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▇▇▇▇▇▇▇▇ GOLD CORPORATION,
AS BORROWER
- AND -
TORONTO DOMINION (TEXAS), INC.,
AS LENDER
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LOAN AGREEMENT
DATED APRIL 30, 1999
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TABLE OF CONTENTS
ARTICLE 1. INTERPRETATION.........................................................................................2
1.1. Definitions...........................................................................................2
1.2. Gender and Number.....................................................................................8
1.3. Interest..............................................................................................8
1.4. Invalidity, etc.......................................................................................8
1.5. Headings, etc.........................................................................................8
1.6. Governing Law; Attornment.............................................................................8
1.7. References............................................................................................9
1.8. Currency..............................................................................................9
1.9. This Agreement to Govern..............................................................................9
1.10. Generally Accepted Accounting Principles..............................................................9
1.11. Computation of Time Periods..........................................................................10
1.12. Actions on Days Other Than Banking Days..............................................................10
1.13. Verbal Instructions..................................................................................10
ARTICLE 2. THE LOAN FACILITY.....................................................................................10
2.1. Amount...............................................................................................10
2.2. Advances.............................................................................................10
2.3. Evidence of Indebtedness.............................................................................11
2.4. Term and Repayment...................................................................................11
2.5. Application of Proceeds..............................................................................11
2.6. Payments Generally...................................................................................11
ARTICLE 3. FEES AND EXPENSES.....................................................................................12
3.1. Facility Fee.........................................................................................12
3.2. Payment of Costs and Expenses........................................................................12
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ARTICLE 4. CONDITIONS PRECEDENT..................................................................................12
4.1. Conditions Precedent to Closing......................................................................13
4.2. General Conditions Precedent to Advances.............................................................14
4.3. Conditions Precedent to Initial Advance..............................................................15
ARTICLE 5. ADVANCES..............................................................................................15
5.1. Loans................................................................................................15
5.2. Payment of Interest..................................................................................16
5.3. Request for Advances.................................................................................16
ARTICLE 6. SECURITY..............................................................................................17
ARTICLE 7. REPRESENTATIONS AND WARRANTIES........................................................................17
7.1. Representations and Warranties.......................................................................17
7.2. Survival of Representations and Warranties...........................................................20
ARTICLE 8. COVENANTS.............................................................................................20
8.1. Affirmative Covenants................................................................................20
8.2. Negative Covenants...................................................................................22
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES........................................................................23
9.1. Events of Default....................................................................................23
9.2. Remedies Upon Default................................................................................25
9.3. Distributions........................................................................................25
ARTICLE 10. ASSIGNMENT...........................................................................................25
10.1. Assignments..........................................................................................25
10.2. Exchange of Information..............................................................................26
ARTICLE 11. GENERAL..............................................................................................26
11.1. Reliance and Non-Merger..............................................................................26
11.2. Amendment and Waiver.................................................................................27
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11.3. Set-Off or Compensation..............................................................................27
11.4. No Set-Off from Payments.............................................................................27
11.5. Reimbursement........................................................................................27
11.6. Capital Adequacy.....................................................................................28
11.7. Indemnity............................................................................................28
11.8. Notices..............................................................................................29
11.9. Time.................................................................................................31
11.10. Further Assurances...................................................................................31
11.11. Counterparts.........................................................................................31
11.12. Entire Agreement.....................................................................................31
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Schedule A - Request for Advance
Schedule B - Grid Promissory Note
Schedule C - Permitted Liens
Schedule D - Notice of Continuation/Conversion
Schedule E - FMG Guarantee
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THIS AGREEMENT is made as of April 30, 1999
BETWEEN:
▇▇▇▇▇▇▇▇ GOLD CORPORATION, A DELAWARE
CORPORATION
(the "Borrower")
- and -
TORONTO DOMINION (TEXAS), INC.
(the "Lender")
RECITALS:
A. The Borrower has requested the Lender to provide to it certain
financing for general corporate purposes (as hereinafter defined); and
B. The Lender agreed to do so upon the terms and conditions set out
herein.
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration
of the covenants and agreements herein contained, the parties hereto agree as
follows:
ARTICLE 1.
INTERPRETATION
1.1. DEFINITIONS
For the purposes of this Agreement the following terms shall have the following
definitions:
"ADVANCE" means a borrowing by the Borrower by way of Loans, and any reference
relating to the amount of Advances shall mean the sum of all outstanding
Advances;
"AGREEMENT" means this agreement and all schedules attached to this agreement,
in each case as they may be amended or supplemented from time to time; the
expressions "HEREOF", "HEREIN", "HERETO", "HEREUNDER", "HEREBY" and similar
expressions refer to this Agreement as a whole and not to any particular
article, section, schedule or other portion hereof, and the expression "ARTICLE"
and "SECTION" followed by a number or by a number and letter, and "SCHEDULE"
followed by a letter, mean and refer to the specified article or section of or
schedule to this Agreement, except as otherwise specifically provided herein;
"APPLICABLE LAW" means, in respect of any Person, property, transaction or
event, all applicable laws, statutes, rules, by-laws and regulations, and all
applicable official directives, orders, judgments and decrees of Governmental
Bodies;
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"ATTORNEY COSTS" means and includes all actual and reasonable fees and
disbursements of any law firm or other external counsel, the allocated actual
and reasonable cost of internal legal services and all reasonable disbursements
of internal counsel.
"BANKING DAY" shall mean a day on which banks are not authorized or required to
be closed and foreign exchange markets are open for the transaction of business
required for this Agreement in London, England, Houston, Texas and New York, New
York, as relevant to the determination to be made or the action to be taken;
"BASE RATE" shall mean, as of any date, a simple interest rate per annum equal
to the greater of (a) the Prime Rate, or (b) the sum of (i) the Federal Funds
Rate, plus (ii) one-half of one percent (1/2%). The Base Rate shall be adjusted
automatically as of the opening of business on the effective date of each change
in the Prime Rate or the Federal Funds Rate, as the case may be;
"BASE RATE ADVANCE" shall mean the principal portion of the Loans which is made
as a Base Rate Advance on the closing date or which the Borrower requests to be
made as a Base Rate Advance or to be converted to a Base Rate Advance after the
closing date;
"BORROWER" means ▇▇▇▇▇▇▇▇ Gold Corporation, a Delaware corporation, and its
successors and assigns;
"BORROWER'S COUNSEL" means ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇;
"BRANCH OF ACCOUNT" means such branch of The Toronto Dominion Bank as the
Lender, acting reasonably, may designate in writing to the Borrower;
"CHANGE OF CONTROL" shall be deemed to have occurred at such time as (a) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934) other than Placer Dome becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of more than fifty percent (50%) of the outstanding
shares of each class of common stock of the Borrower, or (b) the current Board
of Directors of the Borrower shall cease to constitute a majority of the Board
of Directors of the Borrower, other than as pursuant to the Merger or (c) the
Borrower fails to own one hundred percent (100%) of the outstanding shares of
the common stock of FMG;
"CLOSING DATE" means the date on which all conditions precedent set forth in
Section 4.1 are satisfied or waived by the Lender (or in the case of subsection
4.1.6., waived by the Person entitled to receive such payment);
"COMMITMENT" means the Lender's agreement to make Advances to the Borrower in a
total maximum amount outstanding at any time of $10,000,000;
"CURRENCY" means U.S. dollars;
"DEFAULT" means any event which, with the lapse of time, giving of notice or
both, would constitute an Event of Default;
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"DESIGNATED ACCOUNT" means, in respect of any Advance, the account or accounts
maintained by the Borrower at the Branch of Account, or such other account or
accounts, that the Borrower designates in its Request for Advance, acting
reasonably;
"DRAWDOWN DATE" means any Banking Day on which an Advance is made;
"DUE DATE" means the earliest to occur of (a) July 20, 1999, (b) three (3)
Banking Days after the consummation of the Merger, or (c) such other date as the
entire balance of the Loan may become due whether by acceleration or otherwise;
"ENVIRONMENTAL LAWS" means all federal, state, municipal or local laws,
regulations or rules relating to generation, operation, manufacture, refining,
treatment, transportation, storage, handling, disposal, transfer, production or
processing of any material or process including, without limiting the generality
of the foregoing, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. ss. 9601, et seq.; the Hazardous
Materials Transportation Act, as amended, 49 U.S.C. ss. 1801, et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. ss. 6901, et seq.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251, et
seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601, et seq.; the Clean
Air Act, 42 U.S.C. ss. 7401, et seq.; the Safe Drinking Water Act, 42 U.S.C. ss.
