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EXHIBIT 10.1

 

 

 

 

 

 

 

Hecla Mining Company

 

CAD$40,000,000 4.68% Series 2018-A Senior Notes
due May 1, 2021

 

_________________

 

Note Purchase Agreement

_________________

 

Dated as of March 5, 2018

 

 

 

 

 

 

 

 

 

 

 

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TABLE OF CONTENTS

 

 

      Page        

Section 1.          Authorization of Notes

1

 

Section 1.1

Description of Notes

1

 

Section 1.2

Additional Series of Notes

1

   

Section 2.          Sale and Purchase of Notes

2

 

Section 2.1

Initial Notes

2

  Section 2.2 Guaranty 2        

Section 3.          Closing.

3

       

Section 4.          Conditions to Closing

3

 

Section 4.1

Representations and Warranties

3

 

Section 4.2

Performance; No Default

3

 

Section 4.3

Compliance Certificates

4

 

Section 4.4

Opinions of Counsel

4

 

Section 4.5

Purchase Permitted By Applicable Law, Etc.

4

 

Section 4.6

[Reserved]

4

 

Section 4.7

Payment of Special Counsel Fees

4

 

Section 4.8

[Reserved]

5

 

Section 4.9

Changes in Corporate Structure

5

 

Section 4.10

Subsidiary Guaranty

5

 

Section 4.11

[Reserved]

5

 

Section 4.12

Funding Instructions

5

 

Section 4.13

Proceedings and Documents

5

 

Section 4.14

Canadian Resale Restrictions

5

   

Section 5.          Representations and Warranties of the Company

6

 

Section 5.1

Organization; Power and Authority

6

 

Section 5.2

Authorization, Etc.

6

 

Section 5.3

Disclosure

6

 

Section 5.4

Organization and Ownership of Shares of Restricted Subsidiaries; Affiliates

6

 

Section 5.5

Financial Statements; Material Liabilities

7

 

Section 5.6

Compliance with Laws, Other Instruments, Etc.

7

 

Section 5.7

Governmental Authorizations, Etc.

7

 

Section 5.8

Litigation; Observance of Agreements, Statutes and Orders

8

 

Section 5.9

Taxes

8

 

Section 5.10

Title to Property; Leases

8

 

Section 5.11

Licenses, Permits, Etc.

9

 

Section 5.12

Compliance with ERISA

9

 

Section 5.13

Private Offering by the Company

10

 

Section 5.14

Use of Proceeds; Margin Regulations

10

 

Section 5.15

No Default under Existing Indebtedness; Future Liens

10

 

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Section 5.16

Foreign Assets Control Regulations, Etc.

11

 

Section 5.17

Status under Certain Statutes

12

 

Section 5.18

Environmental Matters

12

 

Section 5.19

Initial Notes Rank Pari Passu

13

 

Section 5.20

Insurance

13

 

Section 5.21

Solvency

13

 

Section 5.22

Disclosure Controls and Procedures

14

 

Section 5.23

Compliance with Labor Laws

14

 

Section 5.24

Related Party Transactions

14

   

Section 6.          Representations of the Purchasers

14

 

Section 6.1

Purchase for Investment

14

 

Section 6.2

Source of Funds

15

 

Section 6.3

Collection of Personal Information

16

 

Section 6.4

Proceeds of Crime

17

 

Section 6.5

Acknowledgement

18

   

Section 7.          Information as to Company

18

 

Section 7.1

Reports

18

 

Section 7.2

Officer’s Certificate

19

   

Section 8.          Payment of the Notes.

20

 

Section 8.1

Required Payments

20

 

Section 8.2

Optional Prepayments with Make-Whole Amount

20

 

Section 8.3

Allocation of Partial Prepayments

21

 

Section 8.4

Maturity; Surrender, Etc.

21

 

Section 8.5

Purchase of Notes

21

 

Section 8.6

Make-Whole Amount

21

 

Section 8.7

Change in Control

22

 

Section 8.8

Sanctions Prepayment

24

 

Section 8.9

Offer to Prepay Notes by Application of Excess Proceeds

26

 

Section 8.10

Prepayment of Principal on 2013 Notes

 

   

Section 9.          Affirmative Covenants

27

 

Section 9.1

Compliance with Laws

27

 

Section 9.2

Insurance

28

 

Section 9.3

Stay, Extension and Usury Laws

28

 

Section 9.4

Payment of Taxes

28

 

Section 9.5

Corporate Existence

28

 

Section 9.6

Additional Subsidiary Guarantors

28

 

Section 9.7

Designation of Subsidiaries

29

 

Section 9.8

Notes to Rank Pari Passu

29

 

Section 9.9

Books and Records

29

 

Section 9.10

Use of Proceeds

29

       

Section 10.          Negative Covenants

30

 

Section 10.1

Restricted Payments

30

 

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Section 10.2

Incurrence of Indebtedness and Issuance of Preferred Stock

34

 

Section 10.3

Limitation on Liens

38

 

Section 10.4

Sales of Assets

39

 

Section 10.5

Merger and Consolidation; Successor Corporation Substituted

41

 

Section 10.6

Transactions with Affiliates

42

 

Section 10.7

Line of Business

45

 

Section 10.8

Terrorism Sanctions Regulations

45

 

Section 10.9

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

45

 

Section 10.10

Changes in Covenants When Notes Rated Investment Grade

47

 

Section 10.11

Limitations on Sale and Leaseback Transactions

48

       

Section 11.          Events of Default

48

       

Section 12.          Remedies on Default, Etc.

50

 

Section 12.1

Acceleration

50

 

Section 12.2

Other Remedies

51

 

Section 12.3

Rescission

51

 

Section 12.4

No Waivers or Election of Remedies, Expenses, Etc.

51

       

Section 13.          Registration; Exchange; Substitution of Notes

51

 

Section 13.1

Registration of Notes

51

 

Section 13.2

Transfer and Exchange of Notes

52

 

Section 13.3

Replacement of Notes

52

   

Section 14.          Payments of Notes

53

 

Section 14.1

Place of Payment

53

 

Section 14.2

Home Office Payment

53

       

Section 15.          Expenses, Etc.

53

 

Section 15.1

Transaction Expenses

53

 

Section 15.2

Survival

54

   

Section 16.          Survival of Representations and Warranties; Entire
Agreement

54

       

Section 17.          Amendment and Waiver

54

 

Section 17.1

Amendments and Waivers

54

 

Section 17.2

Solicitation of Holders of Notes

55

 

Section 17.3

Binding Effect, Etc.

55

 

Section 17.4

Notes Held by Company, Etc.

56

       

Section 18.          Notices

56

       

Section 19.          Reproduction of Documents

56

       

Section 20.          Confidential Information

57

       

Section 21.          Substitution of Purchaser

58

 

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Section 22.          Legal Defeasance and Covenant Defeasance

58

 

Section 22.1

Option to Effect Legal Defeasance or Covenant Defeasance

58

 

Section 22.2

Legal Defeasance and Discharge

59

 

Section 22.3

Covenant Discharge

59

 

Section 22.4

Conditions to Legal or Covenant Defeasance

60

 

Section 22.5

Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions

61

 

Section 22.6

Repayment to Company

61

 

Section 22.7

Reinstatement

62

       

Section 23.          Satisfaction and Discharge

62

 

Section 23.1

Satisfaction and Discharge

62

 

Section 23.2

Application of Escrowed Money

63

       

Section 24.          Guarantee and Limitation on Guarantor Liability

64

 

Section 24.1

Guarantee

64  

Section 24.2

Limitation on Subsidiary Guarantor Liability

65

 

Section 24.3

Execution and Delivery of Note Guarantee

65

       

Section 25.          Merger and Consolidation and Release of Subsidiary
Guarantors

65

 

Section 25.1

Guarantors May Consolidate, etc., on Certain Terms

65

 

Section 25.2

Releases

66

       

Section 26.          Miscellaneous

67

 

Section 26.1

Successors and Assigns

67

 

Section 26.2

Payments Due on Non-Business Days

67

 

Section 26.3

Accounting Terms

67

 

Section 26.4

Severability

68

 

Section 26.5

Construction, etc.

68

 

Section 26.6

Counterparts

68

 

Section 26.7

Governing Law

68

 

Section 26.8

Jurisdiction and Process; Waiver of Jury Trial

68

 

Section 26.9

English Language

69

 

Schedule A — Information Relating to Purchasers       Schedule B — Defined Terms
      Schedule C — Company Disclosure Schedule       Exhibit 1 — Form of 4.68%
Series 2018-A Senior Note Due May 1, 2018       Exhibit 2.2 — Form of Notation
of Guaranty       Exhibit 4.4(a) — Form of Opinion of Special U.S. Counsel to
the Company       Exhibit S — Form of Supplement to Note Purchase Agreement

 

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Hecla Mining Company
6500 N. Mineral Drive
Coeur d’Alene, Idaho 83815-9408

 

CAD$40,000,000 4.68% Series 2018-A Senior Notes due May 1, 2021

 

March 5, 2018

 

To Each Of The Purchasers Listed In
Schedule A Hereto:

 

Ladies and Gentlemen:

 

Hecla Mining Company, a Delaware corporation (the “Company”), agrees with each
of the purchasers listed in the attached Schedule A to this Note Purchase
Agreement (this “Agreement”) as follows:

 

Section 1.     Authorization of Notes.

 

Section 1.1     Description of Notes. The Company will authorize the issue and
sale of the following Senior Notes:

 

Issue

Series

Aggregate 

Principal Amount

 

Interest Rate

Maturity Date

Senior Notes

Series 2018-A

CAD$40,000,000

 

4.68%

May 1, 2021

 

The Series 2018-A Senior Notes described above are hereinafter referred to as
the “Initial Notes” and together with each Series of Additional Notes which may
from time to time be issued pursuant to the provisions of Section 1.2 are
collectively referred to as the “Notes” (such term shall also include any such
notes issued in substitution therefor pursuant to Section 13 of this Agreement).
The Initial Notes shall be substantially in the form set out in Exhibit 1 with
such changes therefrom, if any, as may be approved by the Purchasers and the
Company. Certain capitalized terms used in this Agreement are defined in
Schedule B; references to a “Schedule” or an “Exhibit” are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.

 

Section 1.2     Additional Series of Notes. The Company may, from time to time,
in its sole discretion but subject to the terms hereof, issue and sell one or
more additional Series of its unsecured promissory notes under the provisions of
this Agreement pursuant to a supplement to this Agreement substantially in the
form of Exhibit S hereto (a “Supplement”). Each additional Series of Notes (the
“Additional Notes”) issued pursuant to a Supplement shall be subject to the
following terms and conditions:

 

(1)     each Series of Additional Notes, when so issued, shall be differentiated
from all previous Series by sequential alphabetical designation inscribed
thereon;

 

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(2)     all Additional Notes shall constitute senior Indebtedness of the Company
and shall rank pari passu with all other outstanding Notes;

 

(3)     each Series of Additional Notes shall be dated the date of issue, bear
interest at such rate or rates, mature on such date or dates, be subject to such
scheduled prepayments and optional prepayment on the dates and at the premiums,
if any, have such additional or different conditions precedent to closing, such
representations and warranties and such additional covenants as shall be
specified in the Supplement under which such Additional Notes are issued,
provided, that any such additional covenants shall inure to the benefit of all
holders of Notes so long as any Additional Notes issued pursuant to such
Supplement remain outstanding;

 

(4)     all purchasers of Additional Notes (such Persons being referred to as
“Additional Purchasers”) shall be Institutional Investors;

 

(5)     each Series of Additional Notes issued under this Agreement shall be in
substantially the form of Exhibit 1 to the Supplement with such variations,
omissions and insertions as are necessary or permitted hereunder;

 

(6)     the aggregate principal amount of all Notes issued under this Agreement
shall not exceed CAD$70,000,000;

 

(7)     the minimum aggregate amount of any Series of Additional Notes issued
under a Supplement shall be $10,000,000;

 

(8)     the minimum principal amount of any Note issued under a Supplement shall
be $1,000,000, except as may be necessary to evidence the outstanding amount of
any Note originally issued in a denomination of $1,000,000 or more; and

 

(9)     no Additional Notes shall be issued hereunder if at the time of issuance
thereof and after giving effect to the application of the proceeds thereof, any
Default or Event of Default shall have occurred and be continuing.

 

Section 2.     Sale and Purchase of Notes.

 

Section 2.1     Initial Notes. Subject to the terms and conditions of this
Agreement, the Company will issue and sell to each Purchaser and each Purchaser
will purchase from the Company, at the Closing provided for in Section 3, the
Initial Notes in the principal amount specified opposite such Purchaser’s name
in Schedule A at the purchase price of 99.42% of the principal amount thereof,
provided that each Purchaser shall purchase Initial Notes with an acquisition
cost to such Purchaser of at least CAD$150,000. The obligations of each
Purchaser hereunder are several and not joint obligations and no Purchaser shall
have any liability to any Person for the performance or non-performance of any
obligation by any other Purchaser hereunder,

 

Section 2.2     Guaranty. The payment by the Company of all amounts due with
respect to the Notes and the performance by the Company of its obligations under
this Agreement will be absolutely and unconditionally guaranteed by each
Subsidiary required to be a Subsidiary Guarantor under Section 9.6, pursuant to
the provisions of Section 24 hereof and the separate notation of such Note
Guaranty, which shall be substantially in the form of Exhibit 2.2 attached
hereto. The Subsidiary Guarantors on the Closing Date are listed on Schedule 2.2
of the Company Disclosure Schedule.

 

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Section 3.     Closing.

 

The execution and delivery of this Agreement by the Company and each Purchaser
shall occur at the offices of Sheppard, Mullin, Richter & Hampton, on March 5,
2018 (the “Execution Date”). The sale and purchase of the Initial Notes to be
purchased by each Purchaser shall occur at the offices of Sheppard, Mullin,
Richter & Hampton at 12:00 a.m., Chicago time, at a Closing on March 5, 2018
(the “Closing”). At the Closing the Company will deliver to each Purchaser the
Initial Notes to be purchased by such Purchaser in the form of a single Initial
Note (or such greater number of Initial Notes in denominations of at least
$1,000,000 as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser’s name (or in the name of a nominee of such
Purchaser), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company in
accordance with the funding instructions provided by the Company pursuant to
Section 4.12 hereof. If at the Closing the Company shall fail to tender such
Initial Notes to any Purchaser as provided above in this Section 3, or any of
the conditions specified in Section 4 shall not have been fulfilled to any
Purchaser’s satisfaction, such Purchaser shall, at such Purchaser’s election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights such Purchaser may have by reason of such failure or such
nonfulfillment.

 

Section 4.     Conditions to Closing.

 

Each Purchaser’s obligation to purchase and pay for the Initial Notes to be sold
to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser’s satisfaction, prior to or at the Closing, of the following
conditions:

 

Section 4.1     Representations and Warranties.

 

(a)     Representations and Warranties of the Company. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.

 

(b)     Representations and Warranties of the Subsidiary Guarantor. The
representations and warranties of the Subsidiary Guarantors in the Subsidiary
Guaranty shall be correct when made and at the time of Closing.

 

Section 4.2     Performance; No Default. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by it prior to or at the Closing. From the
Execution Date until the Closing, before and after giving effect to the issue
and sale of the Initial Notes (and the application of the proceeds thereof as
contemplated by Section 5.14), no Default or Event of Default shall have
occurred and be continuing. Neither the Company nor any Subsidiary shall have
entered into any transaction since the Execution Date that would have been
prohibited by Section 10 hereof as if such provisions had applied to the Company
since such date. The Company shall have been in compliance with the provisions
of Section 9 hereof since the Execution Date as if such provisions had applied
to the Company since such date.

 

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Section 4.3     Compliance Certificates.

 

(1)     Officer’s Certificate of the Company. The Company shall have delivered
to such Purchaser an Officer’s Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.

 

(2)     Secretary’s Certificate of the Company. The Company shall have delivered
to such Purchaser a certificate of its Secretary or Assistant Secretary, dated
the date of Closing, certifying as to (i) the resolutions attached thereto and
other corporate proceedings relating to the authorization, execution and
delivery of the Initial Notes and this Agreement and (ii) the Company’s
organizational documents as then in effect.

 

(3)     Officer’s Certificate of the Subsidiary Guarantor. The Subsidiary
Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated
the date of the Closing, certifying that the conditions specified in Sections
4.l(b), 4.2 and 4.9 have been fulfilled.

 

(4)     Secretary’s Certificate of the Subsidiary Guarantor. The Subsidiary
Guarantor shall have delivered to such Purchaser a certificate of its Secretary
or Assistant Secretary, dated the date of Closing, certifying as to (i) the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notation of Guaranty and (ii) the
Subsidiary Guarantor’s organizational documents as then in effect.

 

Section 4.4     Opinions of Counsel. Such Purchaser shall have received opinions
in form and substance satisfactory to such Purchaser, dated the date of Closing
from Sheppard, Mullin, Richter & Hampton, LLP, special U.S. counsel for the
Company, covering the matters set forth in Exhibit 4.4(a) and covering such
other matters incident to the transactions contemplated hereby as such Purchaser
or its counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to the Purchasers).

 

Section 4.5     Purchase Permitted By Applicable Law, Etc. On the date of the
Closing such Purchaser’s purchase of Initial Notes shall (a) be permitted by the
laws and regulations of each jurisdiction to which such Purchaser is subject,
(b) not violate any applicable law or regulation (including, without limitation,
Regulation T, U or X of the Board of Governors of the Federal Reserve System)
and (c) not subject such Purchaser to any tax (excluding any franchise tax and
any tax based on income), penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect on the
date hereof. If requested by such Purchaser, such Purchaser shall have received
an Officer’s Certificate certifying as to such matters of fact as such Purchaser
may reasonably specify to enable such Purchaser to determine whether such
purchase is so permitted.

 

Section 4.6     [Reserved].

 

Section 4.7     Payment of Special Counsel Fees. Without limiting the provisions
of Section 15.1, the Company shall have paid on or before the date of Closing,
the reasonable fees, reasonable charges and reasonable disbursements of the
Purchasers’ special counsel referred to in Section 4.4 to the extent reflected
in a statement of such counsel rendered to the Company at least one Business Day
prior to the date of Closing.

 

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Section 4.8     [Reserved].

 

Section 4.9     Changes in Corporate Structure. Neither the Company nor any
Subsidiary Guarantor shall have changed its jurisdiction of incorporation, or
except as reflected in Schedule 4.9 of the Company Disclosure Schedule, been a
party to any merger or consolidation, or shall have succeeded to all or any
substantial part of the liabilities of any other entity, at any time following
the date of the most recent financial statements in the Hecla Public Disclosure
Record.

 

Section 4.10     Subsidiary Guaranty. A notation of Guaranty in the form
attached hereto as Exhibit 2.2 (a “Notation of Guaranty”) shall have been duly
authorized, executed and delivered by the Subsidiary Guarantors, shall
constitute the legal, valid and binding contract and agreement of each
Subsidiary Guarantor except as enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or
conveyance, or other similar laws affecting the enforcement of creditors’ rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and such
Purchaser shall have received a true, correct and complete copy thereof.

 

Section 4.11     [Reserved].

 

Section 4.12     Funding Instructions. At least one Business Day prior to the
date of the Closing, such Purchaser shall have received written instructions
signed by a Responsible Officer on letterhead of the Company confirming the wire
transfer instructions including (i) the name and address of the Company’s bank,
(ii) such bank’s ABA number and (iii) the account name and number into which the
purchase price for the Initial Notes is to be deposited.

 

Section 4.13     Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory to such Purchaser and its special counsel, and such Purchaser and
its special counsel shall have received all such counterpart originals or
certified or other copies of such documents as such Purchaser or such special
counsel may reasonably request.

 

Section 4.14     Canadian Resale Restrictions. Each Purchaser hereby
acknowledges and agrees that the offering of Notes is being made pursuant to
exemptions from prospectus requirements of Applicable Canadian Securities
Legislation and, as a result, the Notes will be subject to a number of statutory
restrictions on resale and trading. Until these restrictions expire, each
Purchaser will not be able to sell or trade the Notes unless the Purchaser
complies with an exemption from the prospectus requirements under Applicable
Canadian Securities Laws. In general, unless permitted under Applicable Canadian
Securities Laws, the Purchaser cannot trade the securities in Canada before the
date that is four months and a day after the date of the Closing.

 

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Certificates representing the Notes purchased under this Agreement shall have
attached to them legends setting out resale restrictions under Applicable
Canadian Securities Laws substantially in the following form (and with the
necessary information inserted):

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE the date which is four months and one day after
the date of the Closing.”

 

Section 5.     Representations and Warranties of the Company.

 

The Company represents and warrants to each Purchaser that, except as otherwise
(i) set forth in the Hecla Public Disclosure Record (to the extent the exception
disclosed is reasonably apparent on its face) or (ii) disclosed in the
Disclosure Schedule attached hereto as Schedule C and incorporated herein by
reference in its entirety (the “Company Disclosure Schedule”):

 

Section 5.1     Organization; Power and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and is duly qualified as a foreign corporation
and is in good standing in each jurisdiction in which such qualification is
required by law, other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The Company has the
corporate power and authority to own or hold under lease the properties it
purports to own or hold under lease, to transact the business it transacts and
proposes to transact, to execute and deliver this Agreement and the Initial
Notes and to perform the provisions hereof and thereof.

 

Section 5.2     Authorization, Etc. This Agreement and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or conveyance, or other similar
laws affecting the enforcement of creditors’ rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

 

Section 5.3     Disclosure. Since December 31, 2017, there has been no change in
the financial condition, operations, business or properties of the Company or
any of its Restricted Subsidiaries except changes that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
There is no fact known to the Company that would reasonably be expected to have
a Material Adverse Effect.

 

Section 5.4     Organization and Ownership of Shares of Restricted Subsidiaries;
Affiliates.

 

(a)     Schedule 5.4 of the Company Disclosure Schedule contains (except as
noted therein) complete and correct lists (i) of the Company’s Restricted and
Unrestricted Subsidiaries as of the date hereof, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, and (ii)
of the Company’s directors and senior officers.

 

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(b)     All of the outstanding shares of capital stock or similar equity
interests of each Restricted Subsidiary shown in Schedule 5.4 of the Company
Disclosure Schedule as being owned by the Company and its Restricted
Subsidiaries have been validly issued, are fully paid and non-assessable and are
owned by the Company or another Restricted Subsidiary free and clear of any Lien
(except for Permitted Liens).

 

(c)     Each Restricted Subsidiary identified in Schedule 5.4 of the Company
Disclosure Schedule is a corporation or other legal entity duly organized,
validly existing and in good standing (or its equivalent) under the laws of its
jurisdiction of organization, and is duly qualified (or its equivalent) as a
foreign corporation or other legal entity and is in good standing (or its
equivalent) in each jurisdiction in which such qualification (or its equivalent)
is required by law, other than those jurisdictions as to which the failure to be
so qualified (or its equivalent) or in good standing (or its equivalent) could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Restricted Subsidiary has the corporate or other power
and authority to own or hold under lease the properties it purports to own or
hold under lease and to transact the business it transacts and proposes to
transact.

 

Section 5.5     Financial Statements; Material Liabilities. All of the Company’s
financial statements (including in each case the related schedules and notes)
for the fiscal year ended December 31, 2017 are available on EDGAR. The
financial statements of the Company contained in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2017 fairly present in all material
respects the consolidated financial position of the Company and its Restricted
Subsidiaries as of the respective dates for such financial statements and the
consolidated results of their operations and cash flows for the respective
periods so specified and have been prepared in accordance with GAAP consistently
applied throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments). The Company and its Restricted Subsidiaries do not have any
Material liabilities that are not disclosed on such financial statements or
otherwise disclosed in the Hecla Public Disclosure Record.

 

Section 5.6     Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of this Agreement and the Initial Notes
will not (a) contravene, result in any breach of, or constitute a default under,
or result in the creation of any Lien in respect of any property of the Company
or any Restricted Subsidiary under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, corporate charter or by-laws,
shareholders agreement or any other agreement or instrument to which the Company
or any Restricted Subsidiary is bound or by which the Company or any Restricted
Subsidiary or any of their respective properties may be bound or affected,
(b) conflict with in any Material respect or result in a Material breach of any
of the terms, conditions or provisions of any Material order, judgment, decree,
or ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Restricted Subsidiary or (c) violate in any Material respect any
provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Company or any Restricted Subsidiary.

 

Section 5.7     Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with (collectively,
“Governmental Action”), any Governmental Authority is required to be made or
obtained by the Company in connection with the execution, delivery or
performance by the Company of this Agreement or the Initial Notes, other than
those that have been obtained and routine Governmental Actions contemplated by
this Agreement, including, without limitation, any filings to be made with the
Securities and Exchange Commission and filing to maintain the good standing of
the Company and its Restricted Subsidiaries in appropriate jurisdictions.

 

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Section 5.8     Litigation; Observance of Agreements, Statutes and Orders.

 

(a)     There are no actions, suits, investigations or proceedings pending or,
to the knowledge of the Company, threatened against or affecting the Company or
any Restricted Subsidiary or any property of the Company or any Restricted
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.

 

(b)     Neither the Company nor any Restricted Subsidiary is (i) in default
under the terms of any agreement or instrument to which it is a party or by
which it is bound, or (ii) in violation of any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or (iii) in violation of any
applicable law, ordinance, rule or regulation of any Governmental Authority
(including, without limitation, Environmental Laws, the USA PATRIOT Act or any
of the other laws or regulations that are referred to in Section 5.16), which
default or violation would, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

Section 5.9     Taxes. The Company and its Restricted Subsidiaries have filed
all Material tax returns that are required to have been filed in any
jurisdiction, and have paid all taxes shown to be due and payable on such
returns and all other taxes and assessments levied upon them or their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
except for any taxes and assessments (a) the amount of which is not individually
or in the aggregate Material or (b) the amount, applicability or validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which the Company or a Restricted Subsidiary, as the case may
be, has established adequate reserves in accordance with GAAP. The Responsible
Officer of the Company knows of no basis for any other tax or assessment that
would reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the consolidated books of the Company and its
Restricted Subsidiaries in respect of federal, state or other taxes for all
fiscal periods are in accordance with GAAP. The federal income tax liabilities
of the Company and its Restricted Subsidiaries have been finally determined
(whether by reason of completed audits or the statute of limitations having run)
for all fiscal years up to and including the fiscal year ended December 31,
2012.

 

Section 5.10     Title to Property; Leases. The Company and its Restricted
Subsidiaries have good and sufficient title to their respective properties which
the Company and its Restricted Subsidiaries own or purport to own and that
individually or in the aggregate are Material, including all such properties
reflected in the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Restricted Subsidiary
after said date (except as sold or otherwise disposed of in the ordinary course
of business), in each case free and clear of Liens prohibited by this Agreement.
All leases that individually or in the aggregate are Material are valid and
subsisting and are in full force and effect in all material respects.

 

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Section 5.11     Licenses, Permits, Etc.

 

(a)     The Company and its Restricted Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, proprietary software,
service marks, trademarks and trade names, or rights thereto, that individually
or in the aggregate are Material, without known conflict with the rights of
others.

 

(b)     To the best knowledge of the Senior Financial Officers of the Company,
no product or service of the Company or any of its Restricted Subsidiaries
infringes in any respect with any license, permit, franchise, authorization,
patent, copyright, proprietary software, service mark, trademark, trade name or
other right owned by any other Person other than those infringements that will
not, individually or in the aggregate with other infringements, have a Material
Adverse Effect.

 

(c)     To the best knowledge of the Senior Financial Officers of the Company,
there is no Material violation by any Person of any right of the Company or any
of its Restricted Subsidiaries with respect to any patent, copyright,
proprietary software, service mark, trademark, trade name, domain name or other
right owned or used by the Company or any of its Restricted Subsidiaries.

 

Section 5.12     Compliance with ERISA.

 

(a)     The Company and each ERISA Affiliate have operated and administered each
Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that would, individually
or in the aggregate, reasonably be expected to result in the incurrence of any
such liability by the Company or any ERISA Affiliate, or in the imposition of
any Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to section
430(k) of the Code or to any such penalty or excise tax provisions under the
Code or federal law or section 4068 of ERISA or by the granting of a security
interest in connection with the amendment of a Plan, other than such liabilities
or Liens as would not be, individually or in the aggregate, Material.

 

(b)     The present value of the aggregate benefit liabilities under each of the
Plans (other than Multiemployer Plans), determined as of the end of such Plan’s
most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan’s most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $10,000,000 in the case of
any single Plan and by more than $50,000,000 in the aggregate for all Plans. The
term “benefit liabilities” has the meaning specified in section 4001 of ERISA
and the terms “current value” and “present value” have the meaning specified in
section 3 of ERISA.

 

(c)     The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.

 

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(d)     The expected post-retirement benefit obligation (determined as of
December 31, 2017 in accordance with Accounting Standards Codification Topic
715-60, without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code) of the Company and its Restricted
Subsidiaries is reflected in the Company’s audited financial statements for the
fiscal year ended December 31, 2017.

