EXHIBIT 10.16
AMENDED AND RESTATED LOAN AGREEMENT
THS AMENDED AND RESTATED LOAN AGREEMENT (as the same may be amended
from time to time, "this Agreement") is made as of the 20 day of March, 1997,
among ▇▇▇▇▇▇ METALS, INC., a Delaware corporation with its principal place of
business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Lender"), and DAKOTA Mining CORPORATION, a federal corporation organized under
the Canada Business Corporation Act ("Dakota"), BROHM MINING CORP., a South
Dakota corporation ("Brohm"), STIBNITE MINE INC, a Delaware corporation
("Stibnite"), and BARRIER REEF INC., a Delaware corporation ("Barrier" and,
jointly and severally with Dakota, Brohm and Stibnite, "Borrower"), all with
principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Borrower has requested that Lender provide Borrower with secured loans
m an aggregate principal amount not to exceed Seven Million Five Hundred
Thousand Dollars (57,500,000) at any time outstanding, (the "Loan(s)") and
Lender has agreed to extend such Loan upon the terms and subject to the
conditions hereinafter set forth Capitalized terms used herein are defined in
Section 1 of this Agreement. To effectuate this arrangement, Lender and Borrower
agree as follows:
1. Definitions. For the purposes of this Agreement:
"Affiliate" shall mean any Person which directly or indirectly
controls, is controlled by, or is under common control with, Borrower
or any Subsidiary For purposes of this Agreement, "control" shall mean
the possession, directly or indirectly, of the power to (i) vote twenty
percent (20%) or more of the securities having ordinary voting power
for the election of directors of such Person or (ii) direct or cause
the direction of management and policies of such Person, whether
through the ownership of' `voting securities, by contract or otherwise
and either alone or in conjunction with others or any group.
"Borrower" shall have the meaning given to such term in the preamble.
"Breakage Costs" shall mean the amount of any reduced return to, or
fees incurred by, Lender as a result of any prepayment or late payment
by Borrower of any payment amount due under the Note.
"Business Day" shall mean any day of the year other than a day on
which banking institutions in the States of New York or Colorado are
authorized by law to close.
"Code" shall mean the internal Revenue Code of 1986, as amended.
"Collateral" shall mean any and all assets, rights and
interests in or to property of Borrower pledged or mortgaged to Lender,
or in which a security interest is granted to Lender, from time to
time, as security pursuant to the Security Documents, whether now owned
or hereafter acquired.
"Commitment" shall have the meaning given to such term in
Section 2(a) of this Agreement.
"Controlled Premises" shall have the meaning given to such
term in Section 8(k)(iii) of this Agreement.
"Date of Acceleration" shall have the meaning given to such
term in Section 12 of this Agreement.
"Default" shall mean an event, condition or default which with
the giving of notice, the passage of time, or both, would be an Event
of Default.
"Dollar(s)" and the sign "$" shall mean lawful money of the
United States of America.
"Environmental Requirement(s)" shall mean any present or
future law, statute, ordinance, rule, regulation, order, code, license,
permit, decree, judgment or directive of or by any Governmental
Authority and relating to or adduessin8 the protection of human health
or the environment, including, without limitation, all laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances
or wastes into the environment (including, without limitation, air,
surface water, ground water or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.
"Event of Default" shall have the meaning given to such term
in Section 12 of this Agreement.
"Fair Market Value" on any day shall mean the Second London
Gold Fixing for that day (if such Fixing does not occur on such day,
the Fixing for the immediately preceding day for which it is
available).
"Governmental Authority" shall mean the federal government of
the United States of America or Canada and the government of any
province, state, county, municipality or other political subdivision
thereof or any governmental body, agency, authority, department or
commission (including, without limitation, any taxing authority) or any
instrumentality or officer thereof (including, without limitation, any
court or tribunal) exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government
and any corporation, partnership or other entity directly or indirectly
owned by or controlled by the foregoing.
"Guarantor" shall mean MinVen Gold (USA) Corporation, a Delaware
corporation.
"Guaranty" shall mean that certain Amended and Restated
Limited Guaranty of even date herewith of Guarantor in favor of Lender,
as the same may be amended, modified, restated or supplemented from
time to time.
"Hazardous Material" shall mean any material or substance (i)
which, whether by its nature or use, is now or hereafter defined as a
hazardous waste, hazardous substance, hazardous material, pollutant or
contaminant under any Environmental Requirement, including, but not
limited to, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss.9601(14) and (33), the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C ss.6903(5),
and the laws of the States of Idaho or South Dakota, (ii) which is
toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous to human health or the
environment, (iii) which is or contains petroleum or any fraction
thereof; including crude oil, heating oil, gasoline or diesel fuel, or
(iv) the presence of which requires investigation or remediation under
any Environmental Requirement.
"Intercreditor Agreement" shall mean that certain
Intercreditor Agreement, dated as of February 26,1997, among Lender, N.
M. Rothschild & Sons Limited and Dakota, as amended by that certain
First Amendment of even date herewith and as the same may hereafter be
amended, modified or supplemented.
"Interest" shall have the meaning given to such term in
Section 3(a) of this Agreement.
"Leases" shall have the meaning given to such term in Section
10(i) of this Agreement.
"Lender" shall have the meaning given to such term in the
preamble of this Agreement.
"Liens" shall mean any lien, claim, charge, pledge, security
interest, mortgage, deed of trust or other encumbrance.
"LIBOR" shall mean the overnight London Interbank Offered Rate
quoted by Telerate, as of 11:00 a.m. British Standard Time, or as
otherwise mutually agreed.
"Loan Balance(s)" at any particular time shall mean the
aggregate principal amount of Loans then outstanding under this
Agreement from time to time.
"Loan Documents" shall mean this Agreement, the Note, the
Security Documents and all other documents or instruments executed and
delivered by or on behalf of Borrower in connection with the Loans and
the transactions contemplated hereby, as the same may be amended,
modified, restated or supplemented from time to time.
"Loan(s)" shall have the meaning given to such term in the
preamble of this Agreement.
"Market Value" on any day shall mean the Second London Gold
Fixing for that day (if such Fixing does not occur on such day, the
Fixing for the immediately preceding day for which it is available).
"Maturity Date" shall mean as to (i) Loan Balances in excess of Five
Million Dollars ($5,000,000), July31, ------------- 1997 and (ii) as
to all Loan Balances, October 30, 1998.
"1996 Revolving Credit Agreement" shall mean that certain
Revolving Loan Agreement between Lender and Borrower dated as of April
12, 1996.
"Note" shall mean the amended and restated secured loan note
provided for in Section 4 of this Agreement.
"Notice" or "Notices" shall mean all requests, demands and
other communications, in writing (including facsimile transmissions),
sent by overnight delivery service, facsimile transmission or
hand-delivery to the other party at that party's Principal Office.
"Permitted Liens" shall mean certain existing liens identified
on Exhibit C hereto.
"Person" shall mean any individual, corporation, partnership,
joint venture, limited liability company, trust or unincorporated
organization, or any Governmental Authority.
"Premises" shall mean the Stibnite property in Valley County,
Idaho and the Gilt Edge property (including, without limitation, the
Anchor Hill Mine) in ▇▇▇▇▇▇▇▇ County, South Dakota.
"Prime Rate" shall mean the rate of interest from time to time
established by The Chase Manhattan Bank, N.A., at its principal office
in New York, New York, as its prime rate for US. domestic commercial
loans; any change in the Prime Rate to be effective as of the opening
of business on the day on which such change becomes effective; it being
understood and agreed that the Prime Rate is a reference rate only and
does not necessarily represent the lowest or best rate actually charged
to any customers of such banking institution.
"Principal Office" shall mean:
For Lender:
▇▇▇▇▇▇ Metals, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, cc: Treasurer
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
For Borrower:
Dakota Mining Corporation, Brohm Mining Corp.,
Stibnite Mine Inc. and Barrier Reef Inc.
c/o Dakota Mining Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
FAX No.: (▇▇▇) ▇▇▇-▇▇▇▇
"Refining Agreements" shall mean those certain
Refining/Purchase Agreements of even date herewith between
Lender and Borrower as amended, modified, restated or
supplemented from time to time.
"Security Agreement(s) " shall mean those certain Amended and
Restated Security Agreements of even date herewith made by
Dakota, Brohm, Stibnite and Barrier in favor of Lender, as the
same may be amended, modified, restated or supplemented from
time to time.
"Security Documents" shall have the meaning given to such term
in Section 7 of this Agreement.
"Subsidiary" shall mean (i) any corporation in an unbroken
chain of corporations beginning with Borrower if all of the
corporations (other than the last corporation in the unbroken
chain) in the aggregate then own stock possessing fifty
percent (50%) or more of the total combined voting power of
all classes of stock in one of the other corporations in such
chain, (ii) any partnership or nominee realty trust in which
Borrower (or any Subsidiary) is a general partner, or (iii)
any partnership in which Borrower (or any Subsidiary)
possesses a fifty percent (50%) or greater interest in the
total capital or total income of such partnership.
"USMX" shall have the meaning given to such term in Section 7
of this Agreement.
2. Loans.
(a) Subject to all of the terms and conditions
contained in this Agreement and provided no Default or Event
of Default has occurred, Lender agrees to make loans to
Borrower from time to time up to and including 12:00 noon (New
York City time) on March 31, 1998 or the Date of Acceleration,
whichever first occurs, in an aggregate amount not to exceed
Seven Million Five Hundred Thousand Dollars ($7,500,000) (or,
subsequent to July 31,1997, Five Million Dollars ($5,000,000)
(the "Commitment")~ Subject to all of the terms and conditions
contained in this Agreement, Borrower may borrow under the
provisions of this Section (each Loan to be in a minimum
amount of $500,000 or an integral multiple thereof).
(b) The Loan Balance shall be repaid (i) as to
amounts in excess of Five Million Dollars ($5,000,000), on
July31, 1997 and (ii) as to Loan Balances of Five Million
Dollars ($5,000,000) or less, in five (5) consecutive monthly
installments, each in an amount equal to the lesser of One
Million Dollars ($1,000,000) or one-fifth (1/5th) of the Loan
Balance outstanding on June 30,1998, commencing on June30,
1998 and continuing thereafter on the last Business Day of
each consecutive calendar month up to and including the
Maturity Date.
(c) Loans will be made by Lender within one (1)
Business Day after Lender's receipt of a written request for a
Loan in the form of Exhibit B hereto, signed by a duly
authorized officer of Borrower indicating the date and amount
of the Loan requested and acknowledging the principal balance
outstanding on the Loans, as of the said date after taking
into consideration the amount of the Loan as so requested.
Such written request for a Loan may be delivered by any
reasonable means, including facsimile transmission.
