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, 1995
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)
(520) 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, 1995: 46,144,942
<PAGE>
MAGMA COPPER COMPANY
Form 10-Q
For the Quarter Ended June 30, 1995
INDEX
Page
Number
Part I - Financial Information 1
Item 1 - Financial Statements
Introduction to the Financial Statements 1
Consolidated Balance Sheets - 2
June 30, 1995 and December 31, 1994
Consolidated Statements of Operations-
Three months and six months ended
June 30, 1995 and 1994 3
Consolidated Statements of Cash Flows -
Six months ended June 30, 1995 and 1994 4
Notes to Consolidated Financial Statements 5
Report of Independent Public Accountants 10
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results
of Operations 11
Part II - Other Information 17
Item 4 - Submission of Matters to a Vote of
of Security Holders 17
Item 6 - Exhibits and Reports on Form 8-K 17
Signature 18
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
The financial statements for the three months and the six months ended
June 30, 1995 and 1994 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, 1995, are not
necessarily indicative of results of operations which will be realized for
the year ending December 31, 1995. The financial statements should be read
in conjunction with the Company's Form 10-K for the year ended December 31,
1994.
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 LLP, the
Company's independent public accountants.
<PAGE>
MAGMA COPPER COMPANY
Consolidated Balance Sheets
(In thousands)
June 30, December 31,
Assets 1995 1994
------ ------------ ------------
Current Assets:
Cash $ 105,069 $ 72,849
Marketable securities 405 15,388
Accounts receivable 97,238 101,058
Inventories:
Metals 150,608 96,186
Materials and supplies 40,508 40,814
Prepaid expenses 23,595 15,045
--------- ---------
Total current assets 417,423 341,340
--------- ---------
Net Property, Plant and Mine
Development 1,410,957 1,217,220
--------- ---------
Other 27,558 18,076
--------- ---------
Total Assets $1,855,938 $1,576,636
========= =========
Liabilities and Stockholders' Equity
------------------------------------
Current Liabilities:
Accounts payable $ 39,294 $ 34,101
Accrued liabilities 171,910 168,516
Short-term borrowings and
current portion of long-term debt 5,466 20,641
Income taxes payable -- 3,218
--------- ---------
Total current liabilities 216,670 226,476
--------- ---------
Accrued Pension, Retirement and
Other Liabilities 67,736 67,934
Deferred Income Taxes 156,513 135,356
Long-Term Debt 583,148 386,802
Commitments and Contingencies
Stockholders' Equity:
Cumulative convertible preferred
stock 40 40
Common stock 461 460
Capital in excess of par value 596,038 625,849
Retained earnings 238,210 137,833
Unearned stock grant compensation (2,880) (4,032)
Unrealized gain (loss) on
marketable securities 2 (82)
--------- ---------
Total stockholders' equity 831,871 760,068
--------- ---------
Total Liabilities and
Stockholders' Equity $1,855,938 $1,576,636
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
MAGMA COPPER COMPANY
Consolidated Statements of Operations
(In thousands, except per share amounts)
Three Months Six Months
ended June 30, ended June 30,
-------------------- ---------------------
1995 1994 1995 1994
-------- -------- --------- ---------
Sales $361,521 $219,534 $659,058 $395,066
Cost of sales:
Cost of products sold (237,084) (159,565) (433,014) (299,789)
Depreciation, depletion
and amortization (27,246) (19,723) (44,037) (34,866)
Selling, general and
administrative (9,936) (5,789) (17,972) (10,937)
Exploration, research
and development (5,499) (3,111) (10,112) (6,349)
------- ------- ------- -------
Income from operations 81,756 31,346 153,923 43,125
Other income (expense):
Interest expense (5,331) (6,097) (10,691) (12,063)
Interest income 1,219 3,257 2,255 6,877
Other (289) (265) 479 729
------- ------- ------- -------
Income before income taxes 77,355 28,241 145,966 38,668
Income tax provision (22,932) (7,631) (39,777) (10,447)
------- ------- ------- -------
Net income $ 54,423 $ 20,610 $106,189 $ 28,221
======= ======= ======= =======
Preferred stock dividends (2,906) (2,906) (5,812) (5,812)
------- ------- ------- -------
Net income available for
common stock $ 51,517 $ 17,704 $100,377 $ 22,409
======= ======= ======= =======
Earnings per share of common
stock, primary:
Net income $ 1.11 $ .42 $ 2.16 $ .57
Preferred stock dividends (.06) (.06) (.11) (.11)
------- ------- ------- -------
Earnings per share of common
stock $ 1.05 $ .36 $ 2.05 $ .46
======= ======= ======= =======
Average common shares
outstanding, primary 48,944 49,283 49,093 49,218
Earnings per share of common
stock, fully diluted:
Net income $ .86 $ .33 $ 1.68 $ .45
======= ======= ======= =======
Average common shares
outstanding, fully diluted 63,065 63,368 63,202 63,368
Common shares outstanding 46,145 45,863 46,145 45,863
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
MAGMA COPPER COMPANY
Consolidated Statements of Cash Flows
(In thousands)
Six months
ended June 30,
-------------------
1995 1994
-------- --------
Net income $106,189 $ 28,221
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation, depletion and amortization 44,037 34,866
Gain on sale of assets 150 45
Other 1,509 1,269
------- -------
151,885 64,401
------- -------
Change in certain assets and liabilities:
(Increase) decrease in:
Accounts receivable 3,820 (6,868)
Inventories (51,855) (21,373)
Prepaid expenses (6,700) (2,090)
Increase (decrease) in:
Accounts payable and accrued expenses 8,587 12,997
Income taxes payable (5,068) 2,502
Accrued pension, retirement
and other liabilities (198) 1,311
Deferred income taxes 7,961 1,388
------- -------
Net change in certain assets and liabilities (43,453) (12,133)
------- -------
Net cash provided by operating activities 108,432 52,268
------- -------
Cash flows from investing activities:
Capital expenditures (223,162) (59,492)
Acquisition of Tintaya (3,716) --
Marketable securities 14,926 (84,662)
Proceeds from sale of assets 381 342
Other (5,834) (6,727)
------- -------
Net cash used by investing activities (217,405) (150,539)
------- -------
Cash flows from financing activities:
Short-term financing 25,500 --
Short-term debt repayment (40,500) --
Long-term debt borrowings 199,464 --
Long-term debt repayment (1,000) (6,951)
Long-term lease financing (2,301) (2,611)
Debt issuance costs (4,309) (402)
Issuance of common stock under stock plans 322 295
Issuance of common stock from warrants exercised 103 925
Issuance of preferred stock -- (85)
Warrant redemption costs (30,274) --
Preferred stock dividend (5,812) (5,812)
------- -------
Net cash provided (used) by financing activities 141,193 (14,641)
------- -------
Net increase (decrease) in cash 32,220 (112,912)
Cash at the beginning of the period 72,849 230,414
------- -------
Cash at the end of the period $105,069 $117,502
======= =======
Marketable securities 405 191,222
------- -------
Total cash and marketable securities $105,474 $308,724
======= =======
Supplemental disclosure of cash flow information:
Cash paid during the period for -
Interest, net of amounts capitalized $ 8,450 $ 13,276
Income taxes $ 33,377 $ 6,300
The accompanying notes are an integral part of these
consolidated financial statements.
<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 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.
Effective July 1, 1995 the Company reorganized its Magma Metals Company
subsidiary to become Magma Metals, a Division of Magma Copper Company.
Note 2 -- Inventories
Copper concentrate is a product that can be readily purchased or sold to
third parties. Typically it is the practice of the Company to classify its
concentrate inventories as "in process" rather than "finished goods" as this
material is subject to further processing at the Company's smelting and
refining complex. However, at June 30, 1995 and December 31, 1994, $11.3
million and $4.7 million, respectively, of copper concentrate from the
Company's Tintaya, Peru property was classified as finished goods because
this material is expected to be sold to third parties.
The components of inventories are as follows (in thousands):
June 30, December 31,
1995 1994
------------- ------------
Metals in process, net $124,232 $ 70,817
Finished goods 26,376 25,369
------- -------
Metals 150,608 96,186
Materials and supplies, net 40,508 40,814
------- -------
$191,116 $137,000
======= =======
Note 3 -- Income Taxes
Statement of Financial Accounting Standards No. 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 benefited 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 $39,777,000 in
the first six months of 1995. Included in this provision is an accrual for
foreign taxes. Additionally, U.S. taxes net of anticipated foreign tax
credits have been provided on foreign earnings as management does not have
<PAGE>
specific plans for reinvestment of foreign earnings nor do they plan to
postpone remittance indefinitely. 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:
For the six months ended
June 30, 1995
---------------------------
Dollars Tax Rate
(In millions) (percentage)
------------ -----------
Income tax provision
at federal
statutory rate $(51,089) (35)%
Percentage depletion 15,225 11
State tax (3,913) (3)
Effect of foreign tax rates -- --
------- ---
Total provision $(39,777) (27)%
======= ===
Note 4 -- Commitments and Contingencies
From time to time the Company is 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 1995 and 1994, $13,360,000 and
$9,217,000, respectively, of interest cost was capitalized on certain long-
term projects. The total amount of interest cost incurred was $24,051,000
and $21,280,000 for the first six months of 1995 and 1994, respectively.
Note 6 -- Capitalized Exploration
During the first six months of 1995, $2,101,000 of exploration cost was
capitalized on projects in the feasibility stage. No exploration costs were
capitalized during 1994.
Note 7 -- 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 and Short-Term Borrowing. The carrying amounts approximate fair
value.
<PAGE>
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 one year 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. The Company utilizes the specific
identification method in computing realized gains and losses.
June 30,
1995
(In Millions)
-------------
Amortized cost basis $0.4
Unrealized holding gain --
Unrealized holding loss --
---
Fair market value $0.4
===
During the three month period ended June 30, 1995, the Company received
no proceeds from available-for-sale securities. During the six month period
ended June 30, 1995, the Company received $7 million in proceeds from
available-for-sale securities, resulting in no realized gains or losses. The
Company utilizes the specific identification method in computing realized
gains and losses. The change in the net unrealized holding loss, net of tax,
for the three month and six month periods ended June 30, 1995 was $0 and $.1
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 premiums which will be amortized ratably as
the contracts expire. The fair value of these contracts is estimated based
on quotes from brokers and market prices at June 30, 1995.
The estimated fair values of the Company's financial instruments as of
June 30, 1995 are as follows (in thousands):
Carrying Fair
Amount Value
-------- -------
Cash $105,069 $105,069
Marketable securities 405 405
Long-term debt (includes
current portion) 588,614 614,989
Copper price protection
contracts 30,836 24,262
Gold swap contracts -- 3,575
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.
<PAGE>
Note 8 -- Acquisition of Tintaya
On October 6, 1994, the government of Peru declared the consortium of
Magma Copper Company and its wholly-owned subsidiary, Global Magma, Ltd., the
winning bidder in the privatization of Empresa Minera Especial Tintaya S.A.
("Tintaya"), which owns one of the largest operating mining projects in Peru.
The consortium acquired 98.43% of the common stock of Tintaya on November 29,
1994.
The following unaudited pro-forma combined financial data give effect to
the acquisition as if it had occurred on the first day of the period. This
pro-forma financial data is provided for comparative purposes only and does
not purport to be indicative of the results which would have been obtained if
the acquisition had been effected during the period presented. The pro-forma
financial information is based on the purchase method of accounting and
reflects adjustments to record the profits of acquired inventories,
conversion from Peruvian GAAP to U.S. GAAP, depreciation, depletion and
amortization of mine development costs on the adjusted asset basis and
adjusts income taxes for the pro-forma adjustments.
Quarter ended Year to Date
June 30, 1994 June 30, 1994
------------- -------------
Total revenue $257,177 $451,484
Income before extraordinary items 29,107 39,246
Net income 29,107 39,246
Primary earnings per share .59 .74
Earnings per share assuming full dilution .46 .61
Note 9 -- Issuance of Senior Subordinated Notes and Repurchase of Outstanding
Common Stock Warrants
On May 15, 1995, the Company issued $200 million of 8.70% Senior
Subordinated Notes due May 15, 2005 ("the Notes"). The Notes have no call
provision. Interest on the Notes is payable on May 15 and November 15 of
each year commencing on November 15, 1995. A portion of the net proceeds
from the sale of the Notes was used to repurchase approximately 3.7 million
of its outstanding publicly traded Common Stock Warrants, $8.50 exercise
price ( the Warrants ). The Warrants purchased represented 5.6% of the fully
diluted shares that would have been outstanding had all the Warrants been
exercised. The Company paid $8.25 per Warrant which resulted in an aggregate
purchase price for the Warrants of approximately $30.2 million. Proceeds
were also used to repay short-term debt. Remaining proceeds will be used for
general corporate purposes.
Note 10 -- Revolving Credit Facility
On June 21, 1995, the Company completed renegotiation of its revolving
credit agreement ( the Revolver ), increasing the available credit from $300
million to $500 million. The Revolver, which expires June 20, 1999, is
provided by a consortium of seventeen banks and is available for general
corporate purposes. Amounts outstanding under the Revolver 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 an all-in
drawn cost of LIBOR plus 0.50%, which includes a facility fee of 0.1875%.
The facility fee is payable on the full amount of the Revolver, regardless of
whether there are any outstanding borrowings.
<PAGE>
Under the terms of the Revolver, the Company must: (i) maintain a
consolidated net worth of not less that the sum of $450 million plus 50% of
consolidated net income for each fiscal year beginning with fiscal 1995 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, 1995, and the related condensed consolidated statements of operations for
the three-month and six-month periods ended June 30, 1995 and 1994 and the
condensed consolidated statements of cash flows for the six-month periods
ended June 30, 1995 and 1994. 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, 1994, (not presented herein), and in our
report dated January 27, 1995, 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, 1994, is fairly
stated, in all material respects, in relation to the balance sheet from which
it has been derived.
Arthur Andersen LLP
Tucson, Arizona,
July 14, 1995.
<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, 1995 was $106.2 million
compared to $28.2 million for the same period in 1994. Earnings before
interest, taxes, depreciation, depletion and amortization (EBITDA) were $198
million for the six months ended June 30, 1995 and $79 million for the same
period in 1994. These increases were primarily due to increased copper
prices and sales volume, largely as a result of production from the Tintaya
mine acquired in November 1994. The Company realized a copper price of $1.30
per pound for the six months ended June 30, 1995, a $.40 per pound increase
from the same period last year. Net cash provided by operating activities
was $108 million during the first six months of 1995. Working capital at
June 30, 1995 was $201 million (including $105 million in cash and marketable
securities) compared to $115 million (including $88 million in cash and
marketable securities) at December 31, 1994. This increase in working
capital is largely attributable to increased inventories as a result of the
Tintaya acquisition in November 1994.
The Company's cash position and cash flow from operations were used to
fund capital expenditures of $227 million for the six months ended June 30,
1995 as compared to $59 million for the same period in 1994.
Results of Operations for the Six Months Ended June 30, 1995
As Compared with the Six Months Ended June 30, 1994
Total sales increased 67% to $659 million in 1995 from $395 million in
1994. Sales of copper increased in 1995 to $591 million from $353 million in
1994 due to higher realized copper prices and increased sales volume of
copper purchased from third parties and also from Magma-source copper, due to
production from the Tintaya mine acquired in November 1994.
Sales of other metal by-products and acid increased $28 million due
primarily to sharply higher prices for molybdenum during January and
February. The sharp market price increase for molybdenum contributed $15
million in increased sales. Other revenue increases resulted from a greater
volume of gold and silver sold, due primarily to production from the Tintaya
mine and higher volume and prices for acid.
