CREDIT AGREEMENT EXHIBIT 10(a)
Between
COEUR D'ALENE MINES CORPORATION
and
SEATTLE-FIRST NATIONAL BANK
TABLE OF CONTENTS
ARTICLE 1
Definitions . . . . . . . . . . . . . . . . . . . . . .1
1.1 Additional Guarantors . . . . . . . . . . . . . . . . .1
1.2 Affiliate . . . . . . . . . . . . . . . . . . . . . . .1
1.3 Available Amount. . . . . . . . . . . . . . . . . . . .2
1.4 Business Day. . . . . . . . . . . . . . . . . . . . . .2
1.5 Capitalized Lease Liabilities . . . . . . . . . . . . .2
1.6 Cash Equivalent Investment. . . . . . . . . . . . . . .2
1.7 Cash Equivalents. . . . . . . . . . . . . . . . . . . .3
1.8 Current Assets. . . . . . . . . . . . . . . . . . . . .3
1.9 Current Liabilities . . . . . . . . . . . . . . . . . .3
1.10 Environmental Laws. . . . . . . . . . . . . . . . . . .4
1.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . .4
1.12 GAAP. . . . . . . . . . . . . . . . . . . . . . . . . .4
1.13 Guarantor(s). . . . . . . . . . . . . . . . . . . . . .4
1.14 Hazardous Material. . . . . . . . . . . . . . . . . . .4
1.15 Indebtedness. . . . . . . . . . . . . . . . . . . . . .4
1.16 Initial Guarantors. . . . . . . . . . . . . . . . . . .4
1.17 Letter(s) of Credit . . . . . . . . . . . . . . . . . .5
1.18 Letter of Credit Balance. . . . . . . . . . . . . . . .5
1.19 Loan Documents. . . . . . . . . . . . . . . . . . . . .5
1.20 Obligations . . . . . . . . . . . . . . . . . . . . . .5
1.21 Person. . . . . . . . . . . . . . . . . . . . . . . . .5
1.22 Plan. . . . . . . . . . . . . . . . . . . . . . . . . .5
1.23 Prime Rate. . . . . . . . . . . . . . . . . . . . . . .5
1.24 Significant Subsidiary. . . . . . . . . . . . . . . . .5
1.25 Subordinated Debt . . . . . . . . . . . . . . . . . . .6
1.26 Subsidiary. . . . . . . . . . . . . . . . . . . . . . .6
1.27 Tangible Net Worth. . . . . . . . . . . . . . . . . . .6
1.28 Termination Date. . . . . . . . . . . . . . . . . . . .7
ARTICLE 2
Letter of Credit. . . . . . . . . . . . . . . . . . . .7
2.1 Issuance. . . . . . . . . . . . . . . . . . . . . . . .7
2.2 Fees. . . . . . . . . . . . . . . . . . . . . . . . . .7
2.3 Yield Indemnity . . . . . . . . . . . . . . . . . . . .8
ARTICLE 3
Guaranties. . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE 4
Conditions of Lending . . . . . . . . . . . . . . . . .8
4.1 Authorization . . . . . . . . . . . . . . . . . . . . .8
4.2 Documentation . . . . . . . . . . . . . . . . . . . . .9
4.3 Guaranties. . . . . . . . . . . . . . . . . . . . . . .9
4.4 Termination of Prior Facility . . . . . . . . . . . . .9
4.5 Proof of Insurance. . . . . . . . . . . . . . . . . . .9
4.6 Representations and Warranties. . . . . . . . . . . . .9
4.7 Compliance. . . . . . . . . . . . . . . . . . . . . . .9
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ARTICLE 5
Representations and Warranties. . . . . . . . . . . . 10
5.1 Existence . . . . . . . . . . . . . . . . . . . . . . 10
5.2 Enforceability. . . . . . . . . . . . . . . . . . . . 10
5.3 No Legal Bar. . . . . . . . . . . . . . . . . . . . . 10
5.4 Financial Information . . . . . . . . . . . . . . . . 10
5.5 Liens and Encumbrances. . . . . . . . . . . . . . . . 11
5.6 Litigation. . . . . . . . . . . . . . . . . . . . . . 11
5.7 Payment of Taxes. . . . . . . . . . . . . . . . . . . 11
5.8 Employee Benefit Plan . . . . . . . . . . . . . . . . 12
5.9 Misrepresentations. . . . . . . . . . . . . . . . . . 12
5.10 No Default. . . . . . . . . . . . . . . . . . . . . . 12
5.11 No Burdensome Restrictions. . . . . . . . . . . . . . 12
ARTICLE 6
Affirmative Covenants . . . . . . . . . . . . . . . . 12
6.1 Use of Proceeds . . . . . . . . . . . . . . . . . . . 12
6.2 Tangible Net Worth. . . . . . . . . . . . . . . . . . 13
6.3 Current Ratio . . . . . . . . . . . . . . . . . . . . 13
6.4 Debt Ratio. . . . . . . . . . . . . . . . . . . . . . 13
6.5 Cash Collateral . . . . . . . . . . . . . . . . . . . 13
6.6 Financial Information . . . . . . . . . . . . . . . . 13
6.7 Maintenance of Existence. . . . . . . . . . . . . . . 14
6.8 Books and Records . . . . . . . . . . . . . . . . . . 15
6.9 Ownership of Guarantors . . . . . . . . . . . . . . . 15
6.10 Access to Premises and Records. . . . . . . . . . . . 15
6.11 Notice of Events. . . . . . . . . . . . . . . . . . . 15
6.12 Payment of Debts and Taxes. . . . . . . . . . . . . . 16
6.13 Environmental Matters . . . . . . . . . . . . . . . . 16
6.14 Insurance . . . . . . . . . . . . . . . . . . . . . . 17
6.15 Additional Guarantors . . . . . . . . . . . . . . . . 17
ARTICLE 7
Events and Consequences of Default. . . . . . . . . . 18
7.1 Events of Default . . . . . . . . . . . . . . . . . . 18
(a) Nonpayment. . . . . . . . . . . . . . . . . . 18
(b) Breach of Warranty. . . . . . . . . . . . . . 18
(c) ERISA . . . . . . . . . . . . . . . . . . . . 18
(d) Failure to Perform. . . . . . . . . . . . . . 18
(e) Defaults on Other Obligations . . . . . . . . 18
(f) Guaranties. . . . . . . . . . . . . . . . . . 19
(g) Loss, Destruction, or Condemnation of Property19
(h) Attachment Proceedings and Insolvency . . . . 19
(i) Judgments . . . . . . . . . . . . . . . . . . 20
(j) Government Approvals. . . . . . . . . . . . . 20
7.2 Remedies Upon Default . . . . . . . . . . . . . . . . 20
7.3 Alleged Default by Bank . . . . . . . . . . . . . . . 20
ARTICLE 8
Miscellaneous . . . . . . . . . . . . . . . . . . . . 21
8.1 Manner of Payments. . . . . . . . . . . . . . . . . . 21
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Documentation and Administration Expenses . . . . . . 22
8.4 Collection Expenses . . . . . . . . . . . . . . . . . 23
8.5 Waiver. . . . . . . . . . . . . . . . . . . . . . . . 23