3808, et seq.; Nev. Rev. Stat. ch. 459; Nev. Rev. Stat. ch. 444; Nev. Rev. Stat.
ch. 445; Nev. Rev. Stat. ch. 590; Nev. Rev. Stat. ▇▇.▇▇. 618.750-618.850,
inclusive; and Nev. Rev. Stat. ss. 477.045; as all of the same may be amended
from time to time;
"ENVIRONMENTAL PERMITS" means all permits, certificates, approvals, consents,
authorizations, registrations and licenses issued by any Governmental Body
pursuant to Environmental Laws;
"EVENT OF DEFAULT" has the meaning attributed to such term in Section 9.1;
"FEDERAL FUNDS RATE" shall mean, as of any date, the weighted average of the
rates on overnight federal funds transactions with the members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Banking Day, for the next preceding Banking Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Banking Day, the average of the quotations for such day on such
transactions received by the Lender from three federal funds brokers of
recognized standing selected by the Lender;
"FMG" means FMG Inc., a wholly-owned subsidiary of the Borrower;
"FMG GUARANTEE" means a guarantee of the Obligations, in form of Schedule E to
this Agreement, by FMG in favor of the Lender;
"GOVERNMENTAL BODY" means any government, parliament, legislature, or any
regulatory authority, agency, commission or board of any government, parliament
or legislature, or any court or (without limitation to the foregoing) any other
law, regulation or rule-making entity (including, without limitation, any
central bank, fiscal or monetary authority or authority
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regulating banks), having or purporting to have jurisdiction in the relevant
circumstances, or any Person acting or purporting to act under the authority of
any of the foregoing;
"GRID PROMISSORY NOTE" means a grid promissory note in the form of Schedule B to
this Agreement;
"INDEBTEDNESS" means with respect to any Person, all indebtedness, obligations,
and liabilities of such Person, including without limitation: (i) all
"liabilities" which would be reflected on the balance sheet of such Person,
prepared in accordance with United States of America generally accepted
accounting principles, (ii) all obligations of such Person in respect of any
guarantee, (iii) all obligations of such Person in respect of any capital lease,
(iv) all obligations, indebtedness and liabilities secured by any lien or any
security interest on any property or assets of such Person, and (v) all
redeemable preferred stock of such Person valued at the greater of its voluntary
or involuntary liquidation preference plus accrued and unpaid dividends;
"INTEREST PERIOD" shall mean, (a) in connection with any Base Rate Advance, the
period beginning on the date such Advance is made and ending on the last day of
the calendar month in which such Advance is made, provided, however, that if a
Base Rate Advance is made on the last day of any calendar month, it shall have
an Interest Period ending on the last day of the following calendar month; and
(b) in connection with any LIBOR Advance, a period of one (1) month, fourteen
(14) days, or seven (7) days as selected by the Borrower. Notwithstanding the
foregoing, however, (i) any applicable Interest Period which would otherwise end
on a day which is not a Banking Day shall be extended to the succeeding Banking
Day unless, with respect to LIBOR Advances only, such Banking Day falls in
another calendar month, in which case such Interest Period shall end on the
preceding Banking Day, (ii) any one (1) month Interest Period, with respect to
LIBOR Advances only, with respect to any Interest Period of one (1) month, which
begins on a day for which there is no numerically corresponding day in the
calendar month during which such Interest Period is to end shall (subject to
clause (i) above) end on the last day of such calendar month, and (iii) no
Interest Period shall extend beyond the Due Date;
"LENDER" means Toronto Dominion (Texas), Inc.;
"LENDER'S COUNSEL" means Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP;
"LIBOR" shall mean the interest rate per annum (rounded upward to the nearest
one sixteenth (1/16th) of one percent) determined by the Lender to be the
average of the rates at which deposits in U.S. dollars for the Interest Period
selected by the Borrower are offered to the Lender in the LIBOR interbank
borrowing market at approximately 11:00 a.m. New York time, two (2) Banking Days
before the first day of such Interest Period, in an amount approximately equal
to the principal amount of the LIBOR Advance sought by the Borrower;
"LIBOR ADVANCE" shall mean the principal portion of the Loans which the Borrower
requests to be converted to a LIBOR Advance, and which bears interest at a per
annum rate equal to the LIBOR Basis plus one and one half percent (1.50%);
▇▇
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"▇▇▇▇▇ ▇▇▇▇▇" shall mean a simple interest rate per annum (rounded upward to the
nearest one-sixteenth (1/16th) of one percent) equal to the quotient of (i)
LIBOR divided by (ii) one (1) minus the LIBOR Reserve Percentage, stated as a
decimal. The LIBOR Basis shall apply to Interest Periods of one (1) month. The
LIBOR Basis shall remain unchanged during the applicable Interest Period, except
for changes to reflect adjustments in the LIBOR Reserve Percentage;
"LIBOR RESERVE PERCENTAGE" shall mean the percentage which is in effect from
time to time under Regulation D of the Board of Governors of the Federal Reserve
System, as such regulation may be amended from time to time, as the maximum
reserve requirement applicable with respect to Eurocurrency Liabilities (as that
term is defined in Regulation D), whether or not the Lender has any such
Eurocurrency Liabilities subject to such reserve requirement at that time. The
LIBOR Basis for the applicable Interest Period shall be adjusted automatically
for any change in the LIBOR Reserve Percentage;
"LIEN" means any mortgage, lien, pledge, assignment, charge, security interest,
lease intended as security, title retention agreement, rights reserved in any
Governmental Body, lease of real property, hypothecation, levy, execution,
seizure, attachment, garnishment or other similar encumbrance;
"LOAN" means, at any time, the principal amount of all Obligations then
outstanding under the Loan Facility;
"LOAN DOCUMENTS" means this Agreement, the Grid Promissory Note, the FMG
Guarantee, and any other agreement executed by the Borrower or FMG in connection
with the transactions contemplated hereby;
"LOAN FACILITY" means the loan facility of $10,000,000 in favor of the Borrower
which is established by this Agreement;
"MATERIAL AUTHORIZATION" means, with respect to any Person, at any point in time
any approval, permit, license or similar authorization (including any trademark,
trade name or patent) from, and any filing or registration with, any
Governmental Body or any other Person required by such Person to own its
property and assets or to carry on its business as carried on by it at such time
or as contemplated hereunder to be carried on by it at such time in each
jurisdiction in which it does so or is contemplated to do so or where the
failure to have such approval, permit, license, authorization, filing or
registration would have a material adverse effect upon its business, financial
condition or prospects or upon its ability to perform its obligations under any
Loan Document to which it is a party;
"MERGER" means the merger of Bullion Acquisition Corp., a Delaware corporation,
with and into the Borrower, making the Borrower a wholly-owned subsidiary of
Placer Dome as more fully set forth in that certain Agreement and Plan of Merger
dated as of December 11, 1998, as amended, among the Borrower, Bullion
Acquisition Corp. and Placer Dome;
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"NOTICE OF CONTINUATION/CONVERSION" means a Notice of Continuation/Conversion in
the form of Schedule D hereto;
"OBLIGATIONS" means all indebtedness, liabilities and other obligations of the
Borrower to the Lender under or in connection with this Agreement and the other
Loan Documents and any other document delivered pursuant hereto, including all
Advances, all interest which may accrue after the filing of any case under the
United States Bankruptcy Code, whether or not such interest is allowed in such
case, and the obligation to pay an amount equal to the amount of any and all
damages which the Lender may suffer by reason of a breach by the Borrower or any
other obligor of any obligation, covenant, or undertaking with respect to this
Agreement or any other Loan Document, whether actual or contingent, direct or
indirect, matured or not, now existing or arising hereafter;
"OFFICERS' CERTIFICATE" means a certificate signed by the Chief Executive
Officer and the Chief Financial Officer of the Borrower or FMG, as the case may
be;
"PAYMENT DATE" shall mean the last day of the Interest Period for any Advance;
"PERMITTED LIENS" has the meaning set out in Schedule C;
"PERSON" means any individual, partnership, limited partnership, limited
liability company, joint venture, syndicate, sole proprietorship, company or
corporation with or without share capital, unincorporated association, trust,
trustee, executor, administrator or other legal personal representative or
Governmental Body;
"PLACER DOME" means Placer Dome Inc., a corporation amalgamated under the Canada
Business Corporations Act;
"PRIME RATE" shall mean, at any time, the rate of interest adopted by The
Toronto-Dominion Bank, New York Branch, as its reference rate for the
determination of interest rates for loans of varying maturities in United States
dollars to United States residents of varying degrees of creditworthiness and
being quoted at such time by such bank as its "prime rate." The Prime Rate is
not necessarily the lowest rate of interest charged to borrowers of The
Toronto-Dominion Bank;
"REQUEST FOR ADVANCE" means a notice in the form of Schedule A to this
Agreement;
"SUBSIDIARY" means FMG and any other subsidiary of the Borrower that may exist
from time to time;
"TAXES" means all taxes of any kind or nature whatsoever including, without
limitation, income taxes, sales or value-added taxes, levies, stamp taxes,
royalties, duties, and all fees, deductions, compulsory loans and withholdings
imposed, levied, collected, withheld or assessed as of the date hereof or at any
time in the future, by any Governmental Body having power to tax, together with
penalties, fines, additions to tax and interest thereon; and
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"U.S. DOLLARS" or "$" means lawful money of the United States of America.