 

(e)     The execution and delivery of this Agreement and the issuance and sale
of the Initial Notes hereunder will not involve any transaction that is subject
to the prohibitions of section 406 of ERISA or in connection with which a tax
could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The
representation by the Company to each Purchaser in the first sentence of this
Section 5.12(e) is made in reliance upon and subject to the accuracy of such
Purchaser’s representation in Section 6.2 as to the sources of the funds to be
used to pay the purchase price of the Initial Notes to be purchased by such
Purchaser.

 

Section 5.13     Private Offering by the Company. Within the last two years,
neither the Company nor anyone acting on its behalf has offered the Initial
Notes or any similar securities for sale to, or solicited any offer to buy the
Initial Notes or any similar securities from, or otherwise approached or
negotiated in respect thereof with, any person other than the Purchaser, which
has been offered the Initial Notes at a private sale for investment. Neither the
Company nor anyone acting on its behalf has taken, or will take, any action that
would subject the issuance or sale of the Initial Notes to the registration
requirements of section 5 of the Securities Act or to the registration
requirements of any securities or blue sky laws of any applicable jurisdiction.

 

Section 5.14     Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Initial Notes (i) in accordance with Section 9.12
and (ii) to pay the transaction costs associated with the issuance of the
Initial Notes. No part of the proceeds from the sale of the Initial Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). As used in this Section, the terms “margin stock” and “purpose of
buying or carrying” shall have the meanings assigned to them in said Regulation
U.

 

Section 5.15     No Default under Existing Indebtedness; Future Liens.

 

(a)     Neither the Company nor any Restricted Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or
interest on any Indebtedness of the Company or such Restricted Subsidiary and no
event or condition exists with respect to any Indebtedness of the Company or any
Restricted Subsidiary, that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.

 

(b)     Neither the Company nor any Restricted Subsidiary has agreed or
consented to cause or permit in the future (upon the happening of a contingency
or otherwise) any of its property, whether now owned or hereafter acquired, to
be subject to a Lien not permitted by Section 10.3.

 

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Section 5.16     Foreign Assets Control Regulations, Etc.

 

(a)     Neither the Company nor any Controlled Entity is (i) a Person whose name
appears on the list of Specially Designated Nationals and Blocked Persons
published by the Office of Foreign Assets Control, United States Department of
the Treasury (“OFAC”) (an “OFAC Listed Person”) (ii) an agent, department, or
instrumentality of, or is otherwise beneficially owned by, controlled by or
acting on behalf of, directly or indirectly, (x) any OFAC Listed Person or (y)
any Person, entity, organization, foreign country or regime that is subject to
any OFAC Sanctions Program, or (iii) otherwise blocked, subject to sanctions
under or engaged in any activity in violation of other United States economic
sanctions, including but not limited to, the Trading with the Enemy Act, the
International Emergency Economic Powers Act, the Comprehensive Iran Sanctions,
Accountability and Divestment Act (“CISADA”) or any similar law or regulation
with respect to Iran or any other country, the Sudan Accountability and
Divestment Act, any OFAC Sanctions Program, or any economic sanctions
regulations administered and enforced by the United States or any enabling
legislation or executive order relating to any of the foregoing (collectively,
“U.S. Economic Sanctions”) (each OFAC Listed Person and each other Person,
entity, organization and government of a country described in clause (i), clause
(ii) or clause (iii), a “Blocked Person”). Neither the Company nor any
Controlled Entity has been notified that its name appears or may in the future
appear on a state list of Persons that engage in investment or other commercial
activities in Iran or any other country that is subject to U.S. Economic
Sanctions.

 

(b)     No part of the proceeds from the sale of the Notes hereunder constitutes
or will constitute funds obtained on behalf of any Blocked Person or will
otherwise be used by the Company or any Controlled Entity, directly or
indirectly, (i) in connection with any investment in, or any transactions or
dealings with, any Blocked Person (assuming, for the purposes of this Section
5.16 only, that no Purchaser nor any of their Controlled Entities shall
constitute a “Blocked Person”), or (ii) otherwise in violation of U.S. Economic
Sanctions.

 

(c)     Neither the Company nor any Controlled Entity (i) has been found in
violation of, charged with, or convicted of, money laundering, drug trafficking,
terrorist-related activities or other money laundering predicate crimes under
the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as
the Bank Secrecy Act), the USA PATRIOT Act, or any other United States law or
regulation governing such activities, or the PCMLTFA (as defined below)
(collectively, “Anti-Money Laundering Laws”) or any U.S. Economic Sanctions
violations, (ii) to the Company’s actual knowledge after making due internal
inquiry, is under investigation by any Governmental Authority for possible
violation of Anti-Money Laundering Laws or any U.S. Economic Sanctions
violations, (iii) has been assessed civil penalties under any Anti-Money
Laundering Laws or any U.S. Economic Sanctions, or (iv) has had any of its funds
seized or forfeited in an action under any Anti-Money Laundering Laws. The
Company has established procedures and controls which it reasonably believes are
adequate (and otherwise comply with applicable law) to ensure that the Company
and each Controlled Entity is and will continue to be in compliance with all
applicable current and future Anti-Money Laundering Laws and U.S. Economic
Sanctions.

 

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(d)         (1)     Neither the Company nor any Controlled Entity (i) has been
charged with, or convicted of bribery or any other anti-corruption related
activity under any applicable law or regulation in a U.S. or any non-U.S.
country or jurisdiction, including but not limited to, the U.S. Foreign Corrupt
Practices Act, the Corruption of Foreign Public Officials Act (Canada) and the
U.K. Bribery Act 2010 (collectively, “Anti-Corruption Laws”), (ii) to the
Company’s actual knowledge after making due internal inquiry, is under
investigation by any U.S. or non-U.S. Governmental Authority for possible
violation of Anti-Corruption Laws, (iii) has been assessed civil or criminal
penalties under any Anti-Corruption Laws or (iv) has been or is the target of
sanctions imposed by the United Nations or the European Union;

 

(2)     To the Company’s actual knowledge after making due internal inquiry,
neither the Company nor any Controlled Entity has, within the last five years,
directly or indirectly offered, promised, given, paid or authorized the offer,
promise, giving or payment of anything of value to a Governmental Official or a
commercial counterparty for the purposes of: (i) influencing any act, decision
or failure to act by such Government Official in his or her official capacity or
such commercial counterparty, (ii) inducing a Governmental Official to do or
omit to do any act in violation of the Governmental Official’s lawful duty, or
(iii) inducing a Governmental Official or a commercial counterparty to use his
or her influence with a government or instrumentality to affect any act or
decision of such government or entity; in each case in order to obtain, retain
or direct business or to otherwise secure an improper business advantage in
violation of any applicable law or regulation; and

 

(3)     No part of the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any illegal payments, including bribes, to any
Governmental Official or commercial counterparty in order to obtain, retain or
direct business or obtain any illegal advantage. The Company has established
procedures and controls which it reasonably believes are adequate (and otherwise
comply with applicable law) to ensure that the Company and each Controlled
Entity is and will continue to be in compliance with all applicable current and
future Anti-Corruption Laws.

 

Section 5.17     Status under Certain Statutes. Neither the Company nor any
Restricted Subsidiary is an “investment company” registered or required to be
registered under the Investment Company Act of 1940, as amended, the ICC
Termination Act of 1995, as amended, or the Federal Power Act, as amended.

 

Section 5.18     Environmental Matters.

 

(a)     Neither the Company nor any Restricted Subsidiary has knowledge of any
claim or has received any notice of any claim, and no proceeding has been
instituted raising any claim against the Company or any of its Restricted
Subsidiaries or any of their respective real properties now or formerly owned,
leased or operated by any of them or other assets, alleging any damage to the
environment or violation of any Environmental Laws, except, in each case, such
as would not, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

(b)     Neither the Company nor any Restricted Subsidiary has knowledge of any
facts which would give rise to any liability, public or private, of violation of
Environmental Laws or damage to the environment emanating from, occurring on or
in any way related to real properties now or formerly owned, leased or operated
by any of them or to other assets or their use, except, in each case, such as
would not, individually or in the aggregate, reasonably be expected to result in
a Material Adverse Effect.

 

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(c)     Neither the Company nor any of its Restricted Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and has not disposed of any Hazardous Materials in each
case in a manner contrary to any Environmental Laws in each case in any manner
that would, individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

(d)     All buildings on all real properties now owned, leased or operated by
the Company or any of its Restricted Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.

 

Section 5.19     Initial Notes Rank Pari Passu. The payment obligations of the
Company under this Agreement and the Initial Notes rank pari passu in right of
payment with all payment obligations under other senior unsecured Indebtedness
of the Company, except for Indebtedness preferred by operation of law.

 

Section 5.20     Insurance. Each of the Company and its Restricted Subsidiaries
are insured by recognized, financially sound institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their businesses, including, without
limitation, policies covering real and personal property owned or leased by the
Company and its Restricted Subsidiaries against theft, damage, destruction, acts
of vandalism, flood and earthquakes. The Company has no reason to believe that
it or any Restricted Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such policies expire or (ii) to obtain comparable
coverage from similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result in a Material
Adverse Effect. None of the Company or any Restricted Subsidiary has been denied
any insurance coverage which it has sought or for which it has applied.

 

Section 5.21     Solvency. Each of the Company and the Subsidiary Guarantors,
when taken as a whole, is, and immediately after the Closing will be, Solvent.
As used herein, the term “Solvent” means, with respect to the Company and the
Subsidiary Guarantors when taken as a whole on a particular date, that on such
date (i) the fair market value of the assets of such persons, when taken as a
whole, are greater than the total amount of liabilities (including contingent
liabilities) of such persons, (ii) the present fair salable value of the assets
of such persons, when taken as a whole, are greater than the amount that will be
required to pay the probable liabilities of such persons on their debts as they
become absolute and matured, (iii) such persons, when taken as a whole, are able
to realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (iv) such persons, when taken as a
whole, do not have unreasonably small capital.

 

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Section 5.22     Disclosure Controls and Procedures. The Company has established
and maintains disclosure controls and procedures. Such disclosure controls and
procedures are designed to ensure that material information relating to the
Company and its Subsidiaries is made known to the chief executive officer and
chief financial officer of the Company by others within the Company or any of
its Subsidiaries, and such disclosure controls and procedures are reasonably
effective to perform the functions for which they were established subject to
the limitations of any such control system. The Company’s auditors and the Audit
Committee of the Board of Directors of the Company have been advised of: (i) any
significant deficiencies or material weaknesses in the design or operation of
internal controls which could adversely affect the Company’s ability to record,
process, summarize, and report financial data; and (ii) any fraud, whether or
not material, that involves management or other employees who have a role in the
Company’s internal controls; and since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes
in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses.

 

Section 5.23     Compliance with Labor Laws. Except as would not, individually
or in the aggregate, result in a Material Adverse Effect, (i) there is (A) no
unfair labor practice complaint pending or, to the best of the Company’s
knowledge, threatened against the Company or any of its Subsidiaries before the
National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements pending, or to the best
of the Company’s knowledge, threatened, against the Company or any of its
Subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending or, to
the best of the Company’s knowledge, threatened against the Company or any of
its Subsidiaries and (C) no union representation question existing with respect
to the employees of the Company or any of its Subsidiaries and, to the best of
the Company’s knowledge, no union organizing activities taking place and (ii)
there has been no violation of any federal, state or local law relating to
discrimination in hiring, promotion or pay of employees or of any applicable
wage or hour laws.

 

Section 5.24     Related Party Transactions. No relationship, direct or
indirect, exists between or among any of the Company or any affiliate of the
Company, on the one hand, and any director, officer, member, stockholder,
customer or supplier of the Company or any affiliate of the Company, on the
other hand, which is required by the Securities Act to be disclosed in a
registration statement on Form S-1. There are no outstanding loans, advances
(except advances for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company or any affiliate of the Company to or
for the benefit of any of the officers or directors of the Company or any
affiliate of the Company or any of their respective family members.

 

Section 6.     Representations of the Purchasers.

 

Section 6.1     Purchase for Investment. Each Purchaser severally represents
that it is purchasing the Initial Notes for its own account or for one or more
separate accounts maintained by it or for the account of one or more pension or
trust funds and not with a view to the distribution thereof, provided that the
disposition of such Purchaser’s or such pension’s or trust fund’s property shall
at all times be within such Purchaser’s or such pension’s or trust fund’s
control. Each Purchaser understands that the Initial Notes have not been
registered under the Securities Act and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Initial Notes.

 

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Section 6.2     Source of Funds. Each Purchaser severally represents that at
least one of the following statements is an accurate representation as to each
source of funds (a “Source”) to be used by such Purchaser to pay the purchase
price of the Initial Notes to be purchased by such Purchaser hereunder:

 

(1)     the Source is an “insurance company general account” (as the term is
defined in the United States Department of Labor’s Prohibited Transaction
Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as
defined by the annual statement for life insurance companies approved by the
NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by
or on behalf of any employee benefit plan together with the amount of the
reserves and liabilities for the general account contract(s) held by or on
behalf of any other employee benefit plans maintained by the same employer (or
affiliate thereof as defined in PTE 95-60) or by the same employee organization
in the general account do not exceed 10% of the total reserves and liabilities
of the general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with such Purchaser’s state of
domicile; or

 

(2)     the Source is a separate account that is maintained solely in connection
with such Purchaser’s fixed contractual obligations under which the amounts
payable, or credited, to any employee benefit plan (or its related trust) that
has any interest in such separate account (or to any participant or beneficiary
of such plan (including any annuitant)) are not affected in any manner by the
investment performance of the separate account; or

 

(3)     the Source is either (i) an insurance company pooled separate account,
within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within
the meaning of PTE 91-38 and, except as disclosed by such Purchaser to the
Company in writing pursuant to this clause (c), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled separate
account or collective investment fund; or

 

(4)     the Source constitutes assets of an “investment fund” (within the
meaning of Part VI of PTE 84-14 (the “QPAM Exemption”)) managed by a “qualified
professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM
Exemption), no employee benefit plan’s assets that are managed by the QPAM in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an affiliate
(within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or
by the same employee organization and managed by such QPAM, represent more than
20% of the total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person
controlling or controlled by the QPAM maintains an ownership interest in the
Company that would cause the QPAM and the Company to be “related” within the
meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM
and (ii) the names of any employee benefit plans whose assets in the investment
fund, when combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate (within the
meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization, represent 10% or more of the assets of such investment
fund, have been disclosed to the Company in writing pursuant to this clause (d);
or

 

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(5)     the Source constitutes assets of a “plan(s)” (within the meaning of
Part IV(h) of PTE 96-23 (the “INHAM Exemption”)) managed by an “in-house asset
manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption),
the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this clause (e); or

 

(6)     the Source is a governmental plan; or

 

(7)     the Source is one or more employee benefit plans, or a separate account
or trust fund comprised of one or more employee benefit plans, each of which has
been identified to the Company in writing pursuant to this clause (g); or

 

(8)     the Source does not include assets of any employee benefit plan, other
than a plan exempt from the coverage of ERISA.

 

As used in this Section 6.2, the terms “employee benefit plan,” “governmental
plan,” and “separate account” shall have the respective meanings assigned to
such terms in section 3 of ERISA.

 

Section 6.3     Collection of Personal Information. Each Purchaser, on its own
behalf and on behalf of any other person for whom it is contracting hereunder,
expressly consents and agrees to:

 

(1)     the Company collecting personal information regarding each Purchaser for
the purpose of completing the transactions contemplated by this Agreement;

 

(2)     the Company releasing personal information regarding each Purchaser and
this subscription, including each Purchaser’s name, residential address,
telephone number, email address and registration and delivery instructions, the
principal amount of Notes purchased, the number of securities of the Company
held by each Purchaser, and, if applicable, information regarding the beneficial
ownership or the principals of each Purchaser, to securities regulatory
authorities in compliance with Applicable Canadian Securities Laws, and to other
authorities as required by law; and

 

(3)     the filing by the Company of reports of exempt distribution on Form
45-106F1 with the applicable securities regulatory authorities in Canada
containing such information regarding each Purchaser as is prescribed by such
form (including, but not limited to, its name, address, telephone number, the
principal amount of Initial Notes subscribed for purchase, the date of
distribution and exemption relied upon and its status as an insider or
registrant, if applicable), certain of which information it understands will be
made available to the public by applicable securities regulatory authorities,
including on their websites.

 

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The purpose of the collection of the information is to ensure the Company is
able to issue Notes to each Purchaser in compliance with applicable corporate,
securities and other laws and to obtain the information required to be provided
in documents required to be filed with securities regulatory authorities under
Applicable Canadian Securities Laws as required, which may include their public
disclosure of such information. Each Purchaser, on its own behalf and on behalf
of any other person for whom it is contracting hereunder, further expressly
consents and agrees to the collection, use and disclosure of all such personal
information to and by securities regulatory authorities, and other authorities,
in accordance with their requirements, including but not limited to the
publishing or making available to the public of such information and the
provision of such information to third party service providers for their
collection, use and disclosure from time to time.

 

The contact information for the officer of the Company who can answer questions
about the collection of information by the Company is as follows:

 

  Name & Title: David Sienko, Vice President – General Counsel   Issuer Name:
Hecla Mining Company  

Address:

6500 N. Mineral Drive, Suite 200, Coeur D’Alene Idaho, 83815-9408

  Telephone No: (208) 769-4100   Email Address: DSienko@hecla-mining.com

          

Section 6.4     Proceeds of Crime. Each Purchaser, on its own behalf and on
behalf of any other person for whom it is contracting hereunder, expressly
acknowledges and agrees that:

 

(1)     the Company may be required to provide applicable Canadian securities
regulators, or otherwise under the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada) (the “PCMLTFA”), a list setting forth the
identities of the purchasers of the Notes and any personal information provided
by each Purchaser, and each Purchaser hereby represents and warrants that to the
best of each Purchaser’s knowledge, none of the funds representing the
subscription proceeds to be provided by each Purchaser (i) have been or will be
derived from or related to any activity that is deemed criminal under the law of
Canada, the United States of America, or any other jurisdiction, or (ii) are
being tendered on behalf of a person or entity who has not been identified to
each Purchaser; each Purchaser hereby further covenants that it shall promptly
notify the Company if each Purchaser discovers that any of such representations
in this Section 6.4 cease to be true, and shall provide the Company with
appropriate information in connection herewith;

 

(2)     the funds being used to purchase each Purchaser’s Notes which will be
advanced by each Purchaser to the Company hereunder will not represent proceeds
of crime for the purposes of the PCMLTFA and each Purchaser and its disclosed
principal, if any, acknowledges that the Company may in the future be required
by law to disclose each Purchaser’s or disclosed principal’s name and other
information relating to this Agreement and each Purchaser’s subscription
hereunder, on a confidential basis, pursuant to the PCMLTFA. To the best of its
knowledge (i) none of the subscription funds to be provided by each Purchaser or
other person for whom it is contracting hereunder (A) have been or will be
derived from or related to any activity that is deemed criminal under the law of
Canada or any other jurisdiction, or (B) are being tendered on behalf of a
person or entity who has not been identified to each Purchaser; and (ii) each
Purchaser shall promptly notify the Company if each Purchaser or disclosed
principal discovers that any of such representations in this Section 6.4 cease
to be true, and to provide the Company with appropriate information in
connection therewith; and

 

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(3)     it shall complete, sign and return such additional documentation as may
be required from time to time under Applicable Canadian Securities Laws or any
other applicable laws in connection with the transactions contemplated by this
Agreement.

 

Section 6.5     Acknowledgement. Furthermore, each Purchaser and any other
person for whom it is contracting hereunder is hereby notified and acknowledges
that:

 

(1)     each Purchaser may be subject to the collection, use, and disclosure of
certain personal information by applicable securities authorities, including the
publishing or otherwise making available to the public personal information
including, their name, number and type of securities purchased, the total
principal amount of Notes subscribed for, and their insider or registrant
status, if applicable, and their address, contact person name and telephone
number and the exemption that each Purchaser is relying on in purchasing the
Notes;

 

(2)     the Company may deliver to the applicable Canadian securities regulatory
authorities certain personal information pertaining to each Purchaser, including
such Purchaser’s full name, residential address, telephone number and email
address, the principal amount of Notes purchased by each Purchaser, the
prospectus exemption relied on by the Company and the date of distribution of
the Notes;

 

(3)     such information is being collected indirectly by the applicable
Canadian securities regulatory authorities under the authority granted to it in
securities legislation.

 

Section 7.     Information as to Company.

 

Section 7.1     Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes are outstanding, the Company will
furnish to the holders of Notes (or file with the SEC for public availability),
within the time periods specified in the SEC’s rules and regulations (and,
during any period in which the Company is not required to file reports with the
SEC, within the time periods specified in the SEC’s rules and regulations for a
“non-accelerated filer”):

 

(1)     all quarterly and annual reports that would be required to be filed with
the SEC on Forms 10-Q and 10-K if the Company were required to file such
reports, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual information
only, a report thereon by the Company’s certified independent accountants; and

 

(2)     all current reports that would be required to be filed with the SEC on
Form 8-K if the Company were required to file such reports.

 

All such reports will be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports, provided that if
the Company is not required to file such reports with the SEC, (i) such
quarterly and annual reports need only include information to the extent similar
information is included in the Offering Memorandum and (ii) such current reports
need only be prepared or delivered if the Company determines in good faith that
the information to be reported is material to the holders of Notes or the
business, operations, assets, liabilities or financial position of the Company
and its Restricted Subsidiaries, taken as a whole. If the Company is not
required to file such reports with the SEC, it will post such reports on its
website (http://www.hecla-mining.com). Whether the Company files such reports
with the SEC or posts its reports on its website, the public posting of such
reports shall satisfy any requirement hereunder to deliver such reports to
holders of Notes. The terms of this Agreement shall not impose any duty on the
Company under the Sarbanes-Oxley Act of 2002 and the related SEC rules that
would not otherwise be applicable to it.

 

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(b)     If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
paragraph (a) of this Section 7.1 will include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations,” of the financial condition and results of operations of
the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of the
Company.

 

(c)     For so long as any Notes remain outstanding, if at any time they are not
required to file with the SEC the reports required by paragraphs (a) and (b) of
this Section 7.1, the Company and the Subsidiary Guarantors will furnish to the
holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

 

(d)     With reasonable promptness, the Company shall provide to the holders of
the Notes such other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or any of its
Restricted Subsidiaries or relating to the ability of the Company and Subsidiary
Guarantors to perform their respective obligations hereunder, under the Notes
and under the Subsidiary Guaranty, as the case may be, as from time to time may
be reasonably requested by any such Purchaser, Additional Purchaser or holder of
a Note.

 

Section 7.2     Officer’s Certificate.

 

(1)     The Company and each Subsidiary Guarantor shall deliver to the holders
of the Notes, within 90 days after the end of each fiscal year beginning with
the fiscal year ending December 31, 2018, an Officer’s Certificate stating that
a review of the activities of the Company and its Restricted Subsidiaries during
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Agreement, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Agreement and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Agreement (or, if a Default or Event of Default has occurred, describing all
such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium
on, if any, or interest, if any, on the Notes is prohibited or if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto.

 

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(2)     So long as any of the Notes are outstanding, the Company will deliver to
the holder of the Notes, within five calendar days (or if such fifth calendar
day is not a Business Day, the next succeeding Business Day) after any Officer
becoming aware of any Default or Event of Default, an Officers’ Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.

 

Section 8.     Payment of the Notes.

 

Section 8.1     Required Payments.

 

(a)     Initial Notes. On May 1, 2021 the Company will pay all outstanding
principal amount of the Initial Notes at par and without payment of the
Make-Whole Amount or any premium. Upon any partial prepayment of any Initial
Notes pursuant to Section 8.2, Section 8.7, Section 8.8 or Section 8.9, the
principal amount of each required payment of the Initial Notes becoming due
under this Section 8.1 on and after the date of such prepayment shall be reduced
in the same proportion as the aggregate principal amount of the Initial Notes is
reduced as a result of such prepayment.

 

(b)     Additional Notes. Each Series of Additional Notes shall be subject to
required prepayments as specified in the Supplement pursuant to which such
Series of Additional Notes was issued. Upon partial prepayment of any Additional
Notes of a Series pursuant to Section 8.2, Section 8.7, Section 8.8, Section 8.9
or the applicable Supplement, the principal amount of each required prepayment
of the Additional Notes of such Series shall be reduced in as set forth in the
Supplement.

 

(c)     Payment on Maturity. As provided therein, the entire remaining unpaid
principal balance of each Note shall be due and payable on the Maturity Date
thereof.

 

Section 8.2     Optional Prepayments with Make-Whole Amount. The Company may, at
its option, upon notice as provided below, prepay at any time the entire unpaid
principal amount of any Series of Notes then outstanding, or from time to time
any part of the unpaid principal amount of any Series of Notes then outstanding
(unless a Default or Event of Default shall exist in which case such prepayment
shall be pro rata among all Notes of all Series then outstanding) in an amount
not less than 10% of the original aggregate principal amount of the Notes of
such Series to be prepaid in the case of a partial prepayment (or such lesser
amount as (1) shall be required to effect a partial prepayment resulting from an
offer of prepayment pursuant to Section 10.4, or (2) to prepay all of the Notes
of such Series then outstanding), at 100% of the principal amount so prepaid,
together with interest accrued on such principal being prepaid to the date of
such prepayment plus, if such prepayment is made prior to December 1, 2020, the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount of each Note then outstanding of the applicable Series to be
prepaid. The Company will give each holder of Notes of the applicable Series
written notice of each optional prepayment under this Section 8.2 not less than
10 days and not more than 60 days prior to the date fixed for such prepayment.
Each such notice shall specify such date (which shall be a Business Day), the
aggregate principal amount of the Notes of the applicable Series to be prepaid
on such date, the principal amount of each Note held by such holder to be
prepaid (determined in accordance with Section 8.3), and the interest to be paid
on the prepayment date with respect to such principal amount being prepaid and
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment, the
Company shall deliver to each holder of Notes of the Series to be prepaid which
provides for the payment of a Make-Whole Amount a certificate of a Senior
Financial Officer specifying the calculation of each such Make-Whole Amount as
of the specified prepayment date.

 

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Section 8.3     Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to the provisions of Section 8.2, the principal
amount of the Notes of the Series to be prepaid shall be allocated among all of
the Notes of such Series at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof. All regularly
scheduled partial prepayments made with respect to any Series of Additional
Notes pursuant to any Supplement shall be allocated as provided therein.

 

Section 8.4     Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment (which shall be a Business Day), together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.

 

Section 8.5     Purchase of Notes. The Company will not and will not permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes of any Series except upon the payment
or prepayment of the Notes of any Series in accordance with the terms of this
Agreement (including any Supplement hereto) and the Notes of the applicable
Series. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.

 

Section 8.6     Make-Whole Amount. The term “Make-Whole Amount” means with
respect to any Note an amount equal to the excess, if any, of the Discounted
Value of the Remaining Scheduled Payments with respect to the Called Principal
of such Note, minus the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes of
determining the Make-Whole Amount, the following terms have the following
meanings:

 

“Called Principal” means with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 8.2 or has become or is declared to be
immediately due and payable pursuant to Section 12.1, as the context requires.

 

“Discounted Value” means, with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Note is payable) equal to the
Reinvestment Yield with respect to such Called Principal.

 

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“Reinvestment Yield” means, with respect to the Called Principal of any Note,
1.00% over the yield to maturity reported by the Bank of Canada as of 10:00 a.m.
([New York City] time) on the second Business Day preceding the Settlement Date
(“Reported”) with respect to such Called Principal, for Canadian government
marketable bonds having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date. If there are no such Canadian
government marketable bonds Reported having a maturity equal to such Remaining
Average Life, then such implied yield to maturity will be determined by (a)
converting Canadian government marketable bond quotations to bond equivalent
yields in accordance with accepted financial practice and (b) interpolating
linearly between the yields Reported for the applicable most recently issued
actively traded Canadian government marketable bonds with the maturities (1)
closest to and greater than such Remaining Average Life and (2) closest to and
less than such Remaining Average Life. The Reinvestment Yield shall be rounded
to the number of decimal places as appears in the interest rate of the
applicable Note.

 

“Remaining Average Life” means, with respect to any Called Principal, the number
of years obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b) the number of
years computed on the basis of a 360-day year composed of twelve 30-day months
and calculated to two decimal places, that will elapse between the Settlement
Date with respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.

 

“Remaining Scheduled Payments” means, with respect to the Called Principal of
any Note, all payments of such Called Principal and interest thereon that would
be due after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Section 8.2 or Section 12.1.

 

“Settlement Date” means, with respect to the Called Principal of any Note, the
date on which such Called Principal is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to Section
12.1, as the context requires.

 

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Section 8.7     Change in Control.

