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Exhibit 10.1(b)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called the "AMENDMENT")
made as of the 1st day of October, 1995, by and among HECLA MINING COMPANY, a
Delaware corporation (herein called "BORROWER"), Colorado Aggregate Company of
New Mexico, a New Mexico corporation, Kentucky-Tennessee Clay Company, a
Delaware corporation, K-T Feldspar Corporation, a North Carolina corporation,
Mountain West Products, Inc., an Idaho corporation, and NATIONSBANK OF TEXAS,
N.A., a national banking association (in its capacity as Agent under the
Original Agreement, herein called "AGENT"), and Lenders named in the Original
Agreement referred to below ("LENDERS"),
W I T N E S S E T H:
WHEREAS, Borrower, Agent and Lenders have entered into that certain Credit
Agreement dated as of August 30, 1994 (the "ORIGINAL AGREEMENT") for the purpose
and consideration therein expressed, whereby Lenders became obligated to make
loans to Borrower as therein provided; and
WHEREAS, Borrower, Agent and Lenders desire to amend the Original Agreement
to provide for the purposes and consideration set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and in the Original Agreement and in
consideration of the loans which may hereafter be made by Lenders to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
DEFINITIONS AND REFERENCES
SECTION 1.1. TERMS DEFINED IN THE ORIGINAL AGREEMENT. Unless the context
otherwise requires or unless otherwise expressly defined herein, the terms
defined in the Original Agreement shall have the same meanings whenever used in
this Amendment.
SECTION 1.2. OTHER DEFINED TERMS. Unless the context otherwise requires,
the following terms when used in this Amendment shall have the meanings assigned
to them in this Section 1.2.
"AMENDMENT" shall mean this First Amendment to Credit Agreement.
"AMENDMENT DOCUMENTS" shall mean this Amendment, the Renewal Notes and
the Pledge Agreement.
"CREDIT AGREEMENT" shall mean the Original Agreement as amended
hereby.
"PLEDGE AGREEMENT" shall mean that certain Pledge Agreement dated as
of October 1, 1995, between Borrower and Agent covering Bonds purchased
with funds drawn under the Bond LC.
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"RENEWAL NOTES" shall mean promissory notes in the form of Exhibit A
made by Borrower payable to the order of each Lender in an amount equal to
such Lender's Percentage Share of the Maximum Loan Amount.
ARTICLE II.
AMENDMENTS TO ORIGINAL AGREEMENT
SECTION 2.1. DEFINED TERMS. (a) The definitions of "BASE RATE,"
"COMMITMENT PERIOD," "FINAL MATURITY DATE," "LETTERS OF CREDIT," "LOAN
BALANCE", "MAXIMUM LOAN AMOUNT", "OBLIGATIONS", "PERCENTAGE SHARE", "PERMITTED
DEBT" and "SPREAD" in Section 1.1 of the Original Agreement are hereby amended
in their entirety to read as follows:
"`BASE RATE' means
(a) ON EACH DAY PRIOR TO NOVEMBER 1, 1995:
(i) the Prime Rate if the Loan Balance is EQUAL TO OR LESS THAN
$20,000,000; or
(ii) the Prime Rate plus 0.125% per annum if the Loan Balance is
GREATER THAN $20,000,000; and
(b) ON NOVEMBER 1, 1995 AND ON EACH DAY THEREAFTER DURING THE COMMITMENT
PERIOD:
(i) the Prime Rate if the Loan Balance on such day is EQUAL TO OR
LESS THAN 50% of the Maximum Loan Amount;
(ii) the Prime Rate plus 0.25% per annum if NEW EQUITY HAS NOT BEEN
ISSUED and the Loan Balance on such day is EQUAL TO OR LESS THAN 75% BUT
GREATER THAN 50% of the Maximum Loan Amount;
(iii) the Prime Rate plus 0.125% per annum if NEW EQUITY HAS BEEN
ISSUED and the Loan Balance on such day is EQUAL TO OR LESS THAN 75% BUT
GREATER THAN 50% of the Maximum Loan Amount;
(iv) the Prime Rate plus 0.50% per annum if NEW EQUITY HAS NOT BEEN
ISSUED and the Loan Balance on such day IS GREATER THAN 75% of the Maximum
Loan Amount; or
(v) the Prime Rate plus 0.375% per annum if NEW EQUITY HAS BEEN
ISSUED and the Loan Balance on such day IS GREATER THAN 75% of the Maximum
Loan Amount; and
(c) ON EACH DAY AFTER THE END OF THE COMMITMENT PERIOD:
(i) the Prime Rate plus .125% per annum if the Loan Balance on such
day is EQUAL TO OR LESS THAN 50% of the Maximum Loan Amount;
(ii) the Prime Rate plus 0.375% per annum if NEW EQUITY HAS NOT BEEN
ISSUED and the Loan Balance on such day is EQUAL TO OR LESS THAN 75% BUT
GREATER THAN 50% of the Maximum Loan Amount;
(iii) the Prime Rate plus 0.25% per annum if NEW EQUITY HAS BEEN
ISSUED and the Loan Balance on such day is EQUAL TO OR LESS THAN 75% BUT
GREATER THAN 50% of the Maximum Loan Amount;
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(iv) the Prime Rate plus 0.625% per annum if NEW EQUITY HAS NOT BEEN
ISSUED and the Loan Balance on such day IS GREATER THAN 75% of the Maximum
Loan Amount; or
(v) the Prime Rate plus 0.50% per annum if NEW EQUITY HAS BEEN ISSUED
and the Loan Balance on such day IS GREATER THAN 75% of the Maximum Loan
Amount.
If the Prime Rate or the Loan Balance changes after the date hereof, the
Base Rate shall be automatically increased or decreased, as the case may
be, without notice to Borrower from time to time as of the effective time
of each change in the Prime Rate or the Loan Balance. The Base Rate shall
in no event, however, exceed the Highest Lawful Rate."
"`COMMITMENT PERIOD' means the period from and including the date
hereof until and including July 31, 1998 (or, if earlier, the day on which
the Notes first become due and payable in full).
"`FINAL MATURITY DATE' means July 31, 2000.