1.2. GENDER AND NUMBER
Words importing the singular include the plural and vice versa
and words importing gender include all genders.
1.3. INTEREST
Where in any Loan Document a rate of interest is to be
calculated on the basis of a year of 360 days, the yearly rate of interest to
which the 360 day rate is equivalent is such rate multiplied by the number of
days in the year for which such calculation is made and divided by 360.
1.4. INVALIDITY, ETC.
Each of the provisions contained in this Agreement is distinct
and severable and a declaration of invalidity, illegality or unenforceability of
any such provision or part thereof by a court of competent jurisdiction shall
not affect the validity or enforceability of any other provision of this
Agreement or of any other Loan Document. Without limiting the generality of the
foregoing, if any amounts on account of interest or fees or otherwise payable by
the Borrower to the Lender hereunder exceed the maximum amount recoverable under
Applicable Law, the amounts so payable hereunder shall be reduced to the maximum
amount recoverable under Applicable Law and the Lender, in consultation with the
Borrower, will determine the payment or payments that are to be reduced or
refunded, as the case may be, to effect such result.
1.5. HEADINGS, ETC.
The division of this Agreement into articles, sections and
clauses, the inclusion of a table of contents and the insertion of headings are
for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
1.6. GOVERNING LAW; ATTORNMENT
THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANY OTHER LOAN DOCUMENT), THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS
OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER
OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE
PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK
OR, AT THE SOLE OPTION OF
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THE LENDER, IN ANY OTHER COURT IN WHICH THE LENDER SHALL INITIATE LEGAL OR
EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER JURISDICTION OVER THE MATTER
IN CONTROVERSY AND PERSONAL JURISDICTION OVER THE BORROWER. EACH OF THE BORROWER
AND THE LENDER WAIVES ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 1.6. THE BORROWER AND THE LENDER HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF THE BORROWER AND THE LENDER
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE
EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO A TRIAL BY THE COURT.
1.7. REFERENCES
Except as otherwise specifically provided, reference in this
Agreement to any contract, agreement or any other instrument shall be deemed to
include references to the same as varied, amended, supplemented or replaced from
time to time and reference in this Agreement to any enactment, including without
limitation, any statute, law, by-law, regulation, ordinance or order, shall be
deemed to include references to such enactment as re-enacted, amended or
extended from time to time.
1.8. CURRENCY
Except as otherwise specifically provided herein, all monetary
amounts in this Agreement are stated in, and all amounts payable hereunder are
payable in, U.S. dollars.
1.9. THIS AGREEMENT TO GOVERN
If there is any inconsistency between the terms of this
Agreement and the terms of any other Loan Document, the provisions hereof shall
prevail to the extent of the inconsistency. For greater certainty,
notwithstanding that any Loan Document may provide for payment on demand, the
Obligations shall only be payable as stipulated herein.
1.10. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Except as otherwise specifically provided herein, all
accounting terms shall be applied and construed in accordance with U.S.
generally accepted accounting principles consistently applied.
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1.11. COMPUTATION OF TIME PERIODS
Except as otherwise specifically provided herein, in the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
1.12. ACTIONS ON DAYS OTHER THAN BANKING DAYS
Except as otherwise specifically provided herein, where any
payment is required to be made or any other action is required to be taken on a
particular day and such day is not a Banking Day and, as a result, such payment
cannot be made or action cannot be taken on such day, then this Agreement shall
be deemed to provide that such payment shall be made or such action shall be
taken on the first Banking Day after such day; provided that if such deferral
would cause such payment to be made or such action to be taken after the first
day of the following calendar month, such payment shall be made or such action
shall be taken on the next preceding Banking Day and interest and fees shall be
calculated accordingly. If the payment of any amount is deferred for any period
under this section, then such period shall, unless otherwise provided herein, be
included for purposes of the computation of any interest or fees payable
hereunder.
1.13. VERBAL INSTRUCTIONS
Notwithstanding any other provision herein regarding the
delivery of notices by the Borrower, the Lender shall in its sole discretion be
entitled to act upon the verbal instructions of the Borrower, or any Person
reasonably believed by the Lender to be a Person authorized by the Borrower to
give instructions regarding any request. All such verbal instructions shall be
at the risk of the Borrower and must be confirmed in writing by the Borrower on
the same Banking Day as the verbal instruction is given. The Lender shall not be
responsible for any error or omission in such instructions or in the performance
thereof except in the case of negligence or wilful misconduct by the Lender as
determined by a final order of a court of competent jurisdiction.
ARTICLE 2.
THE LOAN FACILITY
2.1. AMOUNT
Upon and subject to the terms and conditions of this
Agreement, the Lender hereby establishes the Loan Facility in favor of the
Borrower in the amount of $10,000,000.
2.2. ADVANCES
The Borrower shall be entitled to obtain Advances under the
Loan Facility, in an amount of $1,000,000 (or an integral multiple of $250,000
in excess of that amount) for each Advance, upon satisfaction of the conditions
set out in Article 4. Upon satisfaction of the
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conditions set out in Article 4, the principal amount of any Loan that is repaid
may be reborrowed.
2.3. EVIDENCE OF INDEBTEDNESS
The indebtedness of the Borrower resulting from Loans made by
the Lender shall be evidenced by the Grid Promissory Note. The Lender shall
record on the Grid Promissory Note each Advance and the date thereof and the
interest, fees and other charges accrued thereon and applicable thereto from
time to time and each payment of principal (including prepayments). The Grid
Promissory Note shall constitute, in the absence of manifest error, prima facie
evidence of the indebtedness of the Borrower to the Lender. The failure of the
Lender to correctly record any amount or date on the Grid Promissory Note shall
not adversely affect the obligation of the Borrower to pay amounts due hereunder
to the Lender in accordance with this Agreement. At all times and for all
purposes, the Grid Promissory Note may be tendered as prima facie evidence, in
the absence of manifest error, of the matters recorded therein.
2.4. TERM AND REPAYMENT
2.4.1. Term: Notwithstanding any other provision of this Agreement,
Obligations outstanding on the Due Date shall be due and
payable, together with all interest accrued and unpaid
thereon, on the Due Date.
2.4.2. Prepayment: The principal amount of the Loans may be repaid in
full or in part at any time prior to the Due Date upon three
(3) Banking Day's prior written notice to the Lender, without
penalty or premium; provided that the Borrower shall reimburse
the Lender for any loss or reasonable out-of-pocket expense
incurred by the Lender in connection with such prepayment, as
set forth in Section 11.5 hereof. Each notice of prepayment
shall be irrevocable. Prepayments of principal hereunder shall
be in integral multiples of $250,000.
2.5. APPLICATION OF PROCEEDS
During the existence of an Event of Default, all amounts
prepaid and repaid shall be applied firstly in reduction of fees due to the
Lender and then in reduction of the accrued and unpaid interest then outstanding
and then in reduction of the principal amount of the Loans then outstanding and
thereafter in reduction of all other Obligations outstanding.
