EXHIBIT 10.7
SECOND AMENDMENT AGREEMENT
THIS SECOND AMENDMENT AGREEMENT, dated as of March 19, 1996
(this "Agreement"), is made among (1) AMAX GOLD INC., a Delaware
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corporation (the "Borrower"), (2) FAIRBANKS GOLD MINING, INC., a
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Delaware corporation ("Fairbanks Gold"), GUANACO MINING COMPANY,
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INC., a Delaware corporation ("Guanaco Mining"), LASSEN GOLD
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MINING, INC., a Delaware corporation ("Lassen Gold"), MELBA CREEK
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MINING, INC., an Alaska corporation ("Melba Creek"), and NEVADA
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GOLD MINING, INC., a Delaware corporation ("Nevada Gold"; all of
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the foregoing entities, collectively, the "Principal
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Subsidiaries", and together with the Borrower, the "Obligers"),
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(3) MERRILL LYNCH CAPITAL CORPORATION, a Delaware corporation
("Merrill Lynch"), ABN AMRO BANK N.V., a bank organized under the
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laws of The Netherlands ("ABN AMRO"), N M ROTHSCHILD & SONS
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LIMITED, a bank organized under the laws of England
("Rothschild"), and THE TORONTO-DOMINION BANK, a bank organized
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under the federal laws of Canada ("Toronto-Dominion"; all of the
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foregoing entities, collectively, the "Arrangers"), (4) THE BANKS
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AND OTHER FINANCIAL INSTITUTIONS whose names appear on the
signature pages hereto under the heading "The Lenders"
(collectively, the "Lenders"),(5) MERRILL LYNCH, in its capacity
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as syndication agent for the Lenders (in such capacity, the
"Syndication Agent"), (6) TORONTO-DOMINION, in its capacity as
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documentation and technical agent for the Lender Parties (in such
capacity, the "Documentation and Technical Agent"), (7) LASALLE
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NATIONAL TRUST, N.A., a U.S. national banking association, in its
capacity as collateral agent for the Lender Parties (in such
capacity, the "Collateral Agent"), and (8) ROTHSCHILD, in its
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capacity as administrative agent for the Lender Parties (in such
capacity, the "Administrative Agent").
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W I T N E S S E T H:
WHEREAS, the Borrower, the Principal Subsidiaries, the
Arrangers, the Lenders party thereto, the Syndication Agent, the
Documentation and Technical Agent, the Collateral Agent and the
Administrative Agent have entered into that certain Loan
Agreement, dated as of October 31, 1995 and amended as of
December 7, 1995 (as so amended, the "Original Loan Agreement");
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WHEREAS, increases in the actual and projected Capital
Expenditures necessary to construct and develop the Fort Knox
Mine have occurred;
WHEREAS, while the Obligors do not acknowledge that any
Default has occurred and is continuing or will occur in the
future, the Obligors have requested that the Lender Parties waive
those Defaults that have occurred or may occur in the future and
suspend the effectiveness of certain provisions of the Original
Loan Agreement, in each case as set forth in greater detail in
Section 3.2 of this Agreement;
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WHEREAS, subject to the terms and conditions of this
Agreement, Cyprus Amax is willing to guarantee unconditionally
and irrevocably the payment obligations of the Borrower and each
other Obligor to the Lender Parties at all times prior to the
Fort Knox Economic Completion Date as set forth in greater detail
in the Cyprus Amax Guaranty; and
WHEREAS, it is a condition to the issue of the Cyprus Amax
Guaranty by Cyprus Amax that the assets and properties (and any
proceeds resulting therefrom) currently subject to the Liens in
favor of the Administrative Agent or the Collateral Agent (in
either case for the rateable benefit of the Lender Parties)
pursuant to the Security Documents (together with certain other
assets and properties of the Borrower and certain of the
Principal Subsidiaries as may be mutually agreed) are made
subject, pursuant to the Priority Agreement, to first-priority,
perfected Liens as may be granted in favor of Cyprus Amax as
security for all of the reimbursement obligations of the Borrower
and the Principal Subsidiaries in connection with the Cyprus Amax
Guaranty;
NOW THEREFORE, in consideration of the agreements herein
contained, the parties hereto hereby agree as follows:
ARTICLE 1. DEFINITIONS; INTERPRETATION
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SECTION 1.1. ORIGINAL LOAN AGREEMENT TERMS. Terms for
which meanings are provided in the Original Loan Agreement are,
unless otherwise defined herein or the context otherwise
requires, used in this Agreement with such meanings. This
Agreement is a Loan Document and shall be interpreted in
accordance with applicable provisions contained in the Original
Loan Agreement (including Sections 1.4 and 1.11 thereof).
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SECTION 1.2. ADDITIONAL TERMS. In this Agreement
(including its preamble and recitals), the following capitalized
terms shall have the following meanings:
"Amended Loan Agreement" means the Original Loan Agreement,
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as amended by this Agreement.
"Amendment Effective Date" is defined in Article 5.
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"Authorized Representative" means, relative to Cyprus Amax,
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those of its officers whose signatures and incumbency shall have
been certified to the Administrative Agent pursuant to clause (b)
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of Section 5.2.
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"Cyprus Amax Guaranty" means that certain Guaranty
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Agreement, from Cyprus Amax in favor of the Administrative Agent
(for the rateable benefit of the Lender Parties), substantially
in the form of Exhibit A attached hereto.
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"Priority Agreement" means that certain Collateral Sharing,
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Priority and Agency Agreement among the Borrower, Fairbanks Gold,
Lassen Gold, Melba Creek, Fairbanks Canada, the Collateral Agent,
the Administrative Agent and Cyprus Amax, substantially in the
form of Exhibit B attached hereto.
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ARTICLE 2. AMENDMENTS TO ORIGINAL LOAN AGREEMENT, BORROWING
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REQUEST AND CONTINUATION/CONVERSION NOTICE
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SECTION 2.1. AMENDMENTS TO SECTION 1.1 OF THE ORIGINAL LOAN
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AGREEMENT. Section 1.1 of the Original Loan Agreement shall be
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amended as set forth in this Section.
(a) Section 1.1 of the Original Loan Agreement shall
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be amended by adding thereto the following definitions in
the appropriate alphabetical order:
"Cyprus Amax Guaranty" means that certain Guaranty
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Agreement, from Cyprus Amax in favor of the
Administrative Agent (for the rateable benefit of the
Lender Parties), substantially in the form of Exhibit A
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attached to the Second Amendment Agreement.
"Fort Knox Bridge Indebtedness" is defined in
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clause (i) of Section 7.2.2.
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"Fort Knox Industrial Revenue Bonds" is defined in
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clause (j) of Section 7.2.2.
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"Permitted Fort Knox Sale-Leaseback" means the sale and
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leaseback of mobile equipment owned by the Borrower or
Fairbanks Gold not in excess of $30,000,000 fair market
value on the date of implementation of such
arrangements.
"Priority Agreement" means that certain Collateral
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Sharing, Priority and Agency Agreement among the
Borrower, Fairbanks Gold, Lassen Gold, Melba Creek,
Fairbanks Canada, the Collateral Agent, the
Administrative Agent and Cyprus Amax, substantially in
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the form of Exhibit B attached to the Second Amendment
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Agreement.
"Second Amendment Agreement" means that certain Second
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Amendment Agreement hereto, dated as of March 19, 1996,
among the Borrower, the Principal Subsidiaries, the
Arrangers, the Lenders party thereto, the Syndication
Agent, the Documentation and Technical Agent, the
Collateral Agent and the Administrative Agent.
"Second Amendment Effective Date" means the Amendment
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Effective Date under (and as defined in) the Second
Amendment Agreement.
(b) The definitions of "Applicable Margin",
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"Calculation Date", "Cash Flow Ratio", "Consolidated
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Fixed Charge Coverage Ratio", "Fort Knox Economic
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Completion" and "Fort Knox Economic Completion Date"
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contained in Section 1.1 of the Original Loan Agreement
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shall be amended in their entirety to read as set forth
below:
"Applicable Margin" means:
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(a) at any time prior to the Second Amendment
Effective Date, two and one-quarter percent (2.25%) per
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annum;
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(b) at any time on or after the Second Amendment
Effective Date but prior to the Fort Knox Economic
Completion Date, the applicable percentage set forth
below based upon the ratings applicable from time to
time to Cyprus Amax' senior, unsecured, non-credit-
enhanced long-term Indebtedness for borrowed money
("Index Debt"):
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Percentage
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Category 1 0.50%
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Rating
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BBB or higher by Standard & Poor's
Baa2 or higher by Moody's
Category 2 0.55%
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Rating
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BBB- by Standard & Poor's
Baa3 by Moody's
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Category 3 0.725%
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Rating
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BB+ or lower by Standard & Poor's
Ba1 or lower by Moody's
For purposes of the foregoing: (i) if the ratings for
Index Debt established or deemed to have been
established by Moody's and Standard & Poor's shall fall
within different categories, the Applicable Margin
shall be determined by reference to the numerically
lower of such categories (i.e., the category
corresponding to the higher rating), (ii) if Moody's or
Standard & Poor's shall not have in effect a rating for
Index Debt (due to the creditworthiness of Cyprus Amax
or to any act or failure to act on the part of Cyprus
Amax, or because such rating agency shall no longer be
in the business of rating corporate debt obligations),
then the Applicable Margin shall be determined by
reference to Category 3 and (iii) if any rating
established or deemed to have been established by
Moody's or Standard & Poor's shall be changed (other
than as a result of a change in the rating system of
Moody's or Standard & Poor's), such change shall be
effective as of the date on which it is first announced
by the applicable rating agency. If the rating system
of Moody's or Standard & Poor's shall change, or if
either such rating agency shall no longer have in
effect a rating for Index Debt (other than for one of
the reasons referred to in clause (ii) above), the
Borrower and the Lenders, acting through the
Administrative Agent, shall negotiate in good faith to
amend the references to specific ratings in this
definition to reflect such changed rating system or the
non-availability of ratings from such rating agency;
and
(c) at any time on or after the Fort Knox Economic
Completion Date, (i) with respect to the portion, if any, of
the Dollar equivalent (calculated as at each day that any
such Loan may be outstanding) of the Principal Amount of
Loans then outstanding in an amount equal to the lesser of
(A) the 1994 DOCLOC Facility Fort Knox Portion or (B) the
aggregate Dollar equivalent of the Principal Amount of Loans
then outstanding, one percent (1%) per annum, and (ii) in
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the case of the remaining portion, if any, of the Principal
Amount of Loans then outstanding, one and three-quarters
percent (1.75%) per annum.
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"Calculation Date" means each of the Fort Knox Economic
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Completion Date and each Quarterly Payment Date coinciding
therewith or occurring thereafter.
"Cash Flow Ratio" means, for any period, an amount equal to
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the ratio, expressed as a percentage, of:
(a) the sum of
(i) Future Net Cash Flow for such period,
(ii) cash balances projected to be standing to
the credit of bank accounts maintained by, and Cash
Equivalent Investments projected to be owned by (valued
on a mark-to-market basis at the relevant prices in
effect at the relevant date of calculation of the Cash
Flow Ratio), the Borrower and its Subsidiaries measured
at the end of such period,
plus
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(iii) the 1994 DOCLOC Facility Available Portion
projected to be outstanding as at the end of such
period;
to
--
(b) the sum of
(i) Funded Debt Service for such period,
plus
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(ii) rental payments in respect of the Permitted
Fort Knox Sale-Leaseback for such period and, subject
to clause (l) of Section 7.2.3, payments in respect of
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the Fort Knox Industrial Revenue Bonds for such period.
"Consolidated Fixed Charge Coverage Ratio" means for any
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Measurement Period, the ratio, expressed as a percentage,
of:
(a) the sum of:
(i) Consolidated Adjusted EBITDA for such
Measurement Period,
(ii) the 1994 DOCLOC Facility Available Portion as
at the last day of such Measurement Period,
plus
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(iii) cash balances standing to the credit of
bank accounts maintained by, and Cash Equivalent
Investments owned by (valued on a mark-to-market basis
at the relevant prices in effect at the relevant date
of calculation of Consolidated Fixed Charge Coverage
Ratio), the Borrower and its Subsidiaries measured at
the last day of such Measurement Period;
to
--
(b) the sum of:
(i) Consolidated Cash Interest Expense for such
Measurement Period,
(ii) the Principal Amount of all Loans repaid or
prepaid during such Measurement Period (other than
pursuant to clause (a) of Section 3.1.1 and calculated,
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in the case of any such Principal Amount denominated in
Gold, on the basis of the Dollar equivalent thereof as
at the date of repayment or prepayment of such
Principal Amount),
(iii) Consolidated Capital Costs paid during such
Measurement Period,
(iv) income taxes paid by the Borrower and its
Subsidiaries during such Measurement Period,
(v) dividends on preferred equity share capital
actually paid in cash or in kind (other than through
the distribution of further shares of capital stock of
the Borrower) by the Borrower during such Measurement
Period,
plus
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(vi) rental payments in respect of the Permitted
Fort Knox Sale-Leaseback during such Measurement Period
and, subject to clause (l) of Section 7.2.3, principal
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payments in respect of the Fort Knox Industrial Revenue
Bonds during such Measurement Period.
in each case without duplication and calculation on a
consolidated basis.