"`LETTERS OF CREDIT' means the standby letters of credit issued by
Issuing Bank at the application of Borrower, and the Bond LC."
"`LOAN BALANCE' means during each Quarterly Period, the amount of the
average aggregate unpaid principal balance of the Loans calculated for the
immediately preceding Quarterly Period, as determined by Agent in its sole
discretion. As used in this definition of Loan Balance, "Quarterly Period"
means each of the following periods for each calendar year: (i) the period
from and including January 1 until and including March 31, (ii) the period
from and including April 1 until and including July 30, (iii) the period
from and including July 1 until and including September 30, and (iv) the
period from and including October 1 until December 31.
"`MAXIMUM LOAN AMOUNT' means the amount of $55,000,000.
"`OBLIGATIONS' means (a) all Debt from time to time owing by any of
the Related Persons to Agent or any Lender under or pursuant to any of the
Loan Documents, including without limitation all LC Obligations plus (b)
all Hedging Obligations.
"`PERCENTAGE SHARE' means, with respect to any Lender (a) when used
in Sections 2.1 or 2.4, in any Request for Advances or when no Loans are
outstanding hereunder, the percentage set forth opposite such Lender's name
on Schedule 3, and (b) when used otherwise, the percentage obtained by
dividing (i) the sum of the unpaid principal balance of such Lender's Loan
at the time in question plus the Matured LC Obligations which such Lender
has funded pursuant to Section 2A.3(b) plus the portion of the Maximum
Drawing Amount which such Lender might be obligated to fund under Section
2A.3(b), divided by (ii) the sum of the aggregate unpaid principal balance
of all Loans at such time plus the aggregate amount of LC Obligations
outstanding at such time.
"`PERMITTED DEBT' means (i) if the aggregate outstanding Funded Debt
is equal to or less than $15,000,000, all of such Funded Debt which matures
after the Final Maturity Date and is not subject to terms which are more
restrictive than the terms and conditions set forth in this Agreement, as
determined by Majority Lenders in their sole discretion; and (ii) if the
aggregate outstanding Funded Debt is greater than $15,000,000, all of such
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Funded Debt which matures after the Final Maturity Date and is not subject
to terms which are more restrictive than the terms and conditions set forth
in this Agreement, as determined by Majority Lenders in their sole
discretion; provided that such Funded Debt shall not constitute Permitted
Debt unless either (A) Majority Lenders have exercised the Pricing
Adjustment Option and the Loan Documents have been amended to provide for
the increase in the Base Rate and the Spread pursuant thereto or (B) Agent
has notified Borrower that Majority Lenders will not exercise the Pricing
Adjustment Option.
"`SPREAD' means
(a) ON EACH DAY PRIOR TO NOVEMBER 1, 1995:
(i) 0.80% per annum if the Loan Balance is equal to or less than
$20,000,000 or
(ii) 0.925% per annum if the Loan Balance is greater than $20,000,000;
and
(b) ON NOVEMBER 1, 1995 AND ON EACH DAY THEREAFTER DURING THE COMMITMENT
PERIOD:
(i) 0.80% per annum if the Loan Balance on such day is EQUAL TO OR
LESS THAN 25% of the Maximum Loan Amount;
(ii) 0.925% per annum if the Loan Balance on such day is EQUAL TO OR
LESS THAN 50% BUT GREATER THAN 25% of the Maximum Loan Amount;
(iii) 1.175% per annum if NEW EQUITY HAS NOT BEEN ISSUED and the
Loan Balance on such day is EQUAL TO OR LESS THAN 75% BUT GREATER THAN 50%
of the Maximum Loan Amount;
(iv) 1.05% per annum if NEW EQUITY HAS BEEN ISSUED and the Loan
Balance on such day is EQUAL TO OR LESS THAN 75% BUT GREATER THAN 50% of
the Maximum Loan Amount;
(v) 1.425% per annum if NEW EQUITY HAS NOT BEEN ISSUED and the Loan
Balance on such day IS GREATER THAN 75% of the Maximum Loan Amount; or
(vi) 1.30% per annum if NEW EQUITY HAS BEEN ISSUED and the Loan
Balance on such day IS GREATER THAN 75% of the Maximum Loan Amount; and
(c) ON EACH DAY AFTER THE END OF THE COMMITMENT PERIOD:
(i) 0.925% per annum if the Loan Balance on such day is EQUAL TO OR
LESS THAN 25% of the Maximum Loan Amount;
(ii) 1.05% per annum if the Loan Balance on such day is EQUAL TO OR
LESS THAN 50% BUT GREATER THAN 25% of the Maximum Loan Amount;
(iii) 1.30% per annum if NEW EQUITY HAS NOT BEEN ISSUED and the
Loan Balance on such day is EQUAL TO OR LESS THAN 75% BUT GREATER THAN 50%
of the Maximum Loan Amount;
(iv) 1.175% per annum if NEW EQUITY HAS BEEN ISSUED and the Loan
Balance on such day is EQUAL TO OR LESS THAN 75% BUT GREATER THAN 50% of
the Maximum Loan Amount;
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(v) 1.55% per annum if NEW EQUITY HAS NOT BEEN ISSUED and the Loan
Balance on such day IS GREATER THAN 75% of the Maximum Loan Amount; or
(vi) 1.425% per annum if NEW EQUITY HAS BEEN ISSUED and the Loan
Balance on such day IS GREATER THAN 75% of the Maximum Loan Amount.
If the Loan Balance changes, the Spread shall be automatically increased
or decreased, as the case may be, without notice to Borrower from time to
time as of the effective time of each change in the Loan Balance."
(b) The following definitions of "BOND" and "BOND LC" are hereby added to
Section 1.1 of the Original Agreement immediately following the definition of
"BASE RATE PORTION:"
"`BONDS' means the bonds issued under the Indenture."
"`BOND LC' means that certain letter of credit issued by Issuing Bank
substantially in the form of Schedule 4, which provides for payment of the
Bonds, and any letter of credit issued by Issuing Bank in substitution therefor
in accordance with the terms of this Agreement and the original Bond LC."