 

(a)     Upon the occurrence of a Change of Control, the Company will make an
offer (a “Change of Control Offer”) to each holder to repurchase all or any part
(equal to $2,000 or an integral multiple of $1,000 in excess thereof) of that
holder’s Notes at a purchase price in cash equal to 101% of the aggregate
principal amount of Notes repurchased, plus accrued and unpaid interest, if any,
on the Notes repurchased to but excluding the date of purchase, subject to the
rights of holders of Notes so called for repurchase on or after a record date
for the payment of interest to receive interest due on the relevant interest
payment date (the “Change of Control Payment”). Within 30 days following any
Change of Control, the Company will mail a notice to each holder describing the
transaction or transactions that constitute the Change of Control and stating:

 

(i)     that the Change of Control Offer is being made pursuant to this
Section 8.7 and that all Notes tendered will be accepted for payment;

 

(ii)     the purchase price and the purchase date, which shall be no earlier
than 30 days and no later than 60 days from the date such notice is mailed (the
“Change of Control Payment Date”);

 

(iii)     that any Note not tendered will continue to accrue interest;

 

(iv)     that, unless the Company defaults in the payment of the Change of
Control Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest after the Change of Control Payment
Date;

 

(v)     that Holders electing to have any Notes purchased pursuant to a Change
of Control Offer will be required to surrender the Notes, with the form entitled
“Option of Holder to Elect Purchase” attached to the Notes completed, to the
Company at the address specified in the notice prior to the close of business on
the third Business Day preceding the Change of Control Payment Date;

 

(vi)     that Holders will be entitled to withdraw their election if the Company
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a facsimile transmission or letter
setting forth the name of the holder, the principal amount of Notes delivered
for purchase, and a statement that such holder is withdrawing his election to
have the Notes purchased; and

 

(vii)     that holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered, which unpurchased portion must be equal to $2,000 in
principal amount or an integral multiple of $1,000 in excess thereof. In
connection with the tender of any Notes with respect to a Change of Control, the
tendering holder of Notes shall provide good title to the Notes, free and clear
of all liens and encumbrances, and shall represent and warrant that such holder
of Notes is presenting good title, free and clear of all Liens and encumbrances,
and such other representations and warranties as are customary.

 

The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with the repurchase of the
Notes as a result of a Change of Control. To the extent that the provisions of
any securities laws or regulations conflict with the provisions of this
Section 8.7, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 8.7 by virtue of such compliance.

 

(b)     On the Change of Control Payment Date, the Company will, to the extent
lawful accept for payment all Notes or portions of Notes properly tendered
pursuant to the Change of Control Offer.

 

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The Company will promptly mail or wire transfer (but in any case not later than
five days after the Change of Control Payment Date) to each holder of Notes
properly tendered the Change of Control Payment for such Notes, and the Company
will promptly authenticate and mail to each tendering holder a new Note equal in
principal amount to the unpurchased portion (if any) of the Note surrendered by
such holder.

 

(c)     Notwithstanding anything to the contrary in this Section 8.7, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 8.7 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer, or (2) notice of redemption has been given pursuant
to Section 8.2 hereof, unless and until there is a default in payment of the
applicable redemption price.

 

(d)     Notwithstanding anything to the contrary contained herein, a Change of
Control Offer may be made in advance of a Change of Control, and conditioned
upon the consummation of such Change of Control, if a definitive agreement is in
place for the Change of Control at the time the Change of Control Offer is made.

 

(e)     If Holders of not less than 90% in aggregate principal amount of the
then outstanding Notes of any Series validly tender and do not withdraw such
Notes of such Series in a Change of Control Offer and the Company, or any other
Person making a Change of Control Offer in lieu of the Company as pursuant to
Section 8.7(c), purchases all of the Notes validly tendered and not withdrawn by
such holders, the Company will have the right, upon not less than 15 nor more
than 30 days’ prior notice, given not more than 15 days following such purchase
pursuant to the Change of Control Offer pursuant to Section 8.7, to redeem all
Notes of such Series that remain outstanding following such purchase at a
redemption price in cash equal to the applicable Change of Control Payment plus,
to the extent not included in the Change of Control Payment, accrued and unpaid
interest to but excluding the date of redemption (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant interest payment date).

 

Section 8.8     Sanctions Prepayment.

 

(a)     Notice of Noteholder Sanctions Violation. If any holder of a Note (in
this case only, “holder” in respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall mean such beneficial owner)
(each, an “Affected Noteholder”) is subject to a Noteholder Sanctions Violation
as a consequence of the activities of the Company or its Controlled Entities
(including, without limitation, the use of proceeds of the Notes) then either
the Company shall, within 15 Business Days after any Responsible Officer has
knowledge of the occurrence of such Noteholder Sanctions Violation, give written
notice of such Noteholder Sanctions Violation to each holder of Notes or an
Affected Noteholder may give notice to the Company of such Noteholder Sanctions
Violation (in which case the Company shall promptly, and in any event within 5
Business Days, give written notice of its receipt of such notice (and the
details thereof) to all other holders of Notes), which notice (the “Noteholder
Sanctions Notice”) shall describe the facts and circumstances of such Noteholder
Sanctions Violation, contain and constitute an offer to prepay Notes of each
Series held by each Affected Noteholder as described in subparagraph (b) of this
Section 8.8 and shall specify: (i) the Proposed Sanctions Prepayment Date; (ii)
that such offer is made pursuant to this Section 8.8; (iii) the principal amount
of each Note offered to be prepaid; (iv) the interest that would be due on each
Note offered to be prepaid, accrued to the Proposed Sanctions Prepayment Date;
and (v) that the conditions of this Section 8.8 have been fulfilled.

 

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(b)     Offer to Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (a) of this Section 8.8 shall be an offer to prepay, in accordance
with and subject to this Section 8.8, all, but not less than all of the Notes
held by each Affected Noteholder on a date specified in such offer (the
“Proposed Sanctions Prepayment Date”). Such date shall be not less than 20 days
and not more than 30 days after the date of such offer (if the Proposed
Sanctions Prepayment Date shall not be specified in such offer, the Proposed
Sanctions Prepayment Date shall be the 20th day after the date of such offer).

 

(c)     Acceptance/Rejection. An Affected Noteholder may accept or reject the
offer to prepay made pursuant to this Section 8.8 by causing a notice of such
acceptance or rejection to be delivered to the Company at least 5 Business Days
prior to the Proposed Sanctions Prepayment Date. A failure by an Affected
Noteholder to respond to an offer to prepay made pursuant to this Section 8.8
shall be deemed to constitute an acceptance of such offer by such holder.

 

(d)     Prepayment. Prepayment of the Notes to be prepaid pursuant to this
Section 8.8 shall be at 100% of the principal amount of such Notes, together
with interest on such Notes accrued to the date of prepayment, but without
payment of any Make-Whole Amount with respect thereto. The prepayment shall be
made on the Proposed Sanctions Prepayment Date except as provided in
subparagraph (e) of this Section 8.8.

 

(e)     Cure of Noteholder Sanctions Violation. Notwithstanding anything to the
contrary contained in this Section 8.8, if the Company has taken such action(s)
in relation to its activities so that such Affected Noteholder(s) shall no
longer be subject to Noteholder Sanctions Violation prior either to the date the
Company makes the offer under Section 8.8(b) or the applicable Proposed
Sanctions Prepayment Date, then the Company shall not be obliged to prepay such
Affected Notes in relation to such Noteholder Sanctions Violation which is no
longer continuing and such offer to prepay shall be deemed to be rescinded;
provided, that the Company shall have reimbursed such Affected Noteholder(s) for
any costs and expenses (including reasonable attorney fees and expenses)
incurred in connection with or as a result of such Noteholder Sanctions
Violation.

 

(f)     Governmental Approval. Notwithstanding the provisions of clauses (c) and
(d) of this Section 8.8, if any Affected Noteholder that has given written
notice to the Company of its acceptance of the Company’s prepayment offer in
accordance with clause (c) also gives notice to the Company prior to the
applicable Proposed Sanctions Prepayment Date that it has determined (in its
sole discretion) that it requires clearance from any Governmental Authority in
order to receive a prepayment pursuant to this Section 8.8, the principal amount
of the Affected Noteholder’s Notes, together with interest accrued thereon to
the date of prepayment, shall become due and payable on the later of (i) such
Sanctions Prepayment Date and (ii) the date that is 10 Business Days after such
Affected Noteholder gives notice to the Company that it is entitled to receive a
prepayment pursuant to this Section 8.8, and in any event, any such delay in
accordance with the foregoing clause (ii) shall not be deemed to give rise to
any Default or Event of Default.

 

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Section 8.9     Offer to Prepay Notes by Application of Excess Proceeds.

 

(1)     In the event that, pursuant to Section 10.4 hereof, the Company is
required to commence an offer to all holders to purchase Notes (an “Asset Sale
Offer”), it will follow the procedures specified below.

 

(2)     The Asset Sale Offer shall be made to all holders of Notes and all
holders of other Indebtedness that is pari passu with the Notes containing
provisions similar to those set forth in this Agreement with respect to offers
to purchase, prepay or redeem with the proceeds of sales of assets. The Asset
Sale Offer will remain open for a period of at least 20 Business Days following
its commencement and not more than 30 Business Days, except to the extent that a
longer period is required by applicable law (the “Offer Period”). No later than
three Business Days after the termination of the Offer Period (the “Purchase
Date”), the Company will apply all Excess Proceeds (the “Offer Amount”), to the
purchase of Notes and such other pari passu Indebtedness (on a pro rata basis
based on the principal amount of Notes and such other pari passu Indebtedness
surrendered, if applicable) or, if less than the Offer Amount has been tendered,
all Notes and other Indebtedness tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased will be made in the same manner as interest
payments are made.

 

(3)     If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, if
any, will be paid to the Person in whose name a Note is registered at the close
of business on such record date, and no additional interest will be payable to
holders who tender Notes pursuant to the Asset Sale Offer.

 

(4)     Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to each of the holders of the Notes. The notice will
contain all instructions and materials necessary to enable such holders to
tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the
terms of the Asset Sale Offer, will state:

 

(A)     that the Asset Sale Offer is being made pursuant to this Section 8.9 and
Section 10.4 hereof and the length of time the Asset Sale Offer will remain
open;

 

(B)     the Offer Amount, the purchase price and the Purchase Date;

 

(C)     that any Note not tendered or accepted for payment will continue to
accrue interest;

 

(D)     that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer will cease to accrue
interest after the Purchase Date;

 

(E)     that holders electing to have a Note purchased pursuant to an Asset Sale
Offer may elect to have Notes purchased in denominations of $2,000 or an
integral multiple of $1,000 in excess thereof;

 

(F)     that holders electing to have Notes purchased pursuant to any Asset Sale
Offer, will be required to surrender the Note, with the form entitled “Option of
Holder to Elect Purchase” attached to the Notes completed to the Company at the
address specified in the notice at least three days before the Purchase Date;

 

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(G)     that holders will be entitled to withdraw their election if the Company
receives, not later than the expiration of the Offer Period, a facsimile
transmission or letter setting forth the name of the holder, the principal
amount of the Note the holder delivered for purchase and a statement that such
holder is withdrawing his election to have such Note purchased;

 

(H)     that, if the aggregate principal amount of Notes and other pari passu
Indebtedness surrendered by holders thereof exceeds the Offer Amount, the
Company or its designee will select the Notes and the applicable agent will
select such other pari passu Indebtedness to be purchased on a pro rata basis
based on the principal amount of Notes and such other pari passu Indebtedness
tendered or required to be prepaid or redeemed (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $2,000,
or an integral multiple of $1,000 in excess thereof, will be purchased); and

 

(I)     that holders whose Notes were purchased only in part will be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.

 

On or before the Purchase Date, the Company will, to the extent lawful, accept
for payment, on a pro rata basis to the extent necessary, the Offer Amount of
Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less
than the Offer Amount has been tendered, all Notes tendered. The Company will
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each tendering holder an amount equal to the purchase price of the
Notes tendered by such holder and accepted by the Company for purchase, and the
Company will promptly issue a new Note and mail or deliver such new Note to such
holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the holder thereof. The Company will publicly announce the
results of the Asset Sale Offer on the Purchase Date.

 

Section 9.     Affirmative Covenants.

 

From the Closing and thereafter, so long as any of the Notes are outstanding,
the Company covenants that:

 

Section 9.1     Compliance with Laws. Without limiting Section 10.8, the Company
will, and will cause each of its Restricted Subsidiaries to, comply with all
laws, ordinances or governmental rules or regulations to which each of them is
subject, including, without limitation, ERISA, Environmental Laws, the USA
PATRIOT Act and the other laws and regulations that are referred to in Section
5.16, and will obtain and maintain in effect all licenses, certificates,
permits, franchises and other governmental authorizations necessary to the
ownership of their respective properties or to the conduct of their respective
businesses, in each case except for non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

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Section 9.2     Insurance. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain, with financially sound and reputable
insurers (which may include captive insurance companies), insurance with respect
to their respective properties and businesses against such casualties and
contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities of
established reputations engaged in the same or a similar business and similarly
situated.

 

Section 9.3     Stay, Extension and Usury Laws. The Company and each of the
Subsidiary Guarantors covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Agreement; and the Company and each of the Subsidiary
Guarantors (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the holders of the Notes, but will suffer and permit the
execution of every such power as though no such law has been enacted.

 

Section 9.4     Payment of Taxes. The Company will pay, and will cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the holders of the Notes..

 

Section 9.5     Corporate Existence. Subject to Section 10.5 hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect:

 

(1)     its corporate existence, and the corporate, partnership or other
existence of each of its Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary; and

 

(2)     the rights (charter and statutory), licenses and franchises of the
Company and its Subsidiaries; provided, however, that the Company shall not be
required to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of its Subsidiaries, if the Board of
Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any
material respect to the holders of the Notes.

 

Section 9.6     Additional Subsidiary Guarantors. The Company will cause each of
its Restricted Subsidiaries that is not a Subsidiary Guarantor and that becomes
a borrower or guarantor under the Senior Credit Facility or that Guarantees, on
the date of this Agreement or any time thereafter, any other Indebtedness of the
Company, which other Indebtedness exceeds $10.0 million in aggregate principal
amount, to become a Subsidiary Guarantor by executing a Notation of Guaranty or
a joinder to an this Agreement and delivering an Opinion of Counsel within 20
Business Days thereafter to the effect that such Notation of Guaranty or joinder
has been duly authorized, executed and delivered by that Restricted Subsidiary
and constitutes a valid and binding agreement of that Restricted Subsidiary,
enforceable in accordance with its terms (subject to customary exceptions).

 

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Section 9.7     Designation of Subsidiaries. The Board of Directors of the
Company may designate any Restricted Subsidiary to be an Unrestricted Subsidiary
if that designation would not cause a Default. If a Restricted Subsidiary is
designated as an Unrestricted Subsidiary, the aggregate Fair Market Value of all
outstanding Investments owned by the Company and its Restricted Subsidiaries in
the Subsidiary designated as Unrestricted will be deemed to be an Investment
made as of the time of the designation and will reduce the amount available
either for Restricted Payments under Section 10.1 hereof or under one or more
clauses of the definition of Permitted Investments, as determined by the Company
in its sole discretion. That designation will only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of the Company may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if that redesignation would not cause a Default.

 

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary
will be evidenced to the holders of the Notes by filing with the holders a
certified copy of a resolution of the Board of Directors of the Company giving
effect to such designation and an Officer’s Certificate certifying that such
designation complied with the preceding conditions and was permitted by Section
10.1 hereof or was a Permitted Investment under one or more of the clauses of
the definition of Permitted Investments. If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of this Agreement and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary of the Company as of such date
and, if such Indebtedness is not permitted to be incurred as of such date under
Section 10.2 hereof, the Company will be in default of such covenant. The Board
of Directors of the Company may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary of the Company; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary, and such designation will only be permitted if (1) such Indebtedness
is permitted under Section 10.2 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the applicable reference
period; and (2) no Default or Event of Default would be in existence following
such designation.

 

Section 9.8     Notes to Rank Pari Passu. The Notes and all other obligations
under this Agreement of the Company are and at all times shall remain direct
obligations of the Company ranking at least pari passu in all respects as
against the assets of the Company with all other Notes from time to time issued
and outstanding hereunder without any preference among themselves and at least
pari passu in all respects in right of payment with all other present and future
senior unsecured Indebtedness of the Company which is not expressed to be
subordinate or junior in rank to any other unsecured Indebtedness of the
Company.

 

Section 9.9     Books and Records. The Company will, and will cause each of its
Restricted Subsidiaries to, maintain proper books of record and account in
conformity with GAAP and all applicable requirements of any Governmental
Authority having legal or regulatory jurisdiction over the Company or such
Restricted Subsidiary, as the case may be.

 

Section 9.10     Use of Proceeds. By no later than the Maturity Date, the
Company will have used the net proceeds from the sale of the Initial Notes for
general corporate purposes related to the Casa Berardi Mine, including capital
expenditures and development and expansion costs at such mine.

 

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Section 10.     Negative Covenants.

 

From the Closing and thereafter, so long as any of the Notes are outstanding,
the Company covenants that:

 

Section 10.1     Restricted Payments. (a) The Company will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly:

 

(i)     declare or pay any dividend or make any other payment or distribution on
account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company or any of its Restricted Subsidiaries) or to
the direct or indirect holders of the Company’s or any of its Restricted
Subsidiaries’ Equity Interests in their capacity as such (other than dividends
or distributions payable in Equity Interests (other than Disqualified Stock) of
the Company and other than dividends or distributions payable to the Company or
a Restricted Subsidiary of the Company);

 

(ii)     purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any direct or indirect Person
owning more than 50% of the outstanding Equity Interests of the Company;

 

(iii)     make any payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness of the Company or any
Subsidiary Guarantor that is contractually subordinated to the Notes or to the
Notation of Guaranty (excluding any intercompany Indebtedness between or among
the Company and any of its Restricted Subsidiaries), except a payment of
interest or principal at the Stated Maturity thereof; or

 

(iv)     make any Restricted Investment

 

(all such payments and other actions set forth in these clauses (i) through (iv)
above being collectively referred to as “Restricted Payments”), unless, at the
time of and after giving effect to such Restricted Payment:

 

(1)     no Default or Event of Default has occurred and is continuing or would
occur as a consequence of such Restricted Payment;

 

(2)     the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made at
the beginning of the applicable four-quarter period, have been permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 10.2(a) hereof; and

 

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(3)     such Restricted Payment, together with the aggregate amount of all other
Restricted Payments made by the Company and its Restricted Subsidiaries since
April 12, 2013 (excluding Restricted Payments permitted by clauses (2), (3),
(4), (5), (6), (7), (8), (9) and (13) of paragraph (b) of this Section 10.1), is
less than the sum, without duplication, of:

 

(A)     50% of the Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after April 12, 2013 to the end of the Company’s most recently ended
fiscal quarter for which internal financial statements are available at the time
of such Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit); plus

 

(B)     100% of the aggregate net cash proceeds and the Fair Market Value, as
determined in good faith by the Board of Directors of the Company, of property
and marketable securities received by the Company since April 12, 2013 as a
contribution to its common equity capital or from the issue or sale of
Qualifying Equity Interests of the Company (other than in connection with the
Aurizon Transaction) or from the issue or sale of convertible or exchangeable
Disqualified Stock of the Company or convertible or exchangeable debt securities
of the Company, in each case that have been converted into or exchanged for
Qualifying Equity Interests of the Company (other than Qualifying Equity
Interests and convertible or exchangeable Disqualified Stock or debt securities
sold to a Subsidiary of the Company); plus

 

(C)     to the extent that any Restricted Investment that was made after April
12, 2013 is (a) sold or otherwise cancelled, liquidated or repaid, or (b) made
in an entity that subsequently becomes a Restricted Subsidiary of the Company
that is a Subsidiary Guarantor, the initial amount of such Restricted Investment
(or, if less, the amount of cash or the Fair Market Value, as determined in good
faith by the Board of Directors of the Company, of property and marketable
securities, in each case received upon repayment or sale); plus

 

(D)     to the extent that any Unrestricted Subsidiary of the Company designated
as such after the date of this Agreement is redesignated as a Restricted
Subsidiary after the date of this Agreement, the lesser of (i) the Fair Market
Value of the Company’s Restricted Investment in such Subsidiary as of the date
of such redesignation or (ii) such Fair Market Value as of the date on which
such Subsidiary was originally designated as an Unrestricted Subsidiary after
the date of this Agreement; plus

 

(E)     100% of any dividends received in cash and the Fair Market Value, as
determined in good faith by the Board of Directors of the Company, of property
and marketable securities received by the Company or a Restricted Subsidiary of
the Company that is a Subsidiary Guarantor after April 12, 2013 from an
Unrestricted Subsidiary of the Company, to the extent that such dividends were
not otherwise included in the Consolidated Net Income of the Company for such
period.

 

(b)     The provisions of Section 10.1(a) hereof will not prohibit:

 

(1)     the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of the dividend or
giving of the redemption notice, as the case may be, if at the date of
declaration or notice, the dividend or redemption payment would have complied
with the provisions of this Agreement;

 

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(2)     the making of any Restricted Payment in exchange for, or out of or with
the net cash proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other than
Disqualified Stock) or from the substantially concurrent contribution of common
equity capital to the Company; provided that the amount of any such net cash
proceeds that are utilized for any such Restricted Payment will not be
considered to be net proceeds of Qualifying Equity Interests for purposes of
Section 10.1(a)(3)(B);

 

(3)     the payment of any dividend (or, in the case of any partnership or
limited liability company, any similar distribution) by a Restricted Subsidiary
of the Company to the holders of its Equity Interests on a pro rata basis;

 

(4)     the repurchase, redemption, defeasance or other acquisition or
retirement for value of Indebtedness of the Company or any Subsidiary Guarantor
that is contractually subordinated to the Notes or to any Subsidiary Guaranty
with the net cash proceeds from a substantially concurrent incurrence of
Permitted Refinancing Indebtedness;

 

(5)     so long as no Default or Event of Default has occurred and is
continuing, the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Restricted Subsidiary of the
Company held by any current or former officer, director, employee or consultant
of the Company or any of its Restricted Subsidiaries pursuant to any management
equity plan or stock option plan, shareholders’ agreement or any other
management or employee benefit plan or agreement or arrangement; provided that
the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests may not exceed $15.0 million in any twelve-month period (with
unused amounts in any twelve-month period being carried over to succeeding
twenty-four month period); provided further, that such amount in any
twelve-month period may be increased by an amount not to exceed:

 

(A)     the cash proceeds from the sale of Qualifying Equity Interests of the
Company and, to the extent contributed to the Company as common equity capital,
the cash proceeds from the sale of Qualifying Equity Interests of any of the
Company’s direct or indirect parent companies, in each case to members of
management, directors or consultants of the Company, any of its Subsidiaries or
any of its direct or indirect parent companies that occurred after April 12,
2013 to the extent the cash proceeds from the sale of Qualifying Equity
Interests have not otherwise been applied to the making of Restricted Payments
pursuant to clause (3) of Section 10.1(a) or Section 10.1(b)(2); plus

 

(B)     the cash proceeds of key man life insurance policies received by the
Company or its Restricted Subsidiaries after April 12, 2013; and in addition,
cancellation of Indebtedness owing to the Company from any current or former
officer, director or employee (or any permitted transferees thereof) of the
Company or any of its Restricted Subsidiaries (or any direct or indirect parent
company thereof), in connection with a repurchase of Equity Interests of the
Company from such Persons will not be deemed to constitute a Restricted Payment
for purposes of this Section 10.1 or any other provisions of this Agreement;

 

(6)     the repurchase, acquisition or retirement for value of Equity Interests
(a) deemed to occur upon the exercise of stock options, warrants, rights to
acquire Equity Interests or other convertible securities to the extent such
Equity Interests represent a portion of the exercise price of those stock
options or warrants, or (b) in connection with the withholding of a portion of
the Equity Interests granted or awarded to an employee to pay for the taxes
payable by such employee upon such grant or award;

 

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(7)     so long as no Default or Event of Default has occurred and is
continuing, the declaration and payment of regularly scheduled or accrued
dividends to holders of any class or series of Disqualified Stock of the Company
or any preferred stock of any Restricted Subsidiary of the Company issued on or
after the date of this Agreement in accordance with the Fixed Charge Coverage
Ratio test described in Section 10.2(a) hereof;

 

(8)     payments of cash, dividends, distributions, advances or other Restricted
Payments by the Company or any of its Restricted Subsidiaries to allow the
payment of cash in lieu of the issuance of fractional shares upon (i) the
exercise of options or warrants or (ii) the conversion or exchange of Capital
Stock of any Person (including in a merger, consolidation, amalgamation or
similar transaction) and payments of cash to dissenting shareholders in
connection with a merger, consolidation, amalgamation, transfer of assets;

 

(9)     the repurchase, redemption or other acquisition or retirement for value
of any Indebtedness that is contractually subordinated to the Notes or to any
Subsidiary Guaranty (a) at a purchase price not greater than 101% of the
principal amount of such Indebtedness in the event of a Change of Control
pursuant to provisions similar to Section 8.7 hereof or (b) at a purchase price
not greater than 100% of the principal amount of such Indebtedness pursuant to
provisions similar to Section 10.4 hereof; provided that all Notes tendered by
holders of the Notes in connection with the related Change of Control Offer or
Asset Sale Offer, as applicable, have been repurchased, redeemed or acquired for
value;

 

(10)     the making by the Company of regular quarterly and/or annual dividend
payments in respect of (a) its outstanding common stock of no more than $35.0
million in any fiscal year (with unused amounts in any fiscal year carried over
to succeeding fiscal years), and (b) its outstanding Series B Cumulative
Convertible Preferred Stock, par value $0.25 per share, which are payable
pursuant to the terms of such preferred stock;

 

(11)     so long as no Default or Event of Default has occurred and is
continuing, the purchase of Equity Interests of the Company in an aggregate
amount not to exceed $20.0 million since April 12, 2013;

 

(12)     so long as no Default or Event of Default has occurred and is
continuing, other Restricted Payments in an aggregate amount not to exceed $75.0
million since April 12, 2013.

 

(c)     The amount of all Restricted Payments (other than cash) will be the Fair
Market Value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The Fair
Market Value of any assets or securities that are required to be valued by this
Section 10.1 will be determined by the Board of Directors of the Company.

 

(d)     For purposes of determining compliance with this covenant, if a
Restricted Payment meets the criteria or more than one of the exceptions
described in clauses (1) through (13) above or is entitled to be made according
to the Section 10.1(a), the Company may, in its sole discretion, classify the
Restricted Payment in any manner that complies with this Section 10.1.

 

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Section 10.2     Incurrence of Indebtedness and Issuance of Preferred Stock.

 

(a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, “incur”) any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, and the Subsidiary Guarantors may incur
Indebtedness (including Acquired Debt) or issue preferred stock, if the Fixed
Charge Coverage Ratio for the Company’s most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock or such preferred stock is issued, as the case may be, would
have been at least 2.0 to 1.0, determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the Disqualified Stock or the preferred stock
had been issued, as the case may be, at the beginning of such four-quarter
period.

 

(b)     The provisions of Section 10.2(a) hereof will not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
“Permitted Debt”):

 

(1)     the incurrence by the Company and any Subsidiary Guarantor of
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding under this clause (1) (with letters
of credit being deemed to have a principal amount equal to the maximum amount
drawable thereunder) not to exceed, as of any date of incurrence, $250.0
million.