(d) On the date of execution and delivery of this
Agreement, Borrower will (i) pay Lender a facility fee in the
amount of $150,000, (ii) grant Lender a gold call option for
five thousand (5,000) ▇▇▇▇ ounces of gold at Three Hundred
Eighty Five Dollars ($385) per ▇▇▇▇ ounce expiring March
27,1998 for value March 31, 1998 and (iii) grant Lender a five
(5) year option from the date of this Agreement to purchase
one hundred thousand (100,000) frilly registered shares of
common stock of Dakota at the market price on the date of
execution and delivery of this Agreement.
3. Interest Payments.
(a) The outstanding principal balance of Loans shall
bear interest, from the date a Loan is made until payment in
full, at LIBOR plus two and one- quarter percent (2 1/4%) per
annum ("Interest"). Interest payments by Borrower to Lender
shall be made monthly on the first Business Day immediately
following the month for which such Interest is calculated and
with a final payment due and payable on the Maturity Date in
an amount equal to all accrued and unpaid Interest hereunder
as of the Maturity Date Interest shall be calculated on the
basis of the actual number of days elapsed over a year of
three hundred sixty (360) days.
(b) Payments and any prepayments (including premiums
thereon) of the principal amount of the Loans, Interest and
other payments hereunder may be made in Dollars. Payment shall
be made in immediately available funds at the principal office
of The Chase Manhattan Bank, N.A., New York, New York for the
account of Lender (Account No 910-120-1995, ABA No ▇▇▇▇▇▇▇▇▇),
initiated by bank wire transfer not later than 12:00 noon New
York time on the date on which such payment shall become due
(each such payment initiated after such time on such due date
to be deemed to have been made on the next succeeding Business
Day) or such other account at the same or such other bank as
Lender shall direct.
(c) Borrower shall pay interest with respect to all
amounts not paid when due under this Agreement or the Note at
a rate equal to four percent (4%) greater than the Prime Rate,
computed from the date due and calculated on the basis of the
actual number of days elapsed over a year of three hundred
sixty (360) days.
(d) The payment obligations of Borrower under this
Agreement are absolute and unconditional and shall not be
affected by reason of; but not limited to, force majeure.
(e) Notwithstanding anything herein contained, if any
law, regulation, treaty or official directive, or any change
therein or in the interpretation or application thereof by any
Governmental Authority, shall make it unlawful for Lender to
give effect to any of its obligations as contemplated hereby,
Lender, by Notice to Borrower, may declare that Lender shall
be released from such obligations (but without in any way
releasing Borrower from any of its obligations hereunder). To
the extent that such requirement or illegality obligates
Lender to require repayment of the Loan, Borrower will repay
the Loans at such time or times, and in such manner, as
necessary to satisfy such requirement or illegality and as
designated by Lender by Notice to Borrower together with any
accrued Interest and other amounts payable by Borrower to
Lender under this Agreement and the Note.
(f) Borrower hereby agrees to indemnify and save
Lender harmless from and against any liability (either
directly or by way of deduction, withholding or otherwise) for
any present or future tax, duty, levy, impost, fee or charge
in respect of; or arising out of; the execution and delivery
of or performance under this Agreement, or the making of the
Loans hereunder or the consummation of any of the transactions
contemplated by this Agreement, other than taxes which are
assessed on a net income basis and remitted by Lender to the
United States of America and any political subdivision or
taxing authority thereof or therein, in respect of; or arising
out of; the making of the Loans hereunder and the entering
into of the transactions described above. In particular,
without limitation, if Borrower should be required or
compelled to make any deduction or withholding of any tax or
other amount as aforesaid from any Interest or other payments
or deliveries payable to Lender hereunder, Borrower will
promptly and without any requirement of notice by Lender, pay
to Lender a sum which, after deduction of all applicable taxes
thereon, shall result in Lender's receiving one hundred
percent (100%) of the amounts of interest or other payment
which would have been received by Lender if such deduction or
withholding were not required. Borrower shall also deliver to
Lender within thirty (30) days after Borrower has made any
payment from which it is required by law to make any such
withholding or deduction a receipt issued by the applicable
taxing or other authorities evidencing the deduction or
withholding of all amounts required to be deducted or withheld
from such payment. Upon receipt by Lender of (i) such tax
receipts and other related information and documents and (ii)
the benefit of any reduction in federal or any other income
tax liability as determined by Lender, in its reasonable
discretion, resulting from the crediting or deducting of such
withholding taxes in the computation of such tax, Lender will
forthwith reimburse Borrower an amount so that Lender shall be
in the same position it would have been if such withholding
taxes had not been imposed. It is agreed that such
determination may be revised and Borrower will make an
appropriate adjustment with Lender after any disallowance of
such credit or deduction upon audit. The obligations of
Borrower and Lender, and their respective obligations to pay
any sums which may become payable, under this Section 3(f)
will survive the expiration or other termination of this
Agreement.
4. Note. The Loans shall be evidenced by the Amended and
Restated Secured Loan Note of Borrower in favor of Lender of
even date herewith in the principal amount of up to$7,500,000,
as the same may be amended, modified or restated from time to
time, which shall be substantially in the form attached hereto
as Exhibit A which promissory note is hereby incorporated
herein by reference and made a part hereof (the "Note").
5. Prepayment.
(a) If at any lime the Loan Balance shall exceed the
Commitment, then Borrower shall immediately prepay the Loans
in an amount equal to such excess.
(b) Subject to the provisions hereof; Borrower may
prepay, without penalty (other than Breakage Costs, if any)
the Loans in whole or in part upon not less than seven (7)
days' prior written notice to Lender. Such notice shall
specify the prepayment date and the amount of the prepayment
(which shall be at least $250,000) and shall be irrevocable.
Interest on the amount prepaid, accrued to the prepayment
date, shall be paid on the prepayment date Borrower also will
promptly pay Lender, within five (5) Business Days after
Lender's Notice and demand therefor, all Breakage Costs.
(c) Prepayments shall be applied first to all outstanding
Interest, and then to outstanding principal.
6. Application of Proceeds. The proceeds of the Loans shall be
used solely for (i) repayment of all indebtedness,
liabilities and obligations of Borrower to Lender under the
1996 Revolving Credit Agreement, (ii) the Gilt Edge Mine and
seasonal startup of the Stibnite Mine and general corporate
purposes related thereto and (iii) as to Loan Balance
amounts in excess of Five Million Dollars ($5,000,000),
working capital needs at the Illinois Creek gold property.
None of such proceeds shall be used to purchase or carry
margin stock or to extend credit to others for the purpose
of probating or carrying any margin stock.
7. Security. Payment and performance of all indebtedness,
liabilities and obligations of Borrower to Lender and any
other indebtedness and liabilities of Borrower to Lender,
whether under the Note or otherwise, shall be secured by:
(a) a first priority security interest in the Collateral
pursuant to the terms of the Security Agreements;
(b) the Guaranty;
(c) a certain Amended and Restated Pledge Agreement of
Guarantor in favor of Lender covering all shares of
Brohm, Stibnite and Barrier;
(d) a certain First Mortgage, Assignment of Rents and
Royalties, Security Agreement and Financing Statement
executed by Stibnite and Barrier dated as of April 12,
1996 granting thereby to Lender a first priority
mortgage lien on the real estate and all improvements
thereon located at the Stibnite Mine, as amended by a
certain First Amendment of even date herewith;
(e) a certain Mortgage-Collateral Real Estate Mortgage
executed by Brohm dated as of April 12, 1996 granting
thereby to Lender a first priority mortgage lien on the
real estate and all improvements thereon known as the
Gilt Edge property of Brohm (including, without
limitation, the Anchor Hill Mine), as amended by a
certain First Amendment of even date herewith;
(f) a certain Collateral Assignment and Pledge Agreement
executed by Dakota with respect to a certain $3,000,000
promissory note of USMX, Inc., a Delaware corporation
in favor of Dakota and the pledge of shares of MXUS,
S.A. de C.V., a Mexican corporation;
(g) a Mortgage and Pledge Agreement pledging Thunder
Mountain (Valley County) contracts and rights described
therein;
(h) an Intercreditor Agreement among Lender, N~▇.
▇▇▇▇▇▇▇▇▇▇ & Sons Limited and Dakota dated as of
February 26, 1997, as amended by a certain First
Amendment of even date herewith; and
(i) such other security documents as rnay he required by
Lender and necessary to attach or perfect a Lien in the
items covered by Subsections (a) through (h) above.
All agreements and instruments described in this Section 7,
together with any and all other agreements and instruments now
or hereafter securing the Note, are sometimes hereinafter
referred to collectively as the "Security Documents" and
individually as a "Security Document".
