the terms and conditions of such Letter of Credit, the
Issuing Bank shall give written or telecopy notice to the Borrower and the
Administrative Agent of the receipt and amount of such draft and the date
on which payment thereon will be made. If the Administrative Agent shall
not have received from the Borrower the payment required pursuant to
paragraph (b) below by 12:00 noon, New York City time, one Business Day
after the date on which payment of a draft presented under any Letter of
Credit has been made, the Administrative Agent shall promptly so notify the
Issuing Bank and each Lender, specifying in the notice to each Lender such
Lender's pro rata percentage, based upon the LC Commitments, of such LC
Disbursement. Each Lender shall pay to the Administrative Agent, not later
than 2:00 p.m., New York City time, on such date, such Lender's percentage
of such LC Disbursement, which the Administrative Agent shall promptly pay
to the Issuing Bank. The Administrative Agent will promptly remit to each
Lender such Lender's percentage of any amounts subsequently received by the
Administrative Agent from the Borrower in respect of such LC Disbursement;
provided that (i) amounts so received for the account of any Lender prior
to payment by such Lender of amounts required to be paid by it hereunder in
respect of any LC Disbursement and (ii) amounts representing interest on
any LC Disbursement for the period prior to the payment by such Lender of
such amounts shall in each case be remitted to the Issuing Bank.
(b) If the Issuing Bank shall pay any draft presented under
a Letter of Credit, the Borrower shall pay to the Issuing Bank or to the
Administrative Agent for the account of the Issuing Bank or, if the
Administrative Agent shall have received the payments provided in
paragraph (a) above with respect to such drawing, for the accounts of the
Lenders, an amount equal to the amount of such draft before 12:00 noon,
New York City time, on the Business Day immediately following the date of
payment of such draft, together with interest on such amount at a rate per
annum equal to the interest rate in effect for ABR Borrowings from (and
including) the date of payment of such draft to (but excluding) the date of
such payment by the Borrower. The obligation of the Borrower to pay the
amounts referred to above in this paragraph (b) shall be absolute,
unconditional and irrevocable and shall be satisfied strictly in accordance
with their terms irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other person may at any time have
against the beneficiary under any Letter of Credit, the
Administrative Agent, the Co-Agent, any Issuing Bank or any
Lender (other than the defense of payment in accordance with the
terms of this Agreement or a defense based on the gross
negligence or wilful misconduct of the Issuing Bank) or any other
person in connection with this Agreement or any other
transaction;
(iii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any
respect; provided that payment by the Issuing Bank under such
Letter of Credit against presentation of such draft or document
shall not have constituted gross negligence or wilful misconduct;
(iv) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document which does not
comply in any immaterial respect with the terms of such Letter of
Credit; provided that such payment shall not have constituted
gross negligence or wilful misconduct; or
(v) any other circumstance or event whatsoever, whether or
not similar to any of the foregoing; provided that such other
circumstance or event shall not have been the result of gross
negligence or wilful misconduct of the Issuing Bank.
It is understood that in making any payment under a Letter of
Credit (x) the Issuing Bank's exclusive reliance on the documents presented
to it under such Letter of Credit as to any and all matters set forth
therein, including without limitation, reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be forged, fraudulent
or invalid in any respect, if such document on its face appears to be in
order, and whether or not any other statement or any other document
presented pursuant to such Letter of Credit proves to be forged or invalid
or any statement therein proves to be inaccurate or untrue in any respect
whatsoever, and (y) any noncompliance in any immaterial respect of the
documents presented under a Letter of Credit with the terms thereof shall,
in either case, not be deemed wilful misconduct or gross negligence of the
Issuing Bank.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the
Administrative Agent and the Lenders as follows:
SECTION 3.01. Organization; Corporate Powers, etc. (a) The
Borrower and each of the Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation; (b) the Borrower and each of the Subsidiaries has the
corporate power and authority to own its property and assets and to carry
on its business as now conducted and is qualified to do business in every
jurisdiction where such qualification is required except where the failure
to so qualify would not result in a material adverse effect on the
business, assets, operations or condition (financial or otherwise) of the
Borrower and the Subsidiaries taken as a whole; and (c) the Borrower has
the corporate power to execute, deliver and perform this Agreement and the
other Loan Documents and to borrow hereunder.
SECTION 3.02. Authorization, etc. The execution, delivery
and performance by the Borrower of this Agreement, the borrowings
hereunder, the Fee Letter and the issuance, execution and delivery of the
Notes: (a) have been duly authorized by all requisite corporate action;
(b) will not violate (i) any provision of law, any order of any court, or
any rule, regulation or order of any other agency of government, (ii) the
Certificate of Incorporation or By-laws of the Borrower or (iii) any
provision of any material indenture, agreement or other instrument to which
the Borrower is a party, or by which the Borrower or any of its properties
or assets are or may be bound; (c) will not be in conflict with, result in
a breach of or constitute (alone, with notice, with lapse of time, or with
any combination of these factors) a default under any indenture, agreement
or other instrument referred to in (b)(iii) above; and (d) will not result
in the creation or imposition of any Lien upon any property or assets of
the Borrower that is not a Permitted Lien. Except for filings which may be
required under the 1934 Act, no registration with or consent or approval
of, or other action by, any Governmental Authority is required in
connection with the execution, delivery and performance of this Agreement,
the execution and delivery of the Notes or the borrowing hereunder.
SECTION 3.03. Enforceability. This Agreement constitutes,
and each other Loan Document when duly executed and delivered by the
Borrower will constitute, the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws of general applicability relating to
or affecting creditors' rights from time to time in effect and to general
principles of equity (regardless of whether such enforcement is considered
in a proceeding at law or in equity).
SECTION 3.04. Financial Condition and Information. The
Borrower has heretofore furnished to each of the Lenders copies of (i) the
consolidated balance sheet of the Borrower and the Subsidiaries as of
December 31, 1993, and the related consolidated statements of income,
shareholder's equity and cash flows of the Borrower and the Subsidiaries
for the year ended December 31, 1993, including without limitation the
related notes, audited by and including the opinion of Arthur Andersen &
Co., independent public accountants for the Borrower and (ii) the Annual
Report on Form 10-K for the fiscal year ended December 31, 1993 of the
Borrower. Such financial statements fairly state the consolidated
financial condition of the Borrower and the Subsidiaries as of the
respective dates thereof and the consolidated results of the operations and
changes in financial position of the Borrower and the Subsidiaries for the
periods covered thereby. All such financial statements, including related
schedules and notes thereto, have been prepared in accordance with GAAP.
SECTION 3.05. No Material Adverse Change. Since
December 31, 1993, there has been no material adverse change in the
business, operations, assets or condition (financial or otherwise) of the
Borrower and the Subsidiaries taken as a whole (except as disclosed in the
financial statements referred to in Section 3.04).
SECTION 3.06. Litigation. Except as set forth in the
Borrower's SEC filing on Form 10-K for the year ended December 31, 1993,
there are no actions, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency now pending or, to
the knowledge of the Borrower, threatened against or affecting the Borrower
or any of the Subsidiaries or any property or rights of the Borrower or any
of the Subsidiaries which would be reasonably likely in the aggregate to
(i) materially impair the ability of the Borrower to perform its
obligations under this Agreement or the Notes or materially impair the
ability of the Borrower and the Subsidiaries taken as a whole to carry on
business substantially as now being conducted or (ii) result in any
material adverse change in the business, assets, operations, or condition
(financial or otherwise) of the Borrower and the Subsidiaries taken as a
whole.
SECTION 3.07. Federal Reserve Regulations. (a) Neither the
Borrower nor any of the Subsidiaries is engaged principally, or as one of
its important activities, in the business of extending credit for the
purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used,
whether directly or indirectly, and whether immediately, incidentally or
ultimately, (i) to purchase or carry Margin Stock or to extend credit to
others for the purpose of purchasing or carrying Margin Stock or to refund
indebtedness originally incurred for such purpose, or (ii) for any purpose
which entails a violation of, or which is inconsistent with, the provisions
of the Regulations of the Board, including Regulation G, U or X.
SECTION 3.08. Investment Company Act. The Borrower is not
an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended.
SECTION 3.09. Public Utility Holding Company Act. The
Borrower is not a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
SECTION 3.10. Tax Returns. As of the filing date of the
Borrower's Form 10-K, Form 10 Q or Form 8-K most recently filed with the
SEC, the Borrower has duly filed or caused to be filed all Federal, state
and local tax returns which are required to have been filed and has paid or
caused to be paid all material taxes required to be paid by it, except
taxes the validity of which is being contested in good faith by appropriate
proceedings and with respect to which the Borrower has set aside on its
books such reserves as are required by GAAP.
SECTION 3.11. ERISA. As of the filing date of the
Borrower's Form 10-K, Form 10-Q or Form 8-K most recently filed with the
SEC, the Borrower had no material undisclosed ERISA Liabilities under any
Plans.
SECTION 3.12. Title to Properties; Possession. Except for
its unpatented federal mining claims, with respect to which the Borrower
has exclusive mining rights (but not title) under applicable law, the
Borrower and each Subsidiary has good and indefeasible title to, or valid
leasehold interests in, all its material properties and assets, subject
only to encumbrances, adverse claims and defects in title which do not
involve any risk of loss that is material to the Borrower and the
Subsidiaries taken as a whole. All such assets and properties are free and
clear of all Liens other than those permitted by Section 6.01. The
Borrower has all licenses and rights necessary to enable it to use all
material technology used by it in its operations.
SECTION 3.13. Use of Proceeds. The Borrower will use the
proceeds of any borrowing hereunder solely for general corporate purposes.
SECTION 3.14. Environmental and Safety Matters. As of the
filing date of the Borrower's Form 10-K, Form 10-Q or Form 8-K most
recently filed with the SEC, the Borrower and the Subsidiaries had no
material undisclosed environmental liabilities.
SECTION 3.15. Subsidiaries. Schedule 3.15(a) and 3.15(b)
set forth as of the date hereof, respectively, a list of all Material
Subsidiaries and Material Divisions and the percentage ownership interest
of the Borrower therein.
