SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 20, 1995
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Homestake Mining Company
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(Exact name of Registrant as specified in its charter)
Delaware 1-8736 94-2934609
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
650 California Street, San Francisco, California 94108-2788
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(415) 983-8150
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<PAGE>
Item 5. Other
This Form 8-K is submitted to file the documents listed below in the Exhibit
Index.
Exhibit Index (Exhibits filed herewith electronically.)
Exhibit 10.1 Amended and Restated Credit Agreement dated as of September
30, 1994 between the Registrant, the Lenders, Bank of Nova
Scotia and Canadian Imperial Bank of Commerce as managing
agents, and Canadian Imperial Bank of Commerce as
administrative agent.
Exhibit 10.2 Retirement plan for outside directors of the Registrant.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated: March 20, 1995
HOMESTAKE MINING COMPANY
(Registrant)
By:/s/ David W. Peat
-----------------------------
David W. Peat
Controller (Principal
Accounting Officer)
<PAGE>
EXHIBIT 10.1
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AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF SEPTEMBER 30, 1994
AMONG
HOMESTAKE MINING COMPANY,
a Delaware corporation, as Guarantor,
HOMESTAKE MINING COMPANY OF CALIFORNIA,
a California corporation, as U.S. Borrower, and
HOMESTAKE CANADA INC.,
an Ontario corporation, as Canadian Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
THE BANK OF NOVA SCOTIA and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Managing Agents,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent
==============================================================
<PAGE>
HOMESTAKE MINING COMPANY
AMENDED AND RESTATED CREDIT AGREEMENT
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<C> <S> <C>
Section 1. DEFINITIONS 2
1.1 Certain Defined Terms 2
1.2 Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement 29
1.3 Other Definitional Provisions 29
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS 29
2.1 Commitments; Loans 29
2.2 Interest on the Loans 37
2.3 Fees 42
2.4 Prepayments and Reductions in Commitments;
General Provisions Regarding Payments 43
2.5 Use of Proceeds 47
2.6 Special Provisions Governing Eurodollar Rate
Loans and Gold Loans 48
2.7 Letters of Credit 52
Section 3. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND
LOANS AND LETTERS OF CREDIT 59
3.1 Conditions to Effectiveness 59
3.2 Conditions to All Loans 63
3.3 Conditions to All Letters of Credit 64
Section 4. REPRESENTATIONS AND WARRANTIES 64
4.1 Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries 65
4.2 Authorization of Borrowing and Guaranty, etc. 66
4.3 Valid Issuance of Stock and Subordinated
Debentures 67
4.4 Financial Condition 67
4.5 No Material Adverse Effect; No Restricted
Junior Payments 68
4.6 Title to Properties; Liens 68
4.7 Litigation; Adverse Facts 68
4.8 Payment of Taxes 69
4.9 Performance of Agreements; Materially Adverse
Agreements 69
4.10 Governmental Regulation 69
4.11 Securities Activities 69
4.12 Employee Benefit Plans 70
4.13 Certain Fees 70
4.14 Environmental Protection 70
4.15 Employee Matters 70
4.16 Solvency 71
4.17 Compliance with Laws 71
4.18 Disclosure 71
Section 5. AFFIRMATIVE COVENANTS 71
(i)
5.1 Financial Statements and Other Reports 72
5.2 Corporate Existence, etc. 76
5.3 Payment of Taxes and Claims; Tax Consolidation 76
5.4 Maintenance of Properties; Insurance 76
5.5 Inspection; Lender Meeting; Reports of
Subsidiaries 77
5.6 Compliance with Laws, etc. 77
5.7 Environmental Disclosure and Inspection 77
5.8 Company's Remedial Action Regarding Hazardous
Materials 78
5.9 Further Assurances 78
Section 6. NEGATIVE COVENANTS 79
6.1 Indebtedness 79
6.2 Liens and Related Matters 81
6.3 Investments; Joint Ventures 82
6.4 Contingent Obligations 83
6.5 Restricted Junior Payments 84
6.6 Financial Covenants 84
6.7 Restriction on Fundamental Changes; Asset Sales 85
6.8 Consolidated Capital Expenditures 86
6.9 Transactions with Shareholders and Affiliates 86
6.10 Disposal of Material Subsidiary Stock 87
6.11 Conduct of Business 87
6.12 Prepayments and Amendments to Subordinated
Indebtedness 87
Section 7. EVENTS OF DEFAULT 88
7.1 Failure to Make Payments When Due 88
7.2 Default in Other Agreements 88
7.3 Breach of Certain Covenants 88
7.4 Breach of Warranty 89
7.5 Other Defaults Under Loan Documents 89
7.6 Involuntary Bankruptcy; Appointment of
Receiver, etc. 89
7.7 Voluntary Bankruptcy; Appointment of Receiver,
etc. 90
7.8 Judgments and Attachments 90
7.9 Dissolution 91
7.10 Employee Benefit Plans 91
7.11 Change in Control of Borrowers 91
Section 8. GUARANTIES OF COMPANY AND U.S. BORROWER OF
OBLIGATIONS 92
8.1 Guaranty by Company 92
8.2 Guaranty by U.S. Borrower 96
Section 9. ADMINISTRATIVE AGENT AND MANAGING AGENTS 100
9.1 Appointment. 100
9.2 Powers; General Immunity. 101
9.3 Representations and Warranties; No
Responsibility For Appraisal of
Creditworthiness 103
9.4 Right to Indemnity. 103
9.5 Registered Persons Treated as Owners. 104
(ii) <PAGE>
9.6 Successor Administrative Agent. 104
Section 10. MISCELLANEOUS 105
10.1 Assignments and Participations in Loans and
Letters of Credit 105
10.2 Expenses 108
10.3 Indemnity 109
10.4 Set Off 110
10.5 Ratable Sharing 110
10.6 Amendments and Waivers 111
10.7 Increased Costs; Taxes; Capital Adequacy 112
10.8 Lenders' Obligation to Mitigate; Replacement of
Lender 116
10.9 Change in Accounting Principles 116
10.10 Independence of Covenants 117
10.11 Notices 117
10.12 Survival of Representations, Warranties and
Agreements 117
10.13 Failure or Indulgence Not Waiver; Remedies
Cumulative 118
10.14 Marshalling; Payments Set Aside 118
10.15 Severability 118
10.16 Obligations Several; Independent Nature of
Lenders' Rights 119
10.17 Headings 119
10.18 Applicable Law 119
10.19 Successors and Assigns 119
10.20 Consent to Jurisdiction and Service of Process 120
10.21 Waiver of Jury Trial 120
10.22 Confidentiality 121
10.23 Entire Agreement 121
10.24 Counterparts; Effectiveness 122
10.25 Judgment Currency 122
10.26 Change in Control 123
</TABLE>
(iii) <PAGE>
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ALLOCATION
IV-A FORM OF AMENDED AND RESTATED CANADIAN BORROWER NOTE
IV-B FORM OF AMENDED AND RESTATED U.S. BORROWER NOTE
V FORM OF AMENDED AND RESTATED GRID GOLD ACKNOWLEDGEMENT
VI FORM OF COMPLIANCE CERTIFICATE
VII-A FORM OF OPINION OF THELEN, MARRIN, JOHNSON & BRIDGES
VII-B FORM OF OPINION OF WAYNE KIRK, ESQ.
VIII FORM OF OPINION OF OSLER, HOSKIN & HARCOURT
IX FORM OF OPINION OF O'MELVENY & MYERS
X FORM OF ASSIGNMENT AND ACCEPTANCE
XI FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
(iv) <PAGE>
SCHEDULES
1.1 CASH FLOW SCHEDULE
1.2 MAJOR MINING PROPERTIES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
2.7 EXISTING LETTERS OF CREDIT
4.1 LIST OF SUBSIDIARIES
4.4 CONTINGENT OBLIGATIONS AND FORWARD COMMITMENTS
4.7 LITIGATION
4.12 CERTAIN EMPLOYEE BENEFIT PLANS
6.1 EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3 EXISTING INVESTMENTS
6.4 EXISTING CONTINGENT OBLIGATIONS
6.9 TRANSACTIONS WITH AFFILIATES
(v) <PAGE>
HOMESTAKE MINING COMPANY OF CALIFORNIA
HOMESTAKE CANADA, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
September 30, 1994 and entered into by and among HOMESTAKE MINING COMPANY, a
Delaware corporation ("Company"), HOMESTAKE MINING COMPANY OF CALIFORNIA, a
California corporation ("U.S. Borrower"), HOMESTAKE CANADA INC., an Ontario
corporation ("Canadian Borrower"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "Lender" and
collectively as "Lenders"), THE BANK OF NOVA SCOTIA and CANADIAN IMPERIAL BANK
OF COMMERCE, as Managing Agents ("Managing Agents"), and CANADIAN IMPERIAL
BANK OF COMMERCE, as Administrative Agent for Lenders ("Administrative
Agent"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in subsection 1.1 of this Agreement.
R E C I T A L S
WHEREAS, pursuant to that certain Credit Agreement dated as of
August 24, 1993 (the "Existing Credit Agreement") among Company, U.S.
Borrower, Canadian Borrower, lenders listed on the signature pages thereof
("Existing Lenders"), Managing Agents and Administrative Agent, Existing
Lenders have made certain credit facilities available to U.S. Borrower and
Canadian Borrower in accordance with the terms thereof;
WHEREAS, parties to the Existing Credit Agreement desire to amend
the terms of the Existing Credit Agreement for the purpose of, among other
things, reducing the interest rate applicable to the Loans and amending
certain covenants as described herein;
WHEREAS, for ease of reference and clarity, parties to the
Existing Credit Agreement desire to restate the Existing Credit Agreement to
incorporate the amendments made hereby and amend and restate the promissory
notes issued by U.S. Borrower and Canadian Borrower pursuant to the Existing
Credit Agreement; and
WHEREAS, parties expressly disclaim any intent to effect a
novation or an extinguishment or discharge of the Existing Credit Agreement or
a discharge of any obligations under the Loan Documents as a result of
entering into this Agreement and the other documents as contemplated herein.
1 <PAGE>
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Canadian
Borrower, U.S. Borrower, Lenders, Managing Agents and Administrative Agent
agree that the Existing Credit Agreement is hereby amended and restated as
follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings:
"Adjusted Eurodollar Rate" means, for any Interest Rate
Determination Date with respect to a Eurodollar Rate Loan, the rate obtained
by dividing (i) the arithmetic average (rounded upward to the nearest 1/16 of
one percent) of the offered quotation, if any, to first class banks in the
interbank Eurodollar market by each of the Reference Lenders for Dollar
deposits of amounts in same day funds comparable to the principal amount of
the Eurodollar Rate Loan of that Reference Lender for which the Adjusted
Eurodollar Rate is then being determined with maturities comparable to the
Interest Period for which such Adjusted Eurodollar Rate will apply as of
approximately 10:00 A.M. (New York time) on such Interest Rate Determination
Date by (ii) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation D);
provided that if any Reference Lender fails to provide Administrative Agent
with its aforementioned quotation then the Adjusted Eurodollar Rate shall be
determined based on the quotation(s) provided to Administrative Agent by the
other Reference Lender(s).
"Administrative Agent" means CIBC and any successor thereto
appointed pursuant to subsection 9.6.
"Affected Lender" has the meaning assigned to that term in
subsection 2.6C.
"Affected Loans" has the meaning assigned to that term in
subsection 2.6C.
"Affiliate", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
2 <PAGE>
management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise.
"Agent" or "Agents" means Administrative Agent and/or Managing
Agents, or any of them.
"Agreement" means this Amended and Restated Credit Agreement dated
as of September 30, 1994, as it may be amended, restated, supplemented or
otherwise modified from time to time.
"Asset Sale" means the sale by Company or any of its Subsidiaries
to any Person other than Company or any of its Subsidiaries of (i) any of the
stock of any of Company's Subsidiaries, (ii) substantially all of the assets
of any division or line of business of Company or any of its Subsidiaries, or
(iii) any other assets (whether tangible or intangible and including
intercompany Indebtedness) of Company or any of its Subsidiaries outside of
the ordinary course of business; provided that any sale of surplus assets
(including land and mineral interests but excluding intercompany Indebtedness)
not being used in the day-to-day conduct of the Company's principal businesses
or worn or obsolete equipment in the ordinary course of business or assets
sold in the ordinary course of business in connection with the routine
replacement of fixed or capital assets shall not be deemed to be an "Asset
Sale".
"Assignment and Acceptance" means an Assignment and Acceptance
entered into by a Lender and an Eligible Assignee, and accepted by
Administrative Agent, in substantially the form of Exhibit X annexed hereto.
"Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy", or any similar statute of Canadian or other laws as now
and hereafter in effect, or any successor statute.
"Base Rate Loans" means Canadian Dollar Loans and/or Dollar Loans
that bear interest at a floating rate of interest, which shall be either the
Canadian Base Rate, in the case of Canadian Dollar Loans, or the U.S. Base
Rate, in the case of Dollar Loans.
"Borrower" or "Borrowers" means U.S. Borrower and/or Canadian
Borrower.
"Business Day" means (i) for all purposes other than as covered by
clauses (ii), (iii) and (iv) below, any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a
day on which banking institutions located in such state are authorized or
required by law or other governmental action to close, (ii) with respect to
all notices, determinations, fundings and payments in connection with Canadian
3 <PAGE>
Loans and Canadian Letters of Credit, any day that is a Business Day described
in clause (i) above which is not a legal holiday under the laws of the
Provinces of Ontario and British Columbia, Canada or a day on which banking
institutions located in such Provinces are authorized or required by law or
other governmental action to close, (iii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day
described in clause (i) above and that is also a day for trading by and
between banks in Dollar deposits in the applicable interbank Eurodollar
market, and (iv) with respect to all notices, determinations, fundings and
payments in connection with Gold Loans, any day that is a Business Day
described in clause (i) above and that is also a day upon which the Price of
Gold is fixed by the London Bullion Market Association.
"Canadian Allocation" means the portion of the Commitments
allocated to Canadian Borrower in Schedule 2.1 or in the most recent Notice of
Allocation delivered by Borrowers and Company pursuant to subsection 2.1A.
"Canadian Base Rate" means, with respect to any Canadian Dollar
Loan as of any date of determination, the greater of (A) the fluctuating
interest rate per annum which CIBC has announced as its reference rate for
determining interest chargeable by it on loans denominated in Canadian Dollars
made in Canada, as in effect on such date of determination, and (B) the
annualized discount rate for bankers' acceptances denominated in Canadian
Dollars, stamped or accepted by CIBC having a term of 30 days prevailing on
such date of determination as quoted at approximately 10:00 A.M. (New York
time) on the CDOR page of the Reuter's Screen plus the Interest Rate Margin
prevailing on such date of determination. As to any loan, the Canadian Base
Rate is a reference rate that varies from time to time and does not
necessarily represent the lowest or best rate actually charged to any customer
by CIBC or any other Canadian Lender for loans denominated in Canadian
Dollars. CIBC and the other Canadian Lenders may make commercial loans or
other loans denominated in Canadian Dollars at rates of interest at, above or
below the Canadian Base Rate. The Canadian Base Rate shall automatically
change, without notice to Company or either Borrower, upon any date that CIBC
announces any change in said reference rate or determines that the prevailing
discount rate on 30-day bankers' acceptances has changed to the extent
necessary to reflect any such change.
"Canadian Base Rate Loans" means Canadian Dollar Loans made by
Canadian Lenders pursuant to subsection 2.1A(i) and bearing interest at rates
determined by reference to the Canadian Base Rate as provided in subsection
2.2A.
4 <PAGE>
"Canadian Borrower" has the meaning assigned to that term in the
introduction of this Agreement.
"Canadian Commitment" means the commitment of each Canadian Lender
(i) to make or maintain Canadian Loans pursuant to subsection 2.1A(i), and
(ii) to issue (in the case of CIBC) or acquire risk participations (in the
case of all other Lenders) in Canadian Letters of Credit pursuant to
subsection 2.7 in an aggregate amount, valued in Dollar Equivalents, at no
time exceeding such Canadian Lender's Pro Rata Share of the Canadian
Allocation.
"Canadian Commitment Usage" means, as of any date of
determination, the aggregate outstanding principal amount of (i) the Canadian
Loans denominated in Dollars, (ii) the Canadian Loans denominated in Canadian
Dollars (but valued in Dollar Equivalents as of such date of determination),
and (iii) the Canadian Loans that are Gold Loans (valued in Dollar Equivalents
based on the Price of Gold on the second Business Day prior to the related
Gold Advance Date) plus the Canadian Letter of Credit Usage.
"Canadian Dollar Loans" means Loans denominated in and advanced to
Canadian Borrower in Canadian Dollars.
"Canadian Dollars" or "Cdn.$" means the lawful money of Canada.
"Canadian Exposure" means, with respect to any Canadian Lender as
of any date of determination, the Canadian Commitments or, if the Commitments
have been terminated, the sum of (A) the aggregate outstanding principal
amount of (i) the Canadian Loans denominated in Dollars, (ii) the Canadian
Loans denominated in Canadian Dollars (but valued in Dollar Equivalents as of
such date of determination), and (iii) the Canadian Loans that are Gold Loans
(valued in Dollar Equivalents based on the Price of Gold on the second
Business Day prior to the related Gold Advance Date) of such Canadian Lender
plus (B) such Canadian Lender's participation interests in the Canadian Letter
of Credit Usage.
"Canadian Lending Office" means, in relation to any Canadian
Lender, its Canadian lending office as specified under its signature on the
signature pages hereof or such other office as is specified by such Lender in
a written notice to Administrative Agent and Canadian Borrower.
"Canadian Lenders" means each of the Lenders designated as the
Canadian Lender for each of the Lending Units on the signature pages hereof or
in any applicable Assignment and Acceptance.
"Canadian Letter of Credit" or "Canadian Letters of Credit" means
Standby Letters of Credit issued, or deemed issued, by CIBC for the
5 <PAGE>
account of Canadian Borrower pursuant to subsection 2.7.
"Canadian Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount (in Dollar
Equivalents) which is available for drawing under all Canadian Letters of
Credit then outstanding plus (ii) the aggregate amount (in Dollar Equivalents)
of all drawings under all Canadian Letters of Credit honored by CIBC and not
theretofore reimbursed by Canadian Borrower.
"Canadian Loans" means the Canadian Dollar Loans, Dollar Loans
and/or Gold Loans made by Canadian Lenders to Canadian Borrower pursuant to
subsection 2.1A(i).
"Capital Lease", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is or should be accounted for as an asset, with a
corresponding liability, on the balance sheet of that Person.
"Cash" means money, currency or a credit balance in a Deposit
Account.
"Cash Flow Analysis" means an analysis of projected cash flow,
substantially in the form of Schedule 1.1 annexed hereto.
"CIBC" means Canadian Imperial Bank of Commerce.
"Commitments" means the commitments of the Lender(s) of each
Lending Unit to make Canadian Loans, to make U.S. Loans and to participate in
Letters of Credit, initially in an aggregate amount equal to $150,000,000.
"Commitment Termination Date" means September 30, 1999.
"Company" has the meaning assigned to that term in the
introduction to this Agreement.
"Company Change of Control" has the meaning assigned to that term
in subsection 10.26A.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit VI annexed hereto delivered to Lenders by Company and
Borrowers pursuant to subsection 5.1(iii).
"Consolidated Capital Expenditures" means, for any period, the
aggregate of all expenditures, including capitalized interest but excluding
expenditures made in connection with the replacement, substitution or
restoration of assets (A) to the extent financed from insurance proceeds,
judgments or settlements paid on account of the loss or damage to the assets
6 <PAGE>
being replaced or restored, or (B) with awards of compensation arising from
the taking by eminent domain or condemnation of the assets being replaced, by
Company and its Subsidiaries that, in conformity with GAAP, are or should be
included in "additions to property, plant or equipment" or comparable items
reflected in the consolidated statement of cash flows of Company and its
Subsidiaries during such period.
"Consolidated Net Worth" means, as at any date of determination,
the sum of the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) of Company and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.
"Consolidated Senior Funded Debt" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness
of Company and its Subsidiaries, excluding any Subordinated Indebtedness,
determined on a consolidated basis in accordance with GAAP.
"Contingent Obligation", as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of
another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in
respect thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Interest Rate Agreements, Currency
Agreements and options, forward sales contracts and futures contracts designed
to protect Company and its Subsidiaries from fluctuations in the Price of
Gold. Contingent Obligations shall include, without limitation, (a) the
direct or indirect guaranty, endorsement (otherwise than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another,
(b) the obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an agreement,
and (c) any liability of such Person for the obligation of another through any
agreement (contingent or otherwise) (X) to purchase, repurchase or otherwise
acquire such obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (Y) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under
subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof
is as described in the preceding sentence. The amount of any Contingent
7 <PAGE>
Obligation shall be equal to the amount of the obligation so guaranteed or
otherwise supported or, if less, the amount to which such Contingent
Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Contractual Obligations" shall include the Subordinated Debentures.
"Covered Tax" means any Tax that is not an Excluded Tax.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in currency values.
"Delivered" or "Delivery" to a particular party means that such
party receiving Gold proceeds of any Gold Loan hereunder has received
confirmation from the bullion depository designated hereunder by such party
that it is holding Gold for such party's account in an allocated or
unallocated account.
"Deposit Account" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"Dollar Equivalents" means (i) with respect to the amount of any
Loan funded in Canadian Dollars, the amount of Dollars which is equivalent to
such amount of Canadian Dollars determined at the rate of exchange quoted by
The Bank of Canada at 12:00 Noon (New York time) on the date of determination
for the spot purchase in the foreign exchange market of Dollars with an
equivalent amount of Canadian Dollars or (ii) with respect to the amount of
any Loan funded in Gold, the amount in Dollars which is the product of the
number of Ounces of Gold comprising such Loan multiplied by the Price of Gold
as in effect on the date of determination.
"Dollar Loans" means Loans denominated and advanced to any
Borrower in Dollars.
"Dollars" and the sign "$" mean the lawful money of the United
States of America.
"Effective Date" means the date on or before September 30, 1994 on
which the conditions set forth in subsection 3.1 are satisfied or waived.
8 <PAGE>
"Eligible Assignee" means (A)(i) a commercial bank or trust
company organized under the laws of the United States or any state thereof;
(ii) a savings and loan association or savings bank organized under the laws
of the United States or any state thereof; (iii) a commercial bank or trust
company organized under the laws of any other country or a political
subdivision thereof; provided that (x) such bank or trust company is acting
through a branch or agency located in the United States or (y) such bank or
trust company is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act) which extends
credit or buys loans funded in Dollars, Canadian Dollars and Gold as one of
its businesses, in each case (under clauses (i) through (iv) above) that is
reasonably acceptable to Administrative Agent; and (B) any Lender and any
Affiliate of any Lender; provided that no Affiliate of Company shall be an
Eligible Assignee; and provided further that such Eligible Assignee must have
at the time of determination unimpaired capital and surplus of not less than
$100,000,000.
"Employee Benefit Plan" means any "employee benefit plan" as
defined in Section 3(3) of ERISA that is subject to Title I of ERISA (a) that
is, or was within the past six years, maintained or contributed to by Company
or any of its ERISA Affiliates and (b) with respect to which Company or any of
its ERISA Affiliates retains any liability.
"Environmental Claim" means any notice of violation, claim,
demand, abatement order or other order or direction (conditional or otherwise)
by any governmental authority or any Person for any damage, including, without
limitation, personal injury (including sickness, disease or death), tangible
or intangible property damage, contribution, indemnity, indirect or
consequential damages, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or for fines,
penalties or restrictions, in each case relating to, resulting from or in
connection with Hazardous Materials and relating to Company, any of its
Subsidiaries, any Affiliates of Company or any Facility.
"Environmental Laws" means all statutes, ordinances, orders,
rules, regulations or decrees relating to (i) environmental matters,
including, without limitation, those relating to fines, injunctions,
penalties, damages, contribution, cost recovery compensation, losses or
injuries resulting from the Release or threatened Release of Hazardous
Materials, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or
welfare, in any manner applicable to Company or any of its Subsidiaries or any
or their respective properties.
9 <PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate", as applied to any Person, means (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is
a member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is
a member; and (iii) any member of an affiliated service group within the
meaning of Section 414(m) or (o) of the Internal Revenue Code of which that
Person, any corporation described in clause (i) above or any trade or business
described in clause (ii) above is a member.
"ERISA Event" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to
any Pension Plan (whether or not waived in accordance with Section 412(d) of
the Internal Revenue Code) or the failure to make by its due date a material
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any material required
contribution to a Multiemployer Plan; (iii) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of
intent to terminate such plan in a distress termination described in Section
4041(c) of ERISA; (iv) the withdrawal by Company or any of its ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in material liability pursuant
to Sections 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which would reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of material liability on Company or any of
its ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason
of the application of Section 4212(c) of ERISA; (vii) the complete or partial
withdrawal by Company or any of its ERISA Affiliates (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan, or the receipt
by Company or any of its ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241 or
4245 of ERISA, or that it intends to terminate or has terminated under Section
4041A or 4042 of ERISA, in any such case if such event would reasonably be
expected to result in material liability to Company or its ERISA Affiliates;
(viii) the occurrence of an act or omission which could give rise to the
10 <PAGE>
imposition on Company or any of its ERISA Affiliates of material fines,
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company or any of its
ERISA Affiliates in connection with any such Employee Benefit Plan;
(x) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified
under Section 401(a) of the Internal Revenue Code) to qualify under Section
401(a) of the Internal Revenue Code, or the failure of any trust forming part
of any Pension Plan to qualify for exemption from taxation under Section
501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"Eurodollar Rate Loans" means Dollar Loans bearing interest at
rates determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"Event of Default" means each of the events set forth in
Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"Excluded Tax" means any of the following taxes, levies, imposts,
duties, deductions, withholdings or charges, and all liabilities with respect
thereto: taxes (without regard to whether such taxes are collected by
withholding or otherwise) imposed by a government or taxing authority (and any
interest, additions to tax, penalties, fines or other charges in respect
thereof other than those arising from a breach by Company or any Borrower of
its obligations hereunder) on any Lender, any Managing Agent or Administrative
Agent that (i) are imposed on, based on or measured by gross or net income or
gross or net receipts (including, without limitation, capital gains taxes,
excess profits taxes, minimum taxes, alternative minimum taxes and taxes on
tax preference items) or (ii) are capital, net worth, intangible, excise,
franchise, doing business, accumulated earnings, personal holding company, or
similar taxes other than franchise, doing business or similar taxes imposed
solely as a result of the transactions contemplated hereby.
"Existing Credit Agreement" has the meaning assigned to that term
in the introduction of this Agreement.
"Existing Lenders" has the meaning assigned to that term in the
introduction of this Agreement.
11 <PAGE>
"Existing Letters of Credit" means the letters of credit issued by
CIBC pursuant to the Existing Credit Agreement for the account of any Borrower
outstanding on the Effective Date and as described in Schedule 2.7 annexed
hereto, which letters of credit shall be deemed to be Letters of Credit under
this Agreement as of the Effective Date. The aggregate usage relating to the
Existing Letters of Credit on the Effective Date is as specified in Schedule
2.7.
"Exposure" means the Canadian Exposure and/or the U.S. Exposure.
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon)
now, hereafter or heretofore owned, leased, operated or used by Company or any
of its Subsidiaries or any of their respective predecessors or Affiliates.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the immediately preceding
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 such day on such transactions received by CIBC from three
Federal funds brokers of recognized standing selected by it.
"Fiscal Year" means the fiscal year of Company ending on
December 31 of each calendar year.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the United States accounting profession, in each case as the same are
applicable to the circumstances as of the date of determination.
"Gold" means unallocated or pool account gold or refined gold in
bar form (which bears the stamp of a smelter and assayer from the good
delivery list of the London Bullion Market Association, as such terms are
understood in the gold trade) of a purity (i.e. the ratio of fine gold per
1,000 parts of gold, expressed to the fourth decimal place) of at least .9950
12 <PAGE>
or such other ratio as Borrowers and Lenders may agree with respect to any
Gold Loan.
"Gold Advance Date" means, in relation to any outstanding Gold
Loan (including any Gold Loan that has been continued for successive Interest
Periods), the date upon which such Gold Loan initially was funded.
"Gold Loan" means a loan of Gold made by the Lenders to any
Borrower hereunder and upon which interest shall accrue at the Gold Rate.
"Gold Rate" means, with respect to any Gold Loan advanced by any
Lender for any Interest Period applicable thereto, the rate of interest per
annum, calculated on the basis of a 360 day year, offered by such Lender and
accepted by the applicable Borrower two Business Days prior to the first day
of such Interest Period.
"Governmental Authorization" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"Government Acts" has the meaning assigned to that term in
subsection 2.7H.
"Grid Gold Acknowledgement" means an acknowledgement by a Borrower
substantially in the form of Exhibit V annexed hereto.
"Hazardous Materials" means any pollutant, contaminant, toxic or
hazardous substance, toxic or hazardous material, toxic or hazardous
constituent or toxic or hazardous waste, as such terms are defined in or
pursuant to any Environmental Law.
"HGAL" means Homestake Gold of Australia Limited, a South
Australia corporation, approximately 81.7% of the capital stock of which is
owned by U.S. Borrower as of the date hereof, together with its Subsidiaries.
"Indebtedness", as applied to any Person, means (i) all
indebtedness for borrowed money or gold loans, (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any part
of the deferred purchase price of property or services, which purchase price
is (A) due more than 90 days from the date of incurrence of the obligation in
respect thereof or (B) evidenced by a note or similar written instrument, and
(v) all obligations of the type described in clauses (i) through (iv) above
secured by any Lien on any property or asset owned or held by that Person
13 <PAGE>
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. Obligations
under Interest Rate Agreements, Currency Agreements, and options, forward
sales contracts and futures contracts designed to protect Company and its
Subsidiaries from fluctuations in the price of Gold (excluding any Gold Loans)
constitute Contingent Obligations and not Indebtedness.
"Indemnitee" has the meaning assigned to that term in subsection
10.3.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate
Loan, March 31, June 30, September 30 and December 31 of each year, commencing
on the first such date to occur after the Effective Date, and (ii) with
respect to any Eurodollar Rate Loan or Gold Loan, the last day of each
Interest Period applicable to such Loan; provided that in the case of each
Interest Period of longer than three months or 90 days, as the case may be,
"Interest Payment Date" shall also include each three month or 90 day, as the
case may be, anniversary of the commencement of such Interest Period.
"Interest Period" means (i) with respect to each Eurodollar Rate
Loan, a period of one, two, three or six months and (ii) with respect to each
Gold Loan, a period of 30, 60, 90 or 180 days and any other period (subject to
availability to each Lender), in each case as selected by the applicable
Borrower pursuant to a Notice of Borrowing or a Notice of Conversion/
Continuation; provided that, subject to the provisions of subsection 2.6C, no
Interest Period in respect of any Gold Loan may be selected by a Borrower if
any Lender is for any reason unable to quote a Gold Rate for, or is otherwise
unable to fund, a Gold Loan having such Interest Period.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in interest rates.
"Interest Rate Determination Date" means each date for calculating
the Adjusted Eurodollar Rate or the Gold Rate for purposes of determining the
interest rate in respect of an Interest Period. The Interest
14 <PAGE>
Rate Determination Date shall be the second Business Day prior to the first
day of the related Interest Period.
"Interest Rate Margin" has the meaning assigned to that term in
subsection 2.2A.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person, or (ii) any direct
or indirect loan, advance (other than advances to current or former employees
or directors pursuant to employee benefit plans, programs or employment
arrangements or otherwise for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in each case in the ordinary course
of business) or capital contribution by Company or any of its Subsidiaries to
any other Person (other than a Subsidiary of Company) including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the
ordinary course of business. A contribution of undeveloped real property or
other mineral interests to a Joint Venture shall not be deemed to be a capital
contribution to any other Person. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto less
the amount of all cash received as repayment of principal or return of
capital, without any adjustments for increases or decreases in value, or
write-ups, write-downs or write-offs with respect to such Investment.
"Joint Venture" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form.
"Lender" and "Lenders" means the persons identified as "Lenders"
and listed on the signature pages of this Agreement (including Canadian
Lenders), together with their successors and permitted assigns pursuant to
subsection 10.1; provided that the term "Lenders", when used in the context of
a particular Commitment, shall mean Lenders having that Commitment.
"Lending Office" means, in relation to any Lender that is a
Canadian Lender, such Lender's Canadian Lending Office; in relation to any
Lender that is a U.S. Lender, such Lender's U.S. Lending Office; or in
relation to any Lender that is both a U.S. Lender and a Canadian Lender, such
Lender's U.S. Lending Office, insofar as borrowings and payments relating to
U.S. Loans are concerned, or Canadian Lending Office, insofar as borrowings
and payments relating to Canadian Loans are concerned.
15 <PAGE>
"Lending Unit" means (i) any Lender that is both a U.S. Lender and
a Canadian Lender or (ii) any U.S. Lender and its affiliated Canadian Lender,
as set forth on the signature pages hereof or in any applicable Assignment and
Acceptance.
"Letter of Credit" or "Letters of Credit" means Standby Letters of
Credit issued, or deemed issued, by CIBC for the account of any Borrower
pursuant to subsection 2.7A.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Lien" shall not include any arrangement with respect to Joint Ventures where
legal title to assets in which the Company or Borrower or their Subsidiaries
have a beneficial interest is held in the name of the operator or another
participant in such Joint Venture or in the name of the Joint Venture if such
arrangement is not for the purpose of securing Indebtedness (other than
Indebtedness that may arise in respect of a participant's lien or an
operator's lien).
"Loan" or "Loans" means any Canadian Loans or any U.S. Loans, or
any combination thereof.
"Loan Documents" means this Agreement, any applications,
reimbursement agreements and other documents or certificates executed in favor
of CIBC relating to the Letters of Credit, any Notes and any Grid Gold
Acknowledgements.
"Major Mining Properties" means those mining properties of Company
and its Subsidiaries listed on Schedule 1.2 annexed hereto.
"Margin Stock" has the meaning assigned to that term in Regulation
U of the Board of Governors of the Federal Reserve System as in effect from
time to time.
"Marketable Securities" means corporate cash investments with a
weighted average portfolio maturity of two years or less, consisting of
(i) marketable direct obligations issued or unconditionally guaranteed by the
United States Government or Canadian Government or issued by any agency
thereof and backed by the full faith and credit of the United States or Canada
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any Province of Canada or any political subdivision of
any such state or Province or any public instrumentality thereof at the time
of acquisition having the highest rating obtainable from Standard & Poor's
corporation, Moody's Investors Service, Inc. or Dominion Bond Rating Service;
(iii) commercial paper at the time of acquisition having a rating of at least
16 <PAGE>
A-1 (or A-2, provided such commercial paper has a rating of at least P-1 from
Moody's Investors Service, Inc.) from Standard & Poor's Corporation, at least
P-1 (or P-2, provided such commercial paper has a rating of at least A-1 from
Standard & Poor's Corporation) from Moody's Investors Service, Inc. or least
R-1 (Middle) from Dominion Bond Rating Service and, any of the preceding
ratings may be met by an attached letter of credit from a bank or municipal
bond insurance; (iv) certificates of deposit or bankers' acceptances issued by
any commercial bank or trust company organized under the laws of the United
States of America or any state thereof or the District of Columbia or under
the laws of Canada or any Province thereof or any non-U.S. commercial bank
which at the time of acquisition is ranked among the 100 largest banks in the
world (by assets as ranked by the American Banker Journal), and rated B/C or
better by IBCA or KBW rating service and having at least one of the credit
ratings identified in clause (iii) above (or higher credit ratings) obtainable
from Standard & Poor's Corporation, Moody's Investors Service, Inc. or
Dominion Bond Rating Service; (v) Eurodollar time deposits purchased directly
from any commercial bank or trust company described in clause (iv) above; and
(vi) repurchase agreements and reverse repurchase agreements with any
commercial bank or trust company described in clause (iv) above or with any
financial institution whose commercial paper at the time of acquisition has a
rating of at least A-1 from Standard and Poor's Corporation or whose long-term
Indebtedness at the time of acquisition has a rating of at least Aa, relating
to marketable direct obligations issued or unconditionally guarantied by the
United States Government or Government of Canada or issued by any agency
thereof and backed by the full faith and credit of the United States or
Canada; and (vii) indebtedness of any corporation at the time of acquisition
rated A1 or AA by Standard & Poor's or equivalent rating service.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company, Company and its Subsidiaries, taken as a
whole, or any Borrower, and in the case of any ERISA Event, the ERISA
Affiliates of Company taken as a whole, or (ii) a material adverse effect on
the ability of Company or any Borrower to perform, or of Administrative Agent,
Managing Agents or Lenders to enforce, the Obligations.
"Material Subsidiary" means any Borrower, any Subsidiary that owns
any assets constituting a portion of the Mining Group and any other Subsidiary
(i) whose total assets at the end of any fiscal quarter of Company equal more
than 10% of the Consolidated Net Worth of Company and its Subsidiaries as at
the end of such quarter or (ii) whose total revenue for any Fiscal Year of
Company equals more than 10% of the consolidated revenues of the Company and
its Subsidiaries for such Fiscal Year determined in accordance with GAAP. A
Subsidiary that is or becomes a Material Subsidiary shall not
17 <PAGE>
cease to be a Material Subsidiary if it subsequently fails to meet either of
the two preceding requirements without the consent of the Requisite Lenders.
The Material Subsidiaries as of the Effective Date are identified in Schedule
4.1 annexed hereto.
"Mining Group" means the currently producing mines, part or all of
which are owned by Company or any of its Subsidiaries or Joint Ventures, which
are listed in the form of Cash Flow Analysis annexed as Schedule 1.1 hereto,
as such Schedule 1.1 may be amended from time to time by Company, Borrowers,
and Requisite Lenders to add any mines which are subsequently developed or
acquired, which are acceptable to Requisite Lenders, by Company or any of its
Subsidiaries or Joint Ventures.
"Mining Group Cost of Future Production" means at any time the
total estimated cost of producing the Mining Group Production (in each case
based on Company's direct or indirect proportionate share of such costs)
during the periods set forth in the most recent Cash Flow Analysis delivered
pursuant to subsection 5.1(xii), as estimated by Company and approved by
Requisite Lenders, which approval will not be unreasonably withheld, the cost
for each period to be determined as the sum of:
(a) operating costs (on a basis consistent with the operating costs
as shown on the Cash Flow Analysis attached as Schedule 1.1 hereto)
for the period in question; plus
(b) Sustaining Capital Expenditures for the period in question;
plus
(c) corporate office expenditures (including development costs
associated with future mines but excluding exploration expenses) and
overhead for the period in question; plus
(d) taxes and royalties for the Mining Group to the extent not
included in operating costs determined under clause (a) above other
than federal, provincial or state income taxes, which taxes and
royalties shall be calculated in accordance with applicable tax
regulations; plus
(e) minority interests.
"Mining Group Future Cash Flow" means at any time the difference
between Mining Group Revenue and Mining Group Cost of Future Production.
"Mining Group Net Present Value of Mining Group Future Cash Flow"
means at any time the Mining Group Future Cash Flow discounted at the rate of
eight percent (8.0%) per annum (or such other rate as may be agreed to from
time to time by Company, Borrowers and Requisite Lenders) over the
18 <PAGE>
estimated periods of production (but in no event to exceed eleven years) for
the Mining Group as set forth in the most recent Cash Flow Analysis delivered
to Lenders pursuant to subsection 5.1(xii).
"Mining Group Production" means for any period Company's direct or
indirect proportionate share of the number of Ounces of gold, Ounces of
silver, tons of sulphur and barrels of oil and amounts of other minerals
approved by Requisite Lenders, which approval shall not be unreasonably
withheld, which it is estimated the Mining Group will produce from proven or
probable reserves during such period.
"Mining Group Revenue" means, with respect to any period in
question, at any time the sum of:
(a) the total revenue from Mining Group Production for that
period that has been sold forward (provided that Company and
Borrowers shall have disclosed the buyer's identity to the Lenders
and the buyer's creditworthiness is acceptable to Requisite Lenders);
and
(b) for Mining Group Production for that period that has not
been sold forward as contemplated by clause (a) above, $325 per Ounce
of Gold, $3.50 per Ounce of silver, $60 per ton of sulphur, $16.50
per barrel of oil, in each case multiplied by the Gold, silver,
sulphur and oil included in the unsold Mining Group Production and
the product of the amount of other products included in Mining Group
Production multiplied by prices approved by Requisite Lenders, which
approval shall not be unreasonably withheld, as estimated by Company
and approved by Requisite Lenders, which approval will not be
unreasonably withheld.
"Multiemployer Plan" means a "multiemployer plan", as defined in
Section 3(37) of ERISA, (i)(a) to which Company or any of its ERISA Affiliates
is contributing, or within the past six years has contributed, or (b) to which
Company or any of its ERISA Affiliates has, or within the past six years has
had, an obligation to contribute, and (ii) with respect to which Company or
any of its ERISA Affiliates retains any liability.