8.6 Assignment. . . . . . . . . . . . . . . . . . . . . . 23
8.7 Merger. . . . . . . . . . . . . . . . . . . . . . . . 23
8.8 Amendments. . . . . . . . . . . . . . . . . . . . . . 24
8.9 Mandatory Arbitration . . . . . . . . . . . . . . . . 24
8.10 Construction. . . . . . . . . . . . . . . . . . . . . 25
8.11 Termination of Agreement. . . . . . . . . . . . . . . 26
EXHIBITS:
Exhibit A -- Form of CFO Certificate
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made between Coeur d'Alene Mines
Corporation, an Idaho corporation ("Borrower"), and Seattle-First National
Bank, a national banking association (including its successors and/or assigns,
"Bank"). The parties agree as follows:
ARTICLE 1
Definitions
All terms defined below shall have the meaning indicated. All references
in this Agreement to:
(a) "dollars" or "$" shall mean U.S. dollars. Any item
denominated in a currency other than U.S. dollars, shall be
converted into U.S. Dollars at Bank's spot rate of exchange
between such currency and U.S. dollars, as quoted on the date
of calculation.;
(b) "Article," "Section," or "Subsection" shall mean articles,
sections, and subsections of this Agreement, unless otherwise
indicated;
(c) terms defined in the Washington version of the Uniform
Commercial Code, R.C.W. ss.62A.9-101, et seq. ("UCC"), and
not otherwise defined in this Agreement, shall have the
meaning given in the UCC; and
(d) an accounting term not otherwise defined in this Agreement
shall have the meaning assigned to it under GAAP.
1.1 Additional Guarantors shall have the meaning given in Section 6.14.
1.2 Affiliate of a Person shall mean any other Person which, directly or
indirectly, controls or is controlled by or under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power:
(a) to vote 10% or more of the securities (on a fully diluted basis)
having ordinary voting power for the election of directors or managing
general partners of such Person; and
(b) to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
1.3 Available Amount shall mean at any time the amount of the Credit Limit
minus the face amount of all Letters of Credit outstanding.
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1.4 Business Day shall mean any day other than a Saturday, Sunday, or
other day on which commercial banks in Seattle, Washington, are authorized or
required by law to close.
1.5 Capitalized Lease Liabilities shall mean all monetary obligations of
Borrower or any Subsidiary under any leasing or similar arrangement which, in
accordance with GAAP, would be classified as capitalized leases, and the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without
payment of a penalty.
1.6 Cash Equivalent Investment shall mean, at any date:
(a) any evidence of Indebtedness, maturing not more than one year
after such date, issued or guaranteed by the United States Government;
(b) commercial paper, maturing not more than nine months from the
date of issue, which is issued by Bank or any other corporation (other
than an Affiliate of Borrower or of any Guarantor) organized under the
laws of any State of the United States or of the District of Columbia and
rated A-1 by Standard & Poor's Corporation or P-1 by Moody's Investors
Service, Inc.;
(c) any certificate of deposit or bankers acceptance, maturing not
more than one year after such date, which is issued by Bank or any other
commercial banking institution that is a member of the Federal Reserve
System and has a combined capital and surplus and undivided profits of not
less than US$500,000,000 (for purposes of this Section, an "Approved
Bank"); or
(d) any repurchase agreement entered into with Bank or any Approved
Bank which repurchase agreement is:
(i) secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c)
above, and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
Bank or such Approved Bank.
1.7 Cash Equivalents shall mean all of Borrower's consolidated cash, Cash
Equivalent Investments and all debt and equity marketable security
investments,
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stated at the lower of cost or market, made in compliance with Borrower's
board of directors-adopted, Bank-reviewed investment policy.
1.8 Current Assets shall mean all consolidated assets of Borrower, on a
GAAP basis, which may be properly classified as current assets in accordance
with GAAP.
1.9 Current Liabilities shall mean all consolidated indebtedness of
Borrower, on a GAAP basis, maturing on demand or within a period of one year
from the date when Borrower's current liabilities are determined and which may
be properly classified as current liabilities in accordance with GAAP.
1.10 Environmental Laws shall mean all applicable federal, state, or local
statutes, laws, ordinances, codes, rules, regulations, and guidelines
(including consent decrees and administrative orders) relating to public
health and safety and protection of the environment issued in the U.S. by any
federal, state, or local authority or in any other jurisdiction by any similar
governmental or other authority.
1.11 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.
1.12 GAAP shall mean generally accepted accounting principles as in effect
from time to time in the United States and as consistently applied by
Borrower.
1.13 Guarantor(s) shall mean the Initial Guarantors and each Additional
Guarantor.
1.14 Hazardous Material shall mean any substance or material defined or
designated as hazardous or toxic wastes, hazardous or toxic material, a
hazardous, toxic or radioactive substance or other similar term by any
applicable federal, state, or local statute, regulation, or ordinance now or
hereafter in effect.