ARTICLE IV
CONDITIONS TO CREDIT EVENTS
The obligations of the Lenders to make Loans, and the
obligation of the Issuing Bank to issue Letters of Credit (each of the
foregoing events being called a "Credit Event") are subject to the
satisfaction of the following conditions:
SECTION 4.01. Credit Events. On the date of each Credit
Event, including the date of each Borrowing in which Loans are refinanced
with new Loans as contemplated by Section 2.04:
(a) The Administrative Agent shall have received in respect
of such Borrowing a Borrowing Notice as required by Section 2.03.
(b) The representations and warranties set forth in
Article III hereof shall have been true and correct in all
material respects on the date hereof and the representations and
warranties set forth in Sections 3.01, 3.02, 3.03, 3.07, 3.08,
3.09, 3.10, 3.12, 3.13 and 3.14 shall be true and correct in all
material respects on and as of the date of such Borrowing with
the same effect as though made on and as of such date, except to
the extent such representations and warranties expressly relate
to an earlier date.
(c) At the time of and immediately after such Borrowing no
Event of Default or Default shall have occurred and be
continuing.
Each Borrowing shall be deemed to constitute a representation and warranty
by the Borrower on the date of such Borrowing as to the satisfaction of the
conditions specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) Each Lender shall have received a duly executed Note
complying with the provisions of Section 2.06.
(b) The Administrative Agent shall have received a favorable
written opinion of Streich Lang, P.A., counsel for the Borrower,
dated the Closing Date and addressed to the Administrative Agent
and the Lenders, to the effect set forth in Exhibit E-1 hereto,
and the Borrower hereby instructs such counsel to deliver such
opinion to the Administrative Agent.
(c) All legal matters incident to this Agreement and the
Credit Events hereunder shall be reasonably satisfactory to the
Lenders and to Cravath, Swaine & Moore, counsel for the
Administrative Agent. In addition, the Administrative Agent
shall have received a favorable written opinion from such
counsel, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, to the effect set forth in
Exhibit E-2 hereto, and the Administrative Agent hereby instructs
such counsel to deliver such opinion to the Administrative Agent.
(d) The Administrative Agent shall have received (i) a copy
of the certificate or articles of incorporation, including all
amendments thereto, of the Borrower, certified as of a recent
date by the Secretary of State of the state of its organization,
and a certificate as to the good standing of the Borrower as of a
recent date, from such Secretary of State; (ii) a certificate of
the Secretary or Assistant Secretary of the Borrower dated the
Closing Date and certifying (A) that attached thereto is a true
and complete copy of the by-laws of the Borrower as in effect on
the Closing Date and at all times since a date prior to the date
of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Borrower authorizing the
execution, delivery and performance of the Loan Documents and the
Credit Events hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect,
(C) that the certificate or articles of incorporation of the
Borrower have not been amended since the date of the last
amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection
herewith on behalf of the Borrower; and (iii) a certificate of
another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate
pursuant to (ii) above.
(e) The Administrative Agent shall have received a
certificate, dated the Closing Date and signed on behalf of the
Borrower by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in
paragraphs (b) and (c) of Section 4.01.
(f) The Administrative Agent shall have received all Fees
and other amounts due and payable hereunder or under the other
Loan Documents on or prior to the Closing Date.
(g) The Administrative Agent shall have received evidence
satisfactory to it that the Existing Credit Agreement shall have
been terminated and all loans and other amounts outstanding
thereunder paid in full on or prior to the date hereof.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as this
Agreement shall remain in effect or the principal of or interest on any
Loan or LC Disbursement or any Fee or any other expenses or amounts payable
hereunder shall be unpaid, unless the Required Lenders shall otherwise
consent in writing, it will, and will cause each of the Subsidiaries to:
SECTION 5.01. Corporate Existence. Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect
its corporate existence (except as expressly permitted by Section 6.04),
material rights, licenses, permits and franchises material to the conduct
of its business; comply in all material respects with all applicable laws,
rules, regulations, and orders (except that force majeure events will
excuse noncompliance so long as noncompliance would not materially impair
the creditworthiness of the Borrower) whether now in effect or hereafter
enacted where the failure to so comply would be reasonably likely to have a
material adverse effect on the business, assets, operations or condition
(financial or otherwise) of the Borrower and the Subsidiaries taken as a
whole; and, at all times maintain and preserve all material property
required for the conduct of its business as presently or hereafter
conducted.
SECTION 5.02. Insurance. Maintain adequate insurance by
financially sound and reputable insurers of all properties of a character
usually insured by companies engaged in the same or a similar business
operating on a similar economic scale in the same vicinity against loss or
damage resulting from fire or other risks insured against by extended
coverage and of the kind customarily insured against by such companies, and
maintain in full force and effect public liability insurance against claims
for personal injury, death or property damage occurring upon, in, about or
in connection with the use of any properties occupied or controlled by it
in such amounts as shall be customary among companies engaged in the same
or similar businesses and similarly situated and maintain such other
insurance as may be required by law; provided, however, that nothing in
this Section 5.02 shall preclude the Borrower or any of the Subsidiaries
from being self-insured to the extent customary with companies in the same
or similar business.
SECTION 5.03. Taxes. Pay and discharge promptly any taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its material property (real or
personal), before the same shall become delinquent; provided, however, that
neither the Borrower nor any of the Subsidiaries shall be required to pay
and discharge or to cause to be paid and discharged any such obligation,
tax, assessment, charge, levy or claim so long as the validity or amount
thereof shall be contested in good faith by appropriate proceedings and the
Borrower or such Subsidiary, as appropriate, shall set aside on its books
such reserves as are required by GAAP with respect thereto.
SECTION 5.04. Financial Statements; Reports, etc. In the
case of the Borrower, furnish to each Lender:
(a) within 90 days after the end of each fiscal year, (i) a
consolidated balance sheet of the Borrower and the Subsidiaries
and the related consolidated statement of income showing the
financial condition of the Borrower and the Subsidiaries as of
the close of such fiscal year and the results of operations
during such year, (ii) a consolidated statement of shareholder's
equity of the Borrower and the Subsidiaries as of the close of
such fiscal year, and (iii) a consolidated statement of cash
flows of the Borrower and the Subsidiaries for such fiscal year,
all the foregoing financial statements to be prepared in
accordance with GAAP and reported on by Arthur Andersen & Co. or
another accounting firm of nationally recognized standing and
(iv) all calculations with respect to Expected Contingent
Liabilities of the Borrower and its Material Subsidiaries, if
any;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Borrower, an unaudited
(i) consolidated balance sheet, (ii) consolidated statement of
income and (iii) consolidated statement of cash flows, each
showing the financial condition of the Borrower and the Subsidiaries
as of the end of such quarter and the results of operations for the
then-elapsed portion of the fiscal year, certified by a Financial
Officer of the Borrower as being correct and complete and as
presenting fairly the financial position and results of operations of
the Borrower and the Subsidiaries in accordance with GAAP, in each
case subject to normal year-end adjustments and (iv) all calculations
with respect to Expected Contingent Liabilities of the Borrower and
its Material Subsidiaries, if any;
(c) concurrently with each delivery of the statements
referred to in (a) and (b) above, a certificate of the firm or
person certifying such statements (which certificate, when
furnished by the independent accountants referred to in
paragraph (a) above, may be limited to accounting matters and
disclaim responsibility for legal interpretations) (i) certifying
that to the best of its or his knowledge no Event of Default or
Default has occurred, or, if such an Event of Default or Default
has occurred, specifying the nature and extent thereof and
accompanied by a statement of a Financial Officer of the Borrower
specifying any corrective action taken or proposed to be taken
with respect thereto, and (ii) setting forth in reasonable detail
the calculations required to demonstrate compliance with the
covenants, conditions and agreements contained in Article VI
hereof;
(d) Concurrently with each delivery of the statements
described in paragraphs (a) and (b) above, a report in form and
level of detail reasonably satisfactory to the Administrative
Agent containing with respect to each Major Capital Project:
(i) a statement of the status of the project in terms of major
milestones reached or major operational requirements accomplished
or obtained, (ii) a reasonable estimate of project capital
expenditures to date, (iii) a discussion of any substantial
revisions made to the budget, milestones or operational
requirements for or objectives of the project since the last such
report to Lenders, and (iv) a current projection of further
expenditures required to complete the project and achieve all
material initial operational objectives;
(e) promptly upon their becoming available, copies of all
reports (other than preliminary proxy statements) filed by the
Borrower or any of the Subsidiaries with the SEC (or any
Governmental Authority succeeding to any or all of the functions
of the SEC) under the requirements of the 1934 Act, or any
successor statute; and
(f) promptly, from time to time, such other information
regarding the operations, business affairs and financial
condition of the Borrower and the Subsidiaries as the
Administrative Agent may reasonably request provided that all
such information shall be held in strict confidence in accordance
with the restrictions set forth in Section 9.16.
SECTION 5.05. Litigation and Other Notices. Give the
Administrative Agent prompt written or telecopy notice of the following:
(a) any Event of Default or Default and the steps, if any,
proposed to be taken by the Borrower with respect thereto;
(b) the filing or commencement of any action, suit or formal
proceeding at law or in equity or by or before any court or
hearing officer of any Governmental Authority, or any other event
or condition, which has resulted in, or which is reasonably
likely to result in, a material adverse change in the business,
operations or condition (financial or otherwise) of the Borrower
and the Subsidiaries taken as a whole and which has not been
reported in the Borrower's most recent SEC filings on Form 10-K,
10-Q or 8-K.
SECTION 5.06. Maintaining Records; Access to Premises and
Records. Maintain all financial records in accordance with GAAP, and upon
reasonable notice permit representatives of the Administrative Agent and
each Lender to have access to such financial records and the premises of
the Borrower and any Subsidiary at reasonable times and to make such
excerpts from such records as such representatives may deem necessary
provided that each person obtaining information shall hold all information
obtained in strict confidence in accordance with the restrictions set forth
in Section 9.16.
