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EXHIBIT 2.06
[EXECUTION COPY]
CREDIT AGREEMENT,
dated as of February 20, 1997
between
HYCROFT RESOURCES & DEVELOPMENT, INC.,
as the Borrower,
and
THE BANK OF NOVA SCOTIA,
as the Lender.
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms .......................................... 1
SECTION 1.2. Use of Defined Terms ................................... 21
SECTION 1.3. Cross-References ....................................... 22
SECTION 1.4. Accounting and Financial Determinations ................ 22
ARTICLE II
COMMITMENT, BORROWING PROCEDURES AND NOTE
SECTION 2.1. Commitment To Make Loans .............................. 22
SECTION 2.1.1. U.S. Loans ............................................ 22
SECTION 2.1.2. Canadian Loans ........................................ 23
SECTION 2.2. Lender Not Permitted or Required To Make
Credit Extensions ..................................... 23
SECTION 2.3. Reduction of Commitment Amount ........................ 23
SECTION 2.4. Borrowing Procedure ................................... 23
SECTION 2.4.1. Canadian Loans ........................................ 23
SECTION 2.4.2. U.S. Loans ............................................ 24
SECTION 2.5. Continuation and Conversion Elections. ................ 24
SECTION 2.6. Funding of LIBO Rate Loans ............................ 24
SECTION 2.7. Note .................................................. 25
SECTION 2.8. Renewal of the Commitment ............................. 25
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments ............................ 26
SECTION 3.2. Interest Provisions ................................... 27
SECTION 3.2.1. Rates ................................................. 27
SECTION 3.2.2. Post-Maturity Rates ................................... 28
SECTION 3.2.3. Payment Dates ......................................... 28
SECTION 3.2.4. Interest Act Provision ................................ 28
SECTION 3.3. Judgment Currency ..................................... 29
SECTION 3.4. Commitment Fee ........................................ 29
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful ............................ 30
SECTION 4.2. Deposits Unavailable .................................. 30
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. .................. 30
SECTION 4.4. Funding Losses ........................................ 31
SECTION 4.5. Increased Capital Costs ............................... 31
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(continued)
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SECTION 4.6. Taxes ............................................... 32
SECTION 4.7. Payments, Computations, etc. ........................ 33
SECTION 4.8. Setoff .............................................. 34
SECTION 4.9. Use of Proceeds ..................................... 34
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension ............................ 34
SECTION 5.1.1. Resolutions, etc. ................................... 34
SECTION 5.1.2. Delivery of Note .................................... 35
SECTION 5.1.3. Payment of Outstanding Indebtedness, etc. ........... 35
SECTION 5.1.4. Guarantees .......................................... 35
SECTION 5.1.5. Pledge Agreements ................................... 35
SECTION 5.1.6. Security Agreements ................................. 36
SECTION 5.1.7. Mortgages ........................................... 37
SECTION 5.1.8. Initial Borrowing Base Certificate .................. 38
SECTION 5.1.9. Compliance Certificate .............................. 38
SECTION 5.1.10. Process Agent Letter ................................ 38
SECTION 5.1.11. Life of Mine Plan; Financial Information, etc. ...... 38
SECTION 5.1.12. Master Subordination Agreement ...................... 38
SECTION 5.1.13. Opinions of Counsel ................................. 38
SECTION 5.1.14. Closing Fees, Expenses, etc. ........................ 39
SECTION 5.2. All Credit Extensions ............................... 39
SECTION 5.2.1. Compliance with Warranties, No Default, etc. ........ 39
SECTION 5.2.2. Borrowing Request ................................... 40
SECTION 5.2.3. Satisfactory Legal Form ............................. 40
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc. .................................. 40
SECTION 6.2. Due Authorization, Non-Contravention, etc. .......... 40
SECTION 6.3. Government Approval, Regulation, etc. ............... 41
SECTION 6.4. Validity, etc. ...................................... 41
SECTION 6.5. Financial Information ............................... 41
SECTION 6.6. No Material Adverse Change .......................... 42
SECTION 6.7. Litigation, Labor Controversies, etc. ............... 42
SECTION 6.8. Subsidiaries ........................................ 42
SECTION 6.9. Ownership of Properties ............................. 42
SECTION 6.10. Taxes ............................................... 42
SECTION 6.11. Pension and Welfare Plans ........................... 42
SECTION 6.12. Environmental Warranties ............................ 43
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SECTION 6.13. Capitalized Lease Liabilities ....................... 44
SECTION 6.14. Regulations G, U and X .............................. 44
SECTION 6.15. Royalties, etc ...................................... 44
SECTION 6.16. Accuracy of Information ............................. 45
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants ............................... 45
SECTION 7.1.1. Financial Information, Reports, Notices, etc. ....... 45
SECTION 7.1.2. Compliance with Laws, etc. .......................... 48
SECTION 7.1.3. Maintenance of Properties ........................... 49
SECTION 7.1.4. Insurance ........................................... 49
SECTION 7.1.5. Books and Records ................................... 49
SECTION 7.1.6. Environmental Covenant .............................. 49
SECTION 7.1.7. Future Subsidiaries ................................. 50
SECTION 7.1.8. Additional Collateral ............................... 51
SECTION 7.1.9. Use of Proceeds ..................................... 51
SECTION 7.1.10. Counterparty Notices ................................ 51
SECTION 7.2. Negative Covenants .................................. 52
SECTION 7.2.1. Business Activities ................................. 52
SECTION 7.2.2. Indebtedness ........................................ 52
SECTION 7.2.3. Liens ............................................... 53
SECTION 7.2.4. Financial Condition ................................. 53
SECTION 7.2.5. Investments ......................................... 54
SECTION 7.2.6. Restricted Payments, etc. ........................... 54
SECTION 7.2.7. Capital Expenditures, etc. .......................... 55
SECTION 7.2.8. Rental Obligations .................................. 55
SECTION 7.2.9. Consolidation, Merger, etc. ......................... 56
SECTION 7.2.10. Asset Dispositions, etc. ............................ 56
SECTION 7.2.11. Modification of Certain Agreements .................. 57
SECTION 7.2.12. Transactions with Affiliates ........................ 57
SECTION 7.2.13. Negative Pledges, etc. .............................. 57
SECTION 7.2.14. Sale and Leaseback .................................. 58
SECTION 7.2.15. Stock of Subsidiaries ............................... 58
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default ........................ 58
SECTION 8.1.1. Non-Payment of Obligations .......................... 58
SECTION 8.1.2. Breach of Warranty .................................. 58
SECTION 8.1.3. Non-Performance of Certain Covenants
and Obligations...................................... 58
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SECTION 8.1.4. Non-Performance of Other Covenants
and Obligations ..................................... 58
SECTION 8.1.5. Default on Other Indebtedness ....................... 59
SECTION 8.1.6. Judgments ........................................... 59
SECTION 8.1.7. Pension Plans ....................................... 59
SECTION 8.1.8. Control of the Borrower ............................. 59
SECTION 8.1.9. Bankruptcy, Insolvency, etc. ........................ 60
SECTION 8.1.10. Impairment of Security, etc. ........................ 60
SECTION 8.2. Action if Bankruptcy ................................ 61
SECTION 8.3. Action if Other Event of Default .................... 61
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Waivers, Amendments, etc. ........................... 61
SECTION 9.2. Notices ............................................. 62
SECTION 9.3. Payment of Costs and Expenses ....................... 62
SECTION 9.4. Indemnification ..................................... 63
SECTION 9.5. Survival ............................................ 64
SECTION 9.6. Severability ........................................ 64
SECTION 9.7. Headings ............................................ 64
SECTION 9.8. Execution in Counterparts, Effectiveness, etc........ 64
SECTION 9.9. Governing Law; Entire Agreement ..................... 64
SECTION 9.10. Successors and Assigns .............................. 64
SECTION 9.11. Other Transactions .................................. 65
SECTION 9.12. Forum Selection and Consent to Jurisdiction ......... 65
SECTION 9.13. Waiver of Jury Trial ................................ 66
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SCHEDULE I - Disclosure Schedule
SCHEDULE II - Calculation of Borrowing Base Amount - Gold
Inventory on Leach Pads Located at Hycroft Mine
SCHEDULE III - Crofoot Mine Description
SCHEDULE IV - Lewis Mine Description
EXHIBIT A - Form of Note
EXHIBIT B - Form of Borrowing Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrowing Base Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F-1 - Form of Parent Guaranty
EXHIBIT F-2 - Form of Holdings Guaranty
EXHIBIT F-3 - Form of Subsidiary Guaranty
EXHIBIT F-4 - Form of Preferred Shareholder Guaranty
EXHIBIT G-1 - Form of Borrower Pledge Agreement
EXHIBIT G-2 - Form of Obligor Pledge Agreement
EXHIBIT H-1 - Form of Borrower Security Agreement
EXHIBIT H-2 - Form of Subsidiary Security Agreement
EXHIBIT I - Form of Mortgage
EXHIBIT J - Form of Master Subordination Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of February 20, 1997 between HYCROFT
RESOURCES & DEVELOPMENT, INC., a Nevada corporation (the "Borrower"), and THE
BANK OF NOVA SCOTIA (the "Lender"),
W I T N E S S E T H:
WHEREAS, the Borrower is engaged directly and through Hycroft Lewis Mine,
Inc., its wholly-owned Subsidiary (such capitalized terms, and other terms used
in these recitals, to have the meanings set forth in Section 1.1 below) in the
business of exploring for and mining gold and silver in the State of Nevada;
and
WHEREAS, the Borrower desires to obtain a Commitment from the Lender
pursuant to which U.S. Loans and Canadian Loans, in a maximum aggregate
principal amount at any one time outstanding not to exceed U.S.$13,000,000 (or
the U.S. Dollar Equivalent thereof), will be made to the Borrower from time to
time prior to the Commitment Termination Date; and
WHEREAS, the Lender is willing, on the terms and subject to the conditions
hereinafter set forth (including Article V), to extend such Commitment and make
such Loans to the Borrower; and
WHEREAS, the proceeds of such Credit Extensions will be used
(a) to make payment in full, concurrently with the initial
Borrowing hereunder, of the Indebtedness (including a portion of the
intercompany Indebtedness owing by the Borrower to the Parent) identified
in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule;
and
(b) for general corporate purposes and working capital purposes of
the Borrower and its Subsidiary Guarantors;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION I.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Affiliate" of any Person means any other Person which,
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directly or indirectly, controls, is controlled by or is under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any Plan). With respect to the Lender, a
Person shall be deemed to be "controlled by" another Person if such other
Person possesses, directly or indirectly, power to vote 51% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners. With respect to all other
Persons, a Person shall be deemed to be "controlled by" another Person if such
other Person possesses, directly or indirectly, power
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or
managing general partners; or
(b) to direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum (rounded upward, if necessary,
to the next highest 1/16 of 1%) equal to the higher of
(a) the rate of interest most recently established by the Lender at
its Domestic Office as its base rate for Loans denominated in U.S.
Dollars; and
(b) the Federal Funds Rate most recently determined by the Lender
plus 1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Lender in connection with extensions of credit.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Lender will give notice promptly to the Borrower of changes in
the Alternate Base Rate.
"Authorized Officer" means, relative to the Borrower and any other
Obligor, those of its officers or managing members (in the case of a limited
liability company) whose signatures and incumbency shall have been certified to
the Lender pursuant to Section 5.1.1.
"Base Rate Loan" means a Loan denominated in U.S. Dollars bearing interest
at a fluctuating rate determined by reference to
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the Alternate Base Rate.
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by the Borrower pursuant to Section 5.1.5 in substantially the form
of Exhibit G-1 hereto, as amended, supplemented, amended and restated or
otherwise modified.
"Borrower Security Agreement" means the Security Agreement executed and
delivered by the Borrower pursuant to Section 5.1.6 and attached hereto as
Exhibit H-1, as amended, supplemented, amended and restated or otherwise
modified.
"Borrowing" means the Loans of the same type, denominated in the same
Currency and, in the case of LIBO Rate Loans, having the same Interest Period
made by the Lender on the same Business Day and pursuant to the same Borrowing
Request in accordance with Section 2.4.
"Borrowing Base Amount" means, at any time, an amount equal to 80% of the
aggregate amount of Eligible Inventory.
"Borrowing Base Certificate" means a certificate duly completed and
executed by the chief accounting or financial Authorized Officer of the
Borrower, substantially in the form of Exhibit D hereto; provided, however,
that the Lender may
(a) at any time specify changes to such form for the purpose of
monitoring the Borrower's compliance with the Borrowing Base Amount; and
(b) from time to time review computations of the Borrowing Base
Amount submitted by the Borrower pursuant to Section 5.1.8 and clause (c)
of Section 7.1.1 and, if in the Lender's reasonable opinion, the
computation in any Borrowing Base Certificate of the Borrowing Base
Amount shall not have been computed in accordance with its definition,
the Lender shall have the right to adjust such computation.
"Borrowing Request" means a loan request and certificate duly executed by
an Authorized Officer of the Borrower, substantially in the form of Exhibit B
hereto.
"Brimstone Expansion" means the expansion of the operations of the Hycroft
Mine as indicated in the Life of Mine Plan delivered to (and approved by) the
Lender pursuant to Section 5.1.11.
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"Business Day" means
(a) any day which is neither a Saturday or Sunday nor
(i) with respect to amounts denominated in Canadian Dollars, a
legal holiday on which banks are authorized or required to be
closed in either Vancouver, British Columbia or San Francisco,
California, or
(ii) with respect to Base Rate Loans, a legal holiday on
which Banks are authorized or required to be closed in San
Francisco, California; and
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day which is a Business Day described in clause (a)
above and which is also a day on which dealings in each Currency are
carried on in the interbank Eurodollar market of the Lender's LIBOR
Office.
"Canada" means the present territory of Canada.
"Canadian Dollar" and "Cdn $" each mean the lawful money of Canada.
"Canadian Dollar Equivalent" or "Cdn $ Equivalent" means the Exchange
Equivalent in Canadian Dollars of any amount of U.S. Dollars.
"Canadian Loan" is defined in Section 2.1.2.
"Capital Expenditures" means, for any period, the sum of
(a) the aggregate amount of all expenditures of the Borrower and
its Subsidiaries for fixed or capital assets made during such period
which, in accordance with GAAP, would be classified as capital
expenditures; and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Subsidiaries under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as capitalized leases, and,
for purposes of this Agreement and each other Loan Document, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
premium or a penalty.
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"Capital Stock" means, relative to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, including partnership interests and other indicia of ownership
of such Person and all warrants, options, purchase rights, conversion or
exchange rights, voting rights, calls or any claims of any character with
respect thereto.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one year
after such time, issued or guaranteed by the United States Government,
the Canadian Government, or the government of any province or territory
of Canada;
(b) commercial paper, maturing not more than twelve months from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of Canada, any province or territory of
Canada, any state of the United States or of the District of
Columbia and rated A-l by Standard & Poor's Rating Services
("S&P"), P-1 by Moody's Investors Service, Inc. ("Moody's") or R-1
by Dominion Bond Rating Services ("DBRS"), or
(ii) the Lender (or its holding company);
(c) any certificate of deposit, bankers acceptance, bearer discount
note or term deposit maturing not more than one year after such time,
which is issued by
(i) a commercial banking institution that is a member of the
Federal Reserve System and which has (x) a credit rating of Aa or
better from Moody's or a comparable rating from S&P and (y) a
combined capital and surplus and undivided profits of not less than
U.S.$500,000,000, or
(ii) a Canadian chartered bank which has a credit rating of
R-1 or better from DBRS, or
(iii) the Lender; or
(d) any repurchase agreement entered into with the Lender (or and
other commercial banking institution of the stature referred to in clause
(c)(i)) or (c)(ii)) which
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(i) is secured by a fully perfected security interest in any
obligation of the type described in clause (a), (b) or (c), and
(ii) has a market value at the time such repurchase agreement
is entered into of not less than 100% of the repurchase obligation
of the Lender (or other commercial banking institution) thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) the acquisition by any Person, or two or more Persons acting in
concert, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934) of 20% or more of the outstanding shares of Voting Stock of the
Borrower;
(b) the failure of the Parent to own (directly or indirectly), free
and clear of all Liens or other encumbrances, at least 100% of the
outstanding shares of Voting Stock of the Borrower on a fully diluted
basis;
(c) the failure of Holdings to own (directly), free and clear of all
Liens or other encumbrances, at least 100% of the outstanding shares of
Voting Stock of the Borrower on a fully diluted basis; or
(d) the failure of the Borrower to own (directly), free and clear of
all Liens or other encumbrances, at least 100% of the outstanding shares
of Voting Stock of Hycroft Lewis Mine, Inc., a Nevada corporation, on a
fully diluted basis.
"Change in Law" means any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having
the force of law) of any court, central bank, regulator or other governmental
authority.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time
to time.
"Commitment" means, collectively, the Lender's obligation to (a) make U.S.
Loans pursuant to Section 2.1.1, and (b) make
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Canadian Loans pursuant to Section 2.1.2.
"Commitment Amount" means, on any date, the U.S. Dollar Equivalent of U.S.
$13,000,000, as such amount may be reduced from time to time pursuant to
Section 2.3.
"Commitment Termination Date" means the earliest of
(a) the Stated Maturity Date (as such date may be extended pursuant
to Section 2.8);
(b) the date on which the Commitment Amount is terminated in full
or reduced to zero pursuant to Section 2.3; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Commitment
shall terminate automatically and without any further action.
"Commitment Termination Event" means
(a) the occurrence of any Default described in clauses (a) through
(d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of all or any portion of the Loans to be
due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Lender to the Borrower that
the Commitment has been terminated.
"Compliance Certificate" means a certificate duly completed and executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
E hereto and including, as attachments thereto (in detail reasonably
satisfactory to the Lender), calculation of the financial test set forth in
Section 7.2.4, together with such changes to such Exhibit form as the Lender
may from time to time reasonably request for the purpose of monitoring the
Borrower's compliance with such financial test.
"Contingent Liability" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than
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by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount (or maximum principal amount, if larger) of the
debt, obligation or other liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"Credit Extension" means, as the context may require, (a) the making of a
U.S. Loan by the Lender and/or (b) the making of a Canadian Loan by the Lender.