"Net Cash Proceeds" means cash proceeds (including any cash
received by way of deferred payment pursuant to, or monetization of, a note
receivable or otherwise, but only as and when so received and including the
portion of such deferred payment which constitutes interest), received from
any Asset Sale net of (i) the actual and reasonable direct costs relating to
such sale (including, without limitation, legal, accounting, investment
banking fees and sales commissions paid by Company or any of its Subsidiaries)
and (ii) taxes paid as a result of such sale but after taking into account any
reduction in tax liability due to available tax credits or deductions and any
tax sharing arrangements.
19 <PAGE>
"Non-Recourse Debt" means indebtedness for borrowed money or gold
loans the repayment of which, by its express contract terms, may be enforced
only by foreclosure or other realization on any collateral security therefor
and as to which the obligor thereon shall not otherwise have any personal
liability.
"Notes" means the promissory notes of Borrowers issued to Lenders
pursuant to subsection 2.1E, substantially in the forms of Exhibit IV-A (in
the case of the Canadian Borrower) and Exhibit IV-B in the case of U.S.
Borrower) annexed hereto, and as they may be further amended, supplemented or
otherwise modified from time to time.
"Notice of Allocation" means a notice substantially in the form of
Exhibit III annexed hereto delivered by Borrowers pursuant to subsection 2.1A
for the purpose of allocating the Commitments between the Canadian Allocation
and the U.S. Allocation.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit I annexed hereto delivered by the applicable Borrower to
Administrative Agent pursuant to subsection 2.1B with respect to a proposed
borrowing of Loans.
"Notice of Conversion/Continuation" means a notice substantially
in the form of Exhibit II annexed hereto delivered by a Borrower to
Administrative Agent pursuant to subsection 2.2D with respect to a proposed
conversion or continuation of the applicable basis for determining the
interest rate with respect to the Loans specified therein.
"Notice of Issuance of Letter of Credit" means a notice in the
form of Exhibit XI annexed hereto, delivered by a Borrower to Administrative
Agent pursuant to subsection 2.7B with appropriate insertions and deletions,
with respect to the proposed issuance or amendment of a Letter of Credit.
"Obligations" means all obligations of every nature of Company and
each Borrower from time to time owed to Managing Agents, Administrative Agent,
Lenders or any of them under the Loan Documents, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer) or its president or one of its vice presidents and by
its chief financial officer or its treasurer; provided that every Officers'
Certificate with respect to the compliance with a condition precedent to the
making of any Loans or the issuance of any Letter of Credit hereunder shall
include (i) a statement that the officer or officers making or giving such
20 <PAGE>
Officers' Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signers, they have made or have caused to be made
such examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers, such
condition has been complied with.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"Original Closing Date" means August 24, 1993.
"Ounce" or "Ounces" means a fine troy ounce or fine troy ounces.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"Permitted Encumbrances" means the following types of Liens:
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 5.3, other than any Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
Section 302(f) or 4068 of ERISA, or deposits or pledges to obtain the
release of any such liens;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by
law and Liens of smelters, refiners and other processors of ore,
minerals and other products thereof, in each case where incurred in
the ordinary course of business for sums not yet delinquent or being
contested in good faith, or deposits or pledges to obtain the release
of any such Liens if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
21 <PAGE>
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 7.8;
(v) leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries;
(vi) easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances or defects in title to property not interfering in any
material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries;
(vii) any interest or title of a lessor or sublessor under any
lease not prohibited by this Agreement;
(viii) precautionary filings relating solely to leases permitted
by this Agreement;
(ix) mineral, oil, gas, and geothermal leases, licenses, grazing
leases, timber cutting rights, easements, minimum royalties and
rents, delayed rentals, work commitments, production royalties,
profit interests, surface owner interests, extralateral rights, and
rights of subadjacent and lateral support burdening any properties of
Company or any of its Subsidiaries;
(x) the paramount rights of the United States of America or any
other governmental authority in and to any unpatented mining or mill
site claims or leases held by Company or any of its Subsidiaries;
(xi) the reservations, limitations, provisos, and conditions, if
any, expressed in any original grants from the Crown;
(xii) Liens of Joint Venture participants and operators on
properties being developed or operated by Joint Ventures securing the
respective obligations of the joint venturers or participants to
advance funds or reimburse advances of funds or to perform
obligations under the applicable joint venture agreements;
(xiii) Liens in favor of Company or Borrowers; and
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(xiv) Liens or deposits or pledges to secure the performance by
Company, Borrowers or their Subsidiaries or Joint Ventures with
respect to the remediation, reclamation or stabilization of
properties disturbed by the mining operations of Company, Borrowers
or their Subsidiaries or Joint Ventures; provided any such Liens
attach only to the property to be remediated, reclaimed or
stabilized; and provided further that Company shall have first used
its best efforts to cause a letter of credit to be issued or deliver
a guaranty to assure performance in lieu of granting such Liens or
making such deposits or pledges; provided such Liens, deposits or
pledges are promptly released upon satisfaction of such remediation,
reclamation or stabilization obligation.
excluding, however, in any case, any such Liens granted or created by Company
or any of its Subsidiaries (other than Prime or HGAL) on or with respect to
their properties or assets to secure any obligations of Prime or HGAL at any
time that Indebtedness permitted under subsection 6.1(vi) or (vii) is
outstanding.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts, business
trusts or other organizations, whether or not legal entities, and governments
and agencies and political subdivisions thereof.
"Potential Event of Default" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"Price of Gold" means, on any day, and except as provided in the
next sentence, the price per Ounce of Gold collectively set by the fixing
members of the London Bullion Market Association in the afternoon (London
time) of such day, (including an amount, if any, equal to the premium and any
other additional amounts that would be payable in the applicable market in
connection with a purchase of Gold). If there is no such fixing, then (a) if
such day is any day other than a Saturday, Sunday or holiday in London, the
"Price of Gold" shall be the publicly quoted price in Dollars per Ounce of
Gold on such other accessible international bullion market as may be selected
by Administrative Agent or (b) if no such quotation is available, or such day
is a Saturday, a Sunday or a holiday in London, the "Price of Gold" shall be
the last price so set by the fixing members of the London Bullion Market
Association.
"Prime" means Prime Resources Group, Inc., a British Columbia
corporation, approximately 50.6% of the capital stock of which is owned
directly or indirectly by Canadian Borrower as of the date hereof, together
with its Subsidiaries.
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"Pro Rata Share" means, with respect to any Lending Unit (and of
any Lender(s) constituting such Lending Unit), the percentage obtained by
dividing (x) the Exposure of that Lending Unit by (y) the aggregate amount of
the Exposure for all Lending Units in any such case as the applicable
percentage may be adjusted by assignments permitted pursuant to subsection
10.1B. The initial Pro Rata Share of each Lending Unit (and of any Lender(s)
constituting such Lending Unit) is set forth opposite the name of that Lending
Unit in Schedule 2.1 annexed hereto.
"Purchase Money Security Interest" means any security interest,
however denominated, on any property created or retained at the time of
acquisition of such property in order to secure all or any part of the
acquisition cost thereof or in order to secure all or any Indebtedness
incurred for the purpose of financing or refinancing (without increasing the
then outstanding amount) such Indebtedness.
"Reference Lenders" means CIBC, Scotiabank and The Chase Manhattan
Bank (National Association).
"Register" has the meaning assigned to that term in subsection
2.1D(i).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the environment
(including, without limitation, the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials), or
into or out of any Facility, including the movement of any Hazardous Material
through the air, soil, surface water, groundwater or property.
"Requisite Lenders" means Lenders having or holding 51% or more of
the sum of the aggregate Exposure of all Lenders.
"Responsible Officer" means, with respect to any Person, any one
of the president, vice presidents and treasurer of such Person.
"Restricted Junior Payment" means (i) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of preferred stock of Company
or any Subsidiary of Company, and (ii) any payment or prepayment of principal
of, premium, if any, or interest on, or redemption, purchase, retirement,
defeasance (including in-substance or legal defeasance), sinking
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fund or similar payment with respect to any Subordinated Indebtedness.
"Scotiabank" means The Bank of Nova Scotia.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"Solvent" means, with respect to any Person, that as of the date
of determination (i) the then fair saleable value of the property of such
Person as a going concern is (y) greater than the total amount of liabilities
(including anticipated Contingent Obligations and other contingent liabilities
only to the extent of the probable liability with respect to such Contingent
Obligations and other contingent liabilities) of such Person and (z) greater
than the amount that will be required to pay the probable liabilities of such
Person's then existing debts as they become absolute and matured; (ii) such
Person's capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend
to incur, or believe that it will incur, debts beyond its ability to pay such
debts as they become due.
"Standby Letter of Credit" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries arising by virtue of the laws
of any jurisdiction requiring third party insurers, (iv) obligations with
respect to Capital Leases or Operating Leases of Company or any of its
Subsidiaries, (v) performance, payment, deposit or surety obligations of
Company or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or agreement in accordance with custom and
practice in the industry, (vi) obligations of Company or any of its Subsidi-
aries imposed by statute or by a court of competent jurisdiction to post
appeal bonds or other security in connection with litigation appeals, and
(vii) other obligations of Company or any of its Subsidiaries approved by
Administrative Agent in its sole discretion; provided that Standby Letters of
Credit may not be issued for the purpose of supporting trade payables.
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"Subordinated Debentures" means Company's 5.5% Convertible
Subordinated Notes due 2000 in the aggregate original principal amount of
$150,000,000.
"Subordinated Indebtedness" means (i) the Subordinated Debentures,
and (ii) any other Indebtedness of Company or any of its Subsidiaries that is
subordinated to the Obligations (including any guaranty of the Obligations) on
terms and conditions approved in writing by Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association, Joint Venture or other business entity of which 50%
or more of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to
vote in the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the power to
direct or cause the direction of the management and policies thereof is at the
time owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination thereof.
"Sustaining Capital Expenditures" means, with respect to the
period in question, those amounts of expenditures required to maintain the
level of mine operations contemplated by the then applicable mining plan
(including those expenditures necessary to improve operating efficiency as
reflected in the Mining Group Cost of Future Production) until the end of the
then existing proven and probable minable reserves of the Mining Group.
"Tax" or "Taxes" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed.
"Tax Transferee" means any Person who acquires any interest in the
Loans (whether or not by operation of law) or the office to which a Lender,
Administrative Agent or a Managing Agent has transferred its Loans for
purposes of determining where the Loans are made, accounted for or booked.
"Total Utilization of Commitments" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all
outstanding Loans, plus (ii) the Canadian Letter of Credit Usage, plus
(iii) the U.S. Letter of Credit Usage.
"U.S. Allocation" means the portion of the Commitments allocated
to U.S. Borrower in Schedule 2.1 or in the most recent Notice of Allocation
delivered by Borrowers and Company pursuant to subsection 2.1A.
"U.S. Base Rate" means, for any period, a fluctuating interest
rate per annum as shall be in effect from time to time which rate per annum
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shall at all times, in the case of U.S. Base Rate Loans borrowed by U.S.
Borrower, be equal to the higher of:
(a)the rate of interest announced publicly by the New York Agency
of CIBC in New York, New York, from time to time, as CIBC's base
rate; or
(b)the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one
percent) of (i) 1/2 of one percent per annum, plus (ii) the rate per
annum obtained by dividing (A) the latest three-week moving average
of secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money
market banks, such three-week moving average being determined weekly
on each Monday (or, if any such day is not a Business Day, on the
next succeeding Business Day) for the three-week period ending on the
previous Friday by CIBC on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be suspended
or terminated, on the basis of quotations for such rates received by
CIBC from three New York certificate of deposit dealers of recognized
standing selected by CIBC by (B) a percentage equal to 100% minus the
average of the daily percentages specified during such three-week
period by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or other
marginal reserve requirement) for member banks of the Federal Reserve
System in respect of liabilities consisting of or including (among
other liabilities) three-month Dollar nonpersonal time deposits in
the United States, plus (iii) the average during such three-week
period of the annual assessment rates estimated by CIBC for
determining the then current annual assessment payable by member
banks of the Federal Reserve System to the Federal Deposit Insurance
Corporation (or any successor) for insuring Dollar deposits of member
banks of the Federal Reserve System in the United States; or
(c)the Federal Funds Rate plus 1% per annum;
or in the case of any U.S. Base Rate Loans borrowed by Canadian Borrower, the
fluctuating interest rate per annum which CIBC has announced in Toronto as its
reference rate for determining interest chargeable by it on loans denominated
in Dollars made in Canada, as in effect on such date of determination.
As to any loan, the U.S. Base Rate is a reference rate that varies
from time to time and does not necessarily represent the lowest or best rate
actually charged to any customer by CIBC or any other U.S. Lender for loans
denominated in Dollars. CIBC and the other U.S. Lenders may make commercial
loans or other loans denominated in Dollars at rates of interest
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at, above or below the U.S. Base Rate. The U.S. Base Rate shall automatically
change upon any date that CIBC announces any change in its applicable base or
reference rate or determines that the interest rates set forth in clauses (b)
and (c) above have changed, to the extent necessary to reflect any such
change.
"U.S. Base Rate Loans" means Dollar Loans bearing interest at
rates determined by reference to the U.S. Base Rate as provided in subsection
2.2A.
"U.S. Commitment" means the commitment of each U.S. Lender (i) to
make or maintain U.S. Loans pursuant to subsection 2.1A(ii), and (ii) to issue
(in the case of CIBC) or acquire risk participations in U.S. Letters of Credit
pursuant to subsection 2.7 in an aggregate amount at no time exceeding such
U.S. Lender's Pro Rata Share of the U.S. Allocation.
"U.S. Commitment Usage" means, as of any date of determination,
the aggregate outstanding principal amount of (i) the U.S. Loans that are
Dollar Loans, and (ii) the U.S. Loans that are Gold Loans (valued in Dollar
Equivalents based on the Price of Gold on the second Business Day prior to the
related Gold Advance Date) plus the U.S. Letter of Credit Usage.
"U.S. Exposure" means, with respect any U.S. Lender as of any date
of determination, the U.S. Commitments or, if the U.S. Commitments have been
terminated, the sum of (A) the aggregate outstanding principal amount of (i)
the U.S. Loans denominated in Dollars, and (ii) the U.S. Loans that are Gold
Loans (valued in Dollar Equivalents based on the Price of Gold on the second
Business Day prior to the related Gold Advance Date) of such U.S. Lender plus
(B) such U.S. Lender's participation interests in the U.S. Letter of Credit
Usage.
"U.S. Lending Office" means, in relation to any U.S. Lender, its
U.S. lending office as specified under its signature on the signature pages
hereof or such other office as is specified by such Lender in a written notice
to Administrative Agent and U.S. Borrower.
"U.S. Lenders" means each of the Lenders of each Lending Unit
designated as the U.S. Lender for such Lending Unit on the signature pages
hereof or in any applicable Assignment and Acceptance.
"U.S. Letter of Credit" or "U.S. Letters of Credit" means Standby
Letters of Credit issued, or deemed issued, by CIBC for the account of U.S.
Borrower pursuant to subsection 2.7.
"U.S. Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is available
for drawing under all U.S. Letters of Credit then outstanding, plus (ii) the
aggregate amount of all drawings under all U.S. Letters of Credit honored by
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CIBC and not theretofore reimbursed by Borrowers.
"U.S. Loans" means Dollar Loans and/or Gold Loans made by U.S.
Lenders to U.S. Borrower pursuant to subsection 2.1A(ii).
1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations
Under Agreement.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii)
and (xi) of subsection 5.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 Commitments; Loans.
A. Commitments. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
and Borrowers herein set forth, each Lender hereby severally agrees (A) to
maintain its outstanding Loans and (B) to make the Loans described in this
subsection 2.1A that are, pursuant to the terms of this subsection 2.1A, to be
made by such Lender. The commitments of the Lenders to make such Loans
consist of the Canadian Commitments of the Canadian Lenders and the U.S.
Commitments of the U.S. Lenders, such commitments being more fully described
below. The principal amount of each Lender's Loans outstanding as of the
Effective Date and the aggregate principal amount of the Loans outstanding as
of the Effective Date are set forth on Schedule 2.1 annexed hereto.
Initially, the aggregate amount of the Commitments shall be $150,000,000.
Company and Borrowers shall allocate the aggregate amount of the Commitments
to Canadian Borrower and U.S. Borrower so that the sum of the Canadian
Allocation and the U.S. Allocation equals the aggregate Commitments. The
initial amounts of the Canadian Allocation and the U.S. Allocation are set
forth on Schedule 2.1. Company and Borrowers may, effective as of March 31,
June 30, September 30 and December 31 of each year, commencing on
September 30, 1994, change the amount of the Commitments allocated to the
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Canadian Allocation and the U.S. Allocation by delivering a Notice of
Allocation to Administrative Agent at least 10 Business Days prior to date
upon which such allocation is to be effective; provided that (1) the sum of
the Canadian Allocation plus the U.S. Allocation shall always equal the amount
of the Commitments then in effect, (2) the Canadian Allocation may not be
reduced to an amount that is less than the outstanding Canadian Commitment
Usage, and (3) the U.S. Allocation may not be reduced to an amount that is
less than the outstanding U.S. Commitment Usage. Administrative Agent shall
promptly notify each Lender of any proposed change in the allocation of the
Commitments and such Lender's Pro Rata Share of the new Canadian Allocation or
U.S. Allocation, as appropriate. The aggregate amount of the Commitments may
be permanently reduced from time to time in accordance with subsection 2.4.
(i)Canadian Loans. Each Canadian Lender of each Lending Unit
severally agrees, subject to the limitations set forth below with
respect to the maximum amount of Canadian Loans permitted to be
outstanding from time to time, (A) to maintain its outstanding
Canadian Loans and (B) to lend to Canadian Borrower from time to time
during the period from the Effective Date to but excluding the
Commitment Termination Date Dollars, Canadian Dollars and/or Gold, in
an aggregate amount, when valued in Dollar Equivalents, not exceeding
the lesser of (a) its Pro Rata Share of the Canadian Allocation as in
effect from time to time and (b) the Commitment of its Lending Unit,
to be used for the purposes identified in subsection 2.5A. The
original amount of each Canadian Lender's Canadian Commitment, each
Lending Unit's Canadian Commitment, the principal amount of each
Canadian Lender's Canadian Loans outstanding as of the Effective
Date, the principal amount of each Lending Unit's Canadian Loans
outstanding as of the Effective Date and the aggregate principal
amount of the Canadian Loans outstanding as of the Effective Date,
are set forth on Schedule 2.1 annexed hereto. The aggregate original
amount of the Commitments of all Lending Units is $150,000,000.
(ii)U.S. Loans. Each U.S. Lender of each Lending Unit severally
agrees, subject to the limitations set forth below with respect to
the maximum amount of U.S. Loans permitted to be outstanding from
time to time, (A) to maintain its outstanding U.S. Loans and (B) to
lend to U.S. Borrower from time to time during the period from the
Effective Date to but excluding the Commitment Termination Date
Dollars and/or Gold, in an aggregate amount, when valued in Dollar
Equivalents, not exceeding the lesser of (a) its Pro Rata Share of
the U.S. Allocation as in effect from time to time and (b) the
Commitment of its Lending Unit, to be used for the purposes
identified in subsection 2.5A. The original amount of each U.S.
Lender's U.S. Commitment, each Lending Unit's U.S.
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Commitment, the principal amount of each U.S. Lender's U.S. Loans
outstanding as of the Effective Date, the principal amount of each
Lending Unit's U.S. Loans outstanding as of the Effective Date and
the aggregate principal amount of the U.S. Loans outstanding as of
the Effective Date, are set forth on Schedule 2.1 annexed hereto and
the aggregate original amount of the Commitments of all Lending Units
is $150,000,000.
(iii)Additional Limitations on Loans. The amounts of the Canadian
Allocation, U.S. Allocation and Commitments shall be reduced from
time to time by the amount of any reductions thereto made pursuant to
subsection 2.4A. Each Lending Unit's Commitment and the Canadian
Commitment and U.S. Commitment of such Lending Unit's Canadian Lender
and U.S. Lender, respectively, shall expire on the Commitment
Termination Date and all Loans and all other amounts owed hereunder
with respect to Loans, Letters of Credit and Commitments shall be
paid in full no later than that date. Amounts borrowed under this
subsection 2.1A may be repaid and reborrowed to but excluding the
Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Loans and the Commitments shall be subject to
the following limitations:
(a)The aggregate amount of the Canadian Exposure and the Canadian
Commitments shall not, in each case, at any time exceed the Canadian
Allocation then in effect;
(b)The aggregate amount of the U.S. Exposure and the U.S.
Commitments shall not, in each case, at any time exceed the U.S.
Allocation then in effect;
(c)The amount otherwise available for borrowing under the Canadian
Commitments as of any time of determination shall be reduced by the
amount of the Canadian Letter of Credit Usage as of such time of
determination;
(d)The amount otherwise available for borrowing under the U.S.
Commitments as of any time of determination shall be reduced by the
amount of the U.S. Letter of Credit Usage as of such time of
determination;
(e)Canadian Borrower shall not request or borrow Canadian Dollar
Loans if, immediately after giving effect to such borrowing, the
aggregate outstanding principal amount of Canadian Dollar Loans and
the stated amount of all Letters of Credit denominated in Canadian
Dollars, when valued in Dollar Equivalents, would exceed 95% of the
Canadian Allocation then in effect;
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(f)No Borrower shall request any Gold Loans if, immediately after
giving effect to such borrowing, the aggregate outstanding amount of
Gold Loans advanced to Borrowers would exceed 200,000 Ounces; and
(g)For purposes of computing compliance with the foregoing clauses
(a) through (f), any extension of credit hereunder the proceeds of
which are used on the same day to repay another extension of credit
hereunder shall not be treated as an increase in the utilization of
the Commitments on such day.
B. Borrowing Mechanics. Loans made on any Funding Date (other than
Loans made pursuant to subsection 2.7C for the purpose of reimbursing CIBC for
the amount of a drawing under a Letter of Credit issued by it) shall be in an
aggregate minimum amount of (i) $5,000,000 and integral multiples of
$1,000,000 in excess of that amount, in the case of Dollar Loans,
(ii) Cdn.$5,000,000 and integral multiples of Cdn.$1,000,000 in excess of that
amount, in the case of Canadian Dollar Loans, and (iii) 10,000 Ounces and
integral multiples of 2,000 Ounces in excess of that amount, in the case of
Gold Loans. Whenever a Borrower desires that Lenders make Loans it shall
deliver to Administrative Agent a Notice of Borrowing no later than 11:00 A.M.
(New York time) at least three Business Days in advance of the proposed
Funding Date (in the case of a Eurodollar Rate Loan or a Gold Loan) or at
least one Business Day in advance of the proposed Funding Date (in the case of
a Base Rate Loan). The Notice of Borrowing shall specify (i) the Borrower
requesting the proposed Loans, (ii) the proposed Funding Date (which shall be
a Business Day), (iii) whether such Loans will be denominated in Canadian
Dollars, Dollars or Ounces of Gold, (iv) in the case of Dollar Loans, whether
such Dollar Loans are to be U.S. Base Rate Loans or Eurodollar Rate Loans,
(v) in the case of Gold Loans, whether the applicable Borrower is requesting
that the amount of such Loan be converted into Dollars (based on the Price of
Gold as in effect two Business Days prior to the proposed Funding Date) or
that an amount of Gold constituting such Loan be Delivered, and if so where,
(vi) in the case of Gold Loans to be funded in Gold, whether the applicable
Borrower is requesting to pay interest during the initial Interest Period on
such Gold Loan in Dollars or in Gold, and if payable in Dollars the basis for
calculating the amount according to one of the alternatives specified in
subsection 2.2F and (vii) in the case of Eurodollar Loans or Gold Loans, the
requested Interest Period. Each such Notice of Borrowing shall also show the
calculation of the Canadian Commitment Usage, the U.S. Commitment Usage and
the Total Utilization of Commitments after giving effect to the proposed
borrowing, which calculation shall demonstrate compliance with the limitations
on Loans set forth in subsection 2.1A(iii). Loans may be continued as or
converted into Loans denominated in the same currency (or in the case of Gold
Loans, Ounces of Gold) in the manner provided in subsection 2.2D. In lieu of
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delivering the above-described Notice of Borrowing, the applicable Borrower
may give Administrative Agent telephonic notice by the required time of any
proposed borrowing under this subsection 2.1B; provided that such notice shall
be promptly confirmed in writing by delivery of a Notice of Borrowing to
Administrative Agent on or before the applicable Funding Date.
Neither Administrative Agent nor any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to
above that Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to borrow on behalf of such
Borrower or for otherwise acting in good faith under this subsection 2.1B, and
upon funding of Loans by Lenders in accordance with this Agreement pursuant to
any such telephonic notice of any Borrower shall have effected Loans hereunder
to such Borrower.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a Eurodollar Rate Loan or a Gold Loan (or telephonic
notice in lieu thereof) shall be irrevocable when given, and the Borrower
delivering such Notice of Borrowing shall be bound to make a borrowing in
accordance therewith.
C. Disbursement of Funds.
(i)Canadian Loans. All Loans requested by Canadian Borrower under
this Agreement shall be made by Canadian Lenders simultaneously and
proportionately to their respective Pro Rata Shares. Promptly after
receipt by Administrative Agent of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof) from Canadian
Borrower, Administrative Agent shall notify each Canadian Lender of
the proposed borrowing and the details thereof. Each Canadian Lender
shall make the amount of its Loan (other than any Gold Loan to be
funded in Gold) available in the appropriate currency to
Administrative Agent, in same day funds at Administrative Agent's
Canadian Lending Office not later than 1:00 P.M. (New York time) on
the applicable Funding Date. In the case of any Gold Loan to be
funded in Gold, each Canadian Lender shall make the amount of its
Gold Loan available in Gold to Administrative Agent by Delivery of
such Gold not later than 11:00 A.M. (London time) on the applicable
Funding Date to Administrative Agent's account with Morgan Guaranty
Trust Company, London, England, or such other London bullion account
as may be designated by Administrative Agent from time to time by
notice to Canadian Lenders not later than three Business Days prior
to the applicable Funding Date. Upon satisfaction or waiver of the
conditions precedent specified in subsections 3.1 (in the case of the
initial Canadian Loans) and 3.2 (in the case of all Canadian Loans),
Administrative Agent shall make the proceeds of such
33 <PAGE>
Canadian Loans, in the appropriate currency or Gold, as the case may
be, available to Canadian Borrower on the applicable Funding Date by
(a) in the case of currency Loans, causing an amount of same day
funds equal to the proceeds of all such Loans received by
Administrative Agent from Canadian Lenders to be credited to the
account of Canadian Borrower at Administrative Agent's Canadian
Lending Office or (b) in the case of Gold Loans, either (1) advancing
the Dollar Equivalent of the Gold Loans, which shall be calculated
based on the Price of Gold as in effect on the second Business Day
preceding the applicable Funding Date, and causing an amount of same
day funds equal to such amount of Dollars to be credited to the
account of Canadian Borrower at Administrative Agent's Canadian
Lending Office or (2) effecting the Delivery of Gold comprising such
Gold Loan to a location mutually agreed upon by Canadian Borrower and
Administrative Agent and set forth in the Notice of Borrowing.
(ii)U.S. Loans. All Loans requested by U.S. Borrower under this
Agreement shall be made by U.S. Lenders simultaneously and
proportionately to their respective Pro Rata Shares. Promptly after
receipt by Administrative Agent of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof) from U.S.
Borrower, Administrative Agent shall notify each U.S. Lender of the
proposed borrowing and the details thereof. Each U.S. Lender shall
make the amount of its Loan (other than any Gold Loan to be funded in
Gold) available in Dollars to Administrative Agent in same day funds
at Administrative Agent's U.S. Lending Office not later than 1:00
P.M. (New York time) on the applicable Funding Date. In the case of
any Gold Loan to be funded in Gold, each U.S. Lender shall make the
amount of its Gold Loan available in Gold to Administrative Agent by
Delivery of such Gold not later than 11:00 A.M. (London time) on the
applicable Funding Date to Administrative Agent's account with Morgan
Guaranty Trust Company, London, England, or such other London bullion
account as may be designated by Administrative Agent by notice to
U.S. Lenders from time to time not later than three Business Days
prior to the applicable Funding Date. Upon satisfaction or waiver of
the conditions precedent specified in subsections 3.1 (in the case of
the initial U.S. Loans) and 3.2 (in the case of all U.S. Loans),
Administrative Agent shall make the proceeds of such Loans in Dollars
or Gold, as the case may be, available to U.S. Borrower on the
applicable Funding Date by (a) in the case of currency Loans, causing
an amount of same day funds equal to the proceeds of all such Loans
received by Administrative Agent from U.S. Lenders to be credited to
such account of U.S. Borrower as U.S. Borrower may from time to time
designate in a written notice to Administrative Agent or (b) in the
case of Gold Loans, either (1) advancing the
34 <PAGE>
Dollar Equivalent of such Gold Loans, which shall be calculated based
on the Price of Gold as in effect on the second Business Day
preceding the applicable Funding Date, and causing an amount of same
day funds equal to such amount of Dollars to be credited to such
account of U.S. Borrower as U.S. Borrower may from time to time
designate in a written notice to Administrative Agent or
(2) effecting the Delivery of Gold comprising such Gold Loans to a
location mutually agreed upon by U.S. Borrower and Administrative
Agent and set forth in the Notice of Borrowing.
(iii)Failure to Fund Loans. No Lender shall be responsible for any
default by any other Lender in that other Lender's obligation to make
a Loan requested hereunder nor shall the Commitment of any Lender to
make the particular type of Loan requested be increased or decreased
as a result of a default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder. Unless Administrative
Agent shall have been notified by any Lender prior to the Funding
Date for any Loans to be funded by such Lender that such Lender does
not intend to make available to Administrative Agent the amount of
such Lender's Loan requested on such Funding Date, Administrative
Agent may assume that such Lender has made such amount available to
Administrative Agent on such Funding Date and Administrative Agent
may, in its sole discretion, but shall not be obligated to, make
available to the applicable Borrower a corresponding amount on such
Funding Date. If such corresponding amount is not in fact made
available to Administrative Agent by such Lender, Administrative
Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day
from such Funding Date until the date such amount is paid to
Administrative Agent, at the customary rate set by Administrative
Agent for the correction of errors among banks for three Business
Days and thereafter at the Canadian Base Rate, in the case of any
Canadian Dollar Loan, the U.S. Base Rate, in the case of any Dollar
Loan, or the applicable Gold Rate for the Administrative Agent in the
case of any Gold Loan. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand
therefor, Administrative Agent shall promptly notify the applicable
Borrower and such Borrower shall immediately pay such corresponding
amount to Administrative Agent together with interest thereon, for
each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the rate then applicable to Canadian Base
Rate Loans in the case of any Canadian Dollar Loan, the rate then
applicable to U.S. Base Rate Loans in the case of any Dollar Loan or
the applicable Gold Rate for the Administrative Agent in the case of
any Gold Loan. Such interest in respect of any Gold Loan shall be
payable in Dollars and shall be calculated daily in accordance with
the provisions of
35 <PAGE>
subsection 2.2F. Nothing in this subsection 2.1C shall be deemed to
relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that any Borrower may have
against any Lender as a result of any default by such Lender
hereunder.
(iv)Confirmation of Delivery, Risk of Loss, Delivery Charges.
Unless Administrative Agent receives notice from the applicable
Borrower within seven Business Days of such Borrower's receipt of any
Gold, the quantity and quality of the Gold so received shall be
deemed to be as set forth in Administrative Agent's delivery order.
If there is any discrepancy in the amount or quality of Gold actually
Delivered, the amount of such difference shall be settled in Dollars
(based on the Dollar Equivalent on the date of Delivery of the Gold
required to be advanced hereunder and the Gold actually Delivered)
promptly after the Delivery thereof. Borrowers assume all risk of
loss, theft or detention of or damage to any Gold Delivered hereunder
from the date the applicable Borrower receives Delivery of such Gold
until the date of its return by Delivery to Administrative Agent.
The applicable Borrower shall pay all costs and charges (including
costs and expenses of collection, shipment, cartage, warehousing,
packaging, refining, converting or insurance and any applicable
location premiums) directly relating to the physical Delivery of Gold
pursuant to this Agreement incurred on and after request for Delivery
of Gold by such Borrower until return of Gold by such Borrower at the
required location.
D. The Register.
(i)Administrative Agent shall maintain, at its U.S. Lending
Office, a register for the recordation of the names and addresses of
Lenders and the Commitments and Loans of each Lender from time to
time (the "Register"). Borrowers, Agents and Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available
for inspection by Company, any Borrower, any Agent or any Lender at
any reasonable time and from time to time upon reasonable prior
notice.
(ii)Administrative Agent shall record in the Register the
Commitments and the Loans from time to time of each Lender and each
repayment or prepayment in respect of the principal amount of the
Loans of each Lender. Any such recordation shall be conclusive and
binding on Company and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Borrower's Obligations in respect
of the applicable Loans.
36 <PAGE>
(iii)Each Lender may record on its internal records (including,
without limitation, any promissory note described in subsection 2.1E)
the amount of each Loan made by it and each payment in respect
thereof; provided that in the event of any inconsistency between the
Register and any Lender's records, the recordations in the Register
shall govern, absent manifest error.
E. Note Option. If so requested by any Lender by written notice to
the applicable Borrower (with a copy to Administrative Agent), the Borrower to
whom such request is made shall execute and deliver to such Lender (within
three Business Days of Company's receipt of such notice) a promissory note
substantially in the form of Exhibit IV-A to this Agreement to evidence such
Lender's Canadian Loans (other than Gold Loans), in the form of Exhibit IV-B
to the Existing Credit Agreement to evidence such Lender's U.S. Loans (other
than Gold Loans), or a Grid Gold Acknowledgement in the form of Exhibit V to
this Agreement to evidence such Lender's Gold Loans.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6
and 10.7 each Loan shall bear interest on the unpaid principal amount thereof
from the date made through maturity (whether by acceleration or otherwise) at
a rate determined by reference to: (i) the U.S. Base Rate or the Adjusted
Eurodollar Rate in the case of any Dollar Loan; (ii) the Canadian Base Rate in
the case of any Canadian Dollar Loan; or (iii) the Gold Rate in the case of
any Gold Loan. The applicable basis for determining the rate of interest with
respect to any Dollar Loan shall be selected by the applicable Borrower
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B. The basis for determining the interest rate with
respect to any Dollar Loan may be changed from time to time pursuant to
subsection 2.2D. If on any day any Dollar Loan is outstanding with respect to
which notice has not been delivered to Administrative Agent in accordance with
the terms of this Agreement specifying the applicable basis for determining
the rate of interest, then for that day that Dollar Loan shall bear interest
determined by reference to the U.S. Base Rate.
Subject to the provisions of subsections 2.2E and 10.7, the Loans
shall bear interest through maturity as follows:
(i)if a U.S. Base Rate Loan, then at the U.S. Base Rate per annum;
(ii)if a Canadian Base Rate Loan, then at the Canadian Base Rate
per annum;
37 <PAGE>
(iii)if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Interest Rate Margin per annum; or
(iv)if a Gold Loan, then at the sum of the Gold Rate plus the
Interest Rate Margin per annum;
The "Interest Rate Margin" shall equal five-eighths of one percent
(0.625%).
B. Interest Periods. In connection with each Eurodollar Rate Loan
and each Gold Loan, the applicable Borrower may, pursuant to the applicable
Notice of Borrowing or Notice of Conversion/Continuation, as the case may be,
select an Interest Period to be applicable to such Loan; provided that:
(i)the initial Interest Period for any Eurodollar Rate Loan or
Gold Loan shall commence on the Funding Date of such Loan, in the
case of a Loan initially made as a Eurodollar Rate Loan or a Gold
Loan, or on the date specified in the applicable Notice of
Conversion/Continuation, in the case of any Loan converted into a
Eurodollar Rate Loan;
(ii)in the case of immediately successive Interest Periods
applicable to any Eurodollar Rate Loan or Gold Loan continued as such
pursuant to a Notice of Conversion/Continuation, each such successive
Interest Period shall commence on the day on which the preceding
Interest Period expires;
(iii)if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, in the case of a Eurodollar
Rate Loan, if any Interest Period would otherwise expire on a day
that is not a Business day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iv)any Interest Period for a Eurodollar Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall, subject to clause (v) of this
subsection 2.2B, end on the last Business Day of a calendar month;
(v)no Interest Period with respect to any Loan shall extend beyond
the Commitment Termination Date; and
(vi)there shall be no more than five Interest Periods relating to
Eurodollar Rate Loans outstanding at any time and there shall be no
more than five Interest Periods relating to Gold Loans outstanding at
any time.
38 <PAGE>
C. Interest Payments; Currencies. Subject to the provisions of
subsection 2.2E, interest on each Loan shall be payable in arrears on and to
each Interest Payment Date applicable to that Loan, upon any prepayment of
that Loan (to the extent accrued on the amount being prepaid) and at maturity.
All payments of interest shall be paid to Administrative Agent in accordance
with the provisions of subsection 2.4B.
Interest payable on any Loan denominated in a currency shall be
payable in the same currency. Interest payable on any Gold Loan shall be
payable, at Borrowers' option, in (a) Gold or (b) Dollars in amounts
determined in accordance with the provisions of 2.2F. Each Borrower shall
advise Administrative Agent of its intention to pay interest on Gold Loans in
Gold in the applicable Notice of Borrowing or Notice of Conversion/
Continuation; provided that Administrative Agent shall, notwithstanding any
request of any Borrower to pay such interest in Gold, have the right to
require that interest with respect to any Gold Loan be paid in Dollars by
notice given on or before the related Funding Date in the case of the initial
Interest Period, and prior to the date of continuation, in the case of a
continuation. If any Borrower fails timely to advise Administrative Agent of
its desire to pay accrued interest in Gold, such Borrower shall be deemed to
have elected to pay such interest in Dollars.
D. Conversion or Continuation. Subject to the provisions of
subsection 2.6, each Borrower shall have the option (i) to convert at any time
all or any part of its outstanding Dollar Loans equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount from Dollar Loans
bearing interest at a rate determined by reference to one basis to Dollar
Loans bearing interest at a rate determined by reference to an alternative
basis, (ii) upon the expiration of any Interest Period applicable to a
Eurodollar Rate Loan to continue all or any portion of such Eurodollar Rate
Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of
that amount as a Eurodollar Rate Loan or (iii) upon the expiration of any
Interest Period applicable to a Gold Loan to continue all or any portion of
such Gold Loan equal to 10,000 Ounces and integral multiples of 2,000 Ounces
in excess of that amount as a Gold Loan; provided, however, that a Eurodollar
Rate Loan may only be converted into a U.S. Base Rate Loan on the expiration
date of an Interest Period applicable thereto; provided further that, subject
to the following proviso, no Loan may be made as or converted into a U.S. Base
Rate Loan during the period from December 24 of any year to and including
January 7 of the immediately succeeding year for the purpose of investing in
securities bearing interest at a rate determined by reference to any other
basis for the purpose of arbitrage or speculation; and provided still further
that no Loan may be converted into, or continued as, a Eurodollar Rate Loan or
a Gold Loan at any time that a Potential Event of Default or an Event of
Default has occurred and is continuing.
39 <PAGE>
The applicable Borrower shall deliver a Notice of Conversion/
Continuation to Administrative Agent no later than 12:00 Noon (New York time)
at least one Business Day in advance of the proposed conversion/continuation
date, in the case of a conversion to a U.S. Base Rate Loan, and at least three
Business Days in advance of the proposed conversion/continuation date, in the
case of a conversion to, or a continuation of, a Eurodollar Rate Loan or a
continuation of a Gold Loan. A Notice of Conversion/Continuation shall
specify (i) the applicable Borrower, (ii) the proposed conversion/continuation
date (which shall be a Business Day), (iii) the amount of the Loan to be
converted/continued, (iv) the nature of the proposed conversion/continuation,
(v) in the case of a conversion to or a continuation of a Eurodollar Rate Loan
or a continuation of a Gold Loan, the requested Interest Period, (vi) in the
case of the continuation of a Gold Loan, whether the Borrower is requesting to
pay interest in Dollars or in Gold, and if payable in Dollars, the basis for
calculating the amount according to one of the alternatives specified in
subsection 2.2F, and (vii) in the case of a conversion to or a continuation of
a Eurodollar Rate Loan or a continuation of a Gold Loan, that no Potential
Event of Default or Event of Default has occurred and is continuing. In lieu
of delivering the above-described Notice of Conversion/Continuation, the
applicable Borrower may give Administrative Agent telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2D; provided that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Administrative Agent on or
before the proposed conversion/continuation date.