8. Representations and Warranties. To induce Lender to enter
into this Agreement and to make the Loans, Borrower hereby represents
and warrants to Lender (which representations and warranties shall
survive the delivery of the Note and the making of the Loans) that:
(a) Borrower (i) is duly organized, validly existing
and in good standing under the laws of the state or country of
its incorporation, (ii) has full power and authority to own
its properties and to carry on business as now being conducted
and is qualified to do business in every jurisdiction in which
the nature of its assets and the business carried on make such
qualification necessary or advisable and (iii) has full power
to execute, deliver and perform its obligations, respectively,
under this Agreement and the Note;
(b) The execution and delivery and performance by
Borrower of its obligations under this Agreement and the Note
have been duly authorized by all requisite action and will not
violate any provision of law, any order of any court or other
agency of government, the corporate charter or by-laws of
Borrower or any indenture, agreement or other instrument to
which it is a party, or by which it is bound, or be in
conflict with, result in a breach of; or constitute (with due
notice or lapse of time or both) a default under, or except as
may be provided by this Agreement, result in the creation or
imposition of any Lien of any nature whatsoever upon any of
the property or assets of Borrower pursuant to, any such
indenture, agreement or instrument;
(c) Borrower is not required to obtain any consent,
approval or authorization from, or to file any declaration or
statement with, any governmental instrumentality or other
agency in connection with or as a condition to the execution,
delivery or performance of this Agreement or the Note;
(d) There is no action, suit or proceeding at law or
in equity or by or before any governmental instrumentality or
other agency now pending or, to the knowledge of Borrower,
threatened against or affecting Borrower;
(e) Borrower has good title to all of its properties
and assets, free and clear of all Liens of any kind (except
(i) Permitted Liens and (ii) restrictions, easements and minor
irregularities in title which do not and will not interfere
with the occupation, use and enjoyment by Borrower of such
properties and assets in the normal course of its business as
presently conducted or materially impair the value of such
properties and assets for the purpose of such business);
(f) Any borrowings made by Borrower under this
Agreement do not and will not render Borrower insolvent;
Borrower is not contemplating either the filing of a petition
by it under any state or federal bankruptcy or insolvency laws
or the liquidating of all or a major portion of its property,
and Borrower has no knowledge of any person contemplating the
filing of any such petition against it;
(g) No statement of fact made by or on behalf of
Borrower in this Agreement or in any certificate or schedule
furnished to Lender pursuant hereto, contains any untrue
statement of a material fact or omits to state any material
fact necessary to make statements contained therein or herein
not misleading. There is no fact presently known to Borrower
which has not been disclosed to Lender which materially
affects adversely, nor as far as Borrower can foresee, will
materially affect adversely the property, business, operations
or condition (financial or otherwise) of Borrower;
(h) Borrower has filed all federal, state and local
tax returns required to be filed and has paid or made adequate
provision for the payment of all federal, state and local
taxes, charges and assessments;
(i) All work performed and other actions or omissions
to act at the mines and other properties owned and/or operated
by Borrower, and the current condition of such mines, comply
in all material respects with all applicable laws (including,
without limitation, all federal mining safety and health acts
and all local, state, provincial and federal environmental
laws), ordinances, rules and regulations of any governmental
agency and with all directions, rules and regulations of
officers of every governmental agency having jurisdiction over
such mines and other properties and there are no existing
material violations of any such applicable laws, ordinances,
directions, rules or regulations;
(j) There are no threatened proceedings or any
situation which (to Borrower's knowledge) would give rise to
proceedings against Borrower in respect of air, water; surface
or subsurface environmental conditions resulting directly or
indirectly from the use, transportation, storage or discharge
of pollutants in, about or relating to assets or business of
Borrower which, if adversely determined, would have a material
adverse effect on the business and operations of Borrower; and
(k) Borrower:
(i) has obtained all permits, licenses and other
authorizations which are required under all
Environmental Requirements;
(ii) is in compliance in all material respects with all
terms and conditions of the required permits, licenses
and authorizations, and is also in compliance with all
other Environmental Requirements or requirements
contained in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder;
(iii)has never caused or, to its knowledge, permitted or
suffered to exist any Hazardous Material to be spilled,
placed, held, located or disposed of on, under or about
The Premises or released Hazardous Material into the
atmosphere, any body of water or any wetlands in excess
of maximum permitted regulatory levels or about which a
Governmental Authority might require corrective action
nor are any now existing on, under or about the
Premises or any other premises owned or leased by
Borrower while such Controlled Premises were owned or
leased by Borrower (collectively the "Controlled
Premises");
(iv) has no knowledge that the Controlled
Premises have ever been used (whether by Borrower or,
to the best knowledge of Borrower, by any other
Person) as a treatment, storage or disposal (whether
permanent or temporary) site for any Hazardous
Material in excess of maximum permitted regulatory
levels or which is otherwise not in compliance with
applicable Environmental Requirements;
(v) has not received any notice from any
Governmental Authority or any tenant, occupant or
operator of the Controlled Premises or from any other
Person with respect to the environmental condition of
the Controlled Premises, the improvements thereon or
any other property which was previously included in
the property description of the Controlled Premises
or such other real property, or with respect to the
release of Hazardous Material at, upon, under or
within the Controlled Premises, the improvements or
such other real property, or the past or ongoing
migration of Hazardous Material from neighboring
lands or to the Controlled Premises or Improvements
thereto; and
(vi) has no knowledge of any underground
storage tanks, asbestos-containing materials, PCBs,
radon gas or urea formaldehyde foam insulation at,
upon, under or within the Controlled Premises or
improvements thereon.
9. Conditions of Making the Loans. The obligation of Lender to make
the Loans hereunder is subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties set forth in
Section 8 hereof and in all other Loan Documents shall be true
and correct on and as of the date hereof and the date of each
Loan.
(b) Borrower shall have executed and delivered to
Lender, or caused to be executed and delivered to Lender; on
or prior to the date of execution of this Agreement, the
following:
(i) The Note;
(ii) A certificate of the Secretary or
Assistant Secretary of Borrower certifying to the
votes of Borrower's Board of Directors authorizing
the execution and delivery of this Agreement, the
Note and the Loan Documents;
(iii) A certificate of the Secretary or
Assistant Secretary of Borrower which shall certify
the names of the officers of Borrower authorized to
sign this Agreement, the Note and any other documents
or certificates to be delivered pursuant to this
Agreement by Borrower or any of its officers,
together with the true signatures of such officers
Lender may conclusively rely on such certificate
until it shall receive a further certificate of the
Secretary or an Assistant Secretary of Borrower
canceling or amending the prior certificate and
submitting the signatures of The officers named in
such further certificate;
(iv) Certificates of the appropriate
Governmental Authority, dated reasonably near the
date of the Loan, of the jurisdiction of
incorporation or organization of Borrower and of each
jurisdiction in which Borrower is qualified to do
business stating that Borrower is duly incorporated
(or qualified) and in good standing in such
jurisdiction and has filed all annual reports and has
paid all franchise and other taxes required to be
filed or paid to the date of such certificate;
(v) Each of the Security Documents, together with any other
documents required by the terms thereof;
(vi) Amended and Restated Pledge Agreement
of even date herewith of Guarantor in favor of Lender
with respect to all of the outstanding shares of
Brohm, Stibnite and Barrier;
(vii) Refining Agreements;
(viii) A favorable written opinion of
counsel to the Borrower, dated the date hereof in the
form attached hereto as Exhibit D; and
(ix) Such other supporting documents,
agreements and certificates as Lender or its counsel
may reasonably request.
(c) All legal matters incident to the transactions hereby
contemplated shall be satisfactory in all respects to
counsel for Lender.
(d) No Default or Event of Default shall have occurred.
(e)Execution and delivery by N. M. Rothschild & Sons Limited
of the Intercreditor Agreement.
10. Affirmative Covenants. Borrower covenants and agrees that, from
the date hereof and until payment in full of the principal-of;
and interest on, the Note and any other indebtedness of Borrower
to Lender, whether now existing or arising hereafter, Borrower
will:
(a) Do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its
corporate existence, rights, licenses, permits and franchises
and comply with all laws and regulations applicable to it; at
all times maintain, preserve and protect all franchises and
trade names and preserve all the remainder of its property
used or useful in the conduct of its business and keep the
same in good working order and condition, and from time to
time, make, or cause to be made, all needful and proper
repairs, renewals, replacements, betterments and improvements
thereto, as is consistent with Borrower's ordinary course of
business;
(b) Comply with all applicable laws, rules,
regulations, ordinances and orders whether now in effect or
hereafter enacted or promulgated by any Governmental Authority
having jurisdiction over the properties of Borrower;
(c) Pay and discharge or cause to be paid and
discharged all taxes, assessments and governmental charges or
levies imposed upon it or upon its respective income and
profits or upon any of its property, real, personal or mixed,
or upon any part thereof; before the same shall become in
default, as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might become a lien
or charge upon such properties or any part thereof;
(d) Give prompt written notice to Lender, as soon as
possible and in any event within ten (10) days after Borrower
has knowledge of any proceedings instituted against it by or
in any federal or state court or before any commission or
other regulatory body, whether federal, state or local, which,
if adversely determined, would have an adverse effect upon its
business, operations, properties, assets, or condition,
financial or otherwise;
(e) Permit agents or representatives of Lender; at
any reasonable time during normal business hours and from time
to time and, at Borrower's expense, at all such times as a
Default or Event of Default has occurred and is continuing,
(i) to examine and make copies of and abstracts from the
records and books of account of Borrower; and (ii) to discuss
the affairs, finances and accounts of Borrower with its
independent accountants and with any of its officers and
directors;
(f) Immediately advise Lender of any material adverse
change in its condition, financial or otherwise, or of
the occurrence of any Default or Event of Default;
(g) Furnish to Lender, promptly after the filing or
receiving thereof; copies of all notices which Borrower
receives from any Governmental Authority alleging its
noncompliance with environmental laws or regulations and any
replies of Borrower filed in response thereto, and take all
necessary remedial action as required by such Governmental
Authority;
(h) Promptly notify Lender of any evidence of
hazardous waste, toxic or similar contamination which requires
notification to any Governmental Authority at any property
owned or leased by Borrower and, in compliance with all
Governmental Authority requirements, diligently prosecute to
completion (subject to the right of Borrower to contest in
good faith the existence of such noncompliance, the amount of
damages caused thereby or the extent of its liability therefor
by appropriate proceedings diligently pursued which shall
operate during the pendency thereof to prevent (i) the sale or
loss of any property and the imposition of any lien thereon
and (ii) any interference with the use or operation of
Borrower's property) the removal of any such contamination;
(i) Perform and observe, or cause to be performed and
observed, all of the terms, covenants and conditions on the
part of Borrower to be performed and observed under all leases
for mining properties ("Leases"); not do or permit anything to
be done within its control, the doing of which, or refrain
from doing anything, the omission of which would be legal and
valid grounds for any landlord under a Lease, or its
successors or assigns, to terminate such Leases; promptly
notify Lender in writing of any known default on the part of
Borrower in the performance of any of The terms, covenants and
conditions under any Leases and of any legal proceedings
Instituted against it by any other party to any of The Leases;
and not cancel or terminate any Leases, or amend or modify the
same, directly or indirectly in any respect whatsoever,
without in each case the prior written consent of Lender;
(j) Borrower will maintain at all times insurance
coverage in respect of the properties and assets of Borrower
in amounts, on terms and with such financially sound and
reputable insurers reasonably acceptable to Lender, as is
consistent with Borrower's ordinary course of business. Such
coverage shall include, without limitation, fire and extended
coverage insurance for the frill insurable value of all
buildings and other improvements located on Borrower's
properties and public liability, business interruption and
worker's compensation insurance, all in amounts not less than
the amount of the coverage maintained immediately prior to the
execution of this Agreement and under policies in form and
content reasonably acceptable to Leader. All policies of
insurance shall name Lender as an additional insured pursuant
to an endorsement as set out in Exhibit E hereto, and shall
provide;
(i) that proceeds of insurance shall be payable to Lender
in accordance with the terms hereof notwithstanding any
act or negligence of Borrower, which might otherwise
result in forfeiture of said insurance;
(ii) a waiver by the insurer of all rights of setoff,
counterclaim or deductions against Borrower;
(iii)a provision precluding cancellation or amendment save
on not less than sixty (60) days' prior written notice
to Lender.
Any surplus remaining from any such insurance in
excess of all indebtedness, liabilities and obligations of
Borrower to Lender shall be delivered to Borrower, or its
successors or assigns.
Borrower shall furnish Lender with an original copy
of all policies of insurance. If Lender permits Borrower to
provide any of the required insurance through blanket
policies, then Borrower shall furnish Lender with a
certificate of insurance for each such policy setting forth
the coverage, the limits of liability, the name of the
carrier, the policy number, and the expiration date.