"Crofoot Mine" means (a) the properties which comprise the Crofoot Mine
(including the Brimstone Expansion thereof), located in Sulphur, Nevada, and as
described in the description of the Mining Rights for the Crofoot Mine on
Schedule III hereto and (b) those certain associated facilities, together with
all plant sites, waste dumps, ore dumps, crushing circuits, heap leach pads,
abandoned heaps, power supply systems and ancillary and infrastructure
facilities thereat which are used in connection with the operation thereof.
"Currency" means U.S. Dollars and Canadian Dollars.
"Default" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with the written consent
of the Lender.
"Domestic Office" means, the office of the Lender designated as such below
its signature hereto or such other office of the Lender (or any successor or
assign of the Lender) within the U.S. as may be designated from time to time by
notice from the Lender to the Borrower.
"Effective Date" means the date this Agreement becomes effective pursuant
to Section 9.8.
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"Eligible Inventory" means, at any time of determination thereof, that
amount of Inventory (measured in ounces) determined by the Lender to be
recoverable on the basis of the Lender's acceptance of the proposed recovery
factors set forth in the Borrower's monthly gold inventory report upon which
the computations contained in the most recently delivered Borrowing Base
Certificate (pursuant to Section 5.1.8 or clause (c) of Section 7.1.1) were
based, multiplied by the lesser of (x) the average price of gold for the
preceding month and (y) U.S.$410 per ounce (net of the average costs to recover
such ounces, as determined by the Lender), generally calculated as set forth in
Schedule II hereto, and as to which each of the following requirements has been
fulfilled to the reasonable satisfaction of the Lender:
(a) the Borrower or such Subsidiary has the full and unqualified
right to assign and grant a Lien in such Inventory to the Lender;
(b) the Borrower or such Subsidiary has full and lawful title to
such Inventory, free and clear of all Liens, other than any Liens in
favor of the Lender and statutory Liens in favor of the holder or owner
of a royalty on the production of metals or minerals from the Hycroft
Mine; and
(c) the Lender has a security interest in such Inventory, which
security interest is legal, valid, binding, perfected and first priority
under the U.C.C.
"Environmental Laws" means all U.S. applicable federal, provincial, state
or local laws, statutes, ordinances, by-laws, codes, rules, regulations,
guidelines, orders, decrees or directives imposing liability or standards of
conduct relating to the environment, land use or the protection of human
health, natural resources, pollution or waste management.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections thereto.
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Equivalent" means, on any date, relative to any amount (the
"Original Amount") expressed in either Canadian Dollars or U.S. Dollars (the
"Original Currency"), the amount expressed in the other Currency which would be
required to buy the Original Amount of the Original Currency using the noon
spot
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rate exchange for Canadian interbank transactions applied in converting
the other Currency into the Original Currency published by the Bank of Canada
for such date.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not
a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Lender from three federal funds brokers of
recognized standing selected by it.
"Fiscal Quarter" or "FQ" means any quarter of a Fiscal Year.
"Fiscal Year" or "FY" means any period of twelve consecutive calendar
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g. the "1997 Fiscal Year" or "1997 FY")
refer to the Fiscal Year ending on the December 31 occurring during such
calendar year.
"F.R.S. Board" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in Section 1.4.
"Guaranty" means, as the context may require, the Parent Guaranty, the
Holdings Guaranty, the Preferred Shareholder Guaranty and/or any Subsidiary
Guaranty.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource Conservation
and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product) within
the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of
conduct concerning any hazardous, toxic or dangerous waste, substance or
material, all as amended or hereafter amended.
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"Hedging Obligations" means, with respect to any Person, all liabilities
of such Person under currency exchange agreements, commodity swap, exchange or
futures agreements, interest rate swap agreements, interest rate cap agreements
and interest rate collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates or
currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained in
this Agreement or any other Loan Document refer to this Agreement or such other
Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Holdings" means Vista Gold Holdings Inc., a Nevada corporation.
"Holdings Guaranty" means the Guaranty executed and delivered by Holdings
pursuant to Section 5.1.4 in substantially the form of Exhibit F-2 hereto, as
amended, supplemented, amended and restated or otherwise modified.
"Hycroft Mine" means, collectively, the Crofoot Mine and the Lewis Mine.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of the Borrower or any other Obligor, any qualification or exception
to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
the Borrower or such other Obligor to be in default of any of its
obligations under Section 7.2.4.
"include" and "including" means including without limiting the generality
of any description preceding such term, and, for purposes of this Agreement and
each other Loan Document, the parties hereto agree that the rule of ejusdem
generis shall not be applicable to limit a general statement, which is followed
by or referable to an enumeration of specific matters, to matters similar to
the matters specifically mentioned.
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"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes or other
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases which
have been or should be, in accordance with GAAP, recorded as Capitalized
Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations;
(f) whether or not so included as liabilities in
accordance with GAAP, all obligations of such Person to pay the deferred
purchase price of property or services, and indebtedness (excluding
prepaid interest thereon) secured by a Lien on property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited in
recourse; and
(g) all Contingent Liabilities of such Person in respect of any of
the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer.
"Indemnified Liabilities" is defined in Section 9.4.
"Indemnified Parties" is defined in Section 9.4.
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"Interest Period" means, relative to any LIBO Rate Loans, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.4 or
2.5 and continuing to (but excluding) the day which, numerically corresponds to
such date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month) as the
Borrower may select in its relevant notice pursuant to Section 2.4 or 2.5;
provided, however, that (i) the Borrower shall not be permitted to select
Interest Periods to be in effect at any one time which have expiration dates
occurring on more than two different dates; (ii) Interest Periods commencing on
the same date for Loans comprising part of the same Borrowing shall be of the
same duration; (iii) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business Day
of a calendar month, in which case such Interest Period shall end on the
Business Day next preceding such numerically corresponding day); and (iv) no
Interest Period may end later than the date set forth in clause (a) of the
definition of "Commitment Termination Date".
"Inventory" means the gold inventory of the Borrower and its Subsidiary
Guarantors contained on the leach pads located at the Hycroft Mine.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other Person
(excluding commission, travel, petty cash and similar advances to
officers and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person incurred in connection
with loans and advances of the type described in clause (a); and
(c) any ownership or similar interest held by such Person in any
other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon (and without adjustment
by reason of the financial condition of such other Person) and shall, if made
by the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"Lender" is defined in the preamble.
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"Lewis Mine" means (a) the properties which comprise the Lewis Mine
(including the Brimstone Expansion thereof), located in Sulphur, Nevada, and as
described in the description of the Mining Rights for the Lewis Mine on
Schedule IV hereto and (b) those certain associated facilities, together with
all plant sites, waste dumps, ore dumps, crushing circuits, heap leach pads,
abandoned heaps, power supply systems and ancillary and infrastructure
facilities located thereat which are used in connection with the operation
thereof.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to
the nearest 1/16 of 1%) of the rates per annum at which deposits in the
relevant Currency in immediately available funds are offered to the Lender's
LIBOR Office in the London, England interbank market as at or about 11:00 a.m.
London, England time two Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Lender's LIBO Rate Loan and for a
period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan denominated in either Currency bearing
interest, at all times during an Interest Period applicable to such Loan, at a
fixed rate of interest determined by reference to the LIBO Rate (Reserve
Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be determined by the Lender on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of the Lender designated as such below its
signature hereto or such other office of the Lender as designated from time to
time by notice from the Lender to the Borrower, whether or not outside the
United States, which shall be making or maintaining LIBO Rate Loans of the
Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or
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other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.
"Lien" means
(a) any security interest mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
charge or interest or preference, priority or other security agreement,
whether or not filed, recorded or otherwise perfected under applicable
law, in property to secure payment of a debt or performance of an
obligation;
(b) any financing statement filed under the U.C.C. (or comparable
law of any jurisdiction); and
(c) any option or other agreement to sell or to
provide any instrument or financing statement of the nature referred to
in clause (a) or (b).
"Loan" means, as the context may require, any U.S. Loan and/or any
Canadian Loan.
"Loan Document" means this Agreement, the Note, each Borrowing Request,
each Continuation/Conversion Notice, each Borrowing Base Certificate, each
Compliance Certificate, the Master Subordination Agreement, each Pledge
Agreement, each Rate Protection Agreement relating to Hedging Obligations of
the Borrower or any of its Subsidiaries, each Security Agreement, each
Guaranty, each Mortgage, and each other agreement, certificate, report,
document or instrument delivered in connection with this Agreement and such
other agreements, whether or not specifically mentioned herein or therein.
"Master Subordination Agreement" means the Master Subordination Agreement,
substantially in the form of Exhibit J hereto, as amended, supplemented,
amended and restated or otherwise modified.
"Material Adverse Change" means any change of circumstances or any event
which, individually or as part of a series of circumstances or events, could be
reasonably expected to have a Material Adverse Effect.
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"Material Adverse Effect" means
(a) a material adverse effect on the financial condition, business,
assets, operations, properties or prospects of the Parent, Holdings, the
Borrower or the Borrower and its Subsidiaries, taken as a whole;
(b) a material impairment of the ability of the Borrower or any
other Obligor to perform when due its respective Obligations under the
Loan Documents to which it is or will be a party; or
(c) an impairment of the validity or enforceability of, or a
material impairment of the rights, remedies or benefits available to the
Lender under, this Agreement or any other Loan Document.
"Monthly Payment Date" means the last day of each calendar month or, if
any such day is not a Business Day, the next succeeding Business Day.
"Mortgage" means each mortgage, deed of trust or agreement executed and
delivered by the Borrower or any other Obligor in favor of the Lender pursuant
to the requirements of this Agreement in substantially the form of Exhibit I
hereto, as applicable, under which a Lien is granted on the Real Property of
the Borrower and each Subsidiary Guarantor and fixtures and other property
described therein, in each case as amended, supplemented, amended and restated
or otherwise modified.
"Note" means a promissory note of the Borrower payable to the Lender, in
the form of Exhibit A hereto (as such promissory note may be amended, endorsed
or otherwise modified from time to time), evidencing the aggregate Indebtedness
of the Borrower to the Lender resulting from outstanding Loans, and also means
all other promissory notes accepted from time to time in substitution therefor
or renewal thereof.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"Obligor" means the Borrower or any other Person (other than the Lender)
obligated under any Loan Document (including the Parent, Holdings, Vista Gold
U.S. Inc. and each Subsidiary Guarantor).
"Obligor Pledge Agreement" means the Pledge Agreement executed and
delivered by Holdings, Vista Gold U.S. Inc. and each Subsidiary of the Borrower
which in turn has any Subsidiaries of its own, substantially in the form of
Exhibit G-2 hereto, in each
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case as amended, supplemented, amended and restated or otherwise modified.
"Operating Lease" means, relative to any Person, any lease (including
leases that may be terminated by the lessee at any time) under which such
Person is the lessee of any property (whether real, personal or mixed) and with
respect to which the obligations of such Person are not Capitalized Lease
Liabilities.
"Organic Document" means, relative to the Borrower or any other Obligor,
as applicable, its certificate of incorporation, by-laws, certificate of
partnership, partnership agreement, certificate of formation, limited liability
agreement and all shareholder agreements, voting trusts and similar
arrangements applicable to any of the Borrower's or such Obligor's, as the
case may be, partnership interests, limited liability company interests or
authorized shares of capital stock.
"Outstanding Amount" means, on any date, the sum of:
(a) the aggregate outstanding principal amount of U.S. Loans;
plus
(b) the U.S. Dollar Equivalent of the aggregate outstanding
principal amount of all Canadian Loans.
"Parent" means Vista Gold Corp., a British Columbia corporation.
"Parent Guaranty" means the Guaranty executed and delivered by the Parent
pursuant to Section 5.1.4 in substantially the form of Exhibit F-1 hereto, as
amended, supplemented, amended and restated or otherwise modified.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the meaning of
Section 4063 of ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under Section 4069 of ERISA.
"Permitted Lien" means the following types of Liens (other than any such
Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code or by ERISA):
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(a) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by Section 7.1.2;
(b) statutory Liens of landlords or holders or owners of any
royalty on the production of metals or minerals from the Hycroft Mine,
Liens of carriers, warehousemen, mechanics and materialmen and other
Liens imposed by law incurred in the ordinary course of business for sums
not yet delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(d) leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of the
Borrower or any Subsidiary;
(e) easements, rights-of-way, restrictions (including zoning
restrictions), defects, encroachments or irregularities in title and
other similar charges or encumbrances of a minor nature which do not and
will not interfere in any material respect with the use and enjoyment of
the Hycroft Mine (including any and all mining operations and the
extraction, removal and sale of minerals therefrom) or the conduct of the
business of the Borrower or any Subsidiary, together with the exceptions
identified in Item 1.1 ("Permitted Encumbrances on Mortgaged Real
Property") of the Disclosure Schedule as Permitted Encumbrances on the
Real Property subject to a Mortgage;
(f) any (x) interest or title of a lessor or sublessor under any
Operating Lease or lease giving rise to any Capitalized Lease Liability
not prohibited by this Agreement, (y) restriction or encumbrance that the
interest or title of such lessor or sublessor may be subject to, or (z)
subordination of the interest of the lessee or sublessee under such lease
to any restriction or encumbrance referred to in item (y); and
(g) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods.
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"Person" means any natural person, corporation, limited liability company,
partnership, joint venture, joint stock company, firm, association, government,
governmental agency, court or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means, as the context may require, the Borrower Pledge
Agreement and/or the Obligor Pledge Agreement.
"Preferred Shareholder Guaranty" means the Guaranty executed and delivered
by Vista Gold U.S. Inc. pursuant to Section 5.1.4 in substantially the form of
Exhibit F-4 hereto, as amended, supplemented, amended and restated or otherwise
modified.
"Rate Protection Agreement" means, collectively, any currency exchange
agreement, any commodity swap, exchange or futures agreement or any interest or
currency rate swap, cap, collar or similar agreement entered into by the
Borrower with the Lender or an Affiliate of the Lender as the counterparty to
such agreement.
"Real Property" means, with respect to any Person, such Person's present
and future right, title and interest (including, without limitation, any
leasehold estate) in
(a) any plots, pieces or parcels of land;
(b) any improvements, buildings, structures and fixtures now or
hereafter located or erected thereon or attached thereto of every nature
whatsoever (the rights and interest described in clauses (a) and (b)
being the "Premises");
(c) any other interests in property constituting appurtenances to
the Premises, or which hereafter shall in any way belong, relate or be
appurtenant thereto; and
(d) all other rights and privileges thereunto belonging or
appertaining and all extensions, additions, improvements, betterments,
renewals, substitutions and replacements to or of any of the rights and
interests described in clause (c) above.
"Release" means a "release", as such term is defined in CERCLA.
"Resource Conservation and Recovery Act" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect from time to
time.
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"Security Agreement" means, as the context may require, the Borrower
Security Agreement and/or each Subsidiary Security Agreement, in each case as
amended, supplemented, amended and restated or otherwise modified.
"Stated Maturity Date" means February 20, 1999 (as such date may be
extended pursuant to Section 2.8).
"Subordinated Debt" means all unsecured Indebtedness of the Borrower or
any Subsidiary for money borrowed (excluding, for greater certainty, amounts
owed by the Borrower or any Subsidiary to the Parent in reimbursement of costs
or expenses incurred by the Borrower or such Subsidiary in the ordinary course
of its business and paid by the Parent) which is subordinated, upon terms
satisfactory to the Lender, in right of payment to the payment in full in cash
of all Obligations.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
capital stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members of
the governing body of such entity (irrespective of whether at the time capital
stock (or other ownership interest) of any other class or classes of such
entity shall or might have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned by such Person, by such Person and
one or more other Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person. Unless the context otherwise specifically
requires, the term "Subsidiary" shall be a reference to a Subsidiary of the
Borrower.
"Subsidiary Guarantor" means each wholly-owned Subsidiary of the Borrower
as of the Effective Date and any Subsidiary of the Borrower as to which, in
accordance with Section 7.1.7,
(a) all of the shares of Capital Stock of which have been pledged
to the Lender by the Borrower or its wholly-owned Subsidiary owning such
shares; and
(b) which has executed and delivered to the Lender a Subsidiary
Guaranty, a Subsidiary Security Agreement and, if required by Section
7.1.7, a Mortgage.
"Subsidiary Guaranty" means, collectively, each Guaranty executed and
delivered by a Subsidiary of the Borrower pursuant to the terms of this
Agreement (including Section 5.1.4 and Section 7.1.7), substantially in the
form of Exhibit F-3 hereto, as amended, supplemented, amended and restated or
otherwise modified.
"Subsidiary Security Agreement" means, collectively, each Security
Agreement executed and delivered by any Subsidiary of
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the Borrower in favor of the Lender pursuant to the terms of this Agreement
(including Section 5.1.6 and Section 7.1.7), in substantially the form of
Exhibit H-2, in each case, as amended, supplemented, amended and restated or
otherwise modified.
"Tangible Net Worth" means the consolidated net worth of the Borrower and
its Subsidiaries after subtracting therefrom the aggregate amount of any
intangible assets of the Borrower and its Subsidiaries, including goodwill,
franchises, licenses, patents, trademarks, trade names, copyrights, service
marks and brand names; provided, that intercompany Indebtedness of the Borrower
owing to the Parent shall, for purposes of determining "net worth", be deemed
to be equity.
"Taxes" is defined in Section 4.6.
"type" means, (a) relative to any U.S. Loan, the portion thereof, if any,
being maintained as a Base Rate Loan or a LIBO Rate Loan and (b) relative to
any Canadian Loan, the portion thereof, if any, being maintained as a LIBO Rate
Loan.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. Dollar Equivalent" or "U.S. $ Equivalent" means the Exchange
Equivalent in U.S. Dollars of any amount of Canadian Dollars.
"U.S. Loan" is defined in Section 2.1.1.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"Welfare Plan" means a "welfare plan", as such term is defined in section
3(1) of ERISA.
"wholly-owned Subsidiary" shall mean, relative to any Person, any
Subsidiary of such Person all of the Capital Stock (and all rights and options
to purchase such Capital Stock) of which is owned, beneficially and of record,
by such Person and/or one or more wholly-owned Subsidiaries of such Person.
SECTION I.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document, the
Disclosure Schedule and in each notice and other communication delivered from
time to time in connection with this Agreement or any other Loan Document.