Neither Administrative Agent nor any Lender shall incur any
liability to any Borrower in acting upon any telephonic notice referred to
above that Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized to act on behalf of the
applicable Borrower or for otherwise acting in good faith under this
subsection 2.2D, and upon conversion or continuation of the applicable basis
for determining the interest rate with respect to any Loans in accordance with
this Agreement pursuant to any such telephonic notice the applicable Borrower
shall have effected a conversion or continuation, as the case may be,
hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of a
Eurodollar Rate Loan or a continuation of a Gold Loan (or telephonic notice in
lieu thereof) shall be irrevocable when given, and the Borrower delivering
such Notice of Conversion/Continuation shall be bound to effect a conversion
or continuation in accordance therewith.
If any Borrower fails to submit a Notice of Conversion/
Continuation with respect to any maturing Eurodollar Rate Loans in accordance
40 <PAGE>
with the forgoing provisions of this subsection 2.2D, then upon the expiration
of the Interest Period for such Eurodollar Rate Loans, such Loans shall
automatically be converted into U.S. Base Rate Loans. If any Borrower fails
to submit a Notice of Conversion/Continuation with respect to any maturing
Gold Loans in accordance with the forgoing provisions of this subsection 2.2D,
then upon the expiration of the Interest Period for such Gold Loans, such
Loans shall automatically be continued as Gold Loans having a 30-day Interest
Period.
E. Post-Maturity Interest. Any principal payments on the Loans not
paid when due and, to the extent permitted by applicable law, any interest
payments on the Loans owed hereunder not paid when due, in each case whether
at stated maturity, by notice of prepayment, by acceleration or otherwise,
shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable under this Agreement in respect of such Loans (or in
the case of any fees or other amounts, a rate which is 2% per annum in excess
of the interest rate otherwise payable under this Agreement for U.S. Base Rate
Loans); provided that, in the case of Eurodollar Rate Loans or Gold Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective, such Eurodollar Rate Loans or Gold
Loans (in the case of Gold Loans, by converting the outstanding amount of such
Loans into Dollars based on the Price of Gold as in effect on such expiration
date) shall thereupon become U.S. Base Rate Loans and shall thereafter bear
interest payable upon demand at a rate which is 2% per annum in excess of the
interest rate otherwise payable under this Agreement at such time for U.S.
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of any Agent or any Lender.
F. Computation of Interest. Interest on the Loans denominated in
currency shall be computed, in the case of Base Rate Loans, on the basis of a
365-day or 366-day year, as the case may be, or in the case of Eurodollar Rate
Loans, on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues, and shall be determined
daily with respect to the amount of such Loans outstanding each day during
such period. Interest on each Gold Loan shall be computed on the basis of a
360-day year and the actual number of days elapsed in the period during which
it accrues and shall be determined daily (i) in the case of interest to be
paid in Gold, with respect to the number of Ounces of Gold outstanding under
such Gold Loan on each day during such period, or (ii) in the case of interest
to be paid in Dollars, with respect to the average of the daily values (such
41 <PAGE>
values being equal to the number of Ounces of such Gold Loan multiplied by the
Price of Gold) of such Gold Loan, in Dollar Equivalents (determined daily
unless the applicable Borrower requests in its Notice of Borrowing or Notice
of Conversion/Continuation that the Price of Gold be fixed at the Price of
Gold on the second Business Day prior to the related Interest Period for the
purpose of determining accrued interest during the applicable Interest Period
and Requisite Lenders have not objected on or before the commencement of such
Interest Period, in their sole discretion, to use such fixed price for such
purpose during such period), for each day during such period. In computing
interest on any Loan, the date of the making of such Loan or the first day of
an Interest Period applicable to such Loan or, with respect to a U.S. Base
Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion
of such Eurodollar Rate Loan to such U.S. Base Rate Loan, shall be included,
and the date of payment of such Loan or the expiration date of an Interest
Period applicable to such Loan or, with respect to a U.S. Base Rate Loan being
converted to a Eurodollar Rate Loan, the date of conversion of such U.S. Base
Rate Loan to such Eurodollar Rate Loan, shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall
be paid on that Loan.
For the purposes of this Agreement, whenever interest is
calculated on the basis of a year of 360 days, each rate of interest
determined pursuant to such calculation expressed as an annual rate for the
purposes of the Interest Act (Canada) is equivalent to such rate as so
determined multiplied by the actual number of days in the calendar year in
which the same is to be ascertained and divided by 360.
2.3 Fees.
A. Commitment Fees. Borrowers jointly and severally agree to pay to
Administrative Agent (i) for distribution to each Canadian Lender, in
proportion to that Lender's Pro Rata Share of the Canadian Allocation,
commitment fees for the period (A) from and including the Original Closing
Date to and excluding the Effective Date, equal to the quarterly average of
the daily excess of the Canadian Allocation over the Canadian Commitment Usage
(in Dollar Equivalents) multiplied by three-eighths of one percent (.375%) per
annum, and (B) from and after the Effective Date to and excluding the
Commitment Termination Date, equal to the quarterly average of the daily
excess of the Canadian Allocation over the Canadian Commitment Usage (in
Dollar Equivalents) multiplied by one-quarter of one percent (0.25%) per
annum, and (ii) for distribution to each U.S. Lender, in proportion to that
Lender's Pro Rata Share of the U.S. Allocation, commitment fees for the period
(A) from and including the Original Closing Date to and excluding the
Effective Date, equal to the quarterly average of the daily excess of the U.S.
Allocation over the U.S. Commitment Usage multiplied by three-eighths of one
percent (.375%) per annum, and (B) from and after the Effective Date to and
42 <PAGE>
excluding the Commitment Termination Date, equal to the quarterly average of
the daily excess of the U.S. Allocation over the U.S. Commitment Usage
multiplied by one-quarter of one percent (0.25%) per annum; all such
commitment fees to be payable in Dollars, quarterly in arrears on March 31,
June 30, September 30 and December 31 of each year and on the Commitment
Termination Date and to be calculated on the basis of a 360-day year, in the
case of fees payable in relation to the U.S. Allocation, or a 365 or 366-day
year (as applicable), in the case of fees payable in relation to the Canadian
Allocation and, in each case, the actual number of days elapsed. Reductions
in the amounts available for borrowing under the Commitments arising from the
operation of the limitations set forth in clauses (a), (b), (e) and (f) of
subsection 2.1A(iii) shall not constitute usages of Commitments for purposes
of this subsection 2.3A and shall not reduce the amount of the commitment fees
that are payable under this subsection 2.3A.
B. Other Fees. Company and Borrowers agree to pay to Administrative
Agent the fees agreed to, and in the amounts and at the times, set forth in
writing among Company, Borrowers and Administrative Agent.
2.4 Prepayments and Reductions in Commitments; General Provisions
Regarding Payments.
A. Prepayments; Reductions in Commitments; Cash Collateralization of
Standby Letters of Credit.
(i)Voluntary Prepayments. Each Borrower may, upon not less than
one Business Day's (in the case of Base Rate Loans) or three Business
Days' (in the case of Eurodollar Rate Loans or Gold Loans) prior
written notice to Administrative Agent (which notice Administrative
Agent will promptly transmit by telecopy, telegram, telex or
telephone to each U.S. Lender or Canadian Lender, as appropriate), at
any time and from time to time prepay any Loans in whole or in part
on any Business Day (a) in an aggregate minimum amount of $5,000,000
and integral multiples of $1,000,000 in excess of that amount in the
case of Dollar Loans, (b) in an aggregate minimum amount of
Cdn.$5,000,000 and integral multiples of Cdn.$1,000,000 in excess of
that amount in the case of Canadian Dollar Loans, or (c) in an
aggregate minimum amount of 10,000 Ounces and integral multiples of
2,000 Ounces in excess of that amount in the case of Gold Loans;
provided, however, that if a Eurodollar Rate Loan or a Gold Loan is
prepaid on a date other than the last day of the Interest Period
applicable thereto, the Borrower making such prepayment shall be
liable for any payments required by subsection 2.6D. Notice of
prepayment having been given as aforesaid, the principal amount of
the Loans specified in such notice shall become due and payable on
43 <PAGE>
the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in subsection 2.4A(iv).
(ii)Voluntary Reductions of Commitments. Borrowers may, upon not
less than three Business Days' prior written notice to Administrative
Agent (which notice Administrative Agent will promptly transmit by
telecopy, telegram, telex or telephone to each Lender), at any time
and from time to time terminate in whole or permanently reduce in
part, without premium or penalty, the Commitments in an amount up to
the amount by which the Commitments exceed the Total Utilization of
Commitments at the time of such proposed termination or reduction;
provided that any such partial reduction of the Commitments shall be
in an aggregate minimum amount of $5,000,000 and integral multiples
of $1,000,000 in excess of that amount; and provided further no
reduction shall reduce the Canadian Allocation to any amount that is
less than the Canadian Commitment Usage or the U.S. Allocation to an
amount that is less than the U.S. Commitment Usage. Borrowers'
notice to Administrative Agent shall designate the date (which shall
be a Business Day) of such termination or reduction, the amount of
any partial reduction and the allocation of any reduction between the
Canadian Allocation and the U.S. Allocation, and such termination or
reduction of the Commitments shall be effective on the date specified
in Borrowers' notice and shall reduce the Commitment of each Lender
proportionately to its Pro Rata Share.
(iii)Mandatory Prepayments of Loans. (a) Borrowers shall prepay
Loans denominated in currency and/or reduce the outstanding Canadian
Letter of Credit Usage or U.S. Letter of Credit Usage (it being
agreed and understood that, for the purposes of this subsection
2.4A(iii) Canadian Letter of Credit Usage and/or U.S. Letter of
Credit Usage shall be reduced to the extent that the applicable
Borrower has cash collateralized its reimbursement obligations under
outstanding Letters of Credit pursuant to arrangements satisfactory
to Administrative Agent) to the extent necessary so that (1) the
Canadian Commitment Usage shall not exceed the Canadian Allocation
then in effect and (2) the U.S. Commitment Usage shall not exceed the
U.S. Allocation then in effect. Any such mandatory prepayments shall
be applied as specified in subsection 2.4A(iv)(c). Additionally, if
the value of any outstanding Gold Loans in Dollar Equivalents (based
upon the Price of Gold as of such date of determination) exceeds 150%
of the value of such Gold Loans in Dollar Equivalents (based on the
Price of Gold on the second Business Day prior to the related Gold
Advance Dates for such Gold Loans) then the applicable Borrower
shall upon demand from Administrative Agent be required to repay its
Gold Loans in an aggregate amount equal to the amount of such excess.
(b) Borrowers shall also prepay the Loans as required pursuant to
44 <PAGE>
subsection 10.26 upon a Company Change of Control.
(iv) Application of Prepayments.
(a)Application of Voluntary Prepayments. Any voluntary
prepayments by Borrowers pursuant to subsection 2.4A(i) shall be
applied to the Loans of each Borrower as specified by Borrowers;
(b)Application of Mandatory Prepayments. Any mandatory
prepayments by Borrowers pursuant to subsection 2.4A(iii)(b) shall
be applied to repay outstanding Loans and to reduce permanently
the Commitments (allocated ratably to the Canadian Allocation and
the U.S. Allocation unless otherwise specified by Borrowers).
(c)Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Any prepayment shall be applied first to
Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes
the amount of any payments required to be made by the applicable
Borrower pursuant to subsection 2.6D.
B. General Provisions Regarding Payments.
(i)Manner and Time of Payment. Borrowers shall make all payments
in respect of any Loan denominated in Dollars or Canadian Dollars in
Dollars or Canadian Dollars, respectively, and shall make all
payments in respect of Gold Loans in Dollars or, if a Borrower so
elects and, with respect to interest, Administrative Agent does not
require payment in Dollars, Gold. If Borrowers do not deliver
Administrative Agent at least two Business Days' prior written notice
of their intention to repay a Gold Loan in Gold, Borrowers shall be
deemed to have elected to repay such Loan in Dollars. If the
principal amount of any Gold Loan is to be repaid in Dollars, the
corresponding amount of Dollars to be repaid shall equal the Dollar
Equivalent of the amount of Gold constituting such Gold Loan
determined as of the second Business Day preceding the repayment
date.
(a)Currency Payments by U.S. Borrower. All currency payments
by U.S. Borrower of principal and interest in respect of
(1) Dollar Loans, (2) Gold Loans to be repaid in Dollars,
(3) Letters of Credit, and (4) fees and other Obligations
hereunder and under any Notes or Grid Gold Acknowledgements shall
be made in Dollars, in same day funds and without defense, setoff
or counterclaim, free of any restriction or condition, and
delivered to Administrative Agent not later than 12:00 Noon (New
45 <PAGE>
York time) on the date due at Administrative Agent's U.S. Lending
Office.
(b)Currency Payments by Canadian Borrower. All currency
payments by Canadian Borrower of principal and interest in respect
of (1) Loans (other than Gold Loans to be repaid in Gold), (2)
Gold Loans to be repaid in Dollars, (3) Letters of Credit, and
(4) any other fees and Obligations hereunder and under any Notes
or Grid Gold Acknowledgements shall be made in the same currency
as incurred, in same day funds and without defense, setoff or
counterclaim, free of any restriction or condition, and delivered
to Administrative Agent not later than 12:00 Noon (New York time)
on the date due at Administrative Agent's Canadian Lending Office.
(c)Gold Payments. All payments of Gold shall be made by
Delivery of such Gold to Administrative Agent's account with
Morgan Guaranty Trust Company, London, England, or such other
bullion depository as may be designated by Administrative Agent
from time to time, before 12:00 Noon (London time) on the day
specified for payment.
Funds or Gold received by Administrative Agent after the times
specified above on the due dates specified above shall be deemed to
have been paid by Borrowers on the next succeeding Business Day.
(ii)Application of Payments to Principal and Interest. All
payments in respect of the principal amount of any Loan shall include
payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments shall be applied to the payment of
interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments shall be apportioned among all outstanding Loans to which
such payments relate, in each case proportionately to each Lender's
respective Pro Rata Share of such Loans; provided, however, that
interest in respect of any Gold Loan shall be apportioned based on
the amount of accrued interest payable to each Lender funding such
Gold Loan in proportion to the amount of accrued interest payable to
all Lenders funding such Gold Loan. Subject to the last sentence of
subsection 2.7D, Administrative Agent shall promptly distribute to
each Lender, at its Lending Office or at such other address as such
Lender may request, its proportionate share of all such payments
received by Administrative Agent (or CIBC) and the commitment fees of
such Lender when received by Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of this
subsection 2.4B(iii), if, pursuant to the provisions of subsection
46 <PAGE>
2.6C, any Notice of Conversion/Continuation is withdrawn as to any
Affected Lender or if any Affected Lender makes U.S. Base Rate Loans
in lieu of its Pro Rata Share of any Eurodollar Rate Loans,
Administrative Agent shall give effect thereto in apportioning
payments received thereafter.
(iv)Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business
Day, such payment shall be made on the next succeeding Business Day,
but not later than the Commitment Termination Date, and such
extension of time shall be included in the computation of the payment
of interest hereunder or of the commitment fees hereunder, as the
case may be.
(v)Notation of Payment. Each Lender agrees that before disposing
of any Note or Grid Gold Acknowledgement held by it, or any part
thereof (other than by granting participations therein), that Lender
will make a notation thereon of all Loans evidenced by that Note and
all principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure to
make (or any error in the making of) a notation of any Loan made
under such Note or Grid Gold Acknowledgement shall not limit,
increase or otherwise affect the obligations of any Borrower
hereunder or under such Note or Grid Gold Acknowledgement with
respect to any Loan or any payments of principal or interest on such
Note or Grid Gold Acknowledgement.
2.5 Use of Proceeds.
A. Loans. The proceeds of the Loans shall be used by Borrowers for
working capital purposes and general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by any Borrower, Company or any of its
Subsidiaries in any manner that might cause the borrowing or the application
of such proceeds to violate Regulation G, Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation of such Board or to violate the Exchange Act, in each case as
in effect on the date or dates of such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans and Gold Loans.
Notwithstanding any other provision of this Agreement to the
contrary, the provisions set forth in this subsection 2.6 shall govern with
47 <PAGE>
respect to Eurodollar Rate Loans and Gold Loans as to the matters covered.
A. Determination of Adjusted Eurodollar Rate and Gold Rate.
(i)Eurodollar Rate Loans. As soon as practicable after 10:00 A.M.
(New York time) on any Interest Rate Determination Date with respect
to any Eurodollar Rate Loan, Administrative Agent shall determine
(which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall
apply to such Eurodollar Rate Loan for which an interest rate is then
being determined for the applicable Interest Period and shall
promptly give notice thereof (in writing or by telephone confirmed in
writing) to the applicable Borrower and each Lender.
(ii)Gold Loans. As soon as practicable after 10:00 A.M. (New York
time) on the Interest Rate Determination Date with respect to any
Gold Loan, each Lender shall notify Administrative Agent of its Gold
Rate that shall apply to such Gold Loan for which an interest rate is
then being determined for the applicable Interest Period, and
Administrative Agent shall promptly give notice thereof (in writing
or by telephone confirmed in writing) to the applicable Borrower and
each Lender. If the Gold Rate quoted by any single Lender is for two
successive Interest Periods more than 120% of the average Gold Rates
quoted by the other Lenders, Borrowers shall afford such Lender the
opportunity to reduce its rates. If such Lender fails to reduce its
rates or if any Lender fails to quote a Gold Rate for two successive
Interest Periods (the "Selling Lender"), Borrowers shall have the
right upon 20 days' notice to each Lender and upon consent by
Requisite Lenders, which consent shall not be unreasonably withheld,
and so long as no Potential Event of Default or Event of Default
shall have occurred, to substitute Eligible Assignees for the Selling
Lender and any Lender that belongs to the Selling Lender's Lending
Unit hereunder; provided such substitute Lenders, taken together,
will constitute a Lending Unit. If Borrowers select such substitute
Lenders, the Selling Lender, and any other Lender belonging to the
Selling Lender's Lending Unit, shall assign their Notes, Grid Gold
Acknowledgements and rights under this Agreement to such substitute
Lenders in accordance with subsection 10.1B (but without the payment
of any recordation fee) for the amount due on prepayment pursuant to
subsection 2.4(A)(i) together with any amounts that may be due
pursuant to subsection 2.6D.
B. Inability to Determine Applicable Interest Rate. If
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto) on any Interest Rate
48 <PAGE>
Determination Date that by reason of circumstances affecting the interbank
Eurodollar market or because no Reference Lender is able to provide its
quotation of a rate, in the case of Eurodollar Rate Loans, or affecting the
international precious metals markets, in the case of Gold Loans, adequate and
fair means do not exist for ascertaining the interest rate applicable to such
Loans, Administrative Agent shall on such date give notice (by telecopy or by
telephone confirmed in writing) to Borrowers and each Lender of such
determination, whereupon (i) no Loans may be made as, or continued or
converted to, Eurodollar Rate Loans or made or continued as Gold Loans, as the
case may be, until such time as Administrative Agent notifies Borrowers and
Lenders that the circumstances giving rise to such notice no longer exist and
(ii) any Notice of Borrowing or Notice of Conversion/Continuation given by any
Borrower with respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by such Borrower.
C. Illegality or Impracticability of Eurodollar Rate Loans or Gold
Loans. If on any date any Lender (including Administrative Agent or any
Managing Agent) shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto but shall be made only after
consultation with Administrative Agent) that the making, maintaining or
continuation of its Eurodollar Rate Loans or Gold Loans, as the case may be,
(i) has become unlawful as a result of compliance by such Lender with any law,
treaty, governmental rule, regulation, guideline or order (or would conflict
with any such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith would not
be unlawful) or (ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after the date of
this Agreement which materially and adversely affect the interbank Eurodollar
market (in the case of Eurodollar Rate Loans), the international precious
metals markets (in the case of Gold Loans) or the position of such Lender in
any such market, then, and in any such event, such Lender shall be an
"Affected Lender" and it shall on that day give notice (by telecopy or by
telephone confirmed in writing) to Borrowers and Administrative Agent of such
determination (which notice Administrative Agent shall promptly transmit to
each other Lender). Thereafter, (a) the obligation of the Affected Lender to
make Loans as, or to convert Loans to or continue Loans as, Eurodollar Rate
Loans or Gold Loans, as the case may be, shall be suspended until such notice
shall be withdrawn by the Affected Lender, (b) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan or a
Gold Loan then being requested by a Borrower pursuant to a Notice of Borrowing
or a Notice of Conversion/Continuation, the Affected Lender shall make such
Loan as (or convert such Loan to, as the case may be) a U.S. Base Rate Loan,
(c) the Affected Lender's obligation to maintain its outstanding Eurodollar
Rate Loans or Gold Loans, as the case may be (the "Affected Loans"), shall be
49 <PAGE>
terminated at the earlier to occur of the expiration of the Interest Period
then in effect with respect to the Affected Loans or if earlier when required
by law, and (d) the Affected Loans shall automatically convert into U.S. Base
Rate Loans on the date of such termination. Notwithstanding the foregoing, to
the extent a determination by an Affected Lender as described above relates to
a Eurodollar Rate Loan or Gold Loan then being requested by any Borrower
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, such
Borrower shall have the option, subject to the provisions of subsection 2.6D,
to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to
all Lenders by giving notice (by telecopy or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each
other Lender). Except as provided in the immediately preceding sentence,
nothing in this subsection 2.6C shall affect the obligation of any Lender
other than an Affected Lender to make or maintain Loans as, or to convert or
continue Loans as, Eurodollar Rate Loans or Gold Loans in accordance with the
terms of this Agreement. Borrowers shall have the right upon 20 days' notice
to each Lender and upon consent by Requisite Lenders, which consent shall not
be unreasonably withheld, and so long as no Potential Event of Default or
Event of Default shall have occurred, to substitute Eligible Assignees for the
Affected Lender and any Lender that belongs to the Affected Lender's Lending
Unit hereunder; provided such substitute Lenders, taken together, will
constitute a Lending Unit. If Borrowers select such substituted Lenders, the
Affected Lender, and any other Lender belonging to the Affected Lender's
Lending Unit, shall assign their Notes, Grid Gold Acknowledgements and rights
under this Agreement to such substitute Lenders in accordance with subsection
10.1B (but without the payment of any recordation fee) for the amount due on
prepayment pursuant to subsection 2.4(A)(i) together with any amounts that may
be due pursuant to subsection 2.6D.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Any Borrower having borrowed, or having delivered a Notice of Borrowing or a
Notice of Conversion/Continuation to request to borrow, convert or continue,
any Eurodollar Rate Loan or Gold Loan shall compensate each Lender, upon
written request by that Lender (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by that Lender to lenders of
funds (or Gold in the case of Gold Loans) borrowed by it to make or carry its
Eurodollar Rate Loans or Gold Loans, as the case may be) (including loss of
anticipated profits) sustained by that Lender in connection with the
liquidation or re-employment of such funds (or Gold), which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) the
50
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borrowing of the Eurodollar Rate Loan or Gold Loan requested by such Borrower
does not occur on a date specified therefor in such Notice of Borrowing or a
telephonic request for borrowing, or the conversion to or continuation
requested by such Borrower of any Eurodollar Rate Loan or Gold Loan does not
occur on a date specified therefor in a Notice of Conversion/Continuation or a
telephonic request for conversion or continuation, (ii) if any prepayment or
conversion of any Eurodollar Rate Loans or Gold Loans made to such Borrower by
such Lender occurs on a date that is not the last day of an Interest Period
applicable to that Loan, (iii) if any prepayment of any such Eurodollar Rate
Loans or Gold Loans is not made on any date specified in a notice of
prepayment given by such Borrower, or (iv) as a consequence of any other
default by such Borrower to repay its Eurodollar Rate Loans or Gold Loans when
required by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Subject to the provisions of
subsection 10.8, any Lender may make, carry or transfer Eurodollar Rate Loans
at, to, or for the account of any of its branch offices or the office of an
Affiliate of that Lender.
F. Assumptions Concerning Funding of Eurodollar Rate Loans.
Calculation of all amounts payable to a Lender under this subsection 2.6 and
under subsection 10.7A shall be made as though that Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar deposit bearing interest at the rate obtained pursuant to clause
(i) of the definition of Adjusted Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity comparable to the
relevant Interest Period and through the transfer of such Eurodollar deposit
from an offshore office of that Lender to a domestic office of that Lender in
the United States of America or Canada; provided, however, that each Lender
may fund each of its Eurodollar Rate Loans in any manner it sees fit and the
foregoing assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection 10.7A.
G. Eurodollar Rate Loans and Gold Loans After Default. After the
occurrence of and during the continuation of a Potential Event of Default or
an Event of Default, (i) Borrowers may not elect to have a Loan be made or
maintained as, or converted to, a Eurodollar Rate Loan or Gold Loan after the
expiration of any Interest Period then in effect for that Loan and
(ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or
Notice of Conversion/Continuation given by a Borrower with respect to a
requested borrowing or conversion/continuation that has not yet occurred shall
be deemed to be rescinded by such Borrower.
51 <PAGE>
2.7 Letters of Credit
A. Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Company
and Borrowers set forth herein, (A) CIBC hereby agrees to maintain the
Existing Letters of Credit as of the Effective Date, and (B) each Borrower may
request, in accordance with the provisions of this subsection 2.7A, that on
and after the Effective Date CIBC issue Letters of Credit for the account of
such Borrower denominated in (i) Dollars (in the case of U.S. Borrower) or
(ii) Canadian Dollars or Dollars (in the case of Canadian Borrower). Such
Letters of Credit shall be issued solely for the purpose of supporting the
obligations of Borrowers and their respective Subsidiaries. Issuances of
Letters of Credit shall be subject to the following limitations:
(i)No Borrower shall request any Letter of Credit if, after giving
effect to such issuance, (a) the Total Utilization of Commitments
would exceed the Commitments, (b) the Canadian Commitment Usage would
exceed the Canadian Allocation, (c) the U.S. Commitment Usage would
exceed the U.S. Allocation or (d) the Letter of Credit Usage would
exceed $30,000,000; and
(ii)In no event shall CIBC issue, reissue, amend or permit the
extension of: (x) any Letter of Credit having an expiration date
later than the Commitment Termination Date in effect at the time of
issuance, reissuance, amendment or extension (automatic or otherwise)
thereof; (y) subject to the foregoing clause (x), any Letter of
Credit having an expiration date more than one year after its date of
issuance; provided that subject to the foregoing clause (x), this
clause (y) shall not prevent CIBC from agreeing that a Letter of
Credit will automatically be extended annually for a period not to
exceed one year if CIBC does not cancel such extension.
It shall be a condition precedent to the issuance of any Letter of
Credit in accordance with the provisions of this subsection 2.7 that each
condition set forth in subsection 3.3 shall have been satisfied.
Immediately upon the issuance of each Letter of Credit, each Canadian
Lender, in the case of any Letter of Credit issued for the account of Canadian
Borrower, or each U.S. Lender, in the case of any Letter of Credit issued for
the account of U.S. Borrower, shall be deemed to, and hereby agrees to, have
irrevocably purchased from CIBC an undivided and continuing participation in
such Letter of Credit and drawings thereunder in an amount equal to such
Lender's Pro Rata Share of the maximum amount which is or at any time may
become available to be drawn thereunder.
52 <PAGE>
CIBC may (but shall not be required to) pay the beneficiary thereof
upon the occurrence of an Event of Default and the acceleration of the
maturity of the Loans or, if payment is not then due to the beneficiary,
provide for the deposit of funds in an account to secure payment to the
beneficiary and any funds so deposited shall be paid to the beneficiary of the
Letter of Credit if conditions to such payment are satisfied or returned to
CIBC for distribution to Lenders (or, if all Obligations shall have been
indefeasibly paid in full, to the applicable Borrower) if no payment to the
beneficiary has been made and 30 days after the final date available for
drawings under the Letter of Credit has passed. Each payment or deposit of
funds by CIBC as provided in this paragraph shall be treated for all purposes
of this Agreement as a drawing duly honored by CIBC under the related Letter
of Credit.
B. Notice of Issuance. Whenever Canadian Borrower desires the
issuance of a Letter of Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit in the form of Exhibit XI hereto no
later than 1:00 P.M. (New York time) at least five Business Days or such
shorter period as may be agreed to by CIBC in any particular instance, in
advance of the proposed date of issuance. Whenever U.S. Borrower desires the
issuance of a Letter of Credit, it shall deliver to Administrative Agent a
Notice of Issuance of Letter of Credit in the form of Exhibit XI hereto no
later than 1:00 P.M. (New York time) at least five Business Days or such
shorter period as may be agreed to by CIBC in any particular instance, in
advance of the proposed date of issuance. Each Notice of Issuance of Letter
of Credit shall specify (i) the Borrower, (ii) the proposed date of issuance
(which shall be a Business Day), (iii) the face amount of the Letter of
Credit, (iv) the expiration date of the Letter of Credit, (v) the name and
address of the beneficiary, (vi) a summary of the purpose and the verbatim
text of such Letter of Credit, and (vii) a precise description of the
documents and the proposed text of any certificate to be presented by the
beneficiary which, if presented by the beneficiary prior to the expiration
date of the Letter of Credit, would require CIBC to make payment under the
Letter of Credit; provided that CIBC, in its sole reasonable judgment, may
require changes in any such documents and certificates; and provided further
that no Letter of Credit shall require payment against a conforming draft to
be made thereunder on the same Business Day that such draft is presented if
such presentation is made after 11:00 A.M. (New York time) on such Business
Day. Promptly upon the issuance of a Letter of Credit, CIBC shall notify the
applicable Lenders of the applicable Borrower of such issuance and the details
thereof. In determining whether to pay under any Letter of Credit, CIBC shall
be responsible only to determine that the documents and certificates required
to be delivered under that Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of Credit.
53 <PAGE>
C. Payment of Amounts Drawn Under Letters of Credit. In the event of
any drawing under any Letter of Credit by the beneficiary thereof, CIBC shall
promptly notify the Borrower for whose account such Letter of Credit was
issued, and such Borrower shall reimburse CIBC on the date on which such
drawing is honored in the same currency as the drawing in an amount in same
day funds equal to the amount of such drawing; provided that, anything
contained in this Agreement to the contrary notwithstanding, (i) unless such
Borrower shall have notified Administrative Agent prior to 11:00 A.M. (New
York time) on the Business Day immediately prior to the date of such drawing
that such Borrower intends to reimburse CIBC for the amount of such drawing
with funds other than the proceeds of Loans, such Borrower shall be deemed to
have given a Notice of Borrowing to Administrative Agent requesting, in the
case of Canadian Borrower, Canadian Lenders to make Canadian Loans (which
shall be Base Rate Loans denominated in the same currency as the drawing) to
the extent of the unused Canadian Allocation on the date on which such drawing
is honored in an amount equal to the amount of such drawing or, in the case of
U.S. Borrower, U.S. Lenders to make U.S. Loans (which shall be Base Rate
Loans) to the extent of the unused U.S. Allocation on the date on which such
drawing is honored in an amount equal to the amount of such drawing, and
(ii) subject to satisfaction or waiver of the conditions specified in
subsection 3.2, such Lenders shall, on the date of such drawing, make such
Loans in the aggregate amount of such drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse CIBC for the amount of
such drawing; and provided further that, if Loans are required to be made and
for any reason proceeds of Loans are not received by CIBC on such date in an
amount equal to the amount of such drawing, the applicable Borrower shall
reimburse CIBC, on the Business Day immediately following the date of such
drawing, in an amount in same day funds (and in the same currency as the
unreimbursed drawing) equal to the excess of the amount of such drawing over
the amount of such Loans which are so received, plus accrued interest on such
amount at the rate set forth in subsection 2.7E(ii).
D. Payment by Lenders with Respect to Letters of Credit. If any
Borrower shall fail to reimburse CIBC as provided in subsection 2.7C in an
amount equal to the amount of any drawing honored by CIBC under a Letter of
Credit issued by CIBC for the account of such Borrower, CIBC shall promptly
notify each Canadian Lender, in the case of any drawing under a Letter of
Credit issued for the account of Canadian Borrower, or each U.S. Lender, in
the case of any drawing under a Letter of Credit issued for the account of
U.S. Borrower, of the unreimbursed amount of such drawing, the currency in
which such drawing was funded, and of such Lender's respective participation
therein, which participation shall be equal to such Lender's Pro Rata Share of
the unreimbursed amount of such drawing. Each Lender shall make available to
CIBC an amount equal to its respective participation in same day funds and in
54 <PAGE>
the same currency as the drawing, at the office of CIBC specified in such
notice, not later than 1:00 P.M. (New York time) on the day such notice is
given to such Lender by CIBC. If any Lender fails to make available to CIBC
the amount of such Lender's participation in such Letter of Credit as provided
in this subsection 2.7D, CIBC shall be entitled to recover such amount on
demand from such Lender together with interest at the customary rate set by
CIBC for the correction of errors among banks for three Business Days and
thereafter at the Canadian Base Rate, in the case of Canadian Dollar drawings,
or the U.S. Base Rate, in the case of Dollar drawings. Nothing in this
subsection 2.7 shall be deemed to prejudice the right of any Lender to recover
from CIBC any amounts made available by such Lender to CIBC pursuant to this
subsection 2.7D if the payment with respect to a Letter of Credit by CIBC in
respect of which payment was made by such Lender constituted gross negligence
or willful misconduct on the part of CIBC, as finally determined by a court of
competent jurisdiction. CIBC shall distribute to each other Lender which has
paid all amounts payable by it under this subsection 2.7D with respect to any
Letter of Credit issued by CIBC such other Lender's Pro Rata Share of all
payments received by CIBC from any Borrower in reimbursement of drawings
honored by CIBC under such Letter of Credit when such payments are received.
Notwithstanding anything to the contrary herein, each Lender which has paid
all amounts payable by it under this subsection 2.7D shall have a direct right
to reimbursement of such amounts from the applicable Borrower, subject to the
procedures for reimbursing Lenders set forth in this subsection 2.7.
E. Compensation. Each Borrower agrees to pay, without duplication,
the following amounts to CIBC with respect to each Letter of Credit issued by
CIBC for the account of such Borrower:
(i)with respect to each Letter of Credit, a letter of credit fee
payable to CIBC equal to 0.625% per annum of the maximum amount
available from time to time to be drawn under such Letter of Credit,
calculated on the basis of a 360-day year, in the case of Letters of
Credit issued for the account of U.S. Borrower, or a 365 or 366-day
year (as applicable) in the case of Letters of Credit issued for the
account of Canadian Borrower, and, in each case, the actual number of
days elapsed and payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each Fiscal Year in immediately
available funds and in the same currency as the Letter of Credit;
(ii)with respect to drawings made under any Letter of Credit,
interest, payable on demand in immediately available funds and in the
same currency as the drawing, on the amount paid by CIBC in respect
of each such drawing from the date of the drawing through the date
such amount is reimbursed by the applicable Borrower (but only if not
reimbursed when due) at a rate which is 2% per annum in excess of the
55 <PAGE>
rate of interest otherwise payable under this Agreement for Canadian
Base Rate Loans, in the case of any Canadian Dollar drawings, or U.S.
Base Rate Loans, in the case of any Dollar drawings; and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder, documentary and
processing charges in accordance with CIBC's standard schedule for
such charges in effect at the time of such issuance, amendment,
transfer or drawing, as the case may be.
Promptly upon receipt by CIBC of any amount described in subdivision
(i) or (ii) of this subsection 2.7E, CIBC shall distribute to each Canadian
Lender or U.S. Lender, as the case may be, its Pro Rata Share of such amount.
F. Obligations Absolute. The obligation of each Borrower to
reimburse CIBC for drawings made under the Letters of Credit issued for such
Borrower's account and the obligations of Lenders under subsection 2.7D shall
be unconditional and irrevocable and shall be paid strictly in accordance with
the terms of this Agreement under all circumstances including, without
limitation, the following circumstances:
(i)any lack of validity or enforceability of any Letter of Credit;
(ii)the existence of any claim, set-off, defense or other right the
applicable Borrower may have at any time against a beneficiary or any
transferee of any Letter of Credit (or any persons or entities for
whom any such transferee may be acting), CIBC, any Agent, any Lender
or any other Person, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction
(including any underlying transaction between such Borrower or any of
its Subsidiaries and the beneficiary for which the Letter of Credit
was procured);
(iii) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent or
invalid in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv)payment by CIBC against a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit unless CIBC failed to exercise reasonable care in ascertaining
whether such document appeared on its face to comply in all material
respects with such terms;
(v)any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
56 <PAGE>
(vi)the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing.
G. Additional Payments. If by reason of (a) any change in applicable
law, regulation, rule, decree or regulatory requirement or any change in the
interpretation or application by any judicial or regulatory authority of any
law, regulation, rule, decree or regulatory requirement or (b) compliance by
CIBC or any Lender with any direction, request or requirement (whether or not
having the force of law) of any governmental or monetary authority including,
without limitation, Regulation D:
(i)any reserve, deposit or similar requirement is or shall be
applicable, imposed or modified in respect of any Letters of Credit
issued by CIBC or participations therein purchased by any Lender; or
(ii)there shall be imposed on CIBC or any Lender any other
condition regarding this subsection 2.7, any Letter of Credit or any
participation therein;
and the result of the foregoing is to directly or indirectly increase the cost
to CIBC or any Lender of issuing, making or maintaining any Letter of Credit
or of purchasing or maintaining any participation therein, or to reduce the
amount receivable in respect thereof by CIBC or any Lender, then and in any
such case CIBC or such Lender may notify the Borrower for whose account such
Letter of Credit was issued and such Borrower shall pay within ten days of
receipt of notice such amounts as CIBC or such Lender may specify pursuant to
the certificate described below to be necessary to compensate CIBC or such
Lender for such additional cost or reduced receipt, together with interest on
such amount from the date of such demand until payment in full thereof at a
rate equal at all times to the U.S. Base Rate per annum. The determination by
CIBC or any Lender, as the case may be, of any amount due pursuant to this
subsection 2.7G as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall, in the absence of manifest error, be
final and conclusive and binding on all of the parties hereto.
H. Indemnification; Nature of CIBC's Duties. In addition to amounts
payable as elsewhere provided in this subsection 2.7, each Borrower hereby
agrees to protect, indemnify, pay and save CIBC harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) which CIBC may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit for the account of such Borrower, or (ii) the failure of CIBC
to honor a drawing under any such Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions herein
called "Government Acts").
57 <PAGE>
As between CIBC and any Borrower for whose account CIBC issues any
Letter of Credit, such Borrower assumes all risks of the acts and omissions of
or misuse of any such Letter of Credit by the beneficiary of any such Letter
of Credit. In furtherance and not in limitation of the foregoing, CIBC shall
not be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of such Letters of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any such Letter of Credit to comply fully with the conditions required in
order to draw upon such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) for errors in interpretation of technical terms; (vi) for any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof;
(vii) for the misapplication by the beneficiary of any such Letter of Credit
of the proceeds of any drawing under such Letter of Credit; and (viii) for any
consequences arising from causes beyond the control of CIBC, including,
without limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of any of CIBC's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by CIBC under or
in connection with the Letters of Credit issued by it or the related
certificates, if taken or omitted in good faith and without gross negligence
or willful misconduct as finally determined by a court of competent
jurisdiction, shall not put CIBC under any resulting liability to any Borrower
or Company.
Notwithstanding anything to the contrary contained in this subsection
2.7, no Borrower shall have any obligation to indemnify CIBC in respect of any
liability incurred by CIBC arising out of the gross negligence or willful
misconduct of CIBC, as finally determined by a court of competent
jurisdiction, or out of the wrongful dishonor by CIBC of proper demand for
payment made under the Letters of Credit issued by it; provided that payment
against a draft or demand presented after the expiration date of any Letter of
Credit shall be deemed to constitute gross negligence.
I. Computation of Interest. Interest payable pursuant to subsection
2.7 shall be computed on the basis of a 360-day year and the actual number of
58 <PAGE>
days elapsed in the period during which it accrues. For the purposes of this
subsection 2.7I, whenever interest is calculated on the basis of a year of 360
days, each rate of interest determined pursuant to such calculation expressed
as an annual rate for the purposes of the Interest Act (Canada) is equivalent
to such rate as so determined multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by 360.
Section 3. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND LOANS
AND LETTERS OF CREDIT
3.1 Conditions to Effectiveness.
The effectiveness of this Agreement is subject to the prior or
concurrent satisfaction of the following conditions:
A. Company Documents. On or before the Effective Date, Company shall
deliver or cause to be delivered to Lenders (or to Administrative Agent for
Lenders with sufficient originally executed copies, where appropriate, for
each Lender and its counsel) the following, each, unless otherwise noted,
dated the Effective Date:
(i)Certified copies of its Certificate of Incorporation, together
with a good standing certificate from the Secretary of State of the
States of Delaware and California, each dated a recent date prior to
the Effective Date;
(ii)Copies of its Bylaws, certified as of the Effective Date by its
corporate secretary or an assistant secretary;
(iii) Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement
and any other Loan Documents to which it is a party, certified as of
the Effective Date by its corporate secretary or an assistant
secretary as being in full force and effect without modification or
amendment;
(iv)Signature and incumbency certificates of its officers executing
this Agreement and any other Loan Documents to which it is a party;
(v)Executed originals of this Agreement and any other Loan
Documents to which it is a party; and
(vi)Such other documents as Administrative Agent or Managing Agents
may reasonably request.