 

(2)     the incurrence by the Company and its Restricted Subsidiaries of the
Existing Indebtedness;

 

(3)     the incurrence by the Company and the Subsidiary Guarantors of
Indebtedness represented by the Notes and the related Subsidiary Guaranties to
be issued on the date of this Agreement or thereafter as provided in this
Agreement;

 

(4)     the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness represented by Capital Lease Obligations (other than Deemed
Capitalized Leases), mortgage financings or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the purchase
price or cost of design, construction, installation or improvement of property,
plant or equipment used in the business of the Company or any of its Restricted
Subsidiaries, in an aggregate principal amount at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to renew, refund,
refinance, replace, defease or discharge any Indebtedness incurred pursuant to
this clause (4), not to exceed, as of any date of incurrence, the greater of
(x) $80.0 million and (y) 3.5% of Consolidated Net Tangible Assets as of such
date of incurrence;

 

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(5)     the incurrence by the Company or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to renew, refund, refinance, replace, defease or discharge any
Indebtedness (other than intercompany Indebtedness) that was permitted by this
Agreement to be incurred under Section 10.2(a) hereof or clauses (2), (3), (4),
(5) or (21) of this Section 10.2(b);

 

(6)     the incurrence by the Company or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Company and any of its Restricted
Subsidiaries; provided, however, that:

 

(A)     if the Company or any Subsidiary Guarantor is the obligor on such
Indebtedness and the payee is not the Company or a Subsidiary Guarantor, such
Indebtedness must be unsecured and expressly subordinated to the prior payment
in full in cash of all Obligations then due with respect to the Notes, in the
case of the Company, or Subsidiary Guaranty, in the case of a Subsidiary
Guarantor; and

 

(B)     (1) any subsequent issuance or transfer of Equity Interests that results
in any such Indebtedness being held by a Person other than the Company or a
Restricted Subsidiary of the Company and (2) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary of the Company, will be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as
the case may be, that was not permitted by this clause (6);

 

(7)     the issuance by any of the Company’s Restricted Subsidiaries to the
Company or to any of its Restricted Subsidiaries of shares of preferred stock;
provided, however, that:

 

(A)     any subsequent issuance or transfer of Equity Interests that results in
any such preferred stock being held by a Person other than the Company or a
Restricted Subsidiary of the Company; and

 

(B)     any sale or other transfer of any such preferred stock to a Person that
is not either the Company or a Restricted Subsidiary of the Company, will be
deemed, in each case, to constitute an issuance of such preferred stock by such
Restricted Subsidiary that was not permitted by this clause (7);

 

(8)     the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness consisting of Hedging Obligations or Treasury Management
Arrangements in the ordinary course of business;

 

(9)     the guarantee by the Company or any of the Subsidiary Guarantors of
Indebtedness of the Company or a Restricted Subsidiary of the Company to the
extent that the guaranteed Indebtedness was permitted to be incurred by another
provision of this Section 10.2; provided that if the Indebtedness being
guaranteed is subordinated to or pari passu with the Notes, then the Guaranty of
such Indebtedness must be subordinated or pari passu, as applicable, to the same
extent as the Indebtedness guaranteed;

 

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(10)     the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness in respect of workers’ compensation claims, health, disability or
other employee benefits or property, casualty or liability insurance,
self-insurance obligations, bankers’ acceptances, performance, bid, surety,
appeal, remediation and similar bonds and completion Guarantees (not for
borrowed money) provided in the ordinary course of business;

 

(11)     the incurrence by the Company or any of its Restricted Subsidiaries of
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently drawn against insufficient
funds, so long as such Indebtedness is covered within five Business Days;

 

(12)     Indebtedness of any Person incurred and outstanding on or prior to the
date on which such Person became a Restricted Subsidiary of the Company or was
acquired by, or merged into or arranged or consolidated with, the Company or any
of its Restricted Subsidiaries (other than Indebtedness incurred in
contemplation of, or in connection with, the transaction or series of related
transactions pursuant to which such Person became a Restricted Subsidiary of or
was otherwise acquired by the Company); provided, however, that on the date that
such Person became a Restricted Subsidiary or was otherwise acquired by the
Company, either: (a) the Company would have been able to incur $1.00 of
additional Indebtedness pursuant to Section 10.2(a) hereof after giving effect
to the incurrence of such Indebtedness pursuant to this clause (12); or (b) the
Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries would
have been greater than such ratio immediately prior to such acquisition, merger,
arrangement or consolidation, in each case after giving effect to the incurrence
of such Indebtedness pursuant to this clause (12);

 

(13)     Indebtedness consisting of unpaid insurance premiums owed to any Person
providing property, casualty, liability or other insurance to the Company or any
Restricted Subsidiary in any fiscal year, pursuant to reimbursement or
indemnification obligations to such Person; provided that such Indebtedness is
incurred only to defer the cost of such unpaid insurance premiums for such
fiscal year and is outstanding only during such fiscal year;

 

(14)     Indebtedness of the Company, to the extent the net proceeds thereof are
substantially concurrently (a) used to purchase Notes tendered in connection
with a Change of Control Offer or (b) deposited to defease the Notes pursuant to
Section 22 hereof or pursuant to Section 23 hereof;

 

(15)     Indebtedness arising from agreements of the Company or a Restricted
Subsidiary providing for indemnification, adjustment of purchase price,
earn-outs or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Capital Stock of a
Subsidiary, other than guarantees of Indebtedness incurred by any Person
acquiring all or any portion of such business, assets or Capital Stock of a
Subsidiary for the purpose of financing such acquisition;

 

(16)     Indebtedness arising in connection with endorsement of instruments for
deposit in the ordinary course of business;

 

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(17)     Indebtedness owed to a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America or Canada in
connection with the settlement or other resolution of any claim or dispute which
may arise from time to time with any such agency;

 

(18)     Indebtedness related to surety bonds or cash collateral posted by the
Company or any of its Restricted Subsidiaries from time to time in order to
secure reclamation obligations;

 

(19)     Indebtedness of the Company or any of its Restricted Subsidiaries
consisting of take-or-pay obligations contained in supply arrangements incurred
in the ordinary course of business;

 

(20)     Indebtedness representing deferred compensation to employees of the
Company or any of its Restricted Subsidiaries in the ordinary course of
business; and

 

(21)     the incurrence by the Company or any of its Restricted Subsidiaries of
additional Indebtedness in an aggregate principal amount (or accreted value, as
applicable) at any time outstanding, including all Permitted Refinancing
Indebtedness incurred to renew, refund, refinance, replace, defease or discharge
any Indebtedness incurred pursuant to this clause (21), not to exceed, as of any
date of incurrence, the greater of (x) $100.0 million and (y) 4.5% of
Consolidated Net Tangible Assets as of such date of incurrence.

 

The Company will not incur, and will not permit any Subsidiary Guarantor to
incur, any Indebtedness (including Permitted Debt) that is contractually
subordinated in right of payment to any other Indebtedness of the Company or
such Subsidiary Guarantor unless such Indebtedness will be contractually
subordinated in right of payment to the Notes and the applicable Subsidiary
Guaranty to at least the same extent as such other Indebtedness; provided,
however, that no Indebtedness will be deemed to be contractually subordinated in
right of payment to any other Indebtedness of the Company solely by virtue of
being unsecured or by virtue of being secured on a junior priority basis.

 

For purposes of determining compliance with this Section 10.2, in the event that
an item of Indebtedness meets the criteria of more than one of the categories of
Permitted Debt described in clauses (1) through (21) above, or is entitled to be
incurred pursuant to Section 10.2(a) hereof, the Company will be permitted to
classify such item of Indebtedness on the date of its incurrence, or later
reclassify all or a portion of such item of Indebtedness, in any manner that
complies with this Section 10.2, Indebtedness under Credit Facilities
outstanding on the date on which the Notes are first issued under this Agreement
will initially be deemed to have been incurred in reliance on the exception
provided by clause (1) of the definition of Permitted Debt. The accrual of
interest or preferred stock dividends, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, the reclassification of preferred
stock as Indebtedness due to a change in accounting principles, and the payment
of dividends on preferred stock or Disqualified Stock in the form of additional
shares of the same class of preferred stock or Disqualified Stock will not be
deemed to be an incurrence of Indebtedness or an issuance of preferred stock or
Disqualified Stock for purposes of this Section 10.2; provided, in each such
case, that the amount thereof is included in Fixed Charges of the Company as
accrued. For purposes of determining compliance with any U.S. dollar-denominated
restriction on the incurrence of Indebtedness, the U.S. dollar-equivalent
principal amount of Indebtedness denominated in a foreign currency shall be
utilized, calculated based on the relevant currency exchange rate in effect on
the date such Indebtedness was incurred. Notwithstanding any other provision of
this Section 10.2, the maximum amount of Indebtedness that the Company or any
Restricted Subsidiary may incur pursuant to this Section 10.2 shall not be
deemed to be exceeded solely as a result of fluctuations in exchange rates or
currency values.

 

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The amount of any Indebtedness outstanding as of any date will be:

 

(1)     the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount;

 

(2)     with respect to contingent obligations, the maximum liability upon the
occurrences of the contingency giving rise to the obligations;

 

(3)     with respect to Hedging Obligations, the net amount payable, if any, by
such Persons of such Hedging Obligations terminated at that time due to default
by such Persons;

 

(4)     the principal amount of the Indebtedness, in the case of any other
Indebtedness; and

 

(5)     in respect of Indebtedness of another Person secured by a Lien on the
assets of the specified Person, the lesser of:

 

(A)     the Fair Market Value of such assets at the date of determination; and

 

(B)     the amount of the Indebtedness of the other Person.

 

Section 10.3     Limitation on Liens. The Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien of any kind securing Indebtedness,
Attributable Debt or trade payables on any asset now owned or hereafter
acquired, except Permitted Liens, unless contemporaneously therewith:

 

(1)     in the case of any Lien securing an obligation that ranks pari passu
with the Notes or a guarantee of the Notes, effective provision is made to
secure the Notes or such Subsidiary Guaranty, as the case may be, at least
equally and ratably with or prior to such obligation with a Lien on the same
assets of the Company or such Restricted Subsidiary, as the case may be; and

 

(2)     in the case of any Lien securing Indebtedness subordinated in right of
payment to the Notes or a Subsidiary Guaranty, effective provision is made to
secure the Notes or such Subsidiary Guaranty, as the case may be, with a Lien on
the same assets of the Company or such Restricted Subsidiary, as the case may
be, that is prior to the Lien securing such subordinated Indebtedness.

 

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Section 10.4     Sales of Assets.

 

(a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:

 

(1)     the Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of the Asset Sale at least equal to the Fair Market
Value (measured as of the date of the definitive agreement with respect to such
Asset Sale) of the assets or Equity Interests issued or sold or otherwise
disposed of; and

 

(2)     solely with respect to any Asset Sales of any of the Principal Mine
Assets, at least 75% of the consideration received in the Asset Sale by the
Company or such Restricted Subsidiary is in the form of cash or Cash
Equivalents. For purposes of this provision, each of the following will be
deemed to be cash:

 

(A)     any liabilities of the Company or any Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Subsidiary Guaranty) that are assumed by the transferee of any
such assets pursuant to a customary novation or indemnity agreement that
releases the Company or such Restricted Subsidiary from or indemnifies the
Company or such Restricted Subsidiary against such liability;

 

(B)     any securities, notes or other obligations received by the Company or
any such Restricted Subsidiary from such transferee that are converted by the
Company or such Restricted Subsidiary into cash within 120 days after such Asset
Sale, to the extent of the cash received in that conversion;

 

(C)     any Designated Non-cash Consideration received by the Company or any of
its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market
Value, taken together with all other Designated Non-cash Consideration received
pursuant to this clause (C) that has at that time not been converted in cash or
a Cash Equivalent, not to exceed the greater of (x) $75.0 million and (y) 3.25%
of Consolidated Net Tangible Assets at the time of the receipt of such
Designated Non-cash Consideration (with the Fair Market Value of each item of
Designated Non-cash Consideration being measured at the time received and
without giving effect to subsequent changes in value); and

 

(D)     any stock or assets of the kind referred to in clauses (3) or (5) of the
next paragraph of this Section 10.4.

 

(b)     Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company (or the applicable Restricted Subsidiary, as the case may be)
may apply such Net Proceeds at its options:

 

(1)     to repay Indebtedness that is secured by a Lien;

 

(2)     to repay Obligations under other Indebtedness (other than Disqualified
Stock or subordinated Indebtedness), other than Indebtedness owed to the Company
or an Affiliate of the Company; provided that the Company shall equally and
ratably reduce the Obligations under the Notes through open market purchases (to
the extent such purchases are at or above 100% of the principal amount thereof)
or by making an offer (in accordance with the procedures set forth below for an
Asset Sale Offer) to all holders to purchase their Notes at 100% of the
principal amount thereof, plus the accrued but unpaid interest, if any, on the
amount of the Notes that would otherwise be prepaid;

 

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(3)     to acquire all or substantially all of the assets of, or any Capital
Stock of, another Permitted Business, if, after giving effect to any such
acquisition of Capital Stock, the Permitted Business is or becomes a Restricted
Subsidiary of the Company;

 

(4)     to make a capital expenditure;

 

(5)     to acquire other assets that are not classified as current assets under
GAAP and that are used or useful in a Permitted Business; or

 

(6)     any combination of the foregoing.

 

provided that, in the case of clauses (1), (3), (4) and (5) above, a binding
commitment shall be treated as a permitted application of the Net Proceeds from
the date of such commitment so long as the Company or such Restricted Subsidiary
enters into such commitment with the good faith expectation that such Net
Proceeds will be applied to satisfy such commitment within 180 days of the date
thereof; provided that if any commitment is later canceled or terminated for any
reason before such Net Proceeds are applied, then such Net Proceeds shall
constitute Excess Proceeds from the later of (i) the date of such cancelation or
termination or (ii) the 365th day after the receipt of such Net Proceeds from
the applicable Asset Sale.

 

Pending the final application of any Net Proceeds, the Company (or the
applicable Restricted Subsidiary) may temporarily reduce revolving credit
borrowings or otherwise invest the Net Proceeds in any manner that is not
prohibited by this Agreement.

 

(c)     Any Net Proceeds from Asset Sales that are not applied or invested as
provided in Section 10.4(b) hereof will constitute “Excess Proceeds.” When the
aggregate amount of Excess Proceeds exceeds $50.0 million, within five Business
Days thereof, the Company will make an Asset Sale Offer to all Holders of Notes
and all holders of other Indebtedness that (i) is pari passu with the Notes, and
(ii) contemporaneously require the purchase, prepayment or redemption of such
Indebtedness with the proceeds of sales of assets in accordance with Section 8.9
hereof to purchase, prepay or redeem the maximum principal amount of Notes and
such other pari passu Indebtedness (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums,
incurred in connection therewith) that may be purchased, prepaid or redeemed out
of the Excess Proceeds. The Excess Proceeds shall be allocated between the Notes
and the other pari passu Indebtedness referred to above on a pro rata basis
based on the aggregate amount of such Indebtedness then outstanding. The offer
price with respect to the Notes in any Asset Sale Offer will be equal to 100% of
the principal amount, plus accrued and unpaid interest and Special Interest, if
any, to the date of purchase, prepayment or redemption, subject to the rights of
Holders of Notes on the relevant record date to receive interest due on the
relevant interest payment date, and will be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer and the
contemporaneous offer with respect to any other pari passu Indebtedness
contemplated above, the Company may use those Excess Proceeds for any purpose
not otherwise prohibited by this Agreement. If the aggregate principal amount of
Notes tendered in such Asset Sale Offer exceeds the amount of Excess Proceeds
allocable to the Notes, the Company or its designee will select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $2,000, or an
integral multiple of $1,000 in excess thereof, will be purchased). The remainder
of the Excess Proceeds allocable to the other pari passu Indebtedness will be
repurchased in a similar manner. Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds will be reset at zero.

 

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(d)     The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Section 8.9 hereof or this Section 10.4, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Section 8.9 hereof or this Section 10.4 by virtue
of such compliance.

 

Section 10.5     Merger and Consolidation; Successor Corporation Substituted.

 

(a)     The Company shall not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation), or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:

 

(1)     either:

 

(A)     the Company is the surviving corporation; or

 

(B)     the Person formed by or surviving any such consolidation or merger (if
other than the Company) or to which such sale, assignment, transfer, conveyance
or other disposition has been made is an entity organized or existing under the
laws of the United States, any state of the United States or the District of
Columbia, Canada, or any province of Canada; and, if such entity is not a
corporation, a co-obligor of the Notes is a corporation organized or existing
under any such laws;

 

(2)     the Person formed by or surviving any such consolidation or merger (if
other than the Company) or the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made assumes all the obligations of the
Company under the Notes and this Agreement pursuant to agreements reasonably
satisfactory to the holders of a majority in principal amount of the Notes;

 

(3)     immediately after such transaction, no Default or Event of Default
exists;

 

(4)     the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, assignment,
transfer, conveyance or other disposition has been made would, on the date of
such transaction after giving pro forma effect thereto and any related financing
transactions as if the same had occurred at the beginning of the applicable
four-quarter period (i) be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 10.2(a) hereof or (ii) have had a Fixed Charge Coverage Ratio greater
than the actual Fixed Charge Coverage Ratio for the Company for such
four-quarter period; and

 

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(5)     the Company has delivered to the holders of the Notes an Officer’s
Certificate and an opinion of counsel, each stating that any such event complies
with the foregoing.

 

In addition, the Company will not, directly or indirectly, lease all or
substantially all of the properties and assets of it and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to any other
Person.

 

This Section 10.5(a) will not apply to any sale, assignment, transfer,
conveyance, lease or other disposition of assets between or among the Company
and any one or more of its Restricted Subsidiaries or between or among any one
or more of the Company’s Restricted Subsidiaries. Clauses (3) and (4) of this
Section10.5(a) will not apply to (i) any merger or consolidation of the Company
with or into one of its Restricted Subsidiaries for any purpose or (ii) with or
into an Affiliate solely for the purpose of reincorporating the Company in
another jurisdiction or creating a holding company for the Company and its
Restricted Subsidiaries.

 

(b)     Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
properties or assets of the Company in a transaction that is subject to, and
that complies with the provisions of, Section 10.5(a) hereof, the successor
Person formed by such consolidation or into or with which the Company is merged
or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, the provisions of this Agreement referring to
the “Company” shall refer instead to the successor Person and not to the
Company), and may exercise every right and power of the Company under this
Agreement and the Notes with the same effect as if such successor Person had
been named as the Company herein; provided, however, that the predecessor
Company shall not be relieved from the obligation to pay the principal of,
premium on, if any, and interest, if any, on, the Notes except in the case of a
sale of all of the Company’s assets in a transaction that is subject to, and
that complies with the provisions of, Section 10.5(a) hereof.

 

Section 10.6     Transactions with Affiliates.

 

(a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each, an “Affiliate Transaction”) involving
aggregate payments or consideration in excess of $10.0 million, unless:

 

(1)     the Affiliate Transaction is on terms, taken as a whole, that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person; and

 

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(2)     the Company delivers to the holders of the Notes:

 

(A)     with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $15.0 million, a
resolution of the Board of Directors of the Company set forth in an Officer’s
Certificate certifying that such Affiliate Transaction complies with this
Section 10.6 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors of the Company; and

 

(B)     with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $50.0 million, an
opinion as to the fairness to the Company or such Restricted Subsidiary of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing designated by the
Company.

 

(b)     The following items will be deemed not to be Affiliate Transactions and,
therefore, will not be subject to the provisions of Section 10.6(a) hereof:

 

(1)     any employment agreement, employee benefit plan, officer or director
indemnification agreement or any similar arrangement entered into by the Company
or any of its Restricted Subsidiaries in the ordinary course of business and
payments pursuant thereto and the issuance of Equity Interests of the Company
(other than Disqualified Stock) to directors and employees pursuant to stock
option or stock ownership plans;

 

(2)     transactions between or among the Company and/or its Restricted
Subsidiaries;

 

(3)     transactions with a Person (other than an Unrestricted Subsidiary of the
Company) that is an Affiliate of the Company solely because the Company owns,
directly or through a Restricted Subsidiary, an Equity Interest in, or controls,
such Person;

 

(4)     payment or advancement of reasonable and customary fees and
reimbursements of expenses (pursuant to indemnity arrangements or otherwise) of
officers, directors, employees or consultants of the Company or any of its
Restricted Subsidiaries;

 

(5)     loans or advances to employees in the ordinary course of business not to
exceed $10.0 million in the aggregate at any one time outstanding;

 

(6)     any issuance of Equity Interests (other than Disqualified Stock) of the
Company to Affiliates of the Company and the granting of registration and other
customary rights in connection therewith;

 

(7)     Restricted Payments that do not violate Section 10.1 hereof and
Permitted Investments;

 

(8)     any agreement as in effect as of the date of this Agreement, as these
agreements may be amended, modified, supplemented, extended or renewed from time
to time, so long as any such amendment, modification, supplement, extension or
renewal is not more disadvantageous to the Holders of Notes in any material
respect than the terms of the agreements in effect on the Issue Date;

 

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(9)     any agreement between any Person and an Affiliate of such Person
existing at the time such Person is acquired by, merged into or amalgamated,
arranged or consolidated with the Company or any of its Restricted Subsidiaries;
provided that such agreement was not entered into in contemplation of such
acquisition, merger, amalgamation, arrangement or consolidation and any
amendment thereto (so long as any such amendment is not more disadvantageous to
the holders of Notes in any material respect than the applicable agreement as in
effect on the date of such acquisition, merger, amalgamation, arrangement or
consolidation);

 

(10)     transactions between the Company or any of its Restricted Subsidiaries
and any Person that is an Affiliate solely because one or more of its directors
is also a director of the Company or any of its Restricted Subsidiaries;
provided that such director abstains from voting as a director of the Company or
such Restricted Subsidiary, as the case may be, on any matter involving such
other Person;

 

(11)     any transaction or series of related transactions for which the Company
or any of its Restricted Subsidiaries receives an opinion as to the fairness to
the Company or the applicable Restricted Subsidiary of such transaction or
series of related transactions from a financial point of view issued by an
accounting, appraisal or investment banking firm of national recognized
standing;

 

(12)     any contribution to the common equity capital of the Company;

 

(13)     the pledge of Equity Interests of any Unrestricted Subsidiary;

 

(14)     the entering into of any tax sharing, allocation or similar agreement
and any payments by the Company (or any direct or indirect parent of the
Company) or any of the Restricted Subsidiaries pursuant to any tax sharing,
allocation or similar agreement;

 

(15)     any transaction or series of related transactions between or among the
Company and any of its subsidiaries implemented in connection with any corporate
restructuring;

 

(16)     payments to or from, and transactions with, any joint venture in the
ordinary course of business; provided that such arrangements are on terms no
less favorable to the Company and its Subsidiaries, on the one hand, than to the
relevant joint venture partner and its Affiliates, on the other hand, taking
into account all related agreements and transactions entered in by the Company
and its Subsidiaries, on the one hand, and the relevant joint venture partner
and its Affiliates, on the other hand (as determined in good faith by the Board
of Directors of the Company); and

 

(17)     the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of its obligations under the terms of any stockholders
agreement, partnership agreement or limited liability company members agreement
(including any registration rights agreement or purchase agreement related
thereto) to which it is a party as of the date of this Agreement and any similar
agreements which it may enter into thereafter, in each case subject to
compliance with the other provisions of this Agreement; provided, however, that
the existence, or the performance by the Company or any of its Restricted
Subsidiaries of obligations under, any future amendment to any such existing
agreement or under any similar agreement entered into after the date of this
Agreement shall only be permitted by this clause (17) to the extent that the
terms (taken as a whole) of any such amendment or new agreement are not
otherwise materially disadvantageous to the holders of the notes, as determined
in good faith by the Board of Directors or senior management of the Company or
such Restricted Subsidiary.

 

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Section 10.7     Line of Business. The Company will not, and will not permit any
of its Restricted Subsidiaries to, engage in any business other than Permitted
Businesses, except to such extent as would not be material to the Company and
its Restricted Subsidiaries taken as a whole.

 

Section 10.8     Terrorism Sanctions Regulations. The Company will not, and will
not permit any Controlled Entity to, (a) become (including by virtue of being
owned or controlled by a Blocked Person), own or control a Blocked Person or any
Person that is the target of sanctions imposed by the United Nations or by the
European Union, or (b) directly or indirectly, have any investment in or engage
in any dealing or transaction (including, without limitation, any investment,
dealing or transaction involving the proceeds of the Notes) with any Person if
such investment, dealing or transaction (i) would cause any Purchaser,
Additional Purchaser or holder to be in violation of any law or regulation
applicable to such Purchaser, Additional Purchaser or holder, or (ii) is
prohibited by or subject to sanctions under any U.S. Economic Sanctions, or
(c) to engage, nor shall any Affiliate of either engage, in any activity that
could subject such Person or any Purchaser, Additional Purchaser or holder to
sanctions under CISADA or any similar law or regulation with respect to Iran or
any other country that is subject to U.S. Economic Sanctions (any such violation
or sanction described in clause (b)(i) or clause (c) with respect to a
Purchaser, Additional Purchaser or holder, a “Noteholder Sanctions Violation”).
In the event of a Noteholder Sanctions Violation, the relevant holder of Notes
shall have those rights and remedies set forth in Section 8.8 in addition to any
other rights or remedies that may be available to such holder under this
Agreement; provided, however, that if the Company complies with Section 8.8, a
Noteholder Sanctions Violation shall not constitute an Event of Default
hereunder.

 

Section 10.9     Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

 

(a)     The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

 

(1)     pay dividends or make any other distributions on its Capital Stock to
the Company or any of its Restricted Subsidiaries, or with respect to any other
interest or participation in, or measured by, its profits, or pay any
indebtedness owed to the Company or any of its Restricted Subsidiaries (it being
understood that the priority of any preferred stock in receiving dividends or
liquidating distributions prior to dividends or liquidating distributions being
paid on common stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock);

 

(2)     make loans or advances to the Company or any of its Restricted
Subsidiaries (it being understood that the subordination of loans or advances
made to the Company or any Restricted Subsidiary to other Indebtedness incurred
by the Company or any Restricted Subsidiary shall not be deemed a restriction on
the ability to make loans or advances); or

 

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(3)     sell, lease or transfer any of its properties or assets to the Company
or any of its Restricted Subsidiaries (it being understood that such transfers
shall not include any type of transfer described in clauses (1) and (2) of this
Section 10.9(a)).

 

(b)     The restrictions in Section 10.9(a) hereof will not apply to
encumbrances or restrictions existing under or by reason of:

 

(1)     agreements governing Existing Indebtedness and Credit Facilities as in
effect on the date of this Agreement (including the Senior Credit Facility) and
any amendments, restatements, modifications, renewals, supplements, refundings,
replacements or refinancings of those agreements; provided that the amendments,
restatements, modifications, renewals, supplements, refundings, replacements or
refinancings, in the good faith judgment of the Company, (x) are not materially
more restrictive, taken as a whole, with respect to such dividend and other
payment restrictions than those contained in those agreements on the date of
this Agreement and (y) will not materially affect the Company’s ability to make
anticipated principal and interest payments on the Notes when due;

 

(2)     this Agreement, the Notes and the Subsidiary Guaranties;

 

(3)     agreements governing other Indebtedness permitted to be incurred under
Section 10.2 hereof and any amendments, restatements, modifications, renewals,
supplements, refundings, replacements or refinancings of those agreements;
provided that in the good faith judgment of the Company, such encumbrances and
restrictions will not materially affect the Company’s ability to make
anticipated principal and interest payments on the Notes when due;

 

(4)     applicable law, rule, regulation or order;

 

(5)     any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness or Capital
Stock was incurred in connection with or in contemplation of such acquisition),
which encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the property or
assets of the Person, so acquired; provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of this Agreement to be incurred;

 

(6)     non-assignment provisions in leases, subleases, licenses and other
contracts entered into in the ordinary course of business, including, without
limitation, any encumbrance or restriction (a) that restricts the subletting,
assignment or transfer of any property or asset that is subject to a lease,
license or similar contract, or the assignment or transfer of such lease,
license or other contract; and (b) pursuant to provisions restricting the
dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary;

 

(7)     purchase money obligations for property acquired in the ordinary course
of business and Attributable Debt or Capital Lease Obligations that impose
restrictions on the property purchased or leased of the nature described in
clause (3) of Section 10.9(a) hereof;

 

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(8)     any agreement for the sale or other disposition of all or a portion of
the Capital Stock or assets of a Restricted Subsidiary that restricts
distributions by that Restricted Subsidiary pending its sale or other
disposition;

 

(9)     Permitted Refinancing Indebtedness; provided that, in the good faith
judgment of the Company, the encumbrances and restrictions contained in the
agreements governing such Permitted Refinancing Indebtedness are not materially
more restrictive, taken as a whole, than those contained in the agreements
governing the Indebtedness being refinanced;

 

(10)     Liens permitted to be incurred under the provisions of Section 10.3
hereof that limit the right of the debtor to dispose of the assets subject to
such Liens, including any Permitted Lien;

 

(11)     provisions limiting the disposition or distribution of assets or
property in joint venture agreements, asset sale agreements, sale-leaseback
agreements, stock sale agreements and other similar agreements (including
agreements entered into in connection with a Restricted Investment), which
limitation is applicable only to the assets that are the subject of such
agreements; and

 

(12)     restrictions on cash or other deposits or net worth imposed by
customers under contracts entered into in the ordinary course of business.

 

Section 10.10     Changes in Covenants When Notes Rated Investment Grade.

 

(a)     If on any date following the date of this Agreement:

 

(1)     the Notes are rated Baa3 or better by Moody’s and BBB- or better by S&P
(or, if either such entity ceases to rate the Notes for reasons outside of the
control of the Company, the equivalent investment grade credit rating from any
other “nationally recognized statistical rating organization” as such term is
defined in Section (3)(a)(62) of the Exchange Act, selected by the Company as a
replacement agency); and

 

(2)     no Default or Event of Default shall have occurred and be continuing,
then, beginning on that day and subject to the provisions of Section 10.10(c),
the covenants contained in Sections 9.6, 10.1, 10.2, 10.4, 10.5(a)(4), 10.6,
10.9, and Sections 10.11(1) and (2) of this Agreement will be suspended.

 

(b)     During any period that the foregoing covenants have been suspended, the
Company’s Board of Directors may not designate any of its Subsidiaries as
Unrestricted Subsidiaries pursuant to Section 9.7 hereof or the definition of
“Unrestricted Subsidiary.”