2.6. PAYMENTS GENERALLY
All payments in respect of the Loans (in respect of principal,
interest, fees or otherwise) shall be made in U.S. dollars in immediately
available funds by the Borrower to the Lender no later than 11:00 a.m. (Houston
time) on the due date thereof to the accounts specified therefor by the Lender
at its Branch of Account. Any payments received after such time shall be
considered for all purposes as having been made on the next following Banking
Day unless the Lender otherwise agrees in writing. All payments shall be made by
way of immediate transfers from accounts of the Borrower with the Lender or
other immediately available funds.
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ARTICLE 3.
FEES AND EXPENSES
3.1. FACILITY FEE
The Borrower shall pay to the Lender a facility fee in the
amount of one percent (1.0%) per annum of the Commitment, which fee shall be
payable commencing on May 1, 1999 and on the first day of each month during the
remaining term of the Loan Facility. The facility fee shall be fully earned when
due and non-refundable when paid, and calculated based on a year of 360 days.
3.2. PAYMENT OF COSTS AND EXPENSES
Whether or not the Borrower obtains any Loans hereunder, the
Borrower shall pay to the Lender upon request all reasonable out-of-pocket costs
and expenses of the Lender, its agents, officers and employees, any receiver or
receiver-manager appointed by it or by a court in connection with this Agreement
or the other Loan Documents, including, without limitation:
3.2.1. the preparation, execution, filing and registration of any of
the Loan Documents, any actual or proposed amendment or
modification hereof or thereof or any waiver hereunder or
thereunder and all instruments supplemental or ancillary
thereto;
3.2.2. obtaining advice as to the Lender's rights and
responsibilities under the Loan Documents; and
3.2.3. the defense, establishment, protection or enforcement of any
of the rights or remedies of the Lender under any of the Loan
Documents including, without limitation, all costs and
expenses of establishing the validity and enforceability of,
or of collection of amounts owing under, any of the Loan
Documents or of any enforcement of the Loan Documents,
and further including, without limitation, all of the fees, expenses and
disbursements of the Lender's Counsel, (and, following the occurrence of an
Event of Default, such legal counsel as may be retained by the Lender), incurred
in connection therewith, and including all sales or value-added taxes payable by
the Lender (whether refundable or not) on all such costs and expenses.
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ARTICLE 4.
CONDITIONS PRECEDENT
4.1. CONDITIONS PRECEDENT TO CLOSING
The obligation of the Lender to close this Agreement is
subject to the fulfilment, to the satisfaction of the Lender and Lender's
Counsel, of each of the following conditions on or before the Closing Date:
4.1.1. the Lender shall have received a duly executed copy of this
Agreement and the FMG Guarantee;
4.1.2. the Borrower shall have delivered to the Lender an opinion of
the Borrower's Counsel, as counsel to the Borrower and FMG,
addressed to the Lender, in form satisfactory to the Lender,
acting reasonably;
4.1.3. the Lender shall have received, in form and substance
satisfactory to the Lender acting reasonably, an Officers'
Certificate from the Borrower dated as of the Closing Date
certifying that attached thereto are true and correct copies
of the following documents, and that such documents are in
full force and effect, unamended:
4.1.3.1. the certificate of incorporation of the
Borrower;
4.1.3.2. the by-laws of the Borrower;
4.1.3.3. good standing certificates for the Borrower
issued by the States of Delaware, Colorado,
and Nevada;
4.1.3.4. a certificate of incumbency, including
sample signatures of officers, of the
Borrower; and
4.1.3.5. the resolutions or other documentation
evidencing that all necessary action,
corporate or otherwise, has been taken by
the Borrower to authorize the execution,
delivery and performance of the Loan
Documents;
4.1.4. the Lender shall have received, in form and substance
satisfactory to the Lender acting reasonably, an Officers'
Certificate from FMG dated as of the Closing Date certifying
that attached thereto are true and correct copies of the
following documents, and that such documents are in full force
and effect, unamended:
4.1.4.1. the articles of incorporation of FMG;
4.1.4.2. the by-laws of FMG;
4.1.4.3. good standing certificates for FMG issued by
the State of Nevada;
4.1.4.4. Intentionally omitted; and
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4.1.4.5. the resolutions or other documentation
evidencing that all necessary action,
corporate or otherwise, has been taken by
FMG to authorize the execution, delivery and
performance of the Loan Documents to which
it is a party;
4.1.5. the Lender shall have received evidence that there are no
Liens on any assets of the Borrower other than Permitted Liens
and that the Borrower has obtained all consents and
authorizations necessary for it to enter into this Agreement
(including, without limitation, the consent of Placer Dome);
and
4.1.6. the Lender shall have received payment by the Borrower of all
accrued and unpaid fees, costs and expenses to the extent then
due and payable by the Borrower to the Lender and its
affiliates, including TD Securities (USA), Inc., as arranger,
on the Closing Date, together with Attorney Costs of the
Lender to the extent invoiced prior to or on the Closing Date,
plus such additional amounts of Attorney Costs as shall
constitute the Lenders' reasonable estimate of Attorney Costs
incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter
preclude final settling of accounts between the Borrower and
Lender); including any such costs, fees and expenses arising
under or referenced in Article 3;
4.1.7. the representations and warranties set forth in Article 7 are
true and accurate in all material respects on the Closing
Date;
4.1.8. the Lender shall have received such other approvals, opinions,
documents or materials as the Lender may reasonably request;
and
4.1.9. the Lender's site visit to the Borrower's mining operations
shall have been completed and the results reasonably
satisfactory to the Lender.
4.2. GENERAL CONDITIONS PRECEDENT TO ALL ADVANCES
The Borrower shall not be entitled to obtain an Advance until
satisfaction of and compliance with the following terms and conditions:
4.2.1. the representations and warranties set forth in Article 7 are
true and accurate in all material respects on the Closing Date
and shall continue to be true and accurate in all material
respects on the date of the Advance in question and the Lender
shall have received an Officers' Certificate from the Borrower
to such effect;
4.2.2. no Default or Event of Default shall have occurred and be
continuing and the Lender shall have received an Officers'
Certificate from the Borrower to such effect; and
4.2.3. the Lender shall have received a Request for Advance in
accordance with Section 5.3.
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4.3. CONDITIONS PRECEDENT TO INITIAL ADVANCE
In addition to the terms and conditions contained in Sections
4.1 and 4.2, the Borrower shall be entitled to obtain the initial Advance under
the Loan Facility upon and only in compliance with the following terms and
conditions:
4.3.1. the Lender shall have received an Officers' Certificate, in
form satisfactory to the Lender acting reasonably, certifying
that all regulatory and other governmental approvals and
consents required for the Merger have been obtained, including
without limitation, that as of the Closing Date the Securities
Exchange Commission has not objected to the treatment of the
Merger as a pooling of interests under U.S. generally accepted
accounting principles:
4.3.2. since the date of the audited consolidated financial
statements of the Borrower dated as of and for the period
ending December 31, 1998, there has been no development which
has had or will have a material adverse effect upon the
business, operation, assets, capitalization, financial
condition or prospects of the Borrower or upon the ability of
the Borrower to perform its obligations under any of the Loan
Documents and the Lender shall have received an Officers'
Certificate from the Borrower to such effect; and
4.3.3. the Lender shall have received the duly executed Grid
Promissory Note.
ARTICLE 5.
ADVANCES
5.1. LOANS
5.1.1. Upon the timely fulfilment of all applicable conditions as set
forth in this Agreement, the Lender shall make the requested
amount of each Advance available to the Borrower on the
Drawdown Date by crediting the Designated Account with such
amount and making the appropriate notation on the Grid
Promissory Note. The Borrower shall designate whether the
requested Advance will be a Base Rate Advance or a LIBOR
Advance.
