EXHIBIT 10.1
 

 
November 26, 2014
 

Commonwealth Bank of Australia,
599 Lexington Avenue, 17th Floor
New York, NY 10022
Attn:           Director, Project Finance
 

 
Ladies and Gentlemen:
 
Reference is made to that certain Credit Agreement, dated as of July 18, 2014
(as amended, supplemented or otherwise modified from time to time prior to the
date hereof, the “Credit Agreement”), among MDW Pan LLP, as Borrower,
Commonwealth Bank of Australia, as Administrative Agent, Collateral Agent,
Technical Agent and Initial Lender, and the other Lenders named therein from
time to time.  Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.
 
 
1.
Amendments

 
In accordance with Section 15.01 of the Credit Agreement, the Borrower hereby
requests that the Lenders and the Administrative Agent evidence their approval
and consent to the following by signing the signature pages for such parties
attached hereto:
 

  (a)
The second paragraph of the “Preliminary Statements” of the Credit Agreement is
hereby amended by (i) replacing the reference to “U.S.$55,000,000” therein with
a reference to “U.S.$53,000,000” and (ii) replacing the reference to
“U.S.$45,000,000” therein with a reference to “U.S.$43,000,000”.
        (b)
The definition of “Capex Reserve Amount” in Section 1.01 of the Credit Agreement
is hereby amended and restated in its entirety as follows:
                 ““Capex Reserve Amount” means U.S.$0.”         (c)
The definition of “Cash Sweep Amount” in Section 1.01 of the Credit Agreement is
hereby amended by replacing the reference to “Section 14.04(d)(xi) and (xii)”
therein with a reference to “Section 14.04(d)(xi) through (xiii)”.
        (d)
The definition of “Commitment” in Section 1.01 of the Credit Agreement is hereby
amended by (i) replacing the reference to “U.S.$55,000,000” therein with a
reference to “U.S.$53,000,000” and (ii) replacing the reference to
“U.S.$45,000,000” therein with a reference to “U.S.$43,000,000”.

 
 
 

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  (e) The definition of “Depositary Agent” in Section 1.01 of the Credit
Agreement is hereby amended and restated in its entirety as follows:            
““Depositary Agent” means (a) with respect to the Proceeds Account, Wells Fargo
Bank, National Association and (b) with respect to each other Depositary
Account, The Bank of New York Mellon, in each case, as depositary bank under the
applicable Depositary Agreement, or any successor depositary agent appointed
pursuant to such Depositary Agreement or otherwise approved in writing by the
Agents and the Lenders.”         (f)
The definition of “Depositary Agreement” in Section 1.01 of the Credit Agreement
is hereby amended and restated in its entirety as follows:
            ““Depositary Agreement” means (a) with respect to the Proceeds
Account, the Deposit Account Control Agreement, dated as of October 3, 2014,
among the Borrower, the Collateral Agent and Wells Fargo Bank, National
Association, as depositary bank and (b) with respect to each other Depositary
Account, the Depositary Agreement, dated as of October 29, 2014, among the
Borrower, the Administrative Agent, the Collateral Agent and The Bank of New
York Mellon, as depositary bank.”         (g)
The definition of “PFF Commitment” in Section 1.01 of the Credit Agreement is
hereby amended by replacing the reference to “U.S.$45,000,000” therein with a
reference to “U.S.$43,000,000”.
        (h)
The definition of “Project Costs” in Section 1.01 of the Credit Agreement is
hereby amended by deleting the proviso at the end thereof.
        (i)
Clause (i) of the definition of “Risk Management Program” is hereby amended and
restated in its entirety as follows:
            “(i) shall include (A) the Gold Price Protection Program and (B) an
interest rate hedge permitted under clause (ii)(A) below representing 75% of the
expected amount of PFF Loans to be borrowed by the Borrower under this Agreement
and maturing after the Maturity Date and”         (j)
Section 2.05(a) of the Credit Agreement is hereby amended by replacing the table
set forth therein with the following table:

 
 
Principal Repayment Date
Repayment Amount (in U.S.$ millions)
June 30, 2015
1.00

 
 

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September 30, 2015
4.60
December 31, 2015
3.60
March 31, 2016
4.05
June 30, 2016
2.00
September 30, 2016
5.75
December 31, 2016
10.75
March 31, 2017
11.25

 
 