 

(c)     Notwithstanding the foregoing, if the rating assigned by either such
rating agency should subsequently decline to below Baa3 or BBB-, respectively,
the covenants specified in Section 10.10(a) will be reinstituted as of and from
the date of such rating decline. Calculations under the reinstated Section 10.1
hereof will be made as if Section 10.1 hereof had been in effect since the date
of this Agreement except that no Default or Event of Default will be deemed to
have occurred solely by reason of a Restricted Payment made while that covenant
was suspended or for any other failure to comply with any suspended covenants
during a period when the covenants were suspended. Notwithstanding the
foregoing, the continued existence after any reinstitution of the foregoing
covenants of obligations arising from transactions that occurred during the
period such covenants were suspended shall not constitute a breach of any
covenant set forth in this Agreement or cause an Event of Default hereunder.

 

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Section 10.11     Limitations on Sale and Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any sale and leaseback transaction; provided that the Company or any Restricted
Subsidiary may enter into a sale and leaseback transaction if:

 

(1)     the Company or that Restricted Subsidiary, as applicable, could have (a)
incurred Indebtedness in an amount equal to the Attributable Debt relating to
such sale and leaseback transaction under the Fixed Charge Coverage Ratio test
in Section 10.2(a) hereof and (b) incurred a Lien to secure such Indebtedness
pursuant to Section 10.3 hereof; and

 

(2)     the transfer of assets in that sale and leaseback transaction is
permitted by, and the Company applies the proceeds of such transaction in
compliance with, Section 10.4 hereof.

 

Section 11.     Events of Default.

 

An “Event of Default” shall exist if any of the following conditions or events
shall occur and be continuing:

 

(1)     any representation or warranty made in writing by or on behalf of the
Company or a Restricted Subsidiary or by any officer of the Company or a
Restricted Subsidiary in this Agreement or in any writing furnished in
connection with the transactions contemplated hereby proves to have been false
or incorrect in any material respect on the date as of which made; or

 

(2)     any default for 30 consecutive days in the payment when due of interest
on the Notes; or

 

(3)     any default in the payment when due (at maturity, upon redemption or
otherwise) of the principal of, or premium, if any, on the Notes; or

 

(4)     any failure by the Company or any of its Restricted Subsidiaries to
comply with Section 10.5(a) hereof; or

 

(5)     any failure by the Company or any of its Restricted Subsidiaries for 30
days after notice to the Company by the holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to
comply with the provisions of Sections 8.7, 10.1, 10.2 or 10.4 hereof; or

 

(6)     any failure by the Company or any of its Restricted Subsidiaries for 60
days after notice to the Company by the holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to
comply with any of the other agreements in this Agreement; or

 

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(7)     any default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries), whether such Indebtedness or Guarantee now exists, or
is created after the date of this Agreement, if that default:

 

(A)     is caused by a failure to pay principal of, premium on, if any, or
interest, if any, on, such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a “Payment
Default”); or

 

(B)     results in the acceleration of such Indebtedness prior to its express
maturity, and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $50.0 million or more; or

 

(8)     any failure by the Company or any Significant Subsidiary or any group of
its Restricted Subsidiaries that, taken together (as of the date of the latest
audited consolidated financial statements of the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, to pay final
non-appealable judgments entered by a court or courts of competent jurisdiction
aggregating in excess of $50.0 million (net of any amounts covered by insurance
policies issued by a reputable and creditworthy insurance company that is not
contesting liability for such amounts) , which final non-appealable judgments
are not paid, discharged or stayed, for a period of 60 days after such judgment
becomes final, and in the event such judgment is covered in full by insurance,
an enforcement proceeding has been commenced by any creditor upon such judgment
or decree which is not promptly stayed; or

 

(9)     except as permitted by this Agreement, any Subsidiary Guaranty of a
Significant Subsidiary or any group of Subsidiary Guarantors that, taken
together (as of the date of the latest audited consolidated financial statements
of the Company and its Restricted Subsidiaries), would constitute a Significant
Subsidiary, is held in any final, non-appealable judicial proceeding to be
unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Subsidiary Guarantor that is a Significant Subsidiary or any
group of Subsidiary Guarantors that, taken together (as of the date of the
latest audited consolidated financial statements of the Company and its
Restricted Subsidiaries), would constitute a Significant Subsidiary, or any
Person acting on behalf of any such Subsidiary Guarantor, denies or disaffirms
its obligations under its Subsidiary Guaranty; or

 

(10)     the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary or any group of Restricted Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary pursuant to or within the
meaning of Bankruptcy Law:

 

(A)     commences a voluntary case,

 

(B)     consents to the entry of an order for relief against it in an
involuntary case,

 

(C)     consents to the appointment of a custodian of it or for all or
substantially all of its property,

 

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(D)     makes a general assignment for the benefit of its creditors, or

 

(E)     generally is unable to pay its debts as they become due; or

 

(11)     a court of competent jurisdiction enters a final non-appealable order
or decree under any Bankruptcy Law that:

 

(A)     is for relief against the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted Subsidiaries of the
Company that, taken together, would constitute a Significant Subsidiary in an
involuntary case;

 

(B)     appoints a custodian of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary or for all or substantially all of the property of the Company or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary; or

 

(C)     orders the liquidation of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary;

 

and the final non-appealable order or decree remains unstayed and in effect for
90 consecutive days.

 

Section 12.     Remedies on Default, Etc.

 

Section 12.1     Acceleration. In the case of an Event of Default specified in
clause (9) or (10) of Section 11 hereof, with respect to the Company, any
Restricted Subsidiary of the Company that is a Significant Subsidiary or any
group of Restricted Subsidiaries of the Company that, taken together, would
constitute a Significant Subsidiary, all outstanding Notes will become due and
payable immediately without further action or notice. If any other Event of
Default occurs and is continuing, the Holders of at least 25% in aggregate
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately.

 

Upon any such declaration, the Notes shall become due and payable immediately.

 

Upon any Notes becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Notes will forthwith mature and the entire
unpaid principal amount of such Notes, plus (i) all accrued and unpaid interest
thereon (including, but not limited to, interest accrued thereon at the Default
Rate) and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount or by the Company in the event that the Notes are prepaid
or are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.

 

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Section 12.2     Other Remedies. If any Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, the holder of any Note
at the time outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or in any
Note or Subsidiary Guaranty, or for an injunction against a violation of any of
the terms hereof or thereof, or in aid of the exercise of any power granted
hereby or thereby or by law or otherwise; provided that no holder of a Note
shall have the right to accelerate its Notes except in accordance with
Section 12.1.

 

Section 12.3     Rescission. At any time after any Notes have been declared due
and payable pursuant to Section 12.1, the Required Holders, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, (b) neither the Company nor any other
Person shall have paid any amounts which have become due solely by reason of
such declaration, (c) all Events of Default and Defaults, other than non-payment
of amounts that have become due solely by reason of such declaration, have been
cured or have been waived pursuant to Section 17, and (d) no judgment or decree
has been entered for the payment of any monies due pursuant hereto or to the
Notes. No rescission and annulment under this Section 12.3 will extend to or
affect any subsequent Event of Default or Default or impair any right consequent
thereon.

 

Section 12.4     No Waivers or Election of Remedies, Expenses, Etc. No course of
dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder’s rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any Note or any Subsidiary Guaranty upon any holder thereof
shall be exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15, the
Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys’ fees, expenses and disbursements.

 

Section 13.     Registration; Exchange; Substitution of Notes.

 

Section 13.1     Registration of Notes. The Company shall keep at its principal
executive office a register for the registration and registration of transfers
of Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, the Person in whose name any Note shall be registered
shall be deemed and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or knowledge to the
contrary. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.

 

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Section 13.2     Transfer and Exchange of Notes. Upon surrender of any Note to
the Company at the address and to the attention of the designated officer (all
as specified in Section 18(D)), for registration of transfer or exchange (and in
the case of a surrender for registration of transfer accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
such holder’s attorney duly authorized in writing and accompanied by the
relevant name, address, payment instructions and notice address and other
information for notices of each transferee of such Note or part thereof), within
ten Business Days thereafter, the Company shall execute and deliver, at the
Company’s expense (except as provided below), one or more new Notes (as
requested by the holder thereof) of the same Series in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of the Note of such
Series originally issued hereunder or pursuant to any Supplement. Each such new
Note shall be dated and bear interest from the date to which interest shall have
been paid on the surrendered Note or dated the date of the surrendered Note if
no interest shall have been paid thereon. The Company may require payment of a
sum sufficient to cover any stamp tax or governmental charge imposed in respect
of any such transfer of Notes. Notes shall not be transferred in denominations
of less than $250,000, provided that if necessary to enable the registration of
transfer by a holder of its entire holding of Notes of a Series, one Note of
such Series may be in a denomination of less than $250,000. Any transferee, by
its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.2,
provided, that such holder may (in reliance upon information provided by the
Company, which shall not be unreasonably withheld) make a representation to the
effect that the purchase by any holder of any Note will not constitute a
non-exempt prohibited transaction under section 406(a) of ERISA.

 

Section 13.3     Replacement of Notes. Upon receipt by the Company at the
address and to the attention of the designated officer (all as specified in
Section 18(D)) of evidence reasonably satisfactory to it of the ownership of and
the loss, theft, destruction or mutilation of any Note (which evidence shall be,
in the case of an Institutional Investor, notice from such Institutional
Investor of such ownership and such loss, theft, destruction or mutilation), and

 

(1)     in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser, an original Additional Purchaser or another holder
of a Note with a minimum net worth of at least $50,000,000 or a Qualified
Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be
deemed to be satisfactory), or

 

(2)     in the case of mutilation, upon surrender and cancellation thereof.

 

within ten Business Days thereafter, the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note of the same Series, dated and
bearing interest from the date to which interest shall have been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such lost,
stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

 

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Section 14.     Payments of Notes.

 

Section 14.1     Place of Payment. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in lawful money of Canada at 6500 N. Mineral Drive,
Suite 200 in Coeur d’Alene, ID. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.

 

Section 14.2     Home Office Payment. So long as any Purchaser or Additional
Purchaser or such Purchaser’s nominee or such Additional Purchaser’s nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.1 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount, if any, and interest
by the method and at the address specified for such purpose for such Purchaser
on Schedule A hereto or, in the case of any Additional Purchaser, Schedule A
attached to any Supplement pursuant to which such Additional Purchaser is a
party, or by such other method or at such other address as such Purchaser or
Additional Purchaser shall have from time to time specified to the Company in
writing for such purpose, without the presentation or surrender of such Note or
the making of any notation thereon, except that upon written request of the
Company made concurrently with or reasonably promptly after payment or
prepayment in full of any Note, such Purchaser or Additional Purchaser shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by any Purchaser or Additional
Purchaser or such Person’s nominee, such Person will, at its election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note.

 

Section 15.     Expenses, Etc.

 

Section 15.1     Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys’ fees of counsel for the Purchasers (or any
Additional Purchasers) incurred by each Purchaser and each Additional Purchaser
and each other holder of a Note in connection with such transactions and in
connection with any amendments, waivers or consents under or in respect of this
Agreement (including any Supplement) or the Notes or any Subsidiary Guaranty
(whether or not such amendment, waiver or consent becomes effective), including,
without limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement (including any Supplement) or the Notes or any Subsidiary
Guaranty or in responding to any subpoena or other legal process or informal
investigative demand by any Governmental Authority issued in connection with
this Agreement (including any Supplement) or the Notes or any Subsidiary
Guaranty, or by reason of being a holder of any Note, and (b) the costs and
expenses, including financial advisors’ fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any workout or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save each Purchaser, each Additional
Purchaser and each other holder of a Note harmless from, all claims in respect
of any fees, costs or expenses, if any, of brokers and finders (other than
those, if any, retained by a Purchaser or other holder in connection with its
purchase of Notes).

 

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Section 15.2     Survival. The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement, any Supplement or the Notes, and the
termination of this Agreement or any Supplement.

 

Section 16.     Survival of Representations and Warranties; Entire Agreement.

 

All representations and warranties contained herein or in any Supplement shall
be deemed given only on the date actually made as to the matters covered thereby
on such date but any claims of a breach on such date may be made from after the
execution and delivery of this Agreement, such Supplement and the Notes, the
purchase or transfer by any Purchaser or any Additional Purchaser of any such
Note or portion thereof or interest therein and the payment of any Note may be
relied upon by any subsequent holder of any such Note, regardless of any
investigation made at any time by or on behalf of any Purchaser or any
Additional Purchaser or any other holder of any such Note. All statements
contained in any certificate delivered by or on behalf of the Company pursuant
to this Agreement or any Supplement shall be deemed representations and
warranties of the Company under this Agreement; provided that the
representations and warranties contained in any Supplement shall only be made
for the benefit of the Additional Purchasers which are party to such Supplement
and the holders of the Notes issued pursuant to such Supplement, including
subsequent holders of any Note issued pursuant to such Supplement, and shall not
require the consent of the holders of existing Notes. Subject to the preceding
sentence, this Agreement (including every Supplement) and the Notes embody the
entire agreement and understanding between the Purchasers and the Additional
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.

 

Section 17.     Amendment and Waiver.

 

Section 17.1     Amendments and Waivers. (a) Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holders holding more than 50% in aggregate
principal amount of outstanding Notes of each Series affected thereby; provided,
however, that without the written consent of all of the holders of each Series
affected thereby, no such amendment or waiver shall be effective (i) which will
change the time of payment (including any required prepayment) of the principal
of or the interest on any Note or change the principal amount thereof or change
the rate of interest thereon, or (ii) which will change any of the provisions
with respect to optional prepayments; and provided further; that without the
consent of all of the holders, no such amendment or waiver shall be effective
which will change (x) the percentage of holders required to consent to any such
amendment or waiver of any of the provisions of this Section 17; (y) Section
11(2) or (3) or Section 12 or (z) the principal amount of the Notes that the
Purchasers or the Additional Purchasers are to purchase pursuant to Section 2
upon the satisfaction of the conditions to Closing that appear in Section 4. For
purposes of any determination pursuant to this Section 17.1, the Initial Notes
shall constitute a single Series of Notes and the holders of the Initial Notes
shall vote as a single class. Unless otherwise provided in any Supplement, each
Series of Additional Notes shall vote as a single class.

 

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(b)     Supplements. Notwithstanding anything to the contrary contained herein,
the Company may enter into any Supplement providing for the issuance of one or
more Series of Additional Notes consistent with Section 1.2 hereof without
obtaining the consent of any holder of any other Series of Notes.

 

Section 17.2     Solicitation of Holders of Notes.

 

(1)     Solicitation. The Company will provide each Purchaser, Additional
Purchaser and each holder of the Notes (irrespective of the amount of Notes then
owned by it) with sufficient information, sufficiently far in advance of the
date a decision is required, to enable such Purchaser, Additional Purchaser and
holder to make an informed and considered decision with respect to any proposed
amendment, waiver or consent in respect of any of the provisions hereof, any
Supplement or of the Notes or any Subsidiary Guaranty. The Company will deliver
executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each Purchaser,
Additional Purchaser and holder of outstanding Notes promptly following the date
on which it is executed and delivered by, or receives the consent or approval
of, the requisite holders of Notes.

 

(2)     Payment. The Company will not directly or indirectly pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, or grant any security or provide other credit support, to any
Purchaser, Additional Purchaser or holder of Notes (in each case solely in their
capacity as a Purchaser, Additional Purchaser or holder of a Note) as
consideration for or as an inducement to the entering into by such Purchaser,
Additional Purchaser or holder of Notes (in each case solely in their capacity
as a Purchaser, Additional Purchaser or holder of a Note) of any waiver or
amendment of any of the terms and provisions hereof, of any Supplement, of any
Note or of any Subsidiary Guaranty unless such remuneration is concurrently
paid, or security is concurrently granted or other credit support is
concurrently provided, on the same terms, ratably to each Purchaser, Additional
Purchaser and holder of Notes (in each case solely in their capacity as a
Purchaser, Additional Purchaser or holder of a Note) then outstanding even if
such Purchaser, Additional Purchaser or holder of Notes did not consent to such
waiver or amendment.

 

Section 17.3     Binding Effect, Etc. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all Purchaser, Additional
Purchaser and holders of Notes and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has
been marked to indicate such amendment or waiver. No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and any Purchaser, Additional
Purchaser or the holder of any Note nor any delay in exercising any rights
hereunder, under any Note or under any Subsidiary Guaranty shall operate as a
waiver of any rights of any Purchaser, Additional Purchaser or holder of such
Note. As used herein, the term “this Agreement” and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.

 

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Section 17.4     Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement, the Notes or any
Subsidiary Guaranty, or have directed the taking of any action provided herein,
in the Notes or in any Subsidiary Guaranty to be taken upon the direction of the
holders of a specified percentage of the aggregate principal amount of Notes
then outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.

 

Section 18.     Notices.

 

All notices and communications provided for hereunder shall be in writing and
sent (a) by telecopy if the sender on the same day sends a confirming copy of
such notice by a recognized overnight delivery service (charges prepaid), or (b)
by a recognized overnight delivery service (with charges prepaid). Any such
notice must be sent:

 

(A)     if to a Purchaser or such Purchaser’s nominee, to such Purchaser or such
Purchaser’s nominee at the address specified for such communications in Schedule
A to this Agreement, or at such other address as such Purchaser or such
Purchaser’s nominee shall have specified to the Company in writing pursuant to
this Section 18;

 

(B)     if to an Additional Purchaser or such Additional Purchaser’s nominee, to
such Additional Purchaser or such Additional Purchaser’s nominee at the address
specified for such communications in Schedule A to any Supplement, or at such
other address as such Additional Purchaser or such Additional Purchaser’s
nominee shall have specified to the Company in writing;

 

(C)     if to any other holder of any Note, to such holder at such address as
such other holder shall have specified to the Company in writing pursuant to
this Section 18; or

 

(D)     if to the Company, to the Company at its address set forth at the
beginning hereof to the attention of the Chief Financial Officer or Treasurer,
or at such other address as the Company shall have specified to the holder of
each Note in writing.

 

Notices under this Section 18 will be deemed given only when actually received.
In the case of Notes which are held by holders which have a common investment
advisor or are Affiliates of a single Institutional Investor, the Company shall
not be required to deliver more than one copy of any notice or other
communication to such holders.

 

Section 19.     Reproduction of Documents.

 

Subject to Section 20, this Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications that may
hereafter be executed, (b) documents received by any Purchaser at the Closing or
by any Additional Purchaser (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter furnished
to any Purchaser or any Additional Purchaser, may be reproduced by such
Purchaser or such Additional Purchaser by any photographic, photostatic,
electronic, digital, or other similar process and such Purchaser or such
Additional Purchaser may destroy any original document so reproduced. Subject to
Section 20, the Company agrees and stipulates that, to the extent permitted by
applicable law, any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by such
Purchaser or such Additional Purchaser in the regular course of business) and
any enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence. This Section 19 shall not prohibit the
Company or any other holder of Notes from contesting any such reproduction to
the same extent that it could contest the original, or from introducing evidence
to demonstrate the inaccuracy of any such reproduction.

 

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Section 20.     Confidential Information.

 

For the purposes of this Section 20, “Confidential Information” means
information delivered to any Purchaser or any Additional Purchaser by or on
behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by such Purchaser or Additional Purchaser as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to such
Purchaser or such Additional Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or such Additional Purchaser or any Person acting on such Purchaser’s or such
Additional Purchaser’s behalf, (c) otherwise becomes known to such Purchaser or
such Additional Purchaser other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to such Purchaser
or such Additional Purchaser under Section 7.1 that are otherwise publicly
available. Each Purchaser and each Additional Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser or such Additional Purchaser in good faith to protect
confidential information of third parties delivered to such Purchaser or such
Additional Purchaser, provided that such Purchaser or such Additional Purchaser
may deliver or disclose Confidential Information to (i) such Purchaser’s or such
Additional Purchaser’s directors, trustees, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by such Purchaser’s or such
Additional Purchaser’s Notes), (ii) such Purchaser’s or such Additional
Purchaser’s auditors, financial advisors and other professional advisors who
agree to hold confidential the Confidential Information substantially in
accordance with the terms of this Section 20, (iii) any other holder of any
Note, (iv) any Institutional Investor to which such Purchaser or such Additional
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
20), (v) any Person from which such Purchaser or such Additional Purchaser
offers to purchase any security of the Company (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 20), (vi) any federal or state regulatory authority
having jurisdiction over such Purchaser or such Additional Purchaser, (vii) any
nationally recognized rating agency that requires access to information about
such Purchaser’s or such Additional Purchaser’s investment portfolio, or (viii)
any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser or such Additional Purchaser, (x) in response to
any subpoena or other legal process, (y) in connection with any litigation to
which such Purchaser or such Additional Purchaser is a party or (z) if an Event
of Default has occurred and is continuing, to the extent such Purchaser or such
Additional Purchaser may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under such Purchaser’s or such Additional Purchaser’s Notes and
this Agreement. Each holder of a Note, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 20 as though it were a party to this Agreement. On reasonable request by
the Company in connection with the delivery to any holder of a Note of
information required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this Agreement
or its nominee), such holder will enter into an agreement with the Company
embodying the provisions of this Section 20.

 

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In the event that as a condition to receiving access to information relating to
the Company or its Subsidiaries in connection with the transactions contemplated
by or otherwise pursuant to this Agreement, any Purchaser, Additional Purchaser
or holder of a Note is required to agree to a confidentiality undertaking
(whether through IntraLinks, another secure website, a secure virtual workspace
or otherwise) which is different from this Section 20, this Section 20 shall not
be amended thereby and, as between such Purchaser, Additional Purchaser or such
holder and the Company, this Section 20 shall supersede any such other
confidentiality undertaking.

 

Section 21.     Substitution of Purchaser.

 

Each Purchaser and each Additional Purchaser shall have the right to substitute
any one of its Affiliates as the purchaser of the Notes that it has agreed to
purchase hereunder, by written notice to the Company, which notice shall be
signed by both such Purchaser or such Additional Purchaser and such Affiliate,
shall contain such Affiliate’s agreement to be bound by this Agreement shall
include information regarding such Affiliate, including without limitation,
payment instructions and the notice address that would be required under Section
13.2 as if such Affiliate were a purchaser of the Notes under such Section, and
shall contain a confirmation by such Affiliate of the accuracy with respect to
it of the representations set forth in Section 6. Upon receipt of such notice,
any reference to such Purchaser or such Additional Purchaser in this Agreement
(other than in this Section 21), shall be deemed to refer to such Affiliate in
lieu of such original Purchaser or such original Additional Purchaser. In the
event that such Affiliate is so substituted as a Purchaser or an Additional
Purchaser hereunder and such Affiliate thereafter transfers to such original
Purchaser or such original Additional Purchaser all of the Notes then held by
such Affiliate, upon receipt by the Company of notice of such transfer, any
reference to such Affiliate as a “Purchaser” or an “Additional Purchaser” in
this Agreement (other than in this Section 21), shall no longer be deemed to
refer to such Affiliate, but shall refer to such original Purchaser or such
original Additional Purchaser, and such original Purchaser or such original
Additional Purchaser shall again have all the rights of an original holder of
the Notes under this Agreement.

 

Section 22.     Legal Defeasance and Covenant Defeasance.

 

Section 22.1     Option to Effect Legal Defeasance or Covenant Defeasance. The
Company may at any time, at the option of its Board of Directors evidenced by a
resolution set forth in an Officer’s Certificate, elect to have either Section
22.2 or 22.3 hereof be applied to all outstanding Notes upon compliance with the
conditions set forth below in this Section 22.

 

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Section 22.2     Legal Defeasance and Discharge. Upon the Company’s exercise
under Section 22.1 hereof of the option applicable to this Section 22.2, the
Company and each of the Subsidiary Guarantors will, subject to the satisfaction
of the conditions set forth in Section 22.4 hereof, be deemed to have been
discharged from their obligations with respect to all outstanding Notes
(including the Subsidiary Guaranties) on the date the conditions set forth below
are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal
Defeasance means that the Company and the Subsidiary Guarantors will be deemed
to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guaranties), which will thereafter
be deemed to be “outstanding” only for the purposes of Section 22.5 hereof and
the other Sections of this Agreement referred to in clauses (1) and (2) below,
and to have satisfied all their other obligations under such Notes, the
Subsidiary Guaranties and this Agreement (and the holders, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which will survive until otherwise
terminated or discharged hereunder:

 

(1)     the rights of holders of outstanding Notes to receive payments in
respect of the principal of, premium on, if any, or interest on, such Notes when
such payments are due from the trust referred to in Section 22.4 hereof;

 

(2)     the Company’s obligations with respect to such Notes under Section 8.1
hereof; and

 

(3)     this Section 22.

 

Subject to compliance with this Section 22, the Company may exercise its option
under this Section 22.2 notwithstanding the prior exercise of its option under
Section 22.3 hereof.

 

Section 22.3     Covenant Discharge. Upon the Company’s exercise under Section
22.1 hereof of the option applicable to this Section 22.3, the Company and each
of the Subsidiary Guarantors will, subject to the satisfaction of the conditions
set forth in Section 22.4 hereof, be released from each of their obligations
under the covenants contained in Sections 8.7, 9.6, 9.7, 10.1 10.2, 10.3, 10.4,
10.6, 10.7, 10.9, 10.10, 10.11, 17.2(2) and 24.1 hereof and clause (a)(4) of
Section 10.5 hereof with respect to the outstanding Notes on and after the date
the conditions set forth in Section 22.4 hereof are satisfied (hereinafter,
“Covenant Defeasance”), and the Notes will thereafter be deemed not
“outstanding” for the purposes of any direction, waiver, consent or declaration
or act of holders (and the consequences of any thereof) in connection with such
covenants, but will continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes will not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes and Subsidiary Guaranties, the Company and the
Subsidiary Guarantors may omit to comply with and will have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply will
not constitute a Default or an Event of Default under Section 11 hereof, but,
except as specified above, the remainder of this Agreement and such Notes and
Subsidiary Guaranties will be unaffected thereby. In addition, upon the
Company’s exercise under Section 22.1 hereof of the option applicable to this
Section 22.3, subject to the satisfaction of the conditions set forth in Section
22.4 hereof, Sections 11(4), (5), (6), (7), (8) and (9) hereof will not
constitute Events of Default.

 

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Section 22.4     Conditions to Legal or Covenant Defeasance. In order to
exercise either Legal Defeasance or Covenant Defeasance under either Section
22.2 or 22.3 hereof:

 

(1)     the Company must irrevocably deposit with an escrow agent, in trust, for
the benefit of the holders, cash in Canadian dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized investment bank, appraisal firm, or firm
of independent public accountants, to pay the principal of, premium on, if any,
and interest on, the outstanding Notes on the stated date for payment thereof or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to such stated date for payment or
to a particular redemption date;

 

(2)     in the case of an election under Section 22.2 hereof, the Company must
deliver to the such escrow agent an opinion of U.S. tax counsel reasonably
acceptable to such escrow agent confirming that:

 

(A)     the Company has received from, or there has been published by, the U.S.
Internal Revenue Service a ruling; or

 

(B)     since the date of this Agreement, there has been a change in the
applicable U.S. federal income tax law,

 

in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;

 

(3)     in the case of an election under Section 22.3 hereof, the Company must
deliver to the escrow agent an opinion of U.S. tax counsel reasonably acceptable
to such escrow agent confirming that the holders of the outstanding Notes will
not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such Covenant Defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;

 

(4)     no Default or Event of Default shall have occurred and be continuing on
the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit (and any similar
concurrent deposit relating to other Indebtedness), and the granting of Liens to
secure such borrowings);

 

(5)     such Legal Defeasance or Covenant Defeasance will not result in a breach
or violation of, or constitute a default under, any material agreement or
instrument (other than this Agreement, the Notes, the Subsidiary Guaranties and
the agreements governing any other Indebtedness being defeased, discharged or
replaced) to which the Company or any of the Subsidiary Guarantors are a party
or by which the Company or any of the Subsidiary Guarantors are bound;

 

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(6)     the Company must deliver to the escrow agent an Officer’s Certificate
stating that the deposit was not made by the Company with the intent of
preferring the holders of Notes over the other creditors of the Company with the
intent of defeating, hindering, delaying or defrauding any creditors of the
Company or others; and

 

(7)     the Company must deliver to the escrow agent an Officer’s Certificate
and an Opinion of Counsel, each stating that all conditions precedent relating
to the Legal Defeasance or the Covenant Defeasance have been complied with.

 

Section 22.5     Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions. Subject to Section 22.6 hereof, all money and
non-callable Government Securities (including the proceeds thereof) deposited
with the escrow agent (or other qualifying trustee, collectively for purposes of
this Section 22.5, the “Escrow Agent”) pursuant to Section 22.4 hereof in
respect of the outstanding Notes will be held in trust and applied by the Escrow
Agent, in accordance with the provisions of such Notes and this Agreement, to
the payment, either directly or through any paying agent (including the Company
acting as paying agent) as the Escrow Agent may determine, to the holders of
such Notes of all sums due and to become due thereon in respect of principal,
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.