5.1.2. So long as there shall not have occurred and be continuing a
Default hereunder, upon at least three (3) Banking Days'
irrevocable prior written notice from time to time to the
Lender pursuant to a Notice of Continuation/Conversion, the
Borrower may convert all or a portion of the principal of any
Base Rate Advance to one or more LIBOR Advances. Additionally,
at least three (3) Banking Days' prior to each Payment Date
for a LIBOR Advance, the Borrower shall give the Lender
written notice pursuant to a Notice of Continuation/Conversion
specifying whether all or a portion of any LIBOR Advance
outstanding on the Payment Date (A) is to be rolled over as
another LIBOR Advance, or (B) is to be converted to a Base
Rate Advance; provided, however, the Borrower shall not have
the right to
20
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roll over a LIBOR Advance as another LIBOR Advance if any
Default then exists, and such LIBOR Advance shall instead be
converted to a Base Rate Advance on such Payment Date. LIBOR
Advances may be prepaid on or prior to the applicable Payment
Date upon at least three (3) Banking Days' prior written
notice to the Lender, only in accordance with the terms of
Section 11.5 hereof.
5.2. PAYMENT OF INTEREST
5.2.1. Interest on the Loans shall be computed on the basis of a year
of 360 days for the actual number of days elapsed and shall be
payable in arrears on the applicable Payment Date for the
period through the date immediately preceding such Payment
Date. Interest on the outstanding Loans shall also be due and
payable on the Due Date. Interest shall accrue and be payable
on each Base Rate Advance at a per annum interest rate equal
to the Base Rate. Interest shall accrue and be payable on each
LIBOR Advance at a per annum interest rate equal to (A) the
LIBOR Basis applicable to such LIBOR Advance, plus (B) one and
one half percent (1.50%).
5.2.2. If an Event of Default shall have occurred and shall be
continuing, the Lender shall have the option (but shall not be
required to give prior notice thereof to the Borrower, to
accelerate the maturity of the Loan, or exercise any other
rights or remedies hereunder in connection with this right) to
charge interest on the outstanding principal balance of the
Loan at a rate which is two percentage points (2.0%) above the
rate which would accrue pursuant to Section 5.2.1. above (the
"Default Rate") from the date of such Event of Default.
Interest at the Default Rate shall be payable on the earlier
of DEMAND by the Lender or the Due Date and shall accrue until
the earlier of (i) waiver in writing by the Lender of the
applicable Event of Default, (ii) agreement by the Lender to
rescind the charging of interest at the Default Rate, or (iii)
payment in full of the Obligations. In addition, upon the
occurrence and during the continuance of an Event of Default,
the Lender shall have all the rights and remedies set forth in
this Agreement and the other Loan Documents. 5.2.3. In
computing interest on any Advance, the date of making the
Advance shall be included and the date of payment shall be
excluded; provided, however, that if an Advance is repaid on
the date that it is made, one (1) day's interest shall be due
with respect to such Advance.
5.3. REQUEST FOR ADVANCES
Request for Advances or repayment notices, as the case may be,
shall be given on the third Banking Day prior to the date of any Advance or
payment. A Request for Advance shall be given not later than 11:00 a.m. (Houston
time) on the date for notice. If a notice is not given by such time, it shall be
deemed to have been given on the next Banking Day, unless the Lender agrees to
accept the late notice as being effective on the date it is given.
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ARTICLE 6.
SECURITY
INTENTIONALLY OMITTED
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
7.1. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
7.1.1. Incorporation and Status: each of the Borrower and FMG is duly
incorporated and validly existing under the laws of Delaware
and Nevada, respectively, and has the corporate power and
capacity to own its properties and assets and to carry on its
business as presently carried on by it or as contemplated
hereunder to be carried on by it and holds all Material
Authorizations;
7.1.2. Power and Authority: the Borrower has the corporate power and
authority to enter into each of the Loan Documents and to do
all acts and things as are required or contemplated hereunder
or thereunder to be done, observed and performed by it;
7.1.3. Business: neither the Borrower nor FMG is engaged in any
business other than as set out in the Borrower's most recent
annual report on Form 10-K;
7.1.4. Due Authorization: the Borrower and FMG have each taken all
necessary corporate actions to authorize the execution,
delivery and performance by it of each of the Loan Documents
to which it is a party;
7.1.5. No Contravention: the execution and delivery by the Borrower
of the Loan Documents to which it is a party and the
performance by the Borrower of its obligations thereunder (i)
does not and will not contravene, breach or result in any
default under the organizational documents of the Borrower or
under any material mortgage, lease, agreement or other legally
binding instrument, license, permit, Material Authorization or
Applicable Law to which the Borrower is a party or by which
the Borrower or any of its properties or assets may be bound,
(ii) will not oblige the Borrower to grant any Lien to any
Person, (iii) will not result in or permit the acceleration of
the maturity of any indebtedness, liability or obligation
under any material mortgage, lease, agreement or other legally
binding instrument of or affecting the Borrower and (iv) will
not violate any judgment, order, injunction, determination or
award which is binding on the Borrower;
7.1.6. No Consents Required: no Material Authorization or other
material authorization, consent or approval of, or filing with
or notice to, any Person (including any Governmental Body) is
required which has not been obtained in connection with
22
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the execution, delivery or performance by the Borrower of this
Agreement or any of the other Loan Documents;
7.1.7. Enforceability: each of the Loan Documents to which the
Borrower is a party constitutes, or upon execution and
delivery will constitute, a valid and binding obligation of
the Borrower enforceable against it in accordance with its
terms, subject only to the qualifications set out in the
opinion of the Borrower's Counsel;
7.1.8. Title: the Borrower has good and valid title to all of the
issued and outstanding capital stock of FMG, free and clear of
any Liens and no Person has any claim or rights with respect
to such capital stock, and the Borrower has good and valid
title to all of its other assets free and clear of Liens other
than Permitted Liens;
7.1.9. No Litigation: there is no court, administrative, regulatory
or similar proceeding (whether civil or criminal); arbitration
or other dispute settlement procedure; investigation or
inquiry by any Governmental Body; or any similar matter or
proceeding (collectively "proceedings") against or involving
the Borrower or FMG, whether in progress or, to its knowledge,
threatened, which could reasonably be expected to materially
adversely affect its ability to perform any of the provisions
of any Loan Document to which it is a party or which purports
to affect the legality, validity and enforceability of any
such Loan Document; no event has occurred which might
reasonably be expected to give rise to any proceedings and
there is no judgment, decree, injunction, rule, award or order
of any Governmental Body outstanding against the Borrower or
FMG which has or could reasonably be expected to have a
material adverse effect on the Borrower's ability to perform
any of the provisions of any Loan Document;
7.1.10. No Default: neither the Borrower nor FMG is in default or
breach under the terms and conditions relating to any Material
Authorizations and there exists no state of facts which, after
notice or the passage of time or both, would constitute such a
default or breach; and there are no proceedings in progress or
pending, or to the Borrower's knowledge, threatened, which may
result in the revocation, cancellation, suspension or any
adverse modification of any Material Authorization;
7.1.11. Financial Statements: the audited consolidated financial
statements of the Borrower dated as of and for the period
ending December 31, 1998 contained in the annual report on
Form 10-K of the Borrower have been prepared in accordance
with U.S. generally accepted accounting principles and fairly,
completely and accurately present the financial position of
the Borrower and the financial information presented therein
for the period and as at the date thereof. Since the date of
such audited consolidated financial statements, there has been
no development which has had or which could reasonably be
expected to have a material adverse effect upon the business,
property, financial condition or
23
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prospects of the Borrower or upon the ability of the Borrower
to perform its obligations under any of the Loan Documents;
7.1.12. Other Material Subsidiaries: The Borrower does not have any
Subsidiaries other than FMG;
7.1.13. Environmental Compliance: The Borrower and FMG and the
business and assets of each of them has been and is being
operated in compliance in all material respects with all
applicable Environmental Laws and Environmental Permits;
7.1.14. Compliance with Regulations U and X. Neither the Borrower nor
any of its Subsidiaries is engaged principally or as one of
its important activities in the business of extending credit
for the purpose of purchasing or carrying, and neither the
Borrower nor any of its Restricted Subsidiaries owns or
presently intends to acquire, any "margin security" or "margin
stock" as defined in Regulations U and X of the Board of
Governors of the Federal Reserve System (herein called "margin
stock"). None of the proceeds of the Loans will be used,
directly or indirectly, for the purpose of purchasing or
carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to
purchase or carry margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within
the meaning of said Regulations U and X;
7.1.15. Year 2000 Issue. The Borrower has (i) initiated a review and
assessment of all areas within its and each of its
Subsidiaries businesses and operations (including those
affected by suppliers, vendors and customers) that could be
adversely affected by the "Year 2000 Issue" (that is, the risk
that computer applications used by the Borrower or any of its
Subsidiaries (or suppliers, vendors and customers) may be
unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and after December
31, 1999), (ii) developed a plan and timeline for addressing
the Year 2000 Issue on a timely basis and (iii) to date,
implemented that plan in accordance with that timetable ((i),
(ii) and (iii), the "Year 2000 Plan"). Based on the foregoing,
the Borrower represents and warrants that all computer
applications that are material to its or any of its
Subsidiaries businesses and operations will be able on a
timely basis to perform properly date sensitive functions for
all dates before and after December 31, 1999 (that is, be
"Year 2000 Compliant"). In addition, neither the cost to the
Borrower and its Subsidiaries of implementing the Year 2000
Plan and becoming Year 2000 Compliant nor the affect of the
Year 2000 Issue on the Borrower and its Subsidiaries has
resulted or is reasonably likely to result in an Event of
Default or a Default or in a material adverse change on the
business, assets, liabilities, financial condition, prospects
or results of operations of the Borrower or its Subsidiaries;
and
24
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7.1.16. ChemFirst, Inc. Indebtedness: the Obligations of the Borrower
are pari passu with all of the Borrower's Indebtedness to
ChemFirst, Inc.