  (k)
Section 4.02(b) of the Credit Agreement is hereby amended and restated in its
entirety as follows:
            “The Risk Management Program (including the Gold Price Protection
Program and the interest rate hedge described in clause (i)(B) of the definition
of Risk Management Program) shall have been fully implemented, and the required
hedge economic outcomes contained therein satisfied.”         (l)
Section 4.04(a)(i) of the Credit Agreement is hereby amended by deleting the
parenthetical therein.
        (m)
Section 4.05(a)(viii) of the Credit Agreement is hereby amended and restated in
its entirety as follows:
            “[Reserved]”         (n)
Section 14.01 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
            “On or prior to the date hereof, the Borrower shall establish, and
shall thereafter maintain, the following segregated Dollar-denominated
collateral accounts with the applicable Depositary Agent for deposit of the
Project Revenues and other moneys and proceeds:                     (a) Account
No. entitled “Proceeds Account” (the “Proceeds Account”);

 
 

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            (b) Account No. entitled “MDW Pan LLP – Operating Reserve Account”
(the “Operating Reserve Account”);                       (c) Account No.
entitled “MDW Pan LLP – Capex Reserve Account” (the “Capex Reserve Account”);  
                    (d) Account No. entitled “MDW Pan LLP – Compensation
Account” (the “Compensation Account”); and                       (e) Account No.
entitled “MDW Pan LLP – Debt Service Reserve Account” (the “Debt Service Reserve
Account”).                   Notwithstanding the foregoing, the parties agree
that no Event of Default or Prospective Event of Default shall occur as a result
of the Borrower’s failure to maintain the Capex Reserve Account.”         (o)
Section 14.04(d)(ix) of the Credit Agreement is hereby amended by replacing the
reference to clause “(vii)” therein with a reference to clause “(viii)”.
        (p)
Section 14.04(d) of the Credit Agreement is hereby amended by replacing clause
(xiii) with the following:
            “(xiii) thirteenth, after the application of funds as provided in
clause (i) through (xii) above, twenty-five percent (25%) of amounts remaining
in the Proceeds Account shall be applied as a mandatory prepayment in accordance
with Section 2.03(b); and               (xiv) fourteenth, after the application
of funds as provided in clauses (i) through (xiii) above, solely to the extent
that Restricted Payments would be permitted with respect to amounts remaining in
the Proceeds Account pursuant to Section 11.01 and not more than once per
Quarterly Period, the Borrower may direct the transfer of such remaining funds
to the Distribution Account.”         (q)
Section 14.08 of the Credit Agreement is hereby amended by deleting the language
“, together with evidence showing that such funds to be transferred and
remaining in the Capex Reserve Account are sufficient in aggregate, on a cost to
complete basis, to meet the First Leach pad Expansion Costs” at the end thereof.
        (r)
The second sentence of Section 14.12(a) of the Credit Agreement is hereby
amended by adding the following language to the end thereof:
            “or such other account as the Administrative Agent and the Borrower
may agree”         (s)
Schedule I (Commitments, Pro Rata Share, Lending Offices) of the Credit
Agreement is hereby replaced in its entirety with Schedule I attached hereto.
        (t)
Schedule IV (Economic Completion Test and Agreed Test Protocols) of the Credit
Agreement is hereby amended by adding the following language to the end thereof:

 
 

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      “(g) First Leach Pad Expansion: The First Leach Pad Expansion has been
completed, in accordance with the Development Plan and Financial Model,
inclusive of                 (i)
Site grading;
                    (ii)
HDPE liner installation, including welding, trenching and placement;
                    (iii)
overliner placement, including crushing, placement and grading; and
                    (iv)
piping, including leak detection and on-solution.
                 
The incremental leach pad space associated with the expansion is to be not less
than 1,300,000 square feet, with a minimum leach pad capacity of 8 million tons
based on 160 feet maximum stacking height.”
        (u)
Paragraph 1 of Exhibit N-2 of the Credit Agreement is hereby amended by deleting
the parenthetical therein.
        (v)
Paragraph 7 of Exhibit O-2 of the Credit Agreement is hereby amended and
restated in its entirety as follows:
            “[Reserved]”         2.
Consents
      In accordance with Section 15.01 of the Credit Agreement, the Borrower
hereby requests that the Lenders and the Administrative Agent evidence their
approval and consent to the following by signing the signature pages for such
parties attached hereto:         (a)
Within thirty (30) days following the occurrence of the Initial Funding Date, so
long as no Event of Default or Prospective Event of Default has occurred and is
continuing, the Borrower shall be permitted to make a one-time Restricted
Payment from the Proceeds Account in an amount not to exceed U.S.$2,750,000.
        (b)
Notwithstanding Sections 2.02(a), 4.03(g)(iv), 14.07 and 14.10 of the Credit
Agreement, with respect to the final Borrowing under the Project Finance
Facility, in addition to any other amounts permitted to be borrowed pursuant to
the Credit Agreement, the Borrower shall be permitted to apply outstanding PFF
Commitments to fund (i) the Operating Reserve Account with up to the amount
necessary to cause amounts deposited in or credited to the Operating Reserve
Account to equal the Operating Reserve Requirement and (ii) the Debt Service
Reserve Account with up to the amount necessary to cause amounts deposited in or
credited to the Debt Service Reserve Account to equal the Debt Service Reserve
Requirement. Conforming changes to the last paragraph of the Loan