"Fort Knox Economic Completion" means the date following the
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Fort Knox Physical Completion Date on which:
(a) either (i) the Independent Consultant shall have
duly completed, certified and delivered to the
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Administrative Agent the Fort Knox Economic Completion
Certificate (as such certificate shall be initially amended
by the Borrower with the consent of all Lenders acting in
their reasonable discretion in consultation with the
Independent Consultant to reflect criteria demonstrating
that the Fort Knox Mine is capable of producing Gold at or
in excess of the levels referred to in the Fort Knox Base
Case at an average cash cost which is lower than that
referred to in the Fort Knox Base Case, as amended pursuant
to Section 3.1 of the Second Amendment Agreement to reflect
the increased capital costs associated with the Fort Knox
Mine and as otherwise amended from time to time pursuant to
Section 1.8); provided, however, that subsequent amendments
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(other than amendments of the magnitude contemplated in the
previous parenthetical phrase, which shall be made with the
consent of all Lenders, acting in their reasonable
discretion) to the Fort Knox Economic Completion Certificate
shall be made in accordance with the terms of the Loan
Agreement; or
(ii) at the request of the Borrower, the Independent
Consultant shall have duly completed, certified and
delivered a certificate to the Administrative Agent (the
"Alternative Certificate") stating that the Fort Knox Mine
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(x) has produced, during the Fort Knox Mine Operating Test
Period (as defined in the Fort Knox Economic Completion
Certificate), Gold at or in excess of the levels referred to
in the Fort Knox Base Case (as so amended) at an average
cash cost per ounce of Gold in the form of dore (plus the
refining costs incurred to upgrade Gold dore to bullion) not
greater than 105% of the forecasted said costs for the
corresponding period contained in the Fort Knox Base Case as
so amended and (y) has demonstrated the capability of
producing Gold at or in excess of the levels referred to in
the Fort Knox Base Case as so amended at an average cash
cost per ounce of Gold in the form of dore (plus the
refining costs incurred to upgrade Gold dore to bullion) not
greater than 105% of the forecasted said costs in the Fort
Knox Base Case as so amended until the then scheduled Final
Maturity Date;
(b) the Borrower shall have delivered: (i) a
certificate of an Authorized Representative of the Borrower
to the effect that no Default shall then have occurred and
be continuing or would occur assuming (and giving effect to)
the occurrence of the then contemplated Fort Knox Economic
Completion Date (including following termination of the
waivers contained in Section 3.2 of the Second Amendment
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Agreement), (ii) a certificate of an Authorized
Representative of the Borrower attaching copies of the Base
Cases (as amended as set forth in clause (a)) as in effect
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on such date and (iii) a Compliance Certificate, dated as of
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such date, demonstrating the Borrower's compliance, on an
actual and/or projected basis, as the case may be, with its
obligations under Section 7.2.4 as of such date and each
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other Calculation Date (if any) scheduled to occur
thereafter; provided, however, that, with respect to the
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obligations of the Borrower contained in clause (c) of
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Section 7.2.4, the calculation of the Consolidated Fixed
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Charge Coverage Ratio contained in such Compliance
Certificate shall be computed on a projected basis with
respect to the period from the intended Fort Knox Economic
Completion Date to (and including) the Final Maturity Date;
and
(c) the Lenders shall have received such evidence as
they shall reasonably require to the effect that,
immediately following the release of the obligations of
Cyprus Amax under the Cyprus Amax Guaranty pursuant to the
terms thereof on the then contemplated Fort Knox Economic
Completion Date, the Liens granted to the Lender Parties
pursuant to the Security Documents shall (except as
permitted by Section 7.2.3) be first-priority perfected
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Liens securing the relevant Obligations.
For purposes of clause (a)(ii), if the Independent
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Consultant elects not to certify the Alternative Certificate,
within five (5) Business Days after notice to such effect, the
Lenders shall appoint an independent engineering firm, which firm
shall be one of Behre Dolbear & Company, Pincock, Allen & Holt,
Kilborn Engineering, Minerals Advisory Group, Chapman, Wood and
Griswold, Micon International Limited or The Harry Winters
Company (the "Second Consultant"). The list of firms contained
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in the preceding sentence may be modified from time to time by
mutual agreement of the Borrower, Cyprus Amax and the Required
Lenders. The Second Consultant shall review the Alternative
Certificate, the Fort Knox Base Case as then in effect, and such
other information as it shall determine is necessary or desirable
in consultation with the Borrower in order for it to deliver an
opinion with respect to the Alternative Certificate and shall
notify the Lenders, the Borrower and Cyprus Amax within twenty
(20) Business Days of its appointment that it either agrees or
does not agree with the decision of the Independent Consultant
not to certify the Alternative Certificate. Subject to the
protest procedures described in the immediately succeeding
paragraph (including clauses (x) and (y) thereof) and to
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compliance with the provisions of clauses (b) and (c), if the
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Alternative Certificate is certified by either the Independent
Consultant or the Second Consultant, Fort Knox Economic
Completion shall then be deemed to have occurred.
For purposes of clause (a)(ii), if the Independent
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Consultant elects to certify the Alternative Certificate but
(A) within ten (10) Business Days after the Administrative Agent
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has notified the Lenders of such certification, one or more
Lenders (the "Protesting Lenders") notify the Borrower, Cyprus
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Amax and the Administrative Agent that they do not, in their sole
discretion, accept such certification, and (B) at the end of ten
(10) further Business Days, having afforded to the Borrower and
Cyprus Amax reasonable opportunity to discuss such non-acceptance
with them, some or all of the Protesting Lenders determine that
Fort Knox Economic Completion has not occurred, the Borrower
shall have the option, subject to the provisos contained in
clause (y) of this paragraph, of electing one of the two
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procedures set forth in clauses (x) and (y) of this paragraph:
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(x) Within five (5) Business Days of the notification
by the Protesting Lenders set forth in sub-clause (B) above
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in this paragraph, the Lenders shall appoint the Second
Consultant from the list in the manner set forth in the
immediately preceding paragraph. The Second Consultant
shall review the Alternative Certificate, the Fort Knox Base
Case as then in effect, and such other information as it
shall determine is necessary or desirable in consultation
with the Borrower in order for it to deliver an opinion with
respect to the Alternative Certificate and shall notify the
Lenders, the Borrower and Cyprus Amax within twenty (20)
Business Days of its appointment that it either agrees or
does not agree with the decision of the Independent
Consultant to certify the Alternative Certificate. Subject
to the immediately succeeding paragraph and to compliance
with the provisions of clauses (b) and (c), if the
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Alternative Certificate is confirmed by the Second
Consultant, Fort Knox Economic Completion shall then be
deemed to have occurred; or
(y) The Borrower may elect to replace one or more
Protesting Lenders with any one or more financial
institutions permitted by Applicable Law to lend to the
Borrower on the terms and conditions set forth in the Loan
Agreement and the other Loan Documents, subject to the
provisions set forth in Sections 10.10 (other than clause
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(a) thereof) and 10.11; provided, however, that (i) the
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election set forth in this clause shall not be available to
the Borrower if the Protesting Lenders hold an Outstanding
Percentage in excess of 25% of the Principal Amount of the
Loans and (ii) in connection with any such replacement, each
Protesting Lender shall have received in consideration
thereof an amount (denominated in Gold or Dollars, as may be
appropriate) equivalent to one hundred percent (100%) of the
aggregate of unpaid Principal Amounts of the Loans
outstanding to such Protesting Lender and all accrued but
unpaid interest, fees and other amounts (including any that
may arise pursuant to Section 4.3) in respect thereof to the
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date of transfer.
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The test in clause (x) of the immediately preceding
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paragraph shall be subject to the further condition that Fort
Knox Economic Completion shall not have occurred if (a) within
ten (10) Business Days after the Alternative Certificate is
certified by the Second Consultant, one or more Lenders (the
"Second Protesting Lenders") notify the Borrower, Cyprus Amax and
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the Administrative Agent that they do not, in their sole
discretion, accept such certification, and (b) at the end of ten
(10) further Business Days, having afforded to the Borrower and
Cyprus Amax reasonable opportunity to discuss such non-acceptance
with them, some or all of the Second Protesting Lenders determine
that Fort Knox Economic Completion has not occurred. In such
circumstances, the Borrower may elect to replace the Second
Protesting Lenders pursuant to the procedures set forth in
clause (y); provided, however, that the election set forth in
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this paragraph shall not be available to the Borrower if the
Second Protesting Lenders hold an Outstanding Percentage in
excess of 25% of the Principal Amount of the Loans.
"Fort Knox Economic Completion Date" means the day on which
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(a) the Documentation and Technical Agent shall have
received counterparts of the Fort Knox Economic Completion
Certificate and (b) the other criteria referred to in the
definition of "Fort Knox Economic Completion" shall
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otherwise have occurred as set forth therein. For the
avoidance of doubt, no provision of this Agreement or any
other Loan Document shall be construed to imply the
occurrence or non-occurrence of the Fort Knox Economic
Completion Date (or the satisfaction of any of the criteria
of Fort Knox Economic Completion) at any time and any
obligations of any Person (including any obligations of
Cyprus Amax under the Cyprus Amax Guaranty) which are stated
to be in effect until the occurrence of Fort Knox Economic
Completion shall, if Fort Knox Economic Completion does not
occur, continue until payment in full of all Obligations
guaranteed thereby.
SECTION 2.2. AMENDMENT TO SECTION 2.4 OF LOAN AGREEMENT.
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Clause (b) of Section 2.4 of the Original Loan Agreement shall be
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amended in its entirety to read as set forth below:
(b) unless, simultaneously with the effective date of such
Continuation/Conversion Notice: (i) the Borrower shall have made
any repayment or prepayment of Loans then required to be made
pursuant to this Agreement and (ii) the Borrower shall have,
during the period on or after the Fort Knox Economic Completion
Date, delivered to the Administrative Agent a Compliance
Certificate calculated as of such date, together with such
information concerning the calculations and assumptions used by
the Borrower in delivering such Compliance Certificate as the
Administrative Agent shall have requested; and
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SECTION 2.3. AMENDMENT TO SECTION 3.1.1 OF THE ORIGINAL
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LOAN AGREEMENT. Clauses (f) and (g) of Section 3.1.1 of the
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Original Loan Agreement shall be amended in their entirety to
read as set forth below:
(f) shall, at all times during the period on or after
the Fort Knox Economic Completion Date (and without
prejudice to clause (g)), within five (5) Business Days
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following the receipt of Net Issuance Proceeds
resulting from any issuance of Approved Subordinated
Indebtedness (Borrower) (excluding, however, any
Approved Subordinated Indebtedness (Borrower) issued
(following the giving of any required consent or waiver
pursuant to the Loan Documents) for the sole purpose of
refinancing any then outstanding Approved Subordinated
Indebtedness (Borrower)) or the receipt of Net Issuance
Proceeds resulting from any issuance of its equity
share capital (excluding, however, any such Net
Issuance Proceeds which are applied within five (5)
Business Days by the Borrower in repayment or
prepayment of amounts outstanding in respect of Fort
Knox Bridge Indebtedness at any time when no Default
shall have occurred and be continuing) to any Person,
make a mandatory prepayment of all Loans outstanding on
such date in a Principal Amount of (i) 100% of the
first $25,000,000 of the aggregate Net Issuance
Proceeds from all such issuances, (ii) 25% of all such
remaining Net Issuance Proceeds (in the case of any
such issue of equity share capital), and (iii) 100% of
all such remaining Net Issuance Proceeds (in the case
of any such issue of Approved Subordinated Indebtedness
(Borrower)).
(g) shall (without prejudice to the provisions of
Section 7.1.15 and of the DOCLOC Support Agreement), on
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and after the Fort Knox Economic Completion Date,
within five (5) Business Days following the receipt by
the Borrower of any cash proceeds (i) resulting from
any exercise of the Lender's Purchase Option (as
defined in the 1994 DOCLOC Facility Agreement), or (ii)
remaining after the application against any amounts
outstanding under the 1994 DOCLOC Facility Agreement of
the proceeds of any other issuance of any equity share
capital by the Borrower to Cyprus Amax pursuant to the
1994 DOCLOC Facility Agreement, make a mandatory
prepayment of all Loans outstanding on such date in a
Principal Amount equal to such cash proceeds.