1.15 Indebtedness shall mean, as to any Person, (a) all consolidated
obligations, on a GAAP basis, included in the liability section of a balance
sheet of Borrower, and (b) all obligations of such Person which should be, in
accordance with GAAP, recorded as Capitalized Lease Liabilities.
1.16 Initial Guarantors shall mean each of the following corporations,
jointly and severally, Coeur Alaska, Inc., a Delaware corporation, CDE Chilean
Mining Corporation, a Delaware corporation, Callahan Mining Corporation, an
Arizona corporation, Coeur Gold New Zealand, Limited., a New Zealand
corporation,
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Coeur New Zealand, Inc., a Delaware corporation, and Coeur-Rochester, Inc., a
Delaware corporation.
1.17 Letter(s) of Credit shall have the meaning assigned in Article 2.
1.18 Letter of Credit Balance shall mean the aggregate outstanding
liability of Bank at any given time under all combined Letters of Credit.
1.19 Loan Documents shall mean collectively this Agreement, the L/C
Agreements, and all other documents, instruments, and agreements now or later
executed in connection with this Agreement.
1.20 Obligations shall mean Borrower's obligation to reimburse Bank for
all amounts drawn under the Letters of Credit, and all fees, costs, expenses,
and indemnifications due to Bank under this Agreement.
1.21 Person shall mean any individual, partnership, corporation, business
trust, unincorporated organization, joint venture, or any governmental entity,
department, agency, or political subdivision.
1.22 Plan shall mean any employee benefit plan or other plan maintained
for Borrower's employees and covered by Title IV of ERISA, excluding any plan
created or operated by or for any labor union.
1.23 Prime Rate shall mean the floating commercial loan reference rate of
Bank, publicly announced from time to time as its "prime rate" (calculated on
the basis of actual number of days elapsed over a year of 360 days), with any
change in the Prime Rate to be effective on the date the "prime rate" changes.
1.24 Significant Subsidiary shall mean, at any date, each Subsidiary that:
(a) accounted for at least 5% of consolidated revenues of Borrower
and its Subsidiaries or 5% of consolidated earnings of Borrower and its
Subsidiaries before interest and taxes, in each case for the fiscal
quarter of Borrower most recently ended on or prior to such date; or
(b) has assets which represent at least 5% of the consolidated assets
of Borrower and its Subsidiaries as of the last day of the last fiscal
quarter of Borrower most recently ended on or prior to such date; all of
which shall be as reflected on the financial statements of Borrower for
the period, or as of the date, in question.
1.25 Subordinated Debt shall mean all Indebtedness of Borrower which is
subordinated to the repayment of the Obligations on terms, and pursuant to
documentation, in form and substance satisfactory to Bank, as necessary to
assure subordination.
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1.26 Subsidiary shall mean, with respect to any Person, any corporation of
which more than 50% of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person. Except as otherwise
indicated herein, references to Subsidiaries shall refer to Subsidiaries of
Borrower.
1.27 Tangible Net Worth shall mean the consolidated net worth of Borrower
and its Subsidiaries after subtracting therefrom the aggregate amount of any
intangible assets of Borrower and its Subsidiaries including goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks, and brand names.
1.28 Termination Date shall mean July 1, 1997, or such earlier date upon
which Bank's commitment to lend is terminated pursuant to Subsection 7.2(a).
ARTICLE 2
Letter of Credit
2.1 Issuance. Upon Borrower's execution of Bank's standard form
Application and Agreement for Standby Credit ("L/C Agreement"), and a
statement of purpose for the letter of credit to be issued, Bank shall issue
for Borrower's account standby letters of credit (together with all letters of
credit issued by Bank for Borrower's account and outstanding prior to the date
of this Agreement, "Letter(s) of Credit") in amounts not to exceed $10,000,000
in the aggregate. Each Letter of Credit shall have a maximum tenor of 360
days, and if "evergreen" shall be cancelable by Bank within 60 days of each
anniversary date. If there is a draw under a Letter of Credit, Borrower shall
on demand immediately reimburse Bank for the amount of the draw, together with
interest on the amount drawn, from the date of draw until paid, at a floating
rate equal to the Prime Rate plus 2% per annum. Bank shall in addition have
all rights provided in the L/C Agreement. Any default in an L/C Agreement
shall be a Default.
2.2 Fees. Borrower shall pay to Bank in advance, upon issuance of each
Letter of Credit and on each anniversary of such issuance, an annual fee of
1.25% per annum on the outstanding balance of the Letter of Credit on the date
payment is due. Borrower shall additionally, on demand, pay transaction fees
according to Bank's then-outstanding standard fee schedule on all drafts,
transfers,
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extensions, and other transactions in regard to the Letters of Credit, and
reimburse Bank for all out-of-pocket costs, legal fees, and expenses.
2.3 Yield Indemnity. If any law or regulation imposes or increases any
reserve, special deposit, or similar requirement against letters of credit
issued by Bank or subjects Bank to any tax, charge, fee, deduction, or
withholding of any kind in regard to the Letters of Credit, Borrower shall
promptly on demand indemnify Bank for any such increased costs, taxes, or
charges (other than taxes based on Bank's gross or net income).
ARTICLE 3
Guaranties
The Obligations shall be absolutely and unconditionally guaranteed by the
Initial Guarantors and the Additional Guarantors, jointly and severally, in
form satisfactory to Bank. Borrower authorizes Bank to release to any present
or future guarantor all information the Bank possesses concerning Borrower or
any loans, credits, or other financial accommodations made to Borrower by
Bank.
ARTICLE 4
Conditions of Lending
Bank's obligation to issue the initial Letter of Credit is subject to the
conditions precedent listed in Sections 4.1 through 4.5, and to issue
subsequent Letters of Credit is subject to the conditions precedent listed in
Sections 4.6 and 4.7, unless waived by Bank in writing:
4.1 Authorization. Borrower shall have delivered to Bank a certified copy
of the resolution of Borrower's board of directors authorizing the
transactions contemplated by this Agreement and the execution, delivery, and
performance of all Loan Documents, together with appropriate certificates of
incumbency. Each corporate guarantor shall have delivered to Bank a certified
copy of a resolution of such guarantor's board of directors, satisfactory in
form to Bank, authorizing its guaranty.