(c) The following definition of "HEDGING OBLIGATIONS" is hereby added to
Section 1.1 of the Original Agreement immediately following the definition of
"HAZARDOUS MATERIALS:"
"`HEDGING OBLIGATIONS' means all of the following:
(i) any and all present or future obligations of one or more of the
Related Persons to any one or more Lenders (or any affiliate of any Lender)
according to the terms of any present or future interest or currency rate
swap, rate cap, rate floor, rate collar, exchange transaction, forward rate
agreement, or other exchange or rate protection agreements or any option
with respect to any such transaction now existing or hereafter entered into
between any of the Related Persons and one or more parties constituting any
Lender (or any affiliate of any Lender); and
(ii) any and all present or future obligations of one or more Related
Persons to any one or more Lenders (or to any affiliate of any Lender)
according to the terms of any present or future swap agreements, cap,
floor, collar, exchange transaction, forward agreement or other exchange
or protection agreements relating to gold or other minerals, or any option
with respect to any such transaction now existing or hereafter entered into
between any of the Related Persons and one or more parties constituting any
Lender (or any affiliate of any Lender)."
(d) The following definition of "INDENTURE" is hereby added to Section 1.1
of the Original Agreement immediately following the definition of "HIGHEST
LAWFUL RATE:"
"`INDENTURE' means that certain Indenture of Trust dated as of October
1, 1995 between The Industrial Development Corporation of Custer County,
Idaho and Norwest Bank of Minnesota, National Association, as Trustee,
pursuant to which the solid waste disposal revenue bonds (Hecla Mining
Company Project) series 1995 are being issued."
(e) The following definition of "LETTER OF CREDIT SUBLIMIT" is hereby
added to Section 1.1 of the Original Agreement immediately following the
definition of "LENDERS:"
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"`LETTER OF CREDIT SUBLIMIT' means the amount of $10,000,000."
(f) The following definition of "LOAN AGREEMENT" is hereby added to
Section 1.1 of the Original Agreement immediately following the definition of
"LENDERS:"
"`LOAN AGREEMENT' means that certain Loan Agreement dated as of
October 1, 1995, between Borrower and the Industrial Development
Corporation of Custer County, Idaho."
(g) the following definition of "NEW EQUITY" is hereby added to Section
1.1 of the Original Agreement immediately following the definition of
"NATIONSBANK:"
"`NEW EQUITY' means issuance of common stock of Borrower after October
1, 1995, in a single transaction or multiple transactions, for an aggregate
purchase price (net of costs of issuance and commissions) of at least
Fifteen Million Dollars ($15,000,000)."
(h) the following definition of "PRICING ADJUSTMENT OPTION" is hereby
added to Section 1.1 of the Original Agreement immediately following the
definition of "PERSON:"
"`PRICING ADJUSTMENT OPTION' means the right of Majority Lenders, in
the event that Funded Debt ever exceeds $15,000,000, to increase the Base
Rate and the Spread by an amount determined by Majority Lenders, in their
sole discretion, to be necessary to reflect market interest rates for a
borrower with a financial condition similar to Borrower and a credit
facility similar to this Agreement and to require Borrower and Subsidiary
Guarantors to amend the Loan Documents to provide for such increase."
SECTION 2.2. FACILITY FEES; LETTER OF CREDIT FEES. Section 2.5 of the
Original Agreement is hereby amended in its entirety as follows:
"Section 2.5 Facility Fees; Letter of Credit Fees.
(a) In consideration of each Lender's commitment to make Advances,
Borrower will pay to Agent for the account of Lenders a nonrefundable
annual facility fee in the amount of 0.325% of the Maximum Loan Amount.
Each such fee shall be payable in advance, on the date hereof and on each
anniversary of the date hereof until this Agreement shall have been
terminated.
(b) In consideration of the issuance of each Letter of Credit by
Issuing Bank, Borrower agrees to pay to Issuing Bank for the account of
Lenders, on the date of issuance thereof, a letter of credit fee equal to
the greater of (i) the amount calculated by applying the Spread to the face
amount of such Letter of Credit for the term thereof or (ii) $500."
SECTION 2.3. CASH FLOW PROJECTIONS. The second sentence of Section 2.8(b)
of the Original Agreement is hereby amended in its entirety to read as follows:
"Within seven (7) days after receipt of the Borrower Projections, each
Lender shall notify Agent whether or not it approves the Borrower
Projections (any Lender's failure to so notify the Agent shall be deemed
approval of the Borrower Projections by such Lender) and within ten (10)
days after receipt of the Borrower Projections, Agent shall notify Borrower
whether Majority Lenders have approved the Borrower Projections, and if not
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approved (i) the reason for withholding such approval and (ii) the Borrower
Projections, as adjusted by Majority Lenders in their reasonable
discretion, as they deem necessary based on the information concerning
Borrower then available to Majority Lenders (the "Adjusted Projections").
SECTION 2.4. LETTERS OF CREDIT; BOND LC. Section 2A.1 of the Original
Agreement is hereby amended in its entirety to read as follows:
"Section 2A.1. Letters of Credit; Bond LC.
(a) Terms Applicable to all Letters of Credit Including Bond LC.
Subject to the terms and conditions hereof, Issuing Bank agrees to issue
from time to time during the Commitment Period, in reliance on the
agreements of Lenders set forth in Section 2A.3(b), at Borrower's
application, such Letters of Credit as Borrower may from time to time
request, so long as:
(i) the sum of (A) the aggregate amount of LC Obligations at
such time, plus (B) the amount of such Letter of Credit, does not
exceed the Letter of Credit Sublimit;
(ii) the sum of (A) the aggregate amount of Advances
outstanding at the time such Letter of Credit is issued plus (B) the
aggregate amount of LC Obligations at such time, plus (C) the amount
of such Letter of Credit, does not exceed the Maximum Loan Amount;
(iii) the form and terms of such Letter of Credit are
satisfactory to Issuing Bank in its sole and absolute discretion;
(iv) the expiration date of such Letter of Credit is on or before
the Business Day immediately preceding the last day of the Commitment
Period, unless otherwise agreed to by Majority Lenders; and
(v) the issuance of such Letter of Credit shall not cause the
Total Debt to Cash Earnings Ratio to exceed 4.0 to 1.0 (calculated
using Total Debt as of the date of issuance of such Letter of Credit,
and including the amount of such Letter of Credit, and using Cash
Earnings as of the end of the most recent Fiscal Quarter).