SECTION 2.4. AMENDMENT TO SECTION 5.2.1 OF THE ORIGINAL
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LOAN AGREEMENT. Section 5.2.1 of the Original Loan Agreement
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shall be amended in its entirety to read as set forth below:
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SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT,
ETC. The representations and warranties of Cyprus Amax
incorporated by reference into Article 4 of the Cyprus Amax
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Guaranty and of the Borrower set forth in Section 6.19 and
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of any Obligor set forth in any Security Document to which
it is a party (subject to the waiver set forth in Section
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3.2 of the Second Amendment Agreement) shall be true and
---
correct as of the date initially made, and both immediately
before and immediately after the making of the Loans (but,
if any Default of the nature of Section 8.1.5 shall have
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occurred with respect to any other Indebtedness without
giving effect to the application, directly or indirectly, of
the proceeds of such Loans to such other Indebtedness):
(a) such representations and warranties shall be true
and correct with the same effect as if then made (unless
stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and
correct as of such earlier date); and
(b) no Default shall have then occurred and be
continuing.
SECTION 2.5. AMENDMENT TO ARTICLE 6 OF THE ORIGINAL LOAN
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AGREEMENT. The first paragraph of Article 6 of the Original Loan
---------
Agreement shall be amended in its entirety to read as set forth
below:
In order to induce the Lender Parties to enter into this
Agreement and, in the case of the Lenders, to make,
maintain, continue and/or convert Loans hereunder, the
Borrower, individually for itself and for the other Obligors
and with respect to matters hereinafter relating to it and
each other Obligor, and each other Obligor individually for
itself and with respect to matters hereinafter relating to
it, represents and warrants unto each Lender Party as set
forth in this Article. The representations and warranties
set forth in this Article shall be made upon the Fort Knox
Economic Completion Date and upon the delivery of each
Continuation/Conversion Notice after the Fort Knox Economic
Completion Date requesting a conversion from one type of
Tranche B Loan to another (and, in the case of any
representation and warranty contained in Section 6.19, and
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in any Security Document (subject to the waiver set forth in
Section 3.2 of the Second Amendment Agreement), upon the
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Second Amendment Effective Date, upon the delivery of any
Borrowing Request and the delivery of each
Continuation/Conversion Notice requesting a conversion from
one type of Tranche B Loan to another on or prior to the
Fort Knox Economic Completion Date).
-13-
SECTION 2.6. AMENDMENT TO SECTION 7.1 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 7.1 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:
SECTION 7.1 CERTAIN AFFIRMATIVE COVENANTS. Each Obligor
agrees with each Lender Party that, at all times on and
after the Fort Knox Economic Completion Date (and, in the
case of any agreement contained in Sections 7.1.1 and
--------------
7.1.13, at all times prior to the Fort Knox Economic
------
Completion Date) until all Obligations have been paid and
performed in full, such Obligor will perform its respective
obligations set forth in this Section. Except where the
context specifically requires otherwise, the Borrower shall
use its best efforts to ensure that each relevant Subsidiary
complies with its respective obligations set forth in this
Section.
SECTION 2.7. AMENDMENT TO SECTION 7.1.1 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Clause (a) of Section 7.1.1 of the Original Loan
---------- -------------
Agreement shall be amended in its entirety to read as set forth
below:
(a) (i) each of the Borrower, Fairbanks Gold and
Melba Creek will deliver, promptly when available, and in
any event within 90 days after the close of each Fiscal Year
of such Obligor:
(x) in the case of the Borrower, the consolidated
balance sheet at the close of such Fiscal Year and the
related consolidated statements of operations, cash
flows and shareholders' equity (for the Fiscal Year
then ended) of the Borrower and its Subsidiaries; and
(y) in the case of Fairbanks Gold and Melba
Creek, its balance sheet at the close of such Fiscal
Year and its related statements of operations and cash
flows for such Obligor,
in each case with comparable information at the close of and
for the prior Fiscal Year and (A) solely in the case of the
Borrower, reported on without Impermissible Qualification by
Price Waterhouse LLP, or another independent certified
public or chartered accountant of recognized international
standing, together, for any Fiscal Year ending on or after
the Fort Knox Economic Completion Date, with a certificate
from such accountant in form and substance reasonably
satisfactory to the Administrative Agent (including with
respect to any disclaimers for legal matters) (1) certifying
that to the best of its knowledge no Default has occurred,
or, if such a Default has occurred, specifying the nature
and extent thereof, and (2) setting forth in reasonable
-14-
detail the calculations (including (without prejudice to
Section 1.5) the impact of any adjustments between GAAP as
-----------
in effect on the Effective Date and GAAP as in effect at the
time of preparation of the relevant financial statements
referred to above) required to demonstrate the due
observance and performance of the covenants and agreements
contained in Article 7 and (B) in the case of Fairbanks Gold
---------
and Melba Creek, certified by an accounting or financial
Authorized Representative of such Obligor; and
SECTION 2.8. AMENDMENT TO SECTION 7.1.1 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Clause (k) of Section 7.1.1 of the Original Loan
---------- -------------
Agreement shall be amended in its entirety to read as set forth
below:
(k) without duplication of any other clause of this
Section, (i) as soon as possible and in any event within
three (3) Business Days after the occurrence of any Default,
the Borrower will deliver a statement of its chief financial
Authorized Representative setting forth details of such
Default and the action which the relevant Obligor has taken
and proposes to take with respect thereto and (ii) during
the period prior to the Fort Knox Economic Completion Date,
as soon as possible and in any event within three (3)
Business Days after the occurrence of any event of the
nature hereinafter referred to in this clause, the Borrower
will deliver a statement of its chief financial Authorized
Officer setting forth the details of any Default which would
have occurred in the performance of any Obligation if,
notwithstanding (but without prejudice to) the waiver
contained in Section 3.2 of the Second Amendment Agreement,
-----------
the provisions of Articles 6 and 7 had been in full force
---------- -
and effect during the period commencing on the Second
Amendment Effective Date and ending on the Fort Knox
Economic Completion Date;
SECTION 2.9. AMENDMENT TO SECTION 7.2 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 7.2 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:
SECTION 7.2 CERTAIN NEGATIVE COVENANTS. Each Obligor
agrees with each Lender Party that, at all times on and
after the Fort Knox Economic Completion Date until all
Obligations have been paid and performed in full, such
Obligor will perform its respective obligations set forth in
this Section. Except where the context specifically
requires otherwise, the Borrower shall use its best efforts
to ensure that each relevant Subsidiary complies with its
respective obligations set forth in this Section.
-15-
SECTION 2.10. AMENDMENT TO SECTION 7.2.2 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 7.2.2 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as set forth below:
SECTION 7.2.2 INDEBTEDNESS. The Borrower shall not, and
shall not permit any Subsidiary to, create, incur, assume,
or suffer to exist or otherwise become or be liable in
respect of any Indebtedness other than:
(a) Indebtedness in respect of the Loans and other
Obligations;
(b) Indebtedness in respect of Hedging Agreements or
Interest Rate Protection Agreements entered into by the
Borrower in accordance with Section 7.1.10 or 7.1.11 or,
-------------- ------
without prejudice to the provisions of clause (b) of Section
---------- -------
7.1.10, other Hedging Obligations incurred in the ordinary
------
course of business;
(c) until the Initial Borrowing Date, Bridge Loan
Existing Indebtedness, Guanaco Existing Indebtedness, Hayden
Hill Existing Indebtedness and other Indebtedness in the
amounts described in Item 2 ("Indebtedness to be Paid") of
------ -----------------------
the Disclosure Schedule;
(d) solely in the case of the Borrower, Indebtedness
which is identified in Item 10 ("Ongoing Borrower
------- ----------------
Indebtedness") of the Disclosure Schedule;
------------
(e) at any date (i) unsecured Indebtedness outstanding
at such date incurred by way of open accounts of less than
270 days extended by suppliers, or letters of credit opened
for the benefit of suppliers, on normal trade terms in
connection with purchases of goods and services in the
ordinary course of business of such Subsidiary which
constitute Consolidated Costs (and excluding, for the
avoidance of doubt, Indebtedness incurred through the
borrowing of money) (ii) Indebtedness of any Obligor not in
excess of $500,000 at any one time outstanding in respect of
such Obligor incurred to suppliers of equipment constituting
Consolidated Capital Costs (other than pursuant to the
Construction Contract) in respect of the deferred purchase
price of such equipment and (iii) Indebtedness evidenced by
the Project Documents as in effect on the Effective Date;
(f) without duplication of clause (i), Approved
----------
Subordinated Indebtedness;
(g) Indebtedness (other than Indebtedness of the
nature referred to in the foregoing clauses) in an aggregate
-16-
principal amount not in excess of $5,000,000 (or the
equivalent thereof in any other currency) for the Borrower
and its Subsidiaries at any one time outstanding;
(h) Indebtedness of any Subsidiary to the Borrower or
any other Subsidiary incurred in connection with any
Investment permitted to be made pursuant to clause (a), (d),
---------- ---
(e) or (f) of Section 7.2.6;
--- --- -------------
(i) Indebtedness of the Borrower ("Fort Knox Bridge
----------------
Indebtedness") to Cyprus Amax or any other Person by way of
------------
borrowings incurred prior to the Fort Knox Economic
Completion Date for purposes of funding the payment of
Consolidated Costs incurred in connection with the Fort Knox
Project and constituting Approved Subordinated Indebtedness
(Borrower) of the nature referred to in clause (b) of the
----------
definition of such term; and
(j) Indebtedness of the Borrower in a principal amount
not in excess of $40,000,000 at any one time outstanding in
respect of industrial revenue bonds (the "Fort Knox
---------
Industrial Revenue Bonds") issued on or prior to the Fort
------------------------
Knox Economic Completion Date to finance the completion of
the Fort Knox Project and constituting Approved Subordinated
Indebtedness (Borrower) of the nature referred to in
clause (b) of the definition of such term or otherwise on
----------
terms and conditions satisfactory to the Required Lenders;
provided, however, that no Indebtedness of the nature referred to
- -------- -------
in clause (f), (g) or (h) may be incurred if, immediately before
---------- --- ---
or after giving effect thereto, any Default shall have occurred
and be continuing.
SECTION 2.11. AMENDMENT TO SECTION 7.2.3 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 7.2.3 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as set forth below:
SECTION 7.2.3 LIENS. The Borrower shall not, and
shall not permit any Subsidiary to, create, incur, assume or
suffer to exist any Lien upon any of its properties,
revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens in favor of the Administrative Agent and/or
the Collateral Agent (for the rateable benefit of the Lender
Parties) granted pursuant to any Loan Document;
-17-
(b) Liens securing Existing Hayden Hill Indebtedness,
which Liens shall be released in full on the Initial
Borrowing Date;
(c) Liens securing Indebtedness of the type permitted
by and described in clause (d) of Section 7.2.2, and
---------- -------------
disclosed in Item 11 ("Ongoing Borrower Liens") of the
------- ----------------------
Disclosure Schedule;
(d) Liens for taxes, assessments or other governmental
charges or levies not at the time delinquent or thereafter
payable without penalty or being contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(e) Liens of carriers, warehousemen, mechanics,
materialmen, suppliers and landlords incurred in the
ordinary course of business for sums not overdue or being
contested in good faith by appropriate proceedings and for
which adequate reserves in accordance with GAAP shall have
been set aside on its books;
(f) Liens incurred in the ordinary course of business
in connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or
benefits, or to secure performance of tenders, statutory
obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(g) Liens incurred in the ordinary course of business
in connection with the ownership of such property or assets
which do not secure Indebtedness and which do not materially
detract from the value of such property or assets or
materially impair the value or use thereof;
(h) solely in the case of any property acquired by the
Borrower or any Subsidiary after the Effective Date, Liens
existing prior to the date of acquisition of any such
property attaching only to such property but not incurred in
connection with such acquisition and any replacement or
extension of such Liens; provided, however, that any such
-------- -------
replacement or extension of any such Lien shall not secure
obligations in an amount greater than those originally
secured;
(i) Liens permitted to be incurred pursuant to any
Collateral Agreement;
(j) judgment Liens in existence less than 10 days
after the entry thereof or with respect to which execution
-18-
has been stayed or the payment of which is covered in full
(subject to a customary deductible) by insurance maintained
with responsible insurance companies;
(k) Liens securing Indebtedness permitted to be
incurred pursuant to clause (e)(ii) of Section 7.2.2;
-------------- -------------
provided, however, that any such Lien shall attach only to
-------- -------
the equipment in respect of which such Indebtedness is
incurred;
(l) Liens securing the Fort Knox Industrial Revenue
Bonds; provided, however, that any such Lien may attach only
-------- -------
to assets (including real estate) constituting the tailings
dam at the Fort Knox Mine and that the documents relating to
the Fort Knox Industrial Revenue Bonds shall contain
provisions as to the priority of liens, subordination of
Indebtedness and other intercreditor arrangements
satisfactory to the Required Lenders;
(m) at any time on or after the Fort Knox Economic
Completion Date, second-priority Liens in favor of Cyprus
Amax encumbering the assets and collateral subject of the
Security Documents as security for the Fort Knox Bridge
Indebtedness; provided, however, that the provisions
-------- -------
relating to the priority of such Liens in favor of Cyprus
Amax and the Liens in favor of the Lender Parties (as
security for the obligations) shall be satisfactory to the
Required Lenders; and
(n) without duplication of clause (b), Liens disclosed
----------
in Item 4 ("Assets; Properties") of the Disclosure Schedule.