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SECTION I.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION I.4. Accounting and Financial Determinations. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, and all accounting determinations and computations hereunder or
thereunder (including under Section 7.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared
in accordance with, those generally accepted accounting principles ("GAAP")
applied in the preparation of the financial statements referred to in Section
6.5 (or, if at any time applicable pursuant to the proviso to clause (b) of
Section 7.1.1, the financial statements of the Borrower and its Subsidiaries
referred to in such proviso to such clause (b)); provided, however, that, for
purposes of determining, whenever the Borrower and its Subsidiaries undertake
any action which involves Canadian Dollars and is of a nature subject to a
limitation in Article VII expressed in U.S. Dollars, the aggregate Canadian
Dollar amount of all actions of the Borrower and its Subsidiaries (including
such action) subject to such limitation shall be converted into U.S. Dollars
based on the then Exchange Equivalent, and if such action is, based on such
conversion, then permitted to be taken, such action shall not subsequently be
impermissible by virtue of any change in the Exchange Equivalent. Unless
otherwise expressly provided, all financial covenants and defined financial
terms shall be computed on a consolidated basis for the Borrower and its
Subsidiaries, in each case without duplication.
ARTICLE II
COMMITMENT, BORROWING PROCEDURES AND NOTE
SECTION II.1. Commitment To Make Loans. On the terms and subject to the
conditions of this Agreement (including Article V), the Lender agrees to make
U.S. Loans pursuant to the Commitment described in Section 2.1.1, and agrees to
make Canadian Loans pursuant to the Commitment described in Section 2.1.2.
SECTION II.1.1. U.S. Loans. From time to time on any Business Day
occurring prior to the Commitment Termination Date, the Lender will make loans
of any type denominated in U.S. Dollars (its "U.S. Loans") to the Borrower
equal to the aggregate
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amount of the Borrowing requested by the Borrower to be made on such day. On
the terms and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow U.S. Loans.
SECTION II.1.2. Canadian Loans. From time to time on any Business Day
occurring prior to the Commitment Termination Date, the Lender will make LIBO
Rate Loans denominated in Canadian Dollars (its "Canadian Loans") to the
Borrower equal to the aggregate amount of the Borrowing requested by the
Borrower to be made on such Business Day. On the terms and subject to the
conditions hereof, the Borrower may from time to time borrow, prepay and
reborrow Canadian Loans.
SECTION II.2. Lender Not Permitted or Required To Make Credit
Extensions. The Lender shall not be permitted or required to make any Credit
Extension if, after giving effect thereto, the Outstanding Amount would exceed
the lesser of (a) the Commitment Amount and (b) the Borrowing Base Amount.
SECTION II.3. Reduction of Commitment Amount. The Borrower may, from
time to time on any Business Day occurring after the time of the initial
Borrowing hereunder, voluntarily reduce the Commitment Amount; provided,
however, that all such reductions shall require at least thirty Business Days'
prior notice to the Lender and be permanent, and any partial reduction of the
Commitment Amount shall be in a minimum amount equal to the U.S. Dollar
Equivalent of U.S.$500,000 and in an integral multiple equal to the U.S. Dollar
Equivalent of U.S.$100,000.
SECTION II.4. Borrowing Procedure. Credit Extensions shall be requested
by the Borrower and made by the Lender in accordance with this Section.
SECTION II.4.1. Canadian Loans. By delivering a Borrowing Request to
the Lender at or before 10:00 a.m. (San Francisco, California time) on a
Business Day, the Borrower may from time to time irrevocably request a
Borrowing of Canadian Loans, which shall be made as LIBO Rate Loans, in a
minimum integral amount of Cdn $500,000 and an integral multiple of Cdn
$100,000, or in the unused amount of the Commitment. Each Borrowing Request
shall be delivered not more than five Business Days and not less than three
Business Days prior to the date of the Borrowing requested thereby. On the
terms and subject to the conditions of this Agreement, each Borrowing of
Canadian Loans shall be comprised of LIBO Rate Loans denominated in Canadian
Dollars, and shall be made on the Business Day, specified in such Borrowing
Request. At or before 11:00 a.m. (San Francisco, California time) on such
Business Day, the Lender shall make funds in an amount equal to the requested
Borrowing available to the Borrower by wire transfer to the accounts the
Borrower shall have specified in its Borrowing Request.
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SECTION II.4.2. U.S. Loans. By delivering a Borrowing Request to the
Lender at or before 10:00 a.m. (San Francisco, California time) on a Business
Day, the Borrower may from time to time irrevocably request a Borrowing of U.S.
Loans, which may be made as LIBO Rate Loans in a minimum integral amount of
U.S. $500,000 and an integral multiple of U.S. $100,000 or as Base Rate Loans
in a minimum amount of U.S. $500,000 and an integral multiple of U.S. $100,000
or, in either case, in the unused amount of the Commitment. Each Borrowing
Request shall be delivered not more than five Business Days and not less than
one Business Day (or, if the U.S. Loans requested thereby are LIBO Rate Loans,
not less than three Business Days) prior to the date of the Borrowing requested
thereby. On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of U.S. Loans, and shall be made on
the Business Day, specified in such Borrowing Request. At or before 11:00 a.m.
(San Francisco, California time) on such Business Day, the Lender shall make
funds in an amount equal to the requested Borrowing available to
the Borrower by wire transfer to the accounts the Borrower shall have specified
in its Borrowing Request.
SECTION II.5. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Lender at or before 10:00 a.m. (San
Francisco, California time) on a Business Day, the Borrower may from time to
time irrevocably elect, on not less than three nor more than five Business
Days' notice that all, or any portion in an aggregate minimum amount of U.S.
$500,000 (or the U.S. Dollar Equivalent thereof) and an integral multiple of
U.S. $100,000 (or the U.S. Dollar Equivalent thereof), of any Loans be, in the
case of Base Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO
Rate Loans, continued as LIBO Rate Loans or on not less than one nor more than
five Business Days' notice that all, or any portion in an aggregate minimum
amount of U.S. $500,000 (or the U.S. Dollar Equivalent thereof) and an integral
multiple of U.S. $100,000 (or the U.S. Dollar Equivalent thereof), of any Loans
be, in the case of LIBO Rate Loans, converted into Base Rate Loans (in the
absence of delivery of a Continuation/ Conversion Notice with respect to any
LIBO Rate Loans at least three Business Days before the last day of the then
current Interest Period with respect thereto, such LIBO Rate Loans shall, on
such last day, automatically convert into Base Rate Loans); provided, however,
that no portion of the outstanding principal amount of any Loans may be
continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing.
SECTION II.6. Funding of LIBO Rate Loans. The Lender may, if it so
elects, fulfill its obligation to make, continue or convert LIBO Rate Loans
hereunder by causing one of its foreign branches or Affiliates (or an
international banking facility accepted by the Lender) to make or maintain such
LIBO Rate Loan; provided, however, that such LIBO Rate Loan shall nonetheless
be
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deemed to have been made and to be held by the Lender, and the obligation of
the Borrower to repay such LIBO Rate Loan shall nevertheless be to the Lender
for the account of such foreign branch, Affiliate or international banking
facility. In addition, the Borrower hereby consents and agrees that, for
purposes of any determination to be made for purposes of Sections 4.1, 4.2,
4.3, or 4.4, it shall be conclusively assumed that the Lender elected to fund
all LIBO Rate Loans by purchasing deposits in the relevant Currency in its
LIBOR Office's interbank eurodollar market. Notwithstanding the provisions of
Sections 4.6 and 4.7, the Borrower shall not be obligated to reimburse the
Lender for any increased capital costs or Taxes if and to the extent that such
increased capital costs or Taxes arise solely as a result of the exercise by
the Lender of the election referred to in this Section.
SECTION II.7. Note. The Lender's Loans under its Commitment shall be
evidenced by a Note payable to the order of the Lender, in a minimum stated
principal amount denominated in U.S. Dollars equal to the original Commitment
Amount. The Borrower hereby irrevocably authorizes the Lender to make (or
cause to be made) appropriate notations on the grid attached to the Lender's
Note (or on any continuation of any such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal of, and the
interest rate and Interest Period applicable to the Loans evidenced thereby,
and whether such Loans are denominated in U.S. Dollars or Canadian Dollars.
Such notations shall be conclusive and binding on the Borrower and the Lender
absent manifest error; provided, however, that the failure of the Lender to
make any such notations shall not limit or otherwise affect any Obligations of
the Borrower or any other Obligor.
SECTION II.8. Renewal of the Commitment. Any term or provision of Article
II to the contrary notwithstanding, the Borrower and the Lender hereby agree
that:
(a) At least fifteen but not more than sixteen months before the
Stated Maturity Date then in effect (if the Commitment then remains in
effect), the Borrower may, by delivery of a written request to the
Lender, request that the Lender provide a new commitment to extend the
then effective Stated Maturity Date for a period of exactly one
additional year and establish a new "Stated Maturity Date" which shall be
extended to the date which is one year from the "Stated Maturity Date"
then in effect at the time of delivery of such written request; provided,
however, that the Borrower may not request more than two such extensions.
(b) Upon its receipt of such notification from the Borrower, the
Lender may, in its sole and absolute discretion, agree to provide to the
Borrower the extension described in the foregoing clause (a) (and thereby
establish
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a new Stated Maturity Date which newly established date shall
be the date which is exactly one year from the "Stated Maturity Date"
then in effect at the time of delivery of such notification), and the
Lender will, no later than 30 days prior to the date which is exactly one
year prior to the "Stated Maturity Date" then in effect at the time of
delivery of such notification, notify the Borrower of its
approval or disapproval of such request.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION III.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a voluntary
prepayment, in whole or in part, of the outstanding principal amount of
any Loans; provided, however, that
(i) no such prepayment of any LIBO Rate Loan may be made on
any day other than the last day of the Interest Period for such
Loan,
(ii) all such voluntary prepayments shall require at least
three but no more than five Business Days' prior written notice to
the Lender, and
(iii) all such voluntary partial prepayments shall be in an
aggregate minimum amount equal to the U.S. Dollar Equivalent of
U.S.$500,000 and an integral multiple equal to the U.S. Dollar
Equivalent of U.S.$100,000;
(b) shall, on each date when any reduction in the Commitment Amount
shall become effective pursuant to Section 2.3, make a mandatory
prepayment of all Loans equal to the excess, if any, of the aggregate,
outstanding principal amount of all Loans over the lesser of (i) the
Commitment Amount as so reduced and (ii) the then existing Borrowing Base
Amount;
(c) shall, upon three Business Days' written notice from the
Lender, in the event that the Lender shall have determined at any time
(including on each date of the making of any Credit Extension and on the
date of a Continuation/Conversion Notice with respect to any Credit
Extension or at any other time periodically) that the aggregate principal
amount of all Credit Extensions
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outstanding (after converting all Credit Extensions denominated in
Canadian Dollars to their U.S. Dollar Equivalent on such date of
determination) was in excess of the lesser of
(i) the Commitment Amount that was then in effect, and
(ii) the Borrowing Base Amount that was then in effect,
make a mandatory prepayment such that the U.S. Dollar Equivalent of the
outstanding principal amount of all Credit Extensions does not exceed the
lesser of (x) the Commitment Amount then in effect or (y) the Borrowing
Base Amount then in effect; and
(d) shall, immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, repay all
Loans, unless, pursuant to Section 8.3, only a portion of all Loans is so
accelerated.
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No voluntary
prepayment of principal of any Loans shall cause a reduction in the Commitment
Amount.
SECTION III.2. Interest Provisions. Interest on the outstanding principal
amount of all Loans shall accrue and be payable in accordance with this Section
3.2.
SECTION III.2.1. Rates. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion of U.S. Loans maintained from time to time as a
Base Rate Loan, equal to the sum of the Alternate Base Rate from time to
time in effect plus a margin of 1%; and
(b) on that portion of Loans maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) applicable to the relevant Currency for such
Interest Period plus a margin of 1.5%.
All LIBO Rate Loans shall bear interest from and including the first day
of the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO Rate
Loan.
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SECTION III.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan is due and payable (whether on the Stated Maturity Date,
upon acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on
such amounts (in the applicable Currency) at a rate per annum equal to the sum
of (a) the Alternate Base Rate, plus (b) the applicable margin for such Loan
pursuant to Section 3.2.1 plus (c) a margin of 2%.
SECTION III.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in part,
of principal outstanding on such Loan;
(c) with respect to Base Rate Loans, on each Monthly Payment Date
occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, the last day of each applicable
Interest Period (and, if such Interest Period shall exceed 90 days, on
the 90th day of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO Rate
Loans on a day when interest would not otherwise have been payable
pursuant to clause (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of which
is accelerated pursuant to Section 8.2 or Section 8.3, immediately upon
such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
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SECTION III.2.4. Interest Act Provision.
(a) For the purposes of the Interest Act (Canada), whenever
interest payable pursuant to this Agreement is calculated with respect to
any monetary Obligation relating to Canadian Loans on the basis of a
period other than a calendar year (the "Calculation Period"), each rate
of interest determined pursuant to such calculation expressed as an
annual rate is equivalent to such rate as so determined, multiplied by
the actual number of days in the calendar year in which the same is to be
ascertained and divided by the number of days in the Calculation Period.
(b) The principal of deemed reinvestment of interest with respect
to any monetary Obligation relating to Canadian Loans shall not apply to
any interest calculation under this Agreement.
(c) The rates of interest with respect to any monetary Obligation
relating to Canadian Loans stipulated in this Agreement are intended to
be nominal rates and not effective rates or yields.
SECTION III.3. Judgment Currency. The Obligations of the Borrower and
each other Obligor in respect of any sum due to the Lender hereunder, under the
Notes or any other Loan Document shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than the currency in which such sum
was originally denominated (the "Original Currency"), be discharged only to the
extent that on the Business Day following receipt by the Lender of any sum
adjudged to be so due in the Judgment Currency, the Lender, in accordance with
normal banking procedures, purchases the Original Currency with the Judgment
Currency. If the amount of Original Currency so purchased is less than the sum
originally due to the Lender, the Borrower agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Lender against such loss,
and if the amount of Original Currency so purchased exceeds the sum originally
due to the Lender, the Lender agrees to remit such excess to the Borrower.
SECTION III.4. Commitment Fee. The Borrower agrees to pay to the Lender,
for the period (including any portion thereof when its Commitment is suspended
by reason of the Borrower's inability to satisfy any condition of Article V)
commencing on the Effective Date and continuing through the final Commitment
Termination Date, a commitment fee at the rate of 1/2 of 1% per annum on the
sum of the average daily unused portion of the Commitment Amount. Such
commitment fees shall be payable by the Borrower in arrears on each Monthly
Payment Date, commencing with the first such day following the Effective Date,
and on the
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Commitment Termination Date. All such fees shall be non-refundable.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION IV.1. LIBO Rate Lending Unlawful. If the Lender shall determine
(which determination shall, upon notice thereof to the Borrower, be conclusive
and binding on the Borrower) that the introduction of or any change in or in
the interpretation of any law makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for the Lender to make,
continue or maintain any Loan as, or to convert any Loan into, a LIBO Rate Loan
of a certain type, the obligations of the Lender to make, continue, maintain or
convert any such Loans shall, upon such determination, forthwith be suspended
until the Lender shall notify the Borrower that the circumstances causing such
suspension no longer exist, and all LIBO Rate Loans of such type shall
automatically convert into Base Rate Loans at the end of the then current
Interest Periods with respect thereto or sooner, if required by such law or
assertion.
SECTION IV.2. Deposits Unavailable. If the Lender shall have determined
that
(a) deposits in the applicable Currency, in the relevant amount and
for the relevant Interest Period are not available to the Lender in its
relevant market; or
(b) by reason of circumstances affecting the Lender's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans of such type,
then, upon notice from the Lender to the Borrower, the obligations of the
Lender under Section 2.4 and Section 2.5 to make or continue any Loans as, or
to convert any Loans into, LIBO Rate Loans of such type shall forthwith be
suspended until the Lender shall notify the Borrower that the circumstances
causing such suspension no longer exist.
SECTION IV.3. Increased LIBO Rate Loan Costs, etc. The Borrower
agrees to reimburse the Lender for any increase in the cost to the Lender of,
or any reduction in the amount of any sum receivable by the Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Loans as, or of converting (or of its obligation to convert)
any Loans into, LIBO Rate Loans. The Lender shall promptly notify the Borrower
in writing of the occurrence of any such
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event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate the Lender for such increased
cost or reduced amount. Such additional amounts shall be payable by the
Borrower to the Lender within five days of its receipt of such notice, and such
notice shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION IV.4. Funding Losses. In the event the Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by the Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last day
of the Interest Period applicable thereto, whether pursuant to Section
3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance with
the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO Rate
Loans in accordance with the Continuation/Conversion Notice therefor,
then, upon the written notice of the Lender to the Borrower, the
Borrower shall, within five days of its receipt thereof, pay to the Lender such
amount as will (in the reasonable determination of the Lender) reimburse the
Lender for such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower.
SECTION IV.5. Increased Capital Costs. If any Change in Law after the
Effective Date affects or would affect the amount of capital required or
expected to be maintained by the Lender or any Person controlling the Lender,
and the Lender determines (in its sole and absolute discretion) that the rate
of return on its or such controlling Person's capital as a consequence of its
Commitment or the Loans made by the Lender is reduced to a level below that
which such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Lender to the Borrower, the Borrower shall immediately pay
directly to the Lender additional amounts sufficient to compensate the Lender
or such controlling Person for such reduction in rate of return; provided,
however, that (x) the Borrower shall not be required to compensate the Lender
or such controlling Person for amounts arising solely as a result of, or
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to the extent such amounts are in respect of, the Lender's delay in complying
with any such Change in Law and (y) the Borrower shall not be required to
compensate the Lender or such controlling Person for increased costs which the
Lender does not pass on to substantially all of its customers to whom the
Lender is, by agreement, entitled to pass on such costs. A statement of the
Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, the Lender
may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.