 

The Company will pay and indemnify the Escrow Agent against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 22.4 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the holders of the outstanding Notes.

 

Notwithstanding anything in this Section 22 to the contrary, the Escrow Agent
will deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 22.4 hereof which, in the opinion of a nationally recognized
investment bank, appraisal firm or firm of independent public accountants
expressed in a written certification thereof delivered to the Escrow Agent
(which may be the opinion delivered under Section 22.4(1) hereof), are in excess
of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

 

Section 22.6     Repayment to Company. Any money deposited with the Escrow Agent
or any paying agent, or then held by the Company, in trust for the payment of
the principal of, premium on, if any, or interest on any Note and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the Company on its request or (if then
held by the Company) will be discharged from such trust; and the holder of such
Note will thereafter be permitted to look only to the Company for payment
thereof, and all liability of the Escrow Agent or such paying agent with respect
to such trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Escrow Agent or such paying agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.

 

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Section 22.7     Reinstatement. If the Escrow Agent or paying agent is unable to
apply any Canadian dollars or non-callable Government Securities in accordance
with Section 22.2 or 22.3 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company’s and the Subsidiary
Guarantors’ obligations under this Agreement and the Notes and the Subsidiary
Guaranties will be revived and reinstated as though no deposit had occurred
pursuant to Section 22.2 or 22.3 hereof until such time as the Escrow Agent or
paying agent is permitted to apply all such money in accordance with Section
22.2 or 22.3 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, premium on, if any, or interest on, any Note
following the reinstatement of its obligations, the Company will be subrogated
to the rights of the holders of such Notes to receive such payment from the
money held by the Escrow Agent or paying agent.

 

Section 23.     Satisfaction and Discharge.

 

Section 23.1     Satisfaction and Discharge. This Agreement will be discharged
and will cease to be of further effect as to all Notes issued hereunder, when:

 

(1)     either:

 

(A)     all Notes that have been issued, except lost, stolen or destroyed Notes
that have been replaced or paid and Notes for whose payment money has been
deposited in trust and thereafter repaid to the Company, have been delivered to
the Company for cancellation; or

 

(B)     all Notes that have not been delivered to the Company for cancellation
have become due and payable by reason of the mailing of a notice of redemption
or otherwise or will become due and payable within one year and the Company or
any Subsidiary Guarantor has irrevocably deposited or caused to be deposited
with the Escrow Agent pledged solely for the benefit of the holders, cash in
Canadian dollars, non-callable Government Securities, or a combination thereof,
in amounts as will be sufficient, without consideration of any reinvestment of
interest, to pay and discharge the entire Indebtedness on the Notes not
delivered to the Company for cancellation for principal of, premium on, if any,
and interest on, the Notes to the date of maturity or redemption;

 

(2)     in respect of subclause (B) of clause (1) of this Section 23, no Default
or Event of Default has occurred and is continuing on the date of the deposit
(other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit and any similar deposit relating to other
Indebtedness and, in each case, the granting of Liens to secure such borrowings)
and the deposit will not result in a breach or violation of, or constitute a
default under, any other instrument to which the Company or any Subsidiary
Guarantor is a party or by which the Company or any Subsidiary Guarantor is
bound (other than with respect to the borrowing of funds to be applied
concurrently to make the deposit required to effect such satisfaction and
discharge and any similar concurrent deposit relating to other Indebtedness, and
in each case the granting of Liens to secure such borrowings);

 

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(3)     the Company or any Subsidiary Guarantor has paid or caused to be paid
all other sums payable by it under this Agreement; and

 

(4)     the Company has delivered irrevocable instructions to the Escrow Agent
to apply the deposited money toward the payment of the Notes at maturity or on
the redemption date, as the case may be.

 

In addition, the Company must deliver an Officer’s Certificate and an Opinion of
Counsel to the Escrow Agent stating that all conditions precedent to
satisfaction and discharge have been satisfied.

 

Notwithstanding the satisfaction and discharge of this Agreement, if money has
been deposited with the Escrow Agent pursuant to subclause (B) of clause (1) of
this Section 23.1, the provisions of Sections 23.2 and 22.6 hereof will survive.
In addition, nothing in this Section 23.1 will be deemed to discharge those
provisions of Section 15 hereof, that, by their terms, survive the satisfaction
and discharge of this Agreement.

 

Section 23.2     Application of Escrowed Money. Subject to the provisions of
Section 22.6 hereof, all money deposited with the Escrow Agent pursuant to
Section 23.1 hereof shall be pledged to pay the Notes and applied by the Escrow
Agent, in accordance with the provisions of the Notes and this Agreement and an
escrow agreement between the Escrow Agent and the Company, to the payment,
either directly or through any paying agent (including the Company acting as its
own paying agent) as the Escrow Agent may determine, to the Persons entitled
thereto, of the principal, premium, if any, and interest for whose payment such
money has been deposited with the Escrow Agent; but such money need not be
segregated from other funds except to the extent required by law.

 

If the Escrow Agent or paying agent is unable to apply any money or Government
Securities in accordance with Section 23.1 hereof by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company’s and any Subsidiary Guarantor’s obligations under this Agreement and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 23.1 hereof; provided that if the Company has made any
payment of principal of, premium on, if any, or interest on, any Notes because
of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the holders of such Notes to receive such payment from the money or
Government Securities held by the Escrow Agent or paying agent.

 

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Section 24.     Guarantee and Limitation on Guarantor Liability

 

Section 24.1     Guarantee. Subject to this Section 24, each of the Subsidiary
Guarantors hereby, jointly and severally, unconditionally guarantees to each
holder of a Note, irrespective of the validity and enforceability of this
Agreement, the Notes or the obligations of the Company hereunder or thereunder,
that:

 

(1)     the principal of, premium, if any, on, interest and Special Interest, if
any, on the Notes will be promptly paid in full when due, whether at maturity,
by acceleration, redemption or otherwise, and interest on the overdue principal
of, premium on, if any, interest and Special Interest, if any, on, the Notes, if
lawful, and all other obligations of the Company to the holders of the Notes
hereunder or thereunder will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; and

 

(2)     in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, that same will be promptly paid in full when due
or performed in accordance with the terms of the extension or renewal, whether
at Stated Maturity, by acceleration or otherwise.

 

Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. Each Subsidiary Guarantor
agrees that this is a guarantee of payment and not a guarantee of collection.

 

The Subsidiary Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Agreement, the absence of any action to enforce the same, any
waiver or consent by any holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Subsidiary
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenant that this Note Guarantee will not be discharged
except by complete performance of the obligations contained in the Notes and
this Agreement.

 

If any holder of the Notes is required by any court or otherwise to return to
the Company, the Subsidiary Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Subsidiary Guarantors, any amount paid by such holder, this Note Guarantee, to
the extent theretofore discharged, will be reinstated in full force and effect.

 

Each Subsidiary Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the holders of the Notes in respect of any
obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between the
Subsidiary Guarantors, on the one hand, and the holders of the Notes, on the
other hand, (1) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 12 hereof for the purposes of this Note
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (2) in
the event of any declaration of acceleration of such obligations as provided in
Section 12 hereof, such obligations (whether or not due and payable) will
forthwith become due and payable by the Subsidiary Guarantors for the purpose of
this Note Guarantee. The Subsidiary Guarantors will have the right to seek
contribution from any non-paying Subsidiary Guarantor so long as the exercise of
such right does not impair the rights of the holders of the Notes under the Note
Guarantee.

 

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Section 24.2     Limitation on Subsidiary Guarantor Liability. Each Subsidiary
Guarantor, and by its acceptance of Notes, each holder of the Notes, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Subsidiary Guarantor not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar federal or state law to the extent
applicable to any Note Guarantee. To effectuate the foregoing intention, the
holders of the Notes and the Subsidiary Guarantors hereby irrevocably agree that
the obligations of such Subsidiary Guarantor will be limited to the maximum
amount that will, after giving effect to such maximum amount and all other
contingent and fixed liabilities of such Subsidiary Guarantor that are relevant
under such laws, and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under this Section 24, result in the obligations of such Subsidiary
Guarantor under its Note Guarantee not constituting a fraudulent transfer or
conveyance.

 

Section 24.3     Execution and Delivery of Note Guarantee. To evidence its Note
Guarantee set forth in Section 24.1 hereof, each Subsidiary Guarantor hereby
agrees that a notation of such Note Guarantee substantially in the form attached
as Exhibit 2.1 hereto will be endorsed by an Officer of such Guarantor on each
Note and that this Agreement will be executed on behalf of such Guarantor by one
of its Officers.

 

Each Guarantor hereby agrees that its Note Guarantee set forth in Section 24.1
hereof will remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.

 

The delivery of any Note by the Company, will constitute due delivery of the
Note Guarantee set forth in this Agreement on behalf of the Guarantors.

 

Section 25.     Merger and Consolidation and Release of Subsidiary Guarantors.

 

Section 25.1     Guarantors May Consolidate, etc., on Certain Terms. Except as
otherwise provided in Section 25.2 hereof, a Subsidiary Guarantor may not sell
or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Subsidiary Guarantor
is the surviving Person) another Person, other than the Company or another
Subsidiary Guarantor, unless:

 

(1)     immediately after giving effect to such transaction, no Default or Event
of Default exists; and

 

(2)     either:

 

(A)     subject to Section 25.2 hereof, the Person acquiring the property in any
such sale or disposition or the Person formed by or surviving any such
consolidation or merger unconditionally assumes all the obligations of such
Subsidiary Guarantor under its Subsidiary Guaranty and this Agreement on the
terms set forth herein or therein, pursuant to a supplemental indenture
satisfactory to the Required Holders; or

 

(B)     the Net Proceeds of such asset sale or other disposition, consolidation
or merger are applied in accordance with the applicable provisions of this
Agreement, including without limitation, Section 10.4 hereof.

 

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In case of any such consolidation, merger, sale or conveyance and upon the
assumption by the successor Person, by supplemental agreement or joinder to, or
assignment and assumption of, the applicable Subsidiary Guaranty, executed and
delivered to the Purchasers and satisfactory in form to the Purchasers, and the
due and punctual performance of all of the covenants and conditions of this
Agreement and the Subsidiary Guarantor to be performed by such Subsidiary
Guarantor, such successor Person will succeed to and be substituted for such
Subsidiary Guarantor with the same effect as if it had been named herein and
therein as a Subsidiary Guarantor. Such successor Person thereupon may cause to
be signed any or all of the Subsidiary Guaranties which theretofore shall not
have been signed by the Subsidiary Guarantor and delivered to the Purchasers.
All the Subsidiary Guaranties so issued will in all respects have the same legal
rank and benefit under this Agreement as the Subsidiary Guaranties theretofore
and thereafter issued in accordance with the terms of this Agreement as though
all of such Subsidiary Guaranties had been issued at the date of the execution
hereof.

 

Except as set forth in Sections 9 and 10 hereof, and notwithstanding clauses
2(A) and (B) above, nothing contained in this Agreement or in any of the Notes
will prevent any consolidation or merger of a Subsidiary Guarantor with or into
the Company or another Subsidiary Guarantor, or will prevent any sale or
conveyance of the property of a Subsidiary Guarantor as an entirety or
substantially as an entirety to the Company or another Subsidiary Guarantor.

 

Section 25.2     Releases.

 

(a)     The Subsidiary Guaranty of a Subsidiary Guarantor will be released:

 

(1)     in connection with any sale or other disposition of all or substantially
all of the assets of that Subsidiary Guarantor, by way of merger, consolidation
or otherwise, to a Person that is not (either before or after giving effect to
such transaction) the Company or a Restricted Subsidiary of the Company, if the
sale or other disposition does not violate Section 10.4 hereof;

 

(2)     in connection with any sale or other disposition of Capital Stock of
that Subsidiary Guarantor to a Person that is not (either before or after giving
effect to such transaction) the Company or a Restricted Subsidiary of the
Company, if the sale or other disposition does not violate Section 10.4 hereof
and the Subsidiary Guarantor ceases to be a Restricted Subsidiary of the Company
as a result of the sale or other disposition;

 

(3)     if the Company designates any Restricted Subsidiary that is a Subsidiary
Guarantor to be an Unrestricted Subsidiary in accordance with the applicable
provisions of this Agreement;

 

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(4)     if the Subsidiary Guarantor ceases to be a borrower or guarantor under
all Credit Facilities and is released or discharged from all obligations
thereunder and such Subsidiary Guarantor is released or discharged from its
Guaranty of any other Indebtedness of the Company in excess of $10.0 million in
aggregate principal amount, including the Guaranty that resulted in the
obligation of such Subsidiary Guarantor to Guaranty the Notes; provided that if
such Person has incurred any Indebtedness in reliance on its status as a
Subsidiary Guarantor under Section 10.2 hereof, such Subsidiary Guarantor’s
obligations under such Indebtedness, as the case may be, so incurred are
satisfied in full and discharged or are otherwise permitted to be Incurred by a
Restricted Subsidiary (other than a Subsidiary Guarantor) under Section 10.2
hereof; or

 

(5)     upon Legal Defeasance or Covenant Defeasance in accordance with Section
22 hereof or satisfaction and discharge of this Agreement in accordance with
Section 23 hereof.

 

(b)     Any Subsidiary Guarantor not released from its obligations under its
Subsidiary Guaranty as provided in this Section 25 will remain liable for the
full amount of principal of, premium on, if any, and interest on, the Notes and
for the other obligations of any Subsidiary Guarantor under this Agreement and
Subsidiary Guaranties as provided in the Subsidiary Guaranty of such Subsidiary
Guarantor.

 

Section 26.     Miscellaneous.

 

Section 26.1     Successors and Assigns. All covenants and other agreements
contained in this Agreement (including all covenants and other agreements
contained in any Supplement) by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.

 

Section 26.2     Payments Due on Non-Business Days. Anything in this Agreement
or the Notes to the contrary notwithstanding (but without limiting the
requirement in Section 8.2 that the notice of any optional prepayment specify a
Business Day as the date fixed for such prepayment), (x) subject to clause (y),
any payment of interest on any Note that is due on a date other than a Business
Day shall be made on the next succeeding Business Day without including the
additional days elapsed in the computation of the interest payable on such next
succeeding Business Day, and (y) any payment of principal of or Make-Whole
Amount on any Note (including principal due on the Maturity Date of such Note)
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.

 

Section 26.3     Accounting Terms. All accounting terms used herein which are
not expressly defined in this Agreement have the meanings respectively given to
them in accordance with GAAP. Except as otherwise specifically provided herein,
(i) all computations made pursuant to this Agreement shall be made in accordance
with GAAP, and (ii) all financial statements shall be prepared in accordance
with GAAP. For purposes of determining compliance with this Agreement
(including, without limitation, Section 9, Section 10 and the definition of
“Indebtedness”), any election by the Company to measure any financial liability
using fair value (as permitted by Financial Accounting Standards Board
Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option,
International Accounting Standard 39 – Financial Instruments: Recognition and
Measurement or any similar accounting standard) shall be disregarded and such
determination shall be made as if such election had not been made. If at any
time any change in GAAP would affect the computation of any financial ratio or
requirement set forth in this Agreement or any Supplement, and either the
Company or the Required Holders shall so request, the holders of the Notes and
the Company shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Holders); provided that, until so amended, (a) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (b) the Company shall provide to the holders of the
Notes financial statements and other documents required under this Agreement or
as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirements made before and after giving effect
to such change in GAAP.

 

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Section 26.4     Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.

 

Section 26.5     Construction, etc. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.

 

For the avoidance of doubt, all Schedules and Exhibits attached to this
Agreement shall be deemed to be a part hereof.

 

Section 26.6     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the parties
hereto.

 

Section 26.7     Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THIS AGREEMENT, THE NOTES AND THE SUBSIDIARY
GUARANTIES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.

 

Section 26.8     Jurisdiction and Process; Waiver of Jury Trial. (a) The Company
irrevocably submits to the non-exclusive jurisdiction of any New York State or
federal court sitting in New York New York, over any suit, action or proceeding
arising out of or relating to this Agreement or the Notes. To the fullest extent
permitted by applicable law, the Company irrevocably waives and agrees not to
assert, by way of motion, as a defense or otherwise, any claim that it is not
subject to the jurisdiction of any such court, any objection that it may now or
hereafter have to the laying of the venue of any such suit, action or proceeding
brought in any such court and any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.

 

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(b)     The Company consents to process being served by or on behalf of any
holder of Notes in any suit, action or proceeding of the nature referred to in
Section 26.8(a) by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, return receipt
requested, to it at its address specified in Section 18 or at such other address
of which such holder shall then have been notified pursuant to said Section. The
Company agrees that such service upon receipt (i) shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and (ii) shall, to the fullest extent permitted by applicable law, be
taken and held to be valid personal service upon and personal delivery to it.
Notices hereunder shall be conclusively presumed received as evidenced by a
delivery receipt furnished by the United States Postal Service or any reputable
commercial delivery service.

 

(c)     Nothing in this Section 26.8 shall affect the right of any holder of a
Note to serve process in any manner permitted by law, or limit any right that
the holders of any of the Notes may have to bring proceedings against the
Company in the courts of any appropriate jurisdiction or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

(d)     The parties hereto hereby waive trial by jury in any action brought on
or with respect to this Agreement, the Notes or any other document executed in
connection herewith or therewith.

 

Section 26.9     English Language. The parties hereto acknowledge and confirm
that they have requested that this Agreement as well as all notices and other
documents contemplated hereby be drawn up in the English language. Les parties
aux présentes reconnaissent et confirment qu’elles ont convenu que la présente
convention ainsi que tous les avis et documents qui s’y rattachent soient
rédigés dans la langue anglaise.

 

* * * * *

 

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The execution hereof by the Purchasers shall constitute a contract among the
Company and the Purchasers for the uses and purposes hereinabove set forth. This
Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.

 

 

Very truly yours,

 

        Hecla Mining Company          

 

 

 

 

 

By:

/s/ Lindsay A. Hall

 

 

Name:

Lindsay A. Hall

 

 

Title:

Sr. Vice President & CFO

 

 

Signature Page to Note Purchase Agreement

 

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Accepted as of the date first written above.

 

 

Ressources Québec

 

       

 

 

 

 

 

By:

/s/ Iya Touré

 

 

 

Name: Iya Touré

 

 

 

Title: Authorized Signatory

 

 

Signature Page to Note Purchase Agreement

 

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Accepted as of the date first written above.

 

 

Hecla Alaska LLC,

 

  a Delaware limited liability company  

 

 

 

 

  By: Hecla Limited,       its Managing Member                  

 

By:

/s/ Lindsay A. Hall

 

 

 

Name: Lindsay A. Hall

 

 

 

Title:   Sr. Vice President & CFO

 

                  Hecla Greens Creek Mining Company, a Delaware corporation    
                By: /s/ Keith Malone       Name: Keith Malone      
Title:   President                    

Hecla Juneau Mining Company,

a Delaware corporation

                    By: /s/ Keith Malone       Name: Keith Malone      
Title:   President                    

Hecla Limited,

a Delaware corporation

                    By: /s/ Dean W.A. McDonald       Name: Dean W.A. McDonald  
    Title:   President  

 

Signature Page to Note Purchase Agreement

 

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Burke Trading Inc.,

 

  a Delaware corporation  

 

 

 

 

       

 

By:

/s/ Dean W.A. McDonald

 

 

Name:

Dean W.A. McDonald

 

 

Title:

President

 

                  Hecla Admiralty Company,     a Delaware corporation          
          By: /s/ Keith Malone     Name: Keith Malone     Title: President      
             

Silver Hunter Mining Company,

    a Delaware corporation                     By: /s/ Dean W.A. McDonald      
Name: Dean W.A. McDonald       Title:   President                    

Rio Grande Silver, Inc., a Delaware corporation

                    By: /s/ Dean W.A. McDonald       Name: Dean W.A. McDonald  
    Title:   President                     Hecla Silver Valley, Inc., a Delaware
corporation                     By: /s/ Daniel A. Nelson       Name: Daniel A.
Nelson       Title:   President  

 

Signature Page to Note Purchase Agreement

 

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Hecla MC Subsidiary, LLC,

 

  a Delaware limited liability company  

 

 

 

 

       

 

By:

/s/ Daniel A. Nelson

 

 

 

Name: Daniel A. Nelson

 

 

 

Title:   President

 

                  Hecla Montana, Inc., a Delaware corporation                  
  By: /s/ Luther J. Russell       Name: Luther J. Russell       Title: 
 President                     Revett Silver Company, a Montana corporation    
                By: /s/ Luther J. Russell       Name: Luther J. Russell      
Title:   President                     Troy Mine Inc., a Montana corporation    
              By: /s/ Luther J. Russell       Name: Luther J. Russell      
Title:   President                     RC Resources, Inc., a Montana corporation
                    By: /s/ Luther J. Russell       Name: Luther J. Russell    
  Title: President  

 

Signature Page to Note Purchase Agreement

 

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  Revett Exploration, Inc., a Montana corporation  

 

 

 

 

       

 

By:

/s/ Luther J. Russell

 

 

 

Name: Luther J. Russell

 

 

 

Title:   President

 

                  Revett holdings, Inc., a Montana corporation                  
  By: /s/ Luther J. Russell       Name: Luther J. Russell       Title: 
 President                     Mines Management, Inc.,     an Idaho corporation
                    By: /s/ Dean W.A. McDonald       Name: Dean W.A. McDonald  
    Title:   President                     Newhi, Inc.,     a Washington
corporation                     By: /s/ Dean W.A. McDonald       Name: Dean W.A.
McDonald       Title:    President                     Montanore Minerals Corp.,
    a Delaware corporation                     By: /s/ Dean W.A. McDonald      
Name: Dean W.A. McDonald       Title:   President  

 

Signature Page to Note Purchase Agreement

 

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Information Relating to Purchasers

 

 

 

Name and Address of Purchaser

Principal Amount of
Initial Notes to be
Purchased

       

Name of Purchaser

Address

     

(1)

All payments on account of Notes held by such purchaser shall be made by wire
transfer of immediately available funds for credit to:

       

(2)

Address for all notices related to payments:

       

(3)

Address for all other communications and notices:

       

(4)

Address for Delivery of Notes:

       

(6)

Tax Identification Number:

      Nominee Name:

 

Schedule A

(to Note Purchase Agreement)

 

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DEFINED TERMS

 

As used herein, the following terms have the respective meanings set forth below
or set forth in the Section hereof following such term:

 

“2013 Notes” means the Company’s 6.875% Senior Notes Due 2021.

 

“Acquired Debt” means, with respect to any specified Person:

 

(1)     Indebtedness of any other Person existing at the time such other Person
is merged or consolidated with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging or consolidating with or into, or
becoming a Restricted Subsidiary of, such specified Person; and

 

(2)     Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person at the time of such asset’s acquisition.

 

“Additional Notes” is defined in Section 1.2.

 

“Additional Purchasers” is defined in Section 1.2(d).

 

“Affected Noteholder” is defined in Section 8.8(a).

 

“Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person (other than a Person eligible to report such ownership
on Schedule 13G under the Exchange Act) will be deemed to be control. For
purposes of this definition, the terms “controlling,” “controlled by” and “under
common control with” have correlative meanings.

 

“Affiliated Transactions” is defined in Section 10.6.

 

“Anti-Corruption Laws” is defined in Section 5.16(d)(1).

 

“Agreement” is defined in the introductory paragraph hereof.

 

“Anti-Money Laundering Laws” is defined in Section 5.16(c).

 

“Applicable Canadian Securities Laws” means the securities legislation and
regulations of, and the instruments, policies, rules, orders, codes, notices and
interpretation notes of the applicable Canadian securities regulatory authority;

 

Schedule B-1

(to Note Purchase Agreement)

 

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“Asset Sale” means:

 

(1)     the sale, lease, conveyance or other disposition of any assets or rights
by the Company or any of the Company’s Restricted Subsidiaries; provided that
the sale, lease, conveyance or other disposition of all or substantially all of
the assets of the Company and its Restricted Subsidiaries taken as a whole will
be governed by the provisions of Section 8.9 hereof and/or the provisions of
Section 10.5 hereof and not by the provisions of Section 10.4 hereof; and

 

(2)     the issuance of Equity Interests by any of the Company’s Restricted
Subsidiaries or the sale by the Company or any of the Company’s Restricted
Subsidiaries of Equity Interests in any of the Company’s Subsidiaries.

 

Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:

 

(1)     any single transaction or series of related transactions that involves
assets having a Fair Market Value of less than $20.0 million;

 

(2)     a transfer of assets between or among the Company and its Restricted
Subsidiaries;

 

(3)     an issuance of Equity Interests by a Restricted Subsidiary of the
Company to the Company or to a Restricted Subsidiary of the Company;

 

(4)     the sale, lease or other transfer of products, services or accounts
receivable in the ordinary course of business (including sales under forward
contracts) and any sale or other disposition of damaged, worn-out or obsolete
assets in the ordinary course of business (including the abandonment or other
disposition of intellectual property that is, in the reasonable judgment of the
Company, no longer economically practicable to maintain or useful in the conduct
of the business of the Company and its Restricted Subsidiaries taken as whole);

 

(5)     the licensing or sublicensing of intellectual property or other general
intangibles and licenses, leases or subleases of other property in the ordinary
course of business which do not materially interfere with the business of the
Company and its Restricted Subsidiaries;

 

(6)     any surrender or waiver of contract rights or settlement, release,
recovery on or surrender of contract, tort or other claims in the ordinary
course of business;

 

(7)     the granting of Liens not prohibited by Section 10.3 hereof;

 

(8)     the sale or other disposition of cash or Cash Equivalents;

 

(9)     a Restricted Payment that does not violate Section 10.1 hereof or a
Permitted Investment;

 

(10)     any exchange of assets for assets (including a combination of assets
(which assets may include Capital Stock or any securities convertible into, or
exercisable or exchangeable for, Capital Stock, but which assets may not include
any Indebtedness) and Cash Equivalents) related to a Permitted Business of
comparable or greater market value or usefulness to the business of the Company
and its Restricted Subsidiaries, taken as a whole, which in the event of an
exchange of assets with a Fair Market Value in excess of (a) $15.0 million shall
be evidenced by an Officer’s Certificate and (b) $30.0 million shall be set
forth in a resolution approved by at least a majority of the members of the
Board of Directors of the Company; provided that the Company shall apply any
cash or Cash Equivalents received in any such exchange of assets as described in
Section 10.4(b) hereof;

 

Schedule B-2

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(11)     dispositions of receivables in connection with the compromise,
settlement or collection thereof in the ordinary course of business or in
bankruptcy or similar proceedings and exclusive of factoring or similar
arrangements;

 

(12)     the issuance by a Restricted Subsidiary of preferred stock that is
permitted by Section 10.2 hereof;

 

(13)     any sale of Capital Stock or Indebtedness or other securities of an
Unrestricted Subsidiary;

 

(14)     sales of assets received by the Company or any Restricted Subsidiary
upon foreclosures on a Lien;

 

(15)     the unwinding of any Hedging Obligations (including sales under forward
contracts);

 

(16)     any dispositions to the extent required by, or made pursuant to
customary buy/sell arrangements between the joint venture parties set forth in
joint venture arrangements and similar binding agreements;

 

(17)     the lease or sublease of office space;

 

(18)     the abandonment, farm-out, lease, assignment, sub-lease, license or
sub-license of any real or personal property in the ordinary course of business;

 

(19)     with respect to dispositions of precious metals pursuant to a royalty
or precious metals streaming agreement or similar transaction, payments made to
the Company or a Restricted Subsidiary directly in respect of minerals or
mineral credits delivered to the counterparty of such agreement pursuant to the
terms of such agreement (excluding any front-end payments or deposits payable
thereunder); and

 

(20)     dispositions of receivables in connection with the compromise,
settlement or collection thereof in the ordinary course of business or in
bankruptcy or similar proceeds and exclusive of factoring or similar
arrangements.

 

“Asset Sale Offer” is defined in Section 8.9(1).

 

“Attributable Debt” in respect of a sale and leaseback transaction means, at the
time of determination, the present value of the obligation of the lessee for net
rental payments during the remaining term of the lease included in such sale and
leaseback transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended. Such present value
shall be calculated using a discount rate equal to the rate of interest implicit
in such transaction, determined in accordance with GAAP; provided, however, that
if such sale and leaseback transaction results in a Capital Lease Obligation,
the amount of Indebtedness represented thereby will be determined in accordance
with the definition of “Capital Lease Obligation.”

 

Schedule B-3

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Aurizon Transaction” means the amalgamation with Aurizon Mines Ltd. (together
with any and all other actions related thereto).

 

“Bankruptcy Law” means Title 11, U.S. Code, the Companies’ Creditors Arrangement
Act (Canada), the Bankruptcy and Insolvency Act (Canada) or the Winding-Up and
Restructuring Act (Canada) or any similar federal, state or provincial law for
the relief of debtors.