SECTION 5.07. Use of Proceeds. Use the proceeds of the
Borrowing hereunder solely for the purposes set forth in Section 3.13.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as this
Agreement shall remain in effect or the principal of or interest on any
Loan or LC Disbursement or any Fee or any other expenses or amounts payable
hereunder shall be unpaid unless the Required Lenders shall otherwise
consent in writing, it will not, and will not cause or permit any of the
Subsidiaries to:
SECTION 6.01. Liens. Incur, create, assume or permit to
exist any Liens on any of its property or assets, or the property or assets
of a Material Subsidiary, now owned or hereafter acquired by it or by a
Material Subsidiary or on any income or rights in respect of any thereof,
to secure any Indebtedness unless the Borrower's obligations under the Loan
Documents shall simultaneously be secured equally and ratably with, and on
terms at least as favorable to the Lenders as those benefitting the holders
of, the Indebtedness so secured; provided that the foregoing shall not
apply to Liens on the property or assets of Borrower or any Subsidiary:
(i) existing on the date hereof and described in
Schedule 6.01 or existing prior to such merger, consolidation or
acquisition in the property or assets of any business association
or sole proprietorship merged with, consolidated with or acquired
by the Borrower or any of its Subsidiaries (excluding, however,
such Liens as are incurred in contemplation of such transaction);
provided that such Liens shall secure only those obligations that
they secure on the date hereof or on the date of (and immediately
prior to) such merger, consolidation or acquisition,
respectively;
(ii) in favor of the United States, any state or any
political subdivision or agency thereof which arise from
Indebtedness of a sort not described in any of clauses (a)
through (e) of the definition of such term;
(iii) that are deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), swap, future or
option contracts (including without limitation contracts entered
into for the purpose of interest rate or commodities hedging),
leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(iv) that are Liens on property, plant, improvements thereto
or equipment acquired (or, in the case of improvements,
constructed) after the Closing Date; provided that (i) such liens
are incurred, and the Indebtedness secured thereby is created,
before, upon or within one year after such acquisition (or
construction), (ii) the Indebtedness secured thereby does not
exceed the cost of such real property or plant, improvements or
equipment and (iii) such security interests do not apply to any
other property or assets of the Borrower or any Subsidiary;
(v) which secure Indebtedness in an amount incurred during
the term of this Agreement not greater than $100,000,000 minus
the aggregate purchase price of any Sale and Lease-Back
Transactions entered into by the Borrower and the Subsidiaries
during such term; and
(vi) that are any extension, renewal, or replacement (or
successive extensions, renewals, or replacements) in whole or in
part, of any lien referred to in (i) through (v) hereof;
provided, however, that (1) the lien shall be limited to all or
part of the property subject to the lien extended, renewed, or
replaced and (2) the principal amount of Indebtedness secured
thereby shall not be increased by such extension, renewal or
replacement.
SECTION 6.02. Sale and Lease-Back Transactions. Enter into
any arrangement, directly or indirectly, with any person whereby it shall
sell or transfer any property, real or personal, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (a "Sale and Lease-Back
Transaction"), provided that the Borrower or any Subsidiary may enter into
any Sale and Lease-Back Transaction in the ordinary course of business if
the aggregate purchase price of all property subject to Sale and Lease-Back
Transactions during the term of this Agreement does not exceed $100,000,000
minus the amount of any Indebtedness referred to in clause (v) of
Section 6.01 which shall be incurred by the Borrower and the Subsidiaries
during the term of this Agreement.
SECTION 6.03. Subsidiary Indebtedness. Permit any
Indebtedness of any Subsidiary to be outstanding, other than
(i) intercorporate debt and other intercorporate obligations exclusively
among the Borrower and its Subsidiaries, (ii) Indebtedness secured by Liens
in the property or assets of any Person that, if existing in property or
assets of the Borrower or any Subsidiary, would be Liens described in one
or more subsections 6.01(i) through (vi), inclusive, to the extent not
greater than the fair market value of the properties or assets subject to
such Liens at the time such Liens were created, (iii) Indebtedness deemed
to exist by reason of Sale and Lease-Back Transactions that, if involving
properties or assets of the Borrower or any Subsidiary, would be permitted
under Section 6.02, and (iv) other Indebtedness (including such portions of
Indebtedness permitted in part by the foregoing subsections (i), (ii) or
(iii) of this Section 6.03 as are in excess of the amount so permitted) in
an aggregate amount not to exceed $25,000,000 at any time.
SECTION 6.04. Mergers, Consolidations, Sales of Assets.
Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or
substantially all of its assets whether now owned or hereafter acquired or
any capital stock of any Material Subsidiary (including any sale or
transfer, by merger or otherwise, of one of the Material Subsidiaries or
Material Divisions); provided that a Material Subsidiary or Material
Division or any of the assets thereof may be transferred to a joint venture
(whether organized in the form of a corporation, limited liability company,
partnership or limited partnership) so long as the Borrower owns at least
50% of the equity, and participates at least substantially equally in the
control, of such joint venture), except that (a) the Borrower and any
Subsidiary may sell inventory in the ordinary course of business and (b) if
at the time thereof and immediately after giving effect thereto no Event of
Default or Default shall have occurred and be continuing (i) any wholly
owned Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation, (ii) any wholly owned Subsidiary may
merge into or consolidate with any other wholly owned Subsidiary in a
transaction in which the surviving entity is a wholly owned Subsidiary and
no person other than the Borrower or a wholly owned Subsidiary receives any
consideration, (iii) any other corporation may be merged with a Subsidiary
of the Borrower, provided that the surviving corporation shall be a
Subsidiary of the Borrower and no Event of Default or Default has occurred
or would occur as a result of such merger or acquisition and (iv) any other
corporation may be merged into the Borrower if the Borrower shall be the
surviving corporation and no Event of Default or Default has occurred or
would occur as a result of such merger or acquisition; provided that in any
merger of the Borrower, pursuant to (iv) above, the surviving entity shall
be at least as creditworthy as the Borrower immediately prior to such
merger or acquisition, and shall fully assume all obligations of the
Borrower pursuant to this Agreement.
SECTION 6.05. Business of Borrower and Subsidiaries.
Substantially change the nature of the business conducted by the Borrower
and the Subsidiaries, taken as a whole.
SECTION 6.06. ERISA Liabilities. Create or suffer to exist
ERISA Liabilities in an aggregate amount for all Plans in excess of
$25,000,000.
SECTION 6.07. Consolidated Net Worth. Permit Consolidated
Net Worth at any time to be less than the sum of (x) $450,000,000 and
(y) 50% of Consolidated Net Income (if positive) for each fiscal year
beginning with the fiscal year ending December 31, 1994. If the Borrower
shall not have delivered financial statements under Section 5.04 which
confirm the existence of a Default under this Section, the Administrative
Agent and the Lenders shall be entitled to take actions available to them
upon such a Default only if circumstances exist or events have occurred
which make the existence of such a Default reasonably certain.
SECTION 6.08. Consolidated Debt to Capitalization. Permit
the ratio of (a) Consolidated Debt, to (b) Capitalization at any time to be
greater than 0.60 to 1.
SECTION 6.09. Subordinated Indebtedness. (a) Amend or
modify the terms of any Subordinated Indebtedness if as a result such terms
would become less favorable to the Lenders.
(b) Amend or modify the covenants or default provisions of
any Subordinated Indebtedness if as a result such covenants or provisions
would be more restrictive of the Borrower.
(c) Cause or permit any Subordinated Indebtedness to become
due prior to the Maturity Date.
(d) Directly or indirectly prepay, redeem, purchase,
defease, retire or otherwise acquire for value (severally and collectively,
"retire", and the terms "retired" and "retirement" shall have the meanings
correlative thereto) any Subordinated Indebtedness; provided, however, that
the Borrower may retire Subordinated Indebtedness (i) with proceeds of new
Subordinated Indebtedness on terms at least as favorable to the Borrower
and the Lenders as the Subordinated Indebtedness being retired or (ii) if
the ratio of (A) Consolidated Debt to (B) Capitalization is less than 0.40
to 1 (determined pro forma as of the end of the Borrower's fiscal quarter
immediately preceding such retirement on the basis that (1) retirement of
the Subordinated Indebtedness had been effected as of that fiscal quarter
end and (2) any equity or indebtedness providing funds for such retirement,
if issued after such fiscal quarter end, was outstanding as of that fiscal
quarter end) and the funds used to effect such retirement are derived
exclusively from cash from operations, the issuance of equity or non-
revolving indebtedness or any combination thereof.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events
(herein called "Events of Default"):
(a) default shall be made in the payment of any principal of
any Loan or the reimbursement of any LC Disbursement, when and as
the same shall become due and payable, whether at the due date
thereof or by acceleration thereof or otherwise and such default
shall continue for a period of one Business Day after such
default;
(b) default shall be made in the payment of any interest on
any Loan or any Fee, indemnification amount or any other amount
due from the Borrower under the Loan Documents (other than an
amount referred to in (a) above), when and as the same shall
become due and payable, and such default shall continue for a
period of five Business Days after the earlier of (i) the day on
which a Designated Officer knows or should have known of such
default in the exercise of prudent business practices customary
to the industry and (ii) receipt by the Borrower of written or
telecopy notice from the Administrative Agent of such default;
(c) any representation or warranty made or deemed made by the
Borrower in connection with the Loan Documents or in any report,
certificate or other instrument furnished by the Borrower
pursuant to the Loan Documents or with the borrowing hereunder
shall prove to have been false or misleading in any material
respect when made or delivered or when deemed made in accordance
with the terms hereof; provided that if any such breach of
representation or warranty has been subsequently remedied (such
that if made or given as of the date of remedy it is no longer false
or misleading in any material respect) and such breach has caused no
material adverse effect on the rights or interests of any Lender
under this Agreement, such breach shall no longer
constitute a Default or Event of Default hereunder.