Cost of products sold increased by 44% to $433 million in 1995 from
$300 million in 1994 due to increased sales volume and a higher market price
of copper concentrates and scrap purchased from third parties for subsequent
processing. Scheduled completion of open-pit mining operations at San Manuel
(which had produced lower unit cost copper cathode) contributed to increasing
the Company's cost per pound before credits of producing Magma source
concentrates by 6 cents as compared to the same period in 1994. In addition,
at current price and profitability levels, the Company incurs incremental
costs related to employee profit sharing and local taxes that are included in
net cash operating costs. Despite this increase in cost during the period,
the per pound cost of products sold net of credits increased by only three
cents to $0.61 compared to $0.58 in 1994, due to the temporary increase in
molybdenum credits. The following table sets forth the volume of copper
sold in relation to the components that make up cost of products sold:
<PAGE>
Six months ended
June 30,
(In millions)
1995 1994
-------- --------
Pounds sold from:
Magma sources 331.3 298.1
Purchased 114.8 81.9
----- -----
Total pounds of copper sold 446.1 380.0
===== =====
Toll Processing Pounds:
Returned as cathode 35.9 28.2
Returned as anode 13.6 13.1
Cost of Products Sold:
Magma sources $249.5 $205.8
Purchased 153.1 71.9
Tolling 6.4 5.8
Other 24.0 16.3
----- -----
Total cost of products sold $433.0 $299.8
===== =====
Per Pound Cost of Products Sold:
Magma Sources
Before credits $ .75 $ .69
Credits (1) (.14) (.11)
----- -----
Net $ .61 $ .58
===== =====
(1) Deductions for rod premiums, profit on by-products and custom
processing.
Depreciation, depletion and amortization expense increased $9.2
million to $44.0 million in 1995 from 1994 as a result of increased Magma
source pounds and the depreciation of new assets, including those of the
Tintaya mine.
Selling, general and administrative expenses increased $7.0 million
due primarily to higher insurance and other costs related to the Tintaya
acquisition.
Exploration, research and development costs increased $3.8 million as
a result of the Company's efforts to increase its proven and probable mineral
reserves. These activities are presently conducted at the Company's existing
minesites and new areas in Chile and Mexico.
Interest expense decreased $1.4 million to $10.7 million in 1995 due
to interest capitalized on the Company's expansion projects.
Interest income decreased $4.6 million to $2.3 million in 1995 as a
result of smaller average balances of cash and marketable securities brought
about by the Company's purchase of the Tintaya mine.
<PAGE>
The Company's provision for income taxes of $39.8 million for 1995 and
$10.4 million for 1994 reflects higher income in the current period as well
as the higher overall rate due to the Tintaya acquisition, the earnings of
which are taxed in Peru at a higher effective rate than the Company's U.S.
operations.
Net income in 1995 was $106.2 million, or $1.68 per share fully
diluted, compared to $28.2 million, or $.45 per share in 1994. After
dividends on preferred stock, $100.4 million in 1995 was available for common
stockholders, or $2.05 per share, compared to $22.4 million or $.46 per
common share in 1994.
Results of Operations for the Three Months Ended June 30, 1995
As Compared with the Three Months Ended June 30, 1994
Total sales increased 65% to $362 million in 1995 from $220 million
in 1994. Sales of copper increased in 1995 to $328 million from $197 million
in 1994 due to higher realized copper prices and increased sales volume of
copper purchased from third parties and also from Magma-source copper, due to
production from the Tintaya mine acquired in November 1994.
Sales of other metal by-products and acid increased $13 million due
primarily to a greater volume of gold and silver sold as a result of
production from the Tintaya mine, and higher prices for acid.
Cost of products sold increased by 48% to $237 million in 1995 from
$160 million in 1994 due to increased sales volume and a higher market price
of copper concentrates and scrap purchased from third parties for subsequent
processing. Scheduled completion of open-pit mining operations at San Manuel
(which had produced lower unit cost copper cathode) and higher costs due to
a smelter maintenance shutdown in the second quarter of 1995 contributed to
increasing the Company's cost per pound before credits of Magma source
production by 6 cents as compared to the same period in 1994. In addition,
at current price and profitability levels, the Company incurs incremental
costs related to employee profit sharing and local taxes that are included in
net cash operating costs. The following table sets forth the volume of
copper sold in relation to the components that make up cost of products sold:
<PAGE>
Three months ended
June 30,
(In millions)
1995 1994
-------- --------
Pounds sold from:
Magma sources 195.6 158.5
Purchased 55.6 41.2
----- -----
Total pounds of copper sold 251.2 199.7
===== =====
Toll Processing Pounds:
Returned as cathode 18.3 14.7
Returned as anode 0.0 3.4
Cost of Products Sold:
Magma sources $146.6 $109.0
Purchased 73.6 38.8
Tolling 3.1 2.9
Other 13.8 8.9
----- -----
Total cost of products sold $237.1 $159.6
===== =====
Per Pound Cost of Products Sold:
Magma Sources
Before credits $ .75 $ .69
Credits (1) (.11) (.11)
----- -----
Net $ .64 $ .58
===== =====
(1) Deductions for rod premiums, profit on by-products and custom
processing.
Depreciation, depletion and amortization expense increased $7.5
million to $27.2 million in 1995 from 1994 as a result of increased Magma
source pounds and the depreciation of new assets, including those of the
Tintaya mine.
Selling, general and administrative expenses increased $4.1 million
due primarily to higher insurance and other costs related to the Tintaya
acquisition.
Exploration, research and development costs increased $2.4 million as
a result of the Company's efforts to increase its proven and probable mineral
reserves. These activities are presently conducted at the Company's existing
minesites and new areas in Chile and Mexico.
Interest expense decreased $0.8 million to $5.3 million in 1995 due
to interest capitalized on the Company's expansion projects.
Interest income decreased $2.0 million to $1.2 million in 1995 as a
result of smaller balances of cash and marketable securities brought about by
the Company's purchase of the Tintaya mine.
<PAGE>
The Company's provision for income taxes of $22.9 million for 1995 and
$7.6 million for 1994 reflects higher income in the current period as well as
the higher overall rate due to the Tintaya acquisition.
Net income in 1995 was $54.4 million, or $.86 per share fully diluted,
compared to $20.6 million, or $.33 per share in 1994. After dividends on
preferred stock, $51.5 million in 1995 was available for common stockholders,
or $1.05 per share, compared to $17.7 million or $.36 per common share in
1994.
CAPITAL RESOURCES AND LIQUIDITY
The Company anticipates spending approximately $700 million over the
next three years on capital projects, $475 million of which is scheduled to
be spent during 1995, $150 million during 1996 and the remainder in 1997.
These projects include the development of the Robinson Mining District, the
continued development of the Lower Kalamazoo orebody, upgrading mining
equipment at Tintaya and in-situ expansion at San Manuel. Capital
expenditures for the six months ended June 30, 1995 were $227 million.
During the first six months of 1995, the Company funded its
development projects through internally generated cash flow, new borrowings,
short-term borrowing and existing cash balances. The Company s cash flow
available for capital expenditures (net income plus depreciation, depletion
and amortization) was $150 million at a realized copper price of $1.30 per
pound. Cash and marketable securities at June 30, 1995 were $105.5 million.
Earnings before interest, taxes, depreciation, depletion and amortization
(EBITDA) were $198 million.
On June 21, 1995 the Company completed renegotiation of its revolving
credit agreement (the Revolver ), increasing the available credit from $300
million to $500 million. The Revolver, which expires on June 20, 1999 is
provided by a consortium of seventeen banks and is available for general
corporate purposes. Amounts outstanding under the Revolver 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 an all-in
drawn cost of 0.50%, which includes a facility fee of 0.1875%. The facility
fee is payable on the full amount of the Revolver, regardless of whether
there are any outstanding borrowings.
Under the terms of the Revolver, the Company must: (i) maintain a
consolidated net worth of not less that the sum of $450 million plus 50% of
consolidated net income for each fiscal year beginning with fiscal 1995 and
(ii) not permit the ratio of its consolidated debt to total capitalization
(debt and equity) to exceed 60%.
On May 15, 1995, the Company issued $200 million of 8.70% Senior
Subordinated Notes due May 15, 2005 ("the Notes"). The Notes have no call
provision. Interest on the Notes is payable on May 15 and November 15 of
each year commencing on November 15, 1995. A portion of the net proceeds
from the sale of the Notes was used to repurchase approximately 3.7 million
of its outstanding publicly traded Common Stock Warrants, $8.50 exercise
price ( the Warrants ). The Warrants purchased represented 5.6% of the fully
diluted shares that would have been outstanding had all the Warrants been
exercised. The Company paid $8.25 per Warrant which resulted in an aggregate
purchase price for the Warrants of approximately $30.2 million. Proceeds
were also used to repay short-term debt. Remaining proceeds will be used for
general corporate purposes.
<PAGE>
On June 22, 1995 the Company filed a Form S-3 Registration Statement
for up to $200 million in debt and/or equity securities which may be issued
from time to time. There is a total of $300 million available to be issued
as debt and/or equity securities.
In light of the historic volatility of copper prices, the Company uses
a combination of put options, futures, swap contracts and forward commitments
to assure cash flow from operations to facilitate its capital spending
program. The Company's price protection program creates floor prices of $.86
and $1.08 for the third and fourth quarters of 1995, respectively, and a
price of $.95 for 1996. For 1997, the Company has purchased put options
covering 364 million pounds of first and second quarter production, creating
a minimum realized price of approximately $.93 per pound. The Company
believes that even if prices were to fall below these levels, because of its
price protection program, it would be able to fund a substantial portion of
the capital expenditures scheduled for these periods from cash balances and
operating cash flow, with the remainder to be funded by its existing credit
facilities, or alternative sources of borrowings that the Company may seek.
The decision to complete ongoing projects or to undertake new projects
is subject to a variety of factors, which may include (depending on the
project), the price of copper, 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.
OTHER MATTERS
Magma Tintaya, S.A., the Company's 98.43% owned subsidiary, has two
labor unions representing 80% of the work force. On July 18, 1995 Magma
Tintaya S.A. and the Tintaya labor unions committed to a five year labor
agreement, from July 1, 1995 through June 30, 2000. This labor agreement
provides for modest base wage increases in the first three years and a lump
sum bonus at the beginning of the fourth and fifth years with no increase in
the base wage. The agreement also provides for a signing bonus of
approximately $200 per person.
<PAGE>
PART II - OTHER INFORMATION
---------------------------
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At its Annual Meeting of Stockholders on May 18, 1995, the
stockholders of the Company elected the following Class II Directors: Judd
R. Cool (39,631,899 votes for and 94,465 withheld), John R. Kennedy
(39,634,572 votes for and 91,792 withheld), Simon D. Strauss (39,609,333
votes for and 117,031 withheld), and J. Burgess Winter (39,487,292 votes for
and 239,072 withheld). There were no broker non-votes or abstentions in this
matter. Persons who will continue to serve on the Company's Board of
Directors until the expiration of their term or until their successors are
duly elected and qualified include Christopher W. Brody, John W. Goth, Henry
B. Sargent, Donald J. Donahue, Thomas W. Rollins, H. Wilson Sundt, and John
L. Vogelstein.
The Company also ratified the Board s selection of Arthur Andersen LLP
as accountants for 1995 with 39,638,406 votes for, 37,895 against and 50,063
abstaining.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 10 - Revolving Credit Facility Agreement dated as
of June 21, 1995.
Exhibit 11 - Statement re computation of per share
earnings.
Exhibit 27 - Financial Data Schedules
(b) Reports on Form 8-K:
The Company filed a Form 8-K dated May 15, 1995 relating to
its offering of $200 million of 8.70% Senior Subordinated
Notes due May 15, 2005 and also to its offer to purchase any
and all of its outstanding Common Stock Warrants.
The Company filed a Form 8-K dated June 14, 1995 reporting the
results of its offer to purchase its outstanding Common Stock
Warrants.
<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: August 7, 1995
By: /s/ Douglas J. Purdom
-------------------------------
Douglas J. Purdom
Vice President and
Chief Financial Officer
(Principal Accounting
and Financial Officer)
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
Dated as of June 21, 1995
among
MAGMA COPPER COMPANY,
THE LENDERS NAMED HEREIN,
and
CHEMICAL BANK,
as Administrative Agent, Issuing Bank and Swingline Lender,
and
NATIONAL WESTMINSTER BANK PLC,
as Co-Agent,
and
BANK OF AMERICA ILLINOIS,
as Swingline Lender and Co-Agent
TABLE OF CONTENTS
Article Section Page
I. DEFINITIONS
1.01 Defined Terms . . . . . . . . . . . . . . 2
1.02 Terms Generally . . . . . . . . . . . . . 16
II. THE CREDITS
2.01 Commitments . . . . . . . . . . . . . . . 17
2.02 Loans . . . . . . . . . . . . . . . . . . 17
2.03 Competitive Bid Procedure . . . . . . . . 19
2.04 Borrowing Procedure . . . . . . . . . . . 21
2.05 Evidence of Debt; Repayment of Loans. . . 22
2.06 Fees. . . . . . . . . . . . . . . . . . . 23
2.07 Interest on Loans . . . . . . . . . . . . 23
2.08 Default Interest. . . . . . . . . . . . . 24
2.09 Alternate Rate of Interest. . . . . . . . 24
2.10 Termination, Reduction and Extension of
Commitments . . . . . . . . . . . . . . . 25
2.11 Prepayment. . . . . . . . . . . . . . . . 27
2.12 Reserve Requirements; Change in
Circumstances. . . . . . . . . . . . . 27
2.13 Change in Legality . . . . . . . . . . 29
2.14 Indemnity. . . . . . . . . . . . . . . 30
2.15 Pro Rata Treatment . . . . . . . . . . 30
2.16 Sharing of Setoffs . . . . . . . . . . 31
2.17 Payments . . . . . . . . . . . . . . . 32
2.18 Taxes. . . . . . . . . . . . . . . . . 32
2.19 Assignment of Commitments Under
Certain Circumstances; Duty
to Mitigate. . . . . . . . . . . . . . 34
2.20 Swingline Loans . . . . . . . . . . . . . 35
2.21 Letters of Credit . . . . . . . . . . . . 37
III. REPRESENTATIONS AND WARRANTIES
3.01 Organization; Corporate Powers, etc.. . . 40
3.02 Authorization, etc. . . . . . . . . . . . 41
3.03 Enforceability. . . . . . . . . . . . . . 41
3.04 Financial Condition and Information . . . 41
3.05 No Material Adverse Change. . . . . . . . 41
3.06 Litigation. . . . . . . . . . . . . . . . 42
3.07 Federal Reserve Regulations . . . . . . . 42
3.08 Investment Company Act. . . . . . . . . . 42
3.09 Public Utility Holding Company Act. . . . 42
3.10 Tax Returns . . . . . . . . . . . . . . . 42
3.11 ERISA . . . . . . . . . . . . . . . . . . 43
3.12 Title to Properties; Possession . . . . . 43
3.13 Use of Proceeds . . . . . . . . . . . . . 43
3.14 Environmental and Safety Matters. . . . . 43
3.15 Subsidiaries. . . . . . . . . . . . . . . 43
Article Section Page
IV. CONDITIONS TO CREDIT EVENTS
4.01 Credit Events . . . . . . . . . . . . . . 43
4.02 Closing Date. . . . . . . . . . . . . . . 44
V. AFFIRMATIVE COVENANTS
5.01 Corporate Existence . . . . . . . . . . . 45
5.02 Insurance . . . . . . . . . . . . . . . . 46
5.03 Taxes . . . . . . . . . . . . . . . . . . 46
5.04 Financial Statements; Reports, etc. . . . 46
5.05 Litigation and Other Notices. . . . . . . 47
5.06 Maintaining Records; Access to
Premises and Records. . . . . . . . . . . 48
5.07 Use of Proceeds . . . . . . . . . . . . . 48
VI. NEGATIVE COVENANTS
6.01 Liens . . . . . . . . . . . . . . . . . . 48
6.02 Sale and Lease-Back Transactions. . . . . 49
6.03 Subsidiary Indebtedness . . . . . . . . . 50
6.04 Mergers, Consolidations, Sales of
Assets. . . . . . . . . . . . . . . . . . 50
6.05 Business of Borrower and Subsidiaries . . 51
6.06 ERISA Liabilities . . . . . . . . . . . . 51
6.07 Consolidated Net Worth. . . . . . . . . . 51
6.08 Consolidated Debt to Capitalization . . . 51
6.09 Use of Proceeds . . . . . . . . . . . . . 51
VII. EVENTS OF DEFAULT. . . . . . . . . . . . . . . 51
VIII. THE ADMINISTRATIVE AGENT . . . . . . . . . . . 54
IX. MISCELLANEOUS
9.01 Notices . . . . . . . . . . . . . . . . . 56
9.02 Survival of Agreement . . . . . . . . . . 57
9.03 Binding Effect. . . . . . . . . . . . . . 57
9.04 Successors and Assigns. . . . . . . . . . 57
9.05 Expenses; Indemnity . . . . . . . . . . . 60
9.06 Right of Setoff . . . . . . . . . . . . . 61
9.07 Applicable Law. . . . . . . . . . . . . . 61
9.08 Waivers; Amendment. . . . . . . . . . . . 62
9.09 Interest Rate Limitation. . . . . . . . . 62
9.10 Entire Agreement. . . . . . . . . . . . . 63
9.11 Waiver of Jury Trial. . . . . . . . . . . 63
9.12 Severability. . . . . . . . . . . . . . . 63
9.13 Counterparts. . . . . . . . . . . . . . . 63
9.14 Headings. . . . . . . . . . . . . . . . . 63
9.15 Jurisdiction; Consent to Service of
Process . . . . . . . . . . . . . . . . . 63
9.16 Confidentiality . . . . . . . . . . . . . 64
9.17 Existing Credit Agreement . . . . . . . . 65
Exhibit A Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D-1 Form of Competitive Bid Request
Exhibit D-2 Form of Notice of Competitive Bid Request
Exhibit D-3 Form of Competitive Bid
Exhibit D-4 Form of Competitive Bid Accept/Reject Letter
Exhibit E-1 Form of Opinion of Andrew A. Brodkey, Esq
Exhibit E-2 Form of Opinion of Sullivan & Cromwell
Exhibit F 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
COMPETITIVE ADVANCE AND REVOLVING CREDIT FACILITY AGREEMENT
dated as of June 21, 1995 among MAGMA COPPER COMPANY, a Delaware
corporation (the Borrower ), the lenders listed in Schedule 2.01
(the Lenders ), NATIONAL WESTMINSTER BANK PLC and BANK OF
AMERICA ILLINOIS, as co-agents (each a Co-Agent and
collectively, the Co-Agents ), CHEMICAL BANK and BANK OF AMERICA
ILLINOIS, as swingline lenders (each a Swingline Lender and
collectively, the Swingline Lenders ) and CHEMICAL BANK, as
issuing bank (in such capacity, the Issuing Bank ) and as
administrative agent for the Lenders (in such capacity, the
Administrative Agent ).