------ ------------------
SECTION 2.12. AMENDMENT TO SECTION 7.2.4 OF THE ORIGINAL
LOAN AGREEMENT. Section 7.2.4 of the Original Loan Agreement
shall be amended in its entirety to read as set forth below:
SECTION 7.2.4 FINANCIAL CONDITION OF BORROWER. The
Borrower will not permit:
(a) the Cash Flow Ratio (calculated on the date of
preparation of each Compliance Certificate with respect to
each consecutive three-month period commencing on the Fort
Knox Economic Completion Date and (without duplication) all
Calculation Dates (if any) scheduled to occur on or after
such date of preparation (and, in the case of the Fort Knox
Economic Completion Date, calculated with respect to the
three month period ending on the next succeeding scheduled
Calculation Date (if any)), to be less than or equal to one-
hundred and twenty-five percent (125%);
-19-
(b) the Loan Life Ratio (calculated on the date of
preparation of each Compliance Certificate with respect to
the Fort Knox Economic Completion Date and (without
duplication) all Calculation Dates (if any) scheduled to
occur on or after such date of preparation), to be less than
or equal to one hundred and sixty percent (160%);
(c) the Consolidated Fixed Charge Coverage Ratio, for
any Measurement Period ending on the last day of each Fiscal
Quarter (commencing with the first Fiscal Quarter to end
after the Fort Knox Economic Completion Date) during either
period set forth below, to be less than or equal to the
percentage set forth below opposite such period:
Measurement Period Minimum Consolidated
Ending Fixed Charge Coverage
------------------ Ratio
---------------------
From the last day 200%
of the first
Fiscal Quarter
ending after the
Fort Knox Economic
Completion Date to
(and including)
December 31, 2000
From March 31, 180%
2001 to (and
including)
December 31, 2001;
(d) the Consolidated Indebtedness/Capitalization
Ratio, (i) at any date on or after the Fort Knox Economic
Completion Date and prior to December 31, 1997, to be equal
to or greater than fifty five percent (55%) and (ii) at any
time thereafter, to be equal to or greater than fifty
percent (50%);
(e) Consolidated Tangible Net Worth, at any date on or
after the Fort Knox Economic Completion Date, to be less
than the sum of (i) $285,000,000, (ii) all Capital
Contributions (including any Capital Contribution of the
nature referred to in clause (d) of Section 5.1.12) made by
---------- --------------
Cyprus Amax to the Borrower (excluding, for the avoidance of
doubt, any undrawn amount under either DOCLOC Facility and
any amount drawn thereunder which has not been converted
into equity share capital on or prior to such date) during
the period commencing on June 30, 1995 and ending on such
date, plus (iii) fifty percent (50%) of Consolidated Net
----
Income for the period commencing on June 30, 1995 and ending
on such date; or
-20-
(f) the Proven and Probable Reserves to be, at any
date on or after the Fort Knox Economic Completion Date,
less than four hundred percent (400%) of the Gold equivalent
of the Principal Amount of all Loans on such date.
SECTION 2.13. AMENDMENT TO SECTION 7.2.10 OF THE ORIGINAL
--------------
LOAN AGREEMENT. Section 7.2.10 of the Original Loan Agreement
--------------
shall be amended in its entirety to read as set forth below:
SECTION 7.2.10. ASSET DISPOSITIONS. The Borrower will
not, and will not permit any of its Subsidiaries or (except
to the extent that CMM shall be under any obligation to the
contrary pursuant to the terms and conditions applicable to
any financing obtained in relation to the Refugio Mine
(excluding any Indebtedness provided by any Affiliate of
CMM)) CMM to sell, transfer, lease or otherwise dispose of
any of, or grant options, warrants or other rights with
respect to, any of its assets (including accounts
receivable) to any Person, unless:
(a) such disposition is made in the ordinary course of
business and consists of finished goods inventories (which
may consist, without limitation, of gold-bearing
concentrates, gold-bearing ore, refined gold or other
products forms customarily sold as end products in the
mining industry);
(b) such disposition is of obsolete or replaced
assets, which are no longer used or useful to the Borrower
or such Subsidiary;
(c) the net book value of all assets disposed of by
the Borrower and its Subsidiaries (excluding, however,
assets disposed of pursuant to clauses (a) and (b)) in the
----------- ---
same Fiscal Year (or shorter period, commencing with the
Effective Date and ending on December 31, 1995) does not
exceed $5,000,000 (or the equivalent thereof in any other
currency calculated at the time of the relevant disposition)
and fair value in cash is received therefor; or
(d) such disposition is of a Material Asset for cash
proceeds as to which the Required Lenders shall have
consented and the Net Disposition Proceeds resulting
therefrom shall be used to make a mandatory prepayment of
the Loans pursuant to clause (h) of Section 3.1.1;
---------- -------------
provided, however, that nothing herein shall prohibit (i) any
- -------- ------- ---
disposition of Gold to the Administrative Agent or the Lenders in
direct repayment of any Gold Obligation, (ii) the incurrence of
----
any Lien permitted to be incurred pursuant to Section 7.2.3, or
-------------
-21-
(iii) at any time when no Default shall have occurred and be
continuing, any disposition by Nevada Gold of any assets
constituting the Sleeper Mine (other than Gold obtained from
residual leaching of the leach pads thereat).
SECTION 2.14. AMENDMENT TO SECTION 7.2.15 OF THE ORIGINAL
--------------
LOAN AGREEMENT. Section 7.2.15 of the Original Loan Agreement
--------------
shall be amended in its entirety to read as set forth below:
SECTION 7.2.15 SALE-LEASEBACK TRANSACTIONS. None of
the Borrower, Fairbanks Gold, Melba Creek or Lassen Gold
shall enter into any arrangement (other than the Permitted
Fort Knox Sale-Leaseback) with any Person providing for the
leasing by such Obligor of any property which property has
been or is to be sold or transferred by such Obligor to such
other Person. The Borrower or Fairbanks Gold shall promptly
inform the Administrative Agent of any default by it in the
performance by or of any obligations in connection with the
Permitted Fort Knox Sale-Leaseback.
SECTION 2.15. AMENDMENT TO SECTION 8.1.15 OF THE ORIGINAL
--------------
LOAN AGREEMENT. Section 8.1.15 of the Original Loan Agreement
--------------
shall be amended in its entirety to read as set forth below:
SECTION 8.1.15. CYPRUS AMAX DEFAULTS.
(a) A default shall be made in the payment of any
amount under the Cyprus Amax Guaranty in respect of the
Principal Amount of any Loan when and as the same shall
become due and payable.
(b) Default shall be made in the payment of any other
amount due from Cyprus Amax under the Cyprus Amax
Guaranty (other than an amount referred to in clause
------
(a)), when and as the same shall become due and
---
payable, and such default shall continue for a period
of five (5) Business Days after receipt by Cyprus Amax
of written or facsimile notice from the Administrative
Agent of such default.
(c) Any representation or warranty made or deemed made
by Cyprus Amax in the Cyprus Amax Guaranty or in any
other Instrument furnished by Cyprus Amax pursuant
thereto shall prove to have been false or misleading in
any material respect when made or delivered or when
deemed made in accordance with the terms thereof.
(d) At any time on or prior to the Fort Knox Economic
Completion Date, default shall be made in the due
-22-
observance or performance of the covenant and agreement
to be observed or performed on the part of Cyprus Amax
contained in Section 7.05 of the Competitive Advance
------------
Facility Agreement (as in effect on the Second
Amendment Effective Date but as modified and
incorporated by reference into Article 5 of the Cyprus
---------
Amax Guaranty).
(e) At any time on or prior to the Fort Knox Economic
Completion Date, default shall be made in the due
observance or performance of the covenant, condition
and agreement to be observed or performed on the part
of Cyprus Amax contained in Section 7.01 of the
------------
Competitive Advance Facility Agreement (as in effect on
the Second Amendment Effective Date but as modified and
incorporated by reference into Article 5 of the Cyprus
---------
Amax Guaranty) and such default shall continue
unremedied for a period of twenty (20) days after the
earlier of (i) the date when Cyprus Amax receives
notice thereof from the Administrative Agent or (ii)
after actual knowledge thereof by any Financial Officer
(as defined in the Competitive Advance Facility
Agreement as in effect on the Second Amendment
Effective Date) of Cyprus Amax.
(f) At any time on or prior to the Fort Knox Economic
Completion Date, and without prejudice to the foregoing
provisions of this Section, any Default or Event of
Default under (and as defined in) the Competitive
Advance Facility Agreement shall have occurred and be
continuing; provided, however, that in any such case
-------- -------
the acceleration of all or any of the Obligations
pursuant to Section 8.2 or 8.3 shall be conditional
----------- ---
upon the acceleration, in whole or in part, of any
loans outstanding under the Competitive Advance
Facility Agreement.
SECTION 2.16. AMENDMENT TO SECTION 9.5 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 9.5 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:
SECTION 9.5. LOANS BY MERRILL, LYNCH, ABN AMRO,
LASALLE, ROTHSCHILD AND TORONTO-DOMINION. Each of Merrill
Lynch, ABN AMRO, Rothschild and Toronto-Dominion shall have
the same rights and powers with respect to (i) the Loans
made by it or any of its Affiliates and (ii) the Notes held
by it or any of its Affiliates as any Lender and may
exercise the same as if it were not an Agent or Arranger, as
the case may be, hereunder. Each of Merrill Lynch, ABN
AMRO, LaSalle, Rothschild, Toronto-Dominion and the
Affiliates of any of the foregoing may accept deposits from,
-23-
lend money to, act as Hedging Counterparties and
Interest Rate Protection Counterparties, and generally
engage in any kind of business with any Obligor, Cyprus
Amax or any Affiliate of any thereof, as if it were not
an Agent or Arranger.
SECTION 2.17. AMENDMENT TO SECTION 9.6 OF THE ORIGINAL LOAN
-----------
AGREEMENT. Section 9.6 of the Original Loan Agreement shall be
-----------
amended in its entirety to read as set forth below:
SECTION 9.6. ROTHSCHILD AS THE ADMINISTRATIVE AGENT.
In acting as Administrative Agent for the Lenders, the
Treasury Division of Rothschild shall be treated as a
separate entity from any other division of Rothschild (or
similar units of Rothschild in any subsequent
reorganization) or Affiliates and, without detracting from
the generality of the foregoing, in the event that any of
Rothschild's divisions (or similar units) or Affiliates
should act for the Borrower, any other Obligor, Cyprus Amax
or any Affiliate of any of the foregoing (the "Group") in an
-----
advisory capacity in relation to any other matter, any
information given by any member of the Group to such
divisions (or similar units) or Affiliates for the purpose
of obtaining advice shall be treated as confidential and
shall not be available to the other Lender Parties without
the consent of such member of the Group; and notwithstanding
anything to the contrary expressed or implied herein and
without prejudice to the generality of the foregoing,
Rothschild shall not as between itself and the other Lender
Parties be bound to disclose to any Lender Party or other
Person any information supplied by any member of the Group
to Rothschild in its capacity as the Administrative Agent
hereunder which is identified by such member at the time of
supply as being unpublished price sensitive information
relating to a proposed transaction by a member of the Group
and supplied solely for the purpose of evaluating in
consultation with Rothschild in such capacity whether such
transaction might require a waiver or amendment to any of
the provisions contained herein or in any other Loan
Document.
SECTION 2.18. AMENDMENT TO SECTION 10.1 OF THE ORIGINAL
------------
LOAN AGREEMENT. Section 10.1 of the Original Loan Agreement
------------
shall be amended by deleting clause (f) thereof and substituting
----------
the following language therefor:
(f) result in the release of the obligations of any
Principal Subsidiary under the Principal Subsidiary
Guaranty to which it is a party, the release of the
obligations of Cyprus Amax under the Cyprus Amax
Guaranty (other than specifically pursuant to its
-24-
terms), or the release of any Lien in respect of any
material collateral granted pursuant to any Security
Document shall be made without the consent of each
Lender; or
SECTION 2.19. AMENDMENT TO SECTION 10.13 OF THE ORIGINAL
-------------
LOAN AGREEMENT. Section 10.13 of the Original Loan Agreement
-------------
shall be amended in its entirety to read as follows:
SECTION 10.13 OTHER TRANSACTIONS. Without prejudice
to the provisions of Section 9.5 or 9.6, nothing contained
----------- ---
herein shall preclude any Lender Party from engaging in any
transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with any Obligor or
Cyprus Amax or any of their Affiliates in which such
Obligor, Cyprus Amax or such Affiliate is not restricted
hereby from engaging with any other Person.
SECTION 2.20. AMENDMENT AND RESTATEMENT OF BORROWING
REQUEST. The Borrowing Request attached as Exhibit I to the
---------
Original Loan Agreement is amended and restated as set forth in
Exhibit E hereto.
- ---------
SECTION 2.21. AMENDMENT AND RESTATEMENT OF
CONTINUATION/CONVERSION NOTICE. The Continuation/Conversion
Notice attached as Exhibit J to the Original Loan Agreement is
---------
amended and restated as set forth in Exhibit F hereto.