B. Canadian Borrower Documents. On or before the Effective Date,
Canadian Borrower shall deliver or cause to be delivered to Lenders (or to
59 <PAGE>
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the Effective Date:
(i)Certified or notarial copies of Canadian Borrower's Certificate
of Incorporation, together with evidence of its corporate status in
the Provinces of Ontario and British Columbia, each dated a recent
date prior to the Effective Date;
(ii)Copies of Canadian Borrower's Bylaws, certified as of the
Effective Date by its corporate secretary or an assistant secretary;
(iii) Resolutions of Canadian Borrower's Board of Directors
approving and authorizing the execution, delivery and performance of
this Agreement and any other Loan Documents to which it is a party,
certified as of the Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
(iv)Signature and incumbency certificates of Canadian Borrower's
officers executing this Agreement and any other Loan Documents to
which it is a party;
(v)Executed originals of this Agreement, any Notes and any Grid
Gold Acknowledgements requested by Lenders and any other Loan
Documents to which Canadian Borrower is a party; and
(vi)Such other documents as Administrative Agent or Managing Agents
may reasonably request.
C. U.S. Borrower Documents. On or before the Effective Date, U.S.
Borrower shall deliver or cause to be delivered to Lenders (or to
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the Effective Date:
(i)Certified copies of U.S. Borrower's Articles of Incorporation,
together with good standing certificates from the Secretary of State
of the States of California, Nevada and South Dakota, each dated a
recent date prior to the Effective Date;
(ii)Copies of U.S. Borrower's Bylaws, certified as of the Effective
Date by its corporate secretary or an assistant secretary;
60 <PAGE>
(iii) Resolutions of U.S. Borrower's Board of Directors approving
and authorizing the execution, delivery and performance of this
Agreement and any other Loan Documents to which it is a party,
certified as of the Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
(iv)Signature and incumbency certificates of U.S. Borrower's
officers executing this Agreement and any other Loan Documents to
which it is a party;
(v)Executed originals of this Agreement, any Notes and any Grid
Gold Acknowledgements requested by Lenders and any other Loan
Documents to which U.S. Borrower is a party; and
(vi)Such other documents as Administrative Agent or Managing Agents
may reasonably request.
D. Opinions of Company's and Borrowers' Counsel. Administrative
Agent on behalf of Lenders, with sufficient originally executed copies for
each Lender, shall have received (i) originally executed copies of one or more
favorable written opinions of (a) Thelen, Marrin, Johnson & Bridges, counsel
for Company and U.S. Borrower, and (b) Wayne Kirk, Vice President and General
Counsel of Company and U.S. Borrower, each in form and substance reasonably
satisfactory to Administrative Agent and its counsel, each dated as of the
Effective Date and setting forth substantially the matters in the opinions
designated in Exhibits VII-A and VII-B, respectively, annexed hereto and as to
such other matters as Administrative Agent may reasonably request, and
(ii) originally executed copies of one or more favorable written opinions of
Osler, Hoskin & Harcourt, counsel for Canadian Borrower, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated as of
the Effective Date and setting forth substantially the matters designated in
Exhibit VIII annexed hereto and as to such other matters as Administrative
Agent may reasonably request.
E. Opinions of Administrative Agent's Counsel. Administrative Agent
on behalf of Lenders, with sufficient originally executed copies for each
Lender, shall have received originally executed copies of one or more
favorable written opinions of O'Melveny & Myers, counsel to Administrative
Agent, dated as of the Effective Date, substantially in the form of Exhibit IX
annexed hereto and as to such other matters as Administrative Agent may
reasonably request.
F. Fees. Company shall have paid to Administrative Agent for
distribution (as appropriate) to Managing Agents and Lenders the fees payable
on the Effective Date referred to in subsection 2.3.
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G. No Material Adverse Effect; New Disclosures. Since December 31,
1993, there shall not have occurred any change, or development or event
involving a prospective change, which in either case, in the opinion of
Lenders has had or could have a Material Adverse Effect, and Managing Agents
shall not have become aware of any previously undisclosed information with
respect to (i) the business, assets, operations, condition (financial or
otherwise) or prospects of Company, Company and its Subsidiaries taken as a
whole, or any Borrower, or (ii) Company's or any Borrower's ability to
perform, or the ability of Lenders to enforce, any of the Obligations.
H. Representations and Warranties; Performance of Agreements. Each
of Company, Canadian Borrower and U.S. Borrower shall have delivered to
Administrative Agent an Officers' Certificate, in form and substance
satisfactory to Administrative Agent, to the effect that the representations
and warranties in Section 4 hereof are true, correct and complete in all
material respects on and as of the Effective Date to the same extent as though
made on and as of that date and that each of Company, Canadian Borrower and
U.S. Borrower has performed in all material respects all agreements and
satisfied all conditions which each Loan Document provides shall be performed
or satisfied by it on or before the Effective Date except as otherwise
disclosed to and agreed to in writing by Administrative Agent and Requisite
Lenders.
I. No Disruption of Financial and Capital Markets or Price of Gold.
There shall have been no material adverse change since June 30, 1994 to the
syndication markets for credit facilities similar in nature to the credit
facilities provided herein, and there shall not have occurred and be
continuing a material disruption of or material adverse change in financial,
banking or capital markets that would have an adverse effect on such
syndication market, in each case as determined by Administrative Agent and
Managing Agents in their reasonable discretion. Additionally, there shall
have been no material adverse change in the price of gold prevailing in
international markets that would have a Material Adverse Effect.
J. Company's Consolidated Net Worth. Administrative Agent shall have
received evidence satisfactory to Administrative Agent that Company's
Consolidated Net Worth is not less
than $500,000,000.
K. Completion of Proceedings. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby
and all documents incidental thereto not previously found acceptable by
Administrative Agent and Managing Agents, acting on behalf of Lenders, and
their counsel shall be satisfactory in form and substance to Administrative
Agent and Managing Agents and their counsel, and Administrative Agent and
Managing Agents and their counsel shall have received all such counterpart
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originals or certified copies of such documents as they may reasonably
request.
L. Other Documents. Each of Company, Canadian Borrower and U.S.
Borrower shall have delivered to Administrative Agent such other documents as
Administrative Agent may reasonably request.
3.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date,
in accordance with the provisions of subsection 2.1B, an originally executed
Notice of Borrowing signed by the chief executive officer, the chief financial
officer or the treasurer of Canadian Borrower or U.S. Borrower, as the case
may be, or by any executive officer of Canadian Borrower or U.S. Borrower, as
the case may be, designated by any of the above-described officers on behalf
of Canadian Borrower or U.S. Borrower, as the case may be, in a writing
delivered to Administrative Agent.
B. As of that Funding Date:
(i)The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same extent
as though made on and as of that date, except to the extent that
changes in the facts and conditions on which such representations and
warranties are based are required or permitted under this Agreement;
(ii)No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential
Event of Default;
(iii) Each of Company, Canadian Borrower and U.S. Borrower shall
have performed in all material respects all agreements and satisfied
all conditions which this Agreement and the other Loan Documents
provide shall be performed or satisfied by it on or before that
Funding Date;
(iv)There shall not be pending or, to the knowledge of Company,
Canadian Borrower or U.S. Borrower, threatened, any action, suit,
proceeding, governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of
Company or any of its Subsidiaries, and there shall have occurred no
development in any such action, suit, proceeding, governmental
investigation or arbitration, that, in either event, in the opinion
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of Requisite Lenders, would reasonably be expected to have a Material
Adverse Effect, unless disclosed to and consented to by Requisite
Lenders; and no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to any
action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a
result of, the transactions contemplated by this Agreement or the
making of Loans or the issuance of Letters of Credit hereunder; and
(v)No Company Change of Control shall have occurred.
3.3 Conditions to All Letters of Credit
The obligation of CIBC to issue any Letter of Credit hereunder is
subject to prior or concurrent satisfaction of all of the following
conditions:
A. On or before the date of issuance of any Letter of Credit
hereunder, CIBC shall have received, in accordance with the provisions of
subsection 2.7B, a Notice of Issuance of Letter of Credit relating to the
proposed Letter of Credit, all other information specified in subsection 2.7B
and such other documents as CIBC may reasonably require in connection with the
issuance of such Letter of Credit.
B. On or before the date of issuance of such Letter of Credit, each
of the conditions set forth in subsection 3.1 shall have been satisfied as of
the Effective Date, and, on such date of issuance, all conditions precedent
described in subsection 3.2B shall be satisfied to the same extent as though
the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
Section 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make the Loans, to induce CIBC to issue Letters of Credit and to induce
Lenders to purchase participations in Letters of Credit, Company, Canadian
Borrower and U.S. Borrower jointly and severally represent and warrant to each
Lender that the following statements are true, correct and complete:
4.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Canadian Borrower is a corporation duly organized, validly existing and in
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good standing under the laws of the Province of Ontario. U.S. Borrower is a
corporation duly organized, validly existing and in good standing under the
laws of the State of California. Each of Company, Canadian Borrower and U.S.
Borrower has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to
be conducted, to enter into the Loan Documents to which it is a party, to
carry out the transactions contemplated thereby and to issue and pay any Notes
and any Grid Gold Acknowledgements to be issued by it.
B. Qualification and Good Standing. Each of Company, Canadian
Borrower and U.S. Borrower is qualified to do business and in good standing in
every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, except in jurisdictions where the
failure to be so qualified or in good standing has not had and will not have a
Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to subsection 6.11.
D. Subsidiaries. All of the Subsidiaries of Company as of the
Effective Date (other than Joint Ventures that do not have an interest in any
of the currently producing mines in the Mining Group) are identified in
Schedule 4.1 annexed hereto. The capital stock of each of the Material
Subsidiaries of Company that is a corporation identified in Schedule 4.1
annexed hereto is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each
of the Material Subsidiaries of Company identified in Schedule 4.1 annexed
hereto that is a corporation is validly existing and in good standing under
the laws of its respective jurisdiction of incorporation set forth therein,
has full corporate power and authority to own its assets and properties and to
operate its business as presently owned and conducted, and is qualified to do
business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in
each case except where failure to be so qualified or in good standing or a
lack of such corporate power and authority has not had and will not have a
Material Adverse Effect. Schedule 4.1 annexed hereto correctly sets forth the
ownership interest of Company in each of its Subsidiaries identified therein.
4.2 Authorization of Borrowing and Guaranty, etc.
A. Authorization of Borrowing and Guaranty. The execution, delivery
and performance of this Agreement and any other Loan Documents and the
issuance, delivery and payment of the Notes and the Grid Gold Acknowledgements
have been duly authorized by all necessary corporate action on the part of
Company, Canadian Borrower and U.S. Borrower, as the case may be.
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B. No Conflict. The execution, delivery and performance by Company
and Borrowers of this Agreement and any other Loan Documents, the issuance,
delivery and payment of the Notes or any Grid Gold Acknowledgments by
Borrowers, the issuance and sale of the Subordinated Debentures by Company and
the incurrence and repayment of extensions of credit pursuant to the Loan
Documents have not, do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of
Company or any of its Subsidiaries or any order, judgment or decree of any
court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a material breach of or constitute
(with due notice or lapse of time or both) a material default under any
Contractual Obligation of Company or any of its Subsidiaries, (iii) result in
or require the creation or imposition of any Lien upon any of the properties
or assets of Company or any of its Subsidiaries (other than any Liens created
under any of the Loan Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders of Company or any of
its Subsidiaries or any approval or consent of any Person under any
Contractual Obligation of Company or any of its Subsidiaries, except for
consents obtained on or before the Effective Date and disclosed in writing to
Lenders.
C. Governmental Consents. The execution, delivery and performance by
Company, Canadian Borrower and U.S. Borrower, as the case may be, of the Loan
Documents, the issuance, delivery and payment of the Notes and Grid Gold
Acknowledgements and the consummation of the transactions contemplated by the
Loan Documents do not and will not require any registration with, consent or
approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
D. Binding Obligation. This Agreement and each other Loan Document
has been duly executed and delivered by Company, Canadian Borrower and U.S.
Borrower, and each Note and each Grid Gold Acknowledgement delivered to any
Lender has been duly issued by the applicable Borrower, and each such Loan
Document is the legally valid and binding obligation of Company, Canadian
Borrower or U.S. Borrower, as the case may be, enforceable against Company,
Canadian Borrower or U.S. Borrower, as the case may be, in accordance with its
respective terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
4.3 Valid Issuance of Stock and Subordinated Debentures.
The Company Common Stock is duly and validly issued, fully paid
and nonassessable. Except for rights under Company's Stockholders Rights
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Agreement dated as of October 16, 1987, as amended, and holders of employee
stock options and holders of delayed delivery agreements of Canadian Borrower
or the Convertible Debentures, no stockholder of Company has or will have any
preemptive rights to subscribe for any additional equity Securities of
Company. The Company Common Stock, when issued and sold, was either
registered or qualified under applicable federal and state securities laws or
exempt therefrom. The Subordinated Debentures have been duly authorized and
validly issued by Company and constitute the legally valid and binding
obligations of Company enforceable against Company in accordance with their
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability. The Subordinated Debentures,
when issued and sold, were either registered or qualified under applicable
federal and state securities laws or exempt therefrom. The subordination
provisions of the Subordinated Debentures are enforceable against the holders
of the Subordinated Debentures. The Obligations constitute "Senior Debt"
under the indenture pursuant to which the Subordinated Debentures have been
issued.
4.4 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders' request,
the following financial statements and information: (i) the audited
consolidated balance sheet of Company and its Subsidiaries as at December 31,
1993 and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for the Fiscal Year then ended,
and (ii) the unaudited consolidated and consolidating balance sheets of
Company and its Subsidiaries as at June 30, 1994 and the related unaudited
consolidated and consolidating statements of income and the unaudited
consolidated statement of cash flows of Company and its Subsidiaries for the
six months then ended. All such statements were prepared in conformity with
GAAP and fairly present the financial position (on a consolidated basis) of
the entities described in such financial statements as at the respective dates
thereof and the results of operations and cash flows (on a consolidated basis)
of the entities described therein for each of the periods then ended, subject,
in the case of any such unaudited financial statements, to changes resulting
from audit and normal year-end adjustments. Except as disclosed in
Schedule 4.4 annexed hereto, Company does not have any Contingent Obligation,
or liability for any taxes, long-term lease or unusual forward or long-term
financial commitment that is not reflected in the most recent financial
statements delivered to Lenders or the notes thereto, if any, or otherwise
permitted under subsection 6.4 and which in any such case is material in
relation to the business, operations, properties, assets or condition
(financial or otherwise) of Company and its Subsidiaries, taken as a whole.
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4.5 No Material Adverse Effect; No Restricted Junior Payments.
Since December 31, 1993, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Neither Company nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted by
subsection 6.5.
4.6 Title to Properties; Liens.
Company and its Subsidiaries have good, sufficient and legal
title, subject to Permitted Encumbrances, to all of their respective
properties and assets reflected in the most recent financial statements
delivered to Lenders, except for (a) assets held in Joint Ventures where the
operator or another participant or the Joint Venture may hold legal title but
Company or one of its Subsidiaries holds a beneficial ownership interest
therein, (b) assets disposed of since the date of such financial statements in
the ordinary course of business, (c) as otherwise permitted under subsection
6.7, and (d) such defects that have not had, or would not reasonably be
expected to result in, a Material Adverse Effect. Except for Permitted
Encumbrances and except as otherwise permitted by this Agreement, all such
properties and assets are free and clear of Liens.
4.7 Litigation; Adverse Facts.
Except as described in Schedule 4.7 annexed hereto or in the
Company's Annual Report on Form 10-K for 1993, there is no action, suit,
proceeding, arbitration or governmental investigation (whether or not
purportedly on behalf of Company or any of its Subsidiaries) at law or in
equity or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, pending or, to the knowledge of Company, threatened against or
affecting Company or any of its Subsidiaries or any property of Company or any
of its Subsidiaries that has had, or would reasonably be expected to result
in, a Material Adverse Effect. Neither Company nor any of its Subsidiaries is
(i) in violation of any applicable law that has had, or would reasonably be
expected to result in, a Material Adverse Effect, or (ii) subject to or in
default with respect to any final judgment, writ, injunction, decree, rule or
regulation of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that has had, or would reasonably be expected to result in, a
Material Adverse Effect.
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4.8 Payment of Taxes.
Except to the extent permitted by subsection 5.3, all material
taxes, assessments, fees and other governmental charges upon Company and its
Subsidiaries and upon their respective properties, assets, income, businesses
and franchises which are due and payable have been paid. Company knows of no
proposed tax assessment against Company or any of its Subsidiaries that has
had or would have a Material Adverse Effect, which is not being actively
contested by Company or such Subsidiary in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
any, as shall be required in conformity with GAAP shall have been made or
provided therefor.
4.9 Performance of Agreements; Materially Adverse Agreements.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any of its Contractual Obligations, and
no condition exists that, with the giving of notice or the lapse of time or
both, would constitute such a default, except where the consequences, direct
or indirect, of such default or defaults, if any, has not had and would not
have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had or will have, individually or in the
aggregate, a Material Adverse Effect.
4.10 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940
or under any other Canadian or U.S. federal or state statute or regulation
which may limit its ability to incur Indebtedness for borrowed money.
4.11 Securities Activities.
Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
4.12 Employee Benefit Plans.
A. Company and each of its ERISA Affiliates are in compliance
with all applicable provisions and requirements of ERISA and the regulations
and published interpretations thereunder with respect to each Employee Benefit
Plan, and have performed all their obligations under each Employee Benefit
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Plan, where failure to comply and perform such obligations would reasonably be
expected to have a Material Adverse Effect.
B. Except as set forth on Schedule 4.12 annexed hereto, no ERISA
Event has occurred or is reasonably expected to occur which would reasonably
be expected to have a Material Adverse Effect.
C. Except to the extent required under Section 601 of ERISA or
Section 4980B of the Internal Revenue Code or except as described on Schedule
4.12 annexed hereto, no Employee Benefit Plan of Company or any of its
Subsidiaries provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employees of Company or any
of its ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities) as set forth in the most recent actuarial report
prepared for such Pension Plan, does not exceed $20,000,000.
4.13 Certain Fees.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the transactions contemplated hereby.
4.14 Environmental Protection.
Except as heretofore disclosed in writing by Company to Lenders or
otherwise disclosed in Company's Annual Report on Form 10-K for its 1993
fiscal year, no event or condition has occurred with respect to Company or any
of its Subsidiaries relating to any Environmental Laws or Release of Hazardous
Materials which, individually, or in the aggregate, has had or would have a
Material Adverse Effect.
4.15 Employee Matters.
There is no strike or work stoppage in existence or, to Company's
knowledge, threatened involving Company or any of its Subsidiaries that has
had or would reasonably be expected to have a Material Adverse Effect.
4.16 Solvency.
Company and its Subsidiaries, taken as a whole, and each of
Borrowers are Solvent.
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4.17 Compliance with Laws.
The businesses and operations of Company and its Subsidiaries
comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority, except to the extent that noncompliance
would not reasonably be expected to cause a Material Adverse Effect.
4.18 Disclosure.
No representation or warranty of Company or any of its
Subsidiaries contained in any Loan Document, the Offering Circular relating to
issuance of the Subordinated Debentures or in any other document, certificate
or written statement furnished to Lenders by or on behalf of Company or any of
its Subsidiaries for use in connection with the transactions contemplated by
this Agreement contains any untrue statement of a material fact or omits to
state a material fact (known to Company or any Borrower, in the case of any
document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances in
which the same were made. Any projections and pro forma financial information
contained in such materials are based upon good faith estimates and
assumptions believed by Company and Borrowers to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There is no fact known (or which should upon the reasonable exercise of
diligence be known) to Company or any Borrower (other than matters of a
general economic nature) that has had, or would reasonably be expected to
result in, a Material Adverse Effect and that has not been disclosed herein or
in such other documents, certificates and statements furnished to Lenders for
use in connection with the transactions contemplated hereby.
Section 5. AFFIRMATIVE COVENANTS
Company and each Borrower severally covenant and agree that, so
long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations, the cancellation or
expiration of all Letters of Credit and the reimbursement of all amounts drawn
thereunder, each of Company and Borrowers shall perform all covenants in this
Section 5 to be performed by it (including in the case of any Borrower,
covenants applicable to it in its capacity as a Subsidiary of Company), and
Company and Borrowers shall cause each of their respective Subsidiaries to
perform, all covenants in this Section 5 applicable to each such Subsidiary.
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5.1 Financial Statements and Other Reports.
Company shall maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of consolidated financial
statements in conformity with GAAP. Company shall deliver to Lenders:
(i)Quarterly Financials: as soon as available and in any event
within 50 days after the end of each fiscal quarter of each Fiscal
Year (beginning with the fiscal quarter ending September 30, 1994),
the consolidated balance sheets of Company and its Subsidiaries as at
the end of such fiscal quarter and the related consolidated
statements of income and cash flows of Company and its Subsidiaries
for such fiscal quarter and for the period from the beginning of the
then current Fiscal Year to the end of such fiscal quarter, all in
reasonable detail and certified by the chief financial officer or
chief accounting officer of Company that they fairly present the
consolidated financial condition of Company and its Subsidiaries as
at the dates indicated and the results of their operations and the
cash flows of Borrower and its Subsidiaries for the periods
indicated, subject to changes resulting from audit and normal year-
end adjustments;
(ii)Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the
consolidated balance sheets of Company and its Subsidiaries and
Canadian Borrower and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries and Canadian
Borrower and its Subsidiaries for such Fiscal Year, all in reasonable
detail and certified by the chief financial officer or chief
accounting officer of Company that they present fairly in all
material respects the consolidated financial condition of Company and
its Subsidiaries and Canadian Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and their cash
flows for the periods indicated, and (b) in the case of such
consolidated financial statements of Company and its Subsidiaries, a
report thereon of independent auditors of recognized national
standing selected by Company, which report shall be unqualified,
shall not include any reference to doubts about the ability of
Company and its Subsidiaries to continue as a going concern, and
shall state that such consolidated financial statements of Company
and its Subsidiaries present fairly in all material respects the
consolidated financial position of Company and its Subsidiaries, as
at the dates indicated and the consolidated results of their
operations and their cash flows for the periods indicated in
conformity with GAAP and that the audit by such auditors in
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connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards;
(iii) Officers' and Compliance Certificates: together with each
delivery of consolidated financial statements of Company and its
Subsidiaries pursuant to subdivisions (i) and (ii) above, (a) an
Officers' Certificate of Company and each Borrower stating that the
signers have reviewed the terms of this Agreement and have made, or
caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signers
do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event that constitutes an
Event of Default or Potential Event of Default, or, if any such
condition or event existed or exists, specifying the nature and
period of existence thereof and what action Company or any Borrower
has taken, is taking and proposes to take with respect thereto; and
(b) a Compliance Certificate demonstrating in reasonable detail
compliance during and at the end of the applicable accounting periods
with the restrictions contained in subsections 6.1, 6.2, 6.3, 6.4,
6.6, 6.7 and 6.8;
(iv)Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all
reports submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit
of the financial statements of Company and its Subsidiaries made by
such accountants, including, without limitation, any comment letter
submitted by such accountants to management in connection with their
annual audit;
(v)Monthly Business Report: promptly upon their becoming
available (but in no event later than 45 days after the last day of
the previous month or 90 days, in the case of December), the monthly
business report relating to Company's and its Subsidiaries'
operations prepared internally for Company's management;
(vi)SEC Filings and Press Releases: (a) promptly upon their
becoming available, copies of (1) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders, (2) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with the Securities and Exchange Commission or any
national securities exchange (including, without limitation,
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Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1994), and (b) concurrently with or immediately
following their being made available to intended recipients, all
press releases and other statements made available generally by
Company to the public concerning material developments in the
business of Company or any of its Subsidiaries;
(vii) Events of Default, etc.: promptly upon any Responsible
Officer of Company or any Borrower obtaining knowledge (a) of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or becoming aware that any Lender, any Managing
Agent, or Administrative Agent has given any notice or taken any
other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Company
or any of its Subsidiaries or taken any other action with respect to
a claimed default or event or condition of the type referred to in
subsection 7.2, (c) of any condition or event that would be required
to be disclosed in a current report filed by Company with the
Securities and Exchange Commission on Form 8-K (Items 1, 2, 4 and 6
of such Form as in effect on the date hereof) (information required
to be disclosed on Form 8-K shall be sent to Lenders when sent for
filing with the Securities and Exchange Commission), or (d) of the
occurrence of any event or change that has caused or evidences,
either individually or in the aggregate, a Material Adverse Effect,
an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature of
such claimed Event of Default, Potential Event of Default, default,
event or condition, and what action Company and each Borrower has
taken, is taking and proposes to take with respect thereto;
(viii) Litigation: promptly upon any Responsible Officer of Company
or any Borrower obtaining knowledge of (X) the institution of, or
threat of, any action, suit, proceeding, governmental investigation
or arbitration against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries
(collectively, "Proceedings") not previously disclosed in writing by
Company to Lenders or (Y) any material development in any Proceeding
that, in the case of either clause (X) or (Y) could reasonably be
expected to cause a Material Adverse Effect, written notice thereof
together with a summary of such Proceedings or material development;
(ix)ERISA Events: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event which could
reasonably be expected to cause a Material Adverse Effect, a written
notice specifying the nature thereof, what action Company or any of
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its ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto;
(x)ERISA Notices: with reasonable promptness, copies of (a) all
notices received by Company or any of its ERISA Affiliates from a
Multiemployer Plan sponsor concerning an ERISA Event which could
reasonably be expected to cause a Material Adverse Effect; and
(b) such other documents or governmental reports or filings relating
to any Employee Benefit Plan as Administrative Agent shall reasonably
request;
(xi)Financial Plans: as soon as practicable and in any event no
later than 90 days after the beginning of each Fiscal Year, (a) a
copy of Company's annual budget promptly after approval thereof by
Company's Board of Directors, (b) a forecast of the amount of capital
expenditures (with separate forecasts for maintenance items and
discretionary items) anticipated for such Fiscal Year, and (c) such
other information and projections as any Lender may reasonably
request, all in form and substance satisfactory to Requisite Lenders;
(xii) Environmental Audits and Reports; Cash Flow Analysis: (a)
promptly after completion thereof (or receipt from an independent
consultant in the case of an audit conducted by Persons who are not
employees of Company or any of its Subsidiaries), copies of all final
environmental audits and reports, whether prepared by personnel of
Company or any of its Subsidiaries or by independent consultants,
with respect to significant environmental matters at any Facility or
which relate to an Environmental Claim which would reasonably be
expected to result in a Material Adverse Effect, and (b) within 50
days after the end of the second fiscal quarter of each fiscal year,
a Cash Flow Analysis which shall be updated to reflect the most
recent life-of-mine operating plans of the currently producing mines
within the Mining Group; and
(xiii) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested by any
Lender.
5.2 Corporate Existence, etc.
Except as permitted under subsection 6.7, Company will, and will
cause each of its Material Subsidiaries to, at all times preserve and keep in
full force and effect its corporate existence and all rights and franchises
material to the business of Company and its Subsidiaries, taken as a whole.
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5.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of
its properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or may become a
Lien upon any of its properties or assets, prior to the time when any penalty
or fine shall be incurred with respect thereto, except for such taxes,
assessments, governmental charges and claims which in the aggregate do not
exceed $3,000,000; provided that no such charge or claim need be paid if being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made
therefor.
B. Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax return with any
Person (other than Company or any of its Subsidiaries) for any period ending
on or after the Effective Date.
5.4 Maintenance of Properties; Insurance.
Company will, and will cause each of its Subsidiaries to, maintain
or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all material properties used in the business
of Company and its Subsidiaries, taken as a whole, or any Borrower (including,
without limitation, Intellectual Property) and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
Company will maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to its properties and business and
the properties and businesses of its Subsidiaries against loss or damage of
the kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar activities in the
countries where such properties or businesses are located.
5.5 Inspection; Lender Meeting; Reports of Subsidiaries.
Company and Borrowers shall, and shall cause each of their
respective Subsidiaries to, permit any authorized representatives designated
by any Lender, at the expense of such Lender, to visit and inspect any of the
properties of Company, any Borrower or any of their respective Subsidiaries,
including its and their financial and accounting records, and, subject to the
provisions of subsection 10.22, to make copies and take extracts therefrom,
and to discuss its and their affairs, finances and accounts with its and their
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officers, all upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably requested. Without in
any way limiting the foregoing, Company will, upon the request of
Administrative Agent or Requisite Lenders, participate in a meeting of
Administrative Agent, Managing Agents and Lenders once during each Fiscal Year
to be held at Company's corporate offices (or such other location as may be
agreed to by Company and Administrative Agent) at such time as may be agreed
to by Company and Administrative Agent. Company shall cause Lenders to be
added to the lists maintained by HGAL and Prime of Persons to receive reports
of the type described in subsection 5.1(vi).
5.6 Compliance with Laws, etc.
Company shall, and shall cause each of its Subsidiaries to, comply
with the requirements of all applicable laws, rules, regulations and orders of
any governmental authority, noncompliance with which in any case or in the
aggregate would reasonably be expected to cause a Material Adverse Effect.
5.7 Environmental Disclosure and Inspection.
A. Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply with all Environmental Laws
where failure to do so would reasonably be expected to result in a Material
Adverse Effect.
B. Company shall promptly advise Lenders in writing and in reasonable
detail of (i) any Release of any Hazardous Materials that would reasonably be
expected to result in a Material Adverse Effect, (ii) any and all written
communications with respect to any Environmental Claims that would reasonably
be expected to result in a Material Adverse Effect, (iii) any remedial action
taken by or at the direction of Company in response to (x) any Hazardous
Materials on, under or about any Facility, the existence of which would
reasonably be expected to result in an Environmental Claim having a Material
Adverse Effect, or (y) any Environmental Claim that would reasonably be
expected to result in a Material Adverse Effect, (iv) Company's discovery of
any occurrence or condition on any real property adjoining or in the vicinity
of any Facility that could cause such Facility or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability or
use thereof under any Environmental Laws and which would reasonably be
expected to result in a Material Adverse Effect, and (v) any request for
information from any governmental agency that indicates such agency is
investigating whether Company or any of its Subsidiaries may be potentially
responsible for a Release of Hazardous Materials, the remediation of which
would reasonably be expected to have a Material Adverse Effect.
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C. Company shall promptly notify Lenders of any proposed acquisition
of stock, assets, or property by Company or any of its Subsidiaries that would
reasonably be expected to expose Company or any of its Subsidiaries to, or
result in, Environmental Claims that would reasonably be expected to result in
a Material Adverse Effect or that would reasonably be expected to have an
adverse effect on any material Governmental Authorization then held by Company
or any of its Subsidiaries.
D. Company shall provide copies of such documents or information as
Administrative Agent may reasonably request in relation to any matters
disclosed pursuant to this subsection 5.7.
5.8 Company's Remedial Action Regarding Hazardous Materials.
Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or
Release of any Hazardous Materials on, under or about any Facility in order to
comply with all applicable Environmental Laws and undisputed Governmental
Authorizations where failure to comply would reasonably be expected to result
in a Material Adverse Effect. If Company or any of its Subsidiaries
undertakes any remedial action with respect to any Hazardous Materials on,
under or about any Facility, Company or such Subsidiary shall conduct and
complete such remedial action in material compliance with all applicable
material Environmental Laws, and in accordance with the policies, orders and
directives of all federal, state and local governmental authorities except
when, and only to the extent that, Company's or such Subsidiary's liability,
including with respect to such presence, storage, use, disposal,
transportation or discharge of any Hazardous Materials, or the jurisdiction or
the authority or the validity or the applicability of the Environmental Laws
or the policies, orders or directions is being contested in good faith by
Company or such Subsidiary.
5.9 Further Assurances.
At any time or from time to time upon the request of
Administrative Agent, Company and Borrowers shall execute and deliver such
further documents and do such other acts and things as Administrative Agent
may reasonably request in order to effect fully the purposes of this Agreement
and to provide for payment of the Obligations in accordance with the terms of
this Agreement and the Notes.
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Section 6. NEGATIVE COVENANTS
Company and each Borrower severally covenant and agree that, so
long as any of the Commitments hereunder shall remain in effect and until
payment in full of all of the Loans and other Obligations, the cancellation or
expiration of all Letters of Credit and the reimbursement of all amounts drawn
thereunder, each of Company and Borrowers shall perform all covenants in this
Section 6 to be performed by it (including, in the case of any Borrower,
covenants applicable to it in its capacity as a Subsidiary of Company), and
Company shall cause each of its Subsidiaries to perform all covenants in this
Section 6 applicable to such Subsidiary.
6.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i)Company and Borrowers may become and remain liable with respect
to their respective Obligations;
(ii)Company and its Subsidiaries may become and remain liable with
respect to Indebtedness arising in respect of Contingent Obligations
permitted by subsection 6.4;
(iii) Company may become and remain liable with respect to
Indebtedness to any of its Subsidiaries, and any Subsidiary of
Company (other than HGAL or Prime) may become and remain liable with
respect to Indebtedness to Company or any other Subsidiary of Company
and Prime and HGAL may become and remain liable with respect to
Indebtedness to Company or any other Subsidiary of Company up to a
maximum of $30,000,000 and $60,000,000, respectively, aggregate
principal amount at any time outstanding; provided that all such
intercompany Indebtedness shall be subordinated on the same terms as
the subordination provisions of subsection 8.1B in right of payment
to the payment in full of the Obligations;
(iv)Company and its Subsidiaries (other than HGAL), as applicable,
may remain liable with respect to Indebtedness described in
Schedule 6.1 annexed hereto;
(v)Company may become and remain liable with respect to the
Subordinated Debentures;
(vi)HGAL may become and remain liable with respect to (a) any
amount of Indebtedness incurred in the ordinary course of business,
which Indebtedness may be secured by Liens on the assets and
properties of HGAL; provided that the holders of such Indebtedness
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have no recourse against Company or any of its Subsidiaries other
than HGAL, including, without limitation, any recourse that would
arise by reason of any direct financial guaranty or any letter of
credit or performance or solvency guaranties, representations or
warranties made or entered into in connection with the incurrence or
creation of such Indebtedness, and (b) in addition to amounts
permitted by subsection 6.1(iii), an aggregate principal amount of
147,194 Ounces of Gold of existing Indebtedness from U.S. Borrower,
as it may be repaid, but not reborrowed;
(vii) Prime may become and remain liable with respect to any amount
of Indebtedness incurred in the ordinary course of business, which
Indebtedness may be secured by Liens on the assets and properties of
Prime; provided that the holders of such Indebtedness have no
recourse against Company or any of its Subsidiaries other than Prime,
including, without limitation, any recourse that would arise by
reason of any direct financial guaranty or any letter of credit or
performance or solvency guaranties, representations or warranties
made or entered into in connection with the incurrence or creation of
such Indebtedness;
(viii)Prime, HGAL, Canadian Borrower and any Subsidiary of Company
(other than U.S. Borrower) that does not own assets included in the
Mining Group may become and remain liable with respect to
Indebtedness in an aggregate outstanding principal amount not at any
time exceeding $300,000,000 secured solely by Liens on assets and
properties owned on the Original Closing Date that are undeveloped or
that are acquired after the Original Closing Date by the Person
receiving the proceeds of such Indebtedness; provided that Requisite
Lenders shall be satisfied that such Indebtedness is Non-Recourse
Debt;
(ix)Borrowers may become and remain liable with respect to
additional Indebtedness in an aggregate outstanding principal amount
not at any time exceeding $50,000,000; and
(x)Company and its Subsidiaries may become and remain liable in
respect of any refinancing or extension of any Indebtedness described
in this subsection 6.1 (other than subsections 6.1(v) and 6.1(vi)(b))
for amounts not exceeding the principal amounts of the Indebtedness
so refunded or extended and with maturities no earlier than such
Indebtedness and if secured, only by the property theretofore
securing such Indebtedness; provided that amounts refinancing such
Indebtedness shall be included in the calculation of any numerical
limitations in the relevant clause of this subsection 6.1 pursuant to
which such Indebtedness was originally permitted.
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6.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits, except:
(i)Permitted Encumbrances;
(ii)Liens described in Schedule 6.2 annexed hereto;
(iii) Purchase Money Security Interests securing up to an aggregate
principal amount of $25,000,000 at any time of Indebtedness permitted
to be outstanding under subsection 6.1(ix); and
(iv)Liens securing Indebtedness permitted to be outstanding under
subsections 6.1(vi), (vii) and (viii), and as provided in subsection
6.1(x).
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, to secure Indebtedness other
than Liens excepted by the provisions of subsection 6.2A, it shall make or
cause to be made effective provision whereby the Obligations will be secured
by such Lien equally and ratably with any and all other Indebtedness secured
thereby as long as any such other Indebtedness shall be so secured; provided
that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien
not permitted by the provisions of subsection 6.2A.
C. No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, property
subject to Liens permitted under subsection 6.2A, and any assets of Prime or
HGAL, neither Company nor any of its Subsidiaries shall enter into any
agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except in respect of Indebtedness permitted by subsections
6.1(vi), (vii) and (viii) and also, with respect to clause (iv) below, except
with respect to properties dedicated under Joint Ventures and in respect of
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Indebtedness secured by Purchase Money Security Interests, and except for
permitted refinancings of such Indebtedness, and as provided herein, Company
will not, and will not permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual prohibition of any
kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock owned by Company
or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed
by such Subsidiary to Company or any other Subsidiary of Company, (iii) make
loans or advances to Company or any other Subsidiary of Company, or
(iv) transfer any of its property or assets to Company or any other Subsidiary
of Company; provided that any restrictions based on financial or other tests
(not effectively acting as prohibitions) shall not be deemed prohibitions.
6.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make or own any Investment in any Person,
including any Joint Venture, except:
(i)Company and its Subsidiaries may make and own Investments in
Marketable Securities;
(ii)Company and its Subsidiaries may make intercompany loans to the
extent permitted under subsection 6.1(iii);
(iii) Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted by subsection 6.8;
(iv)Company and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 6.3 annexed
hereto or, if not described in Schedule 6.3, in the aggregate not
exceeding $5,000,000;
(v)Borrowers and their respective Subsidiaries may continue to own
and make Investments in or make acquisitions of businesses
substantially similar to those currently conducted by Company or in
related industries and Borrowers and their Subsidiaries may make
Investments in new and existing Subsidiaries; provided that any such
Investments are permitted by the provisions of subsection 6.7(v);
(vi)Borrowers and their respective Subsidiaries may acquire and
retain ownership of Investments in connection with Asset Sales
permitted by subsection 6.7(iv); provided that the aggregate net
amount of all such Investments described in this subsection 6.3(vi)
shall not at any time exceed $50,000,000; and provided further,
however, that for purposes of compliance with this subsection 6.3(vi)
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Asset Sales involving the simultaneous receipt of notes and sale of
such notes to a third party shall be excluded;
(vii) Company and its Subsidiaries may make and own Investments
received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations
of, and other disputes with, customers and suppliers arising in the
ordinary course of business;
(viii)Company and its Subsidiaries may make and own Investments
with respect to Contingent Obligations which are permitted by
subsection 6.4; and
(ix)Company and its Subsidiaries may make and continue to own
Investments in, and may make and own Investments resulting from
capital calls, buyout obligations or similar requirements in respect
of, Joint Ventures in the ordinary course of business.
6.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:
(i)Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations (a) in respect of Letters of
Credit, or (b) set forth in this Agreement;
(ii)Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under Interest Rate Agreements
having a notional principal amount not exceeding $75,000,000 with
respect to Indebtedness permitted under subsection 6.1;
(iii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations incurred in
connection with sales of assets permitted under subsection 6.7;
(iv)Company and its Subsidiaries may guarantee any obligations of
their respective Subsidiaries (including Joint Ventures) provided
that the aggregate amount guaranteed does not exceed $75,000,000;
(v)Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 6.4
annexed hereto;
(vi)Company and its Subsidiaries may become and remain liable with
respect to gold futures, options or forward sales contracts and
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Currency Agreements or similar arrangements designed to protect
Company or any of its Subsidiaries against fluctuations in the price
of Gold or the relative exchange rates for currencies in accordance
with current industry practice or the past practices of Company and
its Subsidiaries provided that the notional amount of the aggregate
contingent liability of Company and its Subsidiaries under all such
futures, options, contracts agreements and arrangements does not at
any time exceed $500,000,000; and
(vii)Company and its Subsidiaries may become and remain liable with
respect to (a) standby letters of credit with respect to pollution
control bonds identified on Schedule 6.4 and refinancings thereof and
Contingent Obligations in respect of standby letters of credit and
surety bonds securing reclamation and other performance obligations
under contracts, permits, statutes and regulations and made in the
ordinary course of business, but not including Indebtedness or
Contingent Obligations of Company and its Subsidiaries for borrowed
money or as described in subsection 6.4(vi), and (b) standby letters
of credit and surety bonds securing Indebtedness or Contingent
Obligations of Company and its Subsidiaries for borrowed money or to
support Contingent Obligations described in subsections 6.4(ii)
through (vi) in an aggregate amount not exceeding $50,000,000 at any
time, it being understood that all letters of credit and surety bonds
for which Company and its Subsidiaries are liable shall be permitted
only under subsection 6.4(i) or this subsection 6.4(vii).