The Borrower, certain Lenders, the Administrative Agent and the
Issuing Bank are parties to a Credit Agreement dated as of May 20, 1994
(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
$500,000,000 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 Borrower has requested the Lenders to provide a procedure pursuant to
which the Borrower may invite the Lenders to bid on an uncommitted basis on
short-term borrowings by the Borrower. The Borrower has requested the
Swingline Lenders to extend credit, at any time and from time to time prior
to the Maturity Date, in the form of Swingline Loans. The Borrower has
requested the Issuing Bank to issue letters of credit, in an aggregate face
amount at any time outstanding not in excess of $50,000,000, to support
payment obligations incurred in the ordinary course of business by the
Borrower and its Subsidiaries. The proceeds of the Loans and such Letters
of Credit are to be used for general corporate purposes of the Borrower.
The Lenders and the Swingline Lenders are willing to extend such
credit to the Borrower and the Issuing Bank is willing to issue letters of
credit for the account of the Borrower on the terms and subject to the
conditions set forth herein. Accordingly, the parties hereto 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) the product of
(i) the Fixed CD Rate in effect for such Interest Period and (ii) Statutory
Reserves, plus (b) the Assessment Rate.
Administrative Fees shall have the meaning assigned to such
term in Section 2.06(b).
Administrative Questionnaire shall mean an Administrative
Questionnaire in the form of Exhibit A 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.
Aggregate Revolving Credit Exposure shall mean the aggregate
amount of the Lenders' Revolving Credit Exposures.
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%. 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
preceding sentence, 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 Percentage shall mean, with respect to any
Eurodollar Loan (other than any Eurodollar Competitive Loan), CD Loan or
ABR Loan, or with respect to the Facility Fees, as the case may be, the
applicable percentage set forth below under the caption Eurodollar
Spread , CD Spread , ABR Spread or Fee Percentage , as the case may be,
based upon the ratings by S&P and Moody's respectively, applicable on such
date to the Index Debt:
EURODOLLAR CD ABR FEE
SPREAD SPREAD SPREAD PERCENTAGE
---------- ------ ------ ----------
CATEGORY 1 0.225% 0.350% 0 0.125%
----------
Rating
------
BBB+ or above by S&P;
Baa1 or above by Moody's
CATEGORY 2 0.275% 0.400% 0 0.150%
----------
Rating
------
BBB by S&P;
Baa2 by Moody's
CATEGORY 3 0.3125% 0.4375% 0 0.1875%
----------
Rating
------
BBB- by S&P;
Baa3 by Moody's
CATEGORY 4 0.500% 0.625% 0 0.250%
----------
Rating
------
BB+ by S&P;
Ba1 by Moody's
CATEGORY 5 0.625% 0.750% 0 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 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 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 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 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.
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 B.
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.
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 (or, in the case of a Competitive Borrowing, by the Lender or
Lenders whose Competitive Bids have been accepted pursuant to Section 2.03)
on a single date and as to which a single Interest Period is in effect.
Borrowing Request shall mean a request by the Borrower in
accordance with the terms of Section 2.04 and substantially in the form of
Exhibit C.
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 shall mean 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;
or (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.
Closing Date shall mean the date of the first Credit Event.
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 any Lender, such
Lender's Revolving Credit Commitment and Swingline Commitment.
Competitive Bid shall mean an offer by a Lender to make a
Competitive Loan pursuant to Section 2.03.
Competitive Bid Accept/Reject Letter shall mean a notification
made by the Borrower pursuant to Section 2.03(d) in the form of Exhibit D-
4.
Competitive Bid Rate shall mean, as to any Competitive Bid made
by a Lender pursuant to Section 2.03(b), (i) in the case of a Eurodollar
Loan, the LIBO Rate plus or minus the Margin, and (ii) in the case of a
Fixed Rate Loan, the fixed rate of interest offered by the Lender making
such Competitive Bid.
Competitive Bid Request shall mean a request made pursuant to
Section 2.03(a) in the form of Exhibit D-1.
Competitive Borrowing shall mean a Borrowing consisting of a
Competitive Loan or concurrent Competitive Loans from the Lender or Lenders
whose Competitive Bids for such Borrowing have been accepted by the
Borrower under the bidding procedure described in Section 2.03.
Competitive Loan shall mean a Loan from a Lender to the
Borrower pursuant to the bidding procedure described in Section 2.03. Each
Competitive Loan shall be a Eurodollar Competitive Loan or a Fixed Rate
Loan.
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 shall mean, 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, 1994; Consolidated Net Worth is currently identified as Total
Stockholders' Equity on the consolidated balance sheets provided by the
Borrower to the SEC.
Continuing Lenders shall have the meaning assigned to such term
in Section 2.10(d).
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 Section
4.01.
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 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 Dollars
is hedged into Dollars, the principal amount of such hedged Debt, or the
hedged portion thereof, shall be deemed to be equal to the amount of
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 March
31, 1995.
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, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
ERISA Liabilities shall mean 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 Competitive Borrowing shall mean a Borrowing
comprised of Eurodollar Competitive Loans.
Eurodollar Competitive Loan shall mean any Competitive Loan
bearing interest at a rate determined by reference to the LIBO Rate in
accordance with the provisions of Article II.
Eurodollar Loan shall mean any Eurodollar Revolving Loan or
Eurodollar Competitive Loan.
Eurodollar Revolving Credit Borrowing shall mean a Borrowing
comprised of Eurodollar Revolving Loans.
Eurodollar Revolving Loan shall mean any Revolving 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.
Existing Maturity Date shall have the meaning assigned to such
term in Section 2.10(d)
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.
Facility Fee shall have the meaning assigned to such term in
Section 2.06(a).
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.
Fee Letter shall mean the Fee Letter dated May 18, 1995, among
the Borrower, the Administrative Agent and Chemical Securities Inc.
Fees shall mean the Facility Fees, the Administrative Fees, the
L/C Participation 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.
Fixed CD Rate shall mean, with respect to any CD Borrowing, the
average rate in the secondary market for certificates of deposit of
approximately equal 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.
Fixed Rate Borrowing shall mean a Borrowing comprised of Fixed
Rate Loans.
Fixed Rate Loan shall mean any Competitive Loan bearing
interest at a fixed percentage rate per annum (expressed in the form of a
decimal to no more than four decimal places) specified by the Lender making
such Loan in its Competitive Bid.
GAAP shall mean 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 shall mean each of the following
(without duplication) that, individually, is in excess of $1,000,000 in
outstanding amount (in 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).
Index Debt shall mean the senior, unsecured, non-credit
enhanced, long-term indebtedness for borrowed money of the Borrower.
Interest Payment Date shall mean, with respect to any Loan, the
last day of the Interest Period applicable to the Borrowing of which such
Loan is a part and, in the case of a Eurodollar Borrowing with an Interest
Period of more than three months' duration or a CD Borrowing or Fixed Rate
Borrowing with an Interest Period of more than 90 days' duration, each day
that would have been an Interest Payment Date had successive Interest
Periods of three months' duration or 90 days' duration, as the case may be,
been applicable to such Borrowing, and, in addition, the date of any
refinancing of such Borrowing with a Borrowing of a different Type.
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 or 6 months
(or, if Interest Periods of such duration shall be available from each
Lender, 9 or 12 months), thereafter, as the Borrower may elect, (b) as to
any CD Borrowing, a period of 30, 60, 90 or 180 days' (or, if Interest
Periods of such duration shall be available from each Lender, 360 days)
duration, as the Borrower may elect, commencing on the date of such
Borrowing, (c) as to any ABR Borrowing, the period commencing on the date
of such Borrowing and ending on the earliest of (i) the next succeeding
March 31, June 30, September 30 or December 31, (ii) the Maturity Date and
(iii) the date such Borrowing is prepaid in accordance with Section 2.11,
(d) as to any Fixed Rate Borrowing, the period commencing on the date of
such Borrowing and ending on the date specified in the Competitive Bids in
which the offers to make the Fixed Rate Loans comprising such Borrowing
were extended, which shall not be earlier than seven days after the date of
such Borrowing or later than 360 days after the date of such Borrowing and
(e) as to any Swingline Loan, the period commencing on the date of such
Swingline Loan and ending on the earlier of (i) the day that is 14 days
thereafter, (ii) the Maturity Date and (iii) the date such Swingline Loan
is prepaid in accordance with Section 2.20(c); 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 a Eurodollar Borrowing 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, and no Interest Period
shall extend beyond the Maturity Date.
Issuing Bank Fees shall have the meaning assigned to such term
in Section 2.06(c).
L/C Commitment shall mean the commitment of the Issuing Bank to
issue Letters of Credit pursuant to Section 2.21.
L/C Disbursement shall mean a payment or disbursement made by
the Issuing Bank pursuant to a Letter of Credit.
L/C Exposure shall mean at any time the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time
plus (b) the aggregate principal amount of all L/C Disbursements that have
not yet been reimbursed at such time. The L/C Exposure of any Lender at
any time shall mean its Pro Rata Percentage of the aggregate L/C Exposure
at such time.
L/C Participation Fee shall have the meaning assigned to such
term in Section 2.06(c).
Lenders shall mean (a) the financial institutions listed on
Schedule 2.01 (other than any such financial institution that has ceased to
be a party hereto pursuant to an Assignment and Acceptance) and (b) any
financial institution that has become a party hereto pursuant to an
Assignment and Acceptance. Unless the context clearly indicates otherwise,
the term Lenders shall include the Swingline Lenders.
Letter of Credit shall mean any letter of credit issued
pursuant to Section 2.21.
LIBO Rate shall mean, with respect to any Eurodollar Borrowing,
the rate (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
(i) in the case of a Revolving Credit Borrowing, to the greater of the
Administrative Agent's portion of such Eurodollar Borrowing and $1,000,000
and (ii) in the case of a Competitive Borrowing, to the greater of a
principal amount that would have been the Administrative Agent's portion of
such Competitive Borrowing had such Competitive Borrowing been a Revolving
Credit 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 shall mean any mortgage, pledge, security interest or
similar lien.
Loan Documents shall mean this Agreement and the Fee Letter.
Loans shall mean the Revolving Loans, the Swingline Loans and
the Competitive Loans.
Major Capital Project shall mean each of the Robinson Project,
the Smelter Expansion and the Lower Kalamazoo Project.
Margin shall mean, as to any Eurodollar Competitive Loan, the
margin (expressed as a percentage rate per annum in the form of a decimal
to no more than four decimal places) to be added to or subtracted from the
LIBO Rate in order to determine the interest rate applicable to such Loan,
as specified in the Competitive Bid relating to such Loan.
Margin Stock shall have the meaning assigned to such term in
Regulation U.
Material Division shall mean 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 shall mean any of Magma Metals Company,
Magma Nevada Mining Company, the Robinson Mining Limited Partnership, Magma
Tintaya S.A. 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, as such date may be extended with respect
to a Continuing Lender pursuant to Section 2.10.
Money Market Rate shall mean, for any day or any applicable
Interest Period, a rate per annum quoted by the applicable Swingline Lender
to the Borrower as the rate based upon quotes for short term financial
instruments, such as bank certificates of deposit, eurocommercial paper and
bank loans, at which such Swingline Lender is willing to make a Swingline
Loan.
Moody's shall mean Moody's Investors Service, Inc.
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 Securities Exchange Act of 1934, as
amended.
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 employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 307 of ERISA, and in respect of which
the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an employer as defined
in Section 3(5) of ERISA.
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 being effective.
Pro Rata Percentage of any Lender at any time shall mean the
percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.
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 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 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
Code Section 414.
Requested Maturity Date shall have the meaning assigned to such
term in Section 2.10(d).
Required Lenders shall mean, at any time, Lenders having
Revolving Credit Commitments representing at least 66-2/3% of the sum of
all Revolving Credit Commitments at such time or, for purposes of
acceleration pursuant to clause (B) of the last paragraph of Article VII,
Lenders having Loans (excluding Swingline Loans), L/C Exposures, Swingline
Exposures and unused Revolving Credit Commitments representing at least 66-
2/3% of the sum of all Loans (other than Swingline Loans) outstanding, L/C
Exposures, Swingline Exposures and unused Revolving Credit Commitments.
Revolving Credit Borrowing shall mean a Borrowing comprised of
Revolving Loans.
Revolving Credit Commitment shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Loans hereunder as
set forth on Schedule 2.01 or in the Assignment and Acceptance pursuant to
which such Lender assumed its Revolving Credit Commitment, as applicable,
as the same may be (a) reduced from time to time pursuant to Section 2.10
or pursuant to Section 2.19 and (b) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 9.04.
Revolving Credit Exposure shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Loans of such Lender, plus the aggregate amount at
such time of such Lender's L/C Exposure, plus the aggregate amount at such
time of such Lender's Swingline Exposure.
Revolving Loans shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.01. Each Revolving Loan
shall be a Eurodollar Revolving Loan, a CD Revolving Loan or an ABR
Revolving Loan.
Sale and Lease-Back Transaction shall have the meaning assigned
to such term in Section 6.02.
S&P shall mean Standard & Poor's Ratings Service, a division of
McGraw-Hill, Inc.
SEC shall mean the 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 with respect to the Adjusted CD Rate or the Base CD Rate, 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.
subsidiary of a person shall mean 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.
Subsidiary Acquisition Liens shall have the meaning assigned to
such term in Section 6.01(iv).
Swingline Commitment shall mean the commitment of any Swingline
Lender to make loans pursuant to Section 2.20, as the same may be reduced
from time to time pursuant to Section 2.10.
Swingline Exposure shall mean at any time the aggregate
principal amount at such time of all outstanding Swingline Loans. The
Swingline Exposure of any Lender at any time shall equal its Pro Rata
Percentage of the aggregate Swingline Exposure at such time.
Swingline Loan shall mean any loan made by a Swingline Lender
pursuant to Section 2.20.
Terminating Lender shall have the meaning assigned to such term
in Section 2.10(d).
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.
Total Revolving Credit Commitment shall mean at any time the
aggregate amount of the Revolving Credit 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, the
term 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
Revolving 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 Revolving Credit Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in such Lender's Revolving Credit Exposure
exceeding such Lender's Revolving Credit Commitment minus the amount by
which outstanding Competitive Borrowings shall be deemed to have utilized
such Revolving Credit Commitment in accordance with Section 2.15.