(k) With respect to environmental matters:
(i) comply strictly and in all respects with all
Environmental Requirements, including, but not limited
to, wetlands laws, laws pertaining to the registration
of underground storage tanks, asbestos and
asbestos-containing materials, PCBs, radon gas and urea
formaldehyde foam insulation; notify Lender promptly
after the discovery of any release, spill, hazardous
waste pollution or contamination affecting Controlled
Premises or the discovery of the presence of asbestos
and asbestos-containing materials, PCBs, radon gas and
urea formaldehyde foam insulation; notify Lender
promptly of any notice relating to environmental
matters received from any Governmental Authority,
tenant, occupant, operator or other Person; and pay
promptly when due any fine or assessment against
Controlled Premises;
(ii) not become involved, and will take
steps to prevent any tenant of Controlled Premises
from becoming involved, in any operations at
Controlled Premises generating, storing, disposing or
handling Hazardous Material in violation of
applicable law or any other activity that could lead
to the imposition on Borrower, Lender or the
Controlled Premises of any liability or lien under
any Environmental Requirement;
(iii) immediately contain, remediate and/or
remove any Hazardous Material found on Controlled
Premises and correct any violation of Environmental
Requirements found on Controlled Premises, which work
must be done in compliance with applicable laws and
at Borrower's expense; and agrees that Lender has the
right, at its sole option but at Borrower's expense,
to have an environmental engineer or other
representative review the work being done; and
(iv) promptly upon the request of Lender
after the occurrence of an Event of Default or at any
time prior to such occurrence based upon Lender's
reasonable belief that a hazardous waste or other
environmental problem exists with respect to
Controlled Premises, provide Lender with an
environmental site assessment report or an update of
any existing report, all in scope, form and content
and performed by such company as may be reasonably
satisfactory to Lender, provided, however that
Borrower also hereby grants to Lender the right to go
on the Controlled Premises and have such a report or
update done (at Borrower's expense).
(l) Pay Lender a commitment fee on the average daily
amount from the date hereof to and including the Maturity Date
by which the Commitment exceeds the Loan Balance, at the rate
of one-half of one percent (1/2%) per annum, payable on the
first (1st) Business Day of each month and on the Maturity
Date.
11. Negative Covenants. Borrower covenants and agrees that,
until payment in full of the principal of; and interest on, the Note
and any other indebtedness of Borrower to Lender, whether now existing
or arising hereafter, Borrower will not, directly or indirectly (except
for Dakota/Rothschild Obligations and Dakota/Rothschild Collateral, as
such terms are defined in the lntercreditor Agreement):
(a) Create, incur, assume or suffer to exist any Lien
of any nature whatsoever on any of its assets or properties,
now or hereafter owned, other than Permitted Liens;
(b) Guarantee, endorse or otherwise in anyway become
or be responsible for obligations of any other person, except
endorsements of negotiable instruments for collection in the
ordinary course of business;
(c) Sell, lease, transfer or otherwise dispose of its
properties, assets, rights, licenses and franchises to any
person, except in the ordinary course of its business, or turn
over the management of such properties, assets, rights,
licenses and franchises;
(d) Enter into any arrangement, directly or
indirectly, with any person whereby it shall sell or transfer
any property, real, personal or mixed, used or useful in its
business, whether now owned or hereafter acquired, and
thereafter rent or lease such property, except as is
consistent with Borrower's ordinary course of business;
(e) Dissolve, liquidate, consolidate with or merge
with, or otherwise acquire (without the prior written consent
of Lender, which consent will not be unreasonably withheld)
all or substantially all of the assets or properties of; any
corporation; make any substantial change in its executive
management; or alter or modify its corporate name, mailing
address 6r principal place of business; or
(f) Without the prior written consent of Lender,
which consent will not be unreasonably withheld, declare or
pay any dividends, or make any distribution of cash or
property, or both, to holders of shares of its capital stock,
or directly or indirectly, redeem, purchase or otherwise
acquire for a consideration, any shares of its capital stock,
of any class.
12. Defaults/Rights and Remedies of Lender Upon Default. In each case
of happening of any of the following events (each of which is
herein and in the Note and the Security Documents sometimes
called an "Event of Default"):
(a) default in the payment of any amount of the Loan
Balance or any mandatory prepayment or other amount
(including, without limitation, Interest) due under this
Agreement or the Note, which shall remain unremedied for a
period of two (2) Business Days after written notice from
Lender to Borrower that such amount is due and payable;
(b) default in the due observance or performance of
any covenant, condition or agreement contained in Sections 10
or 11 hereof; in the Note or in any instrument granting
security to Lender for the Note, and such default shall
continue unremedied for thirty (30) days after written notice
thereof by Lender to Borrower;
(c) default in the due observance or performance of
any other covenant, condition or agreement, on the part of
Borrower to be observed or performed pursuant to the terms
hereof (except as specifically referred to in this Section
12), and such default shall continue unremedied for twenty
(20) days after `written notice thereof by Lender to Borrower;
(d) any representation or warranty made herein or in
any report, certificate, financial statement or other
instrument finished in connection with this Agreement, or the
making of the Loans by Lender hereunder, shall prove to be
false or misleading in any material respect when made;
(e) default with respect to any evidence of
indebtedness of Borrower (other than to Lender), if the effect
of such default is to accelerate the maturity of such
indebtedness or to permit the holder thereof to cause such
indebtedness to become due prior to the stated maturity
thereof; or if any indebtedness of Borrower (other than to
Lender) is not paid, when due and payable, whether at the due
date thereof or a date fixed for prepayment or otherwise;
(f) Borrower shall (i) discontinue or abandon
operation of its business; (ii) apply for or consent to the
appointment of a receiver, trustee, custodian or liquidator of
it or any of its property, (iii) admit in writing its
inability to pay its debts as they mature, (iv) make a general
assignment for the benefit of creditors, (v) file, or have
filed against it a petition for relief under Title 11 of the
United States Code or (vi) file, or have filed against it, a
petition in bankruptcy, or a petition or an answer seeking
reorganization or an arrangement with creditors or to take
advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or
statute, or an answer admitting the material allegations of a
petition filed against it in any proceeding under any such law
or if corporate action shall be taken for the purpose of
effecting any of the foregoing;
(g) any order, judgment or decree shall be entered,
without the application, approval or consent of Borrower by
any court of competent jurisdiction, approving a petition
seeking reorganization of either Borrower or appointing a
receiver, trustee, custodian or liquidator of Borrower or of
all or a substantial part of the assets of Borrower, and such
order, judgment or decree shall continue unstayed and in
effect for any period of thirty (30) days;
(h) final judgment for the payment of money in excess
of an aggregate of Fifty Thousand Dollars ($50,000) shall be
rendered against Borrower, and the same shall remain
undischarged for a period of thirty (30) consecutive days,
during which execution shall not be effectively stayed;
(i) the occurrence of any attachment of any deposits
or other property of Borrower in the hands or possession of
Lender, or the occurrence of any attachment of any other
property of Borrower in an amount exceeding Twenty-five
Thousand Dollars ($25,000) which shall not be discharged
within thirty (30) days of the date of such attachment unless
being contested in good faith by appropriate proceedings and
as to which adequate reserves have been provided on the books
of Borrower;
(f) the occurrence of any event or condition
described in paragraph (d), (e), (f), (g) or (h) of this
Section 12 with respect to (1) Guarantor or (2) any other
Person liable, in whole or in part, for payment or performance
hereof or of the Note;
(k) for any reason, any Security Document at any time
shall not be in frill force and effect in all material
respects or shall not be enforceable in all material respects
in accordance with its terms, or any Lien or charge granted
pursuant thereto shall fail to be perfected, or Borrower shall
contest the validity, enforceability or perfection of any Lien
granted pursuant thereto, or Borrower shall seek to disaffirm,
terminate, limit or reduce its obligations under any Security
Documents;
(l) the occurrence of any Event of Default (as defined therein)
under any of the Security Documents;
(m) for any reason Guarantor shall terminate or seek
to terminate or limit, by written or verbal notice, its
Guaranty or shall be in default of Guarantor's own obligations
to Lender;
(n) the occurrence of any Event of Default under (i)
a certain Trading Agreement between Lender and Dakota dated
September 12, 1994, as the same may be amended, modified,
restated or supplemented from time to time or (ii) the
Refining Agreements; or
(o) the occurrence of any default or Event of Default
by Borrower or any subsidiary or affiliate of Borrower under
any agreement promissory note or other documents with or in
favor of N.M. Rothschild & Sons Ltd.; then, upon the
occurrence of any such Event of Default which has not been
cured by Borrower or waived in writing by Lender, Lender may,
by notice to Borrower; declare all indebtedness, liabilities
and obligations of Borrower to Lender to be immediate due and
payable. Upon Lender's declaration (the "Date of
Acceleration"), such indebtedness shall be immediately due and
payable, both as to principal and/or interest, without
presentment, demand, protest or notice of any land, all of
which are hereby expressly waived, anything contained herein
or in the Note or in any other evidence of such indebtedness
to the contrary notwithstanding (except with respect to any
Event of Default set forth in Section 12(f), in which case all
indebtedness, liabilities and obligations shall automatically
become immediately due and payable without the necessity of
any notice or other demand). Lender, in such instance, may
enforce payment of the same, may liquidate any or all of the
then open positions of Borrower with Lender (including,
without limitation, option or forward contracts), and may
exercise any or all of the rights, powers and remedies
possessed by Lender under the Note, this Agreement, the
Security Documents or under any agreement securing the
obligations of Borrower to Lender, whether afforded by law or
in equity. The remedies provided for herein are cumulative and
are not exclusive of any other remedies provided by law.
Borrower agrees to pay Lender's reasonable attorneys' fees and
legal expenses incurred in enforcing Lender's rights, powers
and remedies under this Agreement, the Note and any Security
Documents.