SECTION IV.6. Taxes. All payments by the Borrower of principal of, and
interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever, and all interest, penalties and
liabilities with respect thereto, imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by the Lender's net
income or net receipts by reason of a connection between the Lender and the
relevant taxing jurisdiction (other than a connection arising solely from the
Lender having executed, delivered, performed its obligations or received any
payment under, or enforced any right arising in connection with, this Agreement
or any related transaction) (such non-excluded items being called "Taxes"). In
the event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will
(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(b) promptly forward to the Lender an official receipt or other
documentation satisfactory to the Lender evidencing such payment to such
authority; and
(c) pay to the Lender such additional amount or amounts as is
necessary to ensure that the net amount actually received by the Lender
will equal the full amount the Lender would have received had no such
withholding or deduction been required.
If the Lender is required by law at any time to pay any Taxes or make any
payment on account of Taxes on, in relation to or calculated by reference to
any sum received or receivable in connection with the Loans or any other amount
payable hereunder, or any liability for Taxes in respect of any such sum is
imposed, levied or assessed against the Lender, then the Borrower will
indemnify the Lender for the full amount of Taxes (including
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Taxes attributable to any payment on account of such indemnification and any
interest, penalties and costs with respect to any such Taxes) actually (or, in
the event such Taxes are directly paid by the Borrower, deemed) paid by the
Lender, whether or not such Taxes were correctly or legally asserted. Such
indemnification shall be made within 30 days of the demand of the Lender
therefor. In the event that the Borrower makes any payment of Taxes in
connection with any such indemnification, the Borrower shall promptly forward
to the Lender an official receipt or other documentation satisfactory to the
Lender evidencing such payment to the applicable taxing authority.
If the Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Borrower shall indemnify the Lender for any
incremental Taxes, interest or penalties that may become payable by the Lender
as a result of any such failure.
The Lender shall, on or prior to the Effective Date, and at
such times as reasonably requested by the Borrower, deliver to the Borrower one
or more United States Internal Revenue Service Form 4224 (or successor forms or
such other forms), appropriately completed, to establish that payments to the
Lender in the then current taxable year of the Lender are exempt from
withholding or deduction of Taxes.
If the Lender fails to deliver to the Borrower the appropriate form in
accordance with the immediately preceding sentence, other than as a result of a
change in law, then the Lender shall not be entitled to indemnification under
this Section with respect to U.S. withholding taxes that the Borrower is
required to pay in accordance with clause (a) above, and the Borrower shall not
be required to pay any additional amount in respect of such U.S. withholding
taxes to the Lender pursuant to clause (c) of this Section.
SECTION IV.7. Payments, Computations, etc.IV.7. Payments, Computations,
etc. All payments by the Borrower pursuant to this Agreement, the Note or any
other Loan Document shall be made by the Borrower to the Lender, without
setoff, deduction or counterclaim, not later than 11:00 a.m. San Francisco,
California time, on the date due, in same day or immediately available funds,
to such account as the Lender shall specify from time to time by notice to the
Borrower. Funds received after that time shall be deemed to have been received
by the Lender on the next succeeding Business Day. All interest and fees shall
be computed on the basis of the actual number of days (including the first day
but excluding the last day) occurring during the period for which such interest
or fee is payable over a year comprised of 360 days (or, in the case of
interest on a Base Rate Loan, 365 days or, if appropriate, 366 days). Whenever
any payment to be made shall otherwise be due on
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a day which is not a Business Day, such payment shall (except as otherwise
required by clause (iii) of the proviso to the definition of the term "Interest
Period" with respect to LIBO Rate Loans) be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees, if any, in connection with such payment.
SECTION IV.8. Setoff. The Lender shall, upon the occurrence of any
Default described in clauses (a) through (d) of Section 8.1.9 or upon the
occurrence of any other Event of Default and the declaration by the Lender
pursuant to Section 8.3 that all or any portion of the Loans and other
Obligations shall be due and payable, have the right to appropriate and apply
to the payment of the Obligations
owing to it (whether or not then due), and (as security for such Obligations)
the Borrower hereby grants to the Lender a continuing security interest in, any
and all balances, credits, deposits, accounts or moneys of the Borrower then or
thereafter maintained with the Lender. The Lender agrees promptly to notify
the Borrower after any such setoff and application made by the Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of the Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which the Lender may have.
SECTION IV.9. Use of Proceeds. The Borrower shall apply the proceeds of
each Borrowing in accordance with the fourth recital; without limiting the
foregoing, no proceeds of any Credit Extension will be used to acquire any
equity security of a class which is registered pursuant to Section 12 of the
Securities Exchange Act of 1934 or any "margin stock", as defined in F.R.S.
Board Regulation U.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION V.1. Initial Credit Extension. The obligation of the Lender to
make the initial Credit Extension shall be subject to the prior or concurrent
satisfaction of each of the conditions precedent set forth in this Section 5.1.
SECTION V.1.1. Resolutions, etc. The Lender shall have received from the
Borrower and each other Obligor a certificate, dated the date of the initial
Credit Extension, of its Secretary or Assistant Secretary as to
(a) resolutions of its Board of Directors then in full force and
effect authorizing the execution, delivery and performance of this
Agreement, the Note and each other Loan Document to be executed by it;
and
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(b) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Note and each other
Loan Document executed or to be
executed by it,
upon which certificate the Lender may conclusively rely until it shall have
received a further certificate of the Secretary of the Borrower or such other
Obligor, as the case may be, canceling or amending such prior certificate.
SECTION V.1.2. Delivery of Note. The Lender shall have received its Note
duly executed and delivered by the Borrower.
SECTION V.1.3. Payment of Outstanding Indebtedness, etc. All
Indebtedness (including any portion of the intercompany Indebtedness owing by
the Borrower to the Parent and outstanding as of the date of the initial Credit
Extension) identified in Item 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in full
(including, to the extent necessary, from proceeds of the initial Credit
Extension) and all commitments (other than in respect of intercompany
Indebtedness owing by the Borrower to the Parent and permitted pursuant to
clause (c) of Section 7.2.2), if any, in respect thereof shall have been
terminated; and all Liens securing payment of any such Indebtedness shall have
been released and the Lender shall have received all Uniform Commercial Code
Form UCC-3 termination statements or other instruments as may be suitable or
appropriate in connection therewith.
SECTION V.1.4. Guarantees. The Lender shall have received (a) the Parent
Guaranty, dated the date hereof, duly executed by Parent, (b) the Holdings
Guaranty, dated the date hereof, duly executed by Holdings, (c) the Subsidiary
Guaranty, dated the date hereof, duly executed by each Subsidiary Guarantor and
(d) the Preferred Shareholder Guaranty, dated the date hereof, duly executed by
Vista Gold U.S. Inc.
SECTION V.1.5. Pledge Agreements. The Lender shall have received (a) the
Borrower Pledge Agreement, dated as of the date hereof, duly executed and
delivered by the Borrower, together (i) with (i) the certificates evidencing all
of the issued and outstanding shares of Capital Stock pledged pursuant to the
Borrower Pledge Agreement, which certificates shall in each case be accompanied
by undated stock powers duly executed in blank, and (ii) all Pledged Notes (as
defined in such Pledge Agreement), if any, evidencing Indebtedness payable to
the Borrower, duly endorsed to the order of the Lender and (b) the Obligor
Pledge Agreement, dated as of the date hereof, duly executed and
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delivered by Holdings and each of the Borrower's Subsidiaries which in turn has
any Subsidiaries of its own, together with (i) the certificates evidencing all
of the issued and outstanding shares of Capital Stock pledged pursuant to the
Obligor Pledge Agreement, which certificates shall in each case be accompanied
by undated stock powers duly executed in blank, and (ii) all Pledged Notes (as
defined in such Pledge Agreement), if any, evidencing Indebtedness payable to
such Obligor (other than Holdings), in each case duly endorsed to the order of
the Lender.
SECTION V.1.6. Security Agreements. The Lender shall have received
executed counterparts of the Borrower Security Agreement and the Subsidiary
Security Agreement, each dated as of the date hereof, duly executed by the
Borrower and each Subsidiary Guarantor, together with
(a) acknowledgment copies of properly filed Uniform Commercial Code
financing statements (Form UCC-1), dated a date reasonably near to the
date of the initial Credit Extension, or such other evidence of filing as
may be acceptable to the Lender, naming the Borrower or each Subsidiary
Guarantor, as the case may be, as the debtor and the Lender as the
secured party, or other similar instruments or documents, filed under the
Uniform Commercial Code of all jurisdictions as may be necessary or, in
the opinion of the Lender, desirable to perfect the security interest of
the Lender pursuant to each such Security Agreement;
(b) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens (other
than Liens of the type described in clause (f) of the definition of
"Permitted Lien", if any) and other rights of any Person
(i) in any collateral described in each such Security
Agreement previously granted by any Person, or
(ii) securing any of the Indebtedness identified in Item
7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Lender may reasonably request from such Obligors; and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11 or Form UCC-2), or a similar search
report certified by a party acceptable to the Lender, dated a date
reasonably near to the date of the initial Credit Extension, listing all
effective financing statements which name the Borrower or
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any Subsidiary (in each case, under its present name and any previous
names) as the debtor and which are filed in the jurisdictions in which
filings were made pursuant to clause (a) above, together with copies of
such financing statements (none of which (other than (x) those described
in clause (a), if such Form UCC-11 or search report, as the case may be,
is current enough to list such financing statements described in clause
(a) and (y) those in respect of Liens of the type described in clause (f)
of the definition of "Permitted Lien") shall cover any collateral
described in any Security Agreement).
SECTION V.1.7. Mortgages. The Lender shall have received counterparts of
all Mortgages with respect to the Real Property identified in Item 5.1.7
("Mortgaged Property") of the Disclosure Schedule, each dated as of the date
hereof or as of a recent date thereto, duly executed by the appropriate Obligor,
together with
(a) evidence of the completion (or satisfactory arrangements for the
completion) of all recordings and filings of such Mortgage as may be
necessary or, in the reasonable opinion of the Lender, desirable
effectively to create a valid, perfected first priority Lien against the
properties purported to be covered thereby;
(b) evidence of the title of the Borrower and Hycroft Lewis Mine,
Inc. to such Real Property in the form of (i) the original and updated
status reports of Erwin Thompson & Hascheff, dated five (5) days before
the first Credit Extension, and (ii) a legal opinion of Erwin Thompson &
Hascheff, dated the date of the initial Credit Extension and in form and
substance satisfactory to the Lender and its legal counsel, which reports
and legal opinion will show title of the Borrower and Hycroft Lewis Mine,
Inc. in such Real Property satisfactory to the Lender and its legal
counsel and that the Borrower and Hycroft Lewis Mine, Inc. have placed of
record in the Offices of the Recorder of Humboldt and Pershing Counties,
Nevada, the Office of the Secretary of State of the State of Nevada and
the Office of the State Engineer of the Department of Conservation and
Natural Resources of the State of Nevada such instruments, in form
satisfactory to the Lender and its legal counsel, necessary to perfect
the Lien and security interest granted by the Borrower and Hycroft Lewis
Mine, Inc. in such Real Property and in the other Collateral described in
(and as such term is defined in) such Mortgage; and
(c) such other approvals, opinions, or documents as the Lender may
reasonably request.
SECTION V.1.8. Initial Borrowing Base Certificate. The Lender shall have
received an initial Borrowing Base Certificate,
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executed and delivered by an Authorized Officer of the Borrower, setting forth,
as of the date of the initial Credit Extension, computation of the Borrowing
Base Amount, and the Lender shall have received a copy of the Borrower's monthly
gold inventory report upon which the computation of the Borrowing Base Amount
was based.
SECTION V.1.9. Compliance Certificate. The Lender shall have received an
initial Compliance Certificate on a pro forma basis as if the Credit Extension
to be made on the date of the Initial Borrowing had occurred and as to such
items therein as the Lender reasonably requests, dated the date of the initial
Credit Extension, duly executed (and with all schedules thereto duly completed)
and delivered by the chief executive, financial or accounting Authorized Officer
of the Borrower.
SECTION V.1.10. Process Agent Letter. The Lender shall have received a
letter from CT Corporation Systems, in form and substance satisfactory to the
Lender, dated on or prior to the date of the initial Credit Extension, whereby
CT Corporation Systems acknowledges and accepts its appointment hereunder and
under all other Loan Documents by each of the Parent, Holdings, the Borrower and
each of the other Obligors as agent for service of process.
SECTION V.1.11. Life of Mine Plan; Financial Information, etc. The
Lender shall have received and be satisfied with its review of (a) the Life of
Mine Plan, (b) a copy of the May 1996 audit of the Borrower's reserves and (c) a
copy of the Borrower's current annual operating plan (which plan shall be on a
per month basis).
SECTION V.1.12. Master Subordination Agreement. The Lender shall have
received counterparts of the Master Subordination Agreement, dated the date
hereof, duly executed by each of the parties thereto.
SECTION V.1.13. Opinions of Counsel. The Lender shall have received
opinion letters in form and substance satisfactory to the Lender and its legal
counsel, each dated the date of the initial Credit Extension and addressed to
the Lender, from
(a) Ladner Downs, Canadian counsel to the Parent, and
(b) Erwin Thompson & Hascheff, Nevada counsel to the Obligors.
SECTION V.1.14. Closing Fees, Expenses, etc. The Lender shall have
received all fees, costs and expenses due and payable pursuant to Sections 3.4
and 9.3, if then invoiced.
SECTION V.2. All Credit Extensions. The obligation of the
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Lender to make any Credit Extension (including the initial
Credit Extension) shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 5.2.
SECTION V.2.1. Compliance with Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct
(a) the representations and warranties set forth in Article VI
(excluding, however, those contained in Section 6.7), Article III of each
Guaranty, Article III of each Pledge Agreement, Article III of each
Security Agreement, Article I of each Mortgage and Section 10 of the
Master Subordination Agreement shall be true and correct with the same
effect as if then made (unless stated to relate solely to an early date,
in which case such representations and warranties shall be true and
correct as of such earlier date);
(b) except as disclosed by the Borrower to the Lender pursuant to
Section 6.7
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or, to
the knowledge of the Borrower, threatened against the Parent,
Holdings, the Borrower or any of its Subsidiaries which might
reasonably be expected to have a Material Adverse Effect, and
(ii) no material adverse development shall have occurred in
any labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7 which
might reasonably be expected to have a Material Adverse Effect; and
(c) no Default or Event of Default shall have then occurred and be
continuing, and neither the Parent, Holdings, the Borrower, any other
Obligor, nor any Subsidiary is in material violation of any law or
governmental regulation or court order or decree; and
(d) the Outstanding Amount will not exceed the Borrowing Base
Amount.
SECTION V.2.2. Borrowing Request. The Lender shall have received a
Borrowing Request for such Credit Extension. Each of the delivery of a
Borrowing Request and the acceptance by the
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Borrower of the proceeds of such Credit Extension shall constitute a
representation and warranty by the Borrower that on the date of such Credit
Extension (both immediately before and after giving effect to such Credit
Extension and the application of the proceeds thereof) the statements made in
Section 5.2.1 are true and correct.
SECTION V.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Parent, Holdings, the Borrower
or any of its Subsidiaries or any other Obligors shall be satisfactory in form
and substance to the Lender and its counsel; the Lender and its counsel shall
have received all information, approvals, opinions, documents or instruments as
the Lender or its counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to make
Credit Extensions hereunder, the Borrower represents and warrants unto the
Lender as set forth in this Article VI.
SECTION VI.1. Organization, etc. Each of the Parent, Holdings, the
Borrower and each Subsidiary is a corporation validly organized and existing
and in good standing under the laws of the jurisdiction of its incorporation,
is duly qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the nature of its business requires such
qualification, and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform
its Obligations under this Agreement, the Note and each other Loan Document to
which it is a party and to own and hold under lease its property and to conduct
its business substantially as currently conducted by it.
SECTION VI.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower of this Agreement, the Note and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by the Parent and Holdings and each other Obligor of
each Loan Document executed or to be executed by it, are within the Borrower's
and each such other Obligor's corporate powers, have been duly authorized by
all necessary corporate action, and do not
(a) contravene the Borrower's or any such Obligor's Organic
Documents;
(b) contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower
or any such Obligor; or
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(c) result in, or require the creation or imposition of, any Lien on
any of the Borrower's or any such Obligor's properties.
SECTION VI.3. Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower, the Parent, Holdings or any other
Obligor of this Agreement, the Note or any other Loan Document to which it is a
party, except for those relating to filings and recordings required to perfect
or maintain perfection of the Liens granted pursuant to the Loan Documents.
Neither the Parent, Holdings, the Borrower nor any of its Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
SECTION VI.4. Validity, etc. This Agreement constitutes, and the Note
and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms; and each Loan Document executed pursuant hereto by the Parent and
Holdings and each other Obligor will, on the due execution and delivery thereof
by such Obligor, be the legal, valid and binding obligation of such Obligor
enforceable in accordance with its terms.
SECTION VI.5. Financial Information. The balance sheets of the Parent
and the Borrower and each of its Subsidiaries as at December 31, 1996, and the
related statements of earnings and changes in cash resources of the Parent and
the Borrower and each of its Subsidiaries, copies of which have been furnished
to the Lender, have been prepared in accordance with GAAP consistently applied,
and present fairly the consolidated financial condition of the corporations
covered thereby as at the dates thereof and the results of their operations for
the periods then ended.
SECTION VI.6. No Material Adverse Change. Since the date of the
financial statements described in Section 6.5, there has been no Material
Adverse Change.
SECTION VI.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrower, threatened litigation, action, proceeding
or labor controversy affecting the Borrower or any of its Subsidiaries, or any
of their respective
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properties, assets or revenues, which might reasonably be expected to have a
Material Adverse Effect, except as disclosed in Item 6.7 ("Litigation") of the
Disclosure Schedule attached hereto.
SECTION VI.8. Subsidiaries. The Borrower has no Subsidiaries, except
those Subsidiaries
(a) which are identified in Item 6.8 ("Existing Subsidiaries") of
the Disclosure Schedule attached hereto; or
(b) which are permitted to have been acquired in accordance with
Section 7.2.5 or 7.2.10.
SECTION VI.9. Ownership of Properties. Subject to the paramount title of
the United States in and to any of the unpatented mining claims which comprise
the Hycroft Mine, the Borrower and each of its Subsidiaries owns good and
marketable title to all of their respective properties and assets, real and
personal, tangible and intangible, of any nature whatsoever (including patents,
trademarks, trade names, service marks and copyrights), free and clear of all
Liens, charges or claims (including infringement claims with respect to
patents, trademarks, copyrights and the like) except as permitted pursuant to
Section 7.2.3.