 

“Blocked Person” is defined in Section 5.16(a).

 

“Board of Directors” means:

 

(1)     with respect to a corporation, the board of directors of the corporation
or any committee thereof duly authorized to act on behalf of such board;

 

(2)     with respect to a partnership, the Board of Directors of the general
partner of the partnership;

 

(3)     with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof or if such
limited liability company is manager-managed, the managers thereof or any
committee of Persons constituting the manager thereof; and

 

(4)     with respect to any other Person, the board or committee of such Person
serving a similar function.

 

“Business Day” means any day other than a Legal Holiday.

 

“Called Principal” is defined in Section 8.6.

 

“Capital Lease” means, at any time, a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

 

“Capital Lease Obligation” means, at the time any determination is to be made,
the amount of the liability in respect of a capital lease that would at that
time be required to be capitalized on a balance sheet prepared in accordance
with GAAP, and the Stated Maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be prepaid or terminated by the lessee without payment of a
penalty.

 

“Capital Stock” means:

 

(1)     in the case of a corporation, corporate stock;

 

(2)     in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;

 

(3)     in the case of a partnership or limited liability company, partnership
interests (whether general or limited) or membership interests; and

 

Schedule B-4

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(4)     any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets of,
the issuing Person, but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.

 

“Cash Equivalents” means:

 

(1)     United States dollars, Canadian dollars and Mexican pesos or such other
local currencies held by the Company and its Subsidiaries, or in a demand
deposit account in the name of the Company or any Subsidiary, from time to time
in the ordinary course of business;

 

(2)     securities issued or directly and fully guaranteed or insured by the
United States or Canadian government or any agency or instrumentality of the
United States or Canadian government (provided that the full faith and credit of
the United States or Canada, as the case may be, is pledged in support of those
securities) having maturities of not more than one year from the date of
acquisition;

 

(3)     certificates of deposit and eurodollar time deposits with maturities of
six months or less from the date of acquisition and bankers’ acceptances with
maturities not exceeding six months, in each case, with any lender party to the
Senior Credit Facility or with any commercial bank the long-term debt of which
is rated at the time of acquisition thereof at least “A” or better by either S&P
or Moody’s, or carrying the equivalent rating by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
investments generally, and having combined capital and surplus in excess of
$500.0 million (or its foreign currency equivalent); provided that Cash
Equivalents may include certificates of deposit and eurodollar time deposits at
a commercial bank that does not meet the ratings or capital requirements set
forth above, in an aggregate amount at any time outstanding, not to exceed, as
of any date of calculation, $1.0 million;

 

(4)     repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;

 

(5)     commercial paper having one of the two highest ratings obtainable from
Moody’s or S&P, or carrying the equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings
of investments and, in each case, maturing within one year after the date of
acquisition; and

 

(6)     money market funds, the investment policies of which require at least
95% of the assets of which constitute Cash Equivalents of the kinds described in
clauses (1) through (5) of this definition.

 

“Change of Control” means the occurrence of any of the following:

 

(1)     the sale, lease, transfer, conveyance or other disposition (other than
by way of merger or consolidation), in one or a series of related transactions,
of all or substantially all of the properties or assets of the Company and its
Subsidiaries taken as a whole to any Person (including any “person” (as that
term is used in Section 13(d)(3) of the Exchange Act));

 

Schedule B-5

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(2)     the adoption of a plan relating to the liquidation or dissolution of the
Company;

 

(3)     the consummation of any transaction (including, without limitation, any
merger or consolidation), the result of which is that any Person (including any
“person” (as defined above)) becomes the Beneficial Owner, directly or
indirectly, of more than 50% of the Voting Stock of the Company, measured by
voting power rather than number of shares; or

 

(4)     the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.

 

“Change of Control Offer” is defined in Section 8.7(a).

 

“Change of Control Payment” is defined in Section 8.7(a).

 

“Change of Control Payment Date” is defined in Section 8.7(a)(ii).

 

“Closing” is defined in Section 3.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

 

“Company” means Hecla Mining Company, a Delaware corporation, and any successor
obligor to its obligations under this Agreement and the Notes.

 

“Company Disclosure Schedule” is defined in Section 5.

 

“Confidential Information” is defined in Section 20.

 

“Consolidated EBITDA” means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus, without
duplication:

 

(1)     provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus

 

(2)     the Fixed Charges of such Person and its Restricted Subsidiaries for
such period, to the extent that such Fixed Charges were deducted in computing
such Consolidated Net Income; plus

 

(3)     any foreign currency translation losses (including losses related to
currency remeasurements of Indebtedness) of such Person and its Restricted
Subsidiaries for such period, to the extent that such losses were taken into
account in computing such Consolidated Net Income; plus

 

(4)     depreciation, amortization (including amortization of intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash charges and expenses (excluding any such non-cash
charge or expense to the extent that it represents an accrual of or reserve for
cash charges or expenses in any future period or amortization of a prepaid cash
charge or expense that was paid in a prior period) of such Person and its
Restricted Subsidiaries for such period to the extent that such depreciation,
amortization and other non-cash charges or expenses were deducted in computing
such Consolidated Net Income; plus

 

Schedule B-6

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(5)     all unusual or non-recurring charges or expenses and all restructuring
charges; minus

 

(6)     any foreign currency translation gains (including gains related to
currency remeasurements of Indebtedness) of such Person and its Restricted
Subsidiaries for such period, to the extent that such gains were taken into
account in computing such Consolidated Net Income; minus

 

(7)     non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business; plus

 

(8)     losses (and minus gains) on Assets Sales, disposals or abandonments;
plus

 

(9)     all costs incurred in connection with the offering of the notes and the
subsequent exchange offer (and any amendment or other modification of notes or
the exchange notes), the Senior Credit Facility; plus

 

(10)     any expenses or charges (other than depreciation, amortization or
depletion expense) related to any Equity Offering, Permitted Investment, merger,
amalgamation, consolidation, arrangement, acquisition, disposition,
recapitalization or the incurrence of Indebtedness permitted to be incurred by
this Indenture (including a refinancing thereof) (whether or not successful);
plus

 

(11)     losses from discontinued operations;

 

in each case, on a consolidated basis and determined in accordance with GAAP.

 

“Consolidated Net Income” means, with respect to any specified Person for any
period, the aggregate of the net income (loss) of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis (excluding the net income
(and loss) of any Unrestricted Subsidiary of such Person), determined in
accordance with GAAP and without any reduction in respect of preferred stock
dividends; provided that:

 

(1)     all extraordinary gains and losses and all gains and losses realized in
connection with any Asset Sale or the disposition of securities or the early
extinguishment of Indebtedness, together with any related provision for taxes on
any such gain or loss, will be excluded;

 

(2)     the net income (and loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting will be
included only to the extent of the amount of dividends or similar distributions
paid in cash to the specified Person or a Restricted Subsidiary of the Person;

 

Schedule B-7

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(3)     solely for the purpose of determining the amount available for
Restricted Payments under Section 10.1(a)(3)(A) hereof, the net income (and
loss) of any Restricted Subsidiary will be excluded to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary of that net income is not at the date of determination permitted
without any prior governmental approval (that has not been obtained) or,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders;
provided that Consolidated Net Income of such Person shall be increased by the
amount of dividends or distributions or other payments that are actually paid in
cash (or to the extent converted into cash) by such Person to the Company or
another Restricted Subsidiary thereof in respect of such period, to the extent
not already included therein;

 

(4)     the cumulative effect of a change in accounting principles will be
excluded;

 

(5)     non-cash gains and losses attributable to movement in the mark-to-market
valuation of Hedging Obligations pursuant to Financial Accounting Standards
Board Statement No. 133 will be excluded;

 

(6)     any amortization of deferred charges resulting from the application of
Accounting Standards Codification 470-20—Debt With Conversion and Other Options
will be excluded;

 

(7)     any impairment charge or asset write-off, including, without limitation,
impairment charges or asset write-offs related to intangible assets, long-lived
assets or investments in debt and equity securities, in each case pursuant to
GAAP, will be excluded;

 

(8)     any non-cash compensation expense recorded from grants of stock
appreciation or similar rights, stock options, restricted stock or other rights
to officers, director or employees will be excluded;

 

(9)     any income (loss) for such period attributable to the early
extinguishment of Indebtedness, Hedging Obligations (other than Hedging
Obligations associated with the Company’s concentrate shipments) or other
derivative instruments will be excluded; and

 

(10)     the effects of adjustments in the inventory, property and equipment,
software, goodwill, other intangible assets and in process research and
development, deferred revenue and debt line items in such Person’s consolidated
financial statements pursuant to GAAP resulting from the application of purchase
accounting in relation to any consummated acquisition after the date of this
Agreement or the amortization or write-off of any amounts thereof, net of taxes,
will be excluded, as will impairment charges whether or not derived therefrom.

 

“Consolidated Net Tangible Assets” means, as of any date, the total consolidated
assets of the Company and its Restricted Subsidiaries, as shown on the most
recent consolidated balance sheet of the Company that is available internally,
minus all current liabilities of the Company and its Restricted Subsidiaries
reflected on such consolidated balance sheet and minus total goodwill and other
intangible assets of the Company and its Restricted Subsidiaries reflected on
such consolidated balance sheet, all calculated on a consolidated basis in
accordance with GAAP; provided that, for purposes of calculating “Consolidated
Net Tangible Assets” for purposes of testing the covenants under this Agreement
in connection with any transaction, the total consolidated assets, current
liabilities, total goodwill and other intangible assets of the Company and its
Restricted Subsidiaries shall be adjusted to reflect any acquisitions and
dispositions of assets that have occurred during the period from the date of the
applicable balance sheet through the applicable date of determination, including
any such transactions occurring on the date of determination.

 

Schedule B-8

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“continuing” means, with respect to any Default or Event of Default, that such
Default or Event of Default has not been cured or waived.

 

“Continuing Directors” means, as of any date of determination, any member of the
Board of Directors of the Company who:

 

(1)     was a member of such Board of Directors on the date of this Agreement;
or

 

(2)     was nominated for election or elected to such Board of Directors with
the approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election.

 

“Controlled Affiliate” means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 20% or more of any class of voting or equity interests of the
Company or any Subsidiary or any Person of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
20% or more of any class of voting or equity interests. As used in this
definition, “Control” means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

 

“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of
their or the Company’s respective Controlled Affiliates and (ii) if the Company
has a parent company, such parent company and its Controlled Affiliates. As used
in this definition, “Controlled” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.

 

“Covenant Defeasance” is defined in Section 22.3.

 

“Credit Facilities” means, one or more debt facilities (including, without
limitation, the Senior Credit Facility) or commercial paper facilities,
indentures or debt security or note issuances, in each case, with banks,
investment banks, insurance companies, mutual funds or other institutional
lenders or investors providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables), letters of credit, other borrowings, debt securities or note
issuances, in each case, as amended, restated, modified, renewed, refunded,
replaced in any manner (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part from time to time.

 

“Deemed Capitalized Leases” means obligations of the Company or any Restricted
Subsidiary of the Company that are classified as “capital lease obligations”
under GAAP due to the application of ASC Topic 840 or any subsequent
pronouncement having similar effect and, except for such regulation or
pronouncement, such obligation would not constitute a Capital Lease Obligation.

 

Schedule B-9

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Default” means any event that is, or with the passage of time or the giving of
notice or both would be, an Event of Default.

 

“Designated Non-cash Consideration” means the Fair Market Value of non-cash
consideration received by the Company or any of its Restricted Subsidiaries in
connection with an Asset Sale that is designated as “Designated Non-cash
Consideration” pursuant to an Officer’s Certificate, setting forth the basis of
such valuation, less the amount of cash or Cash Equivalents received in
connection with a subsequent sale, redemption or payment of, on or with respect
to such Designated Non-cash Consideration.

 

“Discounted Value” is defined in Section 8.6.

 

“Disqualified Stock” means any Capital Stock that, by its terms (or by the terms
of any security into which it is convertible, or for which it is exchangeable,
in each case, at the option of the holder of the Capital Stock), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
of the Capital Stock, in whole or in part, on or prior to the date that is 91
days after the date on which the Notes mature. Notwithstanding the preceding
sentence, any Capital Stock that would constitute Disqualified Stock solely
because the holders of the Capital Stock have the right to require the Company
to repurchase such Capital Stock upon the occurrence of a change of control or
an asset sale will not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 10.1 hereof. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Agreement will be the maximum
amount that the Company and its Restricted Subsidiaries may become obligated to
pay upon the maturity of, or pursuant to any mandatory redemption provisions of,
such Disqualified Stock, exclusive of accrued dividends, expenses and
indemnification obligations.

 

“Environmental Laws” means any and all federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, licenses or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including but not limited to those related to Hazardous
Materials.

 

“Equity Interests” means Capital Stock and all warrants, options or other rights
to acquire Capital Stock (but excluding any debt security that is convertible
into, or exchangeable for, Capital Stock prior to its conversion or exchange).

 

‘ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder from
time to time in effect.

 

“ERISA Affiliate” means any trade or business (whether or not incorporated) that
is treated as a single employer together with the Company under section 414 of
the Code.

 

“Event of Default” is defined in Section 11.

 

Schedule B-10

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Excess Proceeds” is defined in Section 10.4(c).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Execution Date” is defined in Section 3.

 

“Existing Indebtedness” means all Indebtedness of the Company and its
Subsidiaries (other than the Senior Credit Facility and Indebtedness described
in clauses (3), (4), (6), (7), (8), (9), (10), (11), (12) or (13) of
Section 10.2(b) hereof) in existence on the date of this Agreement, until such
amounts are repaid.

 

“Fair Market Value” means the value that would be paid by a willing buyer to an
unaffiliated willing seller in a transaction not involving distress or necessity
of either party. Fair Market Value shall be conclusively determined in good
faith by (i) the Company’s Board of Directors and set forth in a resolution of
the Company’s Board of Directors or (ii) if an Officer of the Company determines
in good faith that the Fair Market Value is less than $50.0 million, an Officer
of the Company and set forth in an Officer’s Certificate.

 

“Fixed Charge Coverage Ratio” means with respect to any specified Person for any
period, the ratio of the Consolidated EBITDA of such Person for such period to
the Fixed Charges of such Person for such period. In the event that the
specified Person or any of its Restricted Subsidiaries incurs, assumes,
guarantees, repays, repurchases, redeems, defeases or otherwise discharges any
Indebtedness (other than ordinary working capital borrowings) or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge
Coverage Ratio will be calculated giving pro forma effect (determined in
accordance with Regulation S-X under the Securities Act, but including any Pro
Forma Cost Savings) to such incurrence, assumption, Guarantee, repayment,
repurchase, redemption, defeasance or other discharge of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom, as if the same had occurred at the beginning of the
applicable four-quarter reference period.

 

In addition, for purposes of calculating the Fixed Charge Coverage Ratio:

 

(1)     acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations, or any
Person or any of its Restricted Subsidiaries acquired by the specified Person or
any of its Restricted Subsidiaries, and including all related financing
transactions and including increases in ownership of Restricted Subsidiaries,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date, or that are to be made on the
Calculation Date, will be given pro forma effect (in accordance with Regulation
S-X under the Securities Act, but including all Pro Forma Cost Savings) as if
they had occurred on the first day of the four-quarter reference period;

 

(2)     the Consolidated EBITDA attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses (and ownership
interests therein) disposed of prior to the Calculation Date, will be excluded;

 

Schedule B-11

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(3)     the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses (and ownership interests
therein) disposed of prior to the Calculation Date, will be excluded, but only
to the extent that the obligations giving rise to such Fixed Charges will not be
obligations of the specified Person or any of its Restricted Subsidiaries
following the Calculation Date;

 

(4)     any Person that is a Restricted Subsidiary on the Calculation Date will
be deemed to have been a Restricted Subsidiary at all times during such
four-quarter period;

 

(5)     any Person that is not a Restricted Subsidiary on the Calculation Date
will be deemed not to have been a Restricted Subsidiary at any time during such
four-quarter period; and

 

(6)     if any Indebtedness bears a floating rate of interest, the interest
expense on such Indebtedness will be calculated as if the rate in effect on the
Calculation Date had been the applicable rate for the entire period (taking into
account any Hedging Obligation applicable to such Indebtedness if such Hedging
Obligation has a remaining term as at the Calculation Date in excess of 12
months).

 

“Fixed Charges” means, with respect to any specified Person for any period, the
sum, without duplication, of:

 

(1)     the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue discount,
non-cash interest payments (other than any non-cash interest income or expense
attributable to the movement in the mark-to-market valuation of Hedging
Obligations or other derivative instruments pursuant to GAAP), the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations (but excluding any interest
expense attributable to Deemed Capitalized Leases), imputed interest with
respect to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers’ acceptance financings, and
net of the effect of all payments made or received pursuant to Hedging
Obligations in respect of interest rates; plus

 

(2)     the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus

 

(3)     any interest on Indebtedness of another Person that is guaranteed by
such Person or one of its Restricted Subsidiaries or secured by a Lien on assets
of such Person or one of its Restricted Subsidiaries, whether or not such
Guaranty or Lien is called upon; plus

 

(4)     the product of (a) all dividends, whether paid or accrued and whether or
not in cash, on any series of preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividends on Equity Interests payable solely
in Equity Interests of the Company (other than Disqualified Stock) or to the
Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, determined on a consolidated basis in
accordance with GAAP; plus

 

Schedule B-12

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(5)     any amortization of deferred charges resulting from the application of
Accounting Standards Codification 470-20—Debt With Conversion and Other Options
that may be settled in cash upon conversion (including partial cash settlement).

 

“GAAP” means United States generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.

 

“Governmental Action” is defined in Section 5.7.

 

“Governmental Authority” means

 

(a)     the government of

 

(i)     the United States of America or any state or other political subdivision
thereof, or

 

(ii)     Canada or any province or political subdivision thereof, or

 

(iii)     any other jurisdiction in which the Company or any Restricted
Subsidiary conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Restricted Subsidiary, or

 

(b)     any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.

 

“Governmental Official” means any governmental official or employee, employee of
any government-owned or government-controlled entity, political party, any
official of a political party, candidate for political office, official of any
public international organization or anyone else acting in an official capacity.

 

“Government Securities” means securities that are:

 

(1)     direct obligations of Canada for the timely payment of which its full
faith and credit is pledged; or

 

(2)     obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of Canada, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by Canada,

 

which, in either case, are not callable or redeemable at the option of the
issuers thereof, and shall also include a depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such Government Securities or a specific payment of principal of or
interest on any such Government Securities held by such custodian for the
account of the holder of such depositary receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depositary receipt.

 

Schedule B-13

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Guaranty” means a guarantee other than by endorsement of negotiable instruments
for collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness (whether arising by virtue of partnership arrangements,
or by agreements to keep-well, to purchase assets, goods, securities or
services, to take or pay or to maintain financial statement conditions or
otherwise).

 

“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or
other substances that might pose a hazard to health and safety, the removal of
which may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage or filtration of which is or
shall be restricted, prohibited or penalized by any applicable law including,
but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated
biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar
restricted, prohibited or penalized substances.

 

“Hecla Public Disclosure Record” means all documents filed or furnished under
applicable securities laws by or on behalf of the Company on SEDAR or EDGAR
between January 1, 2017 and the date hereof.

 

“Hedging Obligations” means, with respect to any specified Person, the
obligations of such Person under:

 

(1)     interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements;

 

(2)     commodity futures or forward contracts, commodity swaps and commodity
options;

 

(3)     other agreements or arrangements designed to manage interest rates or
interest rate risk; and

 

(4)     other agreements or arrangements designed to protect such Person against
fluctuations in currency exchange rates or commodity prices or availability
(including both physical and financial settlement transactions).

 

“holder” means, with respect to any Note the Person in whose name such Note is
registered in the register maintained by the Company pursuant to Section 13.1.

 

“INHAM Exemption” is defined in Section 6.2(e).

 

“Indebtedness” means, with respect to any specified Person, any indebtedness of
such Person (excluding accrued expenses and trade payables), whether or not
contingent:

 

(1)     in respect of borrowed money;

 

Schedule B-14

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(2)     evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);

 

(3)     in respect of banker’s acceptances;

 

(4)     representing Capital Lease Obligations or Attributable Debt in respect
of sale and leaseback transactions;

 

(5)     representing the balance deferred and unpaid of the purchase price of
any property or services due more than six months after such property is
acquired or such services are completed; or

 

(6)     representing any net obligation under any Hedging Obligations,

 

if and to the extent any of the preceding items (other than letters of credit,
Attributable Debt and Hedging Obligations) would appear as a liability upon a
balance sheet of the specified Person prepared in accordance with GAAP, but
excluding Deemed Capitalized Leases. In addition, the term “Indebtedness”
includes all Indebtedness of others secured by a Lien on any asset of the
specified Person (whether or not such Indebtedness is assumed by the specified
Person) and, to the extent not otherwise included, the Guaranty by the specified
Person of any Indebtedness of any other Person. Indebtedness shall be calculated
without giving effect to the effects of Statement of Financial Accounting
Standards No. 133 and related interpretations to the extent such effects would
otherwise increase or decrease an amount of Indebtedness for any purpose under
this Agreement as a result of accounting for any embedded derivatives created by
the terms of such Indebtedness. Notwithstanding the foregoing, money borrowed
and set aside at the time of the incurrence of any Indebtedness in order to
pre-fund the payment of interest on such Indebtedness shall not be deemed to be
“Indebtedness”; provided that such money is held to secure the payment of such
interest.

 

In addition, “Indebtedness” of the Company and its Restricted Subsidiaries shall
include (without duplication) Indebtedness described in the preceding paragraph
that would not appear as a liability on the balance sheet of the Company and its
Restricted Subsidiaries if:

 

(1)     such Indebtedness is the obligation of a partnership or joint venture
that is not a Subsidiary of the Company (a “Joint Venture”);

 

(2)     the Company or any of its Restricted Subsidiaries is a general partner
of the Joint Venture (a “General Partner”); and

 

(3)     there is recourse, by contract or operation of law, with respect to the
payment of such Indebtedness to property or assets of the Company or any of its
Restricted Subsidiaries; and then such Indebtedness shall be included in an
amount not to exceed:

 

(a)     the lesser of (i) the net assets of the General Partner and (ii) the
amount of such obligations to the extent that there is recourse, by contract or
operation of law, to the property or assets of the Company or any of its
Restricted Subsidiaries; or

 

Schedule B-15

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(b)     if less than the amount determined pursuant to clause (a) immediately
above, the actual amount of such Indebtedness that is recourse to the Company or
any of its Restricted Subsidiaries, if the Indebtedness is evidenced by a
writing and is for a determinable amount.

 

“Initial Notes” is defined in Section 1.1.

 

“Institutional Investor” means (a) any original Purchaser or Additional
Purchaser of a Note, (b) any holder of a Note holding (together with one or more
of its affiliates more than $1,000,000 of the aggregate principal amount of the
Notes then outstanding, (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other, similar
financial institution or entity, regardless of legal form and (d) any Related
Fund of any holder of any Note.

 

“Investments” means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guaranties or other obligations), advances or capital
contributions (excluding commission, travel and similar advances to officers and
employees made in the ordinary course of business and any advance payments made
to vendors of goods or services used in the ordinary course of business that are
made prior to the delivery of the applicable good or service), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition equal to the
Fair Market Value of the Company’s Investments in such Subsidiary that were not
sold or disposed of in an amount determined as provided in Section 10.1(c)
hereof. The acquisition by the Company or any Restricted Subsidiary of the
Company of a Person that holds an Investment in a third Person will be deemed to
be an Investment by the Company or such Restricted Subsidiary in such third
Person in an amount equal to the Fair Market Value of the Investments held by
the acquired Person in such third Person in an amount determined as provided in
Section 10.1(c) hereof. Except as otherwise provided in this Agreement, the
amount of an Investment will be determined at the time the Investment is made
and without giving effect to subsequent changes in value.

 

“Legal Defeasance” is defined in Section 22.2.

 

“Legal Holiday” means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue on
such payment for the intervening period.

 

“Lien” “ means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement, any lease in the nature
thereof, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.

 

Schedule B-16

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Make-Whole Amount” shall have the meaning (i) set forth in Section 8.6 with
respect to any Initial Note and (ii) set forth in the applicable Supplement with
respect to any other Series of Notes.

 

“Material” means material in relation to the business, results of operations, or
financial condition of the Company and its Restricted Subsidiaries taken as a
whole.

 

“Material Adverse Effect” means (a) a material adverse effect on the business,
results of operations, or financial condition, of the Company and its Restricted
Subsidiaries taken as a whole, or (b) the occurrence of any event or condition
which will prevent the Company or the Subsidiary Guarantors from paying their
obligations under this Agreement (including any Supplement) and the Notes, or
(c) a material adverse effect on the validity or enforceability of this
Agreement (including any Supplement), the Notes or the Subsidiary Guaranty.

 

“Maturity Date” shall have the meaning (i) set forth in Section 1.1 with respect
to any Initial Note and (ii) set forth in the applicable Supplement with respect
to any other Series of Notes.

 

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term
is defined in section 4001(a)(3) of ERISA).

 

“Net Proceeds” means the aggregate cash proceeds and Cash Equivalents received
by the Company or any of its Restricted Subsidiaries in respect of any Asset
Sale (including, without limitation, any cash or Cash Equivalents received upon
the sale or other disposition of any non-cash consideration received in any
Asset Sale, but excluding any royalty payments or other future stream of
payments relating to precious metals), net of the direct costs relating to such
Asset Sale, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result of the Asset Sale, and taxes paid or payable as a result of the Asset
Sale, in each case, after taking into account any available tax credits or
deductions and any tax sharing arrangements, and any reserve for adjustment or
indemnification obligations in respect of the sale price of such asset or assets
established by the Company or such Restricted Subsidiary in good faith.

 

“Non-Recourse Debt” means Indebtedness:

 

(1)     as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable as a guarantor or otherwise; and

 

(2)     as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries (other than the Equity Interests of an Unrestricted Subsidiary).

 

“Notes” is defined in Section 1.1.

 

Schedule B-17

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Noteholder Sanctions Notice” is defined in Section 8.8(a).

 

“Noteholder Sanctions Violation” is defined in Section 10.8.

 

“Obligations” means any principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.

 

“OFAC” is defined in Section 5.16(a).

 

“OFAC Listed Person” is defined in Section 5.16(a).

 

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is
responsible for administering and enforcing. A list of OFAC Sanctions Programs
may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.

 

“Offer Amount” is defined in Section 8.9(2).

 

“Offer Period” is defined in Section 8.9(2).

 

“Offering Memorandum” means the final offering memorandum, dated April 9, 2013,
relating to the offering of the Company’s 6.875% Senior Notes Due 2021.

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, the Treasurer or an
Assistant Treasurer, or the Secretary of the Company or an Assistant Secretary,
except that with respect to any annual compliance certificate delivered pursuant
to this Agreement, such term means only the Chief Executive Officer, the Chief
Financial Officer, or the Chief Accounting Officer of the Company.

 

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of
any other officer of the Company whose responsibilities extend to the subject
matter of such certificate.

 

“Opinion of Counsel” means an opinion from legal counsel who is reasonably
acceptable to the Purchasers. The counsel may be an employee of or counsel to
the Company or any Subsidiary of the Company.

 

“Payment Default” is defined in Section 11(7)(A).

 

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA or any successor thereto.

 

“Permitted Business” means:

 

(1)     the acquisition, exploration, development, operation and disposition of
mining and precious or base metal processing properties and assets;

 

(2)     any of the businesses in which the Company and its Restricted
Subsidiaries are engaged on the date of this Agreement; and

 

Schedule B-18

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(3)     any other business that is the same as, or reasonably related, ancillary
or complementary to, the businesses described in clauses (1) and (2) above.

 

“Permitted Business Investments” means Investments made in (A) the ordinary
course of, or of a nature that are customary in, the mining business as a means
of exploiting, exploring for, acquiring, developing, processing, gathering,
producing, transporting or marketing gold, silver or other precious or base
metals and metal by-products used, useful or created in the mining business,
including through agreements, acquisitions, transactions, interests or
arrangements which permit one to share (or have the effect of sharing) risks or
costs, comply with regulatory requirements regarding ownership or satisfy other
customary objectives in the mining business, and in any event including, without
limitation, Investments made in connection with or in the form of (i) direct or
indirect ownership interests in mining properties, gathering or upgrading
systems or facilities and (ii) operating agreements, development agreements,
area of mutual interest agreements, pooling agreements, service contracts, joint
venture agreements, partnership or limited liability company agreements (whether
general or limited), or other similar or customary agreements, transactions,
properties, interests or arrangements, and Investments and expenditures in
connection therewith or pursuant thereto; and (B) Persons engaged in a Permitted
Business.