4.2 Documentation. Borrower shall have executed and delivered to Bank all
documents to reflect the existence of the Obligations.
4.3 Guaranties. Each guarantor shall have executed and delivered its
guaranty to Bank, and each such guaranty shall remain in full force and
effect.
4.4 Termination of Prior Facility. Borrower shall have terminated, and
shall have no further letters of credit or advances outstanding under, the
$38,000,000 credit facility evidenced by the Amended and Restated Loan
Agreement
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dated June 17, 1993, among Borrower, various banks, Bank as "Issuing Bank,"
and N.M. Rothschild & Sons Limited as "Agent."
4.5 Proof of Insurance. Proof of insurance as required by Section 6.14 has
been provided to Bank.
4.6 Representations and Warranties. The representations and warranties
made by Borrower in the Loan Documents and in any certificate, document, or
financial statement furnished at any time shall continue to be true and
correct, except to the extent that such representations and warranties
expressly relate to an earlier date.
4.7 Compliance. No Default or other event which, upon notice or lapse of
time or both would constitute a Default, shall have occurred and be
continuing, or shall exist after giving effect to the advance of credit to be
made.
ARTICLE 5
Representations and Warranties
To induce Bank to enter into this Agreement, Borrower represents,
warrants, and covenants to Bank as follows:
5.1 Existence. Borrower is in good standing as a corporation under the
laws of the state of its incorporation, has the power, authority, and legal
right to own and operate its property or lease the property it operates and to
conduct its current business; and is qualified to do business and is in good
standing in all other jurisdictions where the ownership, lease, or operation
of its property or the conduct of its business requires such qualification.
5.2 Enforceability. The Loan Documents, when executed and delivered by
Borrower, shall be enforceable against Borrower in accordance with their
respective terms.
5.3 No Legal Bar. The execution, delivery, and performance by Borrower of
the Loan Documents, and the use of the loan proceeds, shall not violate any
existing law or regulation applicable to Borrower; any ruling applicable to
Borrower of any court, arbitrator, or governmental agency or body of any kind;
Borrower's articles of incorporation or bylaws; any security issued by
Borrower; or any mortgage, indenture, lease, contract, undertaking, or other
agreement to which Borrower is a party or by which Borrower or any of its
property may be bound.
5.4 Financial Information. By submitting each of the financial statements
required by Subsection 6.6(a) and 6.6(b), Borrower is deemed to
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represent and warrant that: (a) such statement is complete and correct and
fairly presents the financial condition of Borrower as of the date of such
statement; (b) such statement discloses all liabilities of Borrower that are
required to be reflected or reserved against under GAAP, whether liquidated or
unliquidated, fixed or contingent; and (c) such statement has been prepared in
accordance with GAAP. As of this date, there has been no adverse change in
Borrower's financial condition since preparation of the last such financial
statements delivered to Bank which would materially impair Borrower's ability
to repay the Obligations.
5.5 Liens and Encumbrances. Borrower and each Subsidiary has sufficient
title to each of its assets in order to conduct its respective business as
presently conducted and as contemplated to be conducted; all of the leases,
subleases, licenses, claims, rights, concessions, and agreements material to
the business of Borrower or any Subsidiary, and under which Borrower or any
Subsidiary holds any properties, are in full force and effect and neither
Borrower nor any Subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of Borrower or any
Subsidiary under any such lease, sublease, license, claim, concession, or
agreement, or affecting or questioning the rights of Borrower or such
Subsidiary to the continued possession of the premises under any such lease,
sublease, license, claim, concession, or agreement.
5.6 Litigation. Except as disclosed in writing to Bank, there is no
threatened (to Borrower's knowledge) or pending litigation, investigation,
arbitration, or administrative action which may materially adversely affect
Borrower's business, property, operations, or financial condition.
5.7 Payment of Taxes. Borrower has filed or caused to be filed all tax
returns when required to be filed; and has paid all taxes, assessments, fees,
licenses, excise taxes, franchise taxes, governmental liens, penalties, and
other charges levied or assessed against Borrower or any of its property
imposed on it by any governmental authority, agency, or instrumentality that
are due and payable (other than those returns or payments of which the amount,
enforceability, or validity are contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP are
provided on Borrower's books).
5.8 Employee Benefit Plan. Borrower is in compliance in all respects with
the provisions of ERISA and the regulations and published interpretations
thereunder. Borrower has not engaged in any acts or omissions which would make
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Borrower liable to the Plan, to any of its participants, or to the Internal
Revenue Service, under ERISA.
5.9 Misrepresentations. No information, exhibits, data, or reports
furnished by Borrower or delivered to Bank in connection with Borrower's
application for credit misstates any material fact, or omits any fact
necessary to make such information, exhibits, data, or reports not misleading.
5.10 No Default. Borrower is not in default in any Loan Document, or in
any contract, agreement, or instrument to which it is a party.
5.11 No Burdensome Restrictions. No contract or other instrument to which
Borrower is a party, or order, award, or decree of any court, arbitrator, or
governmental agency, materially impairs Borrower's ability to repay the
Obligations.
ARTICLE 6
Affirmative Covenants
So long as this Agreement shall remain in effect, or any liability exists
under the Loan Documents, Borrower shall:
6.1 Use of Proceeds. Use the Letters of Credit to back reclamation and
surety bonds, primarily for the Golden Cross Mine in New Zealand, and for
other general corporate purposes in the ordinary course of Borrower's
business.
6.2 Tangible Net Worth. Maintain a Tangible Net Worth of not less than
$150,000,000 measured semiannually as of the second quarter end and the fiscal
year end.