Within the limits set forth in the preceding sentence, the
Borrower may borrow, pay or prepay and reborrow Revolving Loans on or 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 (other than Swingline Loans
and Competitive Loans) shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their respective
Revolving Credit 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). Each Competitive Loan shall be
made in accordance with the procedures set forth in Section 2.03. Except
for Loans deemed made pursuant to Section 2.02(g), the Loans comprising any
Borrowing shall be in an aggregate principal amount that is (i) (x) with
respect to any Competitive Borrowing, an integral multiple of $1,000,000
and not less than $5,000,000 and (y) with respect to any other Borrowing,
an integral multiple of $500,000 and not less than $1,000,000 or (ii) equal
to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.09 and 2.13, each Competitive
Borrowing shall be comprised entirely of Eurodollar Competitive Loans or
Fixed Rate Loans, and each other Borrowing (other than a Swingline
Borrowing) shall be comprised entirely of ABR Loans, CD Loans or Eurodollar
Loans as the Borrower may request pursuant to Section 2.03 or 2.04, as
applicable. 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. 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 that, if made, would result in an aggregate of
more than twenty separate Loans of any Lender being outstanding hereunder
at any one time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
(c) Each Lender shall make each Loan (other than a Swingline
Loan) to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds to such account in New York City as
the Administrative Agent may designate not later than 1:30 p.m., New York
City time, or in the case of an ABR Loan, not later than 2:30 p.m., New
York City time, and the Administrative Agent shall by 3:00 p.m, New York
City time, or in the case of an ABR Loan, by 4:00 p.m. New York City time,
credit the amounts so received to an account with the Administrative Agent
or another Lender designated by the Borrower in the applicable Borrowing
Request or Competitive Bid Request, which account must be in the name of
the Borrower 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.
(d) Unless the Administrative Agent shall have received notice
from a Lender at least two hours prior to the time of any Borrowing that
such Lender will not make available to the Administrative Agent such
Lender's portion of such Borrowing, or the Administrative Agent shall have
failed to notify a Lender 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
paragraph (c) above and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If the Administrative Agent shall have so made funds available
then, 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.
(e) 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.
(f) The Borrower may refinance all or any part of a Borrowing
with another Borrowing, subject to the conditions and limitations set forth
in this Agreement. Any Borrowing or part thereof so refinanced shall be
deemed to be repaid or prepaid in accordance with the applicable provisions
of this Agreement with the proceeds of the new Borrowing, and the proceeds
of such 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 paragraph (c) above; provided, however that (i) if the
principal amount extended by a Lender in a refinancing is greater than the
principal amount extended by such Lender in the Borrowing being refinanced
then such Lender shall pay such difference to the Administrative Agent for
distribution to the Lenders described in (ii) below, (ii) if the principal
amount extended by a Lender in the Borrowing being refinanced is greater
than the principal amount being extended by such Lender in the refinancing,
the Administrative Agent shall return the difference to such Lender out of
amounts received pursuant to (i) above, and (iii) to the extent any Lender
fails to pay the Administrative Agent amounts due from it pursuant to (i)
above, any Loan or portion thereof being refinanced shall not be deemed
repaid in accordance with Section 2.17 and shall be payable by the
Borrower.
(g) If the Issuing Bank shall not have received from the
Borrower the payment required to be made by Section 2.21(e) by the time
specified in such Section, the Issuing Bank will promptly notify the
Administrative Agent of the L/C Disbursement and the Administrative Agent
will promptly notify each Lender of such L/C Disbursement and its Pro Rata
Percentage thereof. Each Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New
York City time, on such date (or, if such Lender shall have received such
notice later than 12:00 (noon) New York City time, on any day, not later
than 12:00 (noon), New York City time, on the immediately following
Business Day), an amount equal to such Lender's Pro Rata Percentage of such
L/C Disbursement (it being understood that such amount shall be deemed to
constitute an ABR Loan of such Lender and such payment shall be deemed to
have reduced the L/C Exposure), and the Administrative Agent will promptly
pay to the Issuing Bank amounts so received by it from the Lenders. The
Administrative Agent will promptly pay to the Issuing Bank any amounts
received by it from the Borrower pursuant to Section 2.21(e) prior to the
time that any Lender makes any payment pursuant to this paragraph (g); any
such amounts received by the Administrative Agent thereafter will be
promptly remitted by the Administrative Agent to the Lenders that shall
have made such payments and to the Issuing Bank, as their interests may
appear. If any Lender shall not have made its Pro Rata Percentage of such
L/C Disbursement available to the Administrative Agent as provided above,
such Lender and the Borrower severally agree to pay interest on such
amount, for each day from and including the date such amount is required to
be paid in accordance with this paragraph to but excluding the date such
amount is paid, to the Administrative Agent at (i) in the case of the
Borrower, a rate per annum equal to the interest rate applicable to ABR
Revolving Loans pursuant to Section 2.07 and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for
each day thereafter, the Alternate Base Rate (it being understood that the
interest allocated by the Administrative Agent from the Borrower and such
Lender will in no event exceed in the aggregate the interest referred to in
the preceeding clause (i)).
SECTION 2.03. Competitive Bid Procedure. (a) In order to
request Competitive Bids, the Borrower shall hand deliver or telecopy to
the Administrative Agent a duly completed Competitive Bid Request (i) in
the case of a Eurodollar Competitive Borrowing, not later than 12:00
(noon), New York City time, four Business Days before the proposed date of
such Borrowing and (ii) in the case of a Fixed Rate Borrowing, not later
than 12:00 (noon), New York City time, one Business Day before the proposed
date of such Borrowing. A Competitive Bid Request shall not be made within
five Business Days after the date of any previous Competitive Bid Request.
No CD Loan or ABR Loan shall be requested in, or made pursuant to, a
Competitive Bid Request. A Competitive Bid Request that does not conform
substantially to the format of Exhibit D-1 may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the
Borrower of such rejection as promptly as practicable. Each Competitive
Bid Request shall refer to this Agreement and specify (i) whether the
Borrowing being requested is to be a Eurodollar Borrowing or a Fixed Rate
Borrowing; (ii) the date of such Borrowing (which shall be a Business Day);
(iii) the number and the location of the account to which funds are to be
disbursed (which shall be an account that complies with the requirements of
Section 2.02(c)); (iv) the aggregate principal amount of such Borrowing,
which shall be a minimum of $10,000,000 and an integral multiple of
$1,000,000; and (v) the Interest Period with respect thereto (which may not
end after the Maturity Date). Promptly after its receipt of a Competitive
Bid Request that is not rejected, the Administrative Agent shall by
telecopy in the form set forth in Exhibit D-2 invite the Lenders to bid to
make Competitive Loans pursuant to the Competitive Bid Request.
(b) Each Lender may make one or more Competitive Bids to the
Borrower responsive to a Competitive Bid Request. Each Competitive Bid by
a Lender must be received by the Administrative Agent by telecopy in the
form of Exhibit D-3, (i) in the case of a Eurodollar Competitive Borrowing,
not later than 10:30 a.m., New York City time, three Business Days before
the proposed date of such Competitive Borrowing, and (ii) in the case of a
Fixed Rate Borrowing, not later than 10:30 a.m., New York City time, on the
proposed date of such Competitive Borrowing. Competitive Bids that do not
conform substantially to the format of Exhibit D-3 may be rejected by the
Administrative Agent, and the Administrative Agent shall notify the
applicable Lender as promptly as practicable. Each Competitive Bid shall
refer to this Agreement and specify (x) the principal amount (which shall
be a minimum of $5,000,000 and an integral multiple of $1,000,000 and which
may equal the entire principal amount of the Competitive Borrowing re-
quested by the Borrower) of the Competitive Loan or Loans that the Lender
is willing to make, (y) the Competitive Bid Rate or Rates at which the
Lender is prepared to make such Loan or Loans and (z) the Interest Period
applicable to such Loan or Loans and the last day thereof.
(c) The Administrative Agent shall promptly notify the Borrower
by telecopy of the Competitive Bid Rate and the principal amount of each
Competitive Loan in respect of which a Competitive Bid shall have been made
and the identity of the Lender that shall have made each bid.
(d) The Borrower may, subject only to the provisions of this
paragraph (d), accept or reject any Competitive Bid. The Borrower shall
notify the Administrative Agent by telephone, confirmed by telecopy in the
form of a Competitive Bid Accept/Reject Letter, whether and to what extent
it has decided to accept or reject each Competitive Bid, (x) in the case of
a Eurodollar Competitive Borrowing, not later than 11:30 a.m. New York City
time, three Business Days before the date of the proposed Competitive
Borrowing, and (y) in the case of a Fixed Rate Borrowing, not later than
11:30 a.m. New York City time, on the proposed date of the Competitive Bor-
rowing; provided, however, that (i) the failure of the Borrower to give
such notice shall be deemed to be a rejection of each Competitive Bid,
(ii) the Borrower shall not accept a Competitive Bid made at a particular
Competitive Bid Rate if the Borrower has decided to reject a Competitive
Bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the
Competitive Bids accepted by the Borrower shall not exceed the principal
amount specified in the Competitive Bid Request, (iv) if the Borrower shall
accept a Competitive Bid or Bids made at a particular Competitive Bid Rate
but the amount of such Competitive Bid or Bids would cause the total amount
to be accepted by the Borrower to exceed the amount specified in the
Competitive Bid Request, then the Borrower shall accept a portion of such
Competitive Bid or Bids in an amount equal to the amount specified in the
Competitive Bid Request less the amount of all other Competitive Bids so
accepted, which acceptance, in the case of multiple Competitive Bids at
such Competitive Bid Rate, shall be made pro rata in accordance with the
amount of each such Bid, and (v) except pursuant to clause (iv) above, no
Competitive Bid shall be accepted for a Competitive Loan unless such
Competitive Loan is in a minimum principal amount of $5,000,000 and an
integral multiple of $1,000,000; provided further, however, that if a
Competitive Loan must be in an amount less than $5,000,000 because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum
of $1,000,000 or any integral multiple thereof, and in calculating the pro
rata allocation of acceptances of portions of multiple Competitive Bids at
a particular Competitive Bid Rate pursuant to clause (iv) the amounts shall
be rounded to integral multiples of $1,000,000 in a manner determined by
the Borrower. A notice given by the Borrower pursuant to this paragraph
(d) shall be irrevocable.
(e) The Administrative Agent shall promptly notify each bidding
Lender by telecopy whether or not its Competitive Bid has been accepted
(and, if so, in what amount and at what Competitive Bid Rate), and each
successful bidder will thereupon become bound, upon the terms and subject
to the conditions hereof, to make the Competitive Loan in respect of which
its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a
Competitive Bid in its capacity as a Lender, it shall submit such
Competitive Bid directly to the Borrower at least one quarter of an hour
earlier than the time by which the other Lenders are required to submit
their Competitive Bids to the Administrative Agent pursuant to paragraph
(b) above.
SECTION 2.04. Borrowing Procedure. In order to request a
Borrowing (other than a Swingline Loan, a Competitive Borrowing or a deemed
Borrowing pursuant to Section 2.02(g), as to which this Section 2.04 shall
not apply), the Borrower shall hand deliver or telecopy to the
Administrative Agent a duly completed Borrowing Request (a) in the case of
a Eurodollar Borrowing, not later than 12:00 (noon), 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 Business Day of a
proposed Borrowing; provided, however, that Borrowing Requests with respect
to Borrowings to be made on the Closing Date may, at the discretion of the
Administrative Agent, be delivered later than the times specified above.
Each Borrowing Request shall be irrevocable, shall be signed by or on
behalf of the Borrower and shall specify the following information:
(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), (iii) the number and location of
the account to which funds are to be disbursed (which shall be an account
that complies with the requirements of Section 2.02(c)); (iv) the amount of
such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing
or CD Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set
forth in Section 2.02. 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. The Borrower shall not request any Eurodollar Borrowing or CD
Borrowing if the Interest Period applicable thereto would end after the
Maturity Date; provided that if the Maturity Date shall have been extended
pursuant to Section 2.10(d), the Interest Period applicable to a Eurodollar
Borrowing or CD Borrowing may end after the Maturity Date in effect for any
Terminating Lenders. The Administrative Agent shall promptly (and in any
event on the same day that the Administrative Agent receives such notice,
if received by 1:00 p.m., New York City time, on such day) advise the
Lenders of any notice given pursuant to this Section 2.04 (and the contents
thereof), of each Lender's portion of the requested Borrowing.
SECTION 2.05. Evidence of Debt; Repayment of Loans. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender, the then unpaid principal amount of each
Revolving Loan, Competitive Loan or Swingline Loan on the last day of the
Interest Period applicable to such Loan or, if earlier, on the Maturity
Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower
to such Lender resulting from each Loan made by such Lender from time to
time, including the amounts of principal and interest payable and paid such
Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, the Type thereof
and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received
by the Administrative Agent hereunder from the Borrower and each Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) above shall be prima facie evidence of the existence
and amounts of the obligations therein recorded; provided, however, that
the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans in accordance with their
terms.
(e) Notwithstanding any other provision of this Agreement, in
the event any Lender shall request and receive a note payable to such
Lender and its registered assigns, the interests represented by such note
shall at all times (including after any assignment of all or part of such
interests pursuant to Section 9.04) be represented by one or more notes
payable to the payee named therein or its registered assigns.
SECTION 2.06. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December in each year, and on the date on which the
Commitment of such Lender shall expire or be terminated as provided herein,
a facility fee (a Facility Fee ) equal to the Applicable Percentage per
annum in effect from time to time on the average daily amount of the
Revolving Credit Commitment of such Lender (whether used or unused) during
the preceding quarter (or shorter period commencing with the date hereof or
ending with the Maturity Date or the date on which the Revolving Credit
Commitment of such Lender shall expire or be terminated). All Facility
Fees shall be computed on the basis of the actual number of days elapsed in
a year of 360 days. The Facility Fee due to each Lender shall commence to
accrue on the date of this Agreement and shall cease to accrue on the date
on which the Revolving Credit Commitment of such Lender shall expire or be
terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent, for
its own account, the administrative fees set forth in the Fee Letter at the
times and in the amounts specified therein (the Administrative Fees ).
(c) The Borrower agrees to pay (i) to each Lender, through the
Administrative Agent, on the last day of March, June, September and
December of each year and on the date on which the Revolving Credit
Commitment of such Lender shall be terminated as provided herein, a fee (an
L/C Participation Fee ) calculated on such Lender's Pro Rata Percentage of
the average daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements) during the preceding
quarter (or shorter period commencing with the date hereof or ending with
the Maturity Date or the date on which all Letters of Credit have been
canceled or have expired and the Revolving Credit Commitments of all
Lenders shall have been terminated) at a rate equal to the Applicable
Percentage from time to time used to determine the interest rate on
Revolving Credit Borrowings comprised of Eurodollar Loans pursuant to
Section 2.07 and (ii) to the Issuing Bank with respect to each Letter of
Credit the standard fronting, issuance and drawing fees specified from time
to time by the Issuing Bank (the Issuing Bank Fees ). All L/C
Participation Fees and Issuing Bank Fees shall be computed on the basis of
the actual number of days elapsed in a year of 360 days.
(d) 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, except that the Issuing Bank Fees shall be
paid directly to the Issuing Bank. Once paid, none of the Fees shall be
refundable under any circumstances.
SECTION 2.07. Interest on Loans. (a) Subject to the provisions
of Section 2.08, 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 the Alternate Base Rate
is 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 Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.08, 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 Percentage in effect from time to time.
(c) Subject to the provisions of Section 2.08, 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 (i) in the case of each Revolving Loan, the LIBO
Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time, and (ii) in the case of
each Competitive Loan, the LIBO Rate for the Interest Period in effect for
such Borrowing plus the Margin offered by the Lender making such Loan and
accepted by the Borrower pursuant to Section 2.03.
(d) Subject to the provisions of Section 2.08, each Swingline
Loan 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
Money Market Rate.
(e) Subject to the provisions of Section 2.08, each Fixed Rate
Loan 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
fixed rate of interest offered by the Lender making such Loan and accepted
by the Borrower pursuant to Section 2.03.