6.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Junior Payment; provided that (i) Company and its Subsidiaries
may pay dividends to their respective shareholders, (ii) so long as (a) no
Event of Default or (b) no Potential Event of Default under subsections 7.1 or
7.6, shall have occurred and be continuing, or result from such payment,
Company may make scheduled payments of interest on the Subordinated Debentures
in accordance with their terms from all available sources and (iii) so long as
no Event of Default or Potential Event of Default shall have occurred and be
continuing, Company may redeem the Subordinated Debentures.
6.6 Financial Covenants.
A. Minimum Consolidated Net Worth. Company shall not permit
Consolidated Net Worth at any time to be less than $500,000,000
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B. Protection Ratio. Company shall not at any time permit the ratio
of (i) the Mining Group Net Present Value of the Mining Group Future Cash Flow
to (ii) the Consolidated Senior Funded Debt to be less than 1.50 to 1.00;
provided Consolidated Senior Funded Debt shall not include, for the purposes
of this subsection 6.6B, Non-Recourse Debt of Company and its Subsidiaries
permitted pursuant to subsection 6.1(viii).
6.7 Restriction on Fundamental Changes; Asset Sales.
Company shall not, and shall not permit any of its Subsidiaries
to, enter into any transaction of merger or consolidation, or liquidate, wind-
up or dissolve itself (or suffer any liquidation or dissolution), or convey,
sell, lease, sub-lease, transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any substantial part of its business,
property or fixed assets, whether now owned or hereafter acquired, or acquire
by purchase or otherwise all or substantially all the business, property or
fixed assets of, or stock or other evidence of beneficial ownership of, any
Person, except:
(i)any Subsidiary of Company (other than any Borrower) may be
merged, consolidated or amalgamated with or into any Borrower or any
Subsidiary of any Borrower, or be liquidated, wound up or dissolved,
or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to any Borrower or any
Subsidiary of any Borrower; provided that, in the case of such a
merger, consolidation or amalgamation with any Borrower, such
Borrower shall be the continuing or surviving corporation and
provided further that immediately after giving effect to such merger,
consolidation or amalgamation, no Potential Event of Default or Event
of Default shall have occurred and be continuing;
(ii)Company and its Subsidiaries may make Consolidated Capital
Expenditures permitted under subsection 6.8;
(iii) subject to subsection 6.11, Company and its Subsidiaries may
sell or otherwise dispose of assets in transactions that do not
constitute Asset Sales;
(iv)Company and its Subsidiaries may make Asset Sales, provided
that the consideration received for such assets shall be in an amount
at least equal to the fair market value thereof; provided, further,
that such Asset Sales do not involve the sale or other disposition,
in one transaction or a series of transaction, of all or any
substantial part of the business, property or fixed assets of Company
and its Subsidiaries and after any such Asset Sales no Potential
Event of Default or Event of Default shall have occurred and be
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continuing; and provided further that in the event of an Asset Sale
of a mine in the Mining Group, Company shall provide to Lenders
within thirty (30) days following the consummation of such Asset
Sale, an updated Cash Flow Analysis which reflects such Asset Sale
with sufficient information to determine compliance with the minimum
protection ratio requirement under subsection 6.6B of this Agreement.
(v)Borrowers and their respective Subsidiaries may acquire
Securities or assets of another Person, including existing
Subsidiaries, or create additional Subsidiaries; provided that after
giving effect to such acquisition, Company and its Subsidiaries will
be in compliance with all covenants set forth in Sections 5 and 6.
6.8 Consolidated Capital Expenditures.
Company shall not, and shall not permit its Subsidiaries to, make
or incur Consolidated Capital Expenditures (other than Consolidated Capital
Expenditures funded with the proceeds of Non-Recourse Debt), in any fiscal
year in excess of the sum of (a) $100,000,000 plus (b) the amount by which
$100,000,000 exceeds Company's Consolidated Capital Expenditures for the
preceding fiscal year (the "Carryover Amount"); provided that in calculating
the amount of Consolidated Capital Expenditures expended in any Fiscal Year,
the amounts described in clause (a) shall be applied prior to the Carryover
Amount and any Carryover Amount not used in the immediately succeeding Fiscal
Year shall not thereafter be available.
6.9 Transactions with Shareholders and Affiliates.
Except as set forth in Schedule 6.9, Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any holder of 5% or more of any class of equity Securities of Company or with
any Affiliate of Company or of any such holder, on terms that are less
favorable to Company or that Subsidiary, as the case may be, than those that
might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or
between any of its wholly-owned Subsidiaries or (ii) reasonable and customary
fees paid to members of the Boards of Directors of Company and its
Subsidiaries.
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6.10 Disposal of Material Subsidiary Stock.
Except for any disposition or sale of capital stock or other
equity Securities of any of its Material Subsidiaries in compliance with the
provisions of subsections 6.7(i) and (iv), Company shall not:
(i)directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Material Subsidiaries, except to qualify
directors if required by applicable law; or
(ii)permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its Material
Subsidiaries (including such Subsidiary), except to Company, another
Subsidiary of Company, or to qualify directors if required by
applicable law;
provided, however, that nothing contained in this Agreement shall (a) prohibit
or otherwise limit the ability of HGAL or Prime to sell securities issued by
them, (b) permit the capital stock of any Borrower (other than 10% of the
Canadian Borrower) to be sold or disposed of, or (c) prohibit Investments by
venturers in Joint Ventures permitted by subsection 6.3(ix).
6.11 Conduct of Business.
From and after the Effective Date, Company shall not, and shall
not permit any of its Subsidiaries to, engage in any business other than the
businesses engaged in by Company and its Subsidiaries on the Effective Date
and similar or related businesses.
6.12 Prepayments and Amendments to Subordinated Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated Indebtedness, or
make any payment consistent with an amendment thereof or change thereto, if
the effect of such amendment or change is to increase the interest rate on
such Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions thereof (or
of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights
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on the holders of such Subordinated Indebtedness (or a trustee or other
representative on their behalf) which would be adverse to Company, any
Borrower or Lenders.
Section 7. EVENTS OF DEFAULT
IF any of the following conditions or events ("Events of Default")
shall occur:
7.1 Failure to Make Payments When Due.
Failure to pay any installment of principal of any Loan when due,
whether at stated maturity, by acceleration, by notice of prepayment or
otherwise; failure to pay when due any amount payable to CIBC in reimbursement
of any drawing under any Letter of Credit issued pursuant to subsection 2.7;
or failure to pay any interest on any Loan or any fee or any other Obligation
within five days after the date due; or
7.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due (a) any
principal of or interest on any Indebtedness (other than Indebtedness referred
to in subsection 7.1) in an individual principal amount of $5,000,000 or more
or (b) any Contingent Obligation in an individual principal or face amount of
$5,000,000 or more or notional amount of $20,000,000 or more, in each case
beyond the end of any grace period provided therefor; or (ii) breach or
default by Company or any of its Subsidiaries with respect to any other
material term of (a) any evidence of any Indebtedness in an individual
principal amount of $5,000,000 or more or any Contingent Obligation in an
individual principal or face amount of $5,000,000 or more or notional amount
of $20,000,000 or more, or (b) any loan agreement, mortgage, indenture or
other agreement relating to such Indebtedness or Contingent Obligation(s), if
the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or
7.3 Breach of Certain Covenants.
Failure of Company or any Borrower, as the case may be, to perform
or comply with any term or condition contained in subsection 2.4, 2.5 or 5.2
or Section 6 of this Agreement; or
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7.4 Breach of Warranty.
Any representation, warranty, certification or other statement
made by Company or any of its Subsidiaries in any Loan Document or in any
statement or certificate at any time given by Company or any of its
Subsidiaries in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect on the date as of which
made; or
7.5 Other Defaults Under Loan Documents.
Company or any Borrower, as the case may be, shall default in the
performance of or compliance with any term contained in this Agreement or any
of the other Loan Documents, other than any such term referred to in any other
subsection of this Section 7, and such default shall not have been remedied or
waived within 30 days after the earlier of (i) a Responsible Officer of
Company or any Borrower becoming aware of such default or (ii) receipt by
Company or any Borrower of notice from Administrative Agent or any Lender of
such default; or
7.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i)A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company, any Borrower or any
of Company's Subsidiaries (other than Subsidiaries operating outside
of the United States, Canada and Australia and not constituting
Material Subsidiaries ("Minor Foreign Subsidiaries")) in an
involuntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law and
not stayed; or
(ii)an involuntary case shall be commenced against Company, any
Borrower or any of Company's Subsidiaries (other than Minor Foreign
Subsidiaries) under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Company, any
Borrower or any of Company's Subsidiaries (other than Minor Foreign
Subsidiaries), or over all or a substantial part of its property,
shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of
Company, any Borrower or any of Company's Subsidiaries (other than
Minor Foreign Subsidiaries) for all or a substantial part of its
property; or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property
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of Company, any Borrower or any of Company's Subsidiaries (other than
Minor Foreign Subsidiaries), and any such event described in this
clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i)Company, any Borrower or any of Company's Subsidiaries (other
than Minor Foreign Subsidiaries) shall have an order for relief
entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, or shall consent to the
entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such
law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of
its property; or Company, any Borrower or any of Company's
Subsidiaries (other than Minor Foreign Subsidiaries) shall make a
general assignment for the benefit of creditors; or
(ii)Company, any Borrower or any of Company's Subsidiaries (other
than Minor Foreign Subsidiaries) shall be unable or shall fail, or
shall admit in writing its inability, to generally pay its debts as
such debts become due; or the Board of Directors of Company, any
Borrower or any of Company's Subsidiaries (other than Minor Foreign
Subsidiaries) (or any committee thereof) shall adopt any resolution
or otherwise authorize any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or
7.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar
process involving (i) in any individual case an amount in excess of $5,000,000
or (ii) in the aggregate at any time an amount in excess of $10,000,000 (in
either case not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Company, any Borrower or any Material Subsidiaries or any of
their respective assets (or shall be entered against any of Company's other
Subsidiaries and Company or any Material Subsidiary shall be or become liable
therefor) and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in any event later than five days prior to the date of
any proposed sale thereunder); or
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7.9 Dissolution.
Except as permitted by subsection 6.7, any order, judgment or
decree shall be entered against Company, any Borrower or any Material
Subsidiary decreeing the dissolution or split up of Company, any Borrower or
any Material Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
7.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which results in or
would reasonably be expected to result in liability of Company or any of its
ERISA Affiliates in an individual amount in excess of $10,000,000 or in an
aggregate amount in excess of $20,000,000 during the term of this Agreement;
or there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities) as set forth in the
most recent actuarial report prepared for such Pension Plans, which exceeds
$40,000,000; or
7.11 Change in Control of Borrowers.
Company shall fail to own all of the issued and outstanding
capital stock of U.S. Borrower, or U.S. Borrower shall fail to own at least
90% of the issued and outstanding capital stock of Canadian Borrower.
THEN (i) upon the occurrence and during the continuance of any Event of
Default described in the foregoing subsections 7.6 or 7.7 each of (x) the
unpaid principal amount of and accrued interest on the Loans, (y) an amount
equal to the maximum amount which may at any time be drawn under all Letters
of Credit then outstanding (whether or not any beneficiary under any Letter of
Credit shall have presented, or shall be entitled at such time to present, the
drafts or other documents required to draw under such Letter of Credit) and
(z) all other Obligations shall automatically become immediately due and
payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by Company and each Borrower
and the obligation of each Lender to make any Loan and the obligation of CIBC
to issue any Letter of Credit hereunder shall thereupon terminate, and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request of Requisite
Lenders, by written notice to Company and each Borrower, declare all of the
Loans to be, and an amount equal to the amounts described in clauses (x)
through (z) above to be, and the same shall forthwith become, due and payable,
together with accrued interest thereon, and the obligation of each Lender to
make any Loan and the obligation of CIBC to issue any Letter of Credit
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hereunder shall thereupon terminate; provided that the foregoing shall not
affect in any way the obligations of Lenders to purchase from CIBC
participations in the unreimbursed amount of any drawings under any Letters of
Credit as provided in subsection 2.7D. So long as any Letter of Credit shall
remain outstanding, any amounts described in clause (y) above with respect to
such Letter of Credit, when received by CIBC, shall be held by CIBC pursuant
to such documentation as CIBC shall request, as cash collateral for the
obligation of the applicable Borrower to reimburse CIBC in the event of any
drawing under such Letter of Credit, and so much of such funds shall at all
times remain on deposit as cash collateral as aforesaid as shall equal the
maximum amount available at any time for drawing under all Letters of Credit
(the "Maximum Available Amount"); provided that, in the event of cancellation
or expiration of any Letter of Credit or any reduction in the Maximum
Available Amount, CIBC shall apply the difference between the Maximum
Available Amount immediately prior to such cancellation, expiration or
reduction and the Maximum Available Amount immediately after such cancellation
or reduction, first, to the payment in full of the outstanding Obligations,
and second, to Company or the applicable Borrower or to such other Person who
may be lawfully entitled to receive such funds or as a court of competent
jurisdiction may direct.
At any time that an Event of Default is continuing and the
principal of any Gold Loan has been declared to be immediately due and
payable, each Lender shall be entitled, for and on behalf of the applicable
Borrower, to purchase in accordance with its normal procedures a number of
Ounces of Gold equal to the number of Ounces of Gold then comprising such Gold
Loan, and to apply the Gold so purchased to pay such Gold Loan. The all-in
costs to any Lender of purchasing such Gold, provided that any costs incurred
are reasonable in the circumstances, shall be deemed to be a U.S. Base Rate
Loan made by such Lender to the applicable Borrower. A certificate of a
Lender as to any such all-in costs shall be prima facie evidence of the costs
to such Lender of making such purchase.
Section 8. GUARANTIES OF COMPANY AND U.S. BORROWER OF
OBLIGATIONS
In order to induce Lenders to enter into this Agreement and to
make the Loans to Borrowers hereunder and to issue Letters of Credit for the
account of Borrowers hereunder, each of Company and U.S. Borrower hereby
agrees as follows:
8.1 Guaranty by Company
A. Guaranty. As consideration for Lenders agreeing to enter into
this Agreement and to continue to extend the Commitments hereunder, Company
hereby confirms that it continues to unconditionally and irrevocably
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guarantee, as primary obligor and not merely as a surety, the due and punctual
payment when due (whether by required prepayment, declaration, demand or
otherwise) (including amounts that would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
362(a) or operation of any such stay under applicable Canadian law) of all
Obligations of Borrowers (including, without limitation, interest which, but
for the filing of a petition in bankruptcy with respect to U.S. Borrower, or a
similar action with respect to Canadian Borrower, would accrue on such
Obligations). For purposes of this Section 8, the obligations of Company
under this subsection 8.1 are referred to as this "Company Guaranty."
B. Terms of Company Guaranty
Company agrees that the Obligations of any Borrower may be
extended or renewed, and the Loans repaid and reborrowed in whole or in part,
without notice or further assent from it, and that it will remain bound upon
this Company Guaranty notwithstanding any extension, renewal or other
alteration of any such Obligation or repayment and reborrowing of the Loans.
Company waives presentation of, demand of, payment from and
protest of any Obligation of any Borrower and also waives notice of protest
for nonpayment. The obligations of Company under this Company Guaranty shall
not be affected by, and Company hereby waives its rights (to the extent
permitted by law) in connection with:
(a)the failure of Administrative Agent, any Managing Agent, or any
Lender to assert any claim or demand or to enforce any right or
remedy against any Borrower or Company under the provisions of this
Agreement or any other agreement or otherwise,
(b)any extension or renewal of any provision thereof,
(c)any rescission, waiver, amendment or modification of any of the
terms or provisions of this Agreement or any instrument executed
pursuant hereto,
(d)the release of any security held by Administrative Agent, any
Managing Agent or any Lender for the Obligations of any Borrower,
(e)the failure of Administrative Agent, any Managing Agent, or any
Lender to exercise any right or remedy against any other guarantor of
the Obligations of any Borrower,
(f)Administrative Agent, any Managing Agent, or any Lender taking
and holding security or collateral for the payment of this Company
Guaranty, any other guaranties of the Obligations or other
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liabilities of any Borrower and the Obligations guarantied hereby,
and exchanging, enforcing, waiving and releasing any such security or
collateral,
(g)Administrative Agent, any Managing Agent or any Lender applying
any such security or collateral and directing the order or manner of
sale thereof as Administrative Agent, such Managing Agent or such
Lender in its discretion may determine,
(h)Administrative Agent, any Managing Agent, or any Lender
settling, releasing, compromising, collecting or otherwise
liquidating the Obligations and any security or collateral therefor
in any manner determined by Administrative Agent, such Managing
Agent, or such Lender, or
(i)any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this guaranty,
including without limitation, the provisions of California Civil Code
Sections 2809, 2810, 2819, 2839, 2845, 2846, 2849, 2850, 2899 and
3433.
Company further agrees that this Company Guaranty constitutes a
guaranty of payment when due and not of collection and waives any right to
require that any resort be had by any Lender, any Managing Agent or
Administrative Agent or any other Person to any security held for payment of
the Obligations of any Borrower or to any balance of any deposit account or
credit on the books of any Lender, any Managing Agent, Administrative Agent or
any other Person in favor of any Borrower or any other Person.
The obligations of Company under this Company Guaranty shall not
be subject to any reduction, limitation, impairment or termination for any
reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations, discharge of
any Borrower from the Obligations in a bankruptcy or similar proceeding or
otherwise. Without limiting the generality of the foregoing, the obligations
of Company under this Company Guaranty shall not be discharged or impaired or
otherwise affected by the failure of Administrative Agent, any Managing Agent,
or any Lender to assert any claim or demand or to enforce any remedy under
this Agreement, any Loan Document or any other agreement, by any waiver or
modification of any provision thereof, by any default, failure or delay,
willful or otherwise, in the performance of the Obligations of any Borrower,
or by any other act or thing or omission or delay to do any other act or thing
that may or might in any manner or to any extent vary the risk of Company or
would otherwise operate as a discharge of Company as a matter of law or equity
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other than indefeasible payment in full of all Obligations.
Administrative Agent, any Managing Agent and any Lender may, at
their election, foreclose on any security held by Administrative Agent, such
Managing Agent or such Lender by one or more judicial or nonjudicial sales, or
exercise any other right or remedy Administrative Agent, any Managing Agent or
any Lender may have against any Borrower or any security without affecting or
impairing in any way the liability of Company hereunder except to the extent
the Obligations have been indefeasibly paid. Company waives any defense
arising out of such election by Administrative Agent, any Managing Agent or
any Lender, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of Company
against any Borrower or any security, so long as Administrative Agent, such
Managing Agent or such Lender act in a commercially reasonable manner.
Company further agrees that this Company Guaranty shall continue
to be effective or be reinstated, as the case may be, if at any time payment,
or any part thereof, of principal of or interest on any Obligation of any
Borrower is rescinded or must otherwise be restored by Administrative Agent,
any Managing Agent or any Lender upon the bankruptcy or reorganization of any
Borrower or otherwise.
Company further agrees, in furtherance of the foregoing and not in
limitation of any other right that Administrative Agent, any Managing Agent or
any Lender may have at law or in equity against Company by virtue hereof, upon
the failure of any Borrower to pay any of its Obligations when and as the same
shall become due (whether by required prepayment, declaration, demand or
otherwise), Company will forthwith pay, or cause to be paid, in cash, to
Administrative Agent an amount equal to the sum of the unpaid principal amount
of such Obligations, accrued and unpaid interest on such Obligations and all
other unpaid Obligations of such Borrower to Administrative Agent, any
Managing Agent or any Lender.
Company hereby irrevocably waives any right of subrogation,
contribution, indemnity or otherwise against any Borrower that may arise out
of or be caused by this Company Guaranty, all rights and/or claims which may
arise against any Borrower by reason of this Company Guaranty, any right to
enforce any remedy that Administrative Agent, any Managing Agent or any Lender
now has or may hereafter have against any Borrower and any benefit of, and any
right to participate in, any security now or hereafter held by Administrative
Agent, any Managing Agent or any Lender.
Any Indebtedness of any of Company's Subsidiaries held by Company
is hereby subordinated in right of payment to the Obligations on the terms of
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this paragraph. Upon the occurrence and during the continuation of an Event
of Default, no distribution of assets in respect of any such Indebtedness
(including any payment of principal, interest or fees or any repurchase,
redemption or setoff of such Indebtedness against other Indebtedness owing to
Company or payment received as a result of other Indebtedness being
subordinated to such Indebtedness) may be made until indefeasible payment in
full in cash of all Obligations. If, notwithstanding the preceding sentence,
any such distribution of assets shall be collected or received by Company
after the occurrence and during the continuation of an Event of Default, such
distribution of assets shall be paid over to Administrative Agent for the
benefit of Lenders to be held as collateral and then or thereafter credited
and applied against the Obligations but without impairing or limiting in any
manner the liability of Company under any other provision of this Section 8.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon any
failure of any Borrower to pay its Obligations when due (whether by required
prepayment, declaration, demand or otherwise) and consequent acceleration of
the Obligations pursuant to Section 7, any Lender, upon the consent of
Administrative Agent and Requisite Lenders, is hereby authorized by Company at
any time or from time to time, without notice to Company or to any other
Person, any such notice being hereby expressly waived to the extent permitted
by applicable law, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time owing by such
Lender to or for the credit or the account of Company against and on account
of the obligations and liabilities of Company to such Lender under this
Company Guaranty, including, but not limited to, all such obligations and
liabilities with respect to all claims of any nature or description arising
out of or connected with this Agreement, this Company Guaranty or the Letters
of Credit or any of the other Loan Documents, irrespective of whether or not
such Lender or Administrative Agent, with respect to any Obligation owed under
the Letters of Credit or this Agreement, shall have made any demand hereunder.
8.2 Guaranty by U.S. Borrower
A. Guaranty. As consideration for Lenders agreeing to enter into
this Agreement and to continue to extend the Commitments hereunder, U.S.
Borrower hereby confirms that it continues to unconditionally and irrevocably
guarantee, as a primary obligor and not merely as a surety, the due and
punctual payment when due (whether by required prepayment, declaration, demand
or otherwise) (including amounts that would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
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362(a) or operation of any such stay under applicable Canadian law) of all
Obligations of Canadian Borrower (including, without limitation, interest
which, but for the filing of a petition in bankruptcy or a similar action with
respect to Canadian Borrower, would accrue on such Obligations). For purposes
of this Section 8, the obligations of U.S. Borrower under this subsection 8.2
are referred to as this "U.S. Borrower Guaranty."
B. Terms of U.S. Borrower Guaranty
U.S. Borrower agrees that the Obligations of Canadian Borrower may
be extended or renewed, and the Loans repaid and reborrowed in whole or in
part, without notice or further assent from it, and that it will remain bound
upon this U.S. Borrower Guaranty notwithstanding any extension, renewal or
other alteration of any such Obligation or repayment and reborrowing of the
Loans.
U.S. Borrower waives presentation of, demand of, payment from and
protest of any Obligation of Canadian Borrower and also waives notice of
protest for nonpayment. The obligations of U.S. Borrower under this U.S.
Borrower Guaranty shall not be affected by, and U.S. Borrower hereby waives
its rights (to the extent permitted by law) in connection with:
(a)the failure of Administrative Agent, any Managing Agent, or any
Lender to assert any claim or demand or to enforce any right or
remedy against Canadian Borrower or U.S. Borrower under the
provisions of this Agreement or any other agreement or otherwise,
(b)any extension or renewal of any provision thereof,
(c)any rescission, waiver, amendment or modification of any of the
terms or provisions of this Agreement or any instrument executed
pursuant hereto,
(d)the release of any security held by Administrative Agent, any
Managing Agent or any Lender for the Obligations of Canadian
Borrower,
(e)the failure of Administrative Agent, any Managing Agent, or any
Lender to exercise any right or remedy against any other guarantor of
the Obligations of Canadian Borrower,
(f)Administrative Agent, any Managing Agent, or any Lender taking
and holding security or collateral for the payment of this U.S.
Borrower Guaranty, any other guaranties of the Obligations or other
liabilities of Canadian Borrower and the Obligations guarantied
hereby, and exchanging, enforcing, waiving and releasing any such
security or collateral,
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(g)Administrative Agent, any Managing Agent or any Lender applying
any such security or collateral and directing the order or manner of
sale thereof as Administrative Agent, such Managing Agent or such
Lender in its discretion may determine,
(h)Administrative Agent, any Managing Agent, or any Lender
settling, releasing, compromising, collecting or otherwise
liquidating the Obligations of Canadian Borrower and any security or
collateral therefor in any manner determined by Administrative Agent,
such Managing Agent, or such Lender, or
(i)any defenses or benefits that may be derived from or afforded
by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this guaranty,
including without limitation, the provisions of California Civil Code
Sections 2809, 2810, 2819, 2839, 2845, 2846, 2849, 2850, 2899 and
3433.
U.S. Borrower further agrees that this U.S. Borrower Guaranty
constitutes a guaranty of payment when due and not of collection and waives
any right to require that any resort be had by any Lender, any Managing Agent,
Administrative Agent or any other Person to any security held for payment of
the Obligations of Canadian Borrower or to any balance of any deposit account
or credit on the books of any Lender, any Managing Agent, Administrative Agent
or any other Person in favor of Canadian Borrower or any other Person.
The obligations of U.S. Borrower under this U.S. Borrower Guaranty
shall not be subject to any reduction, limitation, impairment or termination
for any reason, including, without limitation, any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to any defense
or setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Obligations, discharge of
Canadian Borrower from the Obligations in a bankruptcy or similar proceeding
or otherwise. Without limiting the generality of the foregoing, the
obligations of U.S. Borrower under this U.S. Borrower Guaranty shall not be
discharged or impaired or otherwise affected by the failure of Administrative
Agent, any Managing Agent, or any Lender to assert any claim or demand or to
enforce any remedy under this Agreement, any Loan Document or any other
agreement, by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations of Canadian Borrower, or by any other act or thing or omission or
delay to do any other act or thing that may or might in any manner or to any
extent vary the risk of U.S. Borrower or would otherwise operate as a
discharge of U.S. Borrower as a matter of law or equity other than
indefeasible payment in full of all Obligations.
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Administrative Agent, any Managing Agent and any Lender may, at
their election, foreclose on any security held by Administrative Agent, such
Managing Agent or such Lender by one or more judicial or nonjudicial sales, or
exercise any other right or remedy Administrative Agent, any Managing Agent or
any Lender may have against Canadian Borrower or any security without
affecting or impairing in any way the liability of U.S. Borrower hereunder
except to the extent the Obligations of Canadian Borrower have been
indefeasibly paid. U.S. Borrower waives any defense arising out of such
election by Administrative Agent, any Managing Agent or any Lender, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of U.S. Borrower against
Canadian Borrower or any security, so long as Administrative Agent, such
Managing Agent or such Lender act in a commercially reasonable manner.
U.S. Borrower further agrees that this U.S. Borrower Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time payment, or any part thereof, of principal of or interest on any
Obligation of Canadian Borrower is rescinded or must otherwise be restored by
Administrative Agent, any Managing Agent or any Lender upon the bankruptcy or
reorganization of Canadian Borrower or otherwise.
U.S. Borrower further agrees, in furtherance of the foregoing and
not in limitation of any other right that Administrative Agent, any Managing
Agent or any Lender may have at law or in equity against Company by virtue
hereof, upon the failure of Canadian Borrower to pay any of its Obligations
when and as the same shall become due (whether by required prepayment,
declaration, demand or otherwise), U.S. Borrower will forthwith pay, or cause
to be paid, in cash, to Administrative Agent an amount equal to the sum of the
unpaid principal amount of such Obligations, accrued and unpaid interest on
such Obligations and all other unpaid Obligations of Canadian Borrower to
Administrative Agent, any Managing Agent or any Lender.
U.S. Borrower hereby irrevocably waives any right of subrogation,
contribution, indemnity or otherwise against Canadian Borrower that may arise
out of or be caused by this U.S. Borrower Guaranty, all rights and/or claims
which may arise against Canadian Borrower by reason of this U.S. Borrower
Guaranty, any right to enforce any remedy that Administrative Agent, any
Managing Agent or any Lender now has or may hereafter have against Canadian
Borrower and any benefit of, and any right to participate in, any security now
or hereafter held by Administrative Agent, any Managing Agent or any Lender.
Any Indebtedness of Company or any of its Subsidiaries held by
U.S. Borrower is hereby subordinated in right of payment to the Obligations on
the terms of this paragraph. Upon the occurrence and during the continuation
of an Event of Default, no distribution of assets in respect of any such
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Indebtedness (including any payment of principal, interest or fees or any
repurchase, redemption or setoff of such Indebtedness against other
Indebtedness owing to U.S. Borrower or payment received as a result of other
Indebtedness being subordinated to such Indebtedness) may be made until
indefeasible payment in full in cash of all Obligations. If, notwithstanding
the preceding sentence, any such distribution of assets shall be collected or
received by U.S. Borrower after the occurrence and during the continuation of
an Event of Default, such distribution of assets shall be paid over to
Administrative Agent for the benefit of Lenders to be held as collateral and
then or thereafter credited and applied against the Obligations but without
impairing or limiting in any manner the liability of U.S. Borrower under any
other provision of this Section 8.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon any
failure of Canadian Borrower to pay its Obligations when due (whether by
required prepayment, declaration, demand or otherwise) and consequent
acceleration of the Obligations pursuant to Section 7, any Lender, upon the
consent of Administrative Agent and Requisite Lenders, is hereby authorized by
U.S. Borrower at any time or from time to time, without notice to U.S.
Borrower or to any other Person, any such notice being hereby expressly waived
to the extent permitted by applicable law, to set off and to appropriate and
to apply any and all deposits (general or special, including, but not limited
to, Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time owing by such Lender to or for the credit or the account of U.S. Borrower
against and on account of the obligations and liabilities of U.S. Borrower to
such Lender under this U.S. Borrower Guaranty, including, but not limited to,
all such obligations and liabilities with respect to all claims of any nature
or description arising out of or connected with this Agreement, this U.S.
Borrower Guaranty or the Letters of Credit or any of the other Loan Documents,
irrespective of whether or not such Lender or Administrative Agent, with
respect to any Obligation owed under the Letters of Credit or this Agreement,
shall have made any demand hereunder.
Section 9. ADMINISTRATIVE AGENT AND MANAGING AGENTS
9.1 Appointment.
CIBC is hereby appointed Administrative Agent under this Agreement
and under the other Loan Documents by each Lender, and each of CIBC and
Scotiabank is hereby appointed a Managing Agent under this Agreement and under
the other Loan Documents by each Lender. Each Lender hereby authorizes
Administrative Agent and each Managing Agent to act as its agents in
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accordance with the terms of this Agreement and the other Loan Documents.
Each of Administrative Agent and Managing Agents agrees to act upon the
express conditions contained in this Agreement and the other Loan Documents,
as applicable. Except as expressly set forth in this Section 9, the
provisions of this Section 9 are solely for the benefit of Administrative
Agent, Managing Agents and Lenders, and neither Company nor any Borrower shall
have any rights as a third party beneficiary of any of the provisions hereof,
but Company and Borrowers shall have the rights expressly granted to them in
subsection 9.6. In performing its functions and duties under this Agreement,
each of Administrative Agent and Managing Agents shall act solely as an agent
of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Company or
any Borrower or any of Company's Subsidiaries.
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes each of
Administrative Agent and each Managing Agent to take such action on such
Lender's behalf and to exercise such powers under this Agreement and under the
other Loan Documents as are specifically delegated to Administrative Agent or
Managing Agents, as the case may be, by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. Each of Administrative
Agent and Managing Agents shall have only those duties and responsibilities
that are expressly specified in this Agreement and the other Loan Documents
and each such Agent may perform such duties by or through its agents or
employees. Neither Administrative Agent nor any Managing Agent shall have, by
reason of this Agreement or any of the other Loan Documents, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any of
the other Loan Documents, express or implied, is intended to or shall be so
construed as to impose upon Administrative Agent or any Managing Agent any
obligations in respect of this Agreement or any of the other Loan Documents
except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Neither Administrative
Agent nor any Managing Agent shall be responsible to any Lender for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any other Loan Document or
for any representations, warranties, recitals or statements made herein or
therein or made in any written or oral statement or in any financial or other
statements, instruments, reports or certificates or any other documents
furnished or made available by Administrative Agent or any Managing Agent to
Lenders or by or on behalf of Company or Borrowers to Administrative Agent or
any Managing Agent or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of Company, any Borrower or any other Person liable for the payment of
any Obligations, nor shall Administrative Agent or any Managing Agent be
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required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or the use of
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, neither Administrative Agent nor any Managing
Agent shall have any liability arising from confirmations of the amount of
outstanding Loans or the Canadian Letter of Credit Usage, the U.S. Letter of
Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Administrative Agent nor any
Managing Agent and none of their respective officers, directors, employees or
agents shall be liable to Lenders for any action taken or omitted by
Administrative Agent or any Managing Agent, as the case may be, hereunder or
in connection herewith except to the extent caused by its or their gross
negligence or willful misconduct, as finally determined by a court of
competent jurisdiction. If Administrative Agent or any Managing Agent shall
request instructions from Lenders with respect to any act or action (including
the failure to take an action) in connection with this Agreement or any of the
other Loan Documents, Administrative Agent or such Managing Agent, as the case
may be, shall be entitled to refrain from such act or taking such action
unless and until Administrative Agent or such Managing Agent, as the case may
be, shall have received instructions from Requisite Lenders or all Lenders, as
the case may be. Without prejudice to the generality of the foregoing,
(i) Administrative Agent and Managing Agents shall be entitled to rely, and
shall be fully protected in relying, upon any communication, instrument or
document believed to be genuine and correct and to have been signed or sent by
the proper person or persons, and shall be entitled to rely and shall be
protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and Borrower and Company's Subsidiaries), accountants,
experts and other professional advisors selected by any of them; and (ii) no
Lender shall have any right of action whatsoever against Administrative Agent
or any Managing Agent as a result of Administrative Agent or such Managing
Agent, as the case may be, acting or (where so instructed) refraining from
acting under this Agreement or any of the other Loan Documents in accordance
with the instructions of Requisite Lenders or all Lenders, as the case may be.
Each of Administrative Agent and Managing Agents shall be entitled to refrain
from exercising any power, discretion or authority vested in it under this
Agreement or any of the other Loan Documents unless and until it has obtained
the instructions of Requisite Lenders or all Lenders, as the case may be.
D. Administrative Agent and Managing Agents Entitled to Act as
Lenders. The agency hereby created shall in no way impair or affect any of
the rights and powers of, or impose any duties or obligations upon,
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Administrative Agent or any Managing Agent in its individual capacity as a
Lender under this Agreement. With respect to its participation in the Loans
and Letters of Credit, each of Administrative Agent and Managing Agents shall
have the same rights and powers under this Agreement as any other Lender and
may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include
each of Administrative Agent and Managing Agents in its individual capacity.
Each of Administrative Agent and Managing Agents and each of their respective
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Company, any
Borrower or any of Company's Affiliates as if it were not performing the
duties specified herein, and may accept fees and other consideration from
Company and Borrowers for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
9.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company,
each Borrower and Company's Subsidiaries in connection with the making of the
Loans hereunder and the issuance of Letters of Credit hereunder and such
Lender's purchasing of participations in such Letters of Credit and that it
has made and shall continue to make its own appraisal of the creditworthiness
of Company, each Borrower and Company's Subsidiaries. Neither Administrative
Agent nor any Managing Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or the issuance of the Letters of Credit or at
any time or times thereafter, and neither Administrative Agent nor any
Managing Agent shall have any responsibility with respect to the accuracy of
or the completeness of any information provided to Lenders.
9.4 Right to Indemnity.
The Lenders of each Lending Unit in proportion to their Lending
Unit's Pro Rata Share, severally with the Lenders of each other Lending Unit
agree to indemnify each of Administrative Agent and Managing Agents (and their
respective directors, officers, employees and agents), to the extent that
Administrative Agent or any Managing Agent, as the case may be (or any of
their respective directors, officers, employees and agents), shall not have
been reimbursed by Company or Borrowers, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
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suits, costs, expenses (including, without limitation, counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Administrative Agent or such
Managing Agent, as the case may be (or their respective directors, officers,
employees and agents), in performing its duties hereunder or under this
Agreement or the other Loan Documents or otherwise in its capacity as
Administrative Agent or Managing Agent, as the case may be, in any way
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from Administrative Agent's or any
Managing Agent's (or any such director's, officer's, employee's or agent's)
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction. If any indemnity furnished to Administrative Agent or
any Managing Agent, as the case may be, for any purpose shall, in the opinion
of Administrative Agent or such Managing Agent, as the case may be, be
insufficient or become impaired, Administrative Agent or such Managing Agent,
as the case may be, may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity
is furnished.
9.5 Registered Persons Treated as Owners.
Administrative Agent may deem and treat the Persons listed as
Lenders in the Register as the owners of the corresponding Loans or
participations in Letters of Credit listed therein for all purposes hereof
unless and until an Assignment and Acceptance effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent and recorded
in the Register as provided in subsection 10.1B(ii) of this Agreement. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is listed in the Register as a
Lender shall be conclusive and binding on any subsequent holder, transferee or
assignee of the corresponding Loan or participation in Letters of Credit.
9.6 Successor Administrative Agent.
Administrative Agent and/or each Managing Agent may resign at any
time by giving 30 days' prior written notice thereof to Lenders, Company and
Borrowers, and Administrative Agent and each Managing Agent may be removed at
any time with or without cause by an instrument or concurrent instruments in
writing delivered to Company, Borrowers and Administrative Agent or such
Managing Agent, as the case may be, and signed by Requisite Lenders. Upon any
such notice of resignation or any such removal, Requisite Lenders shall have
the right, upon five Business Days' notice to Company and Borrowers, to
appoint a successor Administrative Agent or Managing Agent; provided that if
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such proposed successor Administrative Agent or Managing Agent is not a
Lender, Company and Borrowers shall have the right to approve such appointment
(which approval may not be unreasonably withheld or delayed). Upon the
acceptance of any appointment as Administrative Agent or Managing Agent
hereunder by a successor Administrative Agent or Managing Agent, that
successor Administrative Agent or Managing Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Administrative Agent or Managing Agent and the retiring or
removed Administrative Agent or Managing Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Administrative Agent's or Managing Agent's resignation or removal hereunder as
Administrative Agent or Managing Agent, the provisions of this subsection 9.6
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent or Managing Agent under this Agreement.
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of Credit.
A. General. Each Lender shall have the right at any time to
(i) sell, assign, transfer or negotiate to any Eligible Assignee which has
both a Canadian Lending Office for borrowings and payments relating to
Canadian Loans and a U.S. Lending Office for borrowings and payments relating
to U.S. Loans, or (ii) sell participations to any Person in, all or any part
of any Loan or Loans made by it or its Commitments or its Letters of Credit or
participations therein or any other interest herein or in any other
Obligations owed to it; provided that no such assignment or participation
shall, without the consent of Company and Borrowers, require Company or any
Borrower to file a registration statement with the Securities and Exchange
Commission or apply to qualify such assignment or participation under the
securities laws of any jurisdiction. Except as otherwise provided in this
subsection 10.1, no Lender shall, as between either Borrower and such Lender,
be relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or any granting of participations in,
all or any part of the Loans, the Commitments, Letters of Credit or
participations therein or the other Obligations owed to such Lender.