(b) Terms Applicable to Bond LC. (i) Each Lender hereby agrees
that the form of the Bond LC attached hereto as Schedule 4 is
acceptable to it and hereby consents to the issuance of the Bond LC
in such form; provided that (A) all of the terms and conditions set
forth in Section 2A.1(a) above, (B) all other conditions precedent to
the issuance of a Letter of Credit hereunder, and (C) all conditions
precedent to the purchase of the Bonds set forth in Section IV of that
certain Placement Agreement by and among Borrower, The Industrial
Development Corporation of Custer County, Idaho, and NationsBank,
N.A., except for delivery of an opinion of Thompson & Knight, P.C.,
counsel for Agent, and the Bond LC, have been satisfied. (Such
consent shall not obligate the Issuing Bank to obtain such Lender's
consent to the issuance or extension of the term of any Letter of
Credit or the extension of the term of the Bond LC except any
extension of the expiration date beyond the last day of the Commitment
Period.)
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(ii) The term of the Bond LC may be extended at the written
request of Borrower (in this subparagraph called "Request for
Extension") for an additional period determined by the Issuing Bank
if the Issuing Bank shall have given written notice to Borrower of
such extension and shall have delivered to the Trustee a notice in the
form of Annex E to the Bond LC (and the Trustee shall have accepted
such notice) at least forty-five (45) days prior to the end of the
then effective expiration date of the Bond LC, subject to the terms
and conditions set forth in this Agreement and the Bond LC, and
subject to earlier termination of the Bond LC in accordance with its
terms. If the Issuing Bank shall not have received from Borrower a
Request for Extension at least ninety (90) days prior to the then
effective expiration date of the Bond LC, Issuing Bank shall have no
obligation to consider extending the term of the Bond LC. Issuing
Bank shall notify Borrower whether or not it shall extend the term of
the Bond LC within forty-five (45) days after Issuing Bank's receipt
of a Request for Extension. Any determination to extend the term of
the Letter of Credit shall be made at Issuing Bank's sole discretion;
no course of dealing or other circumstances shall require the Issuing
Bank to extend the Letter of Credit.
SECTION 2.5. CASH COLLATERAL FOR LC OBLIGATIONS. Paragraph (a) of Section
2A.8 of the Original Agreement is hereby amended and restated in its entirety
to read as follows:
"(a) Cash Collateral for LC Obligations.
(i) Acceleration. If the Obligations, or any part thereof, become
immediately due and payable pursuant to Article VII, then all LC
Obligations shall become immediately due and payable without regard for
actual drawings or payments on the Letters of Credit and Borrower shall
immediately pay to Agent for the account of the Issuing Bank an amount
equal to the aggregate LC Obligations then outstanding.
(ii) Long-term Letters of Credit. If in accordance with the terms of
Section 2A.1 of this Agreement, Majority Lenders have agreed to extend the
expiration date of any Letter of Credit beyond the last Business Day of the
Commitment Period, on such Business Day Borrower will pay to Agent for the
account of the Issuing Bank an amount equal to the aggregate LC Obligations
relating to such Letters of Credit, in addition to all other amounts then
due under the Loan Documents.
(iii) Required Prepayment Amount. If at the time Borrower is
required to pay all or part of a Required Prepayment Amount pursuant to
Section 2.8, the amount of Obligations, other than LC Obligations, then
outstanding is less than the amount of the Required Prepayment Amount then
due, Borrower shall pay to Agent for the account of Issuing Bank the amount
by which (A) the amount of the Required Prepayment Amount then due exceeds
(B) the amount of Obligations, other than LC Obligations, then outstanding,
(in each case the "Excess Amount") to be held pursuant to Section 2.A8. So
long as no Default or Event of Default has occurred and is continuing, upon
written request of Borrower to Agent within thirty (30) days after the end
of any Fiscal Quarter for which the Total Debt to Cash Earnings Ratio
exceeds 4.0 to 1.0 without any additional Required Prepayment Amount, Agent
shall remit to Borrower the Cash Collateral deposited pursuant to this
subsection in the amount so requested."
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SECTION 2.6. OPTIONAL PREPAYMENTS. Section 2.7 of the Original Agreement
is hereby amended in its entirety to read as follows:
"Section 2.7. Optional Prepayments. Borrower may, upon one Business
Day's notice to each Lender, from time to time and without premium or
penalty prepay the Notes, in whole or in part, so long as the aggregate
amounts of all partial prepayments of principal on the Notes equals
$500,000 or any higher integral multiple of $500,000, and so long as
Borrower pays any costs with respect to the prepayment of any Fixed Rate
Portion due under Section 2.13. Each partial prepayment of principal made
after the end of the Commitment Period shall be applied to the regular
installments of principal due under the Notes in the inverse order of their
maturities. Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so
prepaid. Any principal or interest prepaid pursuant to this section shall
be in addition to, and not in lieu of, all payments otherwise required to
be paid under the Loan Documents at the time of such prepayment."
SECTION 2.7. BOOKS, FINANCIAL STATEMENTS AND REPORTS. The following two
new paragraphs (v) and (vi) are hereby added to Section 5.1(b) of the Original
Agreement immediately after paragraph (iv) thereof.
(v) A copy of the final Rosebud project feasibility study to Agent
and Lenders upon completion thereof; and
(vi) A quarterly variance report explaining material variances between
actual versus budgeted amounts for all material business units of Borrower,
including information such as unit price and cost data, capital
expenditures, revenues, and operating costs.
SECTION 2.8. EVENTS OF DEFAULT. The following new paragraphs (k) and (l)
are hereby added to Section 7.1 of the Original Agreement immediately after 1(j)
thereof and shall read as follows:
"(k) an `Event of Default' occurs and is continuing under the
Indenture or under the Loan Agreement; and
(l) any party to the Indenture fails to observe or perform any of the
covenants, conditions, or agreements of the Indenture or the Bonds in any
material respect, or any party to the Loan Agreement fails to observe or
perform any of the covenants, conditions, or agreements of the Loan
Agreement in any material respect, and such failure has not been waived or
not cured within any applicable grace period."