 

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Notice, paragraph 8 of the officer’s certificate in the form of Exhibit M-1 to
the Credit Agreement and paragraph 4 of the Independent Engineer’s certificate
in the form of Exhibit M-2 to the Credit Agreement, in each case delivered with
respect

 

  (c) The Borrower delivered to the Administrative Agent and the Technical Agent
on November 26, 2014 an updated Financial Model under the file name “Pan Gold
Project Base Case Financial Model v8” (the “Updated Financial Model”). The
parties agree that the existing Development Plan shall be deemed to be updated
to reflect the Updated Financial Model as well as the new mine plan and leach
pad stacking plan delivered by the Borrower to the Administrative Agent and the
Technical Agent on November 14, 2014 under the file names “Progress Memo Pit
Design and Stacking Plan 13-Nov-2014.pdf” and “Pan Resources - vulcanpit 7 fixed
(v7b).xlsx” (the Development Plan as so updated, the “Updated Development
Plan”). The Borrower hereby certifies that the Updated Development Plan and the
Updated Financial Model (i) were prepared in good faith by the Borrower, (ii)
are based on assumptions that are consistent with the requirements of the
Transaction Documents, the Agreement Approvals, the Project Approvals and
Applicable Law and that the Borrower considers to be reasonable in light of the
conditions existing as of the delivery of the Update Development Plan and the
Updated Financial Model and (iii) represent the Borrower’s best estimate of the
information set forth therein as of the date of such delivery. Solely with
respect to the Updated Development Plan and the Updated Financial Model
referenced herein, the Lenders hereby consent to the foregoing certification
being provided in lieu of the Officer’s Certificates contemplated by Sections
9.01(d)(i) and 9.01(e)(i) of the Credit Agreement and approve such Updated
Development Plan and Updated Financial Model.         3.
Miscellaneous
      This letter shall become effective as of the date first written above only
upon (a) receipt by the Borrower and the Administrative Agent of (i)
counterparts of this letter executed by the Borrower, the Lenders and the
Administrative Agent and (ii) the Consent and Reaffirmation attached hereto
executed by each of the Guarantors, Guarantor Equity Pledgors and Equity
Pledgors and (b) payment of the first installment of the Amendment Fee described
below.   In connection with this letter, the Borrower shall pay or cause to be
paid to the Administrative Agent an amendment fee equal to 1.00% of the
aggregate Commitment as of the date hereof (after giving effect to this
Amendment) (the “Amendment Fee”). The Amendment Fee shall become due and payable
in two installments, with 75% of the Amendment Fee becoming due on the Initial
Funding Date and 25% of the Amendment Fee becoming due on the initial Principal
Repayment Date. The Borrower agrees that, once paid, the Amendment Fee (or any
portion thereof) will not be refundable under any circumstances. The Amendment
Fee will be paid in immediately available funds, shall not be subject to
reduction by way of set-off or counterclaim, and may be shared among the Lenders
and the Agents (and their respective affiliates) as the Administrative Agent may
determine in its sole discretion.

 
 

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Upon the effectiveness of this letter, each reference in the Credit Agreement to
“this Agreement”, “hereunder”, “hereof” or words of like import referring to the
Credit Agreement, and each reference in the other Loan Documents to “the Credit
Agreement”, “thereunder”, “thereof” or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement, as in
effect after giving effect to this letter.   The Credit Agreement and each of
the other Loan Documents are and shall continue to be in full force and effect
and, except as otherwise waived in accordance with the terms hereof, are hereby
in all respects ratified and confirmed. The execution, delivery and
effectiveness of this letter shall not, except as expressly provided herein,
constitute a waiver of any provision of any of the Loan Documents.   In case any
provision herein or obligation hereunder shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.  
This letter may be executed in any number of counterparts and by the different
parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this letter by electronic means shall be effective as delivery of a manually
executed counterpart of this letter.   This letter shall be governed by, and
construed in accordance with, the law of the State of New York.

 
 
[Signature pages follow]
 
 

 
 

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MDW PAN LLP, as Borrower
        By: MDW Pan Holding Corp., its Managing Partne         By:
_________________________________     Name:     Title:

 

 

 
 
 

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COMMONWEALTH BANK OF AUSTRALIA, as Administrative Agent and Lender
      By: _________________________________     Name:    

 

 

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