(d) default shall be made in the due observance or
performance of any covenant or agreement to be observed or
performed on the part of the Borrower contained in Section 5.01
or in Article VI, and with respect only to Section 5.01 (other
than the covenant in such Section to preserve its corporate
existence) and Section 6.01, such default shall continue for a
period of fifteen days after the earlier of (i) the day on which
a Designated Officer knows or should have known of such default
in the exercise of prudent business practices customary to the
industry and (ii) receipt by the Borrower of written or telecopy
notice from the Administrative Agent of such default;
(e) default shall be made in the due observance or
performance of any other covenant, condition or agreement to be
observed or performed on the part of the Borrower pursuant to the
terms hereof and such default shall remain unremedied for more
than thirty days after the earlier of (i) the day on which a
Designated Officer of Borrower knows or should have known of such
default in the exercise of prudent business practices customary
to the industry or (ii) written notice of such default shall have
been given to a Designated Officer by the Administrative Agent;
(f) the Borrower or any of its Material Subsidiaries shall
fail to make any payment on Indebtedness in excess of $5,000,000
when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness, or any
failure by the Borrower or any of its Material Subsidiaries to
perform any term, covenant or agreement on its part to be
performed under any agreement or instrument evidencing or
securing or relating to any Indebtedness in excess of $5,000,000
shall result in the acceleration of the maturity of a portion of
such Indebtedness in excess of $5,000,000;
(g) the Borrower or any of its Material Subsidiaries shall
(i) voluntarily commence any proceeding or file any petition
seeking relief under Title 11 of the United States Code or any
other Federal, state or foreign bankruptcy, insolvency or similar
law, (ii) consent to the institution of, or fail to controvert in
a timely and appropriate manner, any such proceeding or the
filing of any such petition, (iii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator or
similar official for such corporation or for a substantial part
of its property, (iv) file an answer admitting the material
allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or
fail generally to pay its debts as they become due or (vii) take
corporate action for the purpose of effecting any of the
foregoing;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any of
its Material Subsidiaries or of a substantial part of its or such
Subsidiary's property under Title 11 of the United States Code or any
other Federal, state or foreign bankruptcy, insolvency or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for the Borrower or any of its Material
Subsidiaries or for a substantial part of the property of any of them,
or (iii) the winding-up or liquidation of the Borrower or any of its
Material Subsidiaries; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering
any of the foregoing shall be entered;
(i) either of (A) the occurrence of any one or more
Reportable Events or (B) a failure to make a "required payment"
under the provisions of Section 412(n)(1) of the Code shall have
occurred with respect to any Plan or Plans and the occurrence of
either (A) or (B) above shall have resulted in any of
(1) liability of the Borrower to the PBGC or to one or more Plans
in an aggregate amount exceeding $25,000,000, (2) the termination
of the respective Plan or Plans by the PBGC, (3) the appointment
by the appropriate United States District Court of a trustee to
administer such Plan or Plans or (4) for the imposition of a Lien
in favor of such Plan or Plans;
(j) any material provision of the Loan Documents ceases to be
valid and binding on or enforceable against the Borrower; or
(k) there shall have occurred a Change in Control.
then, and in any such event, and at any time thereafter during
the continuance of such event, the Administrative Agent, at the
request of the Required Lenders, shall, by written or telecopy
notice to the Borrower, take either or both of the following
actions at the same or different times: (A) terminate forthwith
the Commitments of the Lenders and the obligations of the Issuing
Bank to issue Letters of Credit hereunder (B) declare the Loans
to be forthwith due and payable, whereupon the principal of such
Loans, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued
hereunder, shall become forthwith due and payable together with
interest thereon, if applicable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in
any Note to the contrary notwithstanding and (C) require that the
Borrower deposit cash with the Administrative Agent in an amount
equal to the aggregate LC Exposure as collateral (under its sole
dominion and control) for the repayment of drawings under
outstanding Letters of Credit; provided, however, that in the
case of an Event of Default specified in paragraph (g) or
involving the Borrower, without notice to the Borrower or any
the Administrative Agent or the Lenders, the Commitments shall
automatically terminate and all such Loans together with all such
interest, Fees and other amounts, shall become immediately due and
payable and the Borrower shall be required to deposit cash
collateral with the Administrative Agent as above provided, all
without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived by the Borrower,
anything contained herein or in any Note to the contrary
notwithstanding.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as Administrative Agent
on behalf of the Lenders. Each of the Lenders, and each subsequent holder
of any Note by its acceptance thereof, hereby irrevocably authorizes the
Administrative Agent to take such actions on its behalf and to exercise
such powers as are specifically delegated to the Administrative Agent by
the terms and provisions hereof and of the other Loan Documents, together
with such actions and powers as are reasonably incidental thereto. The
Administrative Agent is hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (a) to receive on behalf of the
Lenders all payments of principal of and interest on the Loans and all
other amounts due to the Lenders hereunder, and promptly to distribute to
each Lender its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the Borrower of any Default or
Event of Default specified in this Agreement of which the Administrative
Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by the Borrower pursuant
to this Agreement as received by the Administrative Agent.
Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable as such for any action taken
or omitted by any of them except for its or his own gross negligence or
wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in
connection herewith, or be required to ascertain or to make any inquiry
concerning the performance or observance by the Borrower of any of the
terms, conditions, covenants or agreements contained in any Loan Document.
The Administrative Agent shall not be responsible to the Lenders or the
holders of the Notes for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement, the Notes or any other
Loan Documents or other instruments or agreements. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes hereof until it shall have received from the payee of such Note
notice, given as provided herein, of the transfer thereof. The
Administrative Agent shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by
the Required Lenders and, except as otherwise specifically provided herein,
such instructions and any action or inaction pursuant thereto shall be
binding on all the Lenders and each subsequent holder of any Note. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith
to be genuine and correct and to have been signed or sent by the proper
person or persons. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall have any responsibility to
the Borrower on account of the failure of or delay in performance or breach
by any Lender of any of its obligations hereunder or to any Lender on
account of the failure of or delay in performance or breach by any other
Lender or the Borrower of any of their respective obligations hereunder or
under any other Loan Document or in connection herewith or therewith. The
Administrative Agent may execute any and all duties hereunder by or through
agents or employees and shall be entitled to rely upon the advice of legal
counsel selected by it with respect to all matters arising hereunder and
shall not be liable for any action taken or suffered in good faith by it in
accordance with the advice of such counsel.
The Lenders hereby acknowledge that the Administrative Agent
shall be under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement unless it shall be
requested in writing to do so by the Required Lenders.
The Administrative Agent may not, without the consent of the
Borrower, resign at any time. Upon receiving such consent, and subject to
giving 30 days' prior written notice to the Lenders, the Administrative
Agent may resign as Administrative Agent hereunder. Upon any such
resignation, the Required Lenders, with the consent of the Borrower (which
consent shall not be unreasonably withheld), shall have the right to
appoint from the Lenders a successor. If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the Administrative Agent gives notice of its
resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance
of any appointment as Administrative Agent hereunder by a successor bank,
such successor shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent and such
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 9.05 shall continue
in effect for its benefit in respect of any actions taken or omitted to be
taken by it while it was acting as an Administrative Agent.
With respect to the Loans made by it hereunder and the Notes
issued to it, the Administrative Agent in its individual capacity and not
as an Administrative Agent shall have the same rights and powers as any
other Lender and may exercise the same as though it were not the
Administrative Agent, and the Administrative Agent and its Affiliates may
accept deposits from, lend money to and generally engage in any kind of
business with the Borrower or any Subsidiary or other Affiliate thereof as
if it were not the Administrative Agent.
Each Lender recognizes that applicable laws, rules,
regulations or guidelines of Governmental Authorities may require the
Administrative Agent to determine whether the transactions contemplated
hereby should be classified as "highly leveraged" or assigned any similar
or successor classification, and that such determination may be binding
upon the other Lenders. Each Lender understands that any such
determination shall be made solely by the Administrative Agent based upon
such factors (which may include, without limitation, the Administrative
Agent's internal policies and prevailing market practices) as the
Administrative Agent shall deem relevant and agrees that the Administrative
Agent shall have no liability for the consequences of any such
determination.
Each Lender agrees (i) to reimburse the Administrative Agent,
on demand, in the amount of its pro rata share (based on its Commitment
hereunder) of any expenses incurred for the benefit of the Lenders by the
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall
not have been reimbursed by the Borrower and (ii) to indemnify and hold
harmless the Administrative Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from
and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or
asserted against it in its capacity as the Administrative Agent or any of
them in any way relating to or arising out of this Agreement or any other
Loan Document or any action taken or omitted by it or any of them under
this Agreement or any other Loan Document, to the extent the same shall not
have been reimbursed by the Borrower; provided that no person shall be
liable to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made
its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance
upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement or any other Loan Document, any related agreement
or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed or sent by telecopy, graphic scanning or
other telegraphic communications equipment of the sending party, as
follows:
(a) if to the Borrower, to it at 7400 North Oracle Road,
Suite 200, Tucson, Arizona 85704, Attention of Mr. Douglas J.
Purdom (Telecopy No. (602) 575-5674);
(b) if to the Administrative Agent, to it at 140 East 45th
Street, New York, New York 10017, Attention of Mr. James Morgan
(Telecopy No.
(212) 622-0854); and
(c) if to a Lender, to it at its address (or telecopy number)
set forth in Schedule 2.01 or in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have
been given on the date of receipt if delivered by hand or overnight courier
service or sent by telecopy or other telegraphic communications equipment
of the sender, or on the date five Business Days after dispatch by
certified or registered mail if mailed, in each case delivered, sent or
mailed (properly addressed) to such party as provided in this Section 9.01
or in accordance with the latest unrevoked direction from such party given
in accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower herein and
in the certificates or other instruments prepared or delivered in
connection with or pursuant to this Agreement or any other Loan Document
shall be considered to have been relied upon by the Lenders and shall
survive the making by the Lenders of the Loans, and the execution and
delivery to the Lenders of the Notes evidencing such Loans, regardless of
any investigation made by the Lenders or on their behalf, and shall
continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under
this Agreement or any other Loan Document is outstanding and unpaid and so
long as the Commitments have not been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
copies hereof which, when taken together, bear the signatures of each
Lender, and thereafter shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent and each Lender and their respective
successors and assigns, except that the Borrower shall not have the right
to assign its rights hereunder or any interest herein without the prior
consent of all the Lenders and the Administrative Agent.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrower, the
Administrative Agent or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and
assigns.
(b) Each Lender at its own expense may assign to one or more
assignees all or a portion of its interests, rights and obligations under
this Agreement (including all or a portion of its Commitment, its LC
Commitment and the Loans at the time owing to it and the Notes held by it);
provided, however, that (i) except in the case of an assignment to a Lender
or an Affiliate of any Lender, the Borrower must give its prior written
consent to such assignment (which consent shall not be unreasonably
withheld), (ii) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations
under this Agreement, (iii) the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to
the Administrative Agent) shall not be less than $10,000,000, (iv) the
parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with the Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500, (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire and (vi) any increased
costs by reason of any such assignment will not be borne by the Borrower.
Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (A) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have all the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto (but shall continue to be entitled to the
benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to any Fees
accrued for its account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the assignee thereunder
shall be deemed to confirm to and agree with each other and the other
parties hereto as follows: (i) such assigning Lender warrants that it is
the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim and that its Commitment, its LC Commitment
and the outstanding balances of its Loans, without giving effect to
assignments thereof which have not become effective, are as set forth in
such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement, or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto or the financial condition of the
Borrower or any Subsidiary or the performance or observance by the Borrower
or any Subsidiary of any of its obligations under this Agreement, any other
Loan Document or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with
copies of the most recent financial statements delivered pursuant to
Section 5.04 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (v) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Administrative Agent by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its
offices in The City of New York a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment and LC Commitment of, and
principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register
shall be conclusive in the absence of manifest error and the Borrower, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee together with
the Note or Notes subject to such assignment, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee
referred to in paragraph (b) above and, if required, the written consent of
the Borrower to such assignment, the Administrative Agent shall (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the
Borrower and the Lenders. Within five Business Days after receipt of
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for the surrendered Note or Notes, a new
Note or Notes to the order of such assigning Lender in a principal amount
equal to the applicable Commitment retained by it. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes; such new Notes shall be dated the
date of the surrendered Notes which they replace and shall otherwise be in
substantially the form of Exhibit A hereto. Canceled Notes shall be
returned to the Borrower.
(f) Each Lender may without the consent of the Borrower or
the Administrative Agent sell participations to one or more banks or other
entities in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment, its LC Commitment
and the Loans owing to it and the Notes held by it); provided, however,
that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the
participating banks or other entities shall be entitled to the benefit of
the cost protection provisions contained in Sections 2.13, 2.15 and 2.19 to
the same extent as if they were Lenders (however no participating bank or
entity shall be entitled to claim a greater amount than could have been
claimed by the Lender from whom the participation was acquired) and
(iv) the Borrower, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender
shall retain the sole right to enforce the obligations of the Borrower
relating to the Loans and to approve any amendment, modification or waiver
of any provision of this Agreement. No entity acquiring a participation
pursuant to this paragraph (f) shall by virtue of such participation have
any direct voting rights under this Agreement.
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation
pursuant to this Section 9.04, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided that,
prior to any such disclosure of such information, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree to preserve the
confidentiality of such information on terms no less restrictive than those
applicable to Lenders pursuant to Section 9.16.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement and the Notes issued to it to a Federal
Reserve Bank; provided that no such assignment shall release a Lender from
any of its obligations hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Lenders.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees
to pay all out-of-pocket expenses reasonably incurred by the Administrative
Agent in connection with the preparation of this Agreement and the other
Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or reasonably
incurred by the Administrative Agent or any Lender in connection with the
enforcement or protection of their rights in connection with this Agreement
and the other Loan Documents or in connection with the Loans made or the
Notes issued hereunder, including without limitation the reasonable fees,
charges and disbursements of Cravath, Swaine & Moore, incurred as counsel
for the Administrative Agent, and, in connection with any such enforcement
or protection, the reasonable fees, charges and disbursements of counsel
for the Lenders. The Borrower further agrees that it shall indemnify the
Lenders from and hold them harmless against any documentary taxes,
assessments or charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement or any of the other Loan
Documents.
(b) The Borrower agrees to indemnify the Administrative
Agent, each Lender and each of their respective directors, officers,
employees and agents (each such person being called an "Indemnitee")
against, and to hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including without
limitation reasonable counsel fees, charges and disbursements, incurred by
or asserted against any Indemnitee arising out of, in any way connected
with, or as a result of (i) the execution or delivery of this Agreement or
any other Loan Document or any agreement or instrument contemplated
thereby, the performance by the parties thereto of their respective
obligations thereunder or the consummation of the transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or the issuance of the
Letters of Credit pursuant to the request of the Borrower or (iii) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto; provided that
such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Indemnitee.
(c) The provisions of this Section 9.05 shall remain
operative and in full force and effect regardless of the expiration of the
term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the invalidity or
unenforceability of any term or provision of this Agreement or any other
Loan Document, or any investigation made by or on behalf of the
Administrative Agent or any Lender. All amounts due under this
Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. Subject to the provisions of
Section 2.17, if an Event of Default shall have occurred and be continuing
and any Lender shall have requested the Administrative Agent to declare the
Loans immediately due and payable pursuant to Article VII, each Lender is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement and any other Loan
Documents held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement or such other Loan Document
and although such obligations may be unmatured; provided that such right of
setoff shall not apply to amounts which may be held in (i) trust accounts
or (ii) asset management accounts, including without limitation brokerage
accounts, cash management accounts or other money management or investment
accounts of a non-depository nature with any Lender. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) Except as otherwise
provided in Section 2.13(d), no failure or delay of the Administrative
Agent or any Lender in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and
remedies of the Administrative Agent and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights
or remedies which they would otherwise have. No waiver of any provision of
this Agreement or any other Loan Document or consent to any departure by
the Borrower therefrom shall in any event be effective unless the same
shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for
which given. No notice or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements
in writing entered into by the Borrower and the Required Lenders; provided,
however, that no such agreement shall (i) decrease the principal amount of,
or extend the maturity of or any scheduled principal payment date or date
for the payment of any interest on any Loan, or waive or excuse any such
payment or any part thereof, or decrease the rate of interest on any Loan,
without the prior written consent of each holder of a Note affected
thereby, (ii) change or extend the Commitment or LC Commitment or decrease
the Commitment Fees or LC Fees of any Lender without the prior written
consent of such Lender, or (iii) amend or modify the provisions of
Sections 2.13, 2.14, 2.16, 2.19, 9.05 or 9.06, the provisions of this
Section or the definition of "Required Lenders", without the prior written
consent of each Lender; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent. Each Lender and each holder of a Note shall be bound
by any waiver, amendment or modification authorized by this Section
regardless of whether its Note shall have been marked to make reference
thereto, and any consent by any Lender or holder of a Note pursuant to this
Section shall bind any person subsequently acquiring a Note from it,
whether or not such Note shall have been so marked.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein or in the Notes to the contrary, if at any time the
applicable interest rate, together with all fees and charges which are
treated as interest under applicable law (collectively the "Charges"), as
provided for herein or in any other document executed in connection
herewith, or otherwise contracted for, charged, received, taken or reserved
by any Lender, shall exceed the maximum lawful rate (the "Maximum Rate")
which may be contracted for, charged, taken, received or reserved by such
Lender in accordance with applicable law, the rate of interest payable
under the Notes held by such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement and the
other Loan Documents constitute the entire contract between the parties
relative to the subject matter hereof. Any previous agreement among the
parties with respect to the subject matter hereof is superseded by this
Agreement and the other Loan Documents. Nothing in this Agreement or in
the other Loan Documents, expressed or implied, is intended to confer upon
any party other than the parties hereto and thereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement or the
other Loan Documents.
SECTION 9.11. Waiver of Jury Trial. Each party hereto
hereby waives, to the fullest extent permitted by applicable law, any right
it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of, under or in connection with this Agreement or
any of the other Loan Documents. Each party hereto (a) certifies that no
representative, agent or attorney of any other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (b) acknowledges that
it and the other parties hereto have been induced to enter into this
Agreement and the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications in this Section 9.11.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document
should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein and therein shall not in any way be affected or impaired thereby.
The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed
in two or more counterparts, each of which shall constitute an original but
all of which when taken together shall constitute but one contract, and
shall become effective as provided in Section 9.03. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile
transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 9.14. Headings. Article and Section headings and
the Table of Contents used herein are for convenience of reference only,
are not part of this Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process.
(a) Each of the parties hereto hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of
any New York State court or Federal court of the United States of America
sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the
other Loan Documents, or for recognition or enforcement of any judgment,
and each of the parties hereto hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be
heard and determined in such New York State or, to the extent permitted by
law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any Lender may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan Documents against the Borrower
or its properties in the courts of any jurisdiction.
(b) Each of the parties hereto hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or the other Loan Documents in any New York
State or Federal court sitting in New York City. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01.
Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 9.16. Confidentiality. (a) Each Lender agrees to
keep confidential (and to cause its respective officers, directors,
employees, agents and representatives to keep confidential) the Information
(as defined below), except that any Lender shall be permitted to disclose
Information (i) to such of its officers, directors, employees, agents and
representatives (including outside counsel) as need to know such
Information; (ii) to the extent required by applicable laws and regulations
or by any subpoena or similar legal process, or requested by any bank
regulatory authority (provided that such Lender shall, except for
Information requested by any such bank regulatory authority, promptly
notify Borrower (to the extent practicable and lawful, notice shall be
given to the Borrower before such disclosure is made so as to permit
Borrower to seek a protective order) of the circumstances and content of
each such disclosure and shall request confidential treatment of any
Information so disclosed); (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Agreement,
(B) becomes available to such Lender on a non-confidential basis from a
source other than the Borrower or its Affiliates or (C) was available to
such Lender on a non-confidential basis prior to its disclosure to such
Lender by the Borrower or its Affiliates; or (iv) to the extent the
Borrower shall have consented to such disclosure in writing. As used in
this Section 9.16, as to any Lender, "Information" shall mean any financial
statements, materials, documents and other information that the Borrower or
any of its Affiliates may have furnished or may hereafter furnish to the
Administrative Agent or any Lender in connection with this Agreement or any
other materials prepared by any such person from any of the foregoing.
IN WITNESS WHEREOF, the Borrower, the Administrative Agent,
the Issuing Bank and the Lenders have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year
first above written.