SECTION 2.9. SCHEDULES; EXHIBITS. Schedule 3 hereto is hereby added as
Schedule 3 to the Original Agreement, Schedule 4 hereto is hereby added as
Schedule 4 to the Original Agreement, and Exhibit A hereto is hereby substituted
for Exhibit A to the Original Agreement.
ARTICLE III.
CONDITIONS OF EFFECTIVENESS
SECTION 3.1. EFFECTIVE DATE. This Amendment shall become effective as of
the date first above written when, and only when:
(a) Agent shall have received each of the Amendment Documents duly
executed and delivered by Borrower;
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(b) Agent shall have additionally received all of the following documents,
each document (unless otherwise indicated) being dated the date of receipt
thereof by Agent, duly authorized, executed and delivered, and in form and
substance satisfactory to Agent:
(i) a certificate of a duly authorized officer of Borrower to the
effect that all of the representations and warranties set forth in Article
IV hereof are true and correct at and as of the time of such effectiveness;
(ii) a certificate of the Secretary of Borrower dated the date of the
Amendment Documents certifying that attached thereto is a true and complete
copy of resolutions adopted by the Board of Directors of Borrower
authorizing the execution, delivery and performance of the Amendment
Documents and certifying the names and true signatures of the officers of
Borrower authorized to sign the Amendment Documents;
(iii) an opinion of counsel to Borrower in the form attached
hereto as Exhibit B; and
(iv) such supporting documents as Agent may reasonably request.
(c) Agent shall have received for the account of Lenders an upfront fee
in the amount of $55,000.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF BORROWER. In order to
induce each Lender to enter into the Amendment Documents, Borrower represents
and warrants to each Lender that:
(a) The representations and warranties contained in Section 4.1 of the
Original Agreement are true and correct at and as of the time of the
effectiveness hereof.
(b) Borrower is duly authorized to execute and deliver the Amendment
Documents and is and will continue to be duly authorized to borrow monies and
to perform its obligations under the Credit Agreement. Borrower has duly taken
all corporate action necessary to authorize the execution and delivery of the
Amendment Documents and to authorize the performance of the obligations of
Borrower hereunder.
(c) The execution and delivery by Borrower of the Amendment Documents, the
performance by Borrower of its obligations thereunder and the consummation of
the transactions contemplated thereby do not and will not conflict with any
provision of law, statute, rule or regulation or of the certificate of
incorporation and bylaws of Borrower, or of any material agreement, judgment,
license, order or permit applicable to or binding upon Borrower, or result in
the creation of any lien, charge or encumbrance upon any assets or properties
of Borrower. Except for those which have been obtained, no consent, approval,
authorization or order of any court or governmental authority or third party is
required in connection with the execution and delivery by Borrower of the
Amendment Documents.
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(d) When duly executed and delivered, each of the Amendment Documents and
the Credit Agreement will be a legal and binding obligation of Borrower,
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency or similar laws of general application relating to the enforcement
of creditors' rights and by equitable principles of general application.
(e) The audited annual Consolidated financial statements of Borrower dated
as of December 31, 1994 and the unaudited quarterly Consolidated financial
statements of Borrower dated as of June 30, 1995 fairly present the Consolidated
financial position at such dates and the Consolidated statement of operations
and the changes in Consolidated financial position for the periods ending on
such dates for Borrower. Copies of such financial statements have heretofore
been delivered to each Lender. Since June 30, 1995, no material adverse change
has occurred in the financial condition or businesses or in the Consolidated
financial condition or businesses of Borrower.
ARTICLE V.
MISCELLANEOUS
SECTION 5.1. RATIFICATION OF AGREEMENTS. The Original Agreement as hereby
amended is hereby ratified and confirmed in all respects. The Loan Documents,
as they may be amended or affected by the various Amendment Documents, are
hereby ratified and confirmed in all respects. Any reference to the Credit
Agreement in any Loan Document shall be deemed to refer to this Amendment also
and any reference in any Loan Document to any other document or instrument
amended, renewed, extended or otherwise affected by any Amendment Document shall
also refer to such Amendment Document. Any reference to the Note in any other
Loan Document shall be deemed to be a reference to the Renewal Note issued and
delivered pursuant to this Amendment. The execution, delivery and effectiveness
of the other Amendment Documents shall not, except as expressly provided herein
or therein, operate as a waiver of any right, power or remedy of Lender under
the Credit Agreement or any other Loan Document nor constitute a waiver of any
provision of the Credit Agreement or any other Loan Document.
SECTION 5.2. SURVIVAL OF AGREEMENTS. All representations, warranties,
covenants and agreements of Borrower herein shall survive the execution and
delivery of the Amendment Documents and the performance hereof, including
without limitation the issuance of the Renewal Notes, and shall further survive
until all of the Obligations are paid in full. All statements and agreements
contained in any certificate or instrument delivered by Borrower or any Related
Person hereunder or under the Credit Agreement to any Lender shall be deemed to
constitute representations and warranties by, and/or agreements and covenants
of, Borrower under the Amendment Documents and under the Credit Agreement.
SECTION 5.3. MARKING OF ORIGINAL NOTE. Lender shall promptly mark each
Lender's original Note either "renewed and extended" or "ineffective" and shall
deliver a photocopy thereof to Borrower.
SECTION 5.4. GOVERNING LAW. The Amendment Documents shall be governed by
and construed in accordance with the laws of the State of Texas and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
SECTION 5.5. COUNTERPARTS. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
12
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
HECLA MINING COMPANY, Borrower
By: /s/ John P. Stilwell
--------------------------------------------
John P. Stilwell
Vice President-Finance and Treasurer
COLORADO AGGREGATE COMPANY OF NEW
MEXICO INC., Subsidiary Guarantor
By: /s/ J. Gary Childress
--------------------------------------------
J. Gary Childress
Vice President
KENTUCKY-TENNESSEE CLAY COMPANY,
Subsidiary Guarantor
By: /s/ J. Gary Childress
--------------------------------------------
J. Gary Childress
Vice President
K-T FELDSPAR CORPORATION,
Subsidiary Guarantor
By: /s/ J. Gary Childress
--------------------------------------------
J. Gary Childress
Vice President
MOUNTAIN WEST PRODUCTS, INC.