(f) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement. The applicable Alternate Base Rate, Adjusted CD Rate or LIBO
Rate for each Interest Period or day within an Interest Period, as the case
may be, shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
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, by acceleration or otherwise, the Borrower
shall on demand from time to time pay interest, to the extent permitted by
law, on such defaulted amount to but excluding the date of actual payment
(after as well as before judgment) (a) in the case of overdue principal, at
the rate otherwise applicable to such Loan pursuant to Section 2.07 plus 2%
per annum and (b) in all other cases, at a rate per annum (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) equal to the sum of 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 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, as soon as
practicable thereafter, give written or 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, (i) any request by the Borrower for a Eurodollar Revolving
Credit Borrowing pursuant to Section 2.04 shall be deemed to be a request
for an ABR Borrowing and (ii) any request by the Borrower for a Eurodollar
Competitive Borrowing pursuant to Section 2.03 shall be of no force and
effect and shall be denied by the Administrative Agent. Each determination
by the Administrative Agent hereunder 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, as soon as practicable thereafter, give written
or 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 2.04 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. Each determination by the Administrative Agent hereunder
shall be conclusive absent manifest error.
SECTION 2.10. Termination, Reduction and Extension of
Commitments. (a) The Revolving Credit Commitments, the Swingline
Commitment and the L/C Commitment shall automatically terminate 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, the Revolving Credit Commitments; provided, however,
that (i) each partial reduction of the Revolving Credit Commitments shall
be in an integral multiple of $1,000,000 and in a minimum principal amount
of $10,000,000 and (ii) the Total Revolving Credit Commitment shall not be
reduced to an amount that is less than the sum of the Aggregate Revolving
Credit Exposure and the aggregate outstanding amount of the Competitive
Loans at the time.
(c) Each reduction in the Revolving Credit Commitments hereunder
shall be made ratably among the Lenders in accordance with their respective
Revolving Credit Commitments. The Borrower shall pay to the Administrative
Agent for the account of the applicable Lenders, on the date of each
termination or reduction, the Facility Fees on the amount of the Revolving
Credit Commitments so terminated or reduced accrued to but excluding the
date of such termination or reduction.
(d) (i) The Borrower may request, in a notice given as herein
provided to the Administrative Agent and each of the Lenders during the 30
day period commencing on the date that is the first day of the calendar
month that is 18 months prior to the Maturity Date then in effect (the
Existing Maturity Date ), that the Maturity Date be extended, which notice
shall specify the new Maturity Date (which shall be 18 months after the
Existing Maturity Date) to be in effect following such extension (the
Requested Maturity Date ). Each Lender, acting in its sole discretion,
shall, not later than a date 20 days after its receipt of any such notice
from the Borrower, notify the Borrower and the Administrative Agent in
writing of its election to extend or not to extend the Maturity Date with
respect to its Commitment. Any Lender which shall not timely notify the
Borrower and the Administrative Agent of its election to extend the
Maturity Date shall be deemed to have elected not to extend the Maturity
Date with respect to its Commitment (any Lender who timely notifies the
Borrower and the Administrative Agent of an election not to extend its
Commitment and any Lender so deemed to have elected not to extend its
Commitment being referred to as a Terminating Lender ). The election of
any Lender to agree to a requested extension shall not obligate any other
Lender to agree.
(ii) If and only if Lenders holding Commitments that aggregate
at least 66-2/3% of the aggregate amount of the Commitments on the date of
the notice delivered by the Borrower pursuant to subparagraph (i) above
(including Commitments of all Terminating Lenders on such date) shall have
agreed during the 20 day period referred to in such subparagraph (i) to
extend the Existing Maturity Date, then (A) the Commitments of the Lenders
other than Terminating Lenders (the Continuing Lenders ) shall, subject to
the other provisions of this Agreement, be extended to the Requested
Maturity Date specified in the notice from the Borrower, and as to such
Lenders the term Maturity Date , as used herein shall on and after the
date as of which the requested extension is effective mean such Requested
Maturity Date, provided that if such date is not a Business Day, then such
Requested Maturity Date shall be the next preceding Business Day and (B)
the Commitments of the Terminating Lenders shall continue until the
Existing Maturity Date, and shall then terminate, and as to the Terminating
Lenders, the term Maturity Date , as used herein, shall continue to mean
such Existing Maturity Date.
(e) In the event that the Maturity Date shall have been extended
for the Continuing Lenders in accordance with paragraph (d) above and, in
connection with such extension, there are Terminating Lenders, the Borrower
may, at its own expense, require any Terminating Lender to transfer and
assign in whole or in part, without recourse (in accordance with
Section 9.04) all or part of its interests, rights and obligations under
this Agreement to an assignee (which assignee may be another Lender, if
another Lender accepts such assignment) that shall assume such assigned
obligations and that shall agree that its Commitment will expire on the
Maturity Date in effect for Continuing Lenders pursuant to such paragraph
(d); provided, however, that (i) the Borrower shall have received a written
consent of the Administrative Agent in the case of an assignee that is not
a Lender, which consent shall not unreasonably be withheld, and (ii) the
assigning Lender shall have received from the Borrower or such assignee
full payment in immediately available funds of the principal of and
interest accrued to the date of such payment on the Loans made by it
hereunder to the extent that such Loans are subject to such assignment and
all other amounts owed to it hereunder. Any such assignee's initial
Maturity Date shall be the Maturity Date in effect at the time of such
assignment for the Continuing Lenders. The Borrower shall not have any
right to require a Lender to assign any part of its interests, rights and
obligations under this Agreement pursuant to this paragraph (e) unless it
has notified such Lender of its intention to require the assignment thereof
at least ten days prior to the proposed assignment date.
SECTION 2.11. 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 at least one Business Day prior written or telecopy notice
(or telephone notice promptly confirmed by written or telecopy notice) to
the Administrative Agent before 11:00 a.m., New York City time; provided,
however, that each partial prepayment shall be in an amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. The Borrower
may have the right to prepay any Competitive Borrowing if and as agreed by
the Borrower and the Lender at the time of such Competitive Borrowing.
(b) In the event of any termination of all the Revolving Credit
Commitments, the Borrower shall repay or prepay all its outstanding
Revolving Credit Borrowings and all outstanding Swingline Loans on the date
of such termination. In the event of any partial reduction of the
Revolving Credit Commitments, or any termination of the Revolving Credit
Commitments of some but not all of the Lenders, then (i) at or prior to the
effective date of such reduction or termination, the Administrative Agent
shall notify the Borrower and the Lenders of the Aggregate Revolving Credit
Exposure after giving effect thereto and (ii) if the sum of the Aggregate
Revolving Credit Exposure and the aggregate principal amount of the
outstanding Competitive Borrowings would exceed the Total Revolving Credit
Commitment after giving effect to such reduction or termination of the
Revolving Credit Commitments of some but not all of the Lenders, then the
Borrower shall, on the date of such reduction or termination, repay or
prepay Revolving Credit Borrowings or Swingline Loans (or a combination
thereof) in an amount sufficient to eliminate such excess.
(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 by the amount stated therein on the date stated therein. All
prepayments of Revolving Loans and Swingline Loans under this Section 2.11
shall be subject to Section 2.14 but otherwise without premium or penalty.
All prepayments under this Section 2.11 shall be accompanied by accrued
interest on the principal amount being prepaid to the date of payment.
SECTION 2.12. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision of this Agreement, if after the
date of this Agreement any change in applicable law or regulation 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 or the Issuing Bank of the principal of or interest on any
Eurodollar Loan, CD Loan or Fixed Rate Loan made by such Lender or any Fees
or other amounts payable hereunder (other than changes in respect of taxes
imposed on the overall net income of such Lender or the Issuing Bank by the
jurisdiction in which such Lender or the Issuing Bank 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 or the Issuing Bank, 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 Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans, CD Loans or Fixed
Rate Loans made by such Lender or any Letter of Credit or participation
therein, and the result of any of the foregoing shall be to increase the
cost to such Lender or the Issuing Bank of making or maintaining any
Eurodollar Loan, CD Loan or Fixed Rate Loan or increase the cost to any
Lender of issuing or maintaining any Letter of Credit or purchasing or
maintaining a participation therein or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Bank hereunder
(whether of principal, interest or otherwise) by an amount deemed by such
Lender or the Issuing Bank to be material, then the Borrower will pay to
such Lender or the Issuing Bank, as the case may be, upon demand such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, 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 such law, rule, regulation or guideline or in the interpretation or
administration thereof by any Governmental Authority 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 regarding
capital adequacy (whether or not having the force of law) of any
Governmental Authority 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 or participations in
Letters of Credit purchased by such Lender pursuant hereto or the Letters
of Credit issued by the Issuing Bank pursuant hereto 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 applicability,
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 from time to time the Borrower shall pay to such Lender or
the Issuing Bank, as the case may be, 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
the amount or amounts necessary to compensate such Lender or the Issuing
Bank or its holding company, as applicable, as specified in paragraph (a)
or (b) above 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 or delay 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 shall not
constitute a waiver of such Lender's or the Issuing Bank's right to demand
such compensation; provided that no Lender or Swingline Lender or the
Issuing Bank shall be entitled to compensation under this Section 2.12 for
any costs incurred or reduction suffered with respect to any date unless
such Lender or Swingline 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 Swingline 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 2.12, no Lender or
Issuing Bank shall demand compensation for any increased cost or reduction
referred to above if it shall not at the time be the general practice of
such Lender or Issuing Bank to demand such compensation in similar
circumstances under comparable provisions of credit agreements, if any,
with similarly situated borrowers. The protection of this Section shall be
available to each Lender and Swingline 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.
SECTION 2.13. Change in Legality. (a) Notwithstanding any
other provision of this Agreement, if, after the date hereof, 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, by written notice to the Borrower and to the
Administrative Agent setting forth in reasonable detail the relevant
circumstances and the effect thereof:
(i) such Lender may declare that Eurodollar Loans will not there-
after (for the duration of such unlawfulness) be made by such Lender
hereunder, whereupon such Lender shall not submit a Competitive Bid in
response to a request for a Eurodollar Competitive Loan and any
request 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) such Lender may 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 that 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 2.13, 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 2.14. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense (which shall not include lost profit)
that such Lender may sustain or incur as a consequence of (a) any action
taken by the Borrower which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Fixed Rate
Loan, CD Loan or Eurodollar Loan prior to the end of the Interest Period in
effect therefor or (ii) any Fixed Rate Loan, CD Loan or Eurodollar Loan to
be made by such Lender not being made after notice of such Loan shall have
been given by the Borrower hereunder (any of the events referred to in this
clause (a) being called a Breakage Event ) or (b) any default in the
making of any payment or prepayment required to be made hereunder. In the
case of any Breakage Event, such loss shall include an amount equal to the
excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Fixed Rate Loan, CD Loan or Eurodollar Loan that is
the subject of such Breakage Event for the period from the date of such
Breakage Event to the last day of the Interest Period in effect (or that
would have been in effect) for such Loan over (ii) the amount of interest
likely to be realized by such Lender in redeploying the funds released or
not utilized by reason of such Breakage Event for such period. A certifi-
cate of any Lender setting forth in reasonable detail any amount or amounts
which such Lender is entitled to receive pursuant to this Section 2.14
shall be delivered to the Borrower and shall be conclusive absent manifest
error.
SECTION 2.15. Pro Rata Treatment. Except as provided in the
succeeding sentence with respect to Competitive Borrowings and Swingline
Loans, as required under Section 2.13 and as required in order that the
Loans of any Terminating Lenders may be paid in full on the Maturity Date
applicable to such Lenders, each Borrowing, each payment or prepayment of
principal of any Borrowing, each payment of interest on the Loans, each
payment of the Facility Fees, each reduction of the Revolving Credit
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 applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal
amounts of their outstanding Loans). Each payment of principal of any
Competitive Borrowing shall be allocated pro rata among the Lenders
participating in such Borrowing in accordance with the respective principal
amounts of their outstanding Competitive Loans comprising such Borrowing.
Each payment of interest on any Competitive Borrowing shall be allocated
pro rata among the Lenders participating in such Borrowing in accordance
with the respective amounts of accrued and unpaid interest on their
outstanding Competitive Loans comprising such Borrowing. For purposes of
determining the available Revolving Credit Commitments of the Lenders at
any time, each outstanding Competitive Borrowing and each outstanding
Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders that shall not have
made Loans as part of such Competitive Borrowing and shall not have made
Swingline Loans) pro rata in accordance with such respective Revolving
Credit Commitments. 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 2.16. 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 or L/C Disbursement as a result of which
the unpaid principal portion of its Revolving Loans and participations in
L/C Disbursements shall be proportionately less than the unpaid principal
portion of the Revolving Loans and participations in L/C Disbursements 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 Revolving Loans and
L/C Disbursement of such other Lender, so that the aggregate unpaid
principal amount of the Revolving Loans and L/C Disbursement and
participations in Revolving Loans and L/C Disbursement held by each Lender
shall be in the same proportion to the aggregate unpaid principal amount of
all Revolving Loans and L/C Disbursement then outstanding as the principal
amount of its Revolving Loans and L/C Disbursement prior to such exercise
of banker's lien, setoff or counterclaim or other event was to the
principal amount of all Revolving Loans and L/C Exposure 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 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 Revolving Loan or L/C Disbursement 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 2.17. Payments. (a) The Borrower shall make each
payment (including, without limitation, principal of or interest on any
Borrowing or any L/C Disbursement or any Fees or other amounts) hereunder
not later than 12:00 (noon), New York City time, on the date when due in
immediately available Dollars, without setoff, defense or counterclaim.
Each such payment (other than (i) Issuing Bank Fees, which shall be paid
directly to the Issuing Bank, and (ii) principal of and interest on
Swingline Loans, which shall be paid directly to the appropriate Swingline
Lender except as otherwise provided in Section 2.20(d)) shall be made to
the Administrative Agent at its offices at 270 Park Avenue, New York, New
York.
(b) Whenever any payment (including, without limitation,
principal of or interest on any Borrowing or any Fees or other amounts)
hereunder 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 2.18. 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 2.18) 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 2.18 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 2.18
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 2.18(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 2.18 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 2.18 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 2.19. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) In the event (i) any Lender or the
Issuing Bank delivers a certificate requesting compensation pursuant to
Section 2.12, (ii) any Lender or the Issuing Bank delivers a notice
described in Section 2.13 or (iii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank pursuant to
Section 2.18, the Borrower may, at its sole expense and effort, upon notice
to such Lender or the Issuing Bank and the Administrative Agent, require
such Lender or the Issuing Bank (i) in the case of Sections 2.12 or 2.18
only, to terminate the Commitment of such Lender or (ii) in all cases
described in this paragraph, to transfer and assign, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04),
all of its interests, rights and obligations under this Agreement to an
assignee which shall assume such assigned obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (x)
such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction,
(y) the Borrower shall have received the prior written consent of the
Administrative Agent and each Swingline Lender, which consent shall not
unreasonably be withheld, and (z) the Borrower or such assignee shall have
paid to the affected Lender or the Issuing Bank in immediately available
funds an amount equal to the sum of the principal of and interest accrued
to the date of such payment on the outstanding Loans and participations in
L/C Disbursements and Swingline Loans of such Lender or the Issuing Bank
plus all Fees and other amounts accrued for the account of such Lender or
the Issuing Bank hereunder (including any amounts under Section 2.12 and
Section 2.14).
(b) If (i) any Lender or the Issuing Bank shall request
compensation under Section 2.12, (ii) any Lender or the Issuing Bank
delivers a notice described in Section 2.13 or (iii) the Borrower is
required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank
pursuant to Section 2.18, then such Lender or the Issuing Bank shall as
promptly as practicable use best efforts (which shall not require such
Lender or the Issuing Bank to incur an unreimbursed loss or unreimbursed
cost or expense or otherwise take any action inconsistent with its internal
policies or legal or regulatory restrictions or suffer any disadvantage or
burden deemed by it to be significant) (x) to file any certificate or
document reasonably requested in writing by the Borrower or (y) to assign
its rights and delegate and transfer its obligations hereunder to another
of its offices, branches or affiliates, if such filing or assignment would
reduce its claims for compensation under Section 2.12 or enable it to
withdraw its notice pursuant to Section 2.13 or would reduce amounts
payable pursuant to Section 2.18, as the case may be, in the future.