SECTION VI.10. Taxes. Each of the Parent, Holdings, the Borrower and
each Subsidiary has filed all tax returns and reports required by law to have
been filed by it and has paid all taxes and governmental charges thereby shown
to be owing, except any such taxes or charges which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its books.
SECTION VI.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution
failure has occurred with respect to any Pension Plan sufficient to give rise
to a Lien under section 302(f) of ERISA. No condition exists or event or
transaction has occurred with respect to any Pension Plan which might result in
the incurrence by the Borrower or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in Item 6.11
("Employee Benefit Plans") of the Disclosure Schedule, neither the Borrower nor
any member of the Controlled Group has any contingent liability with respect to
any post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
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SECTION VI.12. Environmental Warranties. Except as set forth in Item
6.12 ("Environmental Matters") of the Disclosure Schedule:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Borrower or any Subsidiary have been, and continue
to be, owned or leased by the Borrower or such Subsidiary in material
compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by the Borrower or any of its Affiliates with respect to
any alleged violation of any Environmental Law by the Borrower or
any Subsidiary, or
(ii) complaints, notices or inquiries to the Borrower or any
of its Affiliates regarding potential liability of the Borrower or
any Subsidiary under any Environmental Law;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower or
any Subsidiary that, singly or in the aggregate, have, or might
reasonably be expected to have, a Material Adverse Effect;
(d) each of the Borrower and each Subsidiary has been issued, or
has applied for, and is in material compliance with, all permits,
certificates, approvals, licenses and other authorizations relating to
environmental matters and necessary or desirable for its businesses;
(e) no property now or previously owned or leased by the Borrower
or any Subsidiary is listed or proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to CERCLA,
on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any Subsidiary that, singly
or in the aggregate, have, or might reasonably be expected to have, a
Material Adverse Effect;
(g) neither the Borrower nor any Subsidiary has directly
transported or directly arranged for the
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transportation of any Hazardous Material to any location which is
listed or proposed for listing on the National Priorities List pursuant
to CERCLA, on the CERCLIS or on any similar state list or which is the
subject of federal, state or local enforcement actions or other
investigations which may lead to material claims against the Borrower or
such Subsidiary for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the Borrower
or any Subsidiary that might, singly or in the aggregate, have, or might
reasonably be expected to have, a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower or any Subsidiary which, with
the passage of time, or the giving of notice or both, would give rise to
liability under any
SECTION VI.13. Capitalized Lease Liabilities. On the Effective Date,
neither the Borrower nor any of its Subsidiaries has any Capitalized Lease
Liabilities other than those Capitalized Lease Liabilities which are identified
in Item 6.13 ("Capitalized Lease Liabilities") of the Disclosure Schedule
attached hereto.
SECTION VI.14. Regulations G, U and XVI.14. Neither the Parent, the
Borrower, nor any Subsidiary is engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock, and no proceeds of any
Credit Extensions will be used for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation G, U or X. Terms for which meanings
are provided in F.R.S. Board Regulation G, U or X or any regulations
substituted therefor, as from time to time in effect, are used in this Section
with such meanings.
SECTION VI.15. Royalties, etc. Except asdisclosed in Item 6.15
("Schedule of Royalties") of the Disclosure Schedule, neither the Hycroft Mine
nor any portion thereof (nor any interest of the Borrower or any Affiliate of
the Borrower therein) is subject to any royalty, net smelter return obligation,
net profit payment or similar payment obligation or arrangement.
SECTION VI.16. Accuracy of Information. All factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower or
any other Obligor in writing to the Lender for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all other
such factual information hereafter furnished by or on behalf of the
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Borrower and each other Obligor to the Lender will be, true and accurate in
every material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement by the
Lender, and such information is not, or shall not be, as the case may be,
incomplete by omitting to state any material fact necessary to make such
information not misleading.
ARTICLE VII
COVENANTS
SECTION VII.1. Affirmative Covenants. The Borrower agrees with the Lender
that, until the Commitment has terminated and all Obligations have been paid
and performed in full, the Borrower will perform the obligations set forth in
this Section 7.1.
SECTION VII.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to the Lender copies of
the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 60 days after the
end of each of the first three Fiscal Quarters of each Fiscal Year of the
Parent, (i) an unaudited consolidated balance sheet of (x) the Parent and
its Subsidiaries and (y) the Borrower and its Subsidiaries, in each case
as of the end of such Fiscal Quarter and (ii) unaudited consolidated
statements of earnings and changes in cash resources of (x) the Parent
and its Subsidiaries and (y) the Borrower and its Subsidiaries, in each
case for such Fiscal Quarter and for the period commencing at the end of
the previous Fiscal Year and ending with the end of such Fiscal Quarter,
in each case certified by the chief financial Authorized Officer of the
Parent or of the Borrower, as the case may be;
(b) as soon as available and in any event within 120 days after the
end of each Fiscal Year of the Parent, (i) a copy of the annual audit
report for such Fiscal Year for the Parent and its Subsidiaries,
including therein an audited consolidated balance sheet of the Parent and
its Subsidiaries as of the end of such Fiscal Year and audited
consolidated statements of earnings and changes in cash resources of the
Parent and its Subsidiaries for such Fiscal Year, in each case certified
(without any Impermissible Qualification) in a manner acceptable to the
Lender by Cooper's & Lybrand or other independent public accountants
acceptable to the Lender, together with a certificate from the chief
financial Authorized Officer of the Borrower containing a computation
of, and showing compliance with,
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the financial covenant contained in Section 7.2.4 and to the effect
that he has not become aware of any Default or Event of Default that has
occurred and is continuing, or, if he has become aware of such Default or
Event of Default, describing such Default or Event of Default and the
steps, if any, being taken to cure it and (ii) an unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such
Fiscal Year and an unaudited consolidated statements of earnings and
changes in cash resources of the Borrower and its Subsidiaries for such
Fiscal Year; provided, however, that in the event the Lender shall at any
time have determined, in its sole and absolute discretion, that a
material change has occurred with respect to the Parent such that the
Lender would prefer to receive audited consolidated financial statements
of the Borrower and its Subsidiaries, the Lender shall so notify the
Borrower no later than 30 days prior to the end of such Fiscal Year and
the Borrower shall furnish, or cause to be furnished to the Lender, as
soon as possible and in any event within 90 days after the end of such
Fiscal Year, a copy of an annual audit report for such Fiscal Year for
the Borrower and its Subsidiaries, including therein an audited
consolidated balance sheet of the Borrower and its Subsidiaries as of the
end of such Fiscal Year and audited consolidated statements of earnings
and changes in cash resources of the Borrower and its Subsidiaries for
such Fiscal Year, in each case certified (without any Impermissible
Qualification) in a manner acceptable to the Lender by Cooper's & Lybrand
or other independent public accountants acceptable to the Lender,
together with a certificate from the chief financial Authorized Officer
of the Borrower containing a computation of, and showing compliance with,
the financial covenant contained in Section 7.2.4 and to the effect that
he has not become aware of any Default or Event of Default that has
occurred and is continuing, or, if he has become aware of such Default or
Event of Default, describing such Default or Event of Default and the
steps, if any, being taken to cure it;
(c) as soon as available and in any event within 21 days after the
end of each month, and at any other time as the Lender may from time to
time request immediately following such request (and, in any event, no
later than three Business Days following such request), a Borrowing Base
Certificate, together with the Borrower's monthly gold inventory report
upon which the computation of the Borrowing Base Amount (as set forth in
such Borrowing Base Certificate) was based;
(d) in any event not later than 60 days after the end of each Fiscal
Year of the Borrower, an annual Life of Mine Plan and an annual operating
plan (on a month-by-month
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basis) for the immediately pending Fiscal Year satisfactory in all
respects and acceptable to the Lender (including with respect to any
change in circumstances pertaining to the Borrower or any other Obligor
or the financial condition, business, assets, operations, properties or
prospects of the Parent, Holdings, the Borrower or the Borrower and its
Subsidiaries taken as a whole);
(e) as soon as available and in any event within 21 days after the
end of each month, mine manager reports on the operation of the Hycroft
Mine;
(f) promptly after the same is approved by the Parent's or the
Borrower's or any Subsidiary's Board of Directors, a copy of long-range
plans that may have been prepared for or at the direction of such Board
of Directors, and all amendments thereto which may be in effect from time
to time;
(g) as soon as available and in any event within 21 days after the
end of each month, a certificate, executed by the chief financial
Authorized Officer of the Borrower, showing (in reasonable detail and
with appropriate calculations and computations in all respects
satisfactory to the Lender) compliance with the financial covenant set
forth in Section 7.2.4.;
(h) as soon as possible and in any event within three days after the
occurrence of each Default, a statement of the chief financial Authorized
Officer of the Borrower setting forth details of such Default and the
action which the Borrower has taken and proposes to take with respect
thereto;
(i) as soon as possible and in any event within three days after (x)
the occurrence of any adverse development with respect to any litigation,
action, proceeding or labor controversy described in Section 6.7 or (y)
the commencement of any labor controversy, litigation, action or
proceeding of the type described in Section 6.7, notice thereof and
copies of all documentation relating thereto;
(j) promptly after the sending or filing thereof, copies of all
reports which the Parent or the Borrower or any of its Subsidiaries sends
to any of its securityholders, and all reports and registration
statements which the Parent or the Borrower or any of its Subsidiaries
files with the Securities and Exchange Commission or any national or
other securities exchange;
(k) immediately upon becoming aware of the institution of any steps
by the Borrower or any other Person to
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terminate any Pension Plan, or the failure to make a required
contribution to any Pension Plan if such failure is sufficient to give
rise to a Lien under section 302(f) of ERISA, or the taking of any action
with respect to a Pension Plan which could result in the requirement that
the Borrower furnish a bond or other security to the PBGC or such Pension
Plan, or the occurrence of any event with respect to any Pension Plan
which could result in the incurrence by the Borrower of any material
liability, fine or penalty, or any material increase in the contingent
liability of the Borrower with respect to any post-retirement Welfare
Plan benefit, notice thereof and copies of all documentation relating
thereto; and
(l) such other information respecting the condition or operations,
financial or otherwise, of the Parent or Holdings or the Borrower or any
of its Subsidiaries as the Lender may from time to time reasonably
request, including such environmental reports from such environmental
audit firms as may be acceptable to the Lender, in form, scope and
substance satisfactory to the Lender, as the Lender may from time to time
reasonably require.
SECTION VII.1.2. Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation):
(a) the maintenance and preservation of its corporate existence and
qualification as a foreign corporation; and
(b) the payment, before the same become delinquent, of all taxes,
assessments and governmental charges imposed upon it or upon its property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION VII.1.3. Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless the Borrower
determines in good faith that the continued maintenance of any of its
properties is no longer economically desirable.
SECTION VII.1.4. Insurance. The Borrower will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained with responsible
insurance companies insurance with respect to its properties and business
(including business
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interruption insurance) against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon the request of the Lender, furnish to the Lender at reasonable
intervals a certificate of an Authorized Officer of the Borrower setting forth
the nature and extent of all insurance maintained by the Borrower and its
Subsidiaries in accordance with this Section.
SECTION VII.1.5. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect
all of its business affairs and transactions and permit the Lender or any of
its representatives, at reasonable times and intervals, following prior notice
by the Lender to the Borrower, to visit all of its offices, to discuss its
financial matters with its officers and independent public accountant (and the
Borrower hereby authorizes such independent public accountant to discuss the
Borrower's financial matters with the Lender or its representatives whether or
not any representative of the Borrower is present) and to examine (and, at the
expense of the Borrower, photocopy extracts from) any of its books or other
corporate records. The Borrower shall pay any fees of such independent public
accountant incurred in connection with the Lender's exercise of its rights
pursuant to this Section.
SECTION VII.1.6. Environmental Covenant. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) immediately notify the Lender and provide copies upon receipt
of all written claims, complaints, notices or inquiries relating to the
condition of its facilities and properties or compliance with
Environmental Laws, and shall promptly cure and have dismissed with
prejudice to the satisfaction of the Lender any actions and proceedings
relating to compliance with Environmental Laws; and
(c) provide such information and certifications which the Lender
may reasonably request from time to time to evidence compliance with this
Section 7.1.6.
SECTION VII.1.7. Future Subsidiaries. Upon any Person becoming, after
the Effective Date, either a direct or indirect Subsidiary of the Borrower, or
upon the Borrower directly or indirectly acquiring additional Capital Stock of
any existing
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Subsidiary having voting rights or contingent voting rights, the
Borrower shall notify the Lender of such acquisition, and, unless otherwise
agreed to by the Borrower and the Lender,
(a) such Person shall (i) execute and deliver to the Lender (A) a
Subsidiary Guaranty, (B) a Subsidiary Security Agreement, (C) if such
Person owns any Real Property, an appropriate form of Mortgage, (ii)
deliver to the Lender acknowledgment copies of Uniform Commercial Code
financing statements (form UCC-1) executed and delivered by such Person
naming such Person as the debtor and the Lender as the secured party, or
other similar instruments or documents, filed under the Uniform
Commercial Code and any other applicable recording statutes, in the case
of Real Property, of all jurisdictions as may be necessary or, in the
opinion of the Lender, desirable to perfect the security
interest of the Lender pursuant to the Subsidiary Security Agreement or a
Mortgage, as the case may be, and (iii) to the extent such Person is
required to pledge stock of a Subsidiary pursuant to clause (b) of
Section 7.1.7, become a party to the Obligor Pledge Agreement, if not
already a party thereto as a pledgor, in a manner satisfactory to the
Lender;
(b) the Borrower and each Subsidiary shall, pursuant to the
applicable Pledge Agreement, pledge to the Lender all of the outstanding
shares of Capital Stock of each Subsidiary along with undated stock
powers for such certificates, executed in blank (or, if any such shares
of capital stock are uncertificated, confirmation and evidence
satisfactory to the Lender that the security interest in such
uncertificated securities has been transferred to and perfected by the
Lender, in accordance with Section 8-313 and Section 8-321 of the U.C.C.
or any other similar law which may be applicable); and
(c) the Borrower and each Subsidiary shall, pursuant to the
applicable Pledge Agreement, pledge to the Lender, all intercompany notes
evidencing Indebtedness in favor of the Borrower or such Subsidiary
(which shall, unless the Lender shall otherwise agree, be in the form of
Exhibit A to the Obligor Pledge Agreement), as the case may be;
together, in each case, with such opinions of legal counsel for the Borrower
(which shall be from counsel reasonably satisfactory to the Lender) relating
thereto, which legal opinions shall be in form and substance reasonably
satisfactory to the Lender.
SECTION VII.1.8. Additional Collateral. The Borrower shall, and shall
cause each of its Subsidiaries to cause the Lender to have at all times a first
priority perfected security interest (subject only to Liens and encumbrances
permitted under
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Section 7.2.3) in all of the property (real and personal) owned from time to
time by the Borrower and such Subsidiaries to the extent the same constitutes
or would constitute "Collateral" under each of the Security Agreements and
under each of the Mortgages. Without limiting the generality of the foregoing,
the Borrower shall, and shall cause each of its Subsidiaries to, execute,
deliver and/or file (as applicable) or cause to be executed, delivered and/or
filed (as applicable), the pledge agreement(s), the security agreement(s),
Uniform Commercial Code (Form UCC-1) financing statements, Uniform Commercial
Code (Form UCC-3) termination statements, and other documentation necessary to
grant and perfect such security interest, in each case in form and substance
satisfactory to the Lender together, in each case, with such opinions of legal
counsel for the Borrower (which shall be from counsel reasonably satisfactory
to the Lender) relating thereto, which legal opinions shall be in form and
substance reasonably satisfactory to the Lender.
SECTION VII.1.9. Use of Proceeds. The Borrower shall apply the proceeds
of the Credit Extensions
(a) for working capital and general corporate purposes of the
Borrower and the Subsidiary Guarantors; and
(b) to repay the Indebtedness identified in Item 7.2.2(b)
("Indebtedness to be Paid") of the Disclosure Schedule and in Item
7.2.2(c) ("Ongoing Indebtedness") of the Disclosure Schedule .
SECTION VII.1.10. Counterparty Notices. The Borrower shall furnish, or
shall cause to be furnished, to the Lender and its legal counsel, as soon as
available and in any event within 30 days after the date hereof, the
Counterparty Notices required to be delivered pursuant to (and as such term is
defined in) the Mortgage executed and delivered pursuant to Section 5.1.7.
SECTION VII.2. Negative Covenants. The Borrower agrees with the Lender
that, until the Commitment has terminated and all Obligations have been paid
and performed in full, the Borrower will perform the obligations set forth in
this Section 7.2.
SECTION VII.2.1. Business Activities. The Borrower will not, and will
not permit any of its Subsidiaries to, engage in any business activity, except
those described in the first recital and such activities as may be incidental
or related thereto.
SECTION VII.2.2. Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
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(a) Indebtedness in respect of the Loans and other Obligations;
(b) until the date of the initial Borrowing, Indebtedness identified
in Item 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure Schedule;
(c) unsecured intercompany Indebtedness of the Borrower owing to the
Parent which is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of
the Disclosure Schedule to the extent (and only to the extent) such
Indebtedness is Subordinated Debt;
(d) Indebtedness incurred in the ordinary course of business
(including open accounts extended by suppliers on normal trade terms in
connection with purchases of goods and services, but excluding
Indebtedness incurred through the borrowing of money or Contingent
Liabilities);
(e) Indebtedness in respect of the Capitalized Lease Liabilities
identified in Item 6.13 ("Capitalized Lease Liabilities") of the
Disclosure Schedule and as further permitted by Section 7.2.7;
(f) Indebtedness of any Subsidiary Guarantor owing to the Borrower
or any other Subsidiary Guarantor, which Indebtedness
(i) shall be evidenced by one or more promissory notes (such
promissory note to be, unless otherwise agreed to by the Lender, in
substantially the form of Exhibit A to the Obligor Pledge
Agreement) duly executed and delivered in pledge pursuant to a
Pledge Agreement to the Lender; and
(ii) shall not be forgiven or otherwise discharged for any
consideration other than payment in full or in part (provided, that
only the amount repaid in part shall be discharged) in cash; and
(g) unsecured intercompany Indebtedness which is Subordinated Debt
(not evidenced by a note or other instrument) of the Borrower owing to a
Subsidiary (provided, that each such Subsidiary has previously executed
and delivered to the Lender the Master Subordination Agreement);
provided, however, that no Indebtedness otherwise permitted by clause (d), (e),
(f) or (g) shall be permitted if, after giving effect to the incurrence
thereof, any Default shall have occurred and be continuing.