---------
ARTICLE 3. REVISION OF BASE CASES; WAIVERS
-------------------------------------------
SECTION 3.1. REVISION OF BASE CASES. The Borrower shall
use its best efforts to revise, in consultation with the
Independent Consultant and the Documentation and Technical Agent,
the Base Cases so that amended versions thereof, which shall
reflect the effect of actual and projected overruns in Capital
Expenditures at the Fort Knox Mine together with the effects of
the Permitted Fort Knox Sale-Leaseback, the Fort Knox Bridge
Indebtedness and the Fort Knox Industrial Revenue Bonds and any
other sources of funding received by or specifically made
available to the Obligors in connection with the Principal Mines
on the projected performance of the Principal Mines and the
financial position of the Borrower and its Subsidiaries, are
approved by all the Lenders (such approval not to be unreasonably
withheld) as soon as practicable thereafter. The Base Cases, if
and to the extent so approved by all the Lenders, shall then be
the "Base Cases" for all purposes of the Loan Agreement and each
----------
other Loan Document. During the period commencing on the
Amendment Effective Date and ending on the date on which revised
Base Cases are agreed pursuant to the foregoing provisions of
this Section compliance with the provisions of clause (b) of
----------
-25-
Section 1.8 of the Amended Loan Agreement is hereby waived.
- -----------
Prior to the amendment described in the first sentence of this
Section, for purposes of clause (a) of Section 1.8 of the Amended
---------- -----------
Loan Agreement, all determinations and calculations of the nature
referred to therein shall be determined to the reasonable
satisfaction of the Documentation and Technical Agent (acting in
consultation with the Required Lenders). All amendments to the
Base Cases subsequent to the amendment described in the first
sentence of this Section shall be made in accordance with clause
------
(b) of Section 1.8 of the Amended Loan Agreement.
- --- -----------
SECTION 3.2. WAIVERS. As of the Amendment Effective Date
and during the period commencing on such date and ending on the
Fort Knox Economic Completion Date, the Lender Parties waive all
Defaults that have occurred or may occur under Section 8.1.2,
-------------
8.1.3 or 8.1.4 of the Original Loan Agreement or the Amended Loan
- ----- -----
Agreement as a result of any breach by the Borrower or any
Principal Subsidiary of any of its undertakings or
representations contained in clause (b) of Section 1.8 or
---------- -----------
Article 6 (excluding, however, Section 6.19) or Article 7
- --------- ------------ ---------
(excluding, however, Section 7.1.1 or 7.1.13) of the Original
------------- ------
Loan Agreement or the Amended Loan Agreement and any Default that
has occurred or may occur under any of Section 8.1.1 (solely to
-------------
the extent any relevant payment subject of such Section shall
have been made by Cyprus Amax as and when required pursuant to
the Cyprus Amax Guaranty) or any of Sections 8.1.5 to 8.1.19 of
-------------- ------
the Original Loan Agreement or any of Sections 8.1.5 to 8.1.14
-------------- ------
and 8.1.16 to 8.1.19 of the Amended Loan Agreement; provided,
------ ------ --------
however, that during the period commencing on the Amendment
- -------
Effective Date and ending on the Fort Knox Economic Completion
Date, the waiver by the Lender Parties of any Default arising as
a result of any breach by the Borrower or any Principal
Subsidiary or Fairbanks Canada of any of its undertakings or
representations contained in any Loan Document with respect to
the priority of any Lien granted to the Lender Parties pursuant
to the Security Documents (excluding any Lien in respect of
equipment subject to the Permitted Fort Knox Sale-Leaseback or
assets subject of the Fort Knox Industrial Revenue Bonds) shall
be limited to the fact that (and the agreements of the Lender
Parties contained in Article 2 shall be conditional upon), as
---------
contemplated by the Priority Agreement, such Liens shall not be
first priority Liens; and provided, further, however, that, if in
-------- ------- -------
connection with any such waiver or any suspension of the
operation of Article 6 or 7 of the Amended Loan Agreement, Cyprus
--------- -
Amax shall, as contemplated by the Priority Agreement, be granted
Liens by the Borrower or any Subsidiary in respect of any assets
not currently secured in favor of the Administrative Agent or the
Collateral Agent (for the rateable benefit of the Lender Parties)
pursuant to any Security Document then the Lender Parties shall,
simultaneously with the granting of such Liens and at all times
prior to the earlier of (i) the release of such Liens by Cyprus
Amax or (ii) the Fort
-26-
Knox Economic Completion Date, be granted a second-priority
perfected Lien in respect of all such assets; and provided,
--------
further, however, that, during the period commencing on
- ------- -------
the Amendment Effective Date and ending on the Fort Knox Economic
Completion Date, no Default shall be deemed to arise pursuant to
Section 6.19 or Section 7.1.13 of the Amended Loan Agreement
- ------------ --------------
unless, in the opinion of the Administrative Agent, such Default
would be expected to result in any liability to any Lender Party
pursuant to Section 10.4 of the Amended Loan Agreement or any
------------
similar provision of any other Loan Document. For the avoidance
of doubt, as of the Amendment Effective Date and during the
period commencing on such date and ending on the Termination Date
under (and as defined in) the Priority Agreement, the Lender
Parties' rights under Section 8.2 and 8.3 of the Amended Loan
----------- ---
Agreement shall be subject to all applicable provisions of the
Priority Agreement.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
------------------------------------------
In order to induce the Lender Parties to enter into this
Agreement and, in the case of the Lenders, to make, maintain,
continue and/or convert Loans under the Amended Loan Agreement,
the Borrower, individually for itself and with respect to matters
hereinafter relating to it and each other Obligor, and each other
Obligor, individually for itself and with respect to matters
hereinafter relating to it, represents and warrants unto each
Lender Party as set forth in this Article.
SECTION 4.1. AUTHORITY. Each Obligor has full power and
authority to enter into this Agreement and perform its
obligations under the Amended Loan Agreement.
SECTION 4.2. DUE AUTHORIZATION; NON-CONTRAVENTION. The
execution and delivery by each Obligor of this Agreement and the
performance by such Obligor of its obligations under the Amended
Loan Agreement have been authorized by all necessary corporate
action on its part, do not and will not require any Approval, do
not and will not conflict with, result in any violation of, or
constitute any default under, any provision of any Requirement of
Law (other than any default that has occurred or may occur under
the Original Loan Agreement specifically waived pursuant to
Section 3.2) or Approval binding on it, and will not result in or
- -----------
require the creation or imposition of any Lien on any of its
properties pursuant to the provisions of any Contractual
Obligations except as permitted to be incurred pursuant to the
Priority Agreement and Section 7.2.3 of the Amended Loan
-------------
Agreement.
SECTION 4.3. VALIDITY. This Agreement constitutes the
legal, valid and binding obligation of each Obligor enforceable
against such Obligor in accordance with its terms, subject as to
-27-
enforceability only, to Applicable Laws relating to bankruptcy
and the enforceability of creditors' rights generally and by the
fact that the availability of equitable remedies is
discretionary.
ARTICLE 5. CONDITIONS TO EFFECTIVENESS
---------------------------------------
This Agreement shall become effective upon receipt by the
Administrative Agent of the documents, certificates and other
Instruments described in this Article. The date on which the
Administrative Agent shall have received all such documents,
certificates and other Instruments is referred to as the
"Amendment Effective Date". In the event that the Amendment
------------------------
Effective Date shall not occur on or prior to April 15, 1996, the
agreements of the parties contained in this Agreement shall be of
no further force and effect.
SECTION 5.1. COUNTERPARTS OF AGREEMENT. The Administrative
Agent shall have received counterparts of this Agreement, duly
executed by the Borrower, the Principal Subsidiaries, the
Arrangers, the Syndication Agent, the Documentation and Technical
Agent, the Collateral Agent and all the Lenders, and duly
acknowledged by an Authorized Representative of Cyprus Amax.
SECTION 5.2. RESOLUTIONS, ETC. The Administrative Agent
shall have received from Cyprus Amax a certificate of its
Secretary or similar officer as to:
(a) resolutions of its Board of Directors or similar
body then in full force and effect authorizing the execution
and performance of the Cyprus Amax Guaranty and each other
document executed or to be executed by it in connection with
the transactions contemplated hereby and thereby,
(b) the incumbency and signatures of those of its
officers authorized to act with respect to the Cyprus Amax
Guaranty and each other document executed or to be executed
by it, and
(c) its constituent documents as then in effect,
upon which certificate each Lender Party may conclusively rely
until it shall have received a further certificate of the
Secretary or similar officer of Cyprus Amax cancelling or
amending such prior certificate; provided, however, that any such
-------- -------
further certificate may not retroactively cancel or amend any
matters contained in any certificate previously delivered
hereunder.
-28-
SECTION 5.3. CYPRUS AMAX GUARANTY. The Administrative
Agent shall have received counterparts of the Cyprus Amax
Guaranty, duly executed by an Authorized Representative of Cyprus
Amax.
SECTION 5.4. PRIORITY AGREEMENT. The Administrative Agent
shall have received counterparts of the Priority Agreement, duly
executed by the Borrower, Fairbanks Gold, Lassen Gold, Melba
Creek, Fairbanks Canada, the Collateral Agent and Cyprus Amax.
SECTION 5.5. COMPETITIVE ADVANCE FACILITY AGREEMENT. The
Administrative Agent shall have received a copy of the
Competitive Advance Facility Agreement, as in effect on March 19,
1996, certified by an Authorized Representative of Cyprus Amax.
SECTION 5.6. OPINIONS OF COUNSEL. The Administrative Agent
shall have received opinions addressed to the Lender Parties
from:
(a) Sullivan & Cromwell, special counsel to Cyprus
Amax, substantially in the form of Exhibit C attached
---------
hereto; and
(b) Dale E. Huffman, General Attorney and Assistant
Secretary of Cyprus Amax, substantially in the form of
Exhibit D attached hereto.
---------
SECTION 5.7. COMPLIANCE WITH WARRANTIES, NO DEFAULTS. The
Administrative Agent shall have received:
(a) a certificate, dated a date as close as
practicable to the intended Amendment Effective Date, of an
Authorized Representative of each Obligor to the effect
that, both immediately before and immediately after giving
effect to the transactions contemplated by this Agreement:
the representations and warranties of each Obligor set forth
in Article 4 and in each Security Document (only to the
---------
extent that any such representation or warranty shall be
required to be made on the Amendment Effective Date) to
which each is a party shall be true and correct with the
same effect as if then made (unless stated to relate solely
to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier
date); and
(b) a certificate, dated a date as close as
practicable to the intended Amendment Effective Date, of an
Authorized Representative of Cyprus Amax to the effect that,
both immediately before and immediately after giving effect
-29-
to the transactions contemplated by this Agreement, the
Cyprus Amax Guaranty and the Priority Agreement: (i) the
representations and warranties of Cyprus Amax set forth in
Article 4 of the Cyprus Amax Guaranty shall be true and
---------
correct with the same effect as if then made and (ii) Cyprus
Amax shall not then be in default (however denominated) of
any of its obligations under the Cyprus Amax Guaranty, the
Priority Agreement or the Competitive Advance Facility
Agreement.
SECTION 5.8. PROCESS AGENT. The Administrative Agent shall
have received evidence that the appointment by Cyprus Amax of the
Process Agent pursuant to Section 5.1.9 of the Amended Loan
-------------
Agreement shall extend to the Cyprus Amax Guaranty and the
Priority Agreement.
ARTICLE 6. MISCELLANEOUS
-------------------------
SECTION 6.1. COUNTERPARTS. This Agreement may be executed
by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall
constitute together but one and the same agreement.
SECTION 6.2. EFFECT OF AMENDMENT. Effective as of the
Amendment Effective Date, references in the Original Loan
Agreement and in each other Loan Document to "the Agreement",
"this Agreement", the "Loan Agreement" and words of similar
import shall be to the Original Loan Agreement, as amended
hereby. Effective as of the Amendment Effective Date, references
in any Loan Document to the Borrowing Request and the
Continuation/Conversion Notice shall mean the Borrowing Request
and the Continuation/Conversion Notice, as amended and restated
pursuant to Sections 2.20 and 2.21, respectively. Except as
------------- ----
amended or otherwise modified hereby, the Original Loan Agreement
shall continue in full force and effect.
SECTION 6.3. GOVERNING LAW; ENTIRE AGREEMENT. THIS
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the
Amendment Effective Date, except with respect to the Borrower's
obligations to indemnify and pay the costs and expenses of the
Underwriters as set forth in the Commitment Letter, the Original
Loan Agreement, as amended hereby, the Notes and the other Loan
Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and supersede
any prior agreements, written or oral, with respect thereto
(including the Commitment Letter (except as aforesaid), the
Indicative Summary Terms for $250,000,000 Senior Term Facility,
dated August 15, 1995, and the Information Memorandum).