B. Assignments.
(i)Amounts and Terms of Assignments. Each Loan, Commitment or
other Obligation to be assigned pursuant to subsection 10.1A may
(a) be assigned in any amount (of a constant and not a varying
percentage) to another Lender, or to an Affiliate of the assigning
Lender or another Lender, with the giving of notice to Company,
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Borrowers and Administrative Agent or (b) be assigned in an amount
(of a constant and not a varying percentage) of not less than
$5,000,000 (or such lesser amount as shall constitute the aggregate
amount of all Loans, Commitments, Letters of Credit or participations
therein and other Obligations of the assigning Lender) to any other
Eligible Assignee with the giving of notice to Company, Borrowers and
Managing Agents and in the case of assignment to any other Eligible
Assignee, with the consent of Company, Borrowers and Managing Agents
for an assignment made by a Lender other than Administrative Agent,
and with the consent of Company, Borrowers and Scotiabank for an
assignment made by Administrative Agent, which consent of Company,
Borrowers and Managing Agents shall not be unreasonably withheld;
provided further that all such assignments by any Lender shall be
permitted only if the Canadian Lender and U.S. Lender of each Lending
Unit simultaneously assign the same proportionate shares of their
outstanding Loans, participations in Letters of Credit and
Commitments to assignees that will constitute the Canadian Lender and
the U.S. Lender of a Lending Unit for the purposes of this Agreement.
To the extent of any such assignment in accordance with either clause
(a) or (b) above, the assigning Lender shall be relieved of its
obligations with respect to its Loans, Commitments, Letters of Credit
or participations therein or other Obligations or the portion thereof
so assigned. The parties to each such assignment shall execute and
deliver to Administrative Agent, for its acceptance and recording in
the Register, an Assignment and Acceptance, together with a
processing and recordation fee of $2,500, and such certificates,
documents or other evidence, if any, with respect to United States
federal income tax withholding matters as the assignee under such
Assignment and Acceptance may be required to deliver to
Administrative Agent pursuant to subsection 10.7B(iii). Upon such
execution, delivery and acceptance, from and after the effective date
specified in such Assignment and Acceptance, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a
Lender hereunder, and (z) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its
rights and 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).
The Commitments hereunder shall be modified to reflect the Commitment
of such assignee and any remaining Commitment of such assigning
Lender and, if any such assignment occurs after the issuance of a
Note or a Grid Gold Acknowledgement to the assigning Lender
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hereunder, if requested pursuant to subsection 2.1E, new Notes and
Grid Gold Acknowledgements shall, upon surrender of the assigning
Lender's Notes or Grid Gold Acknowledgements, be issued to the
assignee and to the assigning Lender, substantially in the forms of
Exhibit IV-A, Exhibit IV-B or Exhibit V annexed hereto, as the case
may be, with appropriate insertions, to reflect the new Commitments
of the assignee and the assigning Lender.
(ii)Acceptance by Managing Agents; Recordation in Register. Upon
its receipt of an Assignment and Acceptance executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee
meeting the requirements of subsection 10.1A, together with the
processing and recordation fee referred to in subsection 10.1B(i) and
any certificates, documents or other evidence with respect to United
States federal and Canadian income tax withholding matters that such
assignee may be required to deliver to Administrative Agent pursuant
to subsection 10.7B(iii), Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit X hereto and if Managing Agents, Company and
Borrowers have consented to the assignment evidenced thereby (in each
case to the extent such consent is required pursuant to subsection
10.1B(i)), (a) accept such Assignment and Acceptance by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Managing Agents to such assignment),
(b) record the information contained therein in the Register, and
(c) give prompt notice thereof to Company and Borrowers.
Administrative Agent shall maintain a copy of each Assignment and
Acceptance delivered to and accepted by it as provided in this
subsection 10.1B(ii).
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the regularly scheduled maturity of
any portion of the principal amount of or interest on any Loan or any
commitment fees allocated to such participation, (ii) the release of Company
or U.S. Borrower from its obligations under Section 8 or (iii) a reduction of
the principal amount of or the rate of interest payable on any Loan or
payments due in repayment of draws under Letters of Credit allocated to such
participation, and all amounts payable by any Borrower or Company hereunder
shall be determined as if such Lender had not sold such participation.
Company and each Borrower hereby acknowledges and agrees that, only for
purposes of subsections 2.6D, 10.5 and 10.7, any participation will give rise
to a direct obligation of Borrowers and Company to the participant and the
participant shall be considered to be a "Lender"; provided that no participant
shall be entitled to receive any greater amount pursuant to subsection 2.6D or
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10.7 than the transferor Lender would have been entitled to receive in respect
of the amount of the participation effected by such transferor Lender to such
participant had no such participation occurred.
D. Information. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to
time to assignees and participants (including prospective assignees and
participants), subject to subsection 10.22.
E. Federal Reserve Bank. Nothing in this subsection 10.1 shall
prevent or prohibit any Lender from pledging its rights (but not its
obligations to make Loans and to issue or participate in Letters of Credit)
under this Agreement and/or its Loans and/or Notes hereunder to a Federal
Reserve Bank.
10.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Company and Borrowers jointly and severally agree to pay promptly
(i) all the actual and reasonable costs and expenses of preparation of the
Loan Documents; (ii) all the costs of furnishing all opinions by counsel for
Company or any Borrower (including without limitation any opinions reasonably
requested by Lenders as to any legal matters arising hereunder) and of
Company's or any Borrower's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this
Agreement and the other Loan Documents including, without limitation, with
respect to confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Administrative Agent in connection with the negotiation, preparation,
execution and administration of the Loan Documents, the Letters of Credit and
the Loans and any consents, amendments, waivers or other modifications hereto
or thereto and any other documents or matters requested by Company or any
Borrower; (iv) all other actual and reasonable costs and expenses incurred by
Administrative Agent in connection with the negotiation, preparation and
execution of the Loan Documents and the transactions contemplated hereby and
thereby; and (v) after the occurrence and during the continuation of an Event
of Default, all costs and expenses, including reasonable attorneys' fees,
excluding in-house counsel, and costs of settlement, incurred by
Administrative Agent, Managing Agents and Lenders in enforcing any Obligations
of or in collecting any payments due from Company or any Borrower hereunder or
under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
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10.3 Indemnity.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be
consummated, Company and Borrowers jointly and severally agree to defend,
indemnify, pay and hold harmless Administrative Agent, Managing Agents and
Lenders, and the officers, directors, employees, counsel, agents and
affiliates of Administrative Agent, Managing Agents and Lenders (collectively
called the "Indemnitees") from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
without limitation the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto),
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including without limitation securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby (including without limitation Lenders'
agreement to make the Loans hereunder or the use or intended use of the
proceeds of any of the Loans or the issuance of Letters of Credit hereunder
and Lenders' agreement to purchase participations therein as provided for
herein, or the use or intended use of the Letters of Credit) or the statements
contained in any commitment letter delivered by any Lender to Company or any
Borrower with respect thereto (collectively called the "Indemnified
Liabilities"); provided that neither Company nor any Borrower shall have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee as finally determined by a
court of competent jurisdiction; provided further, that, subject to the hold
harmless provisions of this subsection 10.3, Company shall be subrogated to
all rights that any such Indemnitee may have in respect of any person or
persons whose acts or failure to act resulted in the indemnified liability and
the Indemnitee shall, upon receipt of payment for all Indemnified Liabilities
payable to such Indemnitee, assign to Company the rights with respect to such
Indemnified Liabilities such Indemnitee may have against any person or persons
whose acts or failure to act resulted in the indemnified liability; and
provided still further that any exercise of rights of subrogation shall be
withheld until payment of all of the related Indemnified Liabilities. To the
extent that the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, Company and each Borrower shall contribute the
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maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them, subject however to the limitations contained in
the last clause of the preceding sentence.
10.4 Set Off.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by Company
and each Borrower at any time or from time to time, without notice to Company
or such Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including, but not limited to, Indebtedness
evidenced by certificates of deposit, whether matured or unmatured, but not
including trust accounts) and any other Indebtedness at any time held or owing
by that Lender to or for the credit or the account of Company or such
Borrower, as the case may be, against and on account of the obligations and
liabilities then due and payable of Company or such Borrower, as the case may
be, to that Lender under this Agreement, and any Notes, any Grid Gold
Acknowledgements and any Letters of Credit and participations therein,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Notes, the Grid Gold
Acknowledgements, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not that Lender shall have
made any demand hereunder.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment, by realization upon security, through the
exercise of any right of set-off or banker's lien, by counterclaim or cross
action or by the enforcement of any right under the Loan Documents or under
Letters of Credit or otherwise, or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receive payment or reduction of
a proportion of the aggregate amount of Obligations then due and owing to that
Lender (collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
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shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy or reorganization of Company, any Borrower or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company and each Borrower
expressly consents to the foregoing arrangement and agrees that any holder of
a participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by Company or
such Borrower to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.
10.6 Amendments and Waivers.
No amendment, modification, termination or waiver of any provision
of this Agreement or of the Notes or consent to any departure by Company or
any Borrower therefrom, shall in any event be effective without the written
concurrence of Requisite Lenders; provided that any amendment, modification,
termination or waiver of or with respect to: the amount of the Commitments or
the principal amount of the Loans or interest accrued thereon; each Lender's
Pro Rata Share; the definitions of "Requisite Lenders," and "Commitment
Termination Date"; any provision expressly requiring the approval or
concurrence of all Lenders; the scheduled final maturity dates of the Loans;
the 150% figure set forth in subsection 2.4A(iii); the dates on which interest
or any fees are payable; decreases in the interest rate margins borne by the
Loans; decreases of any amounts payable in respect of the Letters of Credit
pursuant to subsections 2.7E(i) and (ii) or in the amount of any fees payable
to all Lenders hereunder; the maximum duration of Interest Periods, the
provisions of Section 8 or any release of Company or U.S. Borrower from its
obligations thereunder; and the provisions contained in subsection 7.1 and
this subsection 10.6 shall be effective only if evidenced by a writing signed
by or on behalf of all Lenders. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 3 shall be
effective only if evidenced by a writing signed by or on behalf of
Administrative Agent and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note or Grid Gold
Acknowledgement shall be effective without the written concurrence of the
holder of that Note or Grid Gold Acknowledgement, and (iii) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement expressly requiring the approval or
concurrence of Administrative Agent shall be effective without the written
concurrence of Administrative Agent and/or Managing Agents. Administrative
Agent may, but shall have no obligation to, with the concurrence of any
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Lender, execute amendments, modifications, waivers or consents on behalf of
that Lender. Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given. No notice to or
demand on Company or any Borrower in any case shall entitle Company or any
Borrower to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company
or any Borrower, on Company and such Borrower, as the case may be.
10.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. If any Lender shall
determine (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any law, treaty or
governmental rule, regulation or order, or any change therein or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or
order), or any determination of a court or governmental authority in each case
that is adopted after the Original Closing Date or compliance by such Lender
with any guideline, request or directive issued or made after the Original
Closing Date by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):
(i)subjects such Lender (or its Lending Office) to any additional
Tax (other than any Excluded Taxes) with respect to this Agreement or
any of the Loans or any of its obligations hereunder, or changes the
basis of taxation of payments to such Lender (or its Lending Office)
of any Obligation (except for changes in Excluded Taxes);
(ii)imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or
other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of such Lender (other than any such reserve or other
requirements with respect to Eurodollar Rate Loans that are reflected
in the definition of Adjusted Eurodollar Rate); or
(iii) imposes any other condition on or affecting such Lender (or
its applicable Lending Office) or its obligations hereunder or the
interbank Eurodollar market or precious metals market;
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and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Loans hereunder or to reduce any
amount received or receivable by such Lender (or its Lending Office) with
respect thereto; then, in any such case, Borrowers and Company shall be
jointly and severally obligated to promptly pay to such Lender, upon written
demand and receipt of the written notice referred to below, such additional
amount or amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender in its sole discretion
shall determine) as may be necessary to compensate such Lender on an after-tax
basis for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company and Borrowers a
written notice, setting forth in reasonable detail the basis for calculating
the additional amounts owed to such Lender under this subsection 10.7A, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
B. Withholding of Taxes.
(i)Payments to Be Free and Clear. All sums payable by Borrowers
and Company under this Agreement and the other Loan Documents to such
Lender shall be paid free and clear of and without any deduction or
withholding on account of any Covered Tax imposed, levied, collected,
withheld or assessed by or within the United States of America or
Canada or any political subdivision in or of the United States of
America or Canada or any other jurisdiction from which a payment is
made by or on behalf of Company or any Borrower or by any federation
or organization of which the United States of America or Canada or
any such jurisdiction is a member at the time of payment.
(ii)Withholding in respect of Payments. If Company, any Borrower
or any other Person is required by law to make any deduction or
withholding on account of any Covered Tax from any sum paid or
payable by Company or such Borrower to Administrative Agent, any
Managing Agent or any Lender under any of the Loan Documents:
(a)Company and Borrowers shall notify Administrative Agent of
any such requirement or any change in any such requirement as soon
as Company or any Borrower becomes aware of it;
(b)Company or such Borrower, as the case may be, shall pay any
such Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on Company
or such Borrower) for its own account or (if that liability is
imposed on Administrative Agent, such Managing Agent or such
Lender, as the case may be) on behalf of and in the name of
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Administrative Agent, such Managing Agent or such Lender;
(c)in the event such Tax is a Covered Tax, the sum payable by
Company or such Borrower in respect of which the relevant
deduction, withholding or payment is required shall be increased
to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent, such
Managing Agent or such Lender, as the case may be, receives on the
due date and retains (free from any liability in respect of any
such deduction, withholding or payment) a net sum equal to what it
would have received and so retained had no such deduction,
withholding or payment in respect of Covered Taxes been required
or made; and
(d)within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within
30 days after the due date of payment of any Tax which it is
required by clause (b) above to pay, Company and Borrowers shall
deliver to Administrative Agent evidence reasonably satisfactory
to the other affected parties of such deduction, withholding or
payment and of the remittance thereof to the relevant taxing or
other authority;
(iii)U.S. Tax Certificates. Each Lender that is organized under
the laws of any jurisdiction other than the United States or any
state or other political subdivision thereof shall deliver to
Administrative Agent for transmission to Company and Borrowers, on or
prior to the Original Closing Date (in the case of each Lender listed
on the signature pages hereof) or on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender (in the case of each
other Lender), and at such other times as may be necessary in the
determination of Company or any Borrower or Administrative Agent
(each in the reasonable exercise of its discretion), such
certificates, documents or other evidence, properly and accurately
completed and duly executed by such Lender (including, without
limitation, Internal Revenue Service Form 1001 or Form 4224 or any
other certificate or statement of exemption required by Treasury
Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any
successor thereto) to establish that such Lender is not subject to
deduction or withholding of United States federal income tax under
Section 1441 or 1442 of the Internal Revenue Code or otherwise (or
under any comparable provisions of any successor statute) and each
Lender shall deliver to Administrative Agent for transmission to
Company and Borrowers any such additional certificates, documents or
other evidence as may at such time be required by applicable United
States or Canadian federal or state or provincial law if required to
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establish that such Lender is not subject to deduction or withholding
under United States or Canadian tax laws with respect to any payments
to such Lender of principal, interest, fees or other amounts payable
under any of the Loan Documents. Neither Company nor any Borrower
shall be required to pay any additional amount to any such Lender
under clause (c) of subsection 10.7B(ii) if such Lender shall have
failed to satisfy the requirements of the immediately preceding
sentence; provided that if such Lender shall have satisfied such
requirements on the Original Closing Date (in the case of each Lender
listed on the signature pages hereof) or on the date of the
Assignment and Acceptance pursuant to which it became a Lender (in
the case of each other Lender), nothing in this subsection 10.7B(iii)
shall relieve Company or any Borrower of any obligation to pay any
additional amounts pursuant to clause (c) of subsection 10.7B(ii) in
the event that, as a result of any change in applicable law after the
Original Closing Date or the date of the applicable Assignment and
Acceptance, as the case may be, such Lender is no longer properly
entitled to deliver certificates, documents or other evidence at a
subsequent date establishing the fact that such Lender is not subject
to withholding as described in the immediately preceding sentence.
C. Capital Adequacy Adjustment. If any Lender shall have determined
in good faith that the adoption, effectiveness, phase-in or applicability
(excluding any adoption, effectiveness, phase-in or applicability published as
of the Original Closing Date and currently scheduled to take effect) after the
Original Closing Date of any law, rule or regulation (or any provision
thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof after the Original Closing Date by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder to a level below that which such Lender
or such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within ten Business Days
after written demand by such Lender (with a copy of such demand to
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Administrative Agent), Company and Borrowers shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such
controlling corporation for such reduction.
10.8 Lenders' Obligation to Mitigate; Replacement of Lender.
Each Lender agrees that, as promptly as practicable after the
officer of such Lender responsible for administering the Loans under this
Agreement becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected Lender as
provided in subsection 2.6C or that would entitle such Lender to receive
payments under subsection 10.7A or 10.7C, it will, to the extent not incon-
sistent with such Lender's internal policies, use reasonable efforts (i) to
make, fund or maintain the Commitments of such Lender or the affected Loans of
such Lender through another lending office of such Lender, or (ii) to take
such other measures as such Lender may deem reasonable, if as a result thereof
the circumstances which would cause such Lender to be an Affected Lender as
provided in subsection 2.6C would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to
subsection 10.7A or 10.7C would be materially reduced and if, as determined by
such Lender in its sole discretion, the making, funding or maintaining of such
Commitments or Loans through such other lending office or in accordance with
such other measures, as the case may be, would not otherwise adversely affect
such Commitments or Loans or the interests of such Lender; provided that such
Lender will not be obligated to utilize such other lending office pursuant to
this subsection 10.8 unless Borrowers agree to pay all reasonable expenses
incurred by such Lender in utilizing such other lending office. A certificate
as to the amount of any such expenses payable by Borrowers pursuant to this
subsection 10.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender to Borrowers shall be conclusive absent
manifest or demonstrable error.
If any Lender becomes entitled to receive payments under
subsection 10.7A or 10.7C, Borrowers have the right at any time to treat such
Lender as an Affected Lender and to substitute one or more Eligible Assignees
for such Lender as provided in subsection 2.6C.
10.9 Change in Accounting Principles.
If any changes in accounting principles from those used in the
preparation of the financial statements referred to in subsection 4.3
hereafter occasioned by the promulgation of rules, regulations, pronouncements
and opinions by or required by the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) result in a change in the method of
calculation of financial covenants, standards or terms found in Sections 1, 5
and 6 hereof, the parties hereto agree to enter into negotiations in order to
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amend such provisions so as to equitably reflect such changes with the desired
result that the criteria for evaluating Company's consolidated financial
condition shall be the same after such changes as if such changes had not been
made.
10.10 Independence of Covenants.
All covenants hereunder shall be given independent effect so that
if a particular action or condition is not permitted by any of such covenants,
the fact that it would be permitted by an exception to, or would otherwise be
within the limitations of, another covenant shall not avoid the occurrence of
an Event of Default or Potential Event of Default if such action is taken or
condition exists.
10.11 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telecopied, telexed or sent by United States or
Canadian mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telecopy or telex
if delivered or received on a Business Day or on the first Business Day after
delivery or receipt if delivered or received on a day that is not a Business
Day. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or (i) as to
Company, any Borrower, Administrative Agent and any Managing Agent, such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto and (ii) as to each other party, such other address
as shall be designated by such party in a written notice delivered to
Administrative Agent.
10.12 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement, the making of the Loans
hereunder and the issuance of the Letters of Credit.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections 2.6D, 10.2,
10.3, 10.4, 10.7, 10.14 and 10.25 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.4, 10.5, 10.7B(iii), and 10.25 shall survive, but
this Agreement shall otherwise terminate, upon the termination of the
Commitments, payment of all Obligations (other than contingent amounts
pursuant to subsections 2.6D, 10.2, 10.3, 10.7 and 10.25 not at such time
claimed or due and payable), the cancellation or expiration of the Letters of
Credit and the reimbursement of any amounts drawn thereunder; provided that
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this Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by Administrative Agent, any Managing
Agent or any Lender upon the bankruptcy or reorganization of Company or any
Borrower or otherwise.
10.13 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Lender in the exercise of
any power, right or privilege hereunder or under a Letter of Credit shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof
or of any other power, right or privilege. All rights and remedies existing
under this Agreement, the Notes, the Letters of Credit and the other Loan
Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
10.14 Marshalling; Payments Set Aside.
Neither Administrative Agent, any Managing Agent nor any Lender
shall be under any obligation to marshal any assets in favor of Company, any
Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that Company or any Borrower makes a payment or
payments to Administrative Agent, any Managing Agent or Lenders, or
Administrative Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.15 Severability.
In case any provision in or obligation under this Agreement, the
Notes or the Grid Gold Acknowledgments shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired
thereby.
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10.16 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each
Lender shall be a separate and independent debt, and each Lender shall be,
subject to Section 7, entitled to protect and enforce its rights arising out
of this Agreement and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
10.17 Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
10.18 Applicable Law.
THIS AGREEMENT AND THE NOTES AND THE LEGAL RELATIONS AMONG THE
PARTIES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH LETTER OF
CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED 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 PRACTICES 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.
10.19 Successors and Assigns.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders. The terms and
provisions of this Agreement shall inure to the benefit of any assignee or
transferee of any of the Obligations, and in the event of any such transfer or
assignment the rights and privileges herein conferred upon Lenders shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. Neither Company's nor any
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company or any Borrower without the prior written
consent of all Lenders. Lenders' rights of assignment are subject to
subsection 10.1.
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10.20 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE
STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER
LOAN DOCUMENT OR SUCH OBLIGATION. Each of Company, U.S. Borrower and Canadian
Borrower designates and appoints CT Corporation System, and such other Persons
as may hereafter be selected by Company and Borrowers irrevocably agreeing in
writing to so serve, as its and Borrowers' agent to receive on their behalf
service of all process in any such proceedings in any such court, such service
being hereby acknowledged by Company and each Borrower to be effective and
binding service in every respect. A copy of any such process so served shall
be mailed by registered mail to Company at its address as provided in
subsection 10.11; provided that, unless otherwise provided by applicable law,
any failure to mail such copy shall not affect the validity of service of such
process. If any agent appointed by Company or any Borrower refuses to accept
service, Company and each Borrower hereby agree that service of process
sufficient for personal jurisdiction in any action against Company or any
Borrower may be made by registered or certified mail, return receipt
requested, to Company at its address as provided in subsection 10.11, and
Company and each Borrower hereby acknowledge that such service shall be
effective and binding in every respect if timely received. Nothing herein
shall affect the right to serve process in any other manner permitted by law
or shall limit the right of any party to bring proceedings against any party
in the courts of any other jurisdiction.
10.21 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION
OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of
this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to enter into a
business relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this waiver in
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their related future dealings. Each party hereto further warrants and
represents that it has reviewed this waiver with its legal counsel and that it
knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE OBLIGATIONS. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
10.22 Confidentiality.
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential by Company or any Borrower in accordance with such Lender's
customary procedures for handling its own confidential information of this
nature and in accordance with safe and sound banking practices, it being
understood and agreed by Company and Borrowers that Lenders may disclose such
information (i) to their accountants and legal counsel in connection with
their ongoing review of the credit extended under this Agreement and (ii) to
any bona fide or prospective assignee, transferee or participant in connection
with the contemplated assignment or transfer by such Lender of any Loans or
any participation therein or as required (provided that in each case of
disclosure under (i) and (ii), the disclosing party shall advise such persons
of the non-public nature of the information and secure from such persons in
advance of disclosure that such persons will treat the information as
confidential in accordance with its customary procedures for handling
confidential information, subject to the disclosure provisions herein),
(iii) to any governmental agency or representative thereof upon its reasonable
request, or (iv) pursuant to legal process (provided that in the case of
disclosure under (iii) and (iv), the disclosing party shall advise Company
(unless such disclosure is prohibited by such governmental agency or legal
process) of such intended disclosure as soon as possible in advance if
feasible and otherwise as soon as possible thereafter and shall cooperate with
Company, at Company's expense, in any reasonable effort by Company to prevent
disclosure of such information); provided that in no event shall any Lender be
obligated or required to return any materials furnished by Company or any of
its Subsidiaries.
10.23 Entire Agreement.
This Agreement, taken together with all of the other Loan
Documents and all certificates and other documents delivered by Company to
Administrative Agent and Lenders pursuant to the Loan Documents, that certain
letter dated June 4, 1993 among Company, Borrowers and Administrative Agent
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relating to Administrative Agent's fees, and that certain letter dated October
6, 1994 among Company, Borrowers and Administrative Agent relating to certain
other fees, embodies the entire agreement and supersedes all prior agreements,
written and oral, relating to the subject matter hereof.
10.24 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Company and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
10.25 Judgment Currency.
If for the purposes of obtaining a judgment in any court it is
necessary to convert a sum due hereunder or under any other Loan Document in
any currency (the "Original Currency") into another currency (the "Other
Currency"), the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate of
exchange quoted by The Bank of Canada at 12:00 Noon (New York time) on the
Business Day preceding that on which final judgment is given. The obligation
of Company and each Borrower in respect of any sum due in the Original
Currency from it to any Lender hereunder or under any other Loan Document
shall, notwithstanding any judgment in any Other Currency, be discharged only
to the extent that on the Business Day following receipt by such Lender of any
sum adjudged to be so due in such Other Currency such Lender may in accordance
with normal banking procedures purchase the Original Currency with such Other
Currency; if the amount of the Original Currency so purchased is less than the
sum originally due to such Lender in the Original Currency, Company and
Borrowers agree, as a separate obligation and notwithstanding any such
judgment, to indemnify such Lender against such loss, and if the amount of the
Original Currency so purchased exceeds the sum originally due to any Lender in
the Original Currency, such Lender agrees to remit to Company or the
applicable Borrower, as the case may be, such excess.
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10.26 Change in Control.
A. If individuals who on September 30, 1994 were members of the board
of directors of Company (together with any new directors whose election to
such board of directors or whose nomination for election by the shareholders
of Company was approved by a vote of a majority of the directors then still in
office who were either directors on September 30, 1994 or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such board of directors then in office; or if a
"Change of Control" as defined in the indenture pursuant to which the
Subordinated Debentures have been issued shall have occurred; or if any Person
or any two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act), directly or indirectly, of Securities of
Company (or other Securities convertible into such Securities) representing
30% or more of the combined voting power of all Securities of Company entitled
to vote in the election of directors, there shall be deemed to have occurred a
"Company Change of Control."
B. If a Change of Control shall occur, automatically and without any
notice to Company and Borrowers, all Commitments and obligations of Lenders
hereunder shall terminate, and two Business Days thereafter, all Obligations
under this Agreement shall become payable in full, including any amounts that
may be due pursuant to subsection 2.6D. Failure to pay all Obligations on the
date due and failure to secure the cancellation of all Letters of Credit then
outstanding shall constitute an Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
Company:
HOMESTAKE MINING COMPANY
By: ________________________
Title: ______________________
Notice Address:
Homestake Mining Company
650 California Street
San Francisco, California 94108-2788
Attn: Treasurer
U.S. Borrower:
HOMESTAKE MINING COMPANY OF CALIFORNIA
By: ________________________
Title: ______________________
Notice Address:
Homestake Mining Company
650 California Street
San Francisco, California 94108-2788
Attn: Treasurer
Canadian Borrower:
HOMESTAKE CANADA INC.
By: ________________________
Title: ______________________
Notice Address:
Homestake Mining Company
650 California Street
San Francisco, California 94108-2788
Attn: Treasurer
S-1
<PAGE>
LENDERS:
CANADIAN IMPERIAL BANK OF COMMERCE,
individually, as a U.S. Lender, as a Managing
Agent and as Administrative Agent
By: ________________________
Title: ___________________________
Notice Address:
Canadian Imperial Bank of Commerce
425 Lexington Avenue, 7th Floor
New York, New York 10017
CANADIAN IMPERIAL BANK OF COMMERCE, as a
Canadian Lender
By: ________________________
Title: ______________________
Notice Address:
Canadian Imperial Bank of Commerce
Commerce Court West 3
Toronto, Ontario M5L 1A2
S-2
<PAGE>
THE BANK OF NOVA SCOTIA, individually,
as a U.S. Lender and as a Managing Agent
By: ______________________
Title: ____________________
Notice Address:
The Bank of Nova Scotia
101 California Street, 48th Fl.
San Francisco, CA 94111
THE BANK OF NOVA SCOTIA, as a Canadian Lender
By: ________________________
Title:______________________
Notice Address:
The Bank of Nova Scotia
Scotia Plaza Branch
44 King Street West
Toronto, Ontario M5H1H1 Canada
Attn: Manager, Corporate Accounts
S-3
<PAGE>
CHEMICAL BANK, as a U.S. Lender
By: _______________________
Title: _____________________
Notice Address:
Chemical Bank
270 Park Avenue
New York, NY 10017
CHEMICAL BANK OF CANADA, as a Canadian Lender
By:_______________________
Title: ___________________
Notice Address:
Chemical Bank
100 Yonge Street, #900
Toronto, Ontario Canada M5C 2W1
S-4
<PAGE>
CREDIT LYONNAIS CAYMAN ISLAND BRANCH, as a
U.S. Lender
By: ________________________
Title: _____________________
Notice Address:
Credit Lyonnais Cayman Island Branch
c/o Credit Lyonnais, Los Angeles Branch
515 South Flower Street, 22nd Floor
Los Angeles, California 90071 - U.S.A.
CREDIT LYONNAIS CANADA, as a Canadian Lender
By: _______________________
Title:_____________________
Notice Address:
Credit Lyonnais Canada
1 Adelaide Street East, Suite 2505
P.O. Box 190
Toronto, Ontario M5C 2V9
S-5
<PAGE>
THE CHASE MANHATTAN BANK, N.A., as a U.S. Lender
By: _______________________
Title:______________________
Notice Address:
The Chase Manhattan Bank, N.A.
1 Chase Plaza
New York, NY 10081
THE CHASE MANHATTAN BANK OF CANADA, as a
Canadian Lender
By:__________________________
Title: ______________________
Notice Address:
The Chase Manhattan Bank of Canada
150 King Street West 16th Floor
Box 68
Toronto Ontario M5H 1J9 Canada
S-6
<PAGE>
MELLON BANK, N.A., as a U.S. Lender
By: ________________________
Title: _____________________
Notice Address:
Mellon Bank, N.A.
1 Mellon Bank Center
Pittsburgh, PA 15258-0001
MELLON BANK CANADA, as a Canadian Lender
By: _______________________
Title: _____________________
Notice Address:
Mellon Bank Canada
P.O. Box 153, Suite 2310
Royal Bank Plaza, South Tower
Toronto, Ontario, Canada M5J 2J4
S-7
<PAGE>
BANK OF MONTREAL, as a U.S. Lender
By: _______________________
Title: ____________________
Notice Address:
Bank of Montreal
430 Park Avenue
New York, NY 10022
BANK OF MONTREAL, as a Canadian Lender
By: _______________________
Title: _____________________
Notice Address:
Bank of Montreal
430 Park Avenue
New York, NY 10022
S-8
<PAGE>
THE TORONTO-DOMINION BANK, as a U.S. Lender
By: ________________________
Title: _____________________
Notice Address:
Credit Distributions
The Toronto-Dominion Bank
70 West Madison, Suite 1900
Three First National Plaza
Chicago, IL 60602
Notice of Borrowing Distributions
The Toronto-Dominion Bank
909 Fannin Street, Suite 1700
Houston, Texas 77010
THE TORONTO-DOMINION BANK, as a Canadian Lender
By: ________________________
Title:______________________
Notice Address:
The Toronto-Dominion Bank
700 W. Georgia Street, 6th Floor
Vancouver, B.C. V7Y LA2
S-9
<PAGE>
EXHIBIT I
FORM OF NOTICE OF BORROWING
Pursuant to that certain Amended and Restated Credit Agreement
dated as of September 30, 1994, as amended to the date hereof (said Credit
Agreement, as so amended, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein
defined), by and among Homestake Mining Company, a Delaware corporation
("Company"), Homestake Mining Company of California, a California corporation
("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian
Borrower"), the financial institutions listed therein as Lenders ("Lenders"),
The Bank of Nova Scotia and Canadian Imperial Bank of Commerce, as Managing
Agents ("Managing Agents"), and Canadian Imperial Bank of Commerce, as
Administrative Agent for Lenders ("Administrative Agent"), this represents the
request of [U.S. Borrower/Canadian Borrower] (hereinafter the "Applicable
Borrower") to borrow on _____________, 199_ (the "Funding Date") from [U.S./
Canadian] Lenders, in accordance with their applicable Pro Rata Shares, Loans
in the amount of [$/Cdn.$____________/____ Ounces of Gold], which Loans shall
be [Canadian Base Rate/U.S. Base Rate/Eurodollar Rate/Gold] Loans.
[This further represents the Applicable Borrower's request that
[the amount of the Gold Loan hereby requested be converted into Dollars based
on the Price of Gold in effect the second Business Day preceding the Funding
Date/Gold constituting such Loan be delivered to the Applicable Borrower].
The Applicable Borrower hereby requests that the Interest on such Gold Loan be
payable in [Dollars/Gold] based on the [average of the daily values of such
Loan, in Dollar Equivalents/the Price of Gold on the second Business Day
preceding the Funding Date.]
[The initial Interest Period for such Loans is requested to be a
[one/two/three/six month] [30/60/90/180 day] period.]
The proceeds of such Loans are to be deposited in the Applicable
Borrower's [account at Administrative Agent's [Canadian/U.S.] Lending office/
bullion account maintained with _________________, at its office located at
___________________].
The undersigned officer, to the best of his or her knowledge, and
the Applicable Borrower certify that:
I-1
<PAGE>
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in
all material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent that
changes in the facts and conditions on which such representations and
warranties were based are required or permitted under the Credit
Agreement;
(ii) No event has occurred and is continuing or would result from
the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) The Company, the U.S. Borrower and the Canadian
Borrower have performed in all material respects all agreements and
satisfied all conditions which the Credit Agreement and other Loan
Documents provide shall be performed or satisfied by it on or before the
date hereof;
(iv) There is no pending or, to the knowledge of Company,
Canadian Borrower or U.S. Borrower, threatened, action, suit,
proceeding, governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries and there has occurred no development in any
such action, suit, proceeding, governmental investigation or arbitration
that, in either event, in the opinion of Requisite Lenders, would
reasonably be expected to have a Material Adverse Effect, unless
disclosed to and consented to by Requisite Lenders; and no injunction or
other restraining order has been issued and no hearing to cause an
injunction or other restraining order to be issued is pending or noticed
with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by the
Credit Agreement or the making of Loans or the issuance of Letters of
Credit thereunder; and
(v) No Company Change of Control has occurred.
DATED: ____________________ [HOMESTAKE MINING COMPANY OF CALIFORNIA/
HOMESTAKE CANADA INC.]
By: __________________________
Title: ________________________
I-2 <PAGE>
EXHIBIT II
FORM OF NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Amended and Restated Credit Agreement
dated as of September 30, 1994, as amended to the date hereof (said Credit
Agreement, as so amended, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein
defined), by and among Homestake Mining Company, a Delaware corporation
("Company"), Homestake Mining Company of California, a California corporation
("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian
Borrower"), the financial institutions listed therein as Lenders ("Lenders"),
The Bank of Nova Scotia and Canadian Imperial Bank of Commerce, as Managing
Agents ("Managing Agents"), and Canadian Imperial Bank of Commerce, as
Administrative Agent for Lenders ("Administrative Agent"), this represents
[U.S. Borrower's/Canadian Borrower's] request to [Select A or B: [A: convert
$_________ in principal amount of presently outstanding Loans that are [Base/
Eurodollar] Rate Loans to [Eurodollar/Base] Rate Loans on ____________, 199_.
[The initial Interest Period for such Eurodollar Rate Loans is requested to be
a [one/two/three/six] month period.]] [B: continue as [Eurodollar/Gold] Rate
Loans [$_________/________Ounces] in principal amount of presently outstanding
Loans with a final Interest Payment Date of ____________, 199_. The Interest
Period for such [Eurodollar/Gold] Rate Loans commencing on such final Interest
Payment Date is requested to be a [one/two/three/six month] [30/60/90/180 day]
period.] [The [U.S./Canadian] Borrower hereby requests that the Interest on
such Gold Loan be payable in [Dollars/Gold] based on the [average of the daily
values of such Loan, in Dollar Equivalents/the Price of Gold on the second
Business Day preceding the first day of the Interest Period hereby
requested].]
[For Conversions to Eurodollar Rate Loans or Continuations of
Eurodollar/Gold Rate Loans Only: The undersigned officer, to the best of his
or her knowledge, and [U.S. Borrower/Canadian Borrower] certify that no Event
of Default or Potential Event of Default has occurred and is continuing under
the Credit Agreement.]
DATED: ____________________ [HOMESTAKE MINING COMPANY OF CALIFORNIA/
HOMESTAKE CANADA INC.]
By: __________________________
Title: ________________________
II-1
<PAGE>
EXHIBIT III
FORM OF NOTICE OF ALLOCATION
(To be Delivered Ten Business Days in Advance)
Pursuant to that certain Amended and Restated Credit Agreement
dated as of September 30, 1994, as amended to the date hereof (said Credit
Agreement, as so amended, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein
defined), by and among Homestake Mining Company, a Delaware corporation
("Company"), Homestake Mining Company of California, a California corporation
("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian
Borrower"; together with U.S. Borrower, "Borrowers"), the financial
institutions listed therein as Lenders ("Lenders"), The Bank of Nova Scotia
and Canadian Imperial Bank of Commerce, as Managing Agents ("Managing
Agents"), and Canadian Imperial Bank of Commerce, as Administrative Agent for
Lenders ("Administrative Agent"), this represents Borrowers' request that the
aggregate amount of the Commitments, which is currently
$_____________________, effective as of [March 31/June 30/September 30/
December 31], 199_, be allocated between the Canadian Allocation and the U.S.
Allocation as follows:
Canadian Allocation $_________________
U.S. Allocation $_________________
such allocations to remain in effect until such time as Borrowers deliver a
Notice of Allocation in accordance with the provisions of subsection 2.1A of
the Credit Agreement for the purpose of changing such allocations.
The undersigned officers and Borrowers hereby certify that, after
giving effect to the allocation requested hereby, (1) the sum of the Canadian
Allocation plus the U.S. Allocation shall equal the aggregate amount of the
Commitments then in effect, (2) the Canadian Allocation shall not be less than
the outstanding Canadian Commitment Usage (which currently equals, in Dollar
Equivalents as of the date hereof, $___________), and (3) the U.S. Allocation
shall not be less than the outstanding U.S. Commitment Usage (which currently
equals, in Dollar Equivalents as of the date hereof, $_____________).
III-1
<PAGE>
DATED: ____________________ HOMESTAKE MINING COMPANY
OF CALIFORNIA
By: __________________________
Title:________________________
HOMESTAKE CANADA INC.
By: __________________________
Title: _______________________
III-2 <PAGE>
EXHIBIT IV-A
FORM OF AMENDED AND RESTATED NOTE
HOMESTAKE CANADA INC.
AMENDED AND RESTATED PROMISSORY NOTE DUE SEPTEMBER 30, 1999
$[1] [2]
[3]
FOR VALUE RECEIVED, HOMESTAKE CANADA INC., an Ontario corporation
("Canadian Borrower"), promises to pay to the order of [NAME OF LENDER]
("Payee"), on or before September 30, 1999, the lesser of (x) [4] ($[1]) and
(y) the unpaid principal amount of all advances made by Payee to Canadian
Borrower as Loans under the Credit Agreement referred to below.
Canadian Borrower also promises to pay interest on the unpaid
principal amount hereof, from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions
of that certain Amended and Restated Credit Agreement dated as of September
30, 1994 by and among Homestake Mining Company, a Delaware corporation,
Homestake Mining Company of California, a California corporation, Homestake
Canada Inc., an Ontario corporation, the financial institutions listed
therein, as Lenders, The Bank of Nova Scotia and Canadian Imperial Bank of
Commerce, as Managing Agents and Canadian Imperial Bank of Commerce, as
Administrative Agent for Lenders (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
This Note is one of Canadian Borrower's "Notes" which in the
aggregate may evidence up to $150,000,000 principal amount of Loans and is
issued pursuant to and entitled to the benefits of the Credit Agreement, to
which reference is hereby made for a more complete statement of the terms and
conditions under which the Loans evidenced hereby were made and are to be
repaid.
[FN]
[1] Insert amount of Lender's Commitment in numbers.
[2] Insert place of delivery of Note.
[3] Insert Effective Date.
[4] Insert amount of Lender's Commitment in words.