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SECTION VII.2.3. Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets, whether now owned or hereafter
acquired, except:
(a) Liens securing payment of the Obligations, granted pursuant to
any Loan Document;
(b) until the date of the initial Borrowing, Liens securing payment
of Indebtedness of the type permitted and described in clause (b) of
Section 7.2.2;
(c) Permitted Liens;
(d) Liens securing Indebtedness in an aggregate amount not to
exceed, at any time, U.S. $500,000 of the type described in clause (d) of
Section 7.2.2; and
(e) judgment Liens in existence less than 15 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies.
SECTION VII.2.4. Financial Condition. The Borrower will not permit at
any time its Tangible Net Worth to be less than U.S. $40,000,000; provided,
that such amount shall be reduced (dollar for dollar), subject to the following
proviso, to the extent (and only to the extent) such repayment is made with
proceeds from Borrowings made hereunder, by the amount of each repayment of the
intercompany Indebtedness of the Borrower outstanding on the Effective Date and
owing to the Parent and permitted pursuant to clauses (b) and (c) of Section
7.2.2; provided, further, that, in any event, the aggregate amount of all such
reductions pursuant to the foregoing proviso shall not exceed U.S. $13,000,000.
SECTION VII.2.5. Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in
Item 7.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
(d) without duplication, investments permitted as Capital
Expenditures pursuant to Section 7.2.7; and
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(e) in the ordinary course of business, Investments by the Borrower
in any of its Subsidiaries, or by any such Subsidiary in any of its
Subsidiaries, by way of contributions to capital or loans or advances;
provided, however, that
(f) any Investment which when made complies with the requirements of
the definition of the term "Cash Equivalent Investment" may continue to
be held notwithstanding that such Investment if made thereafter would not
comply with such requirements; and
(g) no Investment otherwise permitted by clause (e) shall be
permitted to be made if, immediately before or after giving effect
thereto, any Default shall have occurred and be continuing.
SECTION VII.2.6. Restricted Payments, etc. On and at all times after the
Effective Date:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of Capital Stock (now or hereafter outstanding) of the Borrower or
on any warrants, options or other rights with respect to any shares of
any class of Capital Stock (now or hereafter outstanding) of the Borrower
(other than dividends or distributions payable in its common stock or
warrants to purchase its common stock or splitups or reclassifications of
its stock into additional or other shares of its common stock) or apply,
or permit any of its Subsidiaries to apply, any of its funds, property or
assets to the purchase, redemption, sinking fund or other retirement of,
or agree or permit any of its Subsidiaries to purchase or redeem, any
shares of any class of Capital Stock (now or hereafter outstanding) of
the Borrower, or warrants, options or other rights with respect to any
shares of any class of Capital Stock (now or hereafter outstanding) of
the Borrower;
(b) the Borrower will not, and will not permit any of its
Subsidiaries to
(i) make any payment or prepayment of principal of, or make
any payment of interest on, any Subordinated Debt which would
violate the subordination provisions of such Subordinated Debt or
which would contravene the provisions of the Master Subordination
Agreement; or
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(ii) redeem, purchase or defease any Subordinated Debt (other
than intercompany Indebtedness owing by any Subsidiary to the
Borrower, in accordance with the provisions hereof and of the
Master Subordination Agreement); and
(c) the Borrower will not, and will not permit any Subsidiary to,
make any deposit for any of the foregoing purposes;
provided, however, that, notwithstanding the provisions of clause (b) above,
the Borrower shall, to the extent not otherwise restricted by the other terms
and provisions of this Agreement or the terms and provisions of the Master
Subordination Agreement or any Subordinated Debt, be permitted to, but only in
connection with, and with the proceeds from, any Borrowing hereunder, make
repayments of the intercompany Indebtedness of the Borrower owing to the Parent
which is identified in Item 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule on the date of the making of, and in an aggregate amount not to exceed
the amount of, such Credit Extension.
SECTION VII.2.7. Capital Expenditures, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except Capital Expenditures detailed in the
annual operating plan for such Fiscal Year delivered pursuant to Section 5.1.11
or clause (d) of Section 7.1.1, which annual operating plan is satisfactory in
all respects and acceptable to the Lender (including with respect to the
Capital Expenditures detailed therein).
SECTION VII.2.8. Rental Obligations. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into at any time any arrangement which
does not create a Capitalized Lease Liability and which involves the leasing by
the Borrower or any of its Subsidiaries from any lessor of any real or personal
property (or any interest therein), except arrangements which are included in
the annual operating plan most recently delivered pursuant to either Section
5.1.11 or clause (d) of Section 7.1.1, which annual operating plan is
satisfactory in all respects and acceptable to the Lender (including with
respect to any such arrangements).
SECTION VII.2.9. Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any
division thereof) except
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(a) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, the Borrower or any other Subsidiary
Guarantor, and the assets or stock of any Subsidiary may be purchased or
otherwise acquired by the Borrower or any other Subsidiary Guarantor; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its Subsidiary
Guarantors may purchase all or substantially all of the assets of any
Person, or
acquire such Person by merger, if permitted (without duplication) by
Section 7.2.7 to be made as a Capital Expenditure.
SECTION VII.2.10. Asset Dispositions, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute,
dispose of or otherwise convey, or grant options, warrants or other rights with
respect to, all or any substantial part of its assets (including accounts
receivable and Capital Stock of Subsidiaries) to any Person, unless
(a) such sale, transfer, lease, contribution, disposition or
conveyance is in the ordinary course of its business or is permitted by
Section 7.2.9;
(b) such sale, transfer, lease, contribution, disposition or
conveyance is in respect of
(i) obsolete or replaced assets or other assets no longer used
or useful to its business; or
(ii) unpatented mining claims in the Outlying Area (as such
term is defined in the Mortgage delivered pursuant to Section
5.1.7) that are neither used nor useful to its business and the
disposal of which will not have a Material Adverse Effect; or
(c) the net book value of such assets, together with the net book
value of all other assets sold, transferred, leased, contributed,
disposed of or conveyed pursuant to this clause (c) (which assets shall,
for greater certainty, exclude assets the sale, transfer, lease,
contribution, disposition or conveyance of which is permitted under
clause (a) or (b) of this Section) does not exceed U.S.$500,000 during
any Fiscal Year.
SECTION VII.2.11. Modification of Certain Agreements. The Borrower will
not consent to any amendment, supplement or other modification of any of the
terms or provisions contained in, or applicable to, any document or instrument
evidencing or applicable to any Subordinated Debt, other than any amendment,
supplement or other modification which extends the date or reduces the amount
of any required repayment or redemption.
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SECTION VII.2.12. Transactions with Affiliates. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement or contract is fair and equitable to the Borrower or
such Subsidiary and is an arrangement or contract of the kind which would be
entered into by a prudent Person in the position of the Borrower or such
Subsidiary with a Person which is not one of its Affiliates.
SECTION VII.2.13. Negative Pledges, etc. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any agreement (excluding this
Agreement, any other Loan Document and any agreement governing any Indebtedness
permitted by clause (b) of Section 7.2.2 as in effect on the Effective Date)
prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, or the
ability of the Borrower or any other Obligor to amend or otherwise modify
this Agreement or any other Loan Document; or
(b) the ability or any Subsidiary to make any payments, directly or
indirectly, to the Borrower by way of dividends, advances, repayments of
loans or advances, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments, or any
other agreement or arrangement which restricts the ability of any such
Subsidiary to make any payment, directly or indirectly, to the Borrower.
SECTION VII.2.14. Sale and Leaseback. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any agreement or arrangement with
any other Person providing for the leasing by the Borrower or any of its
Subsidiaries of real or personal property which has been or is to be sold or
transferred by the Borrower or any of its Subsidiaries to such other Person or
to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the Borrower
or any of its Subsidiaries.
SECTION VII.2.15. Stock of Subsidiaries. The Borrower will not permit
any Subsidiary to issue any Capital Stock (whether for value or otherwise) to
any Person other than the Borrower or another wholly-owned Subsidiary.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION VIII.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default".
SECTION VIII.1.1. Non-Payment of Obligations. The Borrower shall
default in the payment or prepayment when due of any principal of or interest
on any Loan, or the Borrower shall default (and such default shall continue
unremedied for a period of five days) in the payment when due of any commitment
fee or of any other Obligation.
SECTION VIII.1.2. Breach of Warranty. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate
furnished by or on behalf of the Borrower or any other Obligor to the Lender
for the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to Article V) is or
shall be incorrect when made in any material respect.
SECTION VIII.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Section 7.1.1 or Section 7.1.10 or Section 7.2.
SECTION VIII.1.4. Non-Performance of Other Covenants and Obligations.
The Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan
Document executed by it, and such default shall continue unremedied for a
period of 30 days after notice thereof shall have been given to the Borrower by
the Lender.
SECTION VIII.1.5. Default on Other Indebtedness. A default shall occur
in the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries or any
other Obligor having a principal amount, individually or in the aggregate, in
excess of (x) in the case of all Obligors excluding the Parent, U.S. $500,000,
and (y) in the case of the Parent, Cdn $2,500,000, or a default shall occur in
the performance or observance of any obligation or condition with respect to
such Indebtedness if the effect of such default is to accelerate the maturity
of any such Indebtedness or such default shall continue unremedied for any
applicable period of time sufficient to permit the holder or
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holders of such Indebtedness, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to its expressed
maturity.
SECTION VIII.1.6. Judgments. Any judgment or order for the payment of
money in excess of U.S. $500,000 shall be rendered against the Borrower or any
of its Subsidiaries or any other Obligor and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect.
SECTION VIII.1.7. Pension Plans. Any of the following events shall
occur with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, the Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a liability or obligation to such Pension Plan, in excess
of U.S. $100,000; or
(b) a contribution failure occurs with respect to any
Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA.
SECTION VIII.1.8. Control of the Borrower. Any Change in Control shall
occur.
SECTION VIII.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of
its Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing
its inability or unwillingness to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in, the appointment of a
trustee, receiver, sequestrator or other custodian for the Borrower or
any of its Subsidiaries or any other Obligor or any property of any
thereof, or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for the Borrower or any of its
Subsidiaries or any other Obligor or for a substantial part of the
property of any thereof, and
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such trustee, receiver, sequestrator or other custodian shall not be
discharged within 60 days, provided that the Borrower, each Subsidiary
and each other Obligor hereby expressly authorizes the Lender to appear
in any court conducting any relevant proceeding during such 60-day period
to preserve, protect and defend its rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Borrower or any of its
Subsidiaries or any other Obligor, and, if any such case or proceeding is
not commenced by the Borrower or such Subsidiary or such other Obligor,
such case or proceeding shall be consented to or acquiesced in by the
Borrower or such Subsidiary or such other Obligor or shall result in the
entry of an order for relief or shall remain for 60 days undismissed,
provided that the Borrower, each Subsidiary and each other Obligor hereby
expressly authorizes the Lender to appear in any court conducting any
such case or proceeding during such 60-day period to preserve, protect
and defend its rights under the Loan Documents; or
(e) take any action (corporate or otherwise) authorizing, or in
furtherance of, any of the foregoing.
SECTION VIII.1.10. Impairment of Security, etc. Any Loan Document, or
any Lien granted thereunder, shall (except in accordance with its terms), in
whole or in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of any Obligor party thereto; the
Borrower, any other Obligor or any other party shall, directly or indirectly,
contest in any manner such effectiveness, validity, binding nature or
enforceability; or any Lien securing any Obligation shall, in whole or in part,
cease to be a perfected first Lien.
SECTION VIII.2. Action if Bankruptcy. If any Event of Default described
in clauses (a) through (d) of Section 8.1.9 shall occur, the Commitment (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION VIII.3. Action if Other Event of Default. If any Event of
Default (other than any Event of Default described in clauses (a) through (d)
of Section 8.1.9) shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Lender shall by notice to the Borrower declare all or
any portion of the outstanding principal amount of the Loans and other
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Obligations to be due and payable and/or the Commitment (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans
and other Obligations which shall be so declared due and payable shall be and
become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitment shall terminate.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION IX.1. Waivers, Amendments, etc. The provisions of this Agreement
and of each other Loan Document may from time to time be amended, modified or
waived, if such amendment, modification or waiver is in writing and consented
to by the Borrower and the Lender. No failure or delay on the part of the
Lender or the holder of the Note in exercising any power or right under this
Agreement or any other Loan Document 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 Borrower in any case shall entitle it to any
notice or demand in similar or other circumstances. No waiver or approval by
the Lender or the holder of the Note under this Agreement or any other Loan
Document 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 IX.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party
at its address or facsimile number set forth below its signature hereto or at
such other address or facsimile number as may be designated by such party in a
notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile,
shall be deemed given when transmitted (upon electronic confirmation thereof).
SECTION IX.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all expenses of the Lender (including the reasonable fees and the
out-of-pocket expenses of counsel to the Lender and of local or special
counsel, if any, who may be retained by counsel to the Lender) in connection
with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments,
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waivers, consents, supplements or other modifications to this Agreement
or any other Loan Document as may from time to time hereafter be required
or requested by the Borrower, whether or not the transactions
contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording of the Mortgage,
each Pledge Agreement and each Security Agreement and/or any Uniform
Commercial Code financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all other
documents or instruments of further assurance required to be filed or
recorded or refiled or rerecorded by the terms hereof or of the Mortgage,
such Pledge Agreement or such Security Agreement; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Lender harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of this Agreement, the extensions of credit
hereunder, or the issuance of the Note or any other Loan Documents. The
Borrower also agrees to reimburse the Lender upon demand for all reasonable
out-of-pocket expenses (including attorneys' fees and legal expenses) incurred
by the Lender in connection with (x) the negotiation of any restructuring or
"work-out", whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
SECTION IX.4. Indemnification. In consideration of the execution and
delivery of this Agreement by the Lender and the extension of the Commitment,
the Borrower hereby indemnifies, exonerates and holds the Lender and each of
its officers, directors, employees and agents (collectively, the "Indemnified
Parties") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses incurred in
connection therewith (irrespective of whether any such Indemnified Party is a
party to the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension;
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(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (including any
action brought by or on behalf of the Borrower as the result of any
determination by the Lender pursuant to Article V not to make any Credit
Extension; provided, that, in the event a court of competent jurisdiction
in a final proceeding shall find that any such determination by the
Lender was solely as a result of the Lender's wilful misconduct, the
Lender will reimburse the Borrower for any Indemnified Liabilities paid
by the Borrower to the Lender in respect of such action);
(c) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by the Borrower or any of
its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any of its Subsidiaries of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or wilful misconduct, and if and to the extent that the
foregoing undertaking may be unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under applicable law.
SECTION IX.5. Survival. The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 9.3 and 9.4 shall in each case survive any termination of
this Agreement, the payment in full of all Obligations and the termination of
all Commitments. The representations and warranties made by the Borrower and
each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document.
SECTION IX.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
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SECTION IX.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION IX.8. Execution in Counterparts, Effectiveness, etc. 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. This Agreement shall become effective
when counterparts hereof executed on behalf of the Borrower and the Lender
shall have been received by the Lender and notice thereof shall have been given
by the Lender to the Borrower.
SECTION IX.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE NOTE
AND EACH OTHER LOAN DOCUMENT (EXCEPT, IN THE CASE OF ANY MORTGAGE, AS OTHERWISE
EXPRESSLY PROVIDED THEREIN) SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement,
the Note 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.
SECTION IX.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that the Borrower may not assign or
transfer its rights or obligations hereunder without the prior written consent
of the Lender. Notwithstanding anything to the contrary herein, the Lender may
at its own expense assign or grant participations in its rights and obligations
hereunder and under each of the other Loan Documents with the Borrower's prior
consent thereto, such consent not to be unreasonably withheld or delayed. In
furtherance of the foregoing sentence, the Lender may, after receiving such
consent from the Borrower, disclose to any assignee or participant or to any
potential assignee or participant in respect of which the Borrower has
provided, in the manner described in the preceding sentence, such consent,
information regarding the financial condition, business, assets, operations,
properties or prospects of the Borrower and its Affiliates and any other
information provided under or otherwise relating to this Agreement or any of
the other Loan Documents.
SECTION IX.11. Other Transactions. Nothing contained herein shall
preclude the Lender from engaging in any transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Affiliates in which the Borrower or such Affiliate is not restricted
hereby from engaging with any other Person.
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SECTION IX.12. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER OR THE
BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE LENDER'S OPTION, IN THE
COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK 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. THE BORROWER
HEREBY IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH
AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, UNITED
STATES, AS ITS AGENT TO RECEIVE, ON THE BORROWER'S BEHALF AND ON BEHALF OF THE
BORROWER'S PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY
OTHER PROCESS WHICH MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS
TO THE BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE
ADDRESS, AND THE BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS
AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF
SERVICE, THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. THE BORROWER 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 BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF 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 BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION IX.13. Waiver of Jury Trial. THE LENDER AND THE BORROWER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY 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 OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE LENDER OR THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER
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PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER LOAN DOCUMENT.
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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.
HYCROFT RESOURCES & THE BANK OF NOVA SCOTIA
DEVELOPMENT, INC.
By:/S/ A. J. ALI By: /s/ M. VAN OTTERLOO
------------------------ ---------------------------
Title: VP Finance & CFO Title: Senior Relationship
Manager
Address: 370 Seventeenth Street Address: 44 King Street West
Suite 3000 16th Floor
Denver, Colorado Toronto, Ontario M5H 1H1
U.S.A. 80202 CANADA
Facsimile No.: (303) 629-2499 Facsimile No.: (416) 866-2009
Attention: Vice President Attention: Vice President,
Finance Chief Corporate Banking-Mining
Financial Officer
Domestic
Office: 580 California Street
Suite 2100
San Francisco, CA 94104
Facsimile No.: (415) 397-0791
Attention: Vice President
LIBOR
Office: 580 California Street
Suite 2100
San Francisco, CA 94104
Facsimile No.: (415) 397-0791
Attention: Vice President
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74
Schedule I
DISCLOSURE SCHEDULE
(Item references are to sections of the Credit Agreement)
ITEM 1.1 PERMITTED ENCUMBRANCES ON MORTGAGED REAL PROPERTY.