6.3 Current Ratio. Maintain a ratio of Current Assets to Current
Liabilities of not less than 2.0 to 1, measured semiannually as of the second
quarter end and the fiscal year end.
6.4 Debt Ratio. Maintain a ratio of Indebtedness to Tangible Net Worth of
not more than 2.0 to 1, measured semiannually as of the second quarter end and
the fiscal year end.
6.5 Cash Collateral. Fully cash-collateralize all outstanding Letters of
Credit by placing immediately available funds in a non-interest-bearing bank
control account at Bank, pledged to Bank, if at any time Borrower's Cash
Equivalents becomes, or would become, as a result of any contemplated
transaction, less than $50,000,000, such collateralization to be effected
prior to consummation of such transaction.
6.6 Financial Information. Maintain a standard system of accounting in
accordance with GAAP and furnish to Bank the following:
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(a) Quarterly Financial Statements. As soon as available and, in any
event, within 60 days after the end of each fiscal quarter of each fiscal
year, a copy of the consolidated statement of operations of Borrower for
the quarter and for the current fiscal year through such quarter, and for
each such quarter a copy of the consolidated balance sheet, consolidated
statement of shareholders' equity, and consolidated statement of cash flow
of Borrower as of the end of such quarter, setting forth, in each case, in
comparative form, figures for the corresponding period of the preceding
fiscal year, all in reasonable detail and satisfactory in scope to Bank,
prepared by the chief financial officer of Borrower, and in form and
substance satisfactory to Bank;
(b) Annual Financial Statements. As soon as available and, in any
event, within 90 days after the end of each fiscal year, a copy of the
consolidated balance sheet, consolidated statement of operations,
consolidated statement of shareholders' equity, and consolidated statement
of cash flow of Borrower for such year, setting forth in each case, in
comparative form, corresponding figures from the preceding annual
statements, each audited by Ernst and Young or one of the other "Big 6"
independent certified public accounting firms, certifying that such
statement is complete and correct, fairly presents without qualification
the financial condition of Borrower for such period, is prepared in
accordance with GAAP, and has been audited in conformity with generally
accepted auditing standards;
(c) Other Certificates. By February 1 and August 1 of each year, a
certificate of the chief financial officer of Borrower, in the form of
Exhibit A attached, as to the semiannual period most recently ended; and
(d) Additional Financial Information. As soon as available and, in
any event, within ten days after request, such other data, information, or
documentation as Bank may reasonably request.
6.7 Maintenance of Existence. Preserve and maintain its existence, powers,
and privileges in the jurisdiction of its incorporation, and qualify and
remain qualified in each jurisdiction in which its presence is necessary or
desirable in view of its business, operations, or ownership of its property.
Borrower shall also maintain and preserve all of its property which is
necessary or useful in the proper course of its business, in good working
order and condition, ordinary wear and tear excepted.
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6.8 Books and Records. Keep accurate and complete books, accounts, and
records in which complete entries shall be made in accordance with GAAP,
reflecting all financial transactions of Borrower.
6.9 Ownership of Guarantors. Continue to own and hold, directly or
indirectly, and free and clear of all liens or other encumbrances, all of the
outstanding shares of capital stock of each Guarantor.
6.10 Access to Premises and Records. At all reasonable times and as often
as Bank may reasonably request, permit any authorized representative
designated by Bank to have access to the premises, property, and financial
records of Borrower, including all records relating to the finances,
operations, and procedures of Borrower, and to make copies of or abstracts
from such records.
6.11 Notice of Events. Furnish Bank prompt written notice of:
(a) Proceedings. Any proceeding instituted by or against Borrower in
any court or before any commission or regulatory body, or any proceeding
threatened against it in writing by any governmental agency which if
adversely determined would have a material adverse effect on Borrower's
business, property, or financial condition, or where the amount involved
is $1,000,000 or more and not covered by insurance;
(b) Material Development. Any material development in any such
proceeding referred to in Subsection 6.11(a);
(c) Defaults. Any action, event, or condition which is or, with
notice or lapse of time or both, would constitute a Default, or a default
under any other agreement to which Borrower is a party; and
(d) Adverse Effect. Any other action, event, or condition of any
nature which could result in a material adverse effect on the business,
property, or financial condition of Borrower.
6.12 Payment of Debts and Taxes. Pay all Debt and perform all obligations
promptly and in accordance with their terms, and pay and discharge promptly
all taxes, assessments, and governmental charges or levies imposed upon
Borrower, its property, or revenues prior to the date on which penalties
attach thereto, as well as all lawful claims for labor, material, supplies, or
otherwise which, if unpaid, might become a lien or charge upon Borrower's
property. Borrower shall not, however, be required to pay or discharge any
such tax, assessment, charge, levy, or claim so long as its enforceability,
amount, or validity is contested in good faith by appropriate proceedings.
6.13 Environmental Matters.
-11-
(a) Use and operate all of its facilities and properties in material
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses, and other authorizations relating to
environmental matters in effect and remain in material compliance
therewith, and handle all Hazardous Materials in material compliance with
all applicable Environmental Laws;
(b) immediately notify Bank and provide copies upon receipt of all
written material claims, complaints, notices, or inquiries relating to the
condition of its facilities and properties or compliance with
Environmental Laws; and
(c) provide such information and certifications which Bank may
reasonably request from time to time to evidence compliance with this
Section.
6.14 Insurance. Maintain commercially adequate levels of coverage with
financially sound and reputable insurers, including, without limitation:
(a) Property Insurance. Insurance on all property of a character
usually insured by organizations engaged in the same or similar type of
business as Borrower against all risks, casualties, and losses through
extended coverage or otherwise and of the kind customarily insured against
by such organizations;
(b) Liability Insurance. Public liability insurance against tort
claims which may be asserted against Borrower; and
(c) Additional Insurance. Such other insurance as may be required by
law.