SECTION 6.4. PROVISIONS INCORPORATED BY REFERENCE. The
parties hereto agree that the provisions of Sections 10.14 (Forum
--------------
Selection and Consent to Jurisdiction; Waiver of Immunity) and
-30-
10.15 (Waiver of Jury Trial) of the Original Loan Agreement shall
- -----
be incorporated by reference into this Agreement as if set forth
in full herein.
-31-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
The Obligors
AMAX GOLD INC.,
as the Borrower
By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Chief
----------------------------------
Financial Officer
FAIRBANKS GOLD MINING, INC.,
as a Principal Subsidiary
By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Treasurer
----------------------------------
GUANACO MINING COMPANY, INC.,
as a Principal Subsidiary
By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Treasurer
----------------------------------
LASSEN GOLD MINING, INC.,
as a Principal Subsidiary
By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Treasurer
----------------------------------
-32-
MELBA CREEK MINING, INC.,
as a Principal Subsidiary
By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Treasurer
----------------------------------
NEVADA GOLD MINING, INC.,
as a Principal Subsidiary
By: /s/ Mark A. Lettes
-------------------------------------
Name Printed: Mark A. Lettes
--------------------------
Title: Vice President and Treasurer
----------------------------------
The Lenders
ABN AMRO NORTH AMERICA, INC.,
acting as agent for ABN AMRO
BANK N.V.
By: /s/ William Heissenbuttel
-------------------------------------
Name Printed: William Heissenbuttel
---------------------------
Title: Vice President and Direcor
----------------------------------
By: /s/ Sean M. Stack
-------------------------------------
Name Printed: Sean M. Stack
---------------------------
Title: Vice President and Direcor
----------------------------------
ARAB BANKING CORPORATION
(B.S.C.)
By: /s/ Stephen A. Plauche
-------------------------------------
Name Printed: Stephen A. Plauche
---------------------------
Title: Vice President
----------------------------------
-33-
BAYERISCHE VEREINSBANK AG
By: /s/ Andrew G. Mathews
-------------------------------------
Name Printed: Andrew G. Mathews
---------------------------
Title: Vice President
----------------------------------
CANADIAN IMPERIAL BANK OF
COMMERCE
By: /s/ John W. Kunkle
-------------------------------------
Name Printed: John W. Kunkle
---------------------------
Title: Authorized Signatory
----------------------------------
CHEMICAL BANK
By: /s/ James H. Ramage
-------------------------------------
Name Printed: James H. Ramage
---------------------------
Title: Vice President
----------------------------------
CREDIT LYONNAIS, New York Branch
By: /s/ Michael Pepe
-------------------------------------
Name Printed: Michael Pepe
---------------------------
Title: Vice President
----------------------------------
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Jane Bek
-------------------------------------
Name Printed: Jane Bek
---------------------------
Title: Vice President
----------------------------------
-34-
THE FUJI BANK LIMITED, Los Angeles
Agency
By: /s/ Nobuhiro Umemura
-------------------------------------
Name Printed: Nobuhiro Umemura
---------------------------
Title: Joint General Manager
----------------------------------
MERRILL LYNCH CAPITAL
CORPORATION
By: /s/ Charles L. Wickham III
-------------------------------------
Name Printed: Charles L. Wickham III
---------------------------
Title: Vice President
----------------------------------
NATIONAL BANK OF ALASKA
By: /s/ Patricia Jelley Benz
-------------------------------------
Name Printed: Patricia Jelley Benz
---------------------------
Title: Vice President
----------------------------------
PNC BANK, N.A.
By: /s/ Robert D. Erwin
-------------------------------------
Name Printed: Robert D. Erwin
---------------------------
Title: Vice President
----------------------------------
per pro N M ROTHSCHILD & SONS
LIMITED
By: /s/ Andrew Wright
-------------------------------------
Name Printed: Andrew Wright
---------------------------
Title: Assistant Director
----------------------------------
By: /s/ D.R. Beadle
-------------------------------------
Name Printed: D.R. Beadle
---------------------------
Title: Assistant Director
----------------------------------
-35-
SOCIETE GENERALE
By: /s/ Richard A. Erbert
-------------------------------------
Name Printed: Richard A. Erbert
---------------------------
Title: Vice President
----------------------------------
SWISS BANK CORPORATION, Cayman
Island Branch
By: /s/ Robert G. Colvin
-------------------------------------
Name Printed: Robert G. Colvin
---------------------------
Title: Director
----------------------------------
By: /s/ Gary Riddell
-------------------------------------
Name Printed: Gary Riddell
---------------------------
Title: Director, Credit Risk Management
----------------------------------
THE TORONTO-DOMINION BANK
By: /s/ Jeffrey J. Weaver
-------------------------------------
Name Printed: Jeffrey J. Weaver
---------------------------
Title: Director
----------------------------------
-36-
The Agents and the Arrangers
ABN AMRO NORTH AMERICA, INC.,
acting as agent for ABN AMRO
BANK N.V., as an Arranger
By: /s/ Sean M. Stack
-------------------------------------
Name Printed: Sean M. Stack
---------------------------
Title: Vice President and Director
----------------------------------
By: /s/ William Heissenbuttel
-------------------------------------
Name Printed: William Heissenbuttel
---------------------------
Title: Vice President and Director
----------------------------------
LASALLE NATIONAL TRUST, N.A., as
the Collateral Agent
By: /s/ Sarah Webb
-------------------------------------
Name Printed: Sarah Webb
---------------------------
Title: Vice President
----------------------------------
By: /s/ Diane Swanson
-------------------------------------
Name Printed: Diane Swanson
---------------------------
Title: Assistant Vice President
----------------------------------
MERRILL LYNCH CAPITAL
CORPORATION, as the Syndication
Agent and as an Arranger
By: /s/ Charles L. Wickham III
-------------------------------------
Name Printed: Charles L. Wickham III
---------------------------
Title: Vice President
----------------------------------
-37-
per pro N M ROTHSCHILD & SONS
LIMITED, as the Administrative
Agent and as an Arranger
By: /s/ Andrew Wright
-------------------------------------
Name Printed: Andrew Wright
---------------------------
Title: Assistant Director
----------------------------------
By: /s/ D.R. Beadle
-------------------------------------
Name Printed: D.R. Beadle
---------------------------
Title: Assistant Director
----------------------------------
THE TORONTO-DOMINION BANK, as
the Documentation and Technical
Agent and as an Arranger
By: /s/ Jeffery J. Weaver
-------------------------------------
Name Printed: Jeffery J. Weaver
---------------------------
Title: Director
----------------------------------
-38-
ACKNOWLEDGEMENT AND AGREEMENT
The undersigned, Cyprus Amax Minerals Company, hereby
acknowledges receipt of a copy of the foregoing Second Amendment
Agreement to the Loan Agreement and agrees to be bound by the
terms and provisions thereof and to use its reasonable best
efforts to carry out such terms and provisions.
Without limiting the foregoing and notwithstanding any
waiver of the provisions of Section 7.1.15 of the Loan Agreement
--------------
effected by the Second Amendment Agreement, Cyprus Amax Minerals
Company acknowledges that the DOCLOC Support Agreement shall
remain in full force and effect.
CYPRUS AMAX MINERALS COMPANY
By: /s/ Francis J. Kane
-------------------------------------
Name Printed: Francis J. Kane
---------------------------
Title: Vice President, Investor
----------------------------------
Relations and Treasurer
Address for Notices:
9100 East Mineral Circle
Englewood
Colorado 80112
U.S.A.
Attention:
Facsimile No.: [ ]
Telex No.: [ ]
(Answerback [ ])
Dated _______________________, 1996
CYPRUS AMAX GUARANTY
THIS GUARANTY, dated as of March 19, 1996 (this
"Agreement"), by CYPRUS AMAX MINERALS COMPANY, a Delaware
---------
corporation (the "Guarantor"), in favor of N M ROTHSCHILD & SONS
---------
LIMITED, a bank organized under the laws of England
("Rothschild"), in its capacity as the administrative agent for
----------
the Lender Parties (in such capacity, the "Administrative
--------------
Agent").
- -----
W I T N E S S E T H:
WHEREAS, pursuant to that certain Loan Agreement, dated as
of October 31, 1995 and amended as of December 7, 1995 and
pursuant to the Second Amendment Agreement (as so amended, the
"Loan Agreement"), among (1) Amax Gold Inc., a Delaware
--------------
corporation (the "Borrower"), (2) Fairbanks Gold Mining, Inc., a
--------
Delaware corporation, Guanaco Mining Company, Inc., a Delaware
corporation, Lassen Gold Mining, Inc., a Delaware corporation,
Melba Creek Mining, Inc., an Alaska corporation, and Nevada Gold
Mining, Inc., a Delaware corporation (collectively, the
"Principal Subsidiaries"), (3) Merrill Lynch Capital Corporation,
----------------------
a Delaware corporation ("Merrill Lynch"), ABN AMRO Bank N.V., a
-------------
bank organized under the laws of The Netherlands, Rothschild and
The Toronto-Dominion Bank, a bank organized under the federal
laws of Canada ("Toronto-Dominion"), as the Arrangers, (4) the
----------------
banks and other financial institutions party thereto
(collectively, the "Lenders"), (5) Merrill Lynch, as Syndication
-------
Agent for the Lenders, (6) Toronto-Dominion, as Documentation and
Technical Agent for the Lender Parties, (7) LaSalle National
Trust, N.A., a U.S. national banking association, as Collateral
Agent for the Lender Parties, and (8) Rothschild, as
Administrative Agent for the Lender Parties, the Lenders extended
Commitments to make Loans to the Borrower;
WHEREAS, the parties to the Loan Agreement have entered into
the Second Amendment Agreement thereto, dated as of March 19,
1996 (the "Second Amendment Agreement");
--------------------------
WHEREAS, the Guarantor owns as of the date hereof
approximately 51.2% of the issued and outstanding capital stock
of the Borrower and the Borrower owns, either directly or
indirectly, all of the outstanding shares of capital stock of the
Principal Subsidiaries;
WHEREAS, in consideration of the Lender Parties agreeing to
the waivers and other transactions contemplated by the Second
Amendment Agreement, the Guarantor has agreed to enter into this
Agreement;
WHEREAS, the Guarantor will derive substantial direct and
indirect benefit from the waivers and other transactions
contemplated by the Second Amendment Agreement; and
WHEREAS, this Agreement is the Cyprus Amax Guaranty referred
to in the Second Amendment Agreement, and it is a condition
precedent to the effectiveness of the Second Amendment Agreement
that the Guarantor execute and deliver this Agreement;
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged by the
Guarantor, the Guarantor undertakes and agrees, for the rateable
benefit of each Lender Party, as follows:
ARTICLE 1. DEFINITIONS; INTERPRETATION
---------------------------------------
SECTION 1.1. LOAN AGREEMENT TERMS; INTERPRETATION.
Capitalized terms used but not defined herein (including in the
preamble and recitals) have the meanings provided in the Second
Amendment Agreement. This Agreement is a Loan Document, and
shall be interpreted and construed in accordance with the terms
and provisions of the Second Amendment Agreement (including
Section 1.1 thereof).
- -----------
SECTION 1.2. DEFINED TERMS. In this Agreement (including
its preamble and recitals), the following capitalized terms shall
have the following meanings:
"Administrative Agent" is defined in the preamble.
-------------------- --------
"Agreement" is defined in the preamble.
--------- --------
"AS" is defined in clause (b)(i) of Section 3.3.
-- ------------- -----------
"Borrower" is defined in the first recital.
-------- -------------
"Guaranteed Obligations" is defined in clause (a) of
---------------------- ----------
Section 2.1.
- -----------
"Guarantor" is defined in the preamble.
--------- --------
"Guaranty" is defined in clause (a) of Section 2.1.
-------- ---------- -----------
"Insolvency Proceeding" is defined in clause (f)(ii) of
--------------------- --------------
Section 2.4.
- -----------
-2-
"Lenders" is defined in the first recital.
------- -------------
"Loan Agreement" is defined in the first recital.
-------------- -------------
"Merrill Lynch" is defined in the first recital.
------------- -------------
"Principal Subsidiaries" is defined in the first recital.
---------------------- -------------
"Rothschild" is defined in the preamble.
---------- --------
"Second Amendment Agreement" is defined in the second
-------------------------- ------
recital.
- -------
"Toronto-Dominion" is defined in the first recital.
---------------- -------------
ARTICLE 2. GUARANTY; OBLIGATIONS WITH RESPECT TO SALE/LEASEBACK
- ----------------------------------------------------------------
OF FORT KNOX ASSETS
-------------------
SECTION 2.1. GUARANTY OF THE BORROWER'S OBLIGATIONS.