1. Reservations and exceptions stated in patents and Acts of law
authorizing the issuance of patents for patented mining claims and the
paramount title of the United States in respect of unpatented mining claims.
2. Statutory liens for: (a) assessments and taxes not yet payable or
not delinquent; and (b) ore and bullion product in accordance with NRS 108.850.
3. Recorded or Bureau of Land Management issued easements and
rights-of-way for existing electrical transmission lines or poles, pipelines
and roads on or under the lands.
4. Rights-of-way granted by the United States Department of Interior,
Bureau of Land Management, including rights-of-way Nos. CC-04688, CC-05734,
N-3335, N-39119, N-42787, N-44999, N-46289, N-46292, N-46564, N-46728, N-46959,
N-47590, N-54892 and N-54893.
5. Financing Statements, as follows:
a. Financing Statement (Form UCC-1) dated April 21, 1993, made
by Hycroft Resources & Development, Inc. as debtor and Caterpillar Financial
Services Corporation as secured party. The UCC-1 was filed in the Office of
the Secretary of State of the State of Nevada, May 11, 1993, File No. 93-04610.
b. Financing Statement (Form UCC-1) dated June 4, 1992, made by
Hycroft Resources & Development, Inc. as debtor and The CIT Group/Equipment
Financing, Inc. as secured party. The UCC-1 was filed in the Office of the
Secretary of State of the State of Nevada, July 2, 1993, File No. 93-06651.
c. Financing Statement (Form UCC-1) dated September 28, 1995,
made by Hycroft Resources & Development, Inc. as debtor and Caterpillar
Financial Services Corporation as secured party. The UCC-1 was filed in the
Office of the Secretary of State of the State of Nevada, October 25, 1995,
File No. 95-15339. This Financing Statement was amended by filings on
February 29, 1996 and March 20, 1996, of Forms UCC-2, to change the collateral
subject to the Financing Statement.
6. The (a) Lewis-Hycroft Agreement dated January 10, 1989; (b) the
Second Lewis-Hycroft Agreement dated March 15, 1991; and (c) the rights of
Frank W. Lewis and F.W. Lewis, Inc. prescribed in the Arbitrator's Rulings
dated January 25, 1996, in the Arbitration Proceedings for the American
Arbitration Association, Cases Nos. 74-E115-0528-89 and 79-199-0063-94, to the
extent such rights affect the rights of use and title of Hycroft Resources &
Development, Inc.
75
Schedule I
in respect of the patented and unpatented mining claims owned by it which
constitute the Crofoot Mine.
7. Reservations stated in the Deed of Patented Mining Claims With
Reservation of Net Proceeds Royalty and Sulphur Mineral Rights and the Deed of
Unpatented Mining Claims with Reservation of Net Proceeds Royalty and Sulphur
Mineral Rights each made by and between Daniel M. Crofoot, individually and as
trustee, and Hycroft Resources & Development, Inc., and recorded on September
26, 1996, in the Office of the Humboldt County Recorder Documents 1996-9621 and
1996-9622, respectively, and in the Office of the Recorder of Pershing County,
Nevada, as File Nos. 208845 and 208846, respectively.
76
Schedule I
ITEM 5.1.7 MORTGAGED PROPERTY.
The patented and unpatented mining claims, real property and water rights
described in Schedules III and IV.
ITEM 6.7 LITIGATION.
Arbitration among Frank W. Lewis, F.W. Lewis, Inc., Hycroft Lewis Mine,
Inc. and Vista Gold Corp. before the American Arbitration Association, Cases
Nos. 74-E115-0528-89 and 79-199-0063-94.
ITEM 6.8 EXISTING SUBSIDIARIES.
STATE OF
NAME INCORPORATION OWNERSHIP % BUSINESS DESCRIPTION
Hycroft Lewis Mine, Inc. Nevada 100% Operates Lewis Mine
ITEM 6.11 EMPLOYEE BENEFIT PLANS.
Vista Gold Holdings Inc. 401 (k) Plan.
ITEM 6.12 ENVIRONMENTAL MATTERS.
I. Alleged Air Quality Violation Nos. 510 and 511 issued August 30,
1988, Failure of water sprays on crusher at the Lewis Mine, Administrative
Stipulation and Order entered and fine paid in the sum of $5,000.00.
II. Notice of Alleged Air Quality Violation No. 436 issued October 7,
1987, accedences of suspended particulate standard, rescinded October 27, 1987.
III. Notice of Alleged Air Quality Violation No. 460 issued December 28,
1987, open burning on Crofoot Mine dump, fine paid in the sum of $50.00.
IV. Notice of Alleged Air Quality Violation No. 1202, operation of lime
bin without required discharge controls, Administrative Stipulation and Order
entered and fine paid in the sum of $600.00.
V. Occurrence of emissions from mercury retort in September 1988 and
following months reported to Nevada Division of Environmental Protection. No
administrative or other action was taken.
VI. Sodium cyanide solution discharge resulting from freezing weather
and pipe failures, week of December 21, 1990, reported to Nevada Division of
Environmental Protection, and remediated. No administrative or other action
was taken.
77
Schedule I
ITEM 6.13 CAPITALIZED LEASE LIABILITIES.
None.
ITEM 6.15 SCHEDULE OF ROYALTIES
a. Crofoot Mine.
Net Proceeds Royalty in the production of minerals payable under Section 3
of the Mining Lease With Option to Purchase (patented mining claims) dated July
1, 1985, between Henry C. Crofoot, Jr., Trustee, and Hycroft Resources &
Development, Inc. ("Hycroft U. S."), and under Section 3 of the Mining Lease
With Option to Purchase (unpatented mining claims) dated July 1, 1985, among
Henry C. Crofoot, Jr. and Iola Jane Crofoot, his wife, and Daniel M. Crofoot
and Theodore A. Kolb and Alison Kolb, his wife, and Hycroft U. S., as amended
by certain amendment agreements, including the Fourth Amendment Agreement dated
effective January 1, 1996, and under the Deed of Unpatented Mining Claims With
Reservation of Net Proceeds Royalty and Sulphur Mineral Rights dated effective
January 1, 1996, and the Deed of Patented Mining Claims With Reservation of Net
Proceeds Royalty Sulphur Mineral Rights effective January 1, 1996 (collectively
the "Crofoot Agreements").
Hycroft U. S. shall pay the Royalty Owner a production royalty of the
applicable percentage of Net Proceeds for all ores and minerals (except
sulphur) mined or otherwise recovered and removed from the Crofoot Mine
properties and sold by or for the account of Hycroft U. S. before or after
processing, smelting or refining ("Ores and Minerals"). The applicable royalty
percentages are:
a. Seven percent (7%) of Net Proceeds derived from the
sale of mercury; and
b. Four percent (4%) of Net Proceeds derived from the
sale of silver, gold and all other minerals (except
sulphur).
"Net Proceeds" means the amount actually received by Hycroft U. S. from
the sale of Ores and Minerals less, but only to the extent actually incurred
and borne by Hycroft U. S.:
a. Sales, use, gross receipts, severance and other taxes, if any,
payable with respect to severance, production, removal, sale or disposition of
Ores and Minerals, but excluding any taxes on net income;
b. Charges and costs, if any, for transportation to places where Ores
and Minerals are milled, treated, processed or otherwise beneficiated,
smeltered, refined and sold;
c. Charges and costs, if any, for milling, treatment, processing, or
other beneficiation, including but not limited to crushing, screening and all
mining costs; and
78
Schedule I
d. Charges, costs and penalties, if any, for smelting, refining and
marketing. In addition to the foregoing deductions, Hycroft U. S. shall
include in deductible costs depreciation of all equipment, billings and
facilities required by Hycroft U. S. to mine and process Ores and Minerals.
Unit depreciation charges shall be determined quarterly by dividing the Crofoot
Mine fixed assets by the total tons of ore reserves expected to be processed
through the Crofoot Mine, including any ores from other properties planned for
commingling through the Crofoot Mine plant. The depreciation deducted on the
quarterly Crofoot Mine royalty statement shall be the product of the Crofoot
Mine ore tons processed during the quarter multiplied by the depreciation
charge per ton calculated above. Upon termination of the Crofoot Mine
operations, the final royalty statement shall include the proceeds from sale or
salvage of the Crofoot Mine fixed assets prorated with respect to the total
tons and Crofoot Mine tons of ore processed through the Crofoot Mine plant.
Charges for interest, exploration, corporate overhead, depletion allowances and
property payments are specifically excluded from the Crofoot Mine Net Proceeds
royalty determination.
If milling, treatment, processing or other beneficiation or smelting or
refining are carried on in facilities owned or controlled, in whole or in
part, by Hycroft U. S., charges, costs and penalties for such operations,
including transportation, shall mean the amount that Hycroft U. S. would have
incurred if such operations were carried out at facilities not owned or
controlled by Hycroft U. S. then offering comparable custom services for
comparable products on prevailing terms.
Hycroft U. S. may recover from production royalties as due to the Royalty
Owner, all advance royalty payments paid in accordance with the Crofoot
Agreements, as well as all other sums which are credited in favor of Hycroft U.
S. in accordance with the Crofoot Agreements against amounts otherwise due to
the Royalty Owner. The Net Proceeds production royalties are payable on or
before the 30th day after the last day of each fiscal quarter during which
Hycroft U. S. receives payment for the sale of Ores and Minerals. The Net
Proceeds production royalty payment obligation terminates and Hycroft U. S.
shall have no further obligation of any kind to the Royalty Owner when Hycroft
U. S. has paid a total of $12,800,000, including the sum of all purchase price
and advance and production royalty payments made pursuant to the Crofoot
Agreements and the conveyances executed and delivered in accordance with the
Crofoot Agreements.
Under the Arbitrator's Rulings described in Item 1.1(6)(c) above, Hycroft
U.S. is obligated to F.W. Lewis, Inc. to deliver data and information and to
account for the production of ores and products from the Crofoot Mine and the
Lewis Mine as provided in the Commingling Plan, as defined in the Arbitrator's
Rulings.
b. Lewis Mine.
The Net Value production royalty payable to Frank W. Lewis and F.W. Lewis,
Inc. (collectively "Lewis"), is payable in accordance with Section 10 of the
Mining Lease dated January 1, 1983, between Frank W. Lewis, lessor, and The
Standard Slag Company, lessee, as assigned to Hycroft Lewis Mine, Inc.
("Hycroft Lewis"), and as amended by the: (a) Lewis-
79
Schedule I
Hycroft Agreement dated January 10, 1989, among Frank W. Lewis, Hycroft Lewis
and Hycroft Resources & Development, Inc.; (b) Second Lewis-Hycroft Agreement
dated March 15, 1991, among Frank W. Lewis, Granges Inc., Hycroft Lewis and
Hycroft Resources & Development, Inc.; (c) Supplemental Memorandum of Mining
Lease dated January 29, 1997, between F.W. Lewis and Hycroft Lewis; and (d) the
Arbitrator's Rulings. Under the Lewis Mine Mining Lease, Hycroft Lewis is
obligated to pay to Lewis royalties of seven and one-half percent (7.5%) of the
net value of all minerals and ores mined and sold by Hycroft Lewis from the
Lewis Mine, except with respect to gold. With respect to gold, the Net Value
royalty percentage rate shall be determined as follows:
ASSAY VALUE NET VALUE ROYALTY RATE
.050 oz., or less, of gold per ton 5%
More than .050 oz. but less than .060 oz. of gold per ton 6%
More than .060 oz. but less than .070 of gold per ton 7%
More than .070 oz. but less than .100 oz. of gold per ton 7-1/2%
More than .100 oz. but less than .120 oz of gold per ton 8%
More than .120 oz. but less than .140 oz of gold per ton 9%
More than .140 oz. or more of gold per ton 10%
Assay Value is determined by dividing the actual gold recovered by the refinery
by the actual number of tons of ore produced during a calendar month, the
resultant figure being the Assay Value per ton.
The term "Net Value" means the gross selling price of ores and
concentrates, less the cost of hauling ores and concentrates, from the Lewis
Mine to the market or smelter or other reduction works which purchases the ores
and concentrates, and freight charges from the shipping point to smelter or the
cost of trucking charges from the Lewis Mine direct to market or smelter, if
handled in that matter, together with smelting, milling and handling charges,
plus the cost of insurance on bullion shipments. No other deductions shall be
permitted without Lewis' written consent.
If ores are processed in a mill or processing plant owned, operated or
controlled by Hycroft Lewis (directly or indirectly) or milled upon the Lewis
Mine properties, no deductions shall be made for milling, processing or
transportation to the mill or other charges. Payment of the Net Value
royalties for gold and silver shall be made to Lewis monthly on or before the
last day of each month on all minerals and ores sold during the preceding
calendar month. Net Value of royalties for gold shall be determined on the
basis of total shipments to the refinery each month. Hycroft Lewis shall
instruct the refiner or smelter to deposit seven and one-half percent (7.5%) of
the silver and other metals, together with the determined gold Net Value
royalty, into an account in Lewis' name.
In each calendar year, Hycroft Lewis is entitled to credit the advance
minimum royalty payments paid under the Lewis Mine Mining Lease against the Net
Value production royalties
80
Schedule I
payable by Hycroft Lewis to Lewis for the year during which the advance minimum
royalty payment is paid.
Under the Arbitrator's Rulings described in Item 1.1(6)(c) above, Hycroft
U.S. is obligated to F.W. Lewis, Inc. to deliver data and information and to
account for the production of ores and products from the Crofoot Mine and the
Lewis Mine as provided in the Commingling Plan, as defined in the Arbitrator's
Rulings.
ITEM 7.2.2(b) INDEBTEDNESS TO BE PAID.
A portion of Intercompany Indebtedness of the Borrower to Parent as
evidenced by the Restated Promissory Note dated as of February 20, 1997, and
the Amended and Restated 1996 Credit Facility Agreement dated as of February
20, 1997, between the Borrower and Parent in the in the amount of
$11,000,000.00.
ITEM 7.2.2(c) ONGOING INDEBTEDNESS.
Unsecured intercompany Indebtedness in an aggregate amount not to exceed
the amount evidenced by Restated Promissory Note dated as of February 20, 1997,
executed by the Borrower, as maker, in the principal amount of $25,000,000 and
the Amended and Restated 1996 Credit Facility Agreement dated as of February
20, 1997, between the Borrower and Parent.
ITEM 7.2.5(a) ONGOING INVESTMENTS.
None.
81
Schedule II
MONTHLY GOLD INVENTORY REPORT
Estimated
Grade Ultimate Total Recoverable
Tonnage (OPT) Recovery Ounces Ounces
------- ----- -------- ------ ----------
(See Note 1)
LEACH PAD #1
- ------------
Cumulative Ounces Placed 318,328 250,007
(As at Borrowing Base Calculation Date Period Start)
Additions During Period 0 0.000 65% 0 0
Ounces Recovered During Period 0
Cumulative Additions 318,328 250,007
Cumulative Ounces Recovered 239,008
Ending Pad #1 Inventory 10,999
(As at Borrowing Base Calculation Date Period End)
LEACH PAD #2
- ------------
Cumulative Ounces Placed 448,664 354,335
(As at Borrowing Base Calculation Date Period Start)
Additions During Period 47,725 0.013 65% 620 403
Ounces Recovered During Period 0
Cumulative Additions 449,284 354,738
Cumulative Ounces Recovered 330,505
Ending Pad #2 Inventory 24,233
(As at Borrowing Base Calculation Date Period End)
LEACH PAD #3
- ------------
Cumulative Ounces Placed 261,577 200,674
(As at Borrowing Base Calculation Date Period Start)
Additions During Period 496,275 0.013 65% 6,452 4,194
Ounces Recovered During Period 9,359
Cumulative Additions 268,029 204,868
Cumulative Ounces Recovered 195,110
Ending Pad #3 Inventory 9,758
(As at Borrowing Base Calculation Date Period End)
82
Schedule II
MONTHLY GOLD INVENTORY REPORT
- -----------------------------
Estimated
Grade Ultimate Total Recoverable
Tonnage (OPT) Recovery Ounces Ounces
------- ----- -------- ------ ----------
LEACH PAD #4 - BRIMSTONE ORE ONLY (See Notes 1)
- ---------------------------------
Cumulative Ounces Placed 7,865 5,506
(As at Borrowing Base Calculation Date Period Start)
Additions During Period 466,000 0.012 70% 5,592 3,914
Ounces Recovered During Period 0
Cumulative Additions 13,457 9,420
Cumulative Ounces Recovered 0
Ending Pad #4 Inventory 9,420
(As at Borrowing Base Calculation Date Period End)
BRIMSTONE ORE TO CROFOOT PADS (AREA #5)
- ---------------------------------------
Cumulative Ounces Placed 0 0
(As at Borrowing Base Calculation Date Period Start)
Additions During Period 0 0.000 70% 0 0
Ounces Recovered During Period 0
Cumulative Additions 0 0
Cumulative Ounces Recovered 0
Ending "Brimstone to Crofoot" Inventory 0
(As at Borrowing Base Calculation Date Period End)
TOTAL HYCROFT LEACH PADS
- ------------------------
Cumulative Ounces Placed 1,036,434 810,522
(As at Borrowing Base Calculation Date Period Start)
Additions During Period 1,010,000 0.013 67% 12,664 8,511
Ounces Recovered During Period 9,359
Cumulative Additions 1,049,098 819,033
Cumulative Ounces Recovered 764,623
Ending Total Hycroft Pad Inventory 54,410
(As at Borrowing Base Calculation Date Period End)
83
Schedule III
CROFOOT PATENTED MINING CLAIMS
CLAIM NAME PATENT NO. SURVEY NO.
Sheol Sulphur Mine No. 1-No. 3 908431 4355
Sheol #4-#8* 908431 4355
Admission 908431 4355
Swager 1213605 4839
Green Rock Placer 1223182 4857
West Virginia No. 1 1064817 4688A
West Virginia No. 2 1064817 4688A
Black Rock 1064817 4688A
* Excepting a portion of Sheol #4 and Sheol #5, described by metes and bounds,
owned by Frank W. Lewis, Inc.