7.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The Borrower covenants that the representations and warranties
made by it in this Article 7 shall be true and correct in all material respects
on each day that this Agreement remains in force and effect, and all such
representations and warranties shall be deemed to be made on each such day with
the same effect as if such representations and warranties had been made and
given on and as of such day, notwithstanding any investigation made at any time
by the Lender; except that if any such representation and warranty is
specifically given in respect of information as of a particular date or
particular period of time and relates only to such information, then such
representation and warranty shall continue to be given as at such date or for
such period of time until the information to which it relates is updated at
which point it shall continue to be given as of such updated date or period of
time, and so forth from time to time.
ARTICLE 8.
COVENANTS
8.1. AFFIRMATIVE COVENANTS
So long as any Obligations remain outstanding and the
Commitment has not been terminated, unless the Lender otherwise consents in
writing, the Borrower covenants and agrees that:
8.1.1. Punctual Payment: it shall pay or cause to be paid all
Obligations falling due hereunder on the dates and in the
manner specified herein;
8.1.2. Conduct of Business: it shall do or cause to be done, and
shall cause FMG to do or cause to be done, all things
necessary or desirable to maintain its corporate existence in
its present jurisdiction of incorporation and to maintain its
corporate power and authority to own its properties and
assets;
8.1.3. Preservation of Material Authorizations: it shall preserve and
maintain all Material Authorizations of the Borrower;
8.1.4. Compliance with Applicable Law and Contracts: it shall comply,
and shall cause FMG to comply, with the requirements of all
Applicable Laws and all contracts to which it is a party or by
which it or its properties are bound, non-compliance with
which would, singly or in the aggregate, have a material
adverse effect upon the Borrower's ability to perform its
obligations under any Loan Document;
8.1.5. Notice of Litigation and Other Matters: as soon as practical
after it shall become aware of the same, the Borrower shall
give, and shall cause FMG to give, notice to the Lender of the
following events:
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8.1.5.1. the commencement of any action, proceeding,
arbitration or investigation against or in any other
way relating adversely to the Borrower or FMG or its
properties, assets or businesses which, if adversely
determined, could reasonably be expected to singly or
when aggregated with all other such actions,
proceedings, arbitrations and investigations, have a
material adverse effect on the ability of the
Borrower to perform its obligations under any Loan
Document;
8.1.5.2. any amendment of the organizational documents of the
Borrower;
8.1.5.3. any development which has had or could reasonably be
expected to have a material adverse effect upon the
ability of the Borrower to perform its obligations
under any Loan Documents; and
8.1.5.4. any Default or Event of Default giving in each case
the details thereof and specifying the action
proposed to be taken with respect thereto.
8.1.6. Maintenance of Assets: it shall, and shall cause FMG to, keep
all of its equipment in good working order and condition, and
protect and maintain the value of all other assets, except
where the failure to do so would not have a material adverse
effect on the Borrower and FMG, taken as a whole;
8.1.7. Use of Proceeds: it shall use the Advance solely for
general working capital purposes of the Borrower;
8.1.8. Compliance Certificate: within two (2) Banking Days following
a request therefor from the Lender, the Borrower shall deliver
to the Lender an Officers' Certificate certifying that no
Default or Event of Default has occurred hereunder or, if any
Default or Event of Default has occurred, specifying the
relevant particulars and the period of existence thereof and
the action taken or proposed to be taken by the Borrower with
respect thereto;
8.1.9. Year 2000 Issue: the Borrower and its Subsidiaries shall
implement and complete the Year 2000 Plan in accordance with
the timetable set out in such Plan. In addition, the Borrower
and its Subsidiaries shall provide the Lender, upon request,
with their current Year 2000 Plan, periodic updates on the
implementation and progress of such Plan and access to their
senior management for discussions on the Year 2000 Plan. The
Borrower and its Subsidiaries shall ensure that adequate
resources are committed to implement and complete the Year
2000 Plan. The Borrower and its Subsidiaries shall be Year
2000 Compliant by December 31, 1999; and
8.1.10. Tax and Accounting Treatment of the Merger: the Borrower shall
not take any action and shall not fail to take any action
which action or failure to act would
26
-22-
prevent, or would be likely to prevent, the Merger from
qualifying (a) for pooling of interests accounting treatment
under U.S. generally accepted accounting principles or (b) as
a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended.
8.2. NEGATIVE COVENANTS
So long as any Obligations remain outstanding and the
Commitment has not been terminated, unless the Lender otherwise consents in
writing, the Borrower covenants and agrees that:
8.2.1. Encumber Assets: without the prior written approval of the
Lender, it shall not and shall not permit FMG to create,
grant, assume or suffer to exist any Liens upon its assets,
other than Permitted Liens;
8.2.2. Unrelated Business: it shall not engage directly or indirectly
in any business activity, or purchase or otherwise acquire any
properties or assets, in each case unrelated to or unnecessary
for the conduct of its present business in the ordinary
course;
8.2.3. Sell Assets: it shall not sell, transfer or otherwise dispose
of any of its assets, except that the Borrower may enter into
sales transactions in the ordinary course of business and may
dispose of worn out, obsolete or replaced assets;
8.2.4. Amalgamations: except for the Merger, it shall not enter into
(a) any merger or amalgamation with any other Person, and (b)
any other transaction (including by way of merger,
reorganization, consolidation, amalgamation, liquidation,
transfer, sale or otherwise) whereby all or any material
portion of the property and assets of the Borrower would
become the property of any other Person;
8.2.5. Limitation on Indebtedness: it shall not, and shall not permit
FMG to, incur, create, contract, assume, guarantee or
otherwise be or become, directly or indirectly, liable in
respect of any Indebtedness, except (i) Indebtedness arising
out of this Agreement; (ii) Indebtedness secured by the
Permitted Liens, (iii) current liabilities for taxes and
assessments incurred in the ordinary course of business, (iv)
Indebtedness in respect of current accounts payable accrued
and incurred in the ordinary course of business, (v)
Indebtedness of the Borrower and FMG as reflected in the
audited consolidated financial statements of the Borrower as
at December 31, 1998, and (vi) Indebtedness incurred pursuant
to the loan agreement between the Borrower and ChemFirst, Inc.
dated September 24, 1995 in an aggregate principal amount
outstanding not to exceed $29, 600,000;
8.2.6. Distributions and Dividends: neither the Borrower nor FMG
shall make any repayment of any Indebtedness (other than the
payment of (a) liabilities for taxes and assessments incurred
in the ordinary course of business, (b) Indebtedness in
respect of current accounts payable accrued and incurred in
the ordinary course of
27
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business, (c) regularly scheduled payments of interest, and
(d) Indebtedness owed to ChemFirst Inc. on September 22, 2000
or upon any "Change of Control" as defined in the Borrower's
loan agreement with ChemFirst Inc.), or issue any capital
stock or security, or pay or declare any dividends or other
forms of cash distributions, except that FMG may pay dividends
to the Borrower;
8.2.7. Negative Pledge. it shall not, and shall not permit FMG to,
enter into any agreement (other than the Loan Documents or the
Merger agreement with Placer Dome) with any Person that
prohibits or restricts or limits the ability of the Borrower
or FMG to create, incur, pledge or suffer to exist any Lien
upon any assets of the Borrower or FMG; and
8.2.8. Subsidiaries: it shall not form or acquire any Subsidiary
other than FMG, and it shall not make any loan or advance to,
or investment or capital contribution in, or otherwise
transfer any assets to FMG other than in the ordinary course
of business.