(a) The Guarantor hereby absolutely, unconditionally and
irrevocably guarantees (the "Guaranty"), for the rateable benefit
--------
of the Lender Parties, the full and punctual payment of principal
and interest from time to time outstanding under the Loan
Agreement (as such amounts may be reduced by any prepayment or
repayment made by the Borrower with the proceeds of the 1994
DOCLOC Facility or otherwise, but without prejudice to any right
or remedy of the Lender Parties with respect thereto) in
accordance with the stated maturities thereof (and not by way of
acceleration of any Obligation pursuant to Section 8.2 or 8.3 of
----------- ---
the Loan Agreement other than any such acceleration arising as a
result of any Event of Default under Section 8.1.15 of the Loan
--------------
Agreement) and all payments in respect of relevant Hedging
Agreements and Interest Rate Protection Agreements (including all
such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, or
the operation of Sections 502(b), 502(d) and 506(b) of the
Bankruptcy Code, and any other similar provisions arising under
Applicable Law; all such amounts and other obligations being
hereinafter referred to as the "Guaranteed Obligations"). The
----------------------
Guarantor hereby further covenants to indemnify and hold harmless
each Lender Party for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Lender
Party in enforcing any rights under this Section.
Notwithstanding the foregoing, except with respect to any claim
made by any Lender Party under the Guaranty on or prior to the
-3-
Fort Knox Economic Completion Date and subject to Section 2.3,
-----------
the Guaranty shall terminate, and the Guarantor shall be released
from its obligations under the Guaranty and this Agreement on the
Fort Knox Economic Completion Date.
(b) The Guaranty constitutes a guaranty of payment when due
and not of collection, and the Guarantor specifically agrees that
it shall not be necessary or required that any Lender Party
exercise any right, assert any claim or demand or enforce any
remedy whatsoever against any Obligor or any other Person before
or as a condition to the obligations of the Guarantor under the
Guaranty and this Agreement.
(c) The Guarantor agrees that the Guaranteed Obligations
will be paid as contemplated by this Agreement, regardless of any
Applicable Law affecting any of such terms or the rights of any
Lender Party with respect thereto.
SECTION 2.2. REINSTATEMENT. The Guarantor agrees that the
Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment (in whole or in part) of
any of the Guaranteed Obligations is rescinded or must otherwise
be restored by any Lender Party, upon an Insolvency Default, all
as though such payment had not been made to such Lender Party;
provided, however, that for the avoidance of doubt, to the extent
- -------- -------
permitted by Applicable Law, if any payment is rescinded or
restored as aforesaid at any time after the Termination Date (as
defined in the Priority Agreement), the arrangements contemplated
by the Priority Agreement shall be reinstated.
SECTION 2.3. WAIVER. In addition to the other waivers
provided in this Agreement, the Guarantor hereby waives each of
the following to the fullest extent permitted by Applicable Law:
(a) all presentments, demands for performance, promptness,
diligence, notices of nonperformance, protests, notices of
protest, notices of dishonor, notices of acceptance of this
Agreement, and demands and notices of every kind with respect to
any of the Guaranteed Obligations and the Guaranty except for any
demand or notice expressly provided for in this Agreement;
(b) subject to the Priority Agreement, any requirement that
any Lender Party protect, secure, perfect or insure any Lien
securing any of the Guaranteed Obligations or the Guarantor's
performance of its obligations hereunder, or any property subject
thereto;
(c) all statutes of limitations as a defense to any action
or proceeding brought against the Guarantor by the Lender Parties
or any of them, to the fullest extent permitted by Applicable
Law;
-4-
(d) any right it may have (whether by contract, in equity
or at law) to require any of the Lender Parties to proceed
against, or proceed against or exhaust any security held from,
any Obligor or any other Person (including any other guarantor or
surety of all or any of the Guaranteed Obligations) or any
collateral securing any of the Guaranteed Obligations or the
Guarantor's performance of its obligations hereunder, or to
pursue any other remedy in such Lender Party's power to pursue
and which would lighten the Guarantor's burden;
(e) any defense based on any claim that the Guarantor's
obligations exceed or are more burdensome than those of any
Obligor;
(f) any defense based on: (i) any legal disability of the
Borrower or any other Obligor, (ii) any release, discharge,
modification, impairment or limitation of the liability of the
Borrower or any other Obligor to any of the Lender Parties from
any cause, whether consented to by the Administrative Agent or
any of the other Lender Parties, or arising by operation of
Applicable Law or from any bankruptcy or other voluntary or
involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships (any such proceeding, an
"Insolvency Proceeding") including any Insolvency Proceeding
---------------------
which results in the delay or modification of the stated maturity
of payments (or the amounts thereof) of the Loans pursuant to the
Loan Agreement, and (iii) any rejection or disaffirmance of any
or all of the Guaranteed Obligations, or any security held for
such Guaranteed Obligations, in any such Insolvency Proceeding;
(g) any defense based on any action taken or omitted by the
Administrative Agent or any of the other Lender Parties in any
Insolvency Proceeding involving the Borrower or any other
Obligor, including any election to have such Lender Party's claim
allowed as being secured, partially secured or unsecured, any
extension of credit by any of the Lender Parties to the Borrower
or any other Obligor in any Insolvency Proceeding, and the taking
and holding by any of the Lender Parties of any security for any
such extension of credit;
(h) any defense based on or arising out of any defense that
the Borrower may have to the payment or performance of the
Guaranteed Obligations or any part of them; and
(i) all other suretyship defenses and rights of every kind
or nature otherwise available under Applicable Law.
SECTION 2.4. SALE/LEASEBACK OF FORT KNOX ASSETS. Upon the
occurrence of any Event of Default permitting or requiring
acceleration of any of the Obligations pursuant to Section 8.2 or
-----------
8.3 of the Loan Agreement, or upon default by the Borrower (or
- ---
-5-
Fairbanks Gold) in the performance of any of its obligations
pursuant to the Permitted Fort Knox Sale-Leaseback if as a
consequence of any such default by the Borrower (or Fairbanks
Gold) the lessor of any of the relevant equipment shall elect to
exercise any of its remedies as a consequence thereof, the
Guarantor will immediately, upon the request of the
Administrative Agent, issue in favor of the lessor under the
Permitted Fort Knox Sale-Leaseback an unconditional and
irrevocable guaranty of all of the obligations of the Borrower
(or Fairbanks Gold) in connection therewith in form and substance
reasonably satisfactory to the Administrative Agent (acting in
consultation with the Required Lenders); provided, however, that
-------- -------
the obligations of the Guarantor to the Lender Parties to
maintain such guaranty shall be discontinued in the event that
the Guarantor shall have fully discharged the Borrower's (or
Fairbanks Gold's) obligations with respect to the Permitted Fort
Knox Sale-Leaseback or shall have arranged for equipment of a
substantially similar nature to that subject to the Permitted
Fort Knox Sale-Leaseback to be delivered to the Borrower (or
Fairbanks Gold) at the Fort Knox Mine free and clear of all Liens
and such equipment shall actually have been delivered within 180
days after the implementation of such arrangement.
ARTICLE 3. PROVISIONS OF GENERAL APPLICATION
---------------------------------------------
SECTION 3.1. OBLIGATIONS ABSOLUTE, ETC. Subject to
Section 2.3, this Agreement shall remain in full force and effect
- -----------
until the earlier to occur of the Fort Knox Economic Completion
Date and the payment in full of the Guaranteed Obligations. The
liability of the Guarantor under this Agreement shall be
absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the
Loan Agreement or any other Operative Document;
(b) the failure of any Lender Party:
(i) to assert any claim or demand or to enforce any
right or remedy against any other guarantor or surety of all
or any of the Guaranteed Obligations, the Borrower, any
guarantor under any Principal Subsidiary Guaranty or any
other Person under the provisions of the Loan Agreement or
any other document, instrument or agreement related thereto,
or otherwise; or
(ii) to exercise any right or remedy against any other
guarantor or surety of, or collateral (whether pursuant to
any Security Document, any Principal Subsidiary Guaranty or
otherwise) securing, the Guaranteed Obligations;
-6-
(c) any change in the time, manner or place of payment or
performance of, or in any other term of, all or any of the
Guaranteed Obligations or any other extension, compromise or
renewal of any Guaranteed Obligation;
(d) any reduction, limitation, impairment or termination of
any Guaranteed Obligation for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall
not be subject to (and the Guarantor hereby waives any right to
or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of or
any other event or occurrence affecting, any Obligation of any
Obligor or otherwise;
(e) any amendment to, rescission, waiver or other
modification of, or any consent to departure from, any of the
terms of the Loan Agreement, any Principal Subsidiary Guaranty or
any other Operative Document;
(f) any addition, enforcement, exchange, change in the
priorities relating to, release, abandonment, liquidation,
surrender or non-perfection of any collateral granted pursuant to
any Security Document securing performance of all or any of the
Guaranteed Obligations or the Guaranty or any other obligations
of the Guarantor arising pursuant to this Agreement, or any
amendment to or waiver or release or addition to, or consent to
departure from, any other guaranty held by any Lender Party
securing any of the Guaranteed Obligations; or
(g) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, any
Obligor, any guarantor under any Principal Subsidiary Guaranty,
or any other surety or any guarantor.
The Guarantor agrees that the Guaranty is an "instrument for
the payment of money only" within the meaning of Section 3213 of
the New York Civil Practice Law and Rules.
SECTION 3.2. RIGHTS OF LENDER PARTIES. The Guarantor
authorizes each of the Lender Parties to perform any or all of
the actions described or implied in Section 3.1 and in addition,
-----------
the following actions at any time, in each case, in its sole
discretion, all without notice to the Guarantor and without
affecting the Guarantor's obligations under this Agreement:
(a) Any Lender Party may, subject to the Priority
Agreement, direct the order and manner of any sale of all or any
part of any security now or later to be held for any of the
Guaranteed Obligations or the Guarantor's obligations under this
-7-
Agreement, and such Lender Party may also bid and purchase at any
such sale.
(b) Subject to the provisions of Section 4.13 of the Loan
------------
Agreement and the Priority Agreement, any Lender Party may accept
and apply any payments or recoveries from the Borrower, the
Guarantor or any other source, and any proceeds of any security,
to the Guaranteed Obligations in such manner, order and priority
as such Lender Party may elect, whether or not those obligations
are guarantied by this Agreement or secured at the time of the
application.
(c) Any Lender Party may substitute, add or release any one
or more guarantors or endorsers.
(d) In addition to the Loans, any one or more of the Lender
Parties may extend any other credit to any Obligor, and may take
and hold security for the credit so extended, all without
affecting the Guarantor's liability under this Agreement or the
obligations of any other guarantor under any Principal Subsidiary
Guaranty to which it is a party.
SECTION 3.3. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
(a) If any default by the Guarantor under this Agreement
shall have occurred and be continuing, but at all times subject
to the Priority Agreement, the Lender Parties, in their sole
discretion, with prior notice to the Guarantor, may elect to:
(i) foreclose either judicially or nonjudicially against any real
or personal property security held for the Guaranteed
Obligations, (ii) accept a transfer of any such security in lieu
of foreclosure, (iii) compromise or adjust any of the Guaranteed
Obligations or any part of any Guaranteed Obligation or any
guarantor or surety of any of the Guaranteed Obligations or
(iv) exercise any other remedy against the Guarantor or any
security. Subject to the Priority Agreement, no such action by a
Lender Party shall release or limit the liability of the
Guarantor, who shall remain liable under this Agreement after the
action, even if the effect of the action is to deprive the
Guarantor of any subrogation rights, rights of indemnity, or
other rights to collect reimbursement from the Borrower or any
Principal Subsidiary for any sums paid to any of the Lender
Parties, whether contractual or arising by operation of
Applicable Law or otherwise. Subject to the Priority Agreement,
the Guarantor expressly agrees that under no circumstances shall
it be deemed to have any right, title, interest or claim in or to
any real or personal property to be held by any of the Lender
Parties or any third party after any foreclosure or transfer in
lieu of foreclosure of any security for the Guaranteed
Obligations.
-8-
(b) Regardless of whether the Guarantor may have made any
payments to any Lender Party, the Guarantor waives, subject to
the Priority Agreement, until the prior payment, in full and in
cash, of all Guaranteed Obligations:
(i) all rights of subrogation and reimbursement, all
rights of indemnity, and any other rights to collect
reimbursement from the Borrower or any Principal Subsidiary
for any sums paid to any Lender Party, whether contractual
or arising by operation of Applicable Law (including under
Alaska Statutes ("AS") 45.03.419, Sections 2847 or 2848 of
--
the California Civil Code, under any provisions of the
United States Bankruptcy Code, or any successor or similar
statutes) or otherwise,
(ii) all rights to enforce any remedy that any Lender
Party may have against the Borrower or any Principal
Subsidiary, and
(iii) all rights to participate in any security now or
later to be held by any Lender Party for any of the
Guaranteed Obligations. The Guarantor further agrees that,
to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement,
indemnification and contribution as set forth herein is
found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation,
reimbursement, indemnification and contribution the
Guarantor may have against the Borrower or any Principal
Subsidiary or against any collateral or security, shall be
junior and subordinate, and to all right, title and interest
any Lender Party may have in any such collateral or
security. If any amount shall be paid to the Guarantor on
account of any such subrogation, reimbursement,
indemnification or contribution rights at any time when all
of the Guaranteed Obligations have not been paid or
otherwise performed in full, such amount shall be held in
trust for the Lender Parties and shall forthwith be paid
over to the Lender Parties to be credited and applied
against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Loan
Documents (including Section 4.13 of the Loan Agreement).