Page 1
84
Schedule III
CROFOOT UNPATENTED MINING CLAIMS
ORIGINAL CROFOOT MINE UNPATENTED MINING CLAIMS.
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ----------------- ---------------- ---------------- ------------ --------------
Airstrip 1-3 4-09-58 10/392-394 88292-88294
Airstrip 4, 5 4-02-59 10/524,525 88295,88296
Airstrip Fraction 7-27-67 25/92 88297
Blackrock No. 2 3-11-89 271/390 545996
Mayo 3-11-89 271/391 545997
Anita 3-11-89 271/392 545998
Ashlode 3-11-89 271/393 545999
Albert 3-11-89 271/394 546000
CKC #1, #2 3-03-73 71/196,197 88348,88349
CKC #3-#6 4-03-73 71/587-590 88350-88353
CKC #7 9-06-73 75/499 88354
CKC #8,#9 9-06-73 51/220,221 88355,88356
CKC 10 3-11-89 271/395 546001
CKC 11 3-11-89 271/396 546002
CKC #12 8-14-87 245/14 202/507 444109
CKC 13 3-11-89 271/397 546003
CKC 14 3-11-89 271/398 546004
CKC #15 8-14-87 245/17 444112
CROFOOT MINE RFG UNPATENTED MINING CLAIMS.
RFG 33, 35 3-10-89 271/399,400 546005, 546006
RFG 37 3-10-89 271/401 546007
RFG 38 3-10-89 271/402 546008
RFG 39A 3-10-89 271/403 546009
RFG 42 3-10-89 271/404 546010
RFG 43 3-10-89 271/405 546011
RFG 44 3-10-89 271/406 546012
RFG 45 3-10-89 271/407 546013
Page 2
85
Schedule III
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ----------------- ---------------- ---------------- ------------ --------------
RFG 46 3-10-89 271/408 546014
RFG 47 3-10-89 271/409 546015
RFG 48 3-10-89 271/410 546016
RFG 49 3-10-89 271/411 546017
RFG 50 3-10-89 271/412 546018
RFG 51 3-10-89 271/413 546019
RFG 52 3-10-89 271/414 546020
RFG 52A 3-10-89 271/415 546021
RFG 53 3-10-89 271/416 546022
RFG 54 3-10-89 271/417 546023
RFG 57-60 3-10-89 271/418-421 546024-546027
RFG 61-67 3-10-89 271/422-428 546028-546034
RFG 67A 3-10-89 271/429 546035
RFG 68 3-10-89 271/430 546036
RFG 68A 3-10-89 271/431 546037
RFG 71 3-11-89 271/432 546038
RFG 73, 74 3-11-89 271/433,434 546039,546040
RFG 75-80 3-11-89 271/435-440 546041-546046
RFG 81 3-11-89 271/441 546047
RFG 81A 3-11-89 271/442 546048
RFG 82 3-11-89 271/443 546049
RFG 83 3-11-89 271/444 546050
RFG 84 3-11-89 271/445 546051
RFG 85 3-11-89 271/446 546052
RFG 86 3-11-89 271/447 546053
RFG 87 3-11-89 271/448 546054
RFG 88 3-11-89 271/449 546055
RFG 89-94 3-11-89 271/450-455 546056-546061
Fr. R.F.G. #94A 2-22-80 134/397 143503
RFG 95, 97 3-11-89 271/456,457 546062,546063
Page 3
86
Schedule III
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ----------------- ---------------- ---------------- ------------ -----------
RFG 99 3-11-89 271/458 227/98 546064
RFG 101 3-11-89 271/459 227/99 546065
Fr. R.F.G. #102 2-22-80 134/400 143481
RFG 103 3-11-89 271/460 227/100 546066
R.F.G. #104 2-14-80 133/702 106/409 141664
R.F.G. #105 1-23-80 133/703 106/410 141665
R.F.G. #106 2-14-80 133/704 106/411 141666
R.F.G. #107 1-23-80 106/412 141667
R.F.G. #108 1-24-80 133/705 106/413 141668
R.F.G. #109 1-23-80 106/414 141669
R.F.G. #110 1-24-80 133/706 106/415 141670
R.F.G. #111 1-24-80 106/416 141671
R.F.G. #112 1-24-80 133/707 106/417 141672
R.F.G. #113-#119 1-24-80 106/418-424 141673-141679
R.F.G. #126, #128 1-09-80 134/407,408 143482,143483
R.F.G. #136, #138 1-09-80 133/720,721 106/438,440 141693,141695
R.F.G. #140 1-09-80 133/722 106/442 141697
R.F.G. #142, #144 1-22-80 106/444,446 141699,141701
R.F.G. #146 1-22-80 106/448 141703
R.F.G. #256 1-11-80 133/727 106/527 141782
R.F.G. #258, #260 1-11-80 134/410,411 143485,143486
R.F.G. #286, #287 1-18-80 134/413,414 143425,143426
RFG 288 3-11-89 271/461 546067
R.F.G. #289 1-18-80 134/416 143428
RFG 290 3-11-89 271/462 546068
R.F.G. #291 1-18-80 134/418 143430
RFG 292 3-11-89 271/463 546069
R.F.G. #293 1-18-80 134/420 143432
RFG 294 3-11-89 271/464 546070
R.F.G. #295 1-18-80 134/422 143434
Page 4
87
Schedule III
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ----------------- ---------------- ---------------- ------------ --------------
RFG 296 3-11-89 271/465 546071
R.F.G. #297 1-18-80 134/424 143436
RFG 298 3-11-89 271/466 546072
R.F.G. #299 1-18-80 134/426 143438
RFG 300 3-11-89 271/467 546073
R.F.G. #301 1-18-80 134/519 143440
RFG 302 3-11-89 271/468 546074
R.F.G. #303 1-18-80 134/521 143442
RFG 304 3-11-89 271/469 546075
RFG 322 3-11-89 271/470 546076
RFG 323 3-11-89 271/471 546077
RFG 324-327 3-11-89 271/472-475 546078-546081
RFG 329, 331 3-11-89 271/476,477 546082,546083
RFG 333, 335 3-11-89 271/478,479 546084,546085
RFG 337 3-11-89 271/480 546086
RFG 339, 341 3-11-89 271/481,482 546087,546088
RFG 343 3-11-89 271/483 546089
Page 5
88
Schedule IV
LEWIS PATENTED MINING CLAIMS
FRANK W. LEWIS AND F.W. LEWIS, INC. PATENTED MINING CLAIMS.
CLAIM NAME PATENT NO. SURVEY NO.
Brim Stone 1001727 4600
Scheol No.9 1008652 4598
Hill Top Placer 1008652 4598
Occult 1008652 4598
Sheol #4 and Sheol #5 908431 4355
Except and excluding those portions excepted and excluded in patents and the
portions of the Sheol #4 and Scheol #5 owned by Hycroft Resources &
Development, Inc.
Page 1
89
Schedule IV
LEWIS UNPATENTED MINING CLAIMS
FRANK W. LEWIS AND F.W. LEWIS, INC. UNPATENTED MINING CLAIMS.
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
A. HUMBOLDT COUNTY CLAIMS.
R.F.G. #1-#10 12-20-79 134/272-281 143252-143261
R.F.G. #11, #12 1-03-80 134/282,283 143262,143263
Fr. R.F.G. #12A 2-20-80 134/284 143490
R.F.G. #13 12-27-79 134/285 143264
Fr. R.F.G. #13A 2-20-80 134/286 143491
R.F.G. #14-#22 1-03-80 134/287-295 143265-143273
Fr. R.F.G. #22A 2-20-80 134/296 143492
R.F.G. #23 1-03-80 134/297 143274
R.F.G. #24, #25 12-22-79 134/298,299 143275,143276
R.F.G. #26-#29 1-05-80 134/300-303 143277-143280
Fr. R.F.G. #29A, #29B 2-06-80 134/304,305 143493,143494
R.F.G. #30A 1-05-80 134/306 143495
R.F.G. #30-#32 12-22-79 134/324-326 143281-143283
R.F.G. #34 12-22-79 134/328 143285
Fr. R.F.G. #36 12-22-79 134/330 143287
Fr. R.F.G.#36A,#36B 2-07-80 134/331,332 143496,143497
Fr. R.F.G.#39 2-21-80 134/335 143290
R.F.G. #39 (A/A) 8-04-87 242/228 143290,436884
R.F.G. #40, #41 1-07-80 134/337,338 143291,143292
R.F.G. #55, #56 1-09-80 134/353,354 143306,143307
R.F.G. #69, #70 1-10-80 134/370,371 143320,143321
R.F.G. #72 1-10-80 134/373 143323
Page 2
90
Schedule IV
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
R.F.G. #72 (A/A) 8-05-87 242/229 143323,436912
R.F.G. #127, #129 1-09-80 133/714,715 106/431,432 141686,141687
R.F.G. #130 1-09-80 134/409 143484
R.F.G. #131-#134 1-09-80 133/716-719 106/433-436 141688-141691
R.F.G. #168-#171 2-01-80 134/429-432 143347-143350
R.F.G. #172-#174 1-31-80 134/433-435 143351-143353
R.F.G. #174 (A) 5-15-80 137/445 143353
R.F.G. #175-#177 1-31-80 134/436-438 143354-143356
R.F.G. #175-#177 (A) 5-15-80 137/446-448 143354-143356
R.F.G. #178-#185 2-01-80 134/439-446 143357-143364
R.F.G. #186 1-31-80 134/447 143365
R.F.G. #187 2-01-80 134/448 143366
R.F.G. #188 1-31-80 134/449 143367
R.F.G. #189 2-01-80 134/450 143368
R.F.G. #190 1-31-80 134/451 143369
R.F.G. #190 (A) 5-15-80 137/449 143369
R.F.G. #191 2-01-80 134/452 143370
R.F.G. #192 1-31-80 134/453 143371
R.F.G. #192 (A) 5-15-80 137/450 143371
R.F.G. #193 2-01-80 134/454 143372
R.F.G. #194 1-31-80 134/455 143373
R.F.G. #194 (A) 5-15-80 137/451 143373
R.F.G. #195 2-01-80 134/456 143374
R.F.G. #196 1-31-80 134/457 143375
R.F.G. #196 (A) 5-15-80 137/452 143375
R.F.G. #197 2-01-80 134/458 143376
Page 3
91
Schedule IV
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
R.F.G. #198 1-31-80 134/459 143377
Fr. R.F.G. #199 2-01-80 134/460 143378
R.F.G. #200 1-31-80 134/307 143379
R.F.G. #200A 12-28-79 133/723 106/470 141725
Fr. R.F.G. #201 2-05-80 134/308 143380
Fr. R.F.G. #201A 2-05-80 134/309 143504
R.F.G. #202-#215 1-30-80 134/461-474 143381-143394
Fr. R.F.G. #215B 2-14-80 134/475 143505
R.F.G. #216, #217 1-30-80 134/476,477 143395,143396
Fr. R.F.G. #217B 2-14-80 134/478 143506
Fr. R.F.G. #218 2-13-80 134/479 143397
Fr. R.F.G.#218A,#218B 2-04-80 134/480,481 143507,143508
Fr. R.F.G. #219 2-13-80 134/482 143398
Fr. R.F.G. #219B 2-13-80 134/483 143509
R.F.G. #220, #221 1-31-80 134/484,485 143399,143400
R.F.G. #222, #223 1-31-80 134/490,491 143401,143402
R.F.G. #224-#227 1-26-80 134/492-495 143403-143406
R.F.G. #228, #230 1-25-80 133/708,709 106/498,502 141753,141757
Fr. R.F.G. #234, #235 1-26-80 133/710,711 106/509,511 141764,141766
Fr. R.F.G. #236 1-26-80 133/712 106/513 141768
Fr. R.F.G. #237 1-30-80 133/713 106/515 141770
Fr. R.F.G. #238F 1-29-80 134/497 143510
Fr. R.F.G. #239 1-29-80 134/501 143407
Fr. R.F.G. #239 2-20-80 134/500 143598
Fr. R.F.G. #239A 2-20-80 134/498 143511
Page 4
92
Schedule IV
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
Fr. R.F.G. #240 2-22-80 134/503 143408
Fr. R.F.G. #240 2-22-80 134/502 143597
Fr. R.F.G. #241 3-11-80 134/504 143409
Fr. R.F.G. #241A 3-11-80 134/505 143596
Fr. R.F.G. #242 3-11-80 134/506 143410
Fr. R.F.G. #243 2-01-80 134/507 143411
Fr. R.F.G. #244, #245 2-03-80 134/508,509 143412,143413
Fr. R.F.G. #246-#248 2-03-80 134/486-488 143414-143416
R.F.G. #250, #252 1-11-80 133/724,725 106/521,523 141776,141778
R.F.G. #254, #257 1-11-80 133/726,728 106/525,528 141780,141783
R.F.G. #259, #261 1-11-80 133/729,730 106/529,530 141784,141785
R.F.G. #262 1-11-80 134/412 143487
R.F.G. #263 1-11-80 133/731 106/531 141786
R.F.G. #264, #265 1-11-80 134/510,511 143417,143418
R.F.G. #266-#271 1-17-80 134/512-517 143419-143424
R.F.G. #305-#307 1-18-80 134/523-525 143444-143446
R.F.G. #328 1-11-80 134/526 143453
RFG No. 328X 5-15-84 187/435 307553
R.F.G. #330 1-11-80 134/528 143455
R.F.G. #332, #334 1-11-80 134/530,532 143457,143459
R.F.G. #336 1-11-80 134/534 143461
R.F.G. #338, #340 1-22-80 134/536,538 143463,143465
R.F.G. #342 1-22-80 134/540 143467
R.F.G. #358 1-31-80 134/489 143469
R.F.G. #359 1-31-80 134/310 143470
Page 5
93
Schedule IV
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
Fr. R.F.G. #360 1-31-80 134/311 143471
R.F.G. #361 1-31-80 134/312 143472
Fr. R.F.G. #362 1-31-80 134/313 143473
Fr. R.F.G. #362A 2-05-80 134/314 143512
R.F.G. #363, #364 1-31-80 134/315,316 143474,143475
Fr. R.F.G. #364A 2-05-80 134/317 143513
R.F.G. #365, #366 1-31-80 134/318,319 143476,143477
Fr. R.F.G. #366A 2-06-80 134/320 143514
R.F.G. #367 1-31-80 134/321 143478
R.F.G. #368 2-01-80 134/322 143479
Fr. R.F.G. #368A 2-06-80 134/323 143515
Fr. R.F.G. #O.B.F. 1-30-80 134/499 143488
Fr. R.F.G. #I.F.S. 1-27-80 134/496 143489
R.F.G. #400-#402 10-25-80 143/13-15 175062-175064
R.F.G. #403-#427 10-17-80 143/16-40 175065-175089
Pacific #2 11-04-80 144/13 181010
Sulfate 11-04-88 144/14 181011
Alunite 11-04-80 144/15 181012
Alunite #2 11-04-80 144/16 181013
DIA No. 1-No. 5 8-25-83 180/326-330 284248-284252
B. PERSHING COUNTY CLAIMS.
R.F.G. #120-#125 1-24-80 106/425-430 141680-141685
R.F.G. #127, #129 1-09-80 133/714,715 106/431,432 141686,141687
R.F.G. #131-#134 1-09-80 133/716-719 106/433-436 141688-141691
R.F.G. #135, #137 1-09-80 106/437,439 141692,141694
Page 6
94
Schedule IV
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
R.F.G. #139, #141 1-09-80 106/441,443 141696,141698
R.F.G. #143, #145 1-22-80 106/445,447 141700,141702
R.F.G. #147-#161 1-22-80 106/449-463 141704-141718
R.F.G. #162-#167 1-23-80 106/464-469 141719-141724
R.F.G. #200A 12-28-79 133/723 106/470 141725
R.F.G. #201A-#223A 12-28-79 106/471-493 141726-141748
R.F.G. #224A-#227A 1-07-80 106/494-497 141749-141752
R.F.G. #228 1-25-80 133/708 106/498 141753
R.F.G. #228A 1-07-80 106/499 141754
R.F.G. #229 1-25-80 106/500 141755
R.F.G. #229A 1-07-80 106/501 141756
R.F.G. #230 1-25-80 133/709 106/502 141757
R.F.G. #230A 1-07-80 106/503 141758
R.F.G. #231 1-25-80 106/504 141759
R.F.G. #231A, #232A 1-07-80 106/505,506 141760,141761
Fr. R.F.G. #233 1-26-80 106/507 141762
R.F.G. #233A 1-07-80 106/508 141763
Fr. R.F.G. #234 1-26-80 133/710 106/509 141764
R.F.G. #234A 1-07-80 106/510 141765
Fr. R.F.G. #235 1-26-80 133/711 106/511 141766
R.F.G. #235A 1-07-80 106/512 141767
Fr. R.F.G. #236 1-26-80 133/712 106/513 141768
R.F.G. #236A 1-08-80 106/514 141769
Fr. R.F.G. #237 1-30-80 133/713 106/515 141770
R.F.G. #237A-#241A 1-08-80 106/516-520 141771-141775
Page 7
95
Schedule IV
DATE OF HUMBOLDT CO. PERSHING CO. BLM
CLAIM NAME LOCATION BOOK/PAGE BOOK/PAGE NMC NO.
- ---------- -------- ----------- --------- -------
R.F.G. #250 1-11-80 133/724 106/521 141776
R.F.G. #251 1-11-80 106/522 141777
R.F.G. #252 1-11-80 133/725 106/523 141778
R.F.G. #253 1-11-80 106/524 141779
R.F.G. #254 1-11-80 133/726 106/525 141780
R.F.G. #255 1-11-80 106/526 141781
R.F.G. #257, #259 1-11-80 133/728,729 106/528,529 141783,141784
R.F.G. #261, #263 1-11-80 133/730,731 106/530,531 141785,141786
WRC -1 thru -28 3-13-95 287/552-579 714252-714279
WRC -29 thru -58 3-14-95 287/580-609 714280-714309
WRC -60 3-14-95 287/611 714311
WRC -82, -84 3-14-95 287/613,615 714313,714315
WRC -87 thru -91 3-14-95 287/617-621 714317-714321
Page 8