6.15 Additional Guarantors. If at any time or from time to time Borrower
shall, directly or indirectly, acquire any Subsidiary which is a Significant
Subsidiary; or if any existing Subsidiary shall become a Significant
Subsidiary, then, at such time, Borrower shall cause such Subsidiary (a) to
execute and deliver to Bank a guaranty of the Obligations, in form
satisfactory to Bank, together with a certified copy of a resolution of such
Subsidiary's board of directors, satisfactory in form to Bank, authorizing its
guaranty; and such Subsidiary shall thereafter be deemed an "Additional
Guarantor" under this Agreement.
-12-
ARTICLE 7
Events and Consequences of Default
7.1 Events of Default. Any of the following events shall, at the option of
Bank and at any time without regard to any previous knowledge on the part of
Bank, constitute a default by Borrower under the terms of this Agreement, the
L/C Agreements, and all other Loan Documents ("Default"):
(a) Nonpayment. Any payment or reimbursement due or demanded under
this Agreement or any Loan Document is not made within five days of the
date when due;
(b) Breach of Warranty. Any representation or warranty made in
connection with this Agreement or any other Loan Document, or any
certificate, notice, or report furnished pursuant hereto, is determined by
Bank to be false in any respect when made, and is relied upon by Bank to
its detriment;
(c) ERISA. Borrower shall engage in any act or omission which would
make Borrower liable under ERISA to the Plan, to any of its participants,
or to the Internal Revenue Service, if such liability would materially
adversely affect Borrower's financial condition;
(d) Failure to Perform. Any other term, covenant, or agreement
contained in any Loan Document is not performed or satisfied, and, if
remediable, such failure continues unremedied for 30 days after written
notice thereof has been given to Borrower by Bank;
(e) Defaults on Other Obligations. There exists a default in the
performance of any other agreement or obligation for the payment of
borrowed money, for the deferred purchase price of property or services,
or for the payment of rent under any lease, whether by acceleration or
otherwise, which would permit such obligation to be declared due and
payable prior to its stated maturity; and such default continues for 30
days after Borrower receives written notice thereof from the creditor so
affected;
(f) Guaranties. Any guarantor of all or any portion of the
Obligations revokes or attempts to revoke such guaranty, whether with
respect to future transactions or outstanding Obligations, or otherwise
breaches the terms and conditions of such guaranty;
(g) Loss, Destruction, or Condemnation of Property. A portion of
Borrower's property is affected by any uninsured loss, damage,
destruction, theft, sale, or encumbrance other than created herein or is
-13-
condemned, seized, or appropriated, the effect of which materially impairs
Borrower's financial condition or its ability to pay its debts as they
come due;
(h) Attachment Proceedings and Insolvency. Borrower or any of
Borrower's property is affected by any:
(i) Judgment lien, execution, attachment, garnishment, general
assignment for the benefit of creditors, sequestration, or
forfeiture, to the extent Borrower's financial condition or its
ability to pay its debts as they come due is thereby materially
impaired; or
(ii) Proceeding under the laws of any jurisdiction relating to
receivership, insolvency, or bankruptcy, whether brought voluntarily
or involuntarily by or against Borrower, including, without
limitation, any reorganization of assets, deferment or arrangement of
debts, or any similar proceeding, and, if such proceeding is
involuntarily brought against Borrower, it is not dismissed within 60
days;
(i) Judgments. Final judgment on claims not covered by insurance
which, together with other outstanding final judgments against Borrower,
exceeds $1,000,000, is rendered against Borrower and is not discharged,
vacated, or reversed, or its execution stayed pending appeal, within 60
days after entry, or is not discharged within 60 days after the expiration
of such stay; or
(j) Government Approvals. Any governmental approval, registration, or
filing with any governmental authority, now or later required in
connection with the performance by Borrower of its obligations under the
Loan Documents, is revoked, withdrawn, or withheld, or fails to remain in
full force and effect, except Borrower shall have 60 days after notice of
any such event to take whatever action is necessary to obtain all
necessary approvals, registrations, and filings.
7.2 Remedies Upon Default. If any Default occurs and is continuing, Bank
may at its option, by notice to Borrower:
(a) Terminate Commitments. Terminate Bank's commitment to issue new
Letters of Credit;
(b) Suspend Commitments. Refuse to issue new Letters of Credit until
any Default has been cured;
-14-
(c) Setoff. Exercise its right of setoff against any cash collateral
pledged to Bank or any other deposit accounts of Borrower with Bank;
and/or
(d) All Remedies. Pursue any other available legal and equitable
remedies. All of Bank's rights and remedies in all Loan Documents shall be
cumulative and can be exercised separately or concurrently.
7.3 Alleged Default by Bank. In the event that Borrower at any time
concludes that Bank has defaulted in any respect under this Agreement or any
of the Loan Documents, Borrower shall promptly give notice thereof to Bank and
provide Bank with a period of not less than 30 days in which to cure such
alleged default; provided, however, that in no event shall this Section 7.3 or
the Borrower's giving such notice to Bank extend the time period(s) granted to
the Borrower to cure any Default under Section 7.1(d). Failure of the Borrower
to provide such notice to Bank shall waive the Borrower's right to assert a
claim against Bank for such alleged default.
ARTICLE 8
Miscellaneous
8.1 Manner of Payments.
(a) Payments on Nonbusiness Days. Whenever any event is to occur or
any payment is to be made under any Loan Document on any day other than a
Business Day, such event may occur or such payment may be made on the next
succeeding Business Day and such extension of time shall be included in
computation of interest in connection with any such payment.
(b) Payments. All payments and prepayments to be made by Borrower
shall be made to Bank when due, at Bank's office as may be designated by
Bank, without offsets or counterclaims for any amounts claimed by Borrower
to be due from Bank, in U.S. dollars and in immediately available funds.
(c) Application of Payments. All payments made by Borrower shall be
applied first against fees, expenses, and indemnities due; second, against
interest due; and third, against principal, with Bank having the right,
after a Default which is continuing, to apply any payments or collections
received against any one or more of the Obligations in any manner which
Bank may choose.
-15-
(d) Recording of Payments. Bank is authorized to record on a schedule
or computer-generated statement the date and amount of each draw under a
Letter of Credit, and all payments of principal and interest. All such
schedules or statements shall constitute prima facie evidence of the
accuracy of the information so recorded.