Subsidiary Guarantor
By: /s/ Michael B. White
--------------------------------------------
Michael B. White
Vice President
13
NATIONSBANK OF TEXAS, N.A.,
Agent and Lender
By: /s/ Ilene S. Larimore
--------------------------------------------
Name: Ilene S. Larimore
Title: Senior Vice President
SEATTLE-FIRST NATIONAL BANK, Lender
By: /s/ Joe Poole
--------------------------------------------
Joe Poole, Vice President
BANK OF AMERICA, IDAHO, N.A., Lender
By: /s/ John A. MacPhee
--------------------------------------------
John A. MacPhee, Vice President
FIRST SECURITY BANK OF IDAHO, N.A.,
Lender
By: /s/ Vicki Riga
--------------------------------------------
Vicki Riga, Vice President
14
SCHEDULE 3
LENDER'S PERCENTAGE SHARES
Percentage Share
Name of Bank Percentage Share of Maximum Amount
------------ ---------------- -----------------
NationsBank of Texas, N.A., 50% $27,500,000
Agent and Lender
Seattle First National Bank, 25% 13,750,000
Lender
Bank of America, Idaho, N.A., 12.5% 6,875,000
Lender
First Security Bank of Idaho, 12.5% 6,875,000
Lender
=============================================
MAXIMUM AMOUNT $55,000,000
15
SCHEDULE 4
FORM OF BOND LC
16
EXHIBIT A
PROMISSORY NOTE
$_____________ Dallas, Texas ______________, 1995
FOR VALUE RECEIVED, the undersigned, Hecla Mining Company, a Delaware
corporation (herein called "Borrower"), hereby promises to pay to the order
of _________________________________________, a national banking association
(herein called "Lender"), the principal sum of
_________________________________ DOLLARS ($__________), or, if greater or
less, the aggregate unpaid principal amount of the Loan made under this Note
by Lender to Borrower pursuant to the terms of the Credit Agreement (as
hereinafter defined), together with interest on the unpaid principal balance
thereof as hereinafter set forth, both principal and interest payable as
herein provided in lawful money of the United States of America at the
offices of the Agent under the Credit Agreement, 901 Main Street, Dallas,
Texas 75202 or at such other place within Dallas County, Texas, as from time
to time may be designated by the holder of this Note.
This Note (a) is issued and delivered under that certain Credit Agreement
dated as of August 30, 1994, among Borrower, NationsBank of Texas, N.A., as
Agent, and the lenders (including Lender) referred to therein (herein, as
from time to time supplemented, amended or restated, called the "Credit
Agreement"), and is a "Note" as defined therein, (b) is subject to the terms
and provisions of the Credit Agreement, which contains provisions for
payments and prepayments hereunder and acceleration of the maturity hereof
upon the happening of certain stated events, and (c) renews and extends, but
does not novate or extinguish, that certain Promissory Note dated August 30,
1994, made by Borrower payable to the order of Lender in the original
principal amount of ___________________ Dollars ($___________). Payments on
this Note shall be made and applied as provided herein and in the Credit
Agreement. Reference is hereby made to the Credit Agreement for a
description of certain rights, limitations of rights, obligations and duties
of the parties hereto and for the meanings assigned to terms used and not
defined herein.
For the purposes of this Note, the following terms have the meanings
assigned to them below:
"Base Rate Payment Date" means (i) the last day of each
October, January, April and July of each year, beginning October 31, 1995,
and (ii) any day on which past due interest or principal is owed hereunder
and is unpaid. If the terms hereof or of the Credit Agreement provide
that payments of interest or principal hereon shall be deferred from one
Base Rate Payment Date to another day, such other day shall also be a Base
Rate Payment Date.
"Fixed Rate Payment Date" means, with respect to any Fixed Rate
Portion: (i) the day on which the related Interest Period ends (and, if
such Interest Period is three months or longer, the three-month
anniversary of the first day of such Interest Period), and (ii) any day on
which past due interest or past due principal is owed hereunder with
respect to such Fixed Rate Portion and is unpaid. If the terms hereof or
of the Credit Agreement provide that payments of interest or principal
with respect to such Fixed Rate Portion shall be deferred from one Fixed
Rate Payment Date to another day, such other day shall also be a Fixed
Rate Payment Date.
17
The principal amount of this Note shall be due and payable in eight (8)
quarterly installments, each of which shall be equal to one-eighth (1/8) of
the aggregate unpaid principal balance of this Note at the end of the
Commitment Period, and shall be due and payable on each Base Rate Payment
Date, beginning with the first Base Rate Payment Date to occur after the end
of the Commitment Period, and continuing regularly thereafter until the Final
Maturity Date, at which time the unpaid principal balance of this Note and
all interest accrued hereon shall be due and payable in full.
The Base Rate Portion of the Loan (exclusive of any past due principal or
interest) from time to time outstanding shall bear interest on each day
outstanding at the Base Rate in effect on such day. On each Base Rate
Payment Date Borrower shall pay to the holder hereof all unpaid interest
which has accrued on the Base Rate Portion to but not including such Base
Rate Payment Date. Each Fixed Rate Portion of the Loan (exclusive of any
past due principal or interest) shall bear interest on each day during the
related Interest Period at the related Fixed Rate in effect on such day. On
each Fixed Rate Payment Date relating to such Fixed Rate Portion Borrower
shall pay to the holder hereof all unpaid interest which has accrued on such
Fixed Rate Portion to but not including such Fixed Rate Payment Date. All
past due principal of and past due interest on the Loan shall bear interest
on each day outstanding at the Late Payment Rate in effect on such day, and
such interest shall be due and payable daily as it accrues. Notwithstanding
the foregoing provisions of this paragraph: (a) this Note shall never bear
interest in excess of the Highest Lawful Rate, and (b) if at any time the
rate at which interest is payable on this Note is limited by the Highest
Lawful Rate (by the foregoing clause (a) or by reference to the Highest
Lawful Rate in the definitions of Base Rate, Fixed Rate, and Late Payment
Rate), this Note shall bear interest at the Highest Lawful Rate and shall
continue to bear interest at the Highest Lawful Rate until such time as the
total amount of interest accrued hereon equals (but does not exceed) the
total amount of interest which would have accrued hereon had there been no
Highest Lawful Rate applicable hereto.