(c) THE GUARANTOR WAIVES ALL RIGHTS AND DEFENSES ARISING
OUT OF AN ELECTION OF REMEDIES BY ANY OF THE LENDER PARTIES
(SUBJECT TO THE PRIORITY AGREEMENT), EVEN THOUGH THAT ELECTION OF
REMEDIES, SUCH AS A NONJUDICIAL FORECLOSURE WITH RESPECT TO
SECURITY FOR A GUARANTEED OBLIGATION, HAS DESTROYED THE
GUARANTOR'S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST THE
BORROWER OR ANY PRINCIPAL SUBSIDIARY BY THE OPERATION OF
-9-
APPLICABLE LAW, INCLUDING AS 45.03.605 OR SECTION 580d OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE OR OTHERWISE.
(d) The Guarantor understands and acknowledges that if the
Lender Parties foreclose, subject to the Priority Agreement,
judicially or nonjudicially against any real property security
for any of the Guaranteed Obligations, that foreclosure could
impair or destroy any ability that the Guarantor may have to seek
reimbursement, contribution or indemnification from the Borrower
or any Principal Subsidiary or others based on any right the
Guarantor may have of subrogation, reimbursement, contribution or
indemnification for any amounts paid by the Guarantor under this
Agreement. The Guarantor further understands and acknowledges
that in the absence of the waivers by the Guarantor set forth in
this Section, such potential impairment or destruction of the
Guarantor's rights, if any, might entitle such Guarantor to
assert a defense to this Agreement based on AS 45.03.605, Section
580d of the California Code of Civil Procedure as interpreted in
Union Bank v. Gradsky, 265, Cal. App.2d 40 (1968) or other
- ---------------------
Applicable Law. With such understanding and without limitation
on any of the foregoing provisions of this Section, by executing
this Agreement, pursuant to AS 45.03.605(h) or other Applicable
Law, the Guarantor freely, irrevocably and unconditionally (but
subject to the Priority Agreement):
(i) waives and relinquishes that defense and agrees
that the Guarantor will be fully liable under this Agreement
even though the Lender Parties may foreclose judicially or
nonjudicially against any real property security for the
Guaranteed Obligations;
(ii) agrees that the Guarantor will not assert that
defense in any action or proceeding which a Lender Party may
commence to enforce this Agreement;
(iii) acknowledges and agrees that the rights and
defenses waived by the Guarantor in this Agreement include
any right or defense that the Guarantor may have or be
entitled to assert based upon or arising out of any one or
more of the circumstances set forth in AS 45.03.605 or
Sections 580a, 580b, 580d or 726 of the California Code of
Civil Procedure of Section 2848 of the California Civil Code
(including any defense that any exercise by the Lender
Parties of any right or remedy hereunder or under the Loan
Documents violates, or would, in combination with the
previous or subsequent exercise by the Guarantor of any
rights of subrogation, reimbursement, contribution or
indemnification against the Borrower or any Principal
Subsidiary or any other Person, directly or indirectly
result in, or be deemed to be, a violation of any of such
statutory provisions); and
-10-
(iv) acknowledges and agrees that each of the Lender
Parties is relying on this waiver in entering into the
Second Amendment Agreement, and that this waiver is a
material part of the consideration which each of the Lender
Parties is entering into the Second Amendment Agreement.
(e) Based on the representations and warranties of the
Guarantor set forth herein, the Guarantor hereby forever and
completely waives any right the Guarantor might otherwise have to
assert or claim, as part of a defense against any action taken by
any Lender Party against the Guarantor under this Agreement after
a Lender Party shall have, subject to the Priority Agreement,
completed an action against the Borrower or another Obligor for
the enforcement of any of the Guaranteed Obligations, that such
action against the Guarantor is barred by operation of California
Civil Code Section 7260 or any "one action" or "one form of
action" statute (or any similar Applicable Law limiting a
creditor's remedies or the manner in which such remedies may be
enforced) on the theory that this Agreement and the Loan
Agreement are part and parcel with the Guaranteed Obligations as
one integrated transaction, rather than related but separate and
distinct transactions, or on the theory that any Obligor is the
alter ego of the Guarantor or the Guarantor is the alter ego of
any Obligor.
(f) Without limitation on any of the other waivers of the
Guarantor hereunder, the Guarantor hereby specifically waives the
benefit of (and any and all rights arising out of) California
Civil Code Section 2845, or any similar statute arising under
Applicable Law, which gives a guarantor or surety the power to
require a creditor to proceed against the principal, or to pursue
any other remedy in the creditor's power which the guarantor or
surety can not pursue, and which would lighten the guarantor's or
the surety's burden.
(g) The covenants and waivers of the Guarantor contained in
this Section shall survive termination of this Agreement and are
made for the benefit of each of the Lender Parties, the Borrower,
the Principal Subsidiaries and any other person against whom the
Guarantor shall at any time have any rights of subrogation,
reimbursement, contribution or indemnification with respect to
the Guarantor's obligations under this Agreement. The covenants
and waivers of the Guarantor contained in this Section are in all
cases subject to the Priority Agreement.
SECTION 3.4. CONSENT OF GUARANTOR. Prior to the Fort Knox
Economic Completion Date, the Administrative Agent shall not
enter into any amendment to, waiver or other modification of, or
give any consent to a departure from, any of the material terms
of the Loan Agreement, any Principal Subsidiary Guaranty or any
-11-
other Operative Document without the prior written consent of the
Guarantor.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
------------------------------------------
In order to induce the Lender Parties to enter into the
Second Amendment Agreement and, in the case of the Lenders, to
make, maintain, continue and/or convert Loans, the Guarantor
represents and warrants unto the Administrative Agent (for the
rateable benefit of the Lender Parties) as set forth in Sections
--------
4.01, 4.02, 4.03 and 4.04 of the Competitive Advance Facility
- ---- ---- ---- ----
Agreement as in effect on the Amendment Effective Date with the
intent that references therein to "this Agreement", "Loan
Documents" and the like shall be deemed to be references to this
Agreement and the Priority Agreement. The representations and
warranties set forth in this Section shall be made upon the date
hereof, the Amendment Effective Date and the delivery of each
Borrowing Request.
ARTICLE 5. COVENANTS
---------------------
Cyprus Amax agrees with the Administrative Agent (for the
rateable benefit of the Lender Parties) that, at all times on or
prior to the Fort Knox Economic Completion Date, it will perform
the obligations set forth in Sections 7.01 and 7.05 of the
------------- ----
Competitive Advance Facility Agreement as in effect on the
Amendment Effective Date with (a) references to this "Agreement"
being deemed to be references to the Loan Agreement and the other
Loan Documents and (b) references to the "Required Lenders" being
deemed to be references to the Required Lenders under the Loan
Agreement.
ARTICLE 6. MISCELLANEOUS
-------------------------
SECTION 6.1. WAIVERS, AMENDMENTS, ETC. The provisions of
this Agreement may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing
and consented to by the Guarantor and the Administrative Agent
(acting with the approval of the Required Lenders or all the
Lenders, as may be required pursuant to the Loan Agreement).
No failure or delay on the part of the Administrative Agent
in exercising any power or right under this Agreement shall
operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No
notice to or demand on the Guarantor in any case shall entitle it
to any notice or demand in similar or other circumstances. No
-12-
waiver or approval by the Administrative Agent under this
Agreement shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions. No waiver
or approval hereunder shall require any similar or dissimilar
waiver or approval thereafter to be granted hereunder.
SECTION 6.2. NOTICES. All notices and other communications
provided to any party hereto under this Agreement shall be in
writing and sent by hand delivery, courier delivery, first class
prepaid post, telex (if the receiving party shall have telex
facilities) or facsimile and addressed or delivered to it at its
address set forth below its signature hereto and designated as
its "Address for notices" or at such other address as may be
designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with first class postage
prepaid, shall be deemed given when delivered; any notice, if
sent by hand or courier delivery, shall be deemed given when
delivered; and any notice, if transmitted by telex or facsimile,
shall be deemed given when transmitted (answerback received at
both the beginning and the end of the relevant transmission in
the case of telexes and transmission completed and confirmed by
the sending facsimile machine in the case of facsimiles).
SECTION 6.3. SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon and shall inure to the benefit of the parties
hereto (and in the case of the Administrative Agent, to the
rateable benefit of the Lender Parties) and their respective
successors and assigns; provided, however, that:
-------- -------
(a) the Guarantor may not assign, delegate or transfer its
rights or obligations hereunder without the prior written consent
of the Administrative Agent and all the Lenders; and
(b) the rights of sale, assignment and transfer of the
Agents and the Lenders are subject to Article 9 and Section 10.11
--------- -------------
of the Loan Agreement.
SECTION 6.4. SEVERABILITY. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the validity
or enforceability of such provision in any other jurisdiction.
SECTION 6.5. HEADINGS. The various headings of this
Agreement are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or any provisions
hereof or thereof.
-13-
SECTION 6.6 GOVERNING LAW; ENTIRE AGREEMENT.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(b) Upon the Amendment Effective Date, except with respect
to the Borrower's obligations to indemnify and pay the costs and
expenses of the Underwriters as set forth in the Commitment
Letter, this Agreement, together with the other Loan Documents,
constitutes the entire understanding between the parties hereto
with respect to the subject matter hereof and supersedes any
prior agreements, written or oral, with respect thereto
(including the Commitment Letter (except as aforesaid), the
Indicative Summary Terms for $250,000,000 Senior Term Loan
Facility, dated August 15, 1995, and the Information Memorandum).
SECTION 6.7. FORUM SELECTION AND CONSENT TO JURISDICTION,
WAIVER OF IMMUNITY. ANY LITIGATION BASED HEREON, OR ARISING OUT
OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT OR THE GUARANTOR
MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW
YORK, BOROUGH OF MANHATTAN, OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND IN ADDITION ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY OF THE GUARANTOR
MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE LOCATED OR
DEEMED LOCATED. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, BOROUGH OF MANHATTAN, AND OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH
LITIGATION. SERVICE OF PROCESS MAY BE MADE UPON THE GUARANTOR BY
MAILING OR DELIVERING A COPY OF SUCH PROCESS TO IT IN CARE OF THE
PROCESS AGENT AT THE PROCESS AGENT'S ADDRESS AND THE GUARANTOR
HEREBY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS IN
ANY SUIT, ACTION OR PROCEEDING IN NEW YORK ARISING OUT OF THIS
AGREEMENT BY THE MAILING OF COPIES OF SUCH PROCESS TO IT AT ITS
ADDRESS FOR NOTICES SET FORTH BELOW ITS SIGNATURE HERETO. THE
GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT
ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT.
-14-
SECTION 6.8. Waiver of Jury Trial. EACH OF THE
ADMINISTRATIVE AGENT, ON BEHALF OF THE OTHER LENDER PARTIES, AND
THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHTS EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT OR ANY OTHER LENDER PARTY, THE
GUARANTOR, AND ANY AND ALL OTHER GUARANTORS OR SURETIES OF ALL OR
ANY OF THE GUARANTEED OBLIGATIONS. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE ADMINISTRATIVE AGENT ENTERING INTO THIS
AGREEMENT.
SECTION 6.9. INCORPORATION OF MISCELLANEOUS PROVISIONS.
The parties hereto agree that the provisions of Sections 4.6
------------
(Taxes), 4.7 (Mitigation), 4.8 (Payments, Computations, etc.),
--- ---
4.9 (Proration of Payments), 4.10 (Miscellaneous Provisions for
- --- ----
Payments in Gold) and 4.11 (Setoff), and the last sentence of
----
Section 10.11.2 (Participations) of the Loan Agreement shall
- ---------------
apply mutatis mutandis to the Guarantor as if set forth herein
------- --------
except that references to an "Obligor" or the like shall be
deemed to be references to the Guarantor.
-15-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their respective
officers thereunto duly authorized as of the day and year first
above written.
The Guarantor:
-------------
CYPRUS AMAX MINERALS COMPANY
By: /s/ Francis J. Kane
-------------------------------------
Name Printed: Francis J. Kane
---------------------------
Title: Vice President, Investor
----------------------------------
Relations and Treasurer
Address for notices:
9100 East Mineral Circle
Englewood
Colorado 80112
USA
Attention:
------------------------------
Facsimile No.: [ ]
-----------------------
Telex No.: [ ]
---------------------------
(Answerback [ ])
-------------------------
-16-
The Administrative Agent:
per pro N M ROTHSCHILD & SONS
LIMITED
By: /s/ Andrew Wright
-------------------------------------
Name Printed: Andrew Wright
---------------------------
Title: Assistant Director
----------------------------------
By: /s/ D.R. Beadle
-------------------------------------
Name Printed: D.R. Beadle
---------------------------
Title: Assistant Director
----------------------------------
Address for notices:
New Court
St. Swithin's Lane
London EC4P 4DU
England
Attention: Dr. Michael A. Price
Facsimile No.: 44-171-280-5679
Telex No.: 888031
-17-