8.2 Notices. All notices, demands, and other communications to be given
pursuant to any of the Loan Documents shall be in writing and shall be deemed
received the earlier of when actually received, or two days after being
mailed, postage prepaid and addressed as follows, or as later designated in
writing:
Bank: Borrower:
SEATTLE-FIRST NATIONAL BANK COEUR D'ALENE MINES CORPORATION
Eastern Commercial Banking 400 Coeur d'Alene Mines Building
West 601 Riverside Avenue 505 Front Avenue, P.O. Box I
Spokane, WA 99210 Coeur d'Alene, Idaho 83814
Attention: Kurt L. Walsdorf Attention: James Sabala
8.3 Documentation and Administration Expenses. Borrower shall pay,
reimburse, and indemnify Bank for all of Bank's reasonable costs and expenses,
including, without limitation, all accounting, appraisal, and report
preparation fees or expenses, all recording or filing fees, and all normal,
reasonable, and customary attorneys' fees (including the allocated cost of
in-house counsel) and legal expenses incurred in connection with the
negotiation, preparation, execution, and administration of this Agreement and
all other Loan Documents, and all amendments, supplements, or modifications
thereto, and the perfection of all security interests, liens, or encumbrances
that may be granted to Bank. Borrower acknowledges that any legal counsel
retained or employed by Bank acts solely on the Bank's behalf and not on
Borrower's behalf, despite Borrower's obligation to reimburse Bank for the
cost of such legal counsel, and that Borrower has had sufficient opportunity
to seek the advice of its own legal counsel with regard to this Agreement.
8.4 Collection Expenses. The nonprevailing party shall, upon demand by the
prevailing party, reimburse the prevailing party for all of its costs,
expenses, and reasonable attorneys' fees (including the allocated cost of
in-house counsel) incurred in connection with any controversy or claim between
said parties relating to this Agreement or any of the other Loan Documents, or
to an alleged tort arising out of the transactions evidenced by this
Agreement, including those incurred in any action, bankruptcy proceeding,
arbitration or
-16-
other alternative dispute resolution proceeding, or appeal, or in the course
of exercising any judicial or nonjudicial remedies.
8.5 Waiver. No failure to exercise and no delay in exercising, on the part
of Bank, any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof, or the
exercise of any other right, power, or privilege. Further, no waiver or
indulgence by Bank of any Default shall constitute a waiver of Bank's right to
declare a subsequent similar failure or event to be a Default.
8.6 Assignment. This Agreement is made expressly for the sole benefit of
Borrower and for the protection of Bank and its successors and assigns. The
rights of Borrower hereunder shall not be assignable by operation of law or
otherwise, without the prior written consent of Bank.
8.7 Merger. The rights and obligations set forth in this Agreement shall
not merge into or be extinguished by any of the Loan Documents, but shall
continue and remain valid and enforceable. This Agreement and the other Loan
Documents constitute Bank's entire agreement with Borrower, and supersede all
prior writings and oral negotiations. No oral or written representation,
covenant, commitment, waiver, or promise of either Bank or Borrower shall have
any effect, whether made before or after the date of this Agreement, unless
contained in this Agreement or another Loan Document, or in an amendment
complying with Section 8.8. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.
8.8 Amendments. Any amendment or waiver of, or consent to any departure by
Borrower from any provision of, this Agreement shall be in writing signed by
each party to be bound thereby, and shall be effective only in the specific
instance and for the specific purpose for which given.
8.9 Mandatory Arbitration.
(a) At the request of either Bank or Borrower, any controversy or
claim between Bank and Borrower, arising from or relating to this
Agreement or any of the other Loan Documents, or arising from an alleged
tort, shall be settled by arbitration in Seattle, Washington. The United
States Arbitration Act shall apply even though this Agreement is otherwise
governed by Washington law. The proceedings shall be administered by the
American Arbitration Association under its commercial rules of
arbitration. Any controversy over whether an issue is arbitrable shall be
-17-
determined by the arbitrator(s). Judgment upon the arbitration award may
be entered in any court having jurisdiction over the parties. The
institution and maintenance of an action for judicial relief or pursuit of
an ancillary or provisional remedy shall not constitute a waiver of the
right of either party, including the plaintiff, to submit the controversy
or claim to arbitration if such action for judicial relief is contested.
For purposes of the application of the statute of limitations, the filing
of an arbitration pursuant to this subsection is the equivalent of the
filing of a lawsuit, and any claim or controversy which may be arbitrated
under this subsection is subject to any applicable statute of limitations.
The arbitrator(s) will have the authority to decide whether any such claim
or controversy is barred by the statute of limitations and, if so, to
dismiss the arbitration on that basis. The parties consent to the joinder
of any guarantor, hypothecator, or other party having an interest relating
to the claim or controversy being arbitrated in any proceedings under this
Section.
(b) Notwithstanding the provisions of subsection 8.9(a), no
controversy or claim shall be submitted to arbitration without the consent
of all parties if at the time of the proposed submission, such controversy
or claim arises from or relates to an obligation secured by real property.
(c) No provision of this subsection shall limit the right of Borrower
or Bank to exercise self-help remedies such as set-off, foreclosure,
retention or sale of any collateral, or obtaining any ancillary,
provisional, or interim remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration proceeding. The
exercise of any such remedy does not waive the right of either party to
request arbitration.
8.10 Construction. Each term of this Agreement and each Loan Document
shall be binding to the extent permitted by law and shall be governed by the
laws of the State of Washington, excluding its conflict of laws rules. If one
or more of the provisions of this Agreement should be invalid, illegal, or
unenforceable in any respect, the remaining provisions of this Agreement shall
remain effective and enforceable. If there is a conflict among the provisions
of any Loan Documents, the provisions of this Agreement shall be controlling.
The captions and organization of this Agreement are for convenience only, and
shall not be construed to affect any provision of this Agreement.