ARTICLE 9.
EVENTS OF DEFAULT AND REMEDIES
9.1. EVENTS OF DEFAULT
The occurrence of any one or more of the following events
shall constitute an Event of Default:
9.1.1. the Borrower shall fail to pay any portion of the principal
amount of any Loan or interest when due, or the Borrower shall
fail to pay any fees or other Obligations within five days of
when due and payable;
9.1.2. default in the performance or observance of any covenant,
condition or obligation contained in any Loan Document that
does not require the payment of money to the Lender and which
is not remedied within thirty (30) days of receipt by the
Borrower of notice of such default from the Lender provided
that, if such default requires more than thirty (30) days to
be cured and the Borrower is diligently and actively pursuing
the curing of such default, the Borrower shall be afforded
such additional time to cure such default as shall be
reasonable in the circumstances provided that in any event
such default is cured within sixty (60) days of receipt by the
Borrower of notice of such default from the Lender;
9.1.3. any representation or warranty made or deemed to have been
made by the Borrower herein or in any Loan Document, Officers'
Certificate or other document delivered to the Lender pursuant
hereto or in connection with any Loan Document is found to be
false or incorrect in any way so as to make it materially
misleading when made or deemed to have been made;
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9.1.4. an event shall occur that causes either the Borrower or FMG to
be in default under one or more agreements or instruments
under or pursuant to which Indebtedness was incurred or
created if the effect of such default or event results in the
Indebtedness of the Borrower or FMG in excess of $1,000,000
becoming due prior to its stated maturity;
9.1.5. either the Borrower or FMG admits its inability to pay its
debts generally as they become due or otherwise acknowledges
its insolvency;
9.1.6. either the Borrower or FMG institutes any proceeding or takes
any corporate action or executes any agreement to authorize
its participation in or commencement of any proceeding (other
than the Merger):
9.1.6.1. seeking to adjudicate it bankrupt or insolvent, or
9.1.6.2. seeking liquidation, dissolution, winding up,
reorganization, arrangement, protection, relief or
composition of it or any of its property or debt or
making a proposal with respect to it under any law
relating to bankruptcy, insolvency, reorganization or
compromise of debts or other similar laws (including,
without limitation, the filing of any petition under
the United States Bankruptcy Code or any similar
federal or state statute);
9.1.7. any proceeding is commenced against or affecting either the
Borrower or FMG:
9.1.7.1. seeking to adjudicate it a bankrupt or insolvent;
9.1.7.2. seeking liquidation, dissolution, winding up,
reorganization, arrangement, protection, relief or
composition of it or any of its property or debt or
making a proposal with respect to it under any law
relating to bankruptcy, insolvency, reorganization or
compromise of debts or other similar laws (including,
without limitation, the filing of any petition under
the United States Bankruptcy Code or any similar
federal or state statute);or
9.1.7.3. seeking appointment of a receiver, trustee, agent,
custodian or other similar official for it or for any
substantial part of its properties and assets, or any
part thereof,
and such proceeding is not being contested in good faith by
appropriate proceedings and is not in any event stayed or
terminated within forty-five (45) days of its commencement,
or, if such proceeding is being contested in good faith, the
Borrower should default under Section 9.1.1;
9.1.8. any execution, distress or other enforcement process, whether
by court order or otherwise, relating to any entry of final
judgment in excess of $1,000,000
29
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becomes enforceable against any property of the Borrower or of
FMG and the same is not fully covered by insurance;
9.1.9. FMG ceases to be a wholly-owned subsidiary of the Borrower; or
9.1.10. any Change of Control shall occur.
9.2. REMEDIES UPON DEFAULT
Upon the occurrence of any Event of Default, the Lender may do
any one or more of the following:
9.2.1. declare the unutilized portion (if any) of the Loan Facility
to be terminated (whereupon the Lender shall not be required
to make any further Advances) and declare all Obligations to
be immediately due and payable;
9.2.2. Intentionally Omitted;
9.2.3. take such actions and commence such proceedings as may be
permitted by law or in equity (whether or not provided for
herein or in the Loan Documents) at such times and in such
manner as the Lender in its sole discretion may consider
expedient,
all without, except as may be required by Applicable Law, any
additional notice, presentment, demand, protest, notice of protest, dishonor or
any other action. The rights and remedies of the Lender hereunder are cumulative
and are in addition to and not in substitution for any other rights or remedies
provided by Applicable Law or by the Loan Documents.
9.3. DISTRIBUTIONS
All distributions under or in respect of the Loan Documents
shall be held by the Lender on account of the Obligations and the Borrower shall
remain liable for any deficiency. All such distributions may be applied to such
part of the Obligations as the Lender may see fit in its sole discretion, and
the Lender may at any time change any appropriation of any such distributions or
other moneys received by it and reapply the same against any other part of the
Obligations as the Lender may see fit, notwithstanding any previous application,
with any remaining amounts following payment of all Obligations, payable to the
Borrower.
ARTICLE 10.
ASSIGNMENT
10.1. ASSIGNMENTS
Except as provided in this section, no party may assign its
rights or benefits under this Agreement.
30
-26-
10.1.1. The Borrower shall not assign or transfer all or any part of
its rights or benefits hereunder without the prior written
consent of the Lender.
10.1.2. The Lender may assign all or part of its rights in respect of
the Obligations and have its corresponding obligations
hereunder assumed by:
10.1.2.1. any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve
System and any Operating Circular issued by such Federal
Reserve Bank (no such assignment shall relieve the Lender from
its obligations hereunder), or any affiliate of the Lender
without the consent of the Borrower, and
10.1.2.2. any other Person with the prior written consent of the
Borrower (which consent shall not be unreasonably withheld).
Any assignment under Section 10.1.2.1 shall become effective when the
Borrower has been notified thereof by the Lender and has received from the
assignee an undertaking to be bound by this Agreement and the other Loan
Documents and to perform the obligations assumed by it; any assignment under
Section 10.1.2.2 shall become effective when the Borrower has provided its
written consent to the Lender and has received from the assignee an undertaking
to be bound by this Agreement and the other Loan Documents and to perform the
obligations assumed by it. Any such assignee shall be treated as a party to this
Agreement for all purposes of this Agreement and the other Loan Documents and
shall be entitled to the full benefit hereof and thereof and shall be subject to
the obligations of the Lender to the same extent as if it were an original party
in respect of the rights assigned to it and obligations assumed by it and,
except in the case of an assignee referred to in Section 10.1.2.1 the Lender
shall be released and discharged accordingly.
10.2. EXCHANGE OF INFORMATION
The Lender may provide to any proposed assignee such
information concerning the financial position and the operations of the Borrower
as, in the opinion of the Lender, may be relevant or useful in connection with
the Loan Facility or any portion thereof proposed to be acquired by such
assignee, provided that each recipient of such information agrees not to
disclose such information to any other Person.
ARTICLE 11.
GENERAL
11.1. RELIANCE AND NON-MERGER
All covenants, agreements, representations and warranties of
the Borrower made herein or in any other Loan Document or in any certificate or
other document signed by any of its directors or officers and delivered by or on
behalf of it pursuant hereto or thereto, shall be
31
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deemed to have been relied upon by the Lender notwithstanding any investigation
heretofore or hereafter made by the Lender or the Lender's Counsel or any
employee or other representative of the Lender and shall survive the execution
and delivery of this Agreement and the other Loan Documents until the Borrower
shall have satisfied and performed all of the Obligations.
11.2. AMENDMENT AND WAIVER
No amendment or waiver of any provision of any Loan Document
or consent to any departure by the Borrower from any provision thereof is
effective unless it is in writing and signed by the Lender. Such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it is given.