Notwithstanding the foregoing paragraph and all other provisions of this
Note, in no event shall the interest payable hereon, whether before or after
maturity, exceed the maximum amount of interest which, under applicable law,
may be charged on this Note, and this Note is expressly made subject to the
provisions of the Credit Agreement which more fully set out the limitations
on how interest accrues hereon. In the event applicable law provides for a
ceiling under Texas Revised Civil Statutes Annotated article 5069-1.04, that
ceiling shall be the indicated rate ceiling and shall be used in this Note
for calculating the Highest Lawful Rate and for all other purposes. The term
"applicable law" as used in this Note shall mean the laws of the State of
Texas or the laws of the United States, whichever laws allow the greater
interest, as such laws now exist or may be changed or amended or come into
effect in the future.
If this Note is placed in the hands of an attorney for collection after
default, or if all or any part of the indebtedness represented hereby is
proved, established or collected in any court or in any bankruptcy,
receivership, debtor relief, probate or other court proceedings, Borrower and
all endorsers, sureties and guarantors of this Note jointly and severally
agree to pay reasonable attorneys' fees and collection costs to the holder
hereof in addition to the principal and interest payable hereunder.
18
Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration
of the maturity of this Note, diligence in collecting, the bringing of any
suit against any party and any notice of or defense on account of any
extensions, renewals, partial payments or changes in any manner of or in this
Note or in any of its terms, provisions and covenants, or any releases or
substitutions of any security, or any delay, indulgence or other act of any
trustee or any holder hereof, whether before or after maturity.
THIS NOTE AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE SAME ARE GOVERNED BY APPLICABLE
FEDERAL LAW.
HECLA MINING COMPANY
By: /s/ John P. Stilwell
--------------------------------------------
John P. Stilwell
Vice President-Finance and Treasurer
19
EXHIBIT B
OPINION OF BORROWER'S COUNSEL
October __, 1995
NationsBank of Texas, N.A., as Agent under
the Agreement referred to below
901 Main Street
Dallas, Texas 75202
Attention: Energy Banking Group
Ladies and Gentlemen:
This opinion is being delivered to you pursuant to Section 3.1(c)(iii)
of the First Amendment to Credit Agreement of even date herewith (the
"Amendment"), which amends that certain Credit Agreement dated August 30,
1994 (the "Original Agreement"; the Original Agreement as amended by the
Amendment, the "Agreement"), by and among Hecla Mining Company ("Borrower"),
Colorado Aggregate Company of New Mexico, Inc., a Delaware corporation,
Kentucky-Tennessee Clay Company, a Delaware corporation and K-T Feldspar
Corporation, a Delaware corporation (each individually, a "Subsidiary
Guarantor" and collectively, "Subsidiary Guarantors"), NationsBank of Texas,
N.A., as Agent, and the Lenders named therein. The Agreement provides for
credit in the maximum principal amount of $55,000,000 to be made available by
Lenders to Borrower, in accordance with the terms and provisions therein
contained. Terms which are defined in the Agreement and which are used but
not defined herein shall have the meanings given them in the Agreement.
We have acted as counsel for Borrower and each Subsidiary Guarantor in
connection with the transactions provided for in the Agreement. As such
counsel we have assisted in the negotiation of the Amendment and the other
Loan Documents and have advised our clients of their duties and obligations
thereunder. We have examined executed counterparts (or, where indicated,
photostatic copies of executed counterparts) of the documents listed in
Schedule 1. We have discussed the matters addressed in this opinion with
officers and representatives of Borrower and each Subsidiary Guarantor to the
extent we have deemed appropriate to enable us to render this opinion. In
particular, but without limitation, we have confirmed that Borrower and each
Subsidiary Guarantor acknowledges, understands and agrees that the Loan
Documents as written set forth the entire understanding and agreement of the
parties thereto.
In preparing this opinion we have also examined original counterparts or
photostatic or certified copies of all other instruments, agreements,
certificates, records and other documents (whether of Borrower or any
Subsidiary Guarantor, their officers, directors, shareholders and
representatives, public officials, or other persons) which we have considered
relevant hereto. In making this examination we have assumed the genuineness
of all signatures and the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as photostatic or certified copies, and the authenticity of the originals
of such copies.
20
Based upon the foregoing, and subject to the qualifications and
exceptions hereinafter set forth, we are of the opinion that:
1. Each of Borrower and the Subsidiary Guarantors is duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware. Each of Borrower and the Subsidiary Guarantors has all
requisite corporate power to enter into the Loan Documents and to perform its
obligations thereunder.
2. Each of Borrower and the Subsidiary Guarantors is duly qualified to
transact business and in good standing in all jurisdictions where the
character of its properties or the nature of its activities makes such
qualification necessary.
3. All of the outstanding capital stock of each Subsidiary Guarantor
is owned of record and, to the best of our knowledge, beneficially by
Borrower. All of such outstanding capital stock has been duly authorized and
validly issued and is fully paid and non-assessable. To the best of our
knowledge, no Subsidiary Guarantor has any obligation or commitment to issue
any other shares of capital stock, nor has any Subsidiary Guarantor granted
any options with respect thereto.
4. The Amendment, the Replacement Notes made payable to Lenders, the
Pledge Agreement (as used herein the terms Replacement Notes and Pledge
Agreement shall have the meanings assigned to them in the Amendment) and the
Credit Agreement (herein collectively referred to as the "Loan Documents")
have been duly authorized, executed and delivered by Borrower and each
Subsidiary Guarantor. The Loan Documents constitute legal valid and binding
instruments and agreements of Borrower and the Subsidiary Guarantors, and the
obligations of Borrower and the Subsidiary Guarantors thereunder are
enforceable in accordance with the terms thereof.