13. Miscellaneous.
(a) This Agreement and all covenants, agreements,
representations and warranties made herein and in the
certificates delivered pursuant hereto, shall survive the
execution and delivery to Lender of this Agreement and the
Note, and shall continue in full force and effect so long as
the Note or any other indebtedness or obligations of Borrower
to Lender is outstanding and unpaid. In this Agreement,
reference to a party shall be deemed to include the successors
and assigns of such party; provided, however that Borrower
shall not assign its rights hereunder or any interest herein
to any other party without the prior written consent of Lender
and any such purported assignment shall be void. All
covenants, agreements and indemnities in this Agreement and
the Note by or on behalf of Borrower shall inure to the
benefit of the successors and assigns of Lender and no
assignment of this Agreement and the Note will affect any of
Borrower's representations and warranties hereunder or
thereunder. Borrower acknowledges and agrees that from time to
time Lender may assign its rights under this Agreement and the
Note or any interest herein or therein to one or more
financial institutions. Any assignee of the Note shall take
the Note free and clear of all offsets, counterclaims or
defenses of any nature whatsoever which Borrower may have
against any assignor of the Note, and no such offset,
counterclaim or defense shall be interposed or asserted by
Borrower in any action or proceeding brought by any such
assignee upon the Note or under this Agreement, and any such
right to interpose or assert any such offset, counterclaim or
defense in any such action or proceeding is hereby expressly
waived by Borrower. The foregoing shall not be deemed or
construed to limit the liability of a prior holder of the Note
for damages relating to any such offset, counterclaim or
defense
(b) Borrower will reimburse Lender upon demand for
all out-of-pocket costs, charges and expenses of Lender
(including reasonable fees and disbursements of counsel to
Lender) in connection with (i) the preparation, execution and
delivery of this Agreement, the Note and any Security
Documents and the making of the Loan (such fees not to exceed
$ 15,000), (ii) any amendments, modifications, consents or
waivers in respect thereof, (iii) enforcing or defending
Lender's rights under or in respect of this Agreement, the
Note and the Security Documents and any other document or
instrument now or hereafter executed in connection herewith,
(iv) foreclosing or otherwise collecting upon the Security
Documents and (v) obtaining legal, accounting or other advice
in connection with any of the foregoing.
(c) This Agreement and the Note shall be construed in
accordance with and governed by the laws of the State of New
York without giving effect to principles of conflict of law
(d) No modification or waiver of any provision of
this Agreement, or of the Note, nor consent to any departure
by Borrower therefrom, shall in any event be effective unless
the same shall be in writing, and then such waiver or consent
shall be effective only in the specific instance, and for the
purpose, for which given. No notice to, or demand, on
Borrower, in any case, shall entitle Borrower to any other or
future notice or demand in the same, similar or other
circumstances.
(e) Neither any failure nor any delay on the part of
Lender in exercising any right, power or privilege hereunder,
or under the Note, or any other instrument given as security
therefor, shall operate as a waiver thereof; nor shall a
single or partial exercise thereof preclude any other or
future exercise, or the exercise of any other right, power or
privilege.
(f) All Notices, communications and distributions
hereunder shall be given or made to the intended recipient at
its Principal Office; or at such other address as the
addressee may hereafter specify for the purpose by written
notice to the other party hereto Such Notices and other
communications (including, without limitation, any
modifications of; or waivers or consents under, this
Agreement) shall be given or made in writing (including
facsimile transmissions), sent by overnight delivery service,
facsimile transmission or band- delivered to the other party
at that party's Principal Office. All such Notices and other
communications shall be deemed to have been duly given when
transmitted by facsimile transmission or personally delivered
or, in the case of overnight delivery, upon receipt, in each
case given or addressed as aforesaid.
(g) This Agreement shall be binding upon and inure to
the benefit of Borrower and Lender and their respective
successors and assigns, except that Borrower shall not have
the right to assign its rights hereunder or any interest
herein without the prior written consent of Lender
(h) Borrower hereby submits to the jurisdiction of
the courts of the State of New York and the United States
District Court for the Southern District of New York, as well
as to the jurisdiction of all courts to which an appeal may be
taken or other review sought from the aforesaid courts, for
the purpose of any suit, action or other proceeding arising
out of any of Borrower's obligations under or with respect to
this Agreement, the Note, or with respect to the transactions
contemplated hereby and Borrower expressly waives any and all
objections it may have as to venue in any such courts.
Borrower also waives any objection it might now or hereafter
have on the ground that any such action or proceeding in such
federal or state court has been brought in an inconvenient
forum. BORROWER AND LENDER EACH WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT By EITHER OF THEM
AGAINST THE OTHER ON ANY MATTER WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, ANY OTHER
DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN). Borrower hereby
irrevocably designates and appoints CT Corporation System,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as its attorney-in-fact
to receive service of process in any suit, action or
proceeding arising out of any of its obligations under or with
respect to this Agreement or the transactions contemplated
hereby, it being expressly stipulated and agreed by Borrower
that service upon such attorney-in-fact shall constitute
personal service upon it Concurrently with the service of
process upon such attorney-in-fact, copies of the papers so
served shall be sent to Borrower. In the event such
attorney-in-fact at any time is incapable of acting or resigns
such appointment, then Borrower shall immediately appoint a
successor and give notice thereof to Lender. Nothing herein
shall affect the right of Lender to serve process in any other
manner permitted by law or to commence legal proceedings or
otherwise proceed against Borrower in any other jurisdiction.
(i) Upon the occurrence and during the continuance of
any Event of Default, Lender is hereby authorized at any time
and from time to time, without notice to Borrower (any such
notice being expressly waived by Borrower), to set off and
apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other
indebtedness at any time owing by Lender to or for the credit
or the account of Borrower, against any and all of the
indebtedness, liabilities, and obligations of Borrower now or
hereafter existing under this Agreement or the Note and
although such obligations may be contingent and unmatured.
Lender agrees promptly to notify Borrower after any such
setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and
application. The rights of Lender under this section are in
addition to any other rights and remedies (including, without
limitation, other rights of setoff) which Lender may have.
(j) All agreements between Borrower and Lender are
hereby expressly limited so that in no contingency or event
whatsoever whether by reason of acceleration of the maturity
of indebtedness or otherwise shall the amount paid or agreed
to be paid to Lender for the use, forbearance or detention of
the indebtedness evidenced hereby or by the Note exceed the
maximum permissible under applicable law. As used herein, the
term "applicable law" shall mean the law in effect as of the
date hereof, provided, however, that in the event there is a
change in the law which results in a higher permissible rate
of interest, then this Agreement and the Note shall be
governed by such new law as of its effective date. If, from
any circumstance whatsoever, fulfilment of any provisions
hereof or of the Note at the time performance of such
provision shall be due, shall involve transcending the limit
of validity prescribed by law, then, ipso facto. the
obligation to be fulfiled shall be reduced to the limit of
such validity, and if from any circumstance Lender should ever
receive as interest an amount which would exceed the highest
lawful rate, such amount which would be interest shall be
applied to the reduction of the principal balance of the Note
and not to the payment of interest. This provision shall
control every other provision of all agreements between
Borrower and Lender
(k) Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
(1) Any Section heading in this Agreement are
included herein for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose
As used in this Agreement, the term "person" shall include any
individual, corporation, partnership, joint venture, trust, or
unincorporated organization, or a government or any agency or
political subdivision thereof.
(rn) Borrower hereby agrees to indemnify, defend and
hold harmless Lender and its officers, directors, employees
and agents (collectively the "Indemnified Parties") against,
and agrees to hold the Indemnified Parties harmless from, any
and all liability, losses (excluding loss of profits), damages
and expenses (including reasonable counsel fees and expenses)
of any kind whatsoever which may be incurred by any of the
Indemnified Parties arising out of; in any way connected with,
or as a result of (i) any breach of any of the representations
or warranties made by Borrower in Section 8 hereof and any
breach of any covenant made by Borrower in Sections 10 and 11
hereof; (ii) any claim, action, suit, investigation or
proceeding relating to Borrower, whether or not any
Indemnified Party is a party thereto or target thereof;
provided that the foregoing indemnity shall not apply to any
such liability, losses, damages or expenses of an Indemnified
Party to the extent arising from willful misconduct or gross
negligence of such Indemnified Party or (iii) any losses,
claims, damages, liabilities, judgments or expenses arising
out of; or in any way related to (A) the presence, disposal,
spillage, discharge, leakage, release or threatened release of
any hazardous material about, from or affecting any property
of Borrower, (B)any personal injury or property damage arising
out of or related to any hazardous material or (C) any
violation of any environmental law or requirement. Borrower's
obligations set forth in this Section 13(m) shall survive any
termination of this Agreement and the payment in full of all
indebtedness, liabilities and obligations of Borrower to
Lender.
All indemnities set forth herein, including, without
limitation, this Section 13(m), shall survive the execution
and delivery of this Agreement and the Note and the making and
repayment of the Loan
(n) Lender represents and warrants to Borrower that:
(i) Lender (A) is duly organized, validly
existing and in good standing under the laws of the
state of its incorporation, (B) has Exit power and
authority to own its properties and to carry on
business as now being conducted and (C) has full
power to execute, deliver and perform its obligations
hereunder; and
(ii) The execution and delivery and
performance by Lender of its obligations under this
Agreement have been duly authorized by all requisite
action and will not violate any provision of law, any
order of any court or other agency of government, the
corporate charter or by-laws of Lender to any
indenture, agreement or other instrument to which it
is a part or by which it is bound.
(o) This Agreement may be executed in any number of
counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered
shall be an original, but all of which shall together
constitute one and the same instrument.
(p) The provisions contained herein shall, effective
the date hereof, be deemed to amend and restate the terms of
the 1996 Revolving Credit Agreement in its entirety, provided,
however, that Borrower shall remain obligated to pay to Lender
any and all accrued fees, charges and other amounts due under
the 1996 Revolving Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers, all as
of the day and the year first above written.
Borrower:
DAKOTA MINING CORPORATION
By: /c/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Finance & CFO
BROHM MINING CORP.
By: /c/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Finance & CFO
STIBNITE MINE INC.
By: /c/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Finance & CFO
BARRIER REEF, INC.
By: /c/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Finance & CFO
Lender:
▇▇▇▇▇▇ METALS, Inc.
By_____________________________________
Title:___________________________________
By: /c/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
EXHIBITS TO AMENDED AND RESTATED REVOLVING LOAN AGREEMENT
EXHIBIT A Note
EXHIBIT B Request for Loan
EXHIBIT C Permitted Liens
EXHIBIT D Opinion of Borrower's counsel
EXHIBIT E Insurance Endorsement
AMENDED AND RESTATED
SECURED LOAN NOTE
$7,500,000 March 20, 1997
FOR VALUE RECEIVED, DAKOTA MINING CORPORATION, a federal corporation
organized under the Canada Business Corporation Act, BROHM MINING CORP., a South
Dakota corporation, STIBNITE MINE INC., a Delaware corporation, and BARRIER REEF
INC., a Delaware corporation (jointly and severally, "Borrower"), promise to pay
to ▇▇▇▇▇▇ METALS, INC., a Delaware corporation lender or to its order, at its
principal ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the principal
sum of Seven Million Five Hundred Thousand Dollars ($7,500,000) or the aggregate
unpaid principal amount of loans made by Lender to Borrower pursuant to that
certain Amended and Restated Loan Agreement of even date herewith between
Borrower and Lender (hereinafter, as the same may be amended, modified, restated
or supplemented from time to time, the "Loan Agreement"), whichever amount is
less. Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed thereto in the Loan Agreement.