11.3. SET-OFF OR COMPENSATION
In addition to and not in limitation of any rights now or
hereafter granted under applicable law, if repayment is accelerated pursuant to
Section 9.2, the Lender may at any time and from time to time without notice to
the Borrower or any other Person, any notice being expressly waived by the
Borrower, set-off and compensate and apply any and all deposits, general or
special, time or demand, provisional or final, matured or unmatured, and any
other indebtedness at any time owing by the Lender to or for the credit of or
the account of the Borrower, against and on account of the Obligations
notwithstanding that any of them are contingent or unmatured and notwithstanding
that any such deposit or indebtedness may or may not be expressed in the same
Currency.
11.4. NO SET-OFF FROM PAYMENTS
The Borrower agrees to pay principal, interest, fees and all
other amounts due hereunder without set-off or counterclaim or any deduction
whatsoever. All payments due to the Lender under this Agreement, whether for
principal, interest, fees or otherwise, shall be made without set-off or
counter-claim, and free and clear and without any deduction or withholding on
account of any taxes, all of which shall be for the account of the Borrower and
paid by it directly to the relevant taxing or other authority when due. If the
Borrower shall be required by law to make any deduction or withholding in
respect of taxes from any payment hereunder, the sum payable shall be increased
by such amount as will result in the receipt by the Lender, after such deduction
or withholding, of the amount that would have been received if such deduction or
withholding had not been required. The Borrower shall, at the request of the
Lender, furnish to the Lender authenticated copies of receipts evidencing that
the Borrower has met its obligations under this section.
11.5. REIMBURSEMENT
11.5.1. Whenever the Lender shall sustain or incur any losses or
reasonable out-of-pocket expenses in connection (i) the
failure by the Borrower to borrow, prepay or convert any
Advance after having given notice of its intention to do so in
accordance with Section 2.4 hereof (whether by reason of the
Borrower's election not to proceed or the non-fulfilment of
any of the conditions set forth in Article ▇
▇▇
-▇▇-
▇▇ ▇▇▇▇▇▇▇▇▇), ▇▇ (▇▇) with the prepayment of any LIBOR
Advance in whole or in part for any reason, the Borrower
agrees to pay to the Lender, upon the earlier of the Lender's
demand or the Due Date, an amount sufficient to compensate the
Lender for all such losses and reasonable out-of-pocket
expenses. The Lender's good faith determination of the amount
of such losses or out-of-pocket expenses, as set forth in
writing and accompanied by calculations in reasonable detail
demonstrating the basis for its demand, shall be conclusive,
absent manifest error.
11.5.2. Losses subject to reimbursement hereunder shall include,
without limiting the generality of the foregoing, expenses
incurred by the Lender or any participant of the Lender in
connection with the re-employment of funds prepaid, repaid,
not borrowed, or paid, as the case may be, and lost profits.
11.6. CAPITAL ADEQUACY.
If, after the date hereof, the adoption of any Applicable Law
regarding the capital adequacy of banks or bank holding companies, or any change
in Applicable Law (whether adopted before the closing date but not effective
until after the closing date or adopted after the closing date), other than in
connection with income taxes, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Lender with any directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the Lender's capital as a consequence of its obligations hereunder with
respect to the Loans to a level below that which it could have achieved but for
such adoption, change or compliance (taking into consideration the Lender's
policies with respect to capital adequacy immediately before such adoption,
change or compliance and assuming that the Lender's capital was fully utilized
prior to such adoption, change or compliance) by an amount reasonably deemed by
the Lender to be material, then upon the earlier of demand by the Lender or the
Due Date, the Borrower shall promptly pay to the Lender such additional amounts
as shall be sufficient to compensate the Lender for such reduced return,
together with interest on such amount from the fourth (4th) day after the date
of demand until payment in full thereof at the Default Rate. A certificate of
the Lender setting forth the amount to be paid to the Lender by the Borrower as
a result of any event referred to in this paragraph and supporting calculations
in reasonable detail demonstrating the basis therefor shall be conclusive,
absent manifest error.
11.7. INDEMNITY.
The Borrower agrees to indemnify and hold harmless the Lender,
and each of its affiliates, employees, representatives, officers, directors and
agents (any of the foregoing shall be an "Indemnitee") from and against any and
all claims, liabilities, losses, damages, actions, investigations, proceedings,
attorneys' fees and expenses (as such fees and expenses are incurred and
irrespective of whether suit is brought) and demands by any party, including the
costs of investigating and defending such claims, actions, investigations or
proceedings, and the costs of answering any discovery served in connection
therewith, whether or not the Borrower, any
33
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Subsidiary or the Person seeking indemnification is the prevailing party and
whether or not the Person seeking indemnification is a party to any such action
or proceeding (a) resulting from any breach or alleged breach by the Borrower or
any Subsidiary of the Borrower of any representation or warranty made hereunder,
or (b) arising out of (i) the Loans or otherwise under this Agreement, including
the use of the proceeds of Loan hereunder in any fashion by the Borrower or any
of its Subsidiaries or the performance of their respective obligations under the
Loan Documents by the Borrower or any of its Subsidiaries, (ii) allegations of
any participation by the Lender in the affairs of the Borrower or any of its
Subsidiaries, or allegations that the Lender has any joint liability with the
Borrower or any of its Subsidiaries for any reason, or (iii) any claims against
the Lender by any shareholder or other investor in or lender to the Borrower or
any Subsidiary of the Borrower, by any brokers or finders or investment advisers
or investment bankers retained by the Borrower or by any other third party, for
any reason whatsoever, or (c) in connection with taxes, fees, and other charges
payable in connection with the Loan, or the execution, delivery, and enforcement
of this Agreement, the other Loan Documents, and any subsequent amendments
thereto or waivers of any of the provisions thereof; unless the Person seeking
indemnification hereunder is determined in such case to have acted or failed to
act with gross negligence or willful misconduct by a non-appealable judicial
order.
11.8. NOTICES
Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be given by prepaid first-class
mail, by nationally recognized overnight delivery service, by telecopier or
other means of electronic communication or by hand-delivery as hereinafter
provided. Any such notice, if mailed by prepaid first-class mail at any time
other than during or within four Banking Days prior to a general discontinuance
of postal service due to strike, lockout or otherwise, shall be deemed to have
been received on the fourth Banking Day after the post-marked date thereof, or
if sent by overnight delivery or by telecopier or other means of electronic
communication, shall be deemed to have been received on the Banking Day
following the sending, or if delivered by hand delivery shall be deemed to have
been received at the time it is delivered to the applicable address of the
addressee. Notice of change of address shall also be governed by this section.
In the event of a general discontinuance of postal service due to strike,
lock-out or otherwise, notices or other communications shall be delivered by
hand or sent by facsimile or other means of electronic communication and shall
be deemed to have been received in accordance with this section. Notices and
other communications shall be addressed to the addresses of the relevant party
hereto as follows:
To the Borrower:
▇▇▇▇▇▇▇▇ Gold Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention: Chief Financial Officer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
34
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with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ U.S.A.
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Lender:
Toronto Dominion (Texas), Inc.
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
The Toronto Dominion
First National Plaza
▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Upon the occurrence of any Event of Default, the Borrower shall notify
the following persons:
Placer Dome Inc.
▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
35
-31-
Attention: J.R. ▇▇▇▇▇▇ ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇
Seyfarth, Shaw, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
11.9. TIME
Time is of the essence with respect to the Loan Documents.
11.10. FURTHER ASSURANCES
Whether before or after the happening of an Event of Default,
the Borrower shall at its own expense do, make, execute or deliver all such
further acts, documents and things in connection with the Loan and the Loan
Documents as the Lender may reasonably require from time to time for the purpose
of giving effect to the Loan Documents including, without limitation, for the
purpose of facilitating the enforcement of the Loan Documents, all promptly upon
the request of the Lender.
11.11. COUNTERPARTS
This Agreement may be signed in any number of counterparts,
each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute one and the same instrument.
11.12. ENTIRE AGREEMENT
The Loan Documents constitute the entire agreement between the
parties hereto pertaining to the matters therein set forth and supersede and
replace any prior understandings or arrangements pertaining to the subject
matter hereof. There are no warranties, representations or agreements between
the parties in connection with such matters except as specifically set forth or
referred to in the Loan Documents.
36
IN WITNESS WHEREOF this Agreement has been executed by the
parties hereto as of the date first written above.
▇▇▇▇▇▇▇▇ GOLD CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Title: Vice President and Chief
--------------------------------
Financial Officer
--------------------------------
TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Title: Vice President
--------------------------------