IV-A-1
<PAGE>
All payments of principal and interest in respect of this Note
shall be made in the same currency (which shall be Dollars or Canadian
Dollars) as the Loans in respect of which such payments are being made, in
same day funds, without defense, setoff or counterclaim, free of any
restriction or condition, and shall be delivered to Administrative Agent at
Administrative Agent's Canadian Lending Office at such times as are provided
for in the Credit Agreement. Until notified in writing of the transfer of
this Note, Canadian Borrower and Administrative Agent shall be entitled to
deem Payee, or such Person who has been so identified by the transferor in
writing to Canadian Borrower and Administrative Agent as the holder of this
Note, as the owner and holder of this Note. Each of Payee and any subsequent
holder of this Note agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all Loans
evidenced by this Note and all principal payments previously made hereunder
and of the date to which interest hereon has been paid; provided, however,
that the failure to make a notation of any payment made on this Note shall not
limit or otherwise affect the obligations of Canadian Borrower hereunder with
respect to payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day, but not later than September 30, 1999, and such
extension of time shall be included in the computation of the payment of
interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at
the option of Canadian Borrower as provided in subsection 2.4A of the Credit
Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.19 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of
Canadian Borrower, which are absolute and unconditional, to pay the principal
of and interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
IV-A-2 <PAGE>
Canadian Borrower promises to pay all costs and expenses,
including reasonable attorneys' fees, all as provided in subsection 10.2 of
the Credit Agreement, incurred in the collection and enforcement of this Note.
Canadian Borrower and any endorsers of this Note hereby consent to renewals
and extensions of time at or after the maturity hereof, without notice, and
hereby waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, Canadian Borrower has caused this Note to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.
HOMESTAKE CANADA INC.
By: __________________________
Title: _______________________
IV-A-3 <PAGE>
TRANSACTIONS
ON
NOTE
Date
Type of Loan Made
This Date
Amount of
Loan Made
This Date
Amount of
Principal Paid
This Date
Outstanding
Principal
Balance
This Date
Notation
Made By
IV-A-4 <PAGE>
EXHIBIT IV-B
FORM OF AMENDED AND RESTATED NOTE
HOMESTAKE MINING COMPANY OF CALIFORNIA
AMENDED AND RESTATED PROMISSORY NOTE DUE SEPTEMBER 30, 1999
$[1] [2]
[3]
FOR VALUE RECEIVED, HOMESTAKE MINING COMPANY OF CALIFORNIA, a
California corporation ("U.S. Borrower"), promises to pay to the order of
[NAME OF LENDER] ("Payee"), on or before September 30, 1999, the lesser of
(x) [4] ($[1]) and (y) the unpaid principal amount of all advances made by
Payee to U.S. Borrower as Loans under the Credit Agreement referred to below.
U.S. Borrower also promises to pay interest on the unpaid
principal amount hereof, from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions
of that certain Amended and Restated Credit Agreement dated as of September
30, 1994 by and among Homestake Mining Company, a Delaware corporation,
Homestake Mining Company of California, a California corporation, Homestake
Canada Inc., an Ontario corporation, the financial institutions listed
therein, as Lenders, The Bank of Nova Scotia and Canadian Imperial Bank of
Commerce, as Managing Agents, and Canadian Imperial Bank of Commerce, as
Administrative Agent for Lenders (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
This Note is one of U.S. Borrower's "Notes" which in the
aggregate may evidence up to $150,000,000 principal amount of Loans and is
issued pursuant to and entitled to the benefits of the Credit Agreement, to
which reference is hereby made for a more complete statement of the terms and
conditions under which the Loans evidenced hereby were made and are to be
repaid.
[FN]
[1] Insert amount of Lender's Commitment in numbers.
[2] Insert place of delivery of Note.
[3] Insert Effective Date.
[4] Insert amount of Lender's Commitment in words.
IV-B-1 <PAGE>
All payments of principal and interest in respect of this Note
shall be made in Dollars in same day funds, without defense, setoff or
counterclaim, free of any restriction or condition, and shall be delivered to
Administrative Agent at Administrative Agent's U.S. Lending Office at such
times as are provided in the Credit Agreement. Until notified in writing of
the transfer of this Note, U.S. Borrower and Administrative Agent shall be
entitled to deem Payee, or such Person who has been so identified by the
transferor in writing to U.S. Borrower and Administrative Agent as the holder
of this Note, as the owner and holder of this Note. Each of Payee and any
subsequent holder of this Note agrees, by its acceptance hereof, that before
disposing of this Note or any part hereof it will make a notation hereon of
all Loans evidenced by this Note and all principal payments previously made
hereunder and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligations of U.S. Borrower hereunder
with respect to payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day, but not later than September 30, 1999, and such
extension of time shall be included in the computation of the payment of
interest on this Note.
This Note is subject to mandatory prepayment and to prepayment at
the option of U.S. Borrower as provided in subsection 2.4A of the Credit
Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued and unpaid
interest thereon, may become, or may be declared to be, due and payable in the
manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Credit Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in subsections 10.1 and 10.19 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Note or the Credit Agreement shall alter or impair the obligations of
U.S. Borrower, which are absolute and unconditional, to pay the principal of
and interest on this Note at the place, at the respective times, and in the
currency herein prescribed.
U.S. Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit
Agreement, incurred in the
IV-B-2 <PAGE>
collection and enforcement of this Note. U.S. Borrower and any endorsers of
this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.
IN WITNESS WHEREOF, U.S. Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.
HOMESTAKE MINING COMPANY OF
CALIFORNIA
By: __________________________
Title:________________________
IV-B-3
<PAGE>
TRANSACTIONS
ON
NOTE
Date
Type of
Loan Made
This Date
Amount of
Loan Made
This Date
Amount of
Principal Paid
This Date
Outstanding
Principal
Balance
This Date
Notation
Made By
IV-B-4 <PAGE>
EXHIBIT V
FORM OF AMENDED AND RESTATED GRID GOLD ACKNOWLEDGEMENT
[NAME OF BORROWER]
CREDIT GOLD OBLIGATION DUE SEPTEMBER 30, 1999
[5]
[6]
FOR VALUE RECEIVED, [NAME OF BORROWER], a _________ corporation
("Borrower"), promises to pay to the order of [NAME OF LENDER] ("Payee"), on
or before September 30, 1999, the number of Ounces of Gold advanced from time
to time by Payee to Borrower as Gold Loans under the Credit Agreement referred
to below.
Canadian Borrower also promises to pay interest on the unpaid
principal amount hereof, from the date hereof until paid in full, at the rates
and at the times which shall be determined in accordance with the provisions
of that certain Amended and Restated Credit Agreement dated as of September
30, 1994 by and among Homestake Mining Company, a Delaware corporation,
Homestake Mining Company of California, a California corporation, Homestake
Canada Inc., an Ontario corporation, the financial institutions listed
therein, as Lenders, The Bank of Nova Scotia and Canadian Imperial Bank of
Commerce, as Managing Agents and Canadian Imperial Bank of Commerce, as
Administrative Agent for Lenders (said Credit Agreement, as it may be amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined).
This Grid Gold Acknowledgement (this "Acknowledgement") is one of
Borrower's "Grid Gold Acknowledgements" which in the aggregate may evidence up
to 200,000 Ounces of Gold and is issued pursuant to and entitled to the
benefits of the Credit Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Gold Loans
evidenced hereby were made and are to be repaid.
All payments of principal and interest in respect of this
Acknowledgement shall be made in accordance with the provisions of the Credit
Agreement, in Gold or in Dollars, in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and shall be delivered,
if paid in Dollars, to Administrative Agent's [U.S./Canadian] Lending Office
or, if paid in Gold, Administrative
[FN]
[5] Insert place of delivery.
[6] Insert Effective Date.
V-1
<PAGE>
Agent's account with Morgan Guaranty Trust Company, London, England, or such
other bullion depository as may be designated by Administrative Agent from
time to time, before 12:00 Noon (London time) on the day specified for
payment. Until notified in writing of the transfer of this Acknowledgement,
Borrower and Administrative Agent shall be entitled to deem Payee, or such
Person who has been so identified by the transferor in writing to Borrower and
Administrative Agent as the holder of this Acknowledgement, as the owner and
holder of this Acknowledgment. Each of Payee and any subsequent holder of
this Acknowledgement agrees, by its acceptance hereof, that before disposing
of this Acknowledgement or any part hereof it will make a notation hereon of
all Loans evidenced by this Acknowledgement and all principal payments
previously made hereunder and of the date to which interest hereon has been
paid; provided, however, that the failure to make a notation of any payment
made on this Acknowledgement shall not limit or otherwise affect the
obligations of Borrower hereunder with respect to payments of principal of or
interest on this Acknowledgement.
Unless Administrative Agent receives notice from Borrower within
seven Business Days of Borrower's receipt of any Gold, the quantity and
quality of the Gold so received shall be deemed to be as set forth in
Administrative Agent's delivery order. If there is any discrepancy in the
amount or quality of Gold actually Delivered, the amount of such difference
shall be settled in Dollars (based on the Dollar Equivalent on the date of
Delivery of the Gold required to be advanced hereunder and the Gold actually
Delivered) promptly after the Delivery thereof. Borrower assumes all risk of
loss, theft or detention of or damage to any Gold Delivered hereunder from the
date Borrower receives Delivery of such Gold until the date of its return by
Delivery to Administrative Agent.
Whenever any payment on this Acknowledgement shall be stated to be
due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day, but not later than September 30, 1999 and such
extension of time shall be included in the computation of the payment of
interest on this Acknowledgement.
This Acknowledgement is subject to mandatory prepayment and to
prepayment at the option of Borrower as provided in subsection 2.4A of the
Credit Agreement.
THE CREDIT AGREEMENT AND THIS ACKNOWLEDGEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS
OF THE STATE OF NEW YORK.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Acknowledgement, together with all accrued and
unpaid interest thereon, may become, or may be declared to be, due and payable
in the manner, upon the conditions and with the effect provided in the Credit
Agreement.
The terms of this Acknowledgement are subject to amendment only in
the manner provided in the Credit Agreement.
V-2 <PAGE>
This Acknowledgement is subject to restrictions on transfer or
assignment as provided in subsections 10.1 and 10.19 of the Credit Agreement.
No reference herein to the Credit Agreement and no provision of
this Acknowledgement or the Credit Agreement shall alter or impair the
obligations of Borrower, which are absolute and unconditional, to pay the
principal of and interest on this Acknowledgement at the place, at the
respective times, and in the currency herein prescribed.
Borrower promises to pay all costs and expenses, including
reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit
Agreement, incurred in the collection and enforcement of this Acknowledgement.
Borrower and any endorsers of this Acknowledgement hereby consent to renewals
and extensions of time at or after the maturity hereof, without notice, and
hereby waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any statute of
limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, Borrower has caused this Acknowledgement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date and at the place first written above.
[NAME OF BORROWER]
By: __________________________
Title:________________________
V-3
<PAGE>
TRANSACTIONS
ON
GRID GOLD ACKNOWLEDGEMENT
Date
Amount of
Loan Made
This Date
Amount of
Gold Paid
This Date
Outstanding
Principal
Balance
This Date
Notation
Made By
V-4 <PAGE>
EXHIBIT VI
FORM OF COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are the duly elected [President/Vice President] and
[Chief Financial Officer/Treasurer/Controller] of each of Homestake
Mining Company, a Delaware corporation ("Company"), Homestake Mining
Company of California, a California corporation ("U.S. Borrower") and
Homestake Canada Inc., an Ontario corporation ("Canadian Borrower");
(2) We have reviewed the terms of that certain Amended and
Restated Credit Agreement dated as of September 30, 1994, as amended to
the date hereof (said Credit Agreement, as so amended, being the "Credit
Agreement", the terms defined therein and not otherwise defined in this
Certificate (including Attachment No. 1 annexed hereto and made a part
hereof) being used in this Certificate as therein defined), by and among
Company, U.S. Borrower, and Canadian Borrower, the financial
institutions listed therein as Lenders (each individually referred to as
"Lender" and collectively as "Lenders"), The Bank of Nova Scotia and
Canadian Imperial Bank of Commerce, as Managing Agents ("Managing
Agents"), and Canadian Imperial Bank of Commerce, as Administrative
Agent for Lenders ("Administrative Agent"), and we have made, or have
caused to be made under our supervision, a review in reasonable detail
of the transactions and condition of Company, U.S. Borrower and Canadian
Borrower and their respective Subsidiaries during the accounting period
covered by the attached financial statements;
(3) The examination described in paragraph (2) above did not
disclose, and we have no knowledge of, the existence of any condition or
event which constitutes an Event of Default or Potential Event of
Default during or at the end of the accounting period covered by the
attached financial statements or as of the date of this Certificate[,
except as set forth below];
[Set forth [below] [in a separate attachment to this Certificate]
are all exceptions to paragraph (3) above listing, in detail, the nature of
the condition or event, the period during which it has existed and the action
which Company, U.S. Borrower and/or Canadian Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_________________________________________________________________]
VI-1 <PAGE>
(4) Company, U.S. Borrower and Canadian Borrower are in
compliance with the restrictions contained in subsections 6.1 through
6.8 of the Credit Agreement [except that [describe any instances where
not in compliance]]; and
(5) There have been no changes to the Subsidiaries of Company
and the Borrowers identified in Schedule 4.1 during the period covered
by this Compliance Certificate [except that [describe changes to
Schedule 4.1]].
The foregoing certifications, together with the computations set
forth in Attachment No. 1 annexed hereto and made a part hereof and the
financial statements delivered with this Certificate in support hereof, are
made and delivered this __________ day of _____________, 199_ pursuant to
subsection 5.1(iii) of the Credit Agreement.
HOMESTAKE MINING COMPANY
By: _______________________________
Title: ____________________________
By: _______________________________
Title: ____________________________
HOMESTAKE MINING COMPANY OF
CALIFORNIA
By: _______________________________
Title: ____________________________
By: _______________________________
Title: ____________________________
VI-2 <PAGE>
HOMESTAKE CANADA INC.
By: _______________________________
Title: ____________________________
By: _______________________________
Title: ____________________________
VI-3 <PAGE>
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part of a
Compliance Certificate dated as of ____________, 199_ and pertains to the
period from ____________, 199_ to ____________, 199_. Subsection references
herein relate to subsections of the Credit Agreement.
A. Indebtedness
1. Aggregate principal amount of
Indebtedness of Prime to Company
or any other subsidiary of Company
under subsection 6.1(iii): $_____________
2. Maximum aggregate principal amount of
Indebtedness of Prime to Company or
any other Subsidiary of Company
permitted under subsection
6.1(iii): $30,000,000
3. Aggregate principal amount of
Indebtedness of HGAL to Company or
any other Subsidiary of Company
under subsection 6.1(iii): $_____________
4. Maximum aggregate principal amount
of Indebtedness of HGAL to Company
or any other Subsidiary of Company
permitted under subsection
6.1(iii): $60,000,000
5. Nonrecourse Debt of Prime,
HGAL, Canadian Borrower and any
Subsidiary of Company (other than U.S.
Borrower) permitted under subsection
6.1(viii): $_____________
6. Maximum amount of Non-Recourse Debt
Indebtedness permitted under
subsection 6.1(viii): $300,000,000
7. Additional Indebtedness of Borrowers
permitted under subsection
6.1(ix): $_____________
VI-4 <PAGE>
8. Maximum amount of additional Indebtedness
permitted under subsection
6.1(ix): $50,000,000
B. Liens:
1. Indebtedness secured by Purchase Money Security
Interests permitted under subsection 6.2(iii):
$_____________
2. Maximum amount of Indebtedness secured by
Purchase Money Security Interests permitted
under subsection 6.2(iii): $25,000,000
C. Investments:
1. Investments acquired in connection with
Asset Sales permitted under
subsection 6.3(vi): $_____________
2. Maximum aggregate amount of
all Investments in connection
with Asset Sales permitted under
subsection 6.3(vi): $50,000,000
D. Contingent Obligations:
1. Contingent obligations of Company
under Interest Rate Agreements
permitted under subsection
6.4(ii): $_____________
2. Maximum notional principal amount of
Interest Rate Agreements permitted
under subsection 6.4(ii): $75,000,000
3. Contingent obligations of Company and its
Subsidiaries under guaranties
of any obligations of Company's Subsidiaries
(including Joint Ventures) permitted
under subsection 6.4(iv): $_____________
4. Maximum aggregate amount permitted
to be guaranteed under subsection
6.4(iv): $75,000,000
VI-5 <PAGE>
5. Aggregate notional amount outstanding
under gold futures, options or forward
sales contracts, Currency Agreements and
similar arrangements designed to
protect against fluctuations in
price of Gold or relative exchange
rates for currencies permitted
under subsection 6.4(vi): $_____________
6. Maximum notional amount of aggregate contingent
liability under all such futures, options,
contracts, agreements and arrangements
permitted under subsection
6.4(vi): $500,000,000
E. Minimum Consolidated Net Worth (as of __________, 19___)
1. Company's current Consolidated Net
Worth: $_____________
2. Minimum Consolidated Net Worth required under
the Credit Agreement:
$500,000,000
F. Minimum Protection Ratio (as of __________, _____)
1. Mining Group Net Present
Value of Mining Group Future Cash Flow
based on most recent Cash Flow
Analysis: $_____________
2. Consolidated Senior Funded Debt
(excluding Non-Recourse Debt): $_____________
3. Ratio of F.1 to F.2: _____ to 1.00
4. Minimum Protection Ratio permitted
under subsection 6.6E: 1.50 to 1.00
G. Consolidated Capital Expenditures
1. Consolidated Capital Expenditures
for Fiscal Year-to-date permitted
under section 6.8, excluding
Capital Expenditures using
Non-Recourse Debt: $_____________
VI-6 <PAGE>
2. Consolidated Capital Expenditures
for prior Fiscal Year, excluding
Capital Expenditures using
Non-Recourse Debt: $_____________
3. The excess, if any, of $100,000,000 over
G.2: $_____________
4. Maximum amount of Consolidated
Capital Expenditures for Fiscal
Year permitted under section 6.8,
$100,000,000 (excluding
Capital Expenditures using
Non-Recourse Debt) plus G.3: $_____________
VI-7
<PAGE>
EXHIBIT VII-A
[FORM OF OPINION OF THELEN, MARRIN, JOHNSON & BRIDGES]
NOT REPRODUCED.
<PAGE>
EXHIBIT VII-B
[FORM OF OPINION OF WAYNE KIRK, ESQ.]
NOT REPRODUCED.
<PAGE>
EXHIBIT VIII
[FORM OF OPINION OF COMPANY'S COUNSEL]
NOT REPRODUCED.
VIII-1 <PAGE>
EXHIBIT IX
FORM OF OPINION OF O'MELVENY & MYERS
[O'M&M Letterhead]
October
_____
1 9 9 4
133,020-023
Canadian Imperial Bank of Commerce,
as Administrative Agent
Commerce Court West
Toronto, Ontario
Canada M5L 1A2
and
The Bank of Nova Scotia and
Canadian Imperial Bank of Commerce,
as Managing Agents,
and the Lenders Listed
on Schedule I Hereto
Re: Amended and Restated Credit Agreement dated as of
September 30, 1994 among Homestake Mining Company, Homestake
Mining Company of California, Homestake Canada Inc., the
Lenders named therein, The Bank of Nova Scotia and Canadian
Imperial Bank of Commerce, as Managing Agents, and Canadian
Imperial Bank of Commerce, as Administrative Agent
Ladies and Gentlemen:
We have acted as counsel to Canadian Imperial Bank of Commerce, as
Administrative Agent (in such capacity, "Administrative Agent"), in connection
with the preparation and delivery of an Amended and Restated Credit Agreement
dated as of September 30, 1994 (the "Credit Agreement") among Homestake Mining
Company, a Delaware corporation ("Company"), Homestake Mining Company of
California, a California
IX-1 <PAGE>
Page 2 - [Administrative Agent, Managing Agents and Lenders] - [Date]
corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation
("Canadian Borrower"), the financial institutions listed therein as the
Lenders (collectively, "Lenders"), The Bank of Nova Scotia and Canadian
Imperial Bank of Commerce, as Managing Agents ("Managing Agents"), and
Canadian Imperial Bank of Commerce, as Administrative Agent for Lenders
("Administrative Agent") and in connection with the preparation and delivery
of certain related documents.
We have participated in various conferences with representatives
of the Company, U.S. Borrower and Canadian Borrower and with your representa-
tives and Blake, Cassels & Graydon, Canadian counsel for Administrative Agent,
during which the Credit Agreement and related matters have been discussed, and
we have also participated in the meeting held on the date hereof incident to
the occurrence of the Effective Date under the Credit Agreement. We have
reviewed the forms of the Credit Agreement and the exhibits thereto, including
the amended and restated promissory notes delivered by U.S. Borrower and
Canadian Borrower, which forms are annexed thereto, and the amended and
restated Grid Gold Acknowledgements which forms are annexed thereto, and the
opinions of Wayne Kirk, General Counsel of Company, Thelen, Marrin, Johnson &
Bridges, special New York counsel to Company and Borrowers and Osler, Hoskin &
Harcourt, special Canadian counsel to Canadian Borrower (collectively, the
"Opinions") and the officers' certificates and other documents delivered on
the Effective Date. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals or copies and the
due authority of all persons executing the same, and we have relied as to
factual matters on the documents that we have reviewed.
Based on and subject to the foregoing, we are of the opinion that
the Credit Agreement constitutes the legally valid and binding obligation of
the Company and the Borrowers enforceable against the Company and the
Borrowers in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally. We advise you that the enforceability of the Credit
Agreement is subject to the effect of general principles of equity including,
without limitation, concepts of materiality, reasonableness, good faith and
fair dealing and the possible unavailability of specific performance or
injunctive relief, regardless of whether considered in a proceeding in equity
or at law.
IX-2 <PAGE>
Page 3 - [Administrative Agent, Managing Agents and Lenders] - [Date]
In addition, although we have not independently considered all of
the matters covered by the Opinions to the extent necessary to enable us to
express the conclusions therein stated, we believe that the Opinions and the
officers' certificates and other documents delivered in connection with the
execution and delivery of, and as conditions to the effectiveness of, the
Credit Agreement are substantially responsive to the requirements of the
Credit Agreement.
We are opining herein as to the effect on the subject transactions
of only United States federal law and the laws of the State of New York. We
are not giving an opinion as to the enforceability of indemnification as to
federal or state securities law violations.
This opinion is furnished by us as counsel for the Administrative
Agent and may be relied upon by you only in connection with the Credit
Agreement. It may not be used or relied upon by you for any other purpose or
by any other person for any purpose whatsoever without in each instance our
prior written consent. You may, however, deliver a copy of this opinion to
permitted assignees under the Credit Agreement in connection with such
assignment, and such assignees may rely on this opinion as if it were
addressed and had been delivered to them on the date hereof.
Respectfully submitted,
IX-3
<PAGE>
EXHIBIT X-A
FORM OF ASSIGNMENT AND ACCEPTANCE
(CANADIAN LENDER)
ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE (this "Agreement") is dated as of
____________, 199_ and entered into by and between [NAME OF LENDER]
("Assignor") and _____________________ ("Assignee").
RECITALS
WHEREAS, Assignor has entered into an Amended and Restated Credit
Agreement dated as of September 30, 1994 (said Credit Agreement, as amended,
supplemented or otherwise modified to the date hereof and as it may hereafter
be amended, supplemented or otherwise modified from time to time, being the
"Credit Agreement", the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Homestake Mining Company, a
Delaware corporation ("Company"), Homestake Mining Company of California, a
California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario
corporation ("Canadian Borrower"), the other Lenders named therein
(collectively, "Lenders"), The Bank of Nova Scotia and Canadian Imperial Bank
of Commerce, as Managing Agents ("Managing Agents"), and Canadian Imperial
Bank of Commerce, as Administrative Agent for Lenders ("Administrative
Agent");
WHEREAS, Assignor is a Canadian Lender under the Credit Agreement
and Assignee will, upon giving effect to this Agreement, likewise be a
Canadian Lender;
WHEREAS, Assignor has a Commitment under the Credit Agreement
pursuant to which Assignor is required (i) to make Loans to Canadian Borrower
pursuant to subsection 2.1A(i) of the Credit Agreement and (ii) to purchase
participations in Canadian Letters of Credit pursuant to subsection 2.7D of
the Credit Agreement (any such participations in any such Letters of Credit
outstanding as of the date hereof being the "Assignor Participations");
X-A-1
<PAGE>
[WHEREAS, Assignor has issued certain outstanding Canadian Letters
of Credit (the "Assignor Letters of Credit") pursuant to subsection 3.3 of the
Credit Agreement;][INSERT IF CANADIAN IMPERIAL BANK OF COMMERCE IS ASSIGNOR
AND CANADIAN LETTERS OF CREDIT ARE OUTSTANDING TO CANADIAN BORROWER]
WHEREAS, Assignor desires to assign to Assignee its rights and
obligations as a Canadian Lender under the Credit Agreement and the other Loan
Documents with respect to [a portion of] Assignor's Canadian Commitment and
any Canadian Loans or Assignor Participations outstanding thereunder [and to
sell to Assignee a participation in the Assignor Letters of Credit (the
"Assignee Participation") equal to the participation required to be purchased
therein pursuant to subsection 2.7D of the Credit Agreement], and Assignee has
agreed to assume the obligations of Assignor under the Loan Documents to the
extent of the rights and obligations so assigned [and to purchase the Assignee
Participation]; and
[WHEREAS, Assignor is both the U.S. Lender and the Canadian Lender
for its Lending Unit, and Assignor is, concurrently herewith entering into an
Assignment and Acceptance with [Name of Assignee or Assignee's U.S. affiliate]
(the "U.S. Assignee") whereby Assignor is assigning to the U.S. Assignee that
portion of its rights and obligations with respect to its U.S. Commitment
which corresponds to the Percentage, as defined below;]
[WHEREAS, Assignor's Lending Unit consists of the Assignor and
[Name of U.S. Lender of Assignor's Lending Unit] ("Assignor's Lending Unit
Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith
entering into an Assignment and Acceptance with [Name of Assignee or
Assignee's U.S. affiliate] (the "U.S. Assignee") whereby Assignor's Lending
Unit Affiliate is assigning to the U.S. Assignee that portion of its rights
and obligations with respect to its U.S. Commitment which corresponds to the
Percentage, as defined below;]
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto
hereby agree as follows:
SECTION 1. Assignment and Assumption.
(a) Assignor hereby assigns to Assignee, effective upon the
receipt of the consideration set forth in Section 1(c) and Administrative
Agent's receipt of any processing and recordation fee required under
subsection 10.1B of the Credit Agreement, without recourse, representation or
warranty (except as expressly set forth herein), an undivided _____% interest
(the "Percentage") in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents relating to
Assignor's Canadian Commitment and any Canadian Loans and Assignor
Participations
X-A-2 <PAGE>
outstanding thereunder [and concurrently therewith sells to Assignee, without
recourse, representation or warranty (except as expressly set forth herein),
the Assignee Participation].
(b) Assignee hereby assumes from Assignor, and Assignor is
hereby expressly and absolutely released from, the Percentage of all of
Assignor's obligations arising under the Loan Documents relating to Assignor's
Canadian Commitment and any Canadian Loans and Assignor Participations
outstanding thereunder, including without limitation all such obligations with
respect to any Canadian Loans to be made, and any participations in Canadian
Letters of Credit to be purchased, pursuant to the Credit Agreement [, and
Assignee hereby purchases from Assignor the Assignee Participation].
(c) Notwithstanding any provisions of this Agreement to the
contrary, each of the Assignor and Assignee hereby acknowledges and confirms
its understanding and agreement that the Canadian Commitments of the Canadian
Lenders under the Credit Agreement may from time to time be increased or
decreased by the Borrowers in accordance with subsection 2.1A of the Credit
Agreement through changes in the Canadian Allocation, provided that the
Canadian Allocation may not at any time exceed the aggregate amount of the
Commitments of all Lending Units then in effect. Each of the Assignor and
Assignee acknowledges that the Percentage interest in the Canadian Commitment
being assigned and assumed hereunder equals the Assignee's Pro Rata Share, as
set forth on Annex II attached hereto, of the Canadian Allocation of the
Commitments as in effect on and after the date upon which this Agreement
becomes effective.
(d) Assignor hereby represents and warrants that as of the
effective date of this Agreement the respective amounts of unpaid principal,
accrued but unpaid interest and accrued but unpaid fees with respect to the
Percentage of Assignor's rights under the Credit Agreement relating to
Assignor's Canadian Commitment and any Canadian Loans and Assignor
Participations outstanding thereunder [and with respect to the Assignee
Participation] are as set forth on Annex I attached hereto. In consideration
of Assignor's assignment, Assignee hereby agrees to pay to Assignor, on the
effective date of this Agreement, the amount(s) of $_________________ [and
Cdn.$_______________] in immediately available funds by wire transfer to
Assignor's office at ________________________________________.
(e) Assignor and Assignee hereby agree that Annex II attached
hereto sets forth the amount of the Canadian Commitment, any Canadian Loans
and participations by Assignee in any Canadian Letters of Credit outstanding
under the Commitment and the Pro Rata Share of Assignee after giving effect to
the assignment and assumption [and the sale and purchase] described above.
(f) Assignor and Assignee hereby agree that, upon giving effect
to the assignment and assumption [and the sale and purchase] described above,
Assignee shall be a party to the
X-A-3 <PAGE>
Credit Agreement as a Canadian Lender thereunder, and shall have all of the
rights and obligations under the Loan Documents of, and shall be deemed to
have made all of the covenants and agreements contained in the Loan Documents
made by, a Canadian Lender having the Canadian Commitment, the outstanding
Canadian Loans, the aggregate participation in outstanding Canadian Letters of
Credit and the Pro Rata Share of Assignee as reflected on Annex II attached
hereto. Assignee hereby acknowledges and agrees that the agreement set forth
in this subsection 1(f) is expressly made for the benefit of Company,
Borrowers, Administrative Agent, Assignor and the other Lenders and their
respective successors and permitted assigns.
(g) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect [(A)] the
assignment by Assignor and the assumption by Assignee of the Percentage of
Assignor's rights and obligations with respect to Assignor's Canadian
Commitment and any Canadian Loans and Assignor Participations outstanding
thereunder and all rights and obligations under the Loan Documents with
respect thereto [and (B) the sale by Assignor and the purchase by Assignee of
the Assignee Participation], (ii) any other assignments by Assignor of a
portion of its rights and obligations with respect to Assignor's Canadian
Commitment and any Canadian Loans or Assignor Participations outstanding
thereunder [, and any other sales by Assignor of participations in the
Assignor Letters of Credit,] shall have no effect on the Canadian Commitment,
the outstanding Canadian Loans, the aggregate participation in outstanding
Canadian Letters of Credit or Pro Rata Share of Assignee set forth on Annex II
attached hereto, and (iii) from and after the effective date of this
Agreement, Administrative Agent shall make all payments under the Credit
Agreement in respect of the Percentage interest assigned hereby [and the
Assignee Participation] (including without limitation all payments of
principal and accrued but unpaid interest and commitment and letter of credit
fees with respect thereto) to Assignee, whether such amounts (in the case of
such interest and fees) have accrued prior to the effective date of this
Agreement or subsequent thereto.
SECTION 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Percentage interest being assigned by it hereunder
[and of the Assignee Participation] and that such interest [is] [and the
Assignee Participation are] free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability, collect-
ibility or sufficiency of any of the Loan Documents or for any
representations, warranties, recitals or statements made therein or made in
any written or oral statement or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by Assignor to Assignee or by or on behalf of Company or any Borrower to
Assignor or Assignee in connection with the Loan
X-A-4 <PAGE>
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of the Company or any Borrower or any other
Person liable for the payment of any Obligations, nor shall Assignor be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or the use of
the Letters of Credit or as to the existence or possible existence of any
Event of Default or Potential Event of Default.
(c) Assignee represents and warrants that it is an Eligible
Assignee; that it has experience and expertise in the making of loans such as
the Loans; that it has acquired its Percentage interest for its own account
and not with any present intention of selling all or any portion of such
interest; and that it has received, reviewed and approved copies of all Loan
Documents.
(d) Assignee represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company
and each of the Borrowers and their respective Subsidiaries in connection with
the assignment evidenced by this Agreement and that it has made and shall
continue to make its own appraisal of the creditworthiness of the Company and
the Borrowers. Assignor shall not have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Assignee or to provide Assignee with any credit or
other information with respect thereto, whether coming into its possession
before the making of the initial Loans or at any time or times thereafter, and
Assignor shall not have any responsibility with respect to the accuracy of or
the completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
X-A-5 <PAGE>
SECTION 3. Miscellaneous.
(a) Each party to this Agreement hereby agrees from time to
time, upon request of the other party hereto, to take such additional actions
and to execute and deliver such additional documents and instruments as such
other party may reasonably request to effect the transactions contemplated by,
and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed
by the party against whom enforcement of such change, waiver, discharge or
termination is sought.
(c) Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telecopied, telexed or sent by United
States mail or Canadian mail or courier service and shall be deemed to have
been given when delivered in person or by courier service, upon receipt of
telecopy or telex, or four Business Days after depositing it in the United
States mail (or five Business Days after depositing it in the Canadian mail),
registered or certified, with postage prepaid and properly addressed; provided
that notices to Administrative Agent shall not be effective until received.
For the purposes hereof, the address of each party hereto shall be as set
forth under such party's name on the signature page hereof or, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party hereto. In addition, the address of
Assignee set forth below its name on the signature page hereof shall serve as
the initial notice address of Assignee for purposes of subsection 10.11 of the
Credit Agreement.
(d) This Agreement shall not effect an assignment of any rights
or obligations relating to the U.S. Commitment of any Lender. Assignor and
Assignee acknowledge and confirm (i) that concurrently herewith, U.S. Assignee
is entering into an Assignment and Acceptance with the U.S. Lender of
Assignor's Lending Unit whereby U.S. Assignee shall be assigned and assume all
rights and obligations of Assignor's Lending Unit with respect to that portion
of such Lending Unit's U.S. Commitment which corresponds to the Percentage
hereunder, and (ii) that after giving effect to such assignment and assumption
and the assignment and assumption to be effected hereunder, Assignee and U.S.
Assignee shall have the same the Pro Rata Shares under the Credit Agreement.
Assignee agrees that U.S. Assignee shall for all purposes be the U.S. Lender
of Assignee's Lending Unit and that the Commitment of such Lending Unit shall
equal the Assignee's Pro Rata Share (as set forth on Annex 1 annexed hereto)
of the aggregate Commitments of all Lending Units as in effect at any time on
and after the date this Amendment becomes effective.
(e) The parties hereto acknowledge the provisions of subsection
2.2F of the Credit Agreement relating to disclosure under the Interest Act
(Canada) and agree that the provisions
X-A-6
<PAGE>
thereof shall apply to the disclosure and calculation of nominal and effective
rates of interest payable hereunder as if such provisions were set forth
herein.
(f) In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
(g) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(h) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(i) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
(j) This Agreement shall become effective upon the execution of
a counterpart hereof by each of Assignor and Assignee and the execution of a
counterpart hereof by Company and Borrowers (as evidence of their consent
hereto in accordance with subsection 10.1B(i) of the Credit Agreement) and
Managing Agents (as evidence of their acceptance hereof in accordance with
subsection 10.1B(ii) of the Credit Agreement) and the receipt by Assignor,
Assignee and Administrative Agent of originals or telecopies of such
counterparts and authorization of delivery thereof.
(k) Assignee hereby appoints Canadian Imperial Bank of Commerce
as Administrative Agent, and Canadian Imperial Bank of Commerce and The Bank
of Nova Scotia as Managing Agents, under the Credit Agreement and the other
Loan Documents, to exercise such powers as are specified in Section 9 of the
Credit Agreement and to be entitled to such protections and indemnities as are
afforded thereunder.
[(l) Assignee hereby agrees to deliver to Canadian Borrower upon
request such certificates, documents or other evidence as may be required from
time to time, properly completed and duly executed by Assignee, to establish
the basis for any applicable exemption from or a reduction of Taxes with
respect to any payment to Assignee of principal, interest, fees, commissions,
or any other amount payable under this Agreement, the Credit Agreement or
otherwise in respect of the Canadian Loans.] [INSERT IF ASSIGNEE IS ORGANIZED
UNDER THE LAWS OF ANY
X-A-7 <PAGE>
JURISDICTION OTHER THAN CANADA OR ANY PROVINCE THEREOF OR IS NOT RESIDENT IN
CANADA.]
[Remainder of page intentionally left blank]
X-A-8 <PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: _____________________ By: ______________________
Title: __________________ Title: ___________________
Notice Address: Notice Address:
________________________ __________________________
________________________ __________________________
________________________ __________________________
Consented to in accordance with Accepted in accordance with
subsection 10.1B(i) of the subsection 10.1B(ii) of the
Credit Agreement Credit Agreement
HOMESTAKE MINING COMPANY CANADIAN IMPERIAL BANK OF COMMERCE, as
Managing Agent
By: _____________________ By: ______________________
Title: __________________ Title: ___________________
HOMESTAKE MINING COMPANY THE BANK OF NOVA SCOTIA,
OF CALIFORNIA as Managing Agent
By: _____________________ By: ______________________
Title: __________________ Title: ___________________
HOMESTAKE CANADA INC.
By: _____________________
Title: __________________
1 <PAGE>
ANNEX I
AMOUNTS OUTSTANDING
Outstanding Principal Amount:
Loans:
Dollar Loans: $_________
Canadian Dollar Loans: $_________
Gold Loans: _____Ounces
(interest to be paid in
[Gold][Dollars based on
[a Price of Gold equal to
$____ per Ounce/Average
daily value, in Dollar
Equivalents]]).
Total: $_________
Accrued But Unpaid Interest: $_________
Accrued But Unpaid Fees: $_________
Total Principal, Interest and Fees: $_________ <PAGE>
ANNEX II
ASSIGNEE'S CANADIAN COMMITMENT,
OUTSTANDING CANADIAN LOANS,
AGGREGATE PARTICIPATION IN
OUTSTANDING CANADIAN LETTERS OF CREDIT AND
PRO RATA SHARE AFTER ASSIGNMENT
Canadian Commitment:
Current Canadian Allocation $_________
Aggregate Commitments $_________
Pro Rata Share _________%
Current Canadian
Commitment $_________
Maximum Canadian
Commitment $_________
Outstanding Loans:
Dollar Loans $_________
Canadian Dollar Loans Cdn.$_________
Gold Loans _________ Ounces
Aggregate participation in
outstanding Canadian Letters of Credit:
Dollar Letters of Credit $_________
Canadian Dollar Letters of Credit Cdn.$_________
Pro Rata Share _________% <PAGE>
EXHIBIT X-B
FORM OF ASSIGNMENT AND ACCEPTANCE
(U.S. LENDER)
ASSIGNMENT AND ACCEPTANCE
This ASSIGNMENT AND ACCEPTANCE (this "Agreement") is dated as of
____________, 199_ and entered into by and between [NAME OF LENDER]
("Assignor") and _____________________ ("Assignee").
RECITALS
WHEREAS, Assignor has entered into an Amended and Restated Credit
Agreement dated as of September 30, 1994 (said Credit Agreement, as amended,
supplemented or otherwise modified to the date hereof and as it may hereafter
be amended, supplemented or otherwise modified from time to time, being the
"Credit Agreement", the terms defined therein and not otherwise defined herein
being used herein as therein defined) with Homestake Mining Company, a
Delaware corporation ("Company"), Homestake Mining Company of California, a
California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario
corporation ("Canadian Borrower"), the other Lenders named therein
(collectively, "Lenders"), The Bank of Nova Scotia and Canadian Imperial Bank
of Commerce, as Managing Agents ("Managing Agents"), and Canadian Imperial
Bank of Commerce, as Administrative Agent for Lenders ("Administrative
Agent");
WHEREAS, Assignor is a U.S. Lender under the Credit Agreement and
Assignee will, upon giving effect to this Agreement, likewise be a U.S.
Lender;
WHEREAS, Assignor has a Commitment under the Credit Agreement
pursuant to which Assignor is required (i) to make Loans to U.S. Borrower
pursuant to subsection 2.1A(ii) of the Credit Agreement and (ii) to purchase
participations in U.S. Letters of Credit pursuant to subsection 2.7D of the
Credit Agreement (any such participations in any such Letters of Credit
outstanding as of the date hereof being the "Assignor Participations");
[WHEREAS, Assignor has issued certain outstanding U.S. Letters of
Credit (the "Assignor Letters of Credit") pursuant to subsection 3.3 of the
Credit Agreement;][INSERT IF CANADIAN IMPERIAL BANK OF COMMERCE IS ASSIGNOR
AND U.S. LETTERS OF CREDIT ARE OUTSTANDING TO U.S. BORROWER]
X-B-1 <PAGE>
WHEREAS, Assignor desires to assign to Assignee its rights and
obligations as a U.S. Lender under the Credit Agreement and the other Loan
Documents with respect to [a portion of] Assignor's U.S. Commitment and any
U.S. Loans or Assignor Participations outstanding thereunder [and to sell to
Assignee a participation in the Assignor Letters of Credit (the "Assignee
Participation") equal to the participation required to be purchased therein
pursuant to subsection 2.7D of the Credit Agreement], and Assignee has agreed
to assume the obligations of Assignor under the Loan Documents to the extent
of the rights and obligations so assigned [and to purchase the Assignee
Participation]; and
[WHEREAS, Assignor is both the U.S. Lender and the Canadian Lender
for its Lending Unit, and Assignor is, concurrently herewith entering into an
Assignment and Acceptance with [Name of Assignee or Assignee's Canadian
affiliate] (the "Canadian Assignee") whereby Assignor is assigning to the
Canadian Assignee that portion of its rights and obligations with respect to
its Canadian Commitment which corresponds to the Percentage, as defined
below;]
[WHEREAS, Assignor's Lending Unit consists of the Assignor and
[Name of Canadian Lender of Assignor's Lending Unit] ("Assignor's Lending Unit
Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith
entering into an Assignment and Acceptance with [Name of Assignee or
Assignee's Canadian affiliate] (the "Canadian Assignee") whereby Assignor's
Lending Unit Affiliate is assigning to the Canadian Assignee that portion of
its rights and obligations with respect to its Canadian Commitment which
corresponds to the Percentage, as defined below;]
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto
hereby agree as follows:
SECTION 1. Assignment and Assumption.