The outstanding principal amount hereof; together with accrued and
unpaid interest thereon, shall he due and payable in the amount, at the rate and
on the dates set forth in, and shall he calculated in accordance with the terms
and provisions of; the Loan Agreement.
Methods of Payment. Payments of both principal and interest as required
hereunder shall be made in lawful money of the United States of America m
immediately available funds at the principal office of The Chase Manhattan Bank,
N.A., New York, New York for the account of Lender (Account No. 910-120-1995,
ABA No ▇▇▇▇▇▇▇▇▇) initiated by bank wire transfer not later than 12:00 noon New
York time on the date on which such payment shall become due (each such payment
initiated after such time on such due date to be deemed to have been made on the
next succeeding Business Day) or such other account at the same or such other
bank as Lender shall direct. If any payment of principal or interest shall
become due on a Saturday, Sunday, public holiday under the laws of the State of
New York or on any other day on which banking institutions are authorized or
obligated by law to close in New York, New York or Denver, Colorado, such
payment shall be made on the next succeeding business day and such extension of
time shall in such case be included in computing interest in connection with
such payment.
Prepayment. Except as otherwise provided in Section 5 of the Loan
Agreement, this Note may be prepaid in whole or in part without premium or
penalty. Any payments received on this Note shall be applied first to any unpaid
fees or expenses incurred in connection with the making of the advances
hereunder, next to accrued but unpaid interest and then to principal amounts
outstanding.
Related Documents. This Note is the Amended and Restated Loan Note
referred to in, made pursuant to the terms of; and governed by the Loan
Agreement, which Loan Agreement is hereby incorporated herein as if set forth
herein at length This Note is entitled to all of the benefits of the Loan
Agreement, including provisions governing the payment and the acceleration of
maturity hereof. This Note is secured, inter alil by certain "Collateral" (as
defined in the Loan Agreement) and is entitled to the benefits thereof.
Remedies After Default. If an Event of Default as defined in the Loan
Agreement or in any of the Security Documents (as defined in the Loan Agreement)
has occurred and is continuing, the entire unpaid principal balance hereunder,
and all other sums paid by Lender to or on behalf of Borrower pursuant to the
terms of this Note, the Loan Agreement, the Security Documents or any of the
other Loan Documents (as defined in the Loan Agreement), together with unpaid
interest thereon, shall at the option of Lender become immediately due and
payable without further notice or demand and Lender may forthwith exercise the
remedies available to Lender at law and in equity as well as those remedies set
forth in this Note, the Loan Agreement, the Security Documents and the other
Loan Documents and one or more executions may forthwith issue on any judgment or
judgments obtained by virtue thereof; and no failure on the part of Lender to
exercise any of Lender's rights hereunder or under any other Loan Document shall
be deemed a waiver of any such rights or of any default. Irrespective of the
exercise or nonexercise of any of the aforesaid rights, Borrower shall pay
interest with respect to all amounts not paid when due under this Note at a rate
equal to four percent (4%) greater than the Prime Rate (as defined in the Loan
Agreement), computed from the date due and calculated on the basis of the actual
number of days elapsed over a year of three hundred sixty (360) days.
Waivers. Borrower hereby waives presentment for payment, protest and
demand, and notice of protest, demand and/or dishonor and nonpayment of this
Note, notice of any Event of Default under the Loan Agreement or any of the
Security Documents except as specifically provided therein, and all other
notices or demands otherwise required by law that Borrower may lawfully waive
Borrower expressly agrees that this Note, or any payment hereunder, may be
extended from time to time, without in any way affecting the liability of
Borrower. No unilateral consent or waiver by Lender with respect to any action
or failure to act which, without consent, would constitute a breach of any
provision of this Note shall be valid and binding unless in writing and signed
by Lender.
Governing Law. The rights and obligations of Borrower and all
provisions hereof shall be governed by and construed in accordance with the laws
of the State of New York without giving effect to principles of conflict of
laws.
Consent to Jurisdiction; Jury Trial Waiver. Borrower hereby submits to
the jurisdiction of the courts of the State of New York and the United States
District Court for the Southern District of New York, as well as to the
jurisdiction of all courts to which an appeal may be taken or other review
sought from the aforesaid courts, for the purpose of any suit, action or other
proceeding arising out of Borrower's obligations under or with respect to this
Note, and expressly waives any and all obligations it may have as to venue in
any of such courts. BORROWER AND LENDER EACH HEREBY WAIVES TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THEM AGAINST THE OTHER
ON ANY MATTERS WHATSOEVER (INCLUDING, WITHOUT LIMLTATION, ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS NOTE, THE LOAN
AGREEMENT, THE SECURITY DOCUMENTS OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION
HEREWITH OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN). No party to
this Note, including but not limited to any assignee of or successor to Borrower
or Lender, shall seek a jury trial in any lawsuit, proceeding, counterclaim, or
any other litigation procedure based upon, or arising out of; this Note, the
Loan Agreement, the Security Documents or any related instruments or the
relationship between the parties. No party will seek to consolidate any such
action, in which a jury trial has been waived, with any other action in which a
jury trial cannot be or has not been waived. THE PROVISIONS OF THIS PARAGRAPH
HAVE BEEN FULLY DISCUSSED BY BORROWER AND LENDER, AND THESE PROVISIONS SHALL BE
SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO
ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WELL NOT BE FULLY ENFORCED
IN ALL INSTANCES.
Savings Clause. All agreements between Borrower and Lender are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof; provided, however, that in
the event there is a change in the law which results in a higher permissible
rate of interest, then this Note shall be governed by such new law as of its
effective date. In this regard, it is expressly agreed that it is the intent of
Borrower and Lender in the execution, delivery and acceptance of this Note to
contract in strict compliance with the laws of the State of New York from time
to time in effect If; from any circumstance whatsoever, fulfillment of any
provision hereof or of the Loan Agreement or the Security Documents at the time
performance of such provision shall be due, shall involve transcending the limit
of validity prescribed by law, then the obligation to be fulfilled shall
automatically be reduced to the limit of such validity, and if from any
circumstances Lender should ever receive as interest an amount which would
exceed the highest lawful rate, such amount which would be excessive interest
shall be applied to the reduction of the principal balance evidenced hereby and
not to the payment of interest This provision shall control every other
provision of all agreements between Borrower and Lender.
Attorneys' Fees. If this Note shall not be paid when due and shall be
placed by the holder hereof in the hands of any attorney for collection, through
legal proceedings or otherwise, Borrower will pay a reasonable attorneys' fee to
the holder hereof together with reasonable costs and expenses of collection.
Continued Liability. Borrower shall remain primarily liable on this
Note and the Security Documents until full payment, unaffected by any agreement
or transaction between Lender and any subsequent Borrower as to payment of
principal, interest or other moneys, by any forbearance or extension of time,
guaranty or assumption by others, or by any other matter, as to all of which
notice is hereby waived by Borrower.
Section Headings. Any section headings in this Note are included herein
for convenience of reference only and shall not constitute a part of this Note
for any other purpose.
Amended and Restatement of Prior Agreement. The provisions contained
herein shall, effective the date hereof; amend and restate in their entirety the
terms of a certain $4,000,000 Secured Revolving Loan Note of Borrower in favor
of Lender dated April 12, 1996, provided, however, that Borrower shall remain
obligated to pay Lender all accrued interest and charges under such $4,000,000
Secured Revolving Loan Note, and all principal outstanding under such $4,000,000
Secured Revolving Loan Note shall hereafter be deemed to be outstanding under
this Note.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed by its
duly authorized officer as of the day and year first above written.
WITNESS: DAKOTA MINING CORPORATION
_______________________________________ By_____________________________________
Title:___________________________________
BROHM MINING CORP.
_____________________________________ By_____________________________________
Title:___________________________________
STIBNITE MINE INC.
______________________________________ By_____________________________________
Title:___________________________________
BARRIER REEF, INC.
____________________________________ By_____________________________________
Title:___________________________________
EXHIBIT B
REQUEST FOR LOAN
________________ 1997
▇▇▇▇▇▇ Metals, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX No.: (▇▇▇)▇▇▇-▇▇▇▇
Attention:
Ladies and Gentlemen:
Pursuant to the provisions of Section 2(a) of the Amended and Restated
Loan Agreement dated as of March ___ 1997, between the undersigned and ▇▇▇▇▇▇
Metals, Inc., as the same may be amended, modified, restated or supplemented
from time to time (the "Agreement"), the undersigned, as borrower, hereby
requests a Loan of________________________________ Dollars ($___________) to be
made on ___________ 1997 which Loan shall be evidenced by the undersigned's
Amended and Restated Secured Loan Note dated March ___, 1997. The principal
balance outstanding under said Secured Loan Note, after taking into
consideration the amount of the Loan requested hereunder, is
_______________________________________________ Dollars
($------------).
The undersigned hereby represents and warrants that (i) no event has
occurred and is continuing, or would result from the proposed Loan, which
constitutes an "Event of Default" or a "Default' as each term is defined in the
Agreement and (ii) the representations and warranties in Section 8 of the
Agreement are true and correct as of the date hereof. The undersigned further
represents and warrants that the financial condition of the undersigned has not
materially adversely changed since the submission of the undersigned's most
recent financial information to Lender
The officer signing below hereby individually represents that he/she is
an authorized officer of the undersigned Borrower and is authorized to request
the Loan on behalf of such Borrower
Very truly yours,
DAKOTA MINING CORPORATION
By: /c/s ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President, Finance & CFO
BROHM MINING CORP.
By: ___________________________________
Title___________________________________
STIBNITE MINE INC.
By_____________________________________
Title:___________________________________
BARRIER REEF, INC.
By_____________________________________
Title:___________________________________
EXHIBIT C
TO AMENDED AND RESTATED LOAN AGREEMENT
PERMITTED LIENS
(A) Property of Dakota Mining Corporation described in the following
financing statements on file on the date hereof:
Collateral
Filing Office Secured Party File No. File Date Description
-----------------------------------------------------------------------------------------------------------------------------
Colorado Sanwa Leasing 952041920 6/2195 Computers
Secretary of Corporation
State
-----------------------------------------------------------------------------------------------------------------------------
Pitney ▇▇▇▇▇ 952053190 7/18/95 Equipment
Credit Corporation
-----------------------------------------------------------------------------------------------------------------------------
South Dakota Arrowhead 951090900531 4/19/95 Specific equipment
Secretary of Industrial Water
State
-----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Machinery 951421102189 5/22/95 Specific equipment
Company
-----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇ Machinery 951600900336 6/9/95 Specific equipment
Company
-----------------------------------------------------------------------------------------------------------------------------
(B) Uniform Commercial Code financing statements filed in favor of ▇.▇.