(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 2.12 or 2.13 or any circumstances which it has determined will
enable it to make any such claims.
SECTION 2.20. Swingline Loans. (a) Swingline Commitment.
Subject to the terms and conditions herein set forth, each of the Swingline
Lenders agrees 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 Revolving Credit Commitments of such Lender
in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in (i) the aggregate principal
amount of all Swingline Loans exceeding $25,000,000 in the aggregate or
(ii) the Aggregate Revolving Credit Exposure, after giving effect to any
Swingline Loan, exceeding the Total Revolving Credit Commitment minus the
aggregate amount of the outstanding Competitive Borrowings. Each Swingline
Loan shall be in a principal amount that is an integral multiple of
$500,000. The Swingline Commitment may be terminated or reduced from time
to time as provided herein. Within the foregoing limits, the Borrower may
borrow, pay or prepay and reborrow Swingline Loans hereunder, on and after
the Closing Date and prior to the Maturity Date, subject to the terms,
conditions and limitations set forth herein.
(b) Swingline Loans. The Borrower shall notify the
Administrative Agent by telecopy, or by telephone (confirmed by telecopy),
not later than 2:00 p.m., New York City time, or in the event Bank of
America Illinois is the specified Swingline Lender, not later than 1:30
p.m., Pacific time, on the day of a proposed Swingline Loan. Such notice
shall be delivered on a Business Day, shall be irrevocable and shall refer
to this Agreement and shall specify the requested date (which shall be a
Business Day) and amount of such Swingline Loan and the Swingline Lender.
The Administrative Agent will promptly advise the appropriate Swingline
Lender of any notice received from the Borrower pursuant to this paragraph
(b). The appropriate Swingline Lender shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit
account of the Borrower with such Swingline Lender by 3:00 p.m., New York
City time, or in the event Bank of America Illinois is the specified
Swingline Lender, by 3:00 p.m., Pacific time, on the date such Swingline
Loan is so requested.
(c) Prepayment. The Borrower shall have the right at any time
and from time to time to prepay any Swingline Loan, in whole or in part,
upon giving written or telecopy notice (or telephone notice promptly
confirmed by written, or telecopy notice) to the appropriate Swingline
Lender and to the Administrative Agent before 12:00 (noon), New York City
time, or in the event Bank of America Illinois is the specified Swingline
Lender, by 3:00 p.m., Pacific time, on the date of prepayment at the
appropriate Swingline Lender's address for notices specified on
Schedule 2.01. All principal payments of Swingline Loans shall be
accompanied by accrued interest on the principal amount being repaid to the
date of payment.
(d) Participations. A Swingline Lender may by written notice
given to the Administrative Agent not later than 10:00 a.m., New York City
time, on any Business Day require the Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of Swingline Loans in which
Lenders will participate. The Administrative Agent will, promptly upon
receipt of such notice, give notice to each Lender, specifying in such
notice such Lender's Pro Rata Percentage of such Swingline Loan or Loans.
In furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to
the Administrative Agent, for the account of the appropriate Swingline
Lender, such Lender's Pro Rata Percentage of such Swingline Loan or Loans.
Each Lender acknowledges and agrees that its obligation to acquire
participations in Swingline Loans pursuant to this paragraph is absolute
and unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of
Default, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever. Each Lender shall comply
with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.02(c) with
respect to Loans made by such Lender, and the Administrative Agent shall
promptly pay to the appropriate Swingline Lender the amounts so received by
it from the Lenders. The Administrative Agent shall notify the Borrower of
any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall
be made to the Administrative Agent and not to a Swingline Lender. Any
amounts received by a Swingline Lender from the Borrower (or other party on
behalf of the Borrower) in respect of a Swingline Loan after receipt by
such Swingline Lender of the proceeds of a sale of participations therein
shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Lenders that shall have made their payments
pursuant to this paragraph and to such Swingline Lender, as their interests
may appear. The purchase of participations in a Swingline Loan pursuant to
this paragraph shall not relieve the Borrower (or other party liable for
obligations of the Borrower) of any default in the payment thereof.
SECTION 2.21. Letters of Credit. (a) General. The Borrower may
request the issuance of Letters of Credit, in a form reasonably acceptable
to the Administrative Agent and the Issuing Bank, appropriately completed,
for the account of the Borrower, at any time and from time to time while
the Revolving Credit Commitments remain in effect. Each Letter of Credit
shall be in a minimum principal amount of $1,000,000 and 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 paragraph (b) below. This Section shall not be
construed to impose an obligation upon the Issuing Bank to issue any Letter
of Credit that is inconsistent with the terms and conditions of this
Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. In order to request the issuance of a Letter of Credit (or to
amend, renew or extend an existing Letter of Credit), the Borrower shall
hand deliver or telecopy to the Issuing Bank and the Administrative Agent
(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) in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a
Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, the date of issuance, amendment, renewal or extension,
the date on which such Letter of Credit is to expire (which shall comply
with paragraph (c) below), the amount of such Letter of Credit, the name
and address of the beneficiary thereof, whether such Letter of Credit shall
permit a single drawing or multiple drawings, 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
such other information as shall be necessary to prepare such Letter of
Credit. Following receipt of such notice and prior to the issuance of the
requested Letter of Credit or the applicable amendment, renewal or
extension, the Administrative Agent shall notify the Borrower and the
Issuing Bank of the amount of the Aggregate Revolving Credit Exposure and
the aggregate principal amount of the outstanding Competitive Borrowings
after giving effect to (i) the issuance, amendment, renewal or extension of
such Letter of Credit, (ii) the issuance or expiration of any other Letter
of Credit that is to be issued or will expire prior to the requested date
of issuance of such Letter of Credit and (iii) the borrowing or repayment
of any Revolving Credit Loans, Swingline Loans or Competitive Loans that
(based upon notices delivered to the Administrative Agent by the Borrower)
are to be borrowed or repaid prior to the requested date of issuance of
such Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if, and upon issuance, amendment, renewal or
extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that, after giving effect to such issuance,
amendment, renewal or extension (A) the L/C Exposure shall not exceed
$50,000,000 and (B) the sum of the Aggregate Revolving Credit Exposure and
the aggregate principal amount of the outstanding Competitive Borrowings
shall not exceed the Total Revolving Credit Commitment.
(c) Expiration Date. Each Letter of Credit shall expire at the
close of business on the earlier of the date one year after the date of the
issuance of such Letter of Credit and the date that is five Business Days
prior to the Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date.
(d) Participations. By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the Lenders,
the Issuing Bank hereby grants to each Lender, and each such Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit
equal to such Lender's Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the
issuance of such Letter of Credit. 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, such
Lender's Pro Rata Percentage of each L/C Disbursement made by the Issuing
Bank and not reimbursed by the Borrower forthwith on the date due as
provided in Section 2.02(g). Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the occurrence and
continuance of a Default or an Event of Default, 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.
(e) Reimbursement. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, the Issuing Bank shall
promptly notify the Borrower thereof, and the Borrower shall pay to the
Administrative Agent the amount of such L/C Disbursement before 12:00
(noon), New York City time, on the Business Day immediately following the
date of payment of such L/C Disbursement.
(f) Obligations Absolute. 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 (f) 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-Agents, 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.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank
shall as promptly as possible give telephonic notification, confirmed by
telecopy, to the Administrative Agent and the Borrower of such demand for
payment and whether the Issuing Bank has made or will make an L/C
Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such L/C
Disbursement. The Administrative Agent shall promptly give each Lender
notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C
Disbursement in respect of a Letter of Credit, then, unless the Borrower
shall reimburse such L/C Disbursement in full on such date, the unpaid
amount thereof shall bear interest for the account of the Issuing Bank, for
each day from and including the date of such L/C Disbursement, to but
excluding the earlier of the date of payment or the date on which interest
shall commence to accrue thereon as provided in Section 2.02(g), at the
rate per annum that would apply to such amount if such amount were an ABR
Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing
Bank may resign at any time by giving 180 days' prior written notice to the
Administrative Agent, the Lenders and the Borrower, and may be removed at
any time by the Borrower by notice to the Issuing Bank, the Administrative
Agent and the Lenders. Subject to the next succeeding sentence, upon the
acceptance of any appointment as the Issuing Bank hereunder by a Lender
which shall agree to serve as successor Issuing Bank, such successor shall,
except to the extent provided in the last sentence of this paragraph,
succeed to and become vested with all the interests, rights and obligations
of the retiring Issuing Bank and the retiring Issuing Bank shall be
discharged from its obligations to issue additional Letters of Credit
hereunder. At the time such removal or resignation shall become effective,
the Borrower shall pay all accrued and unpaid fees pursuant to Section
2.06(c)(ii). The acceptance of any appointment as the Issuing Bank
hereunder by a successor Lender shall be evidenced by an agreement entered
into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such
agreement, (i) such successor Lender shall have all the rights and
obligations of the previous Issuing Bank under this Agreement and (ii)
references herein to the term Issuing Bank shall be deemed to refer to
such successor or to any previous Issuing Bank, or to such successor and
all previous Issuing Banks, as the context shall require. After the
resignation or removal of the Issuing Bank hereunder, the retiring Issuing
Bank shall remain a party hereto and shall continue to have all the rights
and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such resignation or removal, but
shall not be required to issue additional Letters of Credit.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Administrative
Agent, the Issuing Bank 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 Document and to borrow hereunder.
SECTION 3.02. Authorization, etc. The execution, delivery and
performance by the Borrower of this Agreement, and the borrowings
hereunder: (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 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, 1994, 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, 1994, 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, 1994 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 the date of the
most recent annual or quarterly financial statements filed by the Borrower
with the SEC, 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, 1994, 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 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. 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. No part of the proceeds of any
Loan will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose which entails a violation of
the provisions of the Regulations of the Board, including Regulation G, U
or X. The assets of the Borrower and the Subsidiaries subject to
restrictions referred to in Sections 6.01 and 6.04 will not consist of
Margin Stock to an extent that would result in the Commitments of the
Lenders being indirectly secured by Margin Stock within the meaning of
the provisions of the Regulations of the Board.
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 reflected thereon 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 all the
proceeds of any borrowing hereunder 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 known to it.
SECTION 3.15. Subsidiaries. Schedule 3.15(a) and 3.15(b) set
forth as of the date hereof a list of all Material Subsidiaries and
Material Divisions, respectively, 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 are subject to the
satisfaction of the following conditions:
SECTION 4.01. Credit Events. On the date of each Borrowing,
including each Borrowing of a Swingline Loan and each Borrowing in which
Loans are refinanced with new Loans as contemplated by Section 2.02(f), and
on the date of each issuance of a Letter of Credit (each such event being
called a Credit Event ):
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03 or 2.04, as applicable, or,
in the case of the issuance of a Letter of Credit, the Issuing Bank
and the Administrative Agent shall have received a notice requesting
the issuance of such Letter of Credit as required by Section 2.21(b)
or, in the case of the Borrowing of a Swingline Loan, the Swingline
Lenders and the Administrative Agent shall have received a notice
requesting such Swingline Loan as required by Section 2.20(b).
(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 Credit Event no
Event of Default or Default shall have occurred and be continuing.
Each Credit Event 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. Closing Date. On the Closing Date:
(a) The Administrative Agent shall have received a favorable
written opinion of Andrew A. Brodkey, Esq., Vice President, Secretary
and General Counsel of the Borrower, and Sullivan & Cromwell, counsel
for the Borrower, each dated the Closing Date and addressed to the
Administrative Agent and the Lenders, to the effect set forth in
Exhibits E-1 and E-2, respectively, and the Borrower hereby instructs
such counsel to deliver such opinion to the Administrative Agent.
(b) 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 F hereto.
(c) 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.
(d) 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.
(e) 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.
(f) 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 and until the Commitments have been terminated and
the principal of or interest on each Loan, all Fees and all other expenses
or amounts payable hereunder shall have been paid in full and all Letters
of Credit have been canceled or have expired and all amounts shown
thereunder have been reimbursed in full, 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 the Administrative Agent and 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; and
(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 all the proceeds of the
Loans and the Letters of Credit 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 and until the Commitments have been terminated and
the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable hereunder have been paid in full and all Letters of
Credit have been canceled or have expired and all amounts drawn thereunder
have been reimbursed in full, unless the Required Lenders shall otherwise
consent in writing, it will not, and will not cause or permit any of the
Subsidiaries to, except as otherwise expressly permitted herein:
SECTION 6.01. Liens. Incur, create or assume 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 any
such Liens:
(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 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 any property, asset, interest, income,
right, plant, improvements thereto or equipment acquired (or, in the
case of improvements, constructed) after the Closing Date, or prior to
the Closing Date in the case of the assets comprising Magma Tintaya
S.A. (and which for the purposes of Section 6.03(ii) shall include
Liens on any property, asset, interest, income, right, plant,
improvement or equipment of any Subsidiary, acquired after the Closing
Date, or prior to the Closing Date in the case of assets comprising
Magma Tintaya S.A., which was owned by the Subsidiary at the time of
its acquisition or acquired thereafter, to secure Indebtedness related
to the acquisition of the Subsidiary or the acquisition, development,
construction or improvement of property, equipment or other asset
thereof, whether incurred at the time of the acquisition of the
Subsidiary or thereafter ( Subsidiary Acquisition Liens )); provided
that (i) Indebtedness secured thereby does not exceed the cost of such
property, asset, interest, income, right, plant, improvements or
equipment (or for purposes of Subsidiary Acquisition Liens the cost of
the acquisition of such Subsidiary and any of the property being
financed), (ii) such Subsidiary Acquisition Liens may apply to any
other property or assets of the acquired Subsidiary but may not apply
to any other property or assets of the Borrower or any other Material
Subsidiary and (iii) except as otherwise permitted by this Section
6.01(iv), such security interests do not apply to any other property
or assets of the Borrower or any Material 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 (A) the lien shall be limited to all or part of the property
subject to the lien extended, renewed, or replaced and (B) 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 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 Subsidiary to
incur, create or assume any Indebtedness 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 $100,000,000 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
$50,000,000.
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 ended 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. Use of Proceeds. Use the proceeds of the Loans
and the Letters of Credit to finance acquisitions of capital stock or
assets of other companies, unless the companies are primarily engaged or
the assets are in the business conducted by the Borrower or a business
reasonably related thereto and, in the case of acquisitions of the capital
stock of public companies, such acquisitions are approved by the boards of
directors of such companies before the Borrower or any Subsidiary commences
any tender offer or proxy solicitation with respect thereto or otherwise
seeks to obtain Control of such companies.
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 L/C 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 deliv-
ered 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 Sections 6.01 and 6.02, 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 $10,000,000 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 $10,000,000 shall result in the acceleration of the
maturity of a portion of such Indebtedness in excess of $10,000,000;
(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
$50,000,000, (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 under Section 412 of the Code in
favor of such Plan or Plans; or
(j) 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 any or all 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 to the contrary notwithstanding and (C) require that the Borrower
deposit cash with the Administrative Agent in an amount equal to the
aggregate L/C 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 (h) above involving the Borrower, without notice to the
Borrower or any other act by 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 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 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 for the
due execution, genuineness, validity, enforceability or effectiveness of
this Agreement or any other Loan Documents or other instruments or
agreements. 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. 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, 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 agrees (i) to reimburse the Administrative Agent, on
demand, in the amount of its pro rata percentage (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. The Co-Agents, solely in their
capacities as such, shall have no duties or responsibilities, and shall
incur no liabilities, under this Agreement.
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 Ms. Janet Belden
(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 the Issuing Bank and
shall survive the making by the Lenders of the Loans and the issuance of
Letters of Credit by the Issuing Bank, regardless of any investigation made
by the Lenders or the Issuing Bank 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 or any
Letter of Credit is outstanding 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
counterparts 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, the Issuing Bank 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 and the Loans
at the time owing to it); provided, however, that (i) except in the case of
an assignment to a Lender or an Affiliate of any Lender, the Borrower and
the Administrative Agent and each Swingline Lender must give their 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 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 2.12, 2.14, 2.18 and 9.05, as
well as to any Fees accrued for its account 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 L/C 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 L/C 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, the Issuing Bank 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, the Issuing Bank 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, 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, the Issuing Bank, the Swingline Lender and the
Lenders. No assignment shall be effective unless it has been recorded in
the Register as provided in this paragraph (e).