(a) Assignor hereby assigns to Assignee, effective upon the
receipt of the consideration set forth in Section 1(c) and Administrative
Agent's receipt of any processing and recordation fee required under
subsection 10.1B of the Credit Agreement, without recourse, representation or
warranty (except as expressly set forth herein), an undivided _____% interest
(the "Percentage") in all of Assignor's rights and obligations as a Lender
arising under the Credit Agreement and the other Loan Documents relating to
Assignor's U.S. Commitment and any U.S. Loans and Assignor Participations
outstanding thereunder [and concurrently therewith sells to Assignee, without
recourse, representation or warranty (except as expressly set forth herein),
the Assignee Participation].
(b) Assignee hereby assumes from Assignor, and Assignor is
hereby expressly and absolutely released from, the Percentage of all of
Assignor's obligations arising under the Loan Documents relating to Assignor's
U.S. Commitment and any
X-B-2 <PAGE>
U.S. Loans and Assignor Participations outstanding thereunder, including
without limitation all such obligations with respect to any U.S. Loans to be
made, and any participations in U.S. Letters of Credit to be purchased,
pursuant to the Credit Agreement [, and Assignee hereby purchases from
Assignor the Assignee Participation].
(c) Notwithstanding any provisions of this Agreement to the
contrary, each of the Assignor and Assignee hereby acknowledges and confirms
its understanding and agreement that the U.S. Commitments of the U.S. Lenders
under the Credit Agreement may from time to time be increased or decreased by
the Borrowers in accordance with subsection 2.1A of the Credit Agreement
through changes in the U.S. Allocation, provided that the U.S. Allocation may
not at any time exceed the aggregate amount of the Commitments of all Lending
Units then in effect. Each of the Assignor and Assignee acknowledges that the
Percentage interest in the U.S. Commitment being assigned and assumed
hereunder equals the Assignee's Pro Rata Share, as set forth on Annex II
attached hereto, of the U.S. Allocation of the Commitments as in effect on
and after the date upon which this Agreement becomes effective.
(d) Assignor hereby represents and warrants that as of the
effective date of this Agreement the respective amounts of unpaid principal,
accrued but unpaid interest and accrued but unpaid fees with respect to the
Percentage of Assignor's rights under the Credit Agreement relating to
Assignor's U.S. Commitment and any U.S. Loans and Assignor Participations
outstanding thereunder [and with respect to the Assignee Participation] are as
set forth on Annex I attached hereto. In consideration of Assignor's
assignment, Assignee hereby agrees to pay to Assignor, on the effective date
of this Agreement, the amount of $_________________ in immediately available
funds by wire transfer to Assignor's office at
________________________________________________.
(e) Assignor and Assignee hereby agree that Annex II attached
hereto sets forth the amount of the U.S. Commitment, any U.S. Loans and
participations by Assignee in any U.S. Letters of Credit outstanding under the
Commitment and the Pro Rata Share of Assignee after giving effect to the
assignment and assumption [and the sale and purchase] described above.
(f) Assignor and Assignee hereby agree that, upon giving effect
to the assignment and assumption [and the sale and purchase] described above,
Assignee shall be a party to the Credit Agreement as a U.S. Lender thereunder,
and shall have all of the rights and obligations under the Loan Documents of,
and shall be deemed to have made all of the covenants and agreements contained
in the Loan Documents made by, a U.S. Lender having the U.S. Commitment, the
outstanding U.S. Loans, the aggregate participation in outstanding U.S.
Letters of Credit and the Pro Rata Share of Assignee as reflected on Annex II
attached hereto. Assignee hereby acknowledges and agrees that the agreement
set forth in this subsection 1(f) is expressly made for the benefit of
Company, Borrowers, Administrative Agent, Assignor and the
X-B-3 <PAGE>
other Lenders and their respective successors and permitted assigns.
(g) Assignor and Assignee hereby acknowledge and confirm their
understanding and intent that (i) this Agreement shall effect [(A)] the
assignment by Assignor and the assumption by Assignee of the Percentage of
Assignor's rights and obligations with respect to Assignor's U.S. Commitment
and any U.S. Loans and Assignor Participations outstanding thereunder and all
rights and obligations under the Loan Documents with respect thereto [and
(B) the sale by Assignor and the purchase by Assignee of the Assignee
Participation], (ii) any other assignments by Assignor of a portion of its
rights and obligations with respect to Assignor's U.S. Commitment and any
U.S. Loans or Assignor Participations outstanding thereunder [, and any other
sales by Assignor of participations in the Assignor Letters of Credit,] shall
have no effect on U.S. Commitment, the outstanding U.S. Loans, the aggregate
participation in outstanding U.S. Letters of Credit or Pro Rata Share of
Assignee set forth on Annex II attached hereto, and (iii) from and after the
effective date of this Agreement, Administrative Agent shall make all payments
under the Credit Agreement in respect of the Percentage interest assigned
hereby [and the Assignee Participation] (including without limitation all
payments of principal and accrued but unpaid interest and commitment and
letter of credit fees with respect thereto) to Assignee, whether such amounts
(in the case of such interest and fees) have accrued prior to the effective
date of this Agreement or subsequent thereto.
SECTION 2. Certain Representations, Warranties and Agreements.
(a) Assignor represents and warrants that it is the legal and
beneficial owner of the Percentage interest being assigned by it hereunder
[and of the Assignee Participation] and that such interest [is] [and the
Assignee Participation are] free and clear of any adverse claim.
(b) Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability, collect-
ibility or sufficiency of any of the Loan Documents or for any
representations, warranties, recitals or statements made therein or made in
any written or oral statement or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made
by Assignor to Assignee or by or on behalf of Company or any Borrower to
Assignor or Assignee in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of the Company or any Borrower or any other Person liable for the
payment of any Obligations, nor shall Assignor be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or
as to the use of the proceeds of the Loans or the use of the Letters of Credit
or as to the existence or possible existence of any Event of Default or
Potential Event of Default.
X-B-4 <PAGE>
(c) Assignee represents and warrants that it is an Eligible
Assignee; that it has experience and expertise in the making of loans such as
the Loans; that it has acquired its Percentage interest for its own account
and not with any present intention of selling all or any portion of such
interest; and that it has received, reviewed and approved copies of all Loan
Documents.
(d) Assignee represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company
and each of the Borrowers and their respective Subsidiaries in connection with
the assignment evidenced by this Agreement and that it has made and shall
continue to make its own appraisal of the creditworthiness of the Company and
the Borrowers. Assignor shall not have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Assignee or to provide Assignee with any credit or
other information with respect thereto, whether coming into its possession
before the making of the initial Loans or at any time or times thereafter, and
Assignor shall not have any responsibility with respect to the accuracy of or
the completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and warrants to the
other party hereto that it has full power and authority to enter into this
Agreement and to perform its obligations hereunder in accordance with the
provisions hereof, that this Agreement has been duly authorized, executed and
delivered by such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by general principles of equity.
SECTION 3. Miscellaneous.
(a) Each party to this Agreement hereby agrees from time to
time, upon request of the other party hereto, to take such additional actions
and to execute and deliver such additional documents and instruments as such
other party may reasonably request to effect the transactions contemplated by,
and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be changed,
waived, discharged or terminated, except by an instrument in writing signed
by the party against whom enforcement of such change, waiver, discharge or
termination is sought.
(c) Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telecopied, telexed or sent by United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telecopy or telex,
or four Business Days after depositing it in the United States
X-B-5 <PAGE>
mail, registered or certified, with postage prepaid and properly addressed;
provided that notices to Administrative Agent shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature page hereof or, as to
either party, such other address as shall be designated by such party in a
written notice delivered to the other party hereto. In addition, the address
of Assignee set forth below its name on the signature page hereof shall serve
as the initial notice address of Assignee for purposes of subsection 10.11 of
the Credit Agreement.
(d) This Agreement shall not effect an assignment of any rights
or obligations relating to the U.S. Commitment of any Lender. Assignor and
Assignee acknowledge and confirm (i) that concurrently herewith, Canadian
Assignee is entering into an Assignment and Acceptance with the Canadian
Lender of Assignor's Lending Unit whereby Canadian Assignee shall be assigned
and assume all rights and obligations of Assignor's Lending Unit with respect
to that portion of such Lending Unit's Canadian Commitment which corresponds
to the Percentage hereunder, and (ii) that after giving effect to such
assignment and assumption and the assignment and assumption to be effected
hereunder, Assignee and Canadian Assignee shall have the same Pro Rata Shares
under the Credit Agreement. Assignee agrees that Canadian Assignee shall for
all purposes be the Canadian Lender of Assignee's Lending Unit and that the
Commitment of such Lending Unit shall equal the Assignee's Pro Rata Share (as
set forth on Annex 1 annexed hereto) of the aggregate Commitments of all
Lending Units as in effect at any time on and after the date this Amendment
becomes effective.
(e) In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way
be affected or impaired thereby.
(f) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(g) This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
(h) This Agreement may be executed in one or more counterparts
and by different parties hereto in separate counterparts, each of which when
so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
X-B-6 <PAGE>
(i) This Agreement shall become effective upon the execution of
a counterpart hereof by each of Assignor and Assignee and the execution of a
counterpart hereof by Company and Borrowers (as evidence of their consent
hereto in accordance with subsection 10.1B(i) of the Credit Agreement) and
Managing Agents (as evidence of their acceptance hereof in accordance with
subsection 10.1B(ii) of the Credit Agreement), and the receipt by Assignor,
Assignee and Administrative Agent of originals or telecopies of such
counterparts and authorization of delivery thereof.
(j) Assignee hereby appoints Canadian Imperial Bank of Commerce
as Administrative Agent, and Canadian Imperial Bank of Commerce and The Bank
of Nova Scotia as Managing Agents, under the Credit Agreement and the other
Loan Documents, to exercise such powers as are specified in Section 9 of the
Credit Agreement and to be entitled to such protections and indemnities as are
afforded thereunder.
[(k) Assignee hereby agrees to deliver to U.S. Borrower such
certificates, documents or other evidence, properly and accurately completed
and duly executed by Assignee (including, without limitation, Internal Revenue
Service Form 1001 or Form 4224 or any other certificate or statement of
exemption required by Treasury Regulations Section 1.1441-4(a) or Section
1.1441-6(c) or any successor thereto) to establish that Assignee is not
subject to deduction or withholding of United States federal income tax under
Section 1441 or 1442 of the Internal Revenue Code or otherwise (or under any
comparable provisions of any successor statute).] [INSERT IF ASSIGNEE IS
ORGANIZED UNDER THE LAWS OF ANY JURISDICTION OTHER THAN THE UNITED STATES OR
ANY STATE THEREOF OR IS NOT RESIDENT IN THE UNITED STATES.]
[Remainder of page intentionally left blank]
X-B-7
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: _____________________ By: _______________________
Title: __________________ Title: ____________________
Notice Address: Notice Address:
_________________________ __________________________
_________________________ __________________________
_________________________ __________________________
Consented to in accordance with subsec- Accepted in accordance with
tion 10.1B(i) of the Credit Agreement subsection 10.1B(ii) of the Credit
Agreement
HOMESTAKE MINING COMPANY CANADIAN IMPERIAL BANK OF COMMERCE, as
Managing Agent
By: _____________________ By: ________________________
Title: __________________ Title: _____________________
HOMESTAKE MINING COMPANY THE BANK OF NOVA SCOTIA,
OF CALIFORNIA as Managing Agent
By: _____________________ By: ________________________
Title: __________________ Title: _____________________
HOMESTAKE CANADA INC.
By: _____________________
Title: _________________
1
<PAGE>
ANNEX I
AMOUNTS OUTSTANDING
Outstanding Principal Amount:
Loans:
Dollar Loans: $_________
Gold Loans: _____Ounces
(interest to be paid in [Gold][Dollars
based on [a Price of Gold equal to
$____ per Ounce/Average daily value, in
Dollar Equivalents]]).
Total: $_________
Accrued But Unpaid Interest: $_________
Accrued But Unpaid Fees: $_________
Total Principal, Interest and Fees: $_________ <PAGE>
ANNEX II
ASSIGNEE'S
U.S. COMMITMENT,
OUTSTANDING U.S. LOANS,
AGGREGATE PARTICIPATION IN
OUTSTANDING U.S. LETTERS OF CREDIT AND
PRO RATA SHARE AFTER ASSIGNMENT
U.S. Commitment:
Current U.S. Allocation $_________
Aggregate Commitments $_________
Pro Rata Share _________%
Current U.S. Commitment $_________
Maximum U.S. Commitment $_________
Outstanding Loans:
Dollar Loans $_________
Gold Loans _________Ounces
Aggregate participation in
outstanding U.S. Letters of Credit: $_________
Pro Rata Share _________% <PAGE>
EXHIBIT XI
FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Amended and Restated Credit Agreement
dated as of September 30, 1994, as amended to the date hereof (said Credit
Agreement, as so amended, being the "Credit Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein
defined), by and among Homestake Mining Company, a Delaware corporation
("Company"), Homestake Mining Company of California, a California corporation
("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian
Borrower"), the financial institutions listed therein as Lenders ("Lenders"),
The Bank of Nova Scotia and Canadian Imperial Bank of Commerce ("CIBC"), as
Managing Agents ("Managing Agents"), and Canadian Imperial Bank of Commerce,
as Administrative Agent for Lenders ("Administrative Agent"), this represents
[U.S. Borrower's/Canadian Borrower's] request that CIBC issue a Standby Letter
of Credit on ___________, 199_ in the face amount of _________________
[Dollars/Canadian Dollars] with an expiration date of ____________, 199_. The
beneficiary of such proposed Letter of Credit shall be [Name of Beneficiary]
and such beneficiary's address is _________________________
________________________________. Attached hereto is the verbatim text of
such proposed Letter of Credit and a precise description of the proposed text
of any certificate to be presented by such beneficiary which, if presented by
such beneficiary prior to the expiration date of the Letter of Credit, would
require CIBC to make payment under the Letter of Credit.
The undersigned officer, to the best of his or her knowledge, and
[U.S. Borrower/Canadian Borrower] certify that:
(i) The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and complete in
all material respects on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent that
changes in the facts and conditions on which such representations and
warranties were based are required or permitted under the Credit
Agreement;
(ii) No event has occurred and is continuing or would result from
the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii) The Company, the U.S. Borrower and the Canadian
Borrower have performed in all material respects all agreements and
satisfied all conditions which the
XI-1
<PAGE>
Credit Agreement and other Loan Documents provide shall be performed or
satisfied by it on or before the date hereof;
(iv) There is no pending or, to the knowledge of Company,
Canadian Borrower or U.S. Borrower, threatened, action, suit,
proceeding, governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company
or any of its Subsidiaries and there has occurred no development in any
such action, suit, proceeding, governmental investigation or arbitration
that, in either event, in the opinion of Requisite Lenders, would
reasonably be expected to have a Material Adverse Effect, unless
disclosed to and consented to by Requisite Lenders; and no injunction or
other restraining order has been issued and no hearing to cause an
injunction or other restraining order to be issued is pending or noticed
with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by the
Credit Agreement or the making of Loans or the issuance of Letters of
Credit thereunder; and
(v) No Company Change of Control has occurred.
DATED: ____________________ [HOMESTAKE MINING COMPANY OF CALIFORNIA/
HOMESTAKE CANADA INC.]
By: ________________________
Title: _____________________
XI-1
<PAGE>
SCHEDULE 1.1
CASH FLOW SCHEDULE
Not reproduced.
<PAGE>
SCHEDULE 1.2
MAJOR MINING PROPERTIES
Homestake Mine
McLaughlin Mine
Round Mountain Mine
Williams Mine
David Bell Mine
Kalgoorlie Consolidated Mines
Main Pass 299 Mine
<PAGE>
SCHEDULE 2.1
LENDERS' COMMITMENTS AND PRO RATA SHARES
Lender's Commitments
- --------------------
<TABLE>
<CAPTION>
Pro
Rata
U.S. Lender Canadian Lender Commitment Share
----------- --------------- ---------- ------
<S> <C> <C> <C>
Canadian Imperial Bank Canadian Imperial $ 30 20%
of Commerce Bank of Commerce million
The Bank of Nova The Bank of Nova 25 17%
Scotia Scotia million
The Chase Manhattan The Chase Manhattan 20 13%
Bank, N.A. Bank of Canada million
Chemical Bank Chemical Bank of 15 10%
Canada million
Credit Lyonnais, Credit Lyonnais 15 10%
Cayman Island Branch Canada million
Mellon Bank, N.A. Mellon Bank Canada 15 10%
million
Bank of Montreal Bank of Montreal 15 10%
million
The Toronto-Dominion The Toronton- 15 10%
Bank Dominion Bank million
------- ------
Total $150 million 100%
</TABLE>
Initial Allocation of Commitments 1
- ----------------------------------
<TABLE>
<CAPTION>
U. S. Lender U.S.
- ------------ -----------
<S> <C>
Canadian Imperial Bank of Commerce $ 6 million
The Bank of Nova Scotia 5 million
The Chase Manhattan Bank, N.A. 4 million
Chemical Bank 3 million
Credit Lyonnais, Cayman Island Branch 3 million
Mellon Bank, N.A. 3 million
Bank of Montreal 3 million
The Toronto-Dominion Bank 3 million
------------
Total $ 30 million
<FN>
1
Total Allocation of Commitments (U.S. and Canadian) - $150 million.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Canadian Lender Canadian
- --------------- ------------
<S> <C>
Canadian Imperial Bank of Commerce $ 24 million
The Bank of Nova Scotia 20 million
The Chase Manhattan Bank of Canada 16 million
Chemical Bank of Canada 12 million
Credit Lyonnais Canada 12 million
Mellon Bank Canada 12 million
Bank of Montreal 12 million
The Toronto-Dominion Bank 12 million
------------
Total $120 million
</TABLE>
As of September 30, 1994 there are no borrowings and no letters of credit
outstanding under the Credit Agreement.
<PAGE>
SCHEDULE 2.7
EXISTING LETTERS OF CREDIT
None.
<PAGE>
SCHEDULE 4.1
LIST OF SUBSIDIARIES
==========================================================
Homestake Mining Company, a Delaware Corporation and its
Subsidiaries
Interest of Homestake Mining Company is 100% unless
otherwise noted
* Denotes Material Subsidiary
( ) Denotes state, province or country of incorporation
==========================================================
Homestake Mining Company (Delaware)
*Homestake Mining Company of California (California)
Denay Creek Gold Mining Company (California)
*Homestake Canada Inc. (Ontario)
588982 Ontario Inc. (Ontario)
759290 Ontario Inc. (Ontario)
759291 Ontario Inc. (Ontario)
759292 Ontario Inc. (Ontario)
Corona Gold Inc. (Nevada)
Santa Fe Gold Inc. (Nevada)
E & B Explorations Inc. (Delaware)
Galveston Resources (Nevada), Inc. (Nevada)
International Corona Resources (Bermuda) Ltd. (Bermuda)
Mexico Exploration (Canada) Limited (Ontario)
PRG Project Development Corp. (British Columbia)
Pezamerica Resource Corporation (Arizona)
Prime Resources Group Inc. (British Columbia) - 50.6%
Stikine Resources Ltd. (British Columbia) - 50.6%
Teck-Corona Operating Company (Ontario) - 50%
The Ventora Corporation (Arizona)
Westcan Holdings Inc. (Nevada)
Williams Operating Company (Ontario) - 50%
Homestake de Argentina S.A. (Buenos Aires)
Homestake Forest Products Company (California)
*Homestake Gold of Australia Limited (South Australia) - 81.5%
*Homestake Australia Limited (South Australia) - 81.5%
Homestake Gold (Queensland) Pty. Ltd. (Queensland) - 81.5%
Homestake International Minerals Ltd. (California)
Homestake Lead Company of Missouri (California)
Homestake Mineral Development Company (Wyoming, in process of
migration to British Columbia)
*Homestake Nevada Corporation (California)
*Homestake Sulphur Company (Delaware)
Black Hills Oil and Gas Company (California)
Felmont Natural Gas Storage Company, Inc. (Delaware)
Homestake Venezuela, S.A. (Venezuela)
Minera Rio Carichapo, S.A. (Venezuela)
La Jara Mesa Mining Company (New Mexico)
Minera Homestake Chile S.A. (Chile)
Whitewood Development Corporation (California)
Unincorporated Joint Ventures
*Williams Mine Joint Venture (Ontario) - 50% held by Canadian
Borrower
*David Bell Joint Venture (Ontario) - 50% held by Canadian
Borrower
<PAGE>
SCHEDULE 4.4
CONTINGENT OBLIGATIONS AND
FORWARD COMMITMENTS
1. Foreign exchange commitments described in Form 10-Q for the second
quarter, 1994.
2. See Schedule 6.4
<PAGE>
SCHEDULE 4.7
LITIGATION
1. Litigation described in Form 10-Q for the second quarter, 1994.
<PAGE>
SCHEDULE 4.12
CERTAIN EMPLOYEE BENEFIT PLANS
B. ERISA Events
None
C. Retiree Health and Welfare Benefits
1. The collective bargaining agreement with the United Steelworkers
at the Homestake Mine (Lead, S.D.) provides for retiree medical
and death benefits (payable from the pension plan) for hourly
employees.
2. The Company provides retiree medical and death benefits (paid from
the pension plan) for salaried employees at the Homestake Mine
(Lead, S.D.).
3. The Company provides retiree medical and death benefits for
certain employees who retired while employed by Felmont Oil
Corporation (now Homestake Sulphur Company).
4. The Company provides retiree medical benefits for certain
employees who retired early under Early Retirement Programs
offered at corporate locations and at its former uranium operating
location at Grants, New Mexico
<PAGE>
SCHEDULE 6.1
EXISTING INDEBTEDNESS
1. Homestake Gold of Australia overdraft facility with Westpac
Banking Corporation. Nothing outstanding at September 30, 1994.
2. U.S. Borrower's California Pollution Control Bonds, Series 1984A,
1984B and 1984C. Principal amount at September 30, 1994 was
$17,000,000.
3. U.S. Borrower's Lawrence County, South Dakota Pollution Control
Bonds, Series 1987. Principal amount at September 30, 1994 was
$18,000,000.
4. Company's 5-1/2% Convertible Subordinated Notes due June 23, 2000.
Principal amount at September 30, 1994 was $149,995,000.
5. Promissory notes evidencing intercompany indebtedness of Homestake
Canada Inc. to Homestake Mining Company of California -
C$149,914,366 principal amount outstanding at September 30, 1994.
6. Promissory notes evidencing intercompany indebtedness of Homestake
Canada Inc. to Corona Gold Inc. - C$53,297,599 principal amount
outstanding at September 30, 1994.
7. Loans from Homestake Canada Inc. to Prime Resources Group Inc. -
intercompany receivable in the amount of C$260,520 at August 31,
1994.
8. Loans from Homestake Canada Inc. to Stikine Resources Ltd. -
intercompany receivable in the amount of C$214,170 at August 31,
1994.
9. Loans from Prime to Stikine Resources Ltd. - intercompany
receivable in the amount of C$33,412,306 at August 31, 1994.
10. Loans from Homestake Canada Inc. to Homestake Mineral Development
Company - intercompany receivable in the amount of C$2,004,741 at
August 31, 1994.
11. Loans from Homestake Mining Company of California to Homestake
Mineral Development Company - intercompany receivable in the
amount of C$13,994,686 at August 31, 1994.
<PAGE>
SCHEDULE 6.2
CERTAIN EXISTING LIENS
CONTINUING LIENS
South Dakota UCC-1
Homestake Mining Company
1. File no. 901131104603 - Unisys Finance Corp. Continuing true
lease, precautionary filing.
2. File no. 892081001974 - Unisys Finance Corp. Continuing true
lease, precautionary filing.
California UCC-1
Homestake Mining Company
1. File no. 89042886 - Union Oil Company of California. Continuing
lease. Precautionary filing
2. File no. 92149391 - Ingersoll-Rand Company/Associates Leasing,
Inc. Continuing lease. Precautionary filing.
3. File no. 93010602 - Michelin Tire Corporation. Cobre Tire is the
debtor with respect to tires on consignment from Michelin and
stored at the McLaughlin Mine. The Company is not the debtor.
Homestake Mining Company of California
1. File no. 92182854 - California Pollution Control Authority.
Continuing security interest in Bond Fund with respect to
Pollution Control Financing, 1984 Series C.
2. File no. 92182855 - California Pollution Control Authority.
Continuing security interest in Bond Fund with respect to
Pollution Control Financing, 1984 Series B.
3. File no. 92182856 - California Pollution Control Authority.
Continuing security interest in Bond Fund with respect to
Pollution Control Financing, 1984 Series A.
<PAGE>
Nevada UCC-1
Marigold Joint Venture - Homestake Mining Company of California
1. File no. 93-04542 - CIT Group/Equipment Financing, Inc.
Continuing purchase money security interest.
British Columbia- Encumbrances Registered under Personal Property
Security Act (British Columbia)
Homestake Canada Inc.
1. Reg. No. 4516730 - Finning Ltd. - Cat Model D9N Tractor.
Continuing lease.
2. Reg. No. 4560181 - Finning Ltd. - Cat Model D10N Tractor.
Continuing lease.
3. Reg. No. 3677855 - Dundee Bancorp Inc. - Absolute assignment of
receivables. Continuing record of sale of receivables of Fort
Cady Mineral Corporation.
4. Reg. No. 4151417 - Dana Commercial Credit Canada Inc. - Canon
NP3325 Copier et al. Continuing lease.
5. Reg. No. 3777626 - Dana Commercial Credit Canada Inc. - Canon
NP6550 Copier et al. Continuing lease.
Homestake Canada Ltd. (name changed to 2241633 Canada Ltd. and dissolved
into Homestake Canada Inc.
1. Reg. No. 3281237 - The Toronto Dominion Bank - Assignment of
Accounts. Continuing security interest in bank accounts
(C$35,000) of Homestake Canada Ltd. and Homestake Mineral
Development Company securing reimbursement obligation with respect
to two letters of credit (C$20,000 and C$15,000) issued under
Letter of Credit Facility Agreement with maximum amount of
C$100,000.
2. Reg. No. 3331416 - North American Trust Company (Asset Mgmt) -
NP8530 Copier et al. Continuing lease.
Prime Resources Group Inc.
1. Reg. No. 3150124 - Euro-Nevada Mining Corporation - Assignment of
1% Net Smelter Royalty. Continuing net smelter royalty.
Ontario- Encumbrances Registered under Personal Property Security Act
(Ontario)
<PAGE>
Homestake Canada Inc.
1. Reg. No. 911030105100434081 - Dundee Bancorp Inc. - Absolute
assignment of receivables. Continuing record of sale of
receivables of Fort Cady Mineral Corporation et al.
2. Reg. No. 891214143200433896 - Central Guaranty Trust Company (now
Montreal Trust Company). Continuing royalty agreement regarding
the Williams Mine.
LIENS BEING TERMINATED
California UCC-1
Homestake Mining Company
1. File no. 90034090 - SMA Equipment Company, Inc./Associates
Commercial Corporation. Lease terminated. Company is in process
of securing release.
<PAGE>
SCHEDULE 6.3
EXISTING INVESTMENTS
1. Existing Investments in Subsidiaries listed in Schedule 4.1
2. See attached Homestake Canada Inc. Security Ownership as at August 31,
1994.
3. $3,700,000 Principal outstanding indebtedness of Golden Hills Resorts,
Inc. (in bankruptcy).
4. Kalgoorlie Consolidated Gold Mines Pty. Ltd. Homestake Mining Company
holds, indirectly, 40.8% of the outstanding stock.
5. Kalgoorlie Mining Associates, Fimiston/Paringa Joint Venture, and Mt.
Percy Joint Venture, operating under the name Kalgoorlie Consolidated
Gold Mines. Homestake Mining Company holds, indirectly, 40.8% of the
interest in these joint ventures.
6. 936,988 common shares of U.S. Gold Corporation.
7. 568,263 common shares of Mega Gold Corporation.
8. 155,000 common shares of Idarado Mining Company.
9. Main Pass 299 Sulphur and Oil and Gas Joint Ventures. Homestake
Mining Company holds, indirectly, 16.7% of the interest in this
venture.
10. Round Mountain Joint Venture. Homestake Mining Company holds,
indirectly, 25% of the interest in this venture.
11. Snip Joint Venture. Homestake Mining Company holds, indirectly,
21.72% of the interest in this venture.
12. Pinson Joint Venture. Homestake Mining Company holds, indirectly,
26.25% of the interest in this venture.
13. Marigold Joint Venture. Homestake Mining Company holds, indirectly,
33.3% of the interest in this venture.
14. Loan by Prime Resources Group Inc. to Noranda Inc.in the maximum
amount of C$12,000,000. Loan made to upgrade Noranda smelter to
accept ore from Eskay Creek Project in connection with ore sales
agreement. Loan is repayable as ore is shipped under ore sales
agreement.
<PAGE>
SCHEDULE 6.4
EXISTING CONTINGENT OBLIGATIONS
1. Foreign exchange commitments described in Form 10-Q for the
second quarter, 1994.
2. Three Guaranty Agreements dated as of May 1, 1984, between
California Pollution Control Financing Authority and Homestake
Mining Company with respect to the obligations of HMCC under
three Loan Agreements dated as of May 1, 1984, between
California Pollution Control Financing Authority and Homestake
Mining Company of California with respect to Pollution Control
Revenue Bonds (Homestake Mining Company of California Project),
Series 1984A, 1984B, and 1984C.
3. Four Letter of Credit Reimbursement Agreements dated as of June
29, 1994 among Homestake Mining Company of California, Homestake
Mining Company and The Bank of Nova Scotia with respect to the
replacement letters of credit issued by The Bank of Nova Scotia
with respect to obligations of HMCC under three Loan Agreements
dated as of May 1, 1984, between California Pollution Control
Financing Authority and HMCC with respect to Pollution Control
Revenue Bonds (Homestake Mining Company of California Project),
Series 1984A, 1984B, and 1984C (principal amount at September
30, 1994 under all three Loan Agreements was $17,000,000) and
Loan Agreement dated as of April 1, 1983, between Lawrence
County, S.D. and HMCC with respect to Pollution Control Revenue
Bonds (Homestake Mining Company Project), Series 1983 (principal
amount at September 30, 1994 was $18,000,000). These letters of
credit replaced the letters of credit previously issued by
Westpac with respect to the above referenced pollution control
revenue bonds (the "Pollution Control Revenue Bonds").
4. Guaranty Agreement dated as of June 29, 1994 between Homestake
Mining Company and The Bank of Nova Scotia pursuant to which
HMCD has guaranteed the obligations of HMCC under the Letter of
Credit Reimbursement Agreements identified in paragraph 2 above,
and also guaranteeing the obligations of HMCC under four Standby
Purchase Agreements dated as of June 29, 1994, between Homestake
Mining Company of California and The Bank of Nova Scotia with
respect to the repurchase from The Bank of Nova Scotia of the
Pollution Control Revenue Bonds purchased by The Bank of Nova
under remarketing agreements with respect to the Pollution
Control Revenue Bonds.
5. See attached schedules of surety agreements, letters of credit
and guarantees.
<PAGE>
HOMESTAKE GOLD OF AUSTRALIA LIMITED
OUTSTANDING GUARANTEES
WESTPAC
<TABLE>
<CAPTION>
EXEC AUD
DATE FAVOUREE EQUIVALENT
<C> <S> <C>
01/02/89 Minister for Mines & Energy Qld 3,000.00
01/02/89 Minister for Mines & Energy Qld 3,000.00
21/02/89 Mines & Energy Northern 4,000.00
19/02/90 Minister for Mines & Energy 4,000.00
02/05/91 Minister for Minerals & Energy 10,000.00
10/05/91 Minister for Mines (W.A.) 50,000.00
30/05/91 Minister for Mines & Energy 10,000.00
21/11/92 Minister for Natural Resources (NSW) 10,000.00
09/01/92 Minister for Natural Resources 10,000.00
09/01/92 Minister for Natural Resources 10,000.00
17/01/92 S.E.C.W.A. 1,700.00
26/05/92 Minister for Resource Industries 12,000.00
18/11/92 Minister for Mines (W.A.) 512,500.00
10/03/93 Minister for Resource Industries 5,000.00
10/03/93 Minister for Resource Industries 5,000.00
23/09/93 Minister for Minerals & Energy 3,000.00
12/01/94 Minister for Minerals & Energy 10,000.00
24/02/94 Minister for Mines & Energy 5,000.00
_____________
Total 668,200.00
</TABLE>
<PAGE>
SCHEDULE 6.9
TRANSACTIONS WITH AFFILIATES
1. Forward gold purchase agreement between Company and HGAL dated
as of June 7, 1989, as amended, under which 136,680 principal
amount of ounces of Gold remain for delivery at September 30,
1994.
2. Loans from Homestake Canada Inc. to Prime Resources Group Inc. -
intercompany receivable in the amount of C$260,520 at August 31,
1994.
3. Loans from Homestake Canada Inc. to Stikine Resources Ltd. -
intercompany receivable in the amount of C$214,170 at August 31,
1994.
4. Loans from Prime to Stikine Resources Ltd. - intercompany
receivable in the amount of C$33,412,306 at August 31, 1994.
5. Shareholder Agreement between the Company, Case, Pomeroy &
Company Inc. and Hadley Case dated as of January 1, 1989, as
amended.
6. Mineral Property Agreement dated as of January 25, 1985 between
Homestake Sulphur Company, Case, Pomeroy & Company Inc. and
Case-Pomeroy Oil Corporation.
EXHIBIT 10.2
RETIREMENT PLAN
FOR OUTSIDE DIRECTORS OF
HOMESTAKE MINING COMPANY
ARTICLE 1 -- INTRODUCTION
1.1 Establishment of Plan. Homestake Mining Company
("Homestake") hereby establishes the Retirement Plan for Outside Directors
of Homestake Mining Company ("Plan").
1.2 Purpose of Plan. The purpose of the Plan is to
provide retirement income to Outside Directors who cease to be Directors on
or after July 21, 1994, or who are designated by the Plan Administrator.
1.3 Status of Plan. The Plan is intended to be
exempt from the Employee Retirement Income Security Act of 1974.
Participants have the status of general unsecured creditors of Homestake,
(ii) the Plan constitutes a mere promise by the Homestake to pay benefits
in the future, and (iii) it is the intention of the parties that the
arrangements be unfunded for tax purposes.
ARTICLE 2 -- DEFINITIONS
2.1 Board means the Board of Directors of Homestake Mining
Company.
2.2 Director means an individual who is a member of the
Board.
2.3 Effective Date means July 21, 1994.
2.4 Outside Director means (i) a Director who is not an
employee of Homestake, or an entity which is treated as the same employer
as Homestake under Section 414(b) or 414(c) of the Internal Revenue Code,
and who does not have a fully vested interest in any other Homestake
retirement plan qualified under Internal Revenue Code section 401, and (ii)
<PAGE>
any other Director or former Director designated as an Outside Director for
purposes of this Plan by the Plan Administrator.
2.5 Participant means an individual who has commenced
participation in the Plan pursuant to Section 3.1.
2.6 Plan Administrator means Homestake.
2.7 Retainer Fee means the annual fee paid by Homestake to a
Director as compensation for service as a Director, and shall not include
any amounts paid for attending any particular meeting of the Board or for
participation or membership on any committee of the Board.
2.8 Month of Service means (i) each calendar month during
which an individual is a Director for all or any part of the month, and
(ii) each calendar month, designated by the Plan Administrator, during
which an individual served on the Board of Directors of any other entity.
2.9 Month of Credited Service means (i) each calendar month
during which an individual is an Outside Director for all or any part of
the month, and (ii) each calendar month, designated by the Plan
Administrator, during which an individual served on the Board of Directors
of any other entity without regard to whether the individual was also an
employee of the other entity.
ARTICLE 3 -- PARTICIPATION; VESTING
3.1 Participation.
Each Director who is an Outside Director on the Effective Date
shall commence participation on the Effective Date. Thereafter, each
Director shall commence participation in the Plan on the day the Director
qualifies as an Outside Director.
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3.2 Vesting.
Subject to Section 3.3, the right of each Participant to receive
benefits under the Plan shall become fully vested upon the earlier of (i)
attaining age 70, (ii) completion of sixty Months of Service, including
Months of Service prior to the Effective Date, or (iii) the death or
disability of the Participant.
3.3 Forfeiture.
Any Director who is removed from the Board for cause shall forfeit
all benefits under the Plan.
ARTICLE 4 -- PLAN BENEFITS
4.1 Retirement Benefits.
A Participant who ceases to be a Director after the Effective
Date, and who is vested in accordance with Section 3.2, or a former
Director who becomes a Participant upon designation by the Plan
Administrator as an Outside Director shall be entitled to receive a monthly
Retirement Benefit equal to one twelfth (1/12) of the Retainer Fee in
effect at the time the Participant ceases to be a Director. Plan benefits
shall be paid, in cash, in equal monthly installments (or less frequently
at the discretion of the Plan Administrator) over a fixed number of months,
equal to the Participant's total Months of Credited Service, including
months prior to the Effective Date. Except as provided below, Retirement
Benefit payments shall commence on the later of (a) the first business day
of the calendar month following the month in which the Participant ceases
to be a Director, or (b) the first business day of the calendar month
following the month in which the Participant attains age 70, subject to
change only at the discretion of the Plan Administrator. A vested
Participant who has at least 120 Months of Service, who has attained age 65
and who ceases to be a Director after the Effective Date shall receive
Retirement Benefits commencing on the first business day of the calendar
month following the month in which the Participant ceases to be a Director.
Retirement Benefits payable to former Directors who are
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designated as Outside Directors shall commence on a date selected by the
Plan Administrator.
4.2 Accelerated Distribution.
In the event a Participant or his or her immediate family incurs a
severe financial hardship, the Plan Administrator, in its sole discretion,,
may accelerate distribution of the Participant's benefits, with or without
a reduction for early retirement, prior to the time such amounts would
otherwise be payable under the terms of the Plan.
4.3 Death of Participant Prior to End of Payout Period.
In the event that a Participant dies before distribution of the
Participant's benefits has been completed, the remaining benefits shall be
paid to the Participant's surviving spouse, at the time they would have
been payable to the Participant if the Participant had survived. If the
surviving spouse dies after the Participant, but before the benefits have
been fully paid, benefit payments shall terminate. In the event that a
Participant dies without a surviving spouse, the Participant's Plan
benefits shall terminate upon the death of the Participant.
ARTICLE 5 -- MISCELLANEOUS PROVISIONS
5.1 Plan Administration.
The Plan Administrator shall have the sole discretionary authority
for interpreting the Plan, for determining eligibility, for calculating
Plan benefits, for making determinations on questions of fact relating to
the operation of the Plan, and for establishing procedures for
administration of the Plan. The Plan Administrator's interpretation of the
Plan shall be conclusive and binding on all persons.
5.2 Non-alienation of Benefits.
No Participant or any other person shall have the right to
commute, encumber, assign, transfer, pledge or otherwise anticipate or
dispose of the right to receive benefits hereunder.
4 <PAGE>
5.3 Nonguarantee of Employment.
Nothing contained herein shall be construed as conferring upon a
Participant the right to continue in the service of Homestake as a Director or
in any other capacity.
5.4 Governing Law.
This Plan shall be construed, administered and enforced according
to the laws of the State of California.
5.5 Text to Control.
The headings of the sections are included solely for convenience
of reference and, if there is any conflict between such headings and the text
of this Plan, the text shall control.
ARTICLE 6 -- AMENDMENT AND TERMINATION
The Plan may be amended or terminated in whole or in part from
time to time by Homestake, in its sole discretion. No amendment or
termination shall reduce retroactively the benefits of any Participant, but an
amendment or termination may change the conditions for distribution of
benefits.
IN WITNESS WHEREOF, Homestake has caused this Plan to be executed
this ______ day of ______________, 1994.
___________________________
DC1LM1003.DOC
7754-111/330.001
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