▇▇▇▇▇▇▇▇ & Son, Inc. with the Secretaries of State of Colorado and
Idaho, County Recorder of Valley County, Idaho subsequent to the
filing of Uniform Commercial Code financing statements filed in favor
of ▇▇▇▇▇▇ Metals, Inc. (as noted in (E) below).
(C) First Mortgage, Assignment of Rents and Royalties, Security Agreement
and Financing Statement dated April, 1996 filed by ▇▇▇▇▇▇ Metals, Inc.
on the real property of Stibnite Mine Inc. and Barrier Reef Inc.
located in Idaho.
(D) Mortgage -- Collateral Real Estate Mortgage dated April, 1996 filed by
▇▇▇▇▇▇ Metals, Inc. on the property of Brohm Mining Corp. located in
South Dakota.
(E) Property described in the following financing statements on file on
the date hereof, all of which list ▇▇▇▇▇▇ Metals, Inc. or its assignee
BHF Bank Aktengesellscahft, as the secured party.
Filing Office Debtor File No. and Date
-----------------------------------------------------------------------------------------------------------------------------
Colorado Secretary of State Dakota Mining Corporation 962030300-- 4/19/96
-----------------------------------------------------------------------------------------------------------------------------
Brohm Mining Corporation 962030299-- 4/19/96
-----------------------------------------------------------------------------------------------------------------------------
Stibnite Mine Inc. 922056191--8/03192
962030297 - 4/19196
-----------------------------------------------------------------------------------------------------------------------------
Barrier Reef Inc. 922056190-- 8/3/92
962030298 - 4/19196
-----------------------------------------------------------------------------------------------------------------------------
South Dakota Brohm Mining Corp.
Secretary of State
-----------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ Co., South Dakota Brohm Mining Corp.
Register of Deeds
-----------------------------------------------------------------------------------------------------------------------------
Idaho Secretary of State Stibnite Mine Inc.
Barrier Reef Inc.
-----------------------------------------------------------------------------------------------------------------------------
Valley Co., Idaho Stibnite Mine Inc.
Clerk and Recorder Barrier Reef Inc.
-----------------------------------------------------------------------------------------------------------------------------
A description of collateral covered by the foregoing financing statements is set
forth in Schedule A attached hereto.
(F) Property of Brohm Mining Corp. described in the following
financing statement on file on the date hereof:
Collateral
Filing Office Secured Party File No. File Date Description
-----------------------------------------------------------------------------------------------------------------------------
Colorado Caterpillar Financial 962052327 7/10/96 Equipment
Secretary of Services Corp.
State
(G) See Opinions of Title delivered by the Law Offices of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇ to Dakota and dated as of January 15, 1996 and April 4, 1996, copies of
which have been delivered to ▇▇▇▇▇▇.
Debtor: Dakota Mining Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Secured Party: ▇▇▇▇▇▇ Metals,, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All fixtures and all tangible and intangible personal property of
Debtor of every kind and description and wherever located, in each case whether
now owned or hereafter acquired by Debtor, or in which Debtor may now have or
hereafter acquire an interest, including, without limitation:
(1) all equipment (as such terms defined in the Uniform
Commercial Code the "UCC"), machinery and fixtures, including, without
limitation, all data processing and computer equipment, in each case
whether now owned or hereafter acquired by Debtor, or in which Debtor
may now have or hereafter acquire an interest;
(2) all products, goods and inventory (as such term is defined
in the UCC), including without limitation, all ore (in whatever form),
merchandise, raw materials, work in process, parts, components, dies,
molds, finished goods and all product inventory returned to or
repossessed by Debtor, in each case whether now owned or hereafter
acquired by Debtor, or in which Debtor may now have or hereafter
acquire an interest;
3) all instruments (as such term is defined in the UCC),
documents of title, general intangibles, contract rights and policies
and certificates of insurance, in each case whether now owned or
hereafter acquired by Debtor, or in which Debtor may now have or
hereafter acquire an interest;
(4) all accessions, additions and improvements to, and all
proceeds and products of, all of the foregoing included collateral,
including proceeds of insurance, whether now owned or hereafter
acquired by Debtor, or in which Debtor may now have or hereafter
acquire an interest; and
(5) all books, records, documents, computer tapes and discs
relating to all of the foregoing included collateral, whether now owned
or hereafter acquired by Debtor, or in which Debtor may now have or
hereafter acquire an interest.
EXHIBIT D
TO AMENDED AND RESTATED LOAN AGREEMENT
March ___, 1997
▇▇▇▇▇▇ Metals, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Amended and Restated Revolving Loan Agreement among ▇▇▇▇▇▇ Metals,
Inc., Dakota Mining Corporation, Stibnite Mine Inc., Barrier Reef The.
and Brohm Miring Corp.
Ladies and Gentlemen:
We have acted as counsel to Stibnite Mine Inc., a Delaware corporation
("Stibnite"), Barrier Reef Inc., a Delaware corporation ("Barrier"), Brohm
Miring Corp., a South Dakota corporation "Brohm"), and MinVen Gold (USA)
Corporation, a Delaware corporation "Guarantor"), and as local counsel to Dakota
Mining Corporation, a federal corporation organized under the Canada Business
Corporations Act ("Dakota"; together with Stibnite, Barrier and Brohm,
"Borrower"), in connection with the amendment and restatement of the various
documents pertaining to a $4,000,000 loan (the "Loan") from ▇▇▇▇▇▇ Metals, Inc.
"Lender") to Borrower on April 15, 1996, including the Amended and Restated
Revolving Loan Agreement of even date herewith (the "Amended Loan Agreement")
among Borrower and Lender and the amended and restated limited guaranty of the
Loan by Guarantor. All capitalized terms used herein and not otherwise defined
shall have the meanings ascribed in the Amended Loan Agreement. In rendering the
opinions set forth below, we have examined, reviewed and relied upon the
following:
1. facsimiles or executed copies of the following:
(a) Amended Loan Agreement (including as to factual matters, the
representations and warranties set forth in Section 8
thereof?);
(b) Amended and Restated Secured Revolving Loan Note of even
date herewith of Borrower in favor of Lender (the "Amended
Note");
(c) Amended First Mortgage, Assignment of Rents and Royalties,
Security Agreement and Financing Statement of even date
herewith of Stibnite and Barrier in favor of Lender (the
"Amended Idaho Mortgage") (including, as to factual matters,
the representations, covenants and agreements contained
therein);
(d) Amended Mortgage--Collateral Real Estate Mortgage of even
date herewith of Brohm in favor of Lender (the "Amended
South Dakota Mortgage") (including, as to factual matters,
the covenants and agreements contained therein);
(e) Amended and Restated Security Agreement of even date
herewith between Dakota and Lender (including, as to factual
matters, the representations and warranties set forth in
Section 3 thereof);
(f) Amended and Restated Security Agreement of even date
herewith between Brohm and Lender (including, as to factual
matters, the representations and warranties set forth in
Section 3 thereof);
(g) Amended and Restated Security Agreement of even date
herewith between Stibnite and Lender (including, as to
factual matters, the representations and warranties set
forth in Section 3 thereof);
(h) Amended and Restated Security Agreement of even date
herewith between Barrier and Lender (including, as to
factual matters, the representations and warranties set
forth in Section 3 thereof);
(i) Amended UCC-1 Financing Statements wherein Borrower is the
debtor and Lender is the secured party ("Amended Financing
Statements") under the Uniform Commercial Code (the "UCC")
of Colorado, Idaho and South Dakota, which Amended Financing
Statements have been or are to be filed in the filing
offices listed on Schedule A hereto;
(j) Amended and Restated Limited Guaranty of even date herewith
of Guarantor favor of Lender; and
(k) Amended and Restated Pledge Agreement of even date herewith
between Lender and Guarantor (the "Amended Pledge
Agreement") (including, as to factual matters, the
representations and warranties set forth in Section 4
thereof);
(the documents listed in (a) through (k) above are collectively referred to
herein as the "Transaction Documents" and references to one or more Transaction
Documents with respect to a particular person or persons, refer only to those
Transaction Documents to which such person or persons is a party; the documents
listed in (e) through (h) above are collectively referred to herein as the
"Security Agreements");
2. facsimiles or copies of resolutions authorizing the
execution and delivery by Borrower of the Transaction
Documents and related matters;
3. facsimiles or executed copies of certificates of the
Assistant Secretaries of the Borrower certifying the
adoption of such resolutions by the Borrowers' Boards of
Directors and the effectiveness of such resolutions;
4. copies of the certificates of incorporation (or like charter
document) and bylaws of Borrower and Guarantor; and
5. certificates from the Secretary of State of Delaware as to
the good standing of Stibnite and Barrier, a certificate
from the Secretary of State of South Dakota as to the good
standing of Brohm, and a Certificate of Compliance of
Industry Canada with respect to Dakota.
In connection with the rendering of the opinions and other statements
set forth herein, we have not undertaken a general investigation of facts, nor
have we independently verified the accuracy or completeness of any records,
agreements, instruments, documents, certificates or letters delivered to us or
of any of the representations, warranties or statements made to us.
Although we have in the past been engaged to render legal services to
Borrower, our engagements have been limited to matters specified by their senior
officers and, consequently, we are not familiar with all of their legal affairs.
We are qualified to practice law in the State of Colorado and,
notwithstanding any provision of this opinion to the contrary, we express no
opinion concerning the applicability or effect of any laws other than the
internal laws of the State of Colorado, the Delaware Corporation Law and the
federal law of the United States of America (without reference to choice or
conflict of laws principles or requirements). For all purposes of this opinion,
we have assumed the applicability solely of the laws referenced in this
paragraph, notwithstanding statements in the Transaction Documents and other
controlling facts to the contrary.
In rendering this opinion, we have assumed, without independent
inquiry, that:
1. All panties to the Transaction Documents other than Borrower and
Guarantor have the power and authority (corporate, partnership or other) to
execute, deliver and perform the Transaction Documents, and the Transaction
Documents constitute the legal, valid and binding obligations of the other
parties thereto.
▇▇▇▇▇▇ Metals, Inc.
March ___ 1997
Page 4
2. Borrower owns the Collateral- We express no opinion as to the
existence of or the right, title or interest of Borrower in, to or under any of
the Collateral. We assume that the descriptions of the Collateral described,
appearing or contained in the Amended Idaho Mortgage, the Amended South Dakota
Mortgage, the Security Agreements and the Amended Financing Statements are
accurate, complete and legally sufficient for all purposes.