 

“Permitted Investments” means:

 

(1)     any Investment in the Company or in a Restricted Subsidiary of the
Company;

 

(2)     any Investment in Cash Equivalents;

 

(3)     any Investment by the Company or any Restricted Subsidiary of the
Company in a Person, if as a result of such Investment:

 

(a)     such Person becomes a Restricted Subsidiary of the Company; or

 

(b)     such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary of the Company;

 

(4)     any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 10.4
hereof;

 

(5)     any acquisition of assets or Capital Stock solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the Company;

 

(6)     any Investments received in compromise or resolution of (A) obligations
of trade creditors or customers that were incurred in the ordinary course of
business of the Company or any of its Restricted Subsidiaries, including
pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer; or (B) litigation,
arbitration or other disputes;

 

(7)     Investments represented by Hedging Obligations;

 

(8)     repurchases of the Notes;

 

Schedule B-19

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(9)     any guarantee of Indebtedness permitted to be incurred by Section 4.09
hereof; provided that if such Indebtedness can only be incurred by the Company
or Subsidiary Guarantors, then such guarantees are only permitted by this clause
to the extent made by the Company or a Subsidiary Guarantor, and
(ii) performance guarantees with respect to obligations incurred by the Company
or any of its Restricted Subsidiaries that are permitted by this Agreement;

 

(10)     any Investment existing on, or made pursuant to binding commitments
existing on, the date of this Agreement and any Investment consisting of an
extension, modification or renewal of any Investment existing on, or made
pursuant to a binding commitment existing on, the date of this Agreement;
provided that the amount of any such Investment may be increased (a) as required
by the terms of such Investment as in existence on the date of this Agreement or
(b) as otherwise permitted under this Agreement;

 

(11)     Investments acquired after the date of this Agreement as a result of
the acquisition by the Company or any Restricted Subsidiary of the Company of
another Person, including by way of a merger, amalgamation or consolidation with
or into the Company or any of its Restricted Subsidiaries in a transaction that
is not prohibited by Section 10.5 hereof after the date of this Agreement to the
extent that such Investments were not made in contemplation of such acquisition,
merger, amalgamation or consolidation and were in existence on the date of such
acquisition, merger, amalgamation or consolidation;

 

(12)     Permitted Business Investments having an aggregate Fair Market Value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (12) that are at the time outstanding not to
exceed, as of the date any such Investment is made, the greater of (x) $300.0
million and (y) 13.5% of Consolidated Net Tangible Assets as of the date of such
Investment;

 

(13)     Guaranties by the Company or any Restricted Subsidiary of operating
leases (other than Capitalized Lease Obligations) or of other obligations that
do not constitute Indebtedness, in each case entered into by any Restricted
Subsidiary in the ordinary course of business;

 

(14)     receivables owing to the Company or any Restricted Subsidiary and
prepaid expenses created or acquired in the ordinary course of business;

 

(15)     Investments in the nature of pledges or deposits with respect to leases
or utilities provided to third parties in the ordinary course of business;

 

(16)     Investments in escrow or trust funds in the ordinary course of
business;

 

(17)     Investments consisting of licensing or contribution of intellectual
property pursuant to joint marketing arrangements with other Persons; and

 

(18)     other Investments in any Person having an aggregate Fair Market Value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (18) that are at the time outstanding not to
exceed, as of the date of such Investment, the greater of (x) $100.0 million and
(y) 4.5% of Consolidated Net Tangible Assets as of the date of such Investment.

 

Schedule B-20

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Permitted Liens” means:

 

(1)     Liens on assets of the Company or any of its Restricted Subsidiaries
securing the Indebtedness permitted to be incurred under Section 10.2(b)(1);

 

(2)     Liens on assets of the Company or any of its Restricted Subsidiaries
securing Indebtedness consisting of Hedging Obligations or Treasury Management
Arrangements;

 

(3)     Liens in favor of the Company or its Restricted Subsidiaries;

 

(4)     Liens on property of a Person existing at the time such Person becomes a
Restricted Subsidiary of the Company or is merged with or into or consolidated
with the Company or any Restricted Subsidiary of the Company; provided that such
Liens were in existence prior to the contemplation of such Person becoming a
Restricted Subsidiary of the Company or such merger or consolidation and do not
extend to any assets other than those of the Person that becomes a Restricted
Subsidiary of the Company or is merged with or into or consolidated with the
Company or any Restricted Subsidiary of the Company;

 

(5)     Liens on property (including Capital Stock) existing at the time of
acquisition of the property by the Company or any Subsidiary of the Company;
provided that such Liens were in existence prior to such acquisition and not
incurred in contemplation of such acquisition;

 

(6)     Liens to secure the performance of statutory obligations, insurance,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business (including Liens to secure letters
of credit issued to assure payment of such obligations);

 

(7)     Liens to secure Indebtedness represented by Capital Lease Obligations
(other than Deemed Capitalized Leases), mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part
of the purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of the Company
or any of its Restricted Subsidiaries, in an aggregate principal amount at any
time outstanding, including all Permitted Refinancing Indebtedness incurred to
renew, refund, refinance, replace, defease or discharge any Indebtedness, when
taken together with all other Indebtedness secured pursuant to this clause (7),
not to exceed, as of any date of incurrence, the greater of (x) $80.0 million
and (y) 3.5% of Consolidated Net Tangible Assets as of such date of incurrence;
provided that such Liens apply only to the assets acquired with or financed by
such Indebtedness;

 

(8)     Liens existing on the date of this Indenture (other than Liens permitted
under clause (1));

 

(9)     Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted; provided that any
reserve or other appropriate provision as is required in conformity with GAAP
has been made therefor;

 

(10)     Liens imposed by law, such as carriers’, warehousemen’s, landlord’s and
mechanics’ Liens, in each case, incurred in the ordinary course of business;

 

Schedule B-21

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(11)     survey exceptions, easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning or other restrictions as to the use
of real property that were not incurred in connection with Indebtedness and that
do not in the aggregate materially impair the use of said properties in the
operation of the business of such Person;

 

(12)     Liens created for the benefit of (or to secure) the Notes (or the Note
Guarantees);

 

(13)     Liens to secure any Permitted Refinancing Indebtedness permitted to be
incurred under this Indenture; provided, however, that:

 

(a)     the new Lien is limited to all or part of the same property and assets
that secured or, under the written agreements pursuant to which the original
Lien arose, could secure the original Lien (plus improvements and accessions to
such property or proceeds or distributions thereof); and

 

(b)     the Indebtedness secured by the new Lien is not increased to any amount
greater than the sum of (x) the outstanding principal amount, or, if greater,
committed amount, of the Indebtedness renewed, refunded, refinanced, replaced,
defeased or discharged with such Permitted Refinancing Indebtedness and (y) an
amount necessary to pay any fees and expenses, including premiums, related to
such renewal, refunding, refinancing, replacement, defeasance or discharge;

 

(14)     Liens on insurance policies and proceeds thereof, or other deposits, to
secure insurance premium financings;

 

(15)     filing of Uniform Commercial Code financing statements as a
precautionary measure in connection with operating leases;

 

(16)     bankers’ Liens, rights of setoff, Liens arising out of judgments or
awards not constituting an Event of Default and notices of lis pendens and
associated rights related to litigation being contested in good faith by
appropriate proceedings;

 

(17)     Liens on cash, Cash Equivalents or other property arising in connection
with the defeasance, discharge or redemption of Indebtedness;

 

(18)     Liens on specific items of inventory or other goods (and the proceeds
thereof) of any Person securing such Person’s obligations in respect of bankers’
acceptances or trade-related letters of credit permitted under Section 4.9
hereof issued or created in the ordinary course of business for the account of
such Person to facilitate the purchase, shipment or storage of such inventory or
other goods;

 

(19)     grants of intellectual property licenses (including software and other
technology licenses) in the ordinary course of business;

 

(20)     Liens arising out of conditional sale, title retention, consignment or
similar arrangements for the sale of goods entered into in the ordinary course
of business;

 

Schedule B-22

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(21)     Liens incurred or pledges or deposits made in the ordinary course of
business in connection with workers’ compensation, unemployment insurance and
other types of social security and employee health and disability benefits
(including pledges or deposits securing liability to insurance carriers under
insurance or self-insurance arrangements);

 

(22)     deposits made in the ordinary course of business to secure liability to
insurance carriers;

 

(23)     with respect to any lease or sublease entered into by the Company or
any Restricted Subsidiary in the ordinary course of business as a lessee,
tenant, subtenant or other occupant, mortgages, obligations, liens and other
encumbrances incurred, created or assumed or permitted to exist and arising by,
through or under a landlord or sublandlord of such leased real property
encumbering such landlord’s or sublandlord’s interest in such leased real
property;

 

(24)     Liens incurred in connection with surety bonds or cash collateral
posted by the Company or any of its Restricted Subsidiaries from time to time in
order to secure reclamation obligations;

 

(25)     all reservations in the original grant of mineral rights in any lands
and premises or any interests therein and all statutory exceptions,
qualifications and reservations in respect of title;

 

(26)     Liens on the assets of any Restricted Subsidiary of the Company that is
not a Guarantor and which secure Indebtedness or other obligations of such
Restricted Subsidiary (or of another Restricted Subsidiary that is not a
Guarantor) that are permitted to be incurred under Section 4.9 hereof;

 

(27)     other Liens incurred in the ordinary course of business of the Company
or any Restricted Subsidiary of the Company with respect to obligations in an
aggregate principal amount at any time outstanding, when taken together with all
other Indebtedness secured pursuant to this clause (27), not to exceed, as of
any date of incurrence, the greater of (x) $100.0 million and (y) 4.5% of
Consolidated Net Tangible Assets as of such date of incurrence; and

 

(28)     Liens securing the Escrow Account for the benefit of the Holders of the
Notes.

 

Liens to secure Credit Facilities will be deemed to have been incurred in
reliance on clause (1) of this definition of “Permitted Liens.”

 

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to renew, refund, refinance, replace, defease or discharge
other Indebtedness of the Company or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided that:

 

(1)     the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness renewed, refunded,
refinanced, replaced, defeased or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses, including premiums,
incurred in connection therewith);

 

Schedule B-23

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(2)     such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to Maturity
that is (a) equal to or greater than the Weighted Average Life to Maturity of
the Indebtedness being renewed, refunded, refinanced, replaced, defeased or
discharged or (b) more than 90 days after the final maturity date of the Notes;

 

(3)     if the Indebtedness being renewed, refunded, refinanced, replaced,
defeased or discharged is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Notes on terms at least as favorable to the Holders of Notes as those contained
in the documentation governing the Indebtedness being renewed, refunded,
refinanced, replaced, defeased or discharged; and

 

(4)     such Indebtedness is incurred either by the Company or by the Restricted
Subsidiary of the Company that was the obligor on the Indebtedness being
renewed, refunded, refinanced, replaced, defeased or discharged and is
guaranteed only by Persons who were obligors or guarantors on the Indebtedness
being renewed, refunded, refinanced, replaced, defeased or discharged.

 

“Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.

 

“Principal Mine Assets” means the Lucky Friday mine located in Mullan, Idaho,
the Greens Creek mine located in Admiralty Island, Alaska and the Casa Berardi
mine located in Quebec, Canada, in each case, as described in the Offering
Memorandum.

 

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA)
subject to Title I of ERISA that is or, within the preceding five years, has
been established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability.

 

“Pro Forma Cost Savings” means, with respect to any four-quarter period, the
reduction in net costs and expenses that:

 

(1)     the Company determines in good faith were directly attributable to an
acquisition, Investment, disposition, merger, consolidation or discontinued
operation or other specified action that occurred during the four-quarter period
or after the end of the four-quarter period and on or prior to the Calculation
Date;

 

(2)     were actually implemented prior to the Calculation Date in connection
with or as a result of an acquisition, Investment, disposition, merger,
consolidation or discontinued operation or other specified action and that are
supportable and quantifiable by the underlying accounting records; or

 

(3)     relate to an acquisition, Investment, disposition, merger, consolidation
or discontinued operation or other specified action and that the Company
reasonably determines are probable based upon specifically identifiable actions
to be taken within six months of the date of the closing of the acquisition,
Investment, disposition, merger, consolidation or discontinued operation or
specified action.

 

Schedule B-24

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“property” or “properties” means, unless otherwise specifically limited, real or
personal property of any kind, tangible or intangible, choate or inchoate.

 

“Proposed Prepayment Date” is defined in Section 8.7(c).

 

“Proposed Sanctions Prepayment Date” is defined in Section 8.8(b).

 

“PTE” is defined in Section 6.2(1).

 

“Purchase Date” is defined in Section 8.9(2).

 

“Purchasers” means each of the purchasers that has executed and delivered this
Agreement to the Company and such Purchaser’s successors and assigns (so long as
any such assignment complies with Section 13.2), provided, however, that any
Purchaser of a Note that ceases to be the registered holder or a beneficial
owner (through a nominee) of such Note as the result of a transfer thereof
pursuant to Section 13.2 shall cease to be included within the meaning of
“Purchaser” of such Note for the purposes of this Agreement upon such transfer.

 

“QPAM Exemption” is defined in Section 6.2(4).

 

“Qualifying Equity Interests” means Equity Interests of the Company other than
Disqualified Stock.

 

“Qualified Institutional Buyer” means any Person who is a “qualified
institutional buyer” within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.

 

“Related Fund” means, with respect to any holder of any Note, any fund or entity
that (i) invests in securities or bank loans, and (ii) is advised or managed by
such holder, the same investment advisor as such holder or by an affiliate of
such holder or such investment advisor.

 

“Reported” is defined in Section 8.6.

 

“Required Holders” means, at any time (i) prior to the Closing, the Purchasers
and (ii) on or after the Closing, the holders of more than 50% in principal
amount of the Notes at the time outstanding (exclusive of Notes then owned by
the Company or any of its Affiliates).

 

“Responsible Officer” means any Senior Financial Officer and any other officer
of the Company with responsibility for the administration of the subject matter
covered by the relevant portion of this Agreement.

 

“Restricted Investment” means an Investment other than a Permitted Investment.

 

“Restricted Subsidiary” of a Person means any Subsidiary of the referent Person
that is not an Unrestricted Subsidiary.

 

“Reinvestment Yield” is defined in Section 8.6.

 

Schedule B-25

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Remaining Average Life” is defined in Section 8.6.

 

“Remaining Scheduled Payments” is defined in Section 8.6.

 

“Restricted Payment” is defined in Section 10.1.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

 

“Senior Credit Facility” means that certain Fourth Amended and Restated Credit
Agreement, dated as of May 20, 2016 (as amended, supplemented, amended and
restated or otherwise modified from time to time) by and among the Company, as
parent and as a guarantor, The Bank of Nova Scotia, as Administrative Agent,
Hecla Alaska LLC, Hecla Greens Creek Mining Company and Hecla Juneau Mining
Company, as borrowers, and the other parties thereto.

 

“Senior Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.

 

“Series” means any series of Notes issued pursuant to this Agreement or any
Supplement hereto.

 

“Settlement Date” is defined in Section 8.6.

 

“Significant Subsidiary” means any Restricted Subsidiary that would be a
“significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Agreement.

 

“Source” is defined in Section 6.2.

 

“Stated Maturity” means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of this Agreement, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.

 

“Subsidiary” means, with respect to any specified Person:

 

(1)     any corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled (without
regard to the occurrence of any contingency and after giving effect to any
voting agreement or stockholders’ agreement that effectively transfers voting
power) to vote in the election of directors, managers or trustees of the
corporation, association or other business entity is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and

 

Schedule B-26

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

(2)     any partnership or limited liability company of which (a) more than 50%
of the capital accounts, distribution rights, total equity and voting interests
or general and limited partnership interests, as applicable, are owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person or a combination thereof, whether in the form of
membership, general, special or limited partnership interests or otherwise, and
(b) such Person or any Subsidiary of such Person is a controlling general
partner or otherwise controls such entity.

 

Unless the context otherwise clearly requires, any reference to a “Subsidiary”
is a reference to a Subsidiary of the Company.

 

“Subsidiary Guarantor” means any Subsidiary of the Company that executes a
Notation of Guaranty in accordance with the provisions of this Agreement, and
their respective successors and assigns, in each case, until the Subsidiary
Guaranty of such Person has been released in accordance with the provisions of
this Agreement.

 

“Subsidiary Guaranty” means the Subsidiary Guaranty provided in Section 25
hereof and the Notation of Guaranty delivered pursuant to Section 2.2 and each
other Subsidiary Guaranty provided under Section 25 hereof and any Notation of
Guaranty hereafter executed and delivered by a Subsidiary of the Company for the
benefit of the holders of the Notes in accordance with Section 9.6.

 

“Supplement” is defined in Section 1.2 of this Agreement.

 

“Unrestricted Subsidiary” means any Subsidiary of the Company that is designated
by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant
to a resolution of the Board of Directors of the Company, but only to the extent
that such Subsidiary:

 

(1)     has no Indebtedness other than Non-Recourse Debt;

 

(2)     except as permitted by Section 10.6 hereof, is not party to any
agreement, contract, arrangement or understanding with the Company or any
Restricted Subsidiary of the Company unless the terms of any such agreement,
contract, arrangement or understanding are not materially less favorable, taken
as a whole, to the Company or such Restricted Subsidiary than those that might
be obtained at the time from Persons who are not Affiliates of the Company; and

 

(3)     is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results..

 

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

 

“U.S. Economic Sanctions” is defined in Section 5.16(a).

 

Schedule B-27

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

“Voting Stock” of any specified Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

 

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at
any date, the number of years obtained by dividing:

 

(1)     the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by

 

(2)     the then outstanding principal amount of such Indebtedness.

 

Schedule B-28

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

COMPANY DISCLOSURE SCHEDULE

 

(see attached)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule C

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

FORM OF SERIES 2018-A NOTE

HECLA MINING COMPANY.

4.68% SERIES 2018-A SENIOR NOTE DUE MAY 1, 2021

 

No. [_____]  [Date] CAD$[_____]  

    

For Value Received, the undersigned, Hecla Mining Company (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [_________], or registered assigns, the
principal sum of [__________] CANADIAN Dollars (or so much thereof as shall not
have been prepaid) on May 1, 2021, with interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid balance hereof at the rate
of 4.68% per annum from the date hereof, payable semi-annually, on the 1st day
of May and November in each year, commencing with the May or November next
succeeding the date hereof, until the principal hereof shall have become due and
payable.

 

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in lawful money of Canada at [______________________]
in [__________________] or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreement referred to below.

 

This Note is one of a Series of Series 2018-A Senior Notes (herein called the
“Notes”) issued pursuant to the Note Purchase Agreement, dated as of March [__],
2018 (as from time to time amended, supplemented or modified, the “Note Purchase
Agreement”), among the Company, the Purchasers named therein and Additional
Purchasers of Notes from time to time issued pursuant to any Supplement to the
Note Purchase Agreement. This Note and the holder hereof are entitled equally
and ratably with the holders of all other Notes of all Series from time to time
outstanding under the Note Purchase Agreement to all the benefits provided for
thereby or referred to therein. Each holder of this Note will be deemed, by its
acceptance hereof, to have (i) agreed to the confidentiality provisions set
forth in Section 20 of the Note Purchase Agreement and (ii) made the
representations set forth in Section 6.2 of the Note Purchase Agreement. Unless
otherwise indicated, capitalized terms used in this Note shall have the
respective meanings ascribed to such terms in the Note Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note
of the same Series for a like principal amount will be issued to, and registered
in the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to the contrary.

 

“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [the date which is four months and one day after
the date of Closing].”

 

 

--------------------------------------------------------------------------------

 

 

The Company will make required prepayments of principal on the dates and in the
amounts specified in the Note Purchase Agreement. This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreement, but not otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

 

Pursuant to the Note Purchase Agreement and Notation of Guaranty dated as of
[________ __], 2018, one or more Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, and interest on
this Note and the performance by the Company of all of its obligations contained
in the Note Purchase Agreement all as more fully set forth in said Notation of
Guaranty.

 

This Note shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.

 

 

Hecla Mining Company

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

--------------------------------------------------------------------------------

 

 

FORM OF NOTATION OF GUARANTY

 

 

 

For value received, each Subsidiary Guarantor (which term includes any successor
Person under the Agreement) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Agreement and subject to the
provisions in the Note Purchase Agreement dated as of March 5, 2018 (the
“Agreement”) among Hecla Mining Company, a Delaware corporation (the “Company”),
the Subsidiary Guarantors party thereto and the Purchasers thereunder, (a) the
due and punctual payment of the principal of, premium on, if any, interest and
Special Interest, if any, on, the Notes, whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal of, premium on, if any, interest and Special Interest, if any, on, the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the holders of the Notes all in accordance with
the terms of the Agreement and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Subsidiary Guarantors to the holders of Notes pursuant to
the Note Guarantee and the Indenture are expressly set forth in Section 24 of
the Agreement and reference is hereby made to the Agreement for the precise
terms of the Note Guarantee.

 

Capitalized terms used but not defined herein have the meanings given to them in
the Agreement.

 

 

[NAME OF GUARANTOR(S)]

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Exhibit 2.2

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

FORM OF OPINION OF SPECIAL U.S. COUNSEL
TO THE COMPANY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 4.4(A)

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

 

 

 

 

 

Hecla Mining Company

 

 

 

 

 

 

[Number] Supplement to Note Purchase Agreement

 

 

 

Dated as of ________ __, 20__

 

 

 

 

 

 

 

 

 

 

 

Re:     $____________ _____% Series ____ Senior Notes,

 

due ________ __, 20__

 

 

 

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

 

Exhibit S

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

Hecla Mining Company
6500 N. Mineral Drive, Suite 200
Coeur d’Alene, Idaho 83815-9408

 

Dated as of
___________, 20__

 

To the Purchaser(s) named in
Schedule A hereto

 

Ladies and Gentlemen:

 

This [Number] Supplement to Note Purchase Agreement (this “Supplement”) between
Hecla Mining Company, a Delaware corporation (the “Company”), and the
institutional investors named on Schedule A attached hereto (the “Purchasers”).

 

Reference is hereby made to that certain Note Purchase Agreement dated as of
[______ __], 2018 (the “Note Purchase Agreement”) among the Company and the
purchasers listed on Schedule A thereto. All capitalized terms not otherwise
defined herein shall have the meaning specified in the Note Purchase Agreement.
Reference is further made to Section 1.2 of the Note Purchase Agreement which
requires that, prior to the delivery of any Additional Notes, the Company and
each Additional Purchaser shall execute and deliver a Supplement.

 

The Company hereby agrees with the Purchaser(s) as follows:

 

1.     The Company has authorized the issue and sale of $__________ aggregate
principal amount of its __% Series __ Senior Notes due _________ ___________
(the “Series __ Notes”). The Series __ Notes, together with the Initial Notes
[and the Series __ Notes] initially issued pursuant to the Note Purchase
Agreement [and the ________ Supplement, respectively,] and each series of
Additional Notes which may from time to time hereafter be issued pursuant to the
provisions of Section 2.2 of the Note Purchase Agreement, are collectively
referred to as the “Notes” (such term shall also include any such notes issued
in substitution therefor pursuant to Section 13 of the Note Purchase Agreement).
The Series __ Notes shall be substantially in the form set out in Exhibit 1
hereto with such changes therefrom, if any, as may be approved by the
Purchaser(s) and the Company.

 

2.     Subject to the terms and conditions hereof and as set forth in the Note
Purchase Agreement and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to each Purchaser,
and each Purchaser agrees to purchase from the Company, Series __ Notes in the
principal amount set forth opposite such Purchaser’s name on Schedule A hereto
at a price of 100% of the principal amount thereof on the closing date
hereinafter mentioned. The obligations of each Purchaser hereunder are several
and not joint obligations and no Purchaser shall have any obligation or any
liability to any Person for the performance or nonperformance by any other
Purchaser hereunder.

 

Exhibit S-1

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

3.     The sale and purchase of the Series __ Notes to be purchased by each
Purchaser shall occur at the offices of [________] at 10:00 A.M. New York time,
at a closing (the “Closing”) on ________ ________ or on such other Business Day
thereafter on or prior to ________, __ 20__ as may be agreed upon by the Company
and the Purchasers. At the Closing, the Company will deliver to each Purchaser
the Series __ Notes to be purchased by such Purchaser in the form of a single
Series __ Note (or such greater number of Series __ Notes in denominations of at
least $100,000 as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser’s name (or in the name of such Purchaser’s
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number at ________ Bank, [Insert Bank address, ABA number for wire
transfers, and any other relevant wire transfer information]. If, at the
Closing, the Company shall fail to tender such Series      __ Notes to any
Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to any Purchaser’s
satisfaction, such Purchaser shall, at such Purchaser’s election, be relieved of
all further obligations under this Supplement, without thereby waiving any
rights such Purchaser may have by reason of such failure or such nonfulfillment.

 

4.     The obligation of each Purchaser to purchase and pay for the Series __
Notes to be sold to such Purchaser at the Closing is subject to the fulfillment
to such Purchaser’s satisfaction, prior to the Closing, of the conditions set
forth in Section 1.2 and Section 4 of the Note Purchase Agreement (each
reference to “Closing Date” or “Closing” set forth therein shall be deemed to be
a reference to the “Closing Date” or “Closing” of the “Series ______ Notes”)
with respect to the Series __ Notes to be purchased at the Closing, and to the
following additional conditions:

 

(a)     Except as supplemented, amended or superseded by the representations and
warranties set forth in Exhibit A hereto, each of the representations and
warranties of the Company set forth in Section 5 of the Note Purchase Agreement
shall be correct as of the date of the Closing and the Company shall have
delivered to each Purchaser an Officer’s Certificate, dated the date of the
Closing certifying that such condition has been fulfilled.

 

(b)     Contemporaneously with the Closing, the Company shall sell to each
Purchaser, and each Purchaser shall purchase the Series __ Notes to be purchased
by such Purchaser at the Closing as specified in Schedule A.

 

5.     [Here insert special provisions for Series __ Notes including prepayment
provisions applicable to Series __ Notes (including Make-Whole Amount) and
closing conditions applicable to Series __ Notes].

 

6.     Each Purchaser represents and warrants that the representations and
warranties set forth in Section 5 of the Note Purchase Agreement are true and
correct on the date hereof with respect to the purchase of the Series __ Notes
by such Purchaser.

 

7.     The Company and each Purchaser agree to be bound by and comply with the
terms and provisions of the Note Purchase Agreement as fully and completely as
if such Purchaser were an original signatory to the Note Purchase Agreement.

 

Exhibit S-2

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

The execution hereof shall constitute a contract between the Company and the
Purchaser(s) for the uses and purposes hereinabove set forth, and this agreement
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.

 

 

Hecla Mining Company

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

Exhibit S-3

(to Note Purchase Agreement)

-78-

--------------------------------------------------------------------------------

 

 

Accepted as of ______ __, 20__

 

 

[Purchaser]

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

Exhibit S-4

(to Note Purchase Agreement)

 

--------------------------------------------------------------------------------

 

 

Information Relating to Purchasers

 

Name and Address of Purchaser

Principal Amount

of Series __ Notes

to be Purchased

   

[Name of Purchaser]

$

    (1)

All payments by wire transfer of immediately available funds to:

               

with sufficient information to identify the source and application of such
funds.

              (2)

All notices of payments and written confirmations of such wire transfers:

              (3)

All other communications:

 

 

Schedule A

(to Supplement)

 

--------------------------------------------------------------------------------

 

 

Supplemental Representations

 

The Company represents and warrants to each Purchaser that, except as otherwise
(i) set forth in the Hecla Public Disclosure Record (to the extent the exception
disclosed is reasonably apparent on its face) or (ii) disclosed in the Company
Disclosure Schedule, each of the representations and warranties set forth in
Section 5 of the Note Purchase Agreement is true and correct in all material
respects as of the date hereof with respect to the Series __ Notes with the same
force and effect as if each reference to “Initial Notes” set forth therein was
modified to refer to the “Series __ Notes”, each reference to “this Agreement”
therein was modified to refer to the Note Purchase Agreement as supplemented by
the ______ Supplement and each reference to “the Purchasers” set forth therein
was modified to refer to “the institutional investors named on Schedule A to the
______ Supplement. The Section references hereinafter set forth correspond to
the similar sections of the Note Purchase Agreement which are supplemented
hereby:

 

Section 5.3. Disclosure. The Note Purchase Agreement and the certificates
delivered to each Purchaser by or on behalf of the Company in connection with
the transactions contemplated by the Note Purchase Agreement and the ______
Supplement and the financial statements listed in the Company Disclosure
Schedule to the ______ Supplement (the Note Purchase Agreement and the
certificates and such financial statements delivered to each Purchaser being
referred to, collectively, as the “Disclosure Documents”), taken as a whole, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made. Since __________, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company or any of its Restricted Subsidiaries except changes
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect. There is no fact known to the Company that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the Disclosure Documents.

 

Section 5.4. Organization and Ownership of Shares of Restricted Subsidiaries.
(a) Schedule 5.4 of the Company Disclosure Schedule