MAGMA COPPER COMPANY,
by
/s/ Douglas J. Purdom
Name: Douglas J. Purdom
Title: Vice President and
Chief Financial Officer
CHEMICAL BANK, individually, as
Administrative Agent and Issuing
Bank,
by
/s/ Theodore L. Parker
Name: Theodore L. Parker
Title: Vice President
NATIONAL WESTMINSTER BANK PLC,
individually and as Co-Agent,
by
/s/ Ian M. Plester
Name: Ian M. Plester
Title: Vice President
THE BANK OF NOVA SCOTIA,
by
/s/ John Quick
Name: John Quick
Title: Vice President
BARCLAYS BANK PLC,
by
/s/ David E. Roberts
Name: David E. Roberts
Title: Associate Director
BHF-BANK,
by
/s/ Robert R. Suehnholz
Name: Robert R. Suehnholz
Title: Senior Vice President
and Assistant General
Manager
by
/s/ Peter-Josef Becker
Name: Peter-Josef Becker
Title: Assistant Vice
President
CONTINENTAL BANK, N.A.,
by
/s/ Robert W. Bolt
Name: Robert W. Bolt
Title: Vice President
CREDIT LYONNAIS
CAYMAN ISLAND BRANCH,
by
/s/ Thierry F. Vincent
Name: Thierry F. Vincent
Title: Authorized Signatory
CREDIT LYONNAIS
LOS ANGELES BRANCH,
by
/s/ Thierry F. Vincent
Name: Thierry F. Vincent
Title: Vice President
FIRST INTERSTATE BANK OF ARIZONA,
N.A.,
by
/s/ John Helms
Name: John Helms
Title: Vice President
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY,
by
/s/ Yasuji Ikawa
Name: Yasuji Ikawa
Title: Joint General Manager
LONG TERM CREDIT BANK OF JAPAN,
LTD.,
by
/s/ Shuichi Takenaka
Name: Shuichi Takenaka
Title: Joint General Manager
by
/s/ T. Morgan Edwards II
Name: T. Morgan Edwards II
Title: Vice President
N. M. ROTHSCHILD & SONS LTD.,
by
/s/ Michael Allan Price
Name: Michael Allan Price
Title: Director
by
/s/ Marion Murdoch
Name: Marion Murdoch
Title: Manager
<PAGE>
EXHIBIT A
FORM OF NOTE
$[ ] New York, New York
May 20, 1994
FOR VALUE RECEIVED, the undersigned, MAGMA COPPER COMPANY, a
Delaware corporation (the "Borrower"), hereby promises to pay to the
order of (the "Bank"), at the office of Chemical Bank (the "Administrative
Agent"), at 270 Park Avenue, New York, New York 10017, on (i) the last day
of each Interest Period as defined in the Revolving Credit Facility
Agreement dated as of May 20, 1994, among the Borrower, the Lenders named
therein and Chemical Bank, as Administrative Agent for the Lenders, and
National Westminster Bank Plc, as Co-Agent (as the same may be modified,
amended,extended or restated from time to time, the "Credit Agreement"), the
aggregate unpaid principal amount of all Loans made by the Bank to the
Borrower pursuant to Sections 2.01 and 2.03 of the Credit Agreement to which
such Interest Period applies and (ii) on the Maturity Date (as defined in the
Credit Agreement), the lesser of the principal sum of Dollars ($ ) and
the aggregate unpaid principal amount of all Loans made by the Bank to the
Borrower pursuant to Sections 2.01 and 2.03 of the Credit Agreement, in lawful
money of the United States of America in same day funds, and to pay
interest from the date hereof on such principal amount from time to time
outstanding, in like funds, at said office, at a rate or rates per annum
and payable on such dates as determined pursuant to the Credit Agreement.
The Borrower promises to pay interest, on demand, on any
overdue principal and, to the extent permitted by law, overdue interest
from their due dates at a rate or rates determined as set forth in the
Credit Agreement.
The Borrower hereby waives diligence, presentment, demand,
protest and notice of any kind whatsoever. The nonexercise by the holder
of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the
respective dates thereof shall be endorsed by the holder hereof on the
schedule attached hereto and made a part hereof, or on a continuation
thereof which shall be attached hereto and made a part hereof, or
otherwise recorded by such holder in its internal records; provided,
however, that any failure of the holder hereof to make such a notation or
any error in such notation shall not in any manner affect the obligation
of the Borrower to make payments of principal and interest in accordance
with the terms of this Note and the Credit Agreement.
This Note is one of the Notes referred to in the Credit
Agreement which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events,
for optional and mandatory prepayment of the principal hereof prior to
the maturity thereof and for the amendment or waiver of certain
provisions of the Credit Agreement, all upon the terms and conditions
therein specified. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED STATES OF AMERICA.
MAGMA COPPER COMPANY,
by
Name:
Title:
<PAGE>
EXHIBIT B
FORM OF BORROWING NOTICE
Chemical Bank, as Administrative
Agent for the Lenders referred to below,
270 Park Avenue
New York, N.Y. 10017
Attention: [ ] [Date]
Dear Sirs:
The undersigned, MAGMA COPPER COMPANY, a Delaware corporation
(the "Borrower"), refers to the Revolving Credit Facility Agreement dated
as of May 20, 1994 (as it may hereafter be amended, modified, extended or
restated from time to time, the "Credit Agreement"), among the Borrower,
the Lenders named therein and Chemical Bank, as Administrative Agent for
the Lenders, and National Westminster Bank Plc, as Co-Agent. Capitalized
terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The Borrower
hereby gives you notice pursuant to Section 2.03 of the Credit Agreement
that it requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the terms on which such Borrowing is
requested to be made:
(A) Date of Borrowing
(which is a Business Day)
(B) Principal Amount of
Borrowing 1/
(C) Interest rate basis 2/
(D) Interest Period and the last
day, thereof 3/
(E) Refinance Election 4/
Identity
Amount
Upon acceptance of any or all of the Loans made by the Lenders
in response to this request, the Borrower shall be deemed to have
represented and warranted that the conditions to lending specified in
Sections 4.01(b) and (c) of the Credit Agreement have been satisfied.
Very truly yours,
MAGMA COPPER COMPANY,
By
Title: [Financial Officer]
- - ------------
1/ Not less than $1,000,000 (and in integral multiples of $500,000) or greater
than the Total Commitment then available.
2/ Eurodollar Borrowing, CD Borrowing or ABR Borrowing.
3/ Which shall be subject to the definition of "Interest Period" and end not
later than the Maturity Date.
4/ Identity shall include the date of the Borrowing, the Type and the date of
the last Interest Period.
<PAGE>
EXHIBIT C
FORM OF LETTER OF CREDIT
CHEMICAL BANK
TRADE SERVICES GROUP
55 WATER STREET
NEW YORK, NY 10041
Issue Date:
Irrevocable Letter of
Credit No:
Amount:
[Name and address of
beneficiary]
Ladies and Gentlemen:
At the request and on the instruction of our customer Magma Copper
Company, a Delaware corporation (the "Company"), we hereby establish in
your favor, as beneficiary, this Irrevocable Letter of Credit in the amount
of $[ ] (the "Stated Amount") effective immediately and expiring at
Chemical Bank's close of business on [ ] unless earlier terminated
in accordance with the provisions hereof. All drawings under this Letter
of Credit will be paid with our funds. Certain terms herein are used
herein as defined in the second-to-last paragraph hereof.
Funds under this Letter of Credit will be made available to you in one
or more drawings against receipt by us of your sight draft drawn on us
together with your written certificate in the form of Annex I (each, a
"Certificate of Drawing") purportedly signed by an Authorized Officer.
Each Certificate of Drawing shall be presented at our office located at
CHEMICAL BANK, 55 Water Street, Letter of Credit Department, New York, New
York 10041, Attention: Standby Letter of Credit Department, Room 1708, or
at any other office in the City and State of New York which may be
designated by us by written notice delivered to you.
If a drawing is made by you hereunder at or prior to 11:00 a.m. (New
York time) on a Business Day, and provided that, at or prior to 11:00 a.m.
(New York time), such drawing and the documents presented in connection
herewith and therewith conform to the terms and conditions hereof, payment
shall be made to you or in accordance with your instructions of the amount
requested to be drawn under the related Certificate of Drawing in United
States dollars (in immediately available funds) not later than 3:00 p.m.
(New York time) on the same Business Day. If a drawing is made by you
hereunder after 11:00 a.m. (New York time) on a Business Day, and provided
that such drawing and the documents presented in connection herewith and
therewith conform to the terms and conditions hereof, payment shall be made
to you or in accordance with your instructions of the amount requested to
be drawn under the related Certificate of Drawing, in United States dollars
(in immediately available funds) not later than 12:00 noon (New York time)
on the next succeeding Business Day. If requested by you, payment under
this Letter of Credit will be made by (a) deposit of the amount requested
to be drawn under the related Certificate of Drawing, in United States
dollars (in immediately available funds) into a designated account that you
maintain with us or (b) by United States Federal Reserve System wire
transfer pursuant to your instructions and subject to deduction of our
standard fee for wire transfer services. If a demand for payment made by
you hereunder does not, in any instance, conform to the terms and
conditions of this Letter of Credit, we shall give you prompt notice that
the demand for payment was not effected in accordance with the terms and
conditions of this Letter of Credit, stating the reasons therefor and that
we will hold any documents at your disposal or upon your instructions
return the same to you. Upon being notified that any demand for payment
was not effected in conformity with this Letter of Credit, you shall be
entitled to correct or cure, or cause the correction or cure of, any such
non-conforming demand, whereupon (and to the extent of such correction or
cure) such demand shall be deemed validly given as of the time and the date
of such correction or cure in such instance for purposes of this Letter of
Credit; provided, that such correction or cure shall occur on or prior to
the Expiration Date.
Only you may make a drawing under this Letter of Credit. Upon
the payment to you, in accordance with your instructions or to your account
of the full amount demanded hereunder with respect to each drawing, we
shall be fully discharged of our obligation under this Letter of Credit
with respect to such demand for payment and we shall not thereafter be
obligated to make any further payments under this Letter or Credit in
respect of such demand for payment to you or any other person or entity.
Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to us at 55 Water Street, New York, New York
10041, Attention: Standby Letter of Credit Department, Room 1708,
specifically referring to this Letter of Credit by number.
This Letter of Credit cannot be transferred or assigned, either
in whole or in part.
As used herein: "Authorized Officer" means any of your Chairman
of the Board, President, Vice Presidents, other chief financial officers,
principal accounting officers, Treasurer and Controller; "Business Day"
means any day other than a day which is a Saturday, Sunday or legal holiday
in the City of New York or a day on which banking institutions are
authorized by law or other governmental actions to close; "Expiration Date"
means the earlier of [ ].
THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS, 1993 REVISION, I.C.C. PUBLICATION NO. 500 (THE
"UNIFORM CUSTOMS"). THIS LETTER OF CREDIT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER, AND SHALL (AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS)
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
Very truly yours,
CHEMICAL BANK
By
Title:
<PAGE>
EXHIBIT D-1
[FORM OF]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Revolving Credit Facility Agreement
dated as of May 20, 1994 (the "Credit Agreement"), among Magma Copper
Company, a Delaware corporation (the "Borrower"), the lenders named therein
(the "Lenders") and Chemical Bank, as Administrative Agent for the Lenders
(in such capacity, the "Administrative Agent"), and National Westminster
Bank Plc, as Co-Agent. Terms defined in the Credit Agreement and not
otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without -
recourse, from the Assignor, effective as of the Effective Date set forth
on the reverse hereof, the interests set forth on the reverse hereof (the
"Assigned Interest") in the Assignor's rights and obligations under the
Credit Agreement, including, without limitation, the interests set forth on
the reverse hereof in the Commitment of the Assignor on the Effective Date
and the Loans owing to the Assignor which are outstanding on the Effective
Date, together with unpaid interest accrued on the assigned Loans to the
Effective Date and the amount, if any, set forth on the reverse hereof of
the Fees accrued to the Effective Date for the account of the Assignor.
Each of the Assignor and the Assignee hereby makes and agrees to be bound
by all the representations, warranties and agreements set forth in
Section 9.04(c) of the Credit Agreement, a copy of which has been received
by each such party. From and after the Effective Date (i) the Assignee
shall be a party to and be bound by the provisions of the Credit Agreement
and, to the extent of the interests assigned by this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and
under the Loan Documents and (ii) the Assignor shall, to the extent of the
interests assigned by this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance is being delivered to the
Agent together with (i) the Notes evidencing the Loans included in the
Assigned Interest, (ii) the appropriate forms specified in Section 2.19(e)
of the Credit Agreement, duly completed and executed by such Assignee,
(iii) if the Assignee is not already a Lender under the Credit Agreement,
an Administrative Questionnaire in the form of Exhibit C-2 to the Credit
Agreement and (iv) a processing and recordation fee of $3,500.
3. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
(may not be fewer than 5 Business
Days after the Date of Assignment):
Facility Principal Amount Assigned Percentage Assigned of
Facility/Commitment (set
forth, to at least 8
decimals, as a percentage
of the Facility and the
aggregate Commitments of
all Lenders thereunder)
Commitment
Assigned: $ %
Loans:
Fees Assigned
(if any):
The terms set forth above and on the
reverse side hereof are hereby agreed to: Accepted 1/
______________________, as Assignor MAGMA COPPER COMPANY,
By By
__________________________ _______________________
Name: Name:
Title: Title:
______________________, as Assignee CHEMICAL BANK, as Agent
By By
__________________________ _______________________
Name: Name:
Title: Title:
______________________
1// To be completed only if consents are required under Section 9.04(b)
<PAGE>
EXHIBIT D-2
ADMINISTRATIVE QUESTIONNAIRE
MAGMA COPPER COMPANY
Please accurately complete the following information and return via FAX to
the attention of James Morgan at Chemical Bank, 140 East 45th Street,
29th Floor, New York, New York 10001, as soon as possible.
FAX Number: 212-622-0854
LEGAL NAME OF YOUR INSTITUTION TO APPEAR IN DOCUMENTATION:
_________________________________________________________________
GENERAL INFORMATION - ALTERNATE BASE RATE LENDING OFFICE:
Institution Name: ______________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name: ______________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
CREDIT CONTACTS/NOTIFICATION METHODS:
Primary Contact: _______________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
Phone Number: __________________________________________________
FAX Number: ____________________________________________________
Backup Credit Contact: _________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
Phone Number: __________________________________________________
FAX Number: ____________________________________________________
<PAGE>
TAX WITHHOLDING:
UNITED STATES
Non-Resident Alien or Foreign Corporation or Other Foreign Entity
__________ YES __________ NO
If yes, please enclose Form 4224 or 1001. If no, please enclose
Form W-8 or W-9.
Tax ID Number _________________________________
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact: _______________________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
Phone Number: __________________________________________________
FAX Number: ____________________________________________________
Telex & Answer Back: ___________________________________________
PAYMENT INSTRUCTIONS:
Name of Bank where funds are to be transferred:
______________________________________________________________
Routing Transit/ABA number of Bank where funds are to be transferred:
______________________________________________________________
Name of Account, if applicable:
______________________________________________________________
Account Number: ________________________________________________
Additional Information: ________________________________________
_________________________________________________________________
MAILINGS:
Please specify who should receive financial information:
Name: __________________________________________________________
Street Address: ________________________________________________
City, State, Zip Code: _________________________________________
It is very important that all of the above information is accurately
filled in and returned promptly. If there is someone other than
yourself who should receive this questionnaire, please notify us of
their name and FAX number and we will FAX them a copy of the
questionnaire. If you have any questions, please call Janet Belden at
212-622-0011 or James Morgan at 212-622-0017.
<PAGE>
Exhibit E-1
Writer's Direct Line:
(602) 229-5333
Phoenix Office
May 20, 1994
Chemical Bank, as Administrative Agent
and Issuing Bank,
National Westminster Bank PLC,
as Co-Agent and the Lenders party
to the Credit Agreement referenced below,
c/o Chemical Bank
270 Park Avenue
New York, New York 10017
Re: Revolving Credit Facility Agreement dated
May 20, 1994
Ladies and Gentlemen:
We are counsel of Magma Copper Company, a Delaware
corporation (the "Borrower"), and have acted as such in connection
with the Revolving Credit Facility Agreement dated as of May 20, 1994
(the "Credit Agreement"), among the Borrower, the financial
institutions listed on the signature pages thereof (the "Lenders"),
and Chemical Bank as Administrative Agent and Issuing Bank, and
National Westminster Bank PLC, as Co-Agent. This opinion is provided
at the instruction of the Borrower pursuant to Section 4.02(b) of the
Credit Agreement. All terms used and not otherwise defined herein
shall have the same meanings given such terms in the Credit Agreement.
In that connection, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments and such
certificates of public officials and of officers of the Borrower as we
have deemed necessary or appropriate for the purposes of this opinion,
including (a) the Certificates of Incorporation, and all amendments
thereof, and By-laws of the Borrower, (b) each of the Loan Documents
or the form thereof, (c) the corporate proceedings and other actions
taken by the Borrower to maintain its good standing in the State of
Delaware, and (d) the corporate proceedings taken by the Borrower to
authorize the execution, delivery and performance of each of the Loan
Documents and the consummation by the Borrower of the transactions
contemplated by the Loan Documents.
In examining the above documents, we have assumed (i) the
genuineness of the signatures not executed in our presence, (ii) the
authenticity of all documents purported to be originals, (iii) the
conformity to originals of all documents purported to be copies, and
(iv) the legal capacity of all natural persons executing the documents
(other than officers of the Borrower).
Based upon the foregoing, and subject to the assumptions,
exceptions and qualifications described below, we render our opinion
as follows:
1. Each of the Borrower and the Subsidiaries (other than
the Robinson Mining Limited Partnership) has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of its state of incorporation with all requisite corporate power
and authority to own its properties and conduct its business
substantially as it is now being conducted.
2. Robinson Mining Limited Partnership is a limited
partnership duly organized and validly existing under the laws of its
state of organization with all requisite partnership power and
authority to own its properties and conduct its business substantially
as it is now being conducted.
3. The Borrower has all requisite corporate power and
authority to enter into each of the Loan Documents, to execute,
deliver and perform its obligations under the Loan Documents, and to
incur the Loans in the manner contemplated by the Loan Documents.
4. The execution, delivery and performance by the Borrower
of each of the Loan Documents and the receipt by the Borrower of the
proceeds of the Loans in the manner contemplated by the Loan Documents
have been duly authorized by all necessary corporate action on the
part of the Borrower and (a) do not violate any provision of any
material indenture, agreement or other instrument known to us to which
the Borrower is a party or by which the Borrower or any of its
material properties and assets are or may be bound; (b) do not violate
any provision of any applicable law, rule or regulation to which the
Borrower is subject or, to the best of our knowledge, any order of any
court, or of any other agency of government presently in effect to
which the Borrower is subject; (c) do not violate any provision of the
Certificate of Incorporation, as amended, or By-laws of the Borrower;
(d) will not result in the creation or imposition of any Lien upon any
material property or assets of the Borrower; and (e) will not be in
conflict with, result in a breach of or constitute (alone, with
notice, with lapse of time, or with any combination of these factors)
a default under any material indenture, agreement or other instrument
known to us as referred to above.
5. The Loan Documents have been duly executed and
delivered by the Borrower, and constitute the legal, valid and binding
obligations of the Borrower enforceable against it in accordance with
their terms.
6. Except for filings which may be required under the
United States Securities Exchange Act of 1934, as amended, no
approval, authorization or consent of, or registration, qualification
or filing with, any Federal, state or other governmental authority or
regulatory body is required for the execution, delivery or performance
by the Borrower of the Loan Documents or the consummation by the
Borrower of the transactions contemplated thereby.
7. To the best of our knowledge, except as set forth in
the Form 10-K for the year ended December 31, 1993, of the Borrower,
there are no actions, suits or proceedings at law or in equity or by
or before any governmental instrumentality or other agency now pending
or threatened, to which the Borrower or any of the Subsidiaries is a
party or of which any material property of the Borrower or any of the
Subsidiaries is the subject, as to which there is a significant
likelihood of an adverse determination and which could, individually
or in the aggregate, if adversely determined to the Borrower or any of
the Subsidiaries, impair the validity or enforceability of the Loan
Documents or materially impair the ability of the Borrower to perform
under the terms of the Loan Documents or materially impair the ability
of the Borrower and the Subsidiaries taken as a whole to carry on
business substantially as now being conducted or result in any
material adverse change in the business, assets, operations or
condition (financial or otherwise) of the Borrower and the
Subsidiaries taken as a whole.