We have also assumed the genuineness and authorization of all
signatures (other than those of borrower and Guarantor) on all documents
submitted to us as or-is, copies, or facsimiles, the legal capacity of natural
persons who signed any documents submitted to us as originals, copies, or
facsimiles (other than those of Borrower and Guarantor), the authenticity and
accuracy of all documents submitted to us as originals and conformity to the
or-is of all documents submitted to us as copies or facsimiles. We have assumed
the genuineness of all signatures of Borrower and Guarantor on all documents
submitted to us as or-is, copies or facsimiles. We have assumed that all of the
Transaction Documents have been properly executed by all parties thereto.
Based on the foregoing and with due regard to legal considerations that
we deem relevant, we are of the following opinions:
1. Each of Borrower and Guarantor is a corporation duly organized
validity existing and in good standing under the laws of its state of
incorporation.
2. Each Borrower has the corporate power and authority to own its
property and assets, Guarantor has the corporate power and authority
to own the Pledged Shares (as defined in the Amended Pledge
Agreement), and each of Borrower and Guarantor have the corporate
power and authority to transact the business in which it is engaged,
and to execute and deliver the Transaction Documents and to perform
its obligations under the Transaction Documents. Each of Borrower and
Guarantor has taken all necessary corporate action to authorize such
execution, delivery and performance.
3. To our knowledge, without independent investigation of any kind and
without any actual or implied duty to perform any independent
investigation, the execution and delivery of the Transaction Documents
by each of Borrower and Guarantor, and the performance of its
respective obligations therein, do not violate or conflict with any
order or judgment of any court or other agency of government
applicable to Borrower or Guarantor (as applicable) or any provision
of Borrower's or Guarantor's respective articles of incorporation (or
like charter document) or bylaws.
4. No filings or registrations with any governmental office, authority or
agency are necessary in order to establish and perfect a security
interest in the Collateral in favor of Lender, except for the
following; (i) the re9ording of the Amended Idaho Mortgage and Amended
South Dakota Mortgage in
▇▇▇▇▇▇ Metals, Inc.
March ___ 1997
Page 5
the filing offices listed on Schedule B hereto; (ii) the filing of the
Amended Financing Statements in the filing offices listed in Schedule
A hereto; and (iii) the filing of continuation statements with respect
to the Amended Financing Statements at required intervals and in
accordance with applicable law.
5. Assuming the applicability solely of the internal laws of the State of
Colorado, the Delaware Corporation Law and the federal law of the
United States of America (without regard to choice or conflict of law
principles or requirements), the obligations of each of Borrower and
Guarantor under the Transaction Documents constitute its legal, valid,
binding and enforceable obligations, except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights
of creditors generally; (ii) the application of general principles of
equity (regardless of whether considered in a proceeding in equity or
at law); and (iii) the assumptions, exceptions and qualifications set
forth elsewhere in this opinion. Notwithstanding the foregoing, and
subject to the assumptions, exceptions and qualifications set forth
elsewhere in this opinion, certain remedies, waivers, rights of Lender
and other provisions of the Transaction Documents may not be valid,
binding or enforceable under the laws expressly referenced above in
this paragraph; however, in our opinion, such matters should not
render the Transaction Documents, as against Borrower and Guarantor,
invalid as a whole or preclude (i) the judicial enforcement of the
obligation of the Borrower to repay the principal, together with
interest thereon (to the extent not deemed a penalty) as provided in
the Amended Note; (ii) the acceleration of the obligation of the
Borrower to repay such principal, together with such interest, upon a
default by Borrower in the payment of such principal or interest, or
upon a material default in any other material provision of the
Transaction Documents; and (iii) the foreclosure against the Borrower
in accordance with applicable law on the liens and security interest
in the Collateral created by the Transaction Documents upon maturity
or upon the acceleration pursuant to clause (ii) above of this
sentence.
FURTHER EXCEPTIONS AND OUALIFICATIONS
The foregoing opinions are subject to the following additional
assumptions, limitations and qualifications:
1. For purposes of the opinions expressed herein, we have assumed that
the recording and filing of the Amended Idaho Mortgage and Amended South Dakota
Mortgage and the Amended Financing Statements in the offices listed in Schedule
A and Schedule B hereto shall have been properly accomplished such that the same
shall be accurately abstracted and indexed in each instance by such office and
that no mistakes or errors shall have occurred in connection with such recording
and filing We have assumed that Lender will hold physical possession of all
stock pledged under the Amended Pledge Agreement and associated stock powers.
▇▇▇▇▇▇ Metals, Inc.
March ___ 1997
Page 6
2. Our opinions are rendered solely for the benefit of Lender and no
other party shall be entitled to rely on any matter set forth herein
without the express written consent of this firm. These opinions may
not be publicized or quoted to any other party without the prior
written consent of this firm or as may be required by law We disavow
any obligation to update these opinions or advise the addressee here
of any changes m our opinions in the event of changes of applicable
law becoming effective after the date hereof or if additional or newly
discovered information is brought to our attention after the date
hereof The opinions set forth in this opinion letter are limited to
the matters expressly stated herein, and no opinion may be Inferred
beyond the matter expressly so stated.
3. We express no opinion as to the priority of any lien, claim, charge,
pledge, security interest, mortgage, deed of trust or other
encumbrance on the Collateral described in the Amended Idaho Mortgage,
Amended South Dakota Mortgage, Security Agreements and Amended
Financing Statements.
4. We render no opinion regarding the perfection of any security interest
in motor vehicles, airplanes, trucks, railroad cars, barges or other
similar types of equipment with respect to which certificates of title
or other similar documents evidencing ownership are issued by a
governmental entity.
5. We have assumed that the Amended Financing Statements adequately
describe the Collateral which is the subject of the Security
Agreements.
6. To the extent any opinion or confirmation set forth herein is rendered
"to our knowledge" or otherwise indicates or refers to our knowledge
or belief, our knowledge or belief is based solely upon our actual
knowledge without our having obtained any factual certificates from
Borrower or Guarantor and without our having made or undertaken any
factual investigation or due diligence not disclosed in this opinion
letter.
7. Notwithstanding any provision of this opinion to the contrary, we
provide no opinion whatsoever as to the following: (i) any provisions
of the Transaction Documents providing for jurisdiction or venue for
resolution of disputes or for enforcement of rights or the choice of
law to govern the construction or enforcement of the Transaction
Documents; (ii) any prohibitions, requirements for consents or other
terms or conditions contained in any agreement or undertaking between
Borrower and or Guarantor and any lessor, royalty holder or landowner;
(iii) the validity, legality or enforceability of the granting of any
security interest in any governmental permit, license or authorization
held by Borrower or in any other asset in which a governmental agency,
authority or instrumentality holds an interest; (iv) any stock option
agreement of Dakota in favor of Lender; (v) any rights of subrogation
as between Lender and any third party; and (vi) whether the
Transaction Documents and the loans thereunder comply with applicable
laws governing usury.
▇▇▇▇▇▇ Metals, Inc.
March ___ 1997
Page 7
8. This opinion is subject to and governed in all respects by the Legal
Opinion Accord (the "Accord") of the ABA Section of Business Law
(1991), as modified by the Report (the "Report") of the ABA Section of
Real Property, Probate and Trust Law and the American College of Real
Estate Lawyers (I 993) as to opinions pertaining to Real Estate
Secured Transactions or to security interests in real property. As a
consequence, and notwithstanding any provision of this opinion to the
contrary, this opinion is subject to all of the qualifications,
exceptions, limitations on coverage and other limitations described in
the Accord and the Report (collectively "Other Qualifications"),
regardless of whether the Other Qualifications are expressly repeated
herein an regardless of whether the Other Qualifications conflict or
are inconsistent with any provision of this opinion. The Other
Qualifications shall be deemed to apply to all aspects of this opinion
and to all aspects of the transactions and Transaction Documents that
are the subject of this opinion, and not just to those aspects
pertaining to real property and the granting of security interests in
real property. This opinion should be read in conjunction with the
Accord and the Report.
PARCEL, MAURO, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C.
Schedule A
UCC FINANCING STATEMENT FILING JURISDICTIONS
Debtor: Dakota Mining Corporation
Jurisdiction: Secretary of State of Colorado
Debtor: Barrier Reef Inc.
Jurisdictions: Secretary of State of Colorado
Secretary of State of Idaho
Valley County, Idaho
Debtor: Stibnite Mine Inc.
Jurisdictions: Secretary of State of Colorado
Secretary' of State of Idaho
Valley County, Idaho
Debtor: Brohm Mining Corp.
Jurisdictions: Secretary of State of Colorado
Secretary of State of South Dakota
▇▇▇▇▇▇▇▇ County, South Dakota
Schedule B
MORTGAGE FILING JURISDICTIONS
Mortgagor: Stibnite Mine Inc., and Barrier Reef Inc.
Jurisdiction: Valley County, Idaho
Mortgagor: Brohm Mining Corp.
Jurisdiction: ▇▇▇▇▇▇▇▇ County, South Dakota
EXHIBIT E
LOSS PAYABLE ENDORSEMENT
Policy No,:
Named Insured: _____________________________________________________________
Name of Loss Payee and Additional Insured: ▇▇▇▇▇▇ Metals, Inc.
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Interest/Description of Property:
Loss under this policy will be payable to the above named Loss Payee
and Additional Insured as Lender or mortgagee as its interests may appear,
The Loss Payee and Additional Insured now has or will acquire from time
to time an insurable interest In certain property insured under this policy.
Such interests will be established by documentary or other written evidence
(including, without limitation, a security agreement).
The interest of the Loss Payee and Additional Insured will not be impaired by;
1. any act or neglect of the borrower, mortgagor or owner of the
above described property except as provided in the last paragraph
of this endorsement;
2, any change in the title or ownership of the property; or
3. a more hazardous occupancy of the premises where the property is
located than is permitted by this policy.
We reserve the right to cancel this policy at any time as provided by
its terms. If we do so, this policy will continue in force for the benefit only
of the Loss Payee and Additional Insured for sixty (60) days after notice to the
Loss Payee and Additional Insured of such cancellation and will then cease.
Whenever we will pay the Loss Payee and Additional Insured any sum for
loss or damage under this policy and claim that, as to the borrower, mortgagor
or owner, no liability existed then we will, to the extent of such payment, be
legally subrogated to all the rights of the party to whom the payment will be
made, under all securities held as collateral to the debt. At our option, we may
pay the Loss Payee and Additional Insured the whole principal due or to grow due
on the debt with interest, and thereupon receive a frill assignment and transfer
of the debt and of the mortgage
and all of such other securities as evidence of the interest of the Loss Payee
and Additional -Insured in the described property However, no subrogation will
impair the Loss Payee and Additional Insured's right to recover the frill amount
of its claim against the borrower, mortgagor or owner.
All other provisions of the policy apply.