5. The execution, delivery and performance by Borrower and each
Subsidiary Guarantor of the Loan Documents and the consummation of the
transactions contemplated thereby, will not and did not (a) violate or
contravene any provision of the charter or bylaws of Borrower or any
Subsidiary Guarantor, or, (b) to the best of our knowledge, conflict with or
result in a breach of any material term or provision of or constitute a
default under or result in the maturing of any indebtedness pursuant to any
indenture, mortgage, deed of trust, note or loan agreement, or other material
agreement or instrument, of which we have knowledge to which Borrower or any
Subsidiary Guarantor is a party or by which any of them or any of their
various properties are bound, or, (c) result in a violation of any law, rule
or regulation or, to the best of our knowledge, any judgment, order, decree,
determination or award of any court or governmental authority which is now in
effect and applicable to Borrower or any Subsidiary Guarantor or to any of
their properties. To the best of our knowledge, neither Borrower nor any
Subsidiary Guarantor is in default under or in violation of any law, rule,
regulation, judgment, order, decree, determination, award, indenture,
mortgage, deed of trust, note, loan agreement or other material agreement or
instrument of which we have knowledge or in violation of its charter or
bylaws.
21
6. To the best of our knowledge, no consent, approval, authorization
or order of any court or governmental agency or of any third party is or was
required (a) for the execution and delivery by Borrower or any Subsidiary
Guarantor of the Loan Documents, (b) for the consummation of the transactions
contemplated thereby, or (c) for the performance by Borrower or any
Subsidiary Guarantor of their various obligations thereunder.
7. To the best of our knowledge there are no actions, suits,
proceedings or investigations pending or threatened against or affecting
Borrower or any Subsidiary Guarantor or any of their various properties in
any court or governmental agency (a) seeking to enjoin, or questioning the
legality or validity of, the performance by Borrower or any Subsidiary
Guarantor of any of their various obligations under the Loan Documents, or
(b) which have, or would have if adversely determined, a material adverse
effect on the ability of Borrower or any Subsidiary Guarantor to perform such
obligations.
8. To the best of our knowledge, (a) the representations and
warranties of Borrower and each Subsidiary Guarantor in the Loan Documents
are and were true and correct in all material respects on the date hereof and
on the dates when made, and (b) there does not exist on the date hereof any
Default or Event of Default under the Credit Agreement.
9. In the course of our representation of Borrower and each Subsidiary
Guarantors in connection with the negotiation of the Agreement, we discussed
with officers and representatives of Borrower and each Subsidiary Guarantor,
to the extent we deemed appropriate, the terms and provisions of the
Agreement. Nothing came to our attention in the course of such
representation or discussions which has led us to believe that the
representations and warranties of Borrower and each Subsidiary Guarantor in
the Amendment or the Agreement are not or were not true and correct in all
material respects on the date hereof and on the dates when made or that there
exists on the date hereof any Default or Event of Default under the
Agreement.
This opinion is limited by, subject to and based on the following:
(a) This opinion is limited in all respects to the General Corporation
Law of the State of Delaware, the laws of the State of Colorado and
applicable federal law; however, we are not members of the bar of the State
of Delaware and our knowledge of its General Corporation Law is derived from
a reading of that statute without consideration of any judicial or
administrative interpretations thereof.
(b) In rendering the opinion expressed in the second sentence of
paragraph 4 hereof, we have assumed that the Loan Documents have been duly
authorized, executed and delivered by Agent and each Lender (to the extent
that each is a party thereto).
(c) In connection with opinions expressed herein as being limited "to
the best of our knowledge", our examination has been limited to discussions
with the officers and representatives of Borrower and each Subsidiary
Guarantor in the course of this transaction, and our knowledge of the affairs
of Borrower and each Subsidiary Guarantor as their counsel, and we have made
no independent investigations as to the accuracy or completeness of any
representations, warranties, data or other information, written or oral, made
or furnished by any of them to us, to Agent or to any Lender.
22
(d) We have made no examination of and express no opinion with respect
to (i) titles to or, except as to adequacy of form, descriptions of the
properties described in the Loan Documents, (ii) whether there are of record
any liens, security interests, charges or encumbrances thereon, or (iii) the
filing or recording of the Loan Documents or any financing statements or
other instruments relating thereto.
(e) The enforceability of the respective obligations of the parties to
the Loan Documents, and the availability of certain rights and remedies
provided for therein, may be limited by (i) applicable state and federal laws
and judicial decisions, but the remedies provided for in the Loan Documents
are adequate for the practical realization of the benefits provided thereby,
(ii) equitable principles which may limit the availability of certain
equitable remedies (such as specific performance) in certain instances, or
(iii) applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally.
The opinions herein expressed are for the benefit of Agent and Lenders
and may be relied upon only by Agent, Lenders and by Thompson & Knight, A
Professional Corporation, in connection with any opinion delivered by them to
Agent.
Respectfully submitted,
23
SCHEDULE 1 to Borrower's Counsel Opinion
LOAN DOCUMENTS REVIEWED
1. The Original Agreement and the Amendment.
2. Replacement Note payable to the order of each Lender.
3. Pledge Agreement.
2. Omnibus Certificate of even date herewith by President and Secretary of
Borrower, with following exhibits: (a) Incumbency and Signature
Certificate of Officers of Borrower, (b) Resolutions of Board of
Directors of Borrower.
3. Omnibus Certificate of even date herewith by President and Secretary of
Colorado Aggregate Company of New Mexico, Inc., a Delaware corporation
("Colorado Aggregate") with following exhibits: (a) Incumbency and
Signature Certificate of officers of Colorado Aggregate, (b) Resolutions
of Board of Directors of Colorado Aggregate.
4. Omnibus Certificate of even date herewith by President and Secretary of
Kentucky-Tennessee Clay Company, a Delaware corporation ("Kentucky-
Tennessee Clay") with following exhibits: (a) Incumbency and Signature
Certificate of officers of Kentucky-Tennessee Clay, (b) Resolutions of
Board of Directors of Kentucky-Tennessee Clay.
5. Omnibus Certificate of even date herewith by President and Secretary of
K-T Feldspar Corporation, a Delaware corporation ("K-T Feldspar") with
following exhibits: (a) Incumbency and Signature Certificate of
officers of K-T Feldspar, (b) Resolutions of Board of Directors of K-T
Feldspar.
6. Compliance Certificate of even date herewith by a duly authorized
officer and Treasurer of Borrower.