The foregoing opinions are subject to the following
additional assumptions, qualifications, limitations and exceptions:
a. Our opinions herein are limited solely to the
laws of the State of Arizona, the general corporate and
limited partnership laws of the State of Delaware and
applicable federal law, and we express no opinion herein
concerning the laws of any other jurisdiction. For purposes
of our opinions herein we have assumed, without any
investigation, that the laws of the State of New York and
all other jurisdictions that may govern or affect the
interpretation of the Loan Documents are identical in all
relevant respects to the laws of the State of Arizona. We
express no opinion as to whether any court of any
jurisdiction would give effect to the choice of governing
law expressed by the parties in the Loan Documents.
b. In rendering these opinions, we undertake no
obligation to revise or supplement them should the present
laws of the State of Arizona, the present general corporate
and limited partnership laws of the State of Delaware, the
present applicable federal law or the present laws of any
other jurisdiction referred to herein be changed by
legislative action, judicial decision or otherwise.
c. The enforceability of the Loan Documents may
be subject to or limited by (i) bankruptcy, insolvency,
reorganization, arrangement, moratorium, or similar laws
relating to or affecting the rights of creditors generally,
and (ii) general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at
law.
d. We have assumed that all of the agreements of
the parties relating to the transactions contemplated by the
Loan Documents are contained therein and that no other
agreements or understandings inconsistent therewith exist
between the parties relating to such matters. We have
assumed further that the Lenders will receive no interest,
charges, fees or other benefits or compensation in the
nature of interest in connection with the Loans other than
those that the Borrower has agreed in writing in the Loan
Documents to pay.
e. We have assumed that any consideration to be
given by any party to any of the Loan Documents has been or
will be duly given pursuant to the terms thereof.
f. The enforceability of certain waivers,
remedies and other provisions contained in the Loan
Documents may be limited by applicable law, but the
inability to enforce those provisions will not affect the
validity of the Loan Documents or prevent the practical
realization of the material benefits contemplated by the
Loan Documents.
g. We have assumed the full power, authority and
legal right of all parties to the Loan Documents other than
Borrower to execute, deliver and perform the Loan Documents
signed by them and the enforceability of such Loan Documents
against all parties to the Loan Documents other than
Borrower.
h. As to questions of fact relating to the
Borrower and its Subsidiaries material to this opinion, we
have consulted with the responsible officers of the Borrower
and have relied upon certificates of appropriate public
officials and upon the representations, warranties and
statements made in the Credit Agreement. We have not
undertaken any independent investigation to verify the
accuracy of such factual matters. However, in the course of
our representation of the Borrower, nothing has come to our
attention that leads us to believe, and we do not believe,
that we or you are not justified in relying upon the
foregoing.
i. When a matter is stated herein as being
"known to us" or "to the best of our knowledge," it is
intended to indicate that we have not conducted an
independent investigation into such matter and that in the
course of our representation of the Borrower, nothing has
come to our attention that leads us to believe, and we do
not believe, that the matter is other than as stated herein.
j. The provisions of the Loan Documents which
permit parties to the Loan Documents other than Borrower to
take action or make determinations may be subject to a
requirement that such action be taken or determination be
made on a reasonable basis and in good faith.
These opinions are furnished to you solely for your use in
connection with the transactions described herein; they are not to be
used or relied upon for any other purpose or by any other person, and
this letter is not to be circulated, quoted or given to any other
person without our prior consent, except that you may provide copies
of this letter to your attorneys and auditors and to governmental
authorities in connection with bank regulatory activities.
STREICH LANG, P.A.
Douglas O. Guffey
FOR THE FIRM
DOG:wp
<PAGE>
EXHIBIT E-2
[FORM OF CS&M OPINION]
May 20, 1994
Magma Copper Company
Revolving Credit Facility Agreement
dated as of May 20, 1994
Dear Sirs:
We have acted as counsel to Chemical Bank, a New York
banking corporation, in connection with the preparation, execution and
delivery of the Revolving Credit Facility Agreement dated as of
May 20, 1994 (the "Credit Agreement"), among Magma Copper Company (the
"Borrower"), the Lenders named therein (the "Lenders") and Chemical
Bank, as administrative agent (the "Administrative Agent").
Capitalized terms not otherwise defined herein shall have the meanings
given them in the Credit Agreement.
In that connection, we have examined an executed counterpart
of the Credit Agreement and originals or copies certified or otherwise
identified to our satisfaction of such other documents, corporate
records and other instruments as we have deemed necessary or
appropriate for purposes of this opinion.
In rendering our opinion, we have assumed the authenticity
of all documents submitted to us as originals and the conformity to
original documents of all documents submitted to us as copies.
Based upon the foregoing, we are of opinion that:
Assuming due authorization, execution and delivery thereof
by the Lenders and the Borrower, the Credit Agreement constitutes the
legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other laws affecting creditors' rights
generally from time to time in effect and except that (i) insofar as
provisions contained in the Credit Agreement provide for
indemnification, the enforcement thereof may be limited by public
policy considerations, (ii) we express no opinion as to the last
sentence of Section 2.17 of the Credit Agreement and (iii) we express
no opinion as to the effect of the law of any jurisdiction other than
the State of New York wherein any Lender may be located or wherein
enforcement of the Credit Agreement may be sought which limits the
rates of interest legally chargeable or collectable. The
enforceability of the Borrower's obligations under the Credit
Agreement is further subject to general equitable principles
(including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing), regardless of whether
such enforceability is considered in a proceeding in equity or at law.
We are admitted to practice only in the State of New York
and express no opinion as to matters governed by any laws other than
the laws of the State of New York, the Federal laws of the United
States of America and the General Corporation Law of the State of
Delaware.
Very truly yours,
To the Lenders under the Credit
Agreement referred to above and
Chemical Bank,
as Administrative Agent under
the Credit Agreement,
270 Park Avenue (8th Floor)
New York, NY 10017
O
256A
<PAGE>
SCHEDULE 2.01
Commitments
-----------
Bank Commitment 1/ LC Commitment
- - ---- ------------ -------------
CHEMICAL BANK $33,000,000 $2,750,000
Domestic and Eurodollar
Lending Office:
270 Park Avenue
New York, NY 10017
NATIONAL WESTMINSTER BANK PLC $33,000,000 $2,750,000
Domestic Lending Office:
175 Water Street
New York, NY 10038-4924
Eurodollar Lending Office:
Nassau Branch
c/o New York Branch
175 Water Street
New York, NY 10038-4924
THE BANK OF NOVA SCOTIA $26,000,000 $2,166,666.67
Domestic and Eurodollar
Lending Office:
101 California St. (48th Floor)
San Francisco, CA 94119
BARCLAYS BANK PLC $26,000,000 $2,166,666.67
Domestic and Eurodollar
Lending Office:
222 Broadway
New York, NY 10038
BHF-BANK $26,000,000 $2,166,666.67
Domestic and Eurodollar
Lending Office:
111 W. Ocean Blvd. (Suite 1325)
Long Beach, CA 90832-2186
CONTINENTAL BANK, N.A. $26,000,000 $2,166,666.67
Domestic and Eurodollar
Lending Office:
231 S. LaSalle Street
Chicago, IL 60697
CREDIT LYONNAIS $26,000,000 $2,166,666.67
Domestic Lending Office:
515 South Flower Street (Suite 2200)
Los Angeles, CA 90071
Eurodollar Lending Office:
Cayman Island Branch
c/o Los Angeles Branch
515 South Flower Street (Suite 2200)
Los Angeles, CA 90071
FIRST INTERSTATE BANK OF ARIZONA $26,000,000 $2,166,666.67
Domestic and Eurodollar
Lending Office:
100 W. Washington (4th Floor)
Phoenix, AZ 85003
THE FUJI BANK LIMITED $26,000,000 $2,166,666.66
(Los Angeles Agency)
Domestic and Eurodollar
Lending Office:
333 South Grand Street (25th Floor)
Los Angeles, CA 90071
THE LONG TERM CREDIT BANK $26,000,000 $2,166,666.66
OF JAPAN LTD.
Domestic and Eurodollar
Lending Office:
444 South Flower Street (Suite 3700)
Los Angeles, CA 90071
N.M. ROTHSCHILD & SONS LTD. $26,000,000 $2,166,666.66
Lending Office:
New Court
St. Swithins Lane
London EC4P 4DV
ENGLAND
_____________________
1/ The Commitment allocation includes the LC Commitment.
<PAGE>
Schedule 3.15(a)
Material Subsidiaries
Subsidiary Percentage Ownership
by Magma
Magma Metals Company 100
Magma Nevada Mining Company 100
Robinson Mining Limited Partnership 100
<PAGE>
Schedule 3.15(b)
Material Divisions
Percentage Ownership
Division by Magma
San Manuel Mining Division 100
Pinto Valley Mining Division 100
<PAGE>
Schedule 6.01
Existing Permitted Liens
None.
<TABLE>
MAGMA COPPER COMPANY EXHIBIT 11
Computation of Per Share Earnings
(In thousands, except per share amounts)
<CAPTION>
Three Months Six Months
ended June 30, ended June 30,
----------------- -----------------
1994 1993 1994 1993
Primary ------ ------ ------- -------
- - -------
<S> <C> <C> <C> <C>
Weighted average common
shares outstanding 49,283 48,161 49,218 48,619
Earnings used in per common
share computation:
Net income $20,610 $ 4,712 $28,221 $ 4,100
Preferred stock dividends (2,906) -- (5,812) --
------ ------ ------ ------
Net income available
for common stock $17,704 $ 4,712 $22,409 $ 4,100
====== ====== ====== ======
Earnings per share:
Income before cumulative
effect of accounting change
and preferred stock dividends $ .42 $ .10 $ .57 $ .10
Cumulative effect of
accounting change,net of tax -- -- -- (.02)
------ ------ ------ ------
Net income $ .42 $ .10 $ .57 $ .08
====== ====== ====== ======
Preferred stock dividends (.06) -- .11 --
------ ------ ------ ------
Earnings per share of
common stock $ .36 $ .10 $ .46 $ .08
====== ====== ====== ======
Assuming full dilution
- - ----------------------
Weighted average common
shares outstanding 63,368 48,161 63,368 48,619
Earnings used in per common
share computation:
Net income $20,610 $ 4,712 $28,221 $ 4,100
Earnings per share:
Net income $ .33 $ .10 $ .45 $ .08
Computation of weighted average
shares outstanding-fully diluted
---------------------------------
Primary weighted average
shares outstanding 49,283 48,161 49,218 48,619
Assuming full dilution:
Conversion of Series D Preferred
Stock (2 million shares at
3.448 conversion rate) 6,896 -- 6,896 --
Conversion of Series E Preferred
Stock (2 million shares at
3.5945 conversion rate) 7,189 -- 7,189 --
Incremental shares -- -- 65 --
------ ------ ------ ------
Fully diluted weighted
average shares outstanding 63,368 48,161 63,368 48,619
====== ====== ====== =======
</TABLE>