(f) Each Lender may without the consent of the Borrower, the
Swingline Lender, the Issuing Bank 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 and the Loans owing to 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 2.12, 2.14 and 2.18 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, the Issuing Bank 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 or L/C Disbursements 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 to a Federal Reserve Bank to secure extensions
of credit by such Federal Reserve Bank to such Lender; provided that no
such assignment shall release a Lender from any of its obligations
hereunder or substitute any such Bank for such Lender as a party hereto.
In order to facilitate such an assignment to a Federal Reserve Bank, the
Borrower shall, at the request of the assigning Lender, duly execute and
deliver to the assigning Lender a promissory note or notes evidencing the
Loans made to the Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its rights
or duties hereunder without the prior written consent of the Administrative
Agent, the Issuing Bank and each Lender, and any attempted assignment
without such consent shall be null and void.
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
Letters of Credit 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 expiration of the Commitments, the
expiration of any Letters of Credit, 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. 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. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH
LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM
CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL
CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE UNIFORM CUSTOMS ) AND, AS TO
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent, any Lender or the Issuing Bank 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, the Issuing
Bank 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,
(ii) change or extend the Commitment or decrease the Facility Fees or L/C
Participation Fees of any Lender without the prior written consent of such
Lender, or (iii) amend or modify the provisions of Sections 2.12, 2.13,
2.15, 2.18, 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, the Issuing Bank
or the Swingline Lender hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate
applicable to any Loan or participation in any L/C Disbursement, together
with all fees, charges and other amounts which are treated as interest on
such Loan or participation in such L/C Disbursement under applicable law
(collectively the Charges ), shall exceed the maximum lawful rate (the
Maximum Rate ) which may be contracted for, charged, taken, received or
reserved by the Lender holding such Loan or participation in accordance
with applicable law, the rate of interest payable in respect of such Loan
or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such
Loan or participation but were not payable as a result of the operation of
this Section shall be cumulated and the interest and Charges payable to
such Lender in respect of other Loans or participations or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate
to the date of repayment, shall have been received by such Lender.
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. 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) is or
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.
SECTION 9.17. Existing Credit Agreement. By executing and
delivering this Agreement the Borrower and each Lender which is a party to
the Existing Credit Agreement hereby agree that the commitments under such
agreement shall terminate automatically upon the effectiveness of this
Agreement and the obligations outstanding thereunder prepaid by notice and
the transfer of funds to the Administrative Agent and without compliance
with any further notice requirements set forth in the Existing Credit
Agreement but subject to the other terms and conditions of the Existing
Credit Agreement.
IN WITNESS WHEREOF, the parties hereto 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 and as
Administrative Agent, Swingline
Lender and Issuing Bank,
by
/s/ Ronald Potter
Name: Ronald Potter
Title: Managing Director
NATIONAL WESTMINSTER BANK PLC,
individually and as Co-Agent,
by
/s/ Ian M. Plester
Name: Ian M. Plester
Title: Vice President
NATIONAL WESTMINSTER BANK PLC
(NASSAU BRANCH), individually and
as Co-Agent,
by
/s/ Ian M. Plester
Name: Ian M. Plester
Title: Vice President
BANK OF AMERICA ILLINOIS,
individually and as Co-Agent and
Swingline Lender,
by
/s/ Thomas H. Pearson
Name: Thomas H. Pearson
Title: Vice President
BANK OF MONTREAL,
by
/s/ Michael P. Sassos
Name: Michael P. Sassos
Title: Director, Mining and
Metals
THE BANK OF NOVA SCOTIA,
by
/s/ Robin Barnato
Name: Robin Barnato
Title: Relationship Manager
BANQUE NATIONALE DE PARIS,
LOS ANGELES BRANCH,
by
/s/ Clive Bettles
Name: Clive Bettles
Title: Vice President and
Deputy Manager
by
/s/ Margaret Mudd
Name: Margaret Mudd
Title: Vice President
BARCLAYS BANK PLC,
by
/s/ David E. Roberts
Name: David E. Roberts
Title: Associate Director
BHF-BANK,
by
/s/ Robert Novak
Name: Robert Novak
Title: Assistant Treasurer
by
/s/ David Fraenkel
Name: David Fraenkel
Title: Vice President
THE CHASE MANHATTAN BANK, N.A.,
by
/s/ Alexander S. Rapetski II
Name: Alexander S. Rapetski II
Title: Vice President
CAISSE NATIONALE DE CREDIT
AGRICOLE,
by
/s/ Dean Balice
Name: Dean Balice
Title: Senior Vice President
Branch Manager
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
THE DAI-ICHI KANGYO BANK, LTD.,
by
/s/ Tomohiro Nozaki
Name: Tomohiro Nozaki
Title: Senior Vice President
and Joint General
Manager
FIRST INTERSTATE BANK OF ARIZONA,
N.A.,
by
/s/ Jenny L. Apker
Name: Jenny L. Apker
Title: Vice President
THE FUJI BANK, LIMITED,
LOS ANGELES AGENCY,
by
/s/ Nobuhiro Umemura
Name: Nobuhiro Umemura
Title: Joint General Manager
THE LONG TERM CREDIT BANK OF JAPAN,
LTD.,
by
/s/ T. Morgan Edwards II
Name: T. Morgan Edwards II
Title: Vice President
by
/s/ Yukata Kamisawa
Name: Yukata Kamisawa
Title: Deputy General Manager
N.M. ROTHSCHILD & SONS LTD,
by
/s/ Michael Allan Price
Name: Michael Allan Price
Title: Director
by
/s/ Andrea Wright
Name: Andrea Wright
Title: Manager
WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
NEW YORK AND CAYMAN ISLANDS
BRANCHES,
by
/s/ Salvatore Battinelli
Name: Salvatore Battinelli
Title: Vice President
by
/s/ Catherine Ruhland
Name: Catherine Ruhland
Title: Associate
EXHIBIT A
CHEMICAL
Chemical Bank
140 East 45 Street
New York, NY 10017-3162
212 622-0001
Fax 212/622-0002
Telex 353006 ABSC NYK
MAGMA COPPER COMPANY
ADMINISTRATIVE QUESTIONNAIRE
Please accurately complete the following information and return via FAX to
the attention of Janet Belden at Chemical Bank as soon as possible.
FAX Number: 212-622-0122
LEGAL NAME TO APPEAR IN DOCUMENTATION:
---------------------------------------------------------------------------
GENERAL INFORMATION - DOMESTIC LENDING OFFICE:
Institution Name:
-------------------------------------------------------
Street Address:
-------------------------------------------------------
City, State, Zip Code:
--------------------------------------------------
GENERAL INFORMATION - EURODOLLAR LENDING OFFICE:
Institution Name:
-------------------------------------------------------
Street Address:
-------------------------------------------------------
City, State, Zip Code:
--------------------------------------------------
CONTACTS/NOTIFICATION METHODS:
CREDIT CONTACTS:
Primary Contact:
-------------------------------------------------------
Street Address:
-------------------------------------------------------
City, State, Zip Code:
--------------------------------------------------
Phone Number
-------------------------------------------------------
FAX Number
-------------------------------------------------------
Backup Contact:
-------------------------------------------------------
Street Address:
-----------------------------------------------------
City, State, Zip Code:
-------------------------------------------------
Phone Number
-------------------------------------------------------
FAX Number
-------------------------------------------------------
TAX WITHHOLDING:
Non Resident Alien Y* N
----- -----
*Form 4224 Enclosed
Tax ID Number
----------------
CONTACTS/NOTIFICATION METHODS:
ADMINISTRATIVE CONTACTS - BORROWINGS, PAYDOWNS, INTEREST, FEES, ETC.
Contact:
-------------------------------------------------------
Street Address:
-------------------------------------------------------
City, State, Zip Code:
--------------------------------------------------
Phone Number
-------------------------------------------------------
FAX Number
-------------------------------------------------------
BID LOAN NOTIFICATION:
Contact:
-------------------------------------------------------
Street Address:
-------------------------------------------------------
City, State, Zip Code:
--------------------------------------------------
Phone Number
-------------------------------------------------------
FAX Number
-------------------------------------------------------
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:
--------------------------------------------------
--------------------------------------------------
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 me on 212-622-0011.
EXHIBIT B
[Form of]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Competitive Advance and Revolving Credit
Facility Agreement dated as of June 21, 1995 (as amended, modified,
extended or restated from time to time, the Credit Agreement ), among
Magma Copper Company, a Delaware corporation (the Borrower ), the lenders
from time to time party thereto (the Lenders ), National Westminster Bank
Plc, as Co-Agent, Bank of America Illinois, as Swingline Lender and Co-
Agent, and Chemical Bank, as administrative agent for the Lenders (in such
capacity, the Administrative Agent ), Swingline Lender and Issuing Bank.
Terms defined in the Credit Agreement are used herein with the same
meanings.
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
below (but not prior to the registration of the information contained
herein in the Register pursuant to Section 9.04(e) of the Credit
Agreement), the interests set forth below (the Assigned Interest ) in the
Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the amounts and percentages set forth below of (i) the
Commitments of the Assignor on the Effective Date, (ii) the Loans owing to
the Assignor which are outstanding on the Effective Date and (iii)
participations in Letters of Credit and Swingline Loans which are
outstanding on the Effective Date. 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
Administrative Agent together with (i) if the Assignee is organized under
the laws of a jurisdiction outside the United States, the forms specified
in Section 2.18(e) of the Credit Agreement, duly completed and executed by
such Assignee, (ii) if the Assignee is not already a Lender under the
Credit Agreement, an Administrative Questionnaire in the form of Exhibit A
to the Credit Agreement and (iii) 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):
Percentage Assigned of
Applicable Facility/
(Principal Amount Commitment (set forth, to at
Assigned and Identifying least 8 decimals, as a
information as percentage of the Facility and
to individual the aggregate Commitments
Facility/Commitment Competitive Loans) of all Lenders thereunder)
------------------- ------------------------ ------------------------------
Revolving Credit $ %
Competitive Loans $ %
Swingline Loans $ %
The terms set forth above are hereby agreed to: Accepted */
, as Assignor CHEMICAL BANK, as Administrative Agent
---------------
by: by:
--------------------------- -----------------------------
Name: Name:
Title: Title:
, as Assignee MAGMA COPPER COMPANY,
---------------
by: by:
--------------------------- -----------------------------
Name: Name:
Title: Title:
, as Issuing Bank
---------------
by:
-----------------------------
Name:
Title:
, as Swingline Lender
----------
by:
-----------------------------
Name:
Title:
--------------
*/ To be completed to the extent consents are required under Section
9.04(b) of the Credit Agreement.
EXHIBIT C
FORM OF BORROWING REQUEST
Chemical Bank, as Administrative Agent for
the Lenders referred to below,
270 Park Avenue
New York, NY 10017
Attention: [ ]
[Date]
Ladies and Gentlemen:
The undersigned, Magma Copper Company (the Borrower ), refers to
the Competitive Advance and Revolving Credit Facility Agreement dated as of
June 21, 1995 (as amended, supplemented or otherwise modified from time to
time, the Credit Agreement ), among the Borrower, the lenders from time to
time party thereto (the Lenders ), National Westminster Bank Plc, as Co-
Agent, Bank of America Illinois, as Swingline Lender and Co-Agent, and
Chemical Bank, as administrative agent for the Lenders (in such capacity,
the Administrative Agent ), Swingline Lender and Issuing Bank. Capital-
ized 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 2.04 of the Credit Agreement
that it requests a Revolving Credit 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
----------------------
(D) Interest Period and the last day thereo
----------------------
(E) Funds are requested to be disbursed to the Borrower's account with
Chemical Bank (Account No. )
1/Not less than $1,000,000 and in an integralmultiple of $500,000, but in
any event not exceeding the Total Revolving Credit Commitment then
available.
2/ Specify 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.
Upon acceptance of any or all of the Loans offered by the Lenders
in response to this request, the Borrower shall be deemed to have
represented and warranted that the applicable conditions to lending
specified in Sections 4.01(b) and 4.01(c) of the Credit Agreement have been
satisfied.
MAGMA COPPER COMPANY,
by
-------------------------------
Name:
Title: [Responsible Officer]
EXHIBIT D-1
FORM OF COMPETITIVE BID REQUEST
Chemical Bank, as Administrative Agent for
the Lenders referred to below,
270 Park Avenue
New York, N.Y. 10017
[Date]
Attention: [ ]
Dear Sirs:
The undersigned, Magma Copper Company (the Borrower ), refers to
the Competitive Advance and Revolving Credit Facility Agreement dated as of
June 21, 1995 (as amended, modified, extended or restated from time to
time, the Credit Agreement ), among the Borrower, the lenders from time to
time party thereto (the Lenders ), National Westminster Bank Plc, as Co-
Agent, Bank of America Illinois, as Swingline Lender and Co-Agent, and
Chemical Bank, as administrative agent for the Lenders (in such capacity,
the Administrative Agent ), Swingline Lender and Issuing Bank. Capital-
ized 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(a) of the Credit Agreement
that it requests a Competitive Borrowing under the Credit Agreement, and in
that connection sets forth below the terms on which such Competitive
Borrowing is requested to be made:
(A) Date of Competitive Borrowing (which is a
Business Day)
--------------------
(B) Principal Amount of Competitive
Borrowing 1/
--------------------
(C) Interest rate basis 2/
--------------------
(D) Interest Period and the last day thereof 3/
--------------------
1/ Not less than $10,000,000 (and in integral multiples of $1,000,000) or
greater than the Total Revolving Credit Commitment then available.
2/ Eurodollar Loan or Fixed Rate Loan.
3/ Which shall be subject to the definition of "Interest Period" and end
not later than the Revolving Credit Maturity Date.
Upon acceptance of any or all of the Loans offered 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 4.01(c) of the Credit Agreement have been satisfied.
Very truly yours,
MAGMA COPPER COMPANY,
by
---------------------------------
Name:
Title: [Responsible Officer]
EXHIBIT D-2
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Lender]
[Address]
[Date]
Attention:
Dear Sirs:
Reference is made to the Competitive Advance and Revolving Credit
Facility Agreement dated as of June 21, 1995 (as amended, modified,
extended or restated from time to time, the Credit Agreement ), among
Magma Copper Company, a Delaware corporation (the Borrower ), the lenders
from time to time party thereto (the Lenders ), National Westminster Bank
Plc, as Co-Agent, Bank of America Illinois, as Swingline Lender and Co-
Agent, and Chemical Bank, as administrative agent for the Lenders (in such
capacity, the Administrative Agent ), Swingline Lender and Issuing Bank.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement. The Borrower
made a Competitive Bid Request on , 19 , pursuant to
Section 2.03(a) of the Credit Agreement, and in that connection you are
invited to submit a Competitive Bid by [Date]/[Time].1/ Your Competitive
Bid must comply with Section 2.03(b) of the Credit Agreement and the terms
set forth below on which the Competitive Bid Request was made:
(A) Date of Competitive Borrowing
------------------
(B) Principal amount of Competitive Borrowing
------------------
(C) Interest rate basis
------------------
(D) Interest Period and the last day thereof
------------------
Very truly yours,
CHEMICAL BANK, as Administrative Agent,
by
--------------------------------
Name:
Title:
1/ The Competitive Bid must be received by the Administrative Agent (i) in
the case of Eurodollar Loans, not later than 10:30 a.m., New York City
time, three Business Days before a proposed Competitive Borrowing, and (ii)
in the case of Fixed Rate Loans, not later than 10:30 a.m., New York City
time, on the Business Day of a proposed Competitive Borrowing.
EXHIBIT D-3
FORM OF COMPETITIVE BID
Chemical Bank, as Administrative Agent for
the Lenders referred to below,
270 Park Avenue
New York, NY 10017
Attention: [ ] [Date]
Dear Sirs:
The undersigned, [Name of Lender], refers to the Competitive
Advance and Revolving Credit Facility Agreement dated as of June 21, 1995
(as amended, modified, extended or restated from time to time, the Credit
Agreement ), among Magma Copper Company, a Delaware corporation (the
Borrower ), the lenders from time to time party thereto (the Lenders ),
National Westminster Bank Plc, as Co-Agent, Bank of America Illinois, as
Swingline Lender and Co-Agent, and Chemical Bank, as administrative agent
for the Lenders (in such capacity, the Administrative Agent ), Swingline
Lender and Issuing Bank. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The undersigned hereby makes a Competitive Bid pursuant to
Section 2.03(b) of the Credit Agreement, in response to the Competitive Bid
Request made by the Borrower on , 19 , and in that connection sets
forth below the terms on which such Competitive Bid is made:
(A) Principal Amount 1/
-----------------
(B) Competitive Bid Rate 2/
-----------------
(C) Interest Period and last day thereof
-----------------
The undersigned hereby confirms that it is prepared, subject to
the conditions set forth in the Credit Agreement, to extend credit to the
Borrower upon acceptance by the Borrower of this bid in accordance with
Section 2.03(d) of the Credit Agreement.