-18-
8.11 Termination of Agreement. All obligations of Borrower under this
Agreement shall remain in full force and effect until (a) no Letters of Credit
remain outstanding, (b) all Obligations have been paid in full and (c) Bank
has no further obligation to issue Letters of Credit; at which time all
obligations of both Bank and Borrower under this Agreement shall terminate,
and all security interests held by Bank shall be deemed released. Bank shall
at such time, upon demand by Borrower, execute all documents of release or
satisfaction necessary to clear title to any collateral.
DATED this 8th day of June, 1994.
Borrower: Bank:
COEUR D'ALENE MINES CORPORATION SEATTLE-FIRST NATIONAL BANK
By /s/James A. Sabala By /s/Kurt L. Walsdorf
------------------ -------------------
James A. Sabala Kurt L. Walsdorf
Title: Sr. Vice President Title: Vice President
------------------ --------------
AWS:cdam.agt
6/2/94
EXHIBIT A TO CREDIT AGREEMENT
[Form of Certificate to be sent with financial reports]
[Date]
Seattle-First National Bank
Eastern Commercial Banking
West 601 Riverside Avenue
Spokane, WA 99210
Attention: Kurt L. Walsdorf
Re: Certificate of Chief Financial Officer
Ladies and Gentlemen:
With respect to that certain Credit Agreement between Coeur d'Alene Mines
Corporation ("Borrower") and Seattle-First National Bank ("Bank") dated
_____________, 1994 (the "Agreement"), we hereby represent to you the
following (capitalized terms used in this certificate shall have the same
meaning as in the Agreement):
Enclosed are financial statements required by Section 6.6 of the Agreement. As
of the date of such financial statements:
1. Borrower's Tangible Net Worth is $ .
2. Borrower's ratio of Current Assets to Current Liabilities is
.
3. Borrower's ratio of Debt to Tangible Net Worth is
.
4. Borrower's Cash Equivalents are $ .
Such financial statements are complete and correct, fairly present, without
qualification, the financial condition of Borrower for such period, and are
prepared in accordance with GAAP;
No Default exists, nor any event which, with lapse of time or upon the giving
of notice would constitute a Default under the Agreement.
Sincerely,
COEUR D'ALENE MINES CORPORATION
By
-----------------------
Chief Financial Officer
SECRETARY'S CERTIFICATE
The undersigned, Secretary of Coeur d'Alene Mines Corporation, Coeur
Alaska, Inc., CDE Chilean Mining Corporation, Callahan Mining Corporation,
Coeur Gold New Zealand Limited, Coeur New Zealand, Inc. and Coeur Rochester,
Inc., hereby certifies that the Resolutions set forth below were duly adopted
at a regular meeting of the Board of Directors of Coeur d'Alene Mines
Corporation held on December 14, 1993:
RESOLVED, that Coeur d'Alene Mines Corporation and its subsidiaries' 1994
Budget presented to the Board at this meeting is hereby approved an adopted,
it being understood that said Budget specifically includes the lease financing
of certain equipment for use at the Rochester Mine.
FURTHER RESOLVED that the appropriate officers of Coeur d'Alene Mines
Corporation and its subsidiaries are authorized to take all steps,a nd to
execute all documents, including contracts, guarantees, bank and financial
institution agreements and authorizations, permits, deeds and any other
instruments which may be necessary to carry out the business of the company
and its subsidiaries as contemplated by the 1994 Budget; and such officers
shall have the authority to effect transactions that do not materially depart
from such Budget.
FURTHER RESOLVED that the Chairman, Chief Executive Officer and
President, the Senior Vice President-Chief Financial Officer, the Senior Vice
President-Operations,and the Secretary of the company and its subsidiaries are
hereby authorized to, severally or jointly as is appropriate to their
customary duties and the transactions involved, provide certificates to third
parties as evidence of the authorization by the Board to carry out the
business and affairs of Coeur d'Alene Mines Corporation and its subsidiaries
as provided in these Resolutions, which certificates may include a
representation that the particular transaction is contemplated by the 1994
Budget, and therefore authorized by the Board, it being understood that third
parties may rely upon such certificate.
It is further certified that the Letters of Credit which are the subject
of that certain Credit Agreement between Coeur d'Alene Mines Corporation and
Seattle-First National Bank dated June 8, 1994, are contemplated by the 1994
budget referred to in the foregoing resolutions, and that James A. Sabala is
the Senior Vice President- Chief Financial Officer of Coeur d'Alene Mines
Corporation and the Vice President of each of the subsidiaries listed above,
and is the officer who, as a part of his customary duties, executes bank
credit agreements and guaranties on behalf of Coeur d'Alene Mines Corporation
and its subsidiaries listed above.
It is further certified that the signature of James A. Sabala which
appears hereon is his true and accurate signature.
/s/James A. Sabala
------------------
DATED this 8th day of June, 1994
/s/William F. Boyd
--------------------------
William F. Boyd, Secretary
DISCLOSURE OF LITIGATION
Pursuant to Paragraph 5.6 of that certain Credit Agreement between Coeur
d'Alene Mines Corporation and Seattle-First National Bank dated June 8, 1994,
Coeur d'Alene Mines Corporation hereby discloses certain litigation, as
follows:
1. Kassover suit, where a settlement of $5,875,000 has been agreed
upon, subject to Court approval. (See page 18 of the 1993 Form
10-K.)
2. Callahan suit, where FN Enterprises claims it is due approximately
$900,000 (if interest is included) from Callahan Mining Corporation
for breach of contract. (See page 18 of the 1993 Form 10-K.)
3. Promissory note suit, where an estate seeks approximately $1,000,000
(if interest is included) from Coeur d'Alene Mines Corporation in
connection with notes claimed to be owed. (See page 19 of the 1993
Form 10-K.)
4. Bunker Hill superfund site, where a settlement has been agreed upon,
subject to Court approval, in the amount of $1,230,000. (See page 16
of the 1993 Form 10-K.)
DATED this 8th day of June, 1994
/s/William F. Boyd
--------------------------
William F. Boyd, Secretary