Very truly yours,
[Name of Lender],
by
------------------------------
Name:
Title:
--------------
1/ In Dollars not less than $5,000,000 and in integral multiples of
$1,000,000. Multiple bids will be accepted by the Administrative Agent.
2/ I.e., LIBO Rate - or - %, in the case of Eurodollar Loans or %,
in the case of Fixed Rate Loans.
EXHIBIT D-4
FORM OF COMPETITIVE BID ACCEPT/REJECT LETTER
Chemical Bank, as Administrative Agent for
the Lenders referred to below
270 Park Avenue
New York, NY 10017
[Date]
Attention: [ ]
Dear Sirs:
The undersigned, Magma Copper Company (the
Borrower ), refers to the Competitive Advance and Revolving Credit
Facility Agreement dated as of June 21, 1995 (as amended, modified,
extended or restated from time to time, the Credit Agreement ), among the
Borrower, the lenders from time to time party thereto (the Lenders ),
National Westminster Bank Plc, as Co-Agent, Bank of America Illinois, as
Swingline Lender and Co-Agent, and Chemical Bank, as administrative agent
for the Lenders (in such capacity, the Administrative Agent ), Swingline
Lender and Issuing Bank.
In accordance with Section 2.03(c) of the
Credit Agreement, we have received a summary of bids in connection with our
Competitive Bid Request dated ___________ and in accordance with
Section 2.03(d) of the Credit Agreement, we hereby accept the following
bids for maturity on [date]:
Principal Amount Fixed Rate/Margin Lender
$ [%]/[+/-. %]
$
We hereby reject the following bids:
Principal Amount Fixed Rate/Margin Lender
$ [%]/[+/-. %]
$
The $ should be deposited in Chemical Bank account number
[ ] on [date].
Very truly yours,
MAGMA COPPER COMPANY,
by
-----------------------------
Name:
Title:
EXHIBIT E- 1
FORM OF OP INION OF ANDREW A. BRODKEY, ESQ.
June 21, 1 995
To the Lenders Party to the
Credit Agreement Referred to Below,
Chemical Bank, as Administrative Agent,
c/o Chemical Bank,
270 Park Avenue,
New York, New York 10017.
Dear Sirs:
I am general counsel to Magma Copper Company, a Delaware
corporation (the "Borrower"). Capitalized terms used herein but
not otherwise defined herein have the respective meanings
assigned thereto in the Competitive Advance and Revolving Credit
Facility Agreement, dated as of June 21, 1995 (the "Credit
Agreement"), among the Borrower, the Lenders named therein,
Chemical Bank, as Administrative Agent, Issuing Bank, and
Swingline Lender, National Westminster Bank PLC, as Co-Agent, and
Bank of America National Trust and Savings Association, as
Swingline Lender and Co-Agent.
I have examined executed copies of the Credit Agreement and
such corporate records, certificates and other documents, and
such questions of law, as I have considered
The Lenders Party to the Credit Agreement -2-
necessary or appropriate for purposes of this opinion. Upon the
basis of such examination, subject to the qualifications set
forth herein, it is my opinion that:
(1) Each of the Subsidiaries (other than the Robinson
Mining Limited Partnership) has been duly incorporated and
is an existing corporation in good standing under the laws
of its state of incorporation and the Borrower and each of
such Subsidiaries has all requisite corporate power and
authority to own its business and conduct its business
substantially as it is now being conducted.
(2) The 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
business and conduct its business substantially as it is now
being conducted.
(3) The execution, delivery and performance by the
Borrower of the credit Agreement and the receipt by the
Borrower of the proceeds of the Loans in the manner
contemplated by the Credit Agreement 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
The Lenders Party to the Credit Agreement -3-
instrument known to me 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 my 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
me as referred to above.
(4) To the best of my knowledge, except as set forth in the
Form 10-K for the year ended December 31, 1994 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
The Lenders Party to the Credit Agreement -4-
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 Credit Agreement or materially impair the ability of the
Borrower to perform under the terms of the Credit Agreement
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 opinion is limited to the Federal laws of the
United States, the laws of the State of Arizona and the General
Corporation Law of the State of Delaware, and I am expressing no
opinion as to the effect of the laws of any other jurisdiction.
In rendering the foregoing opinion, I have, with your
approval, relied as to certain matters upon information obtained
from public officials, officers of the Borrower and other sources
believed by me to be responsible, and I have
The Lenders Party to the Credit Agreement -5-
assumed that the Credit Agreement has been duly authorized,
executed and delivered by you and each of the Lenders, and that
the signatures on all documents examined by me are genuine,
assumptions which I have not independently verified.
This opinion is solely for your benefit in connection
with the Credit Agreement and may not be relied upon by any other
person or for any other purpose.
Very truly yours,
Form of Opinion of Sullivan & Cromwell
June 21, 1995
To the Lenders Party to the
Credit Agreement Referred to Below,
Chemical Bank, as Administrative Agent,
c/o Chemical Bank,
270 Park Avenue,
New York, New York 10017.
Dear Sirs:
We have acted as counsel to Magma Copper Company, a
Delaware corporation (the "Borrower"), in connection with the
Competitive Advance and Revolving Credit Facility Agreement,
dated as of June 21, 1995 (the "Credit Agreement"), among the
Borrower, the Lenders named therein, Chemical Bank, as
Administrative Agent, Issuing Bank, and Swingline Lender,
National Westminster Bank PLC, as Co-Agent, and Bank of America
National Trust and Savings Association, as Swingline Lender and
Co-Agent. Capitalized terms used herein but not otherwise
defined herein have the respective meanings assigned thereto in
the Credit Agreement.
We have examined executed copies of the Credit
Agreement and such corporate records, certificates and other
documents, and such questions of law, as we have considered
necessary or appropriate for purposes of this opinion. Upon the
basis of such examination, subject to the qualifications set
forth herein, it is our opinion that:
(1) The Borrower has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware.
(2) The Borrower has all requisite corporate power and
authority to execute and deliver the Credit Agreement and to
perform its obligations thereunder.
(3) The Credit Agreement has been duly authorized,
executed and delivered by the Borrower and constitutes a
valid and legally binding obligation of the Borrower
enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general
equity principles.
(4) All regulatory consents, authorizations, approvals
and filings required to be obtained or made by the Company
under the Federal laws of the United States, the laws of the
State of New York and the General Corporation Law of the
State of Delaware for the execution and delivery of the
Credit Agreement and the performance by the Borrower of its
obligations thereunder have been obtained or made; provided,
however, that insofar as the performance by the Company of
its obligations under the Credit Agreement is concerned, we
express no opinion as to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights or as to general equity principles.
We express no opinion as to the validity, binding
effect or enforceability of any provision in the Credit Agreement
which purports to (i) provide indemnification of any person for
any claims, damages, liabilities or expenses resulting from
violation by such person of applicable securities laws, (ii)
grant to any Lender rights of set-off other than as provided in
Section 151 of the Debtor & Creditor Law of the State of New York
or (iii) preserve or maintain the enforceability of the Credit
Agreement where one or more of the provisions contained therein
is determined to be invalid, illegal or unenforceable. We also
express no opinion as to the last sentence of Section 2.16 of the
Credit Agreement.
The foregoing opinion is limited to the Federal laws of
the United States, the laws of the State of New York and the
General Corporation Law of the State of Delaware, and we are
expressing no opinion as to the effect of the laws of any other
jurisdiction.
In rendering the foregoing opinion, we have, with your
approval, relied as to certain matters upon information obtained
from public officials, officers of the Borrower and other sources
believed by us to be responsible, and we have assumed that the
Credit Agreement has been duly authorized, executed and delivered
by you and each of the Lenders, and that the signatures on all
documents examined by us are genuine, assumptions which we have
not independently verified.
This opinion is solely for your benefit in connection
with the Credit Agreement and may not be relied upon by any other
person or for any other purpose.
Very truly yours,
EXHIBIT F
[Letterhead of]
CRAVATH, SWAINE & MOORE
June 21, 1995
Magma Copper Company
Competitive Advance and Revolving Credit Facility
dated as of June 28, 1995
Ladies and Gentlemen:
We have acted as counsel to Chemical Bank, a New York banking
corporation, in connection with the preparation, execution and delivery of
the Competitive Advance and Revolving Credit Facility Agreement dated as of
June 21, 1995 (the Credit Agreement ), among Magma Copper Company (the
Borrower ), the Lenders named therein (the Lenders ), National
Westminster Bank PLC, as Co-Agent, Bank of America Illinois, as Swingline
Lender and Co-Agent, and Chemical Bank, as Swingline Lender and Issuing
Bank and as administrative agent (in such capacity, 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 executed counterparts of the
Credit Agreement and originals or copies certified or otherwise identified
to our satisfaction of such other corporate records and other instruments
and documents 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 and 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 2.16 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 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 and the Federal laws of the United States of
America.
Very truly yours,
To the Lenders under the Credit
Agreement referred to above
Chemical Bank, as Administrative Agent
270 Park Avenue
New York, NY 10017
316A
SCHEDULE 2.01
Bank Commitment
---- ----------
CHEMICAL BANK
-------------
Domestic and Eurodollar $50,000,000
Lending Office
270 Park Avenue
New York, NY 10017
NATIONAL WESTMINSTER BANK PLC $40,000,000
-----------------------------
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
BANK OF AMERICA ILLINOIS $40,000,000
------------------------
Domestic and Eurodollar
Lending Office
231 South LaSalle Street
Chicago, IL 60697
THE BANK OF NOVA SCOTIA $30,000,000
-----------------------
Domestic and Eurodollar
Lending Office:
101 California Street (48th Floor)
San Francisco, CA 94119
BANK OF MONTREAL $25,000,000
----------------
Domestic and Eurodollar
Lending Office:
430 Park Avenue
New York, NY 10022
BANQUE NATIONALE DE PARIS $25,000,000
-------------------------
Domestic and Eurodollar
Lending Office:
725 Figueroa Street
Los Angeles, CA 90017
BARCLAYS BANK PLC $25,000,000
-----------------
Domestic and Eurodollar
Lending Office:
222 Broadway
New York, NY 10038
BHF-BANK $25,000,000
--------
Domestic and Eurodollar
Lending Office:
Grand Cayman Branch
c/o New York Branch
590 Madison Avenue
New York, NY 10022
THE CHASE MANHATTAN BANK, N.A. $25,000,000
------------------------------
Domestic and Eurodollar
Lending Office:
1 Chase Manhattan Plaza
New York, NY 10081
CREDIT AGRICOLE $25,000,000
---------------
Domestic and Eurodollar
Lending Office:
55 East Monroe Street
Chicago, IL 60603
CREDIT LYONNAIS $30,000,000
---------------
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
THE DAI-ICHI KANGYO BANK, LTD. $25,000,000
------------------------------
Domestic and Eurodollar
Lending Office:
555 West Fifth Street
Los Angeles, CA 90013
FIRST INTERSTATE BANK OF ARIZONA, N.A. $25,000,000
--------------------------------------
Domestic and Eurodollar
Lending Office:
100 W. Washington (4th Floor)
Phoenix, AZ 85003
THE FUJI BANK LIMITED $30,000,000
---------------------
(Los Angeles Agency)
Domestic and Eurodollar
Lending Office:
333 South Grand Street (25th Floor)
Los Angeles, CA 90071
THE LONG TERM CREDIT BANK OF JAPAN LTD. $30,000,000
---------------------------------------
Domestic and Eurodollar
Lending Office:
444 South Flower Street (Suite 3700)
Los Angeles, CA 90071
N.M. ROTHSCHILD & SONS LTD. $25,000,000
---------------------------
Lending Office:
New Court
St. Swithins Lane
London EC4P 4DV
ENGLAND
WESTDEUTSCHE LANDESBANK GIROZENTRALE $25,000,000
------------------------------------
Domestic and Eurodollar
Lending Office:
1911 Avenue of the Americas
New York, NY 10036
Schedule 3.15(a)
Material Subsidiaries
---------------------
Percentage Ownership
Subsidiary by Magma
---------- --------------------
Magma Metals Company 100
Magma Nevada Mining Company 100
Robinson Mining Limited Partnership 100
Magma Tintaya, S.A. 100
Schedule 3.15(b)
Material Divisions
------------------
Percentage Ownership
Division by Magma
-------- --------------------
San Manuel Mining Division 100
Pinto Valley Mining Division 100
Schedule 6.01
Existing Permitted Liens
-------------------------
None.
MAGMA COPPER COMPANY EXHIBIT 11
Computation of Per Share Earnings
(In thousands, except per share amounts)
Three Months Six Months
ended June 30, ended June 30,
----------------- -------------------
1995 1994 1995 1994
Primary ------- ------ ------ -------
-------
Weighted average common
shares outstanding 48,944 49,283 49,093 49,218
Earnings used in per common
share computation:
Net income $54,423 $20,610 $106,189 $28,221
Preferred stock dividends (2,906) (2,906) (5,812) (5,812)
------ ------ ------- ------
Net income available
for common stock $51,517 $17,704 $100,377 $22,409
====== ====== ======= ======
Earnings per share:
Net income $ 1.11 $ .42 $ 2.16 $ .57
====== ====== ======= ======
Preferred stock dividends (.06) (.06) (.11) (.11)
------ ------ ------- ------
Earnings per share of
common stock $ 1.05 $ .36 $ 2.05 $ .46
====== ====== ======= ======
Assuming full dilution
----------------------
Weighted average common
shares outstanding 63,065 63,368 63,202 63,368
Earnings used in per common
share computation:
Net income $54,423 $20,610 $106,189 $28,221
Earnings per share:
Net income $ .86 $ .33 $ 1.68 $ .45
Computation of weighted average
shares outstanding-fully diluted
---------------------------------
Primary weighted average
shares outstanding 48,944 49,283 49,093 49,218
Assuming full dilution:
Conversion of Series D Preferred
Stock (2 million shares at
3.448 conversion rate) 6,896 6,896 6,896 6,896
Conversion of Series E Preferred
Stock (2 million shares at
3.5945 conversion rate) 7,189 7,189 7,189 7,189
Incremental shares 36 -- 24 65
------ ------ ------- ------
Fully diluted weighted
average shares outstanding 63,065 63,368 63,202 63,368
====== ====== ======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND THE CONSOLIDATED STATEMENTS OF OPERATIONS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 105,069
<SECURITIES> 405
<RECEIVABLES> 97,238
<ALLOWANCES> 0
<INVENTORY> 191,116
<CURRENT-ASSETS> 415,573
<PP&E> 1,646,472
<DEPRECIATION> 235,515
<TOTAL-ASSETS> 1,854,088
<CURRENT-LIABILITIES> 214,820
<BONDS> 583,148<F1>
<COMMON> 461
0
40
<OTHER-SE> 831,370
<TOTAL-LIABILITY-AND-EQUITY> 1,854,088
<SALES> 361,521
<TOTAL-REVENUES> 361,521
<CGS> 237,084
<TOTAL-COSTS> 264,330<F2>
<OTHER-EXPENSES> 15,435<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,331
<INCOME-PRETAX> 77,355
<INCOME-TAX> 22,932
<INCOME-CONTINUING> 54,423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,423
<EPS-PRIMARY> 1.05
<EPS-DILUTED> .86
<FN>
<F1>REFLECTS THE COMPANY'S LONG-TERM DEBT.
<F2>TOTAL COSTS REFLECTS THE COMPANY'S COST OF GOODS SOLD AND DEPRECIATION,
DEPLETION AND AMORTIZATION COSTS.
<F3>OTHER EXPENSES REFLECTS SELLING, GENERAL AND ADMINISTRATION COMBINED WITH
EXPLORATION, RESEARCH AND DEVELOPMENT COSTS.
</FN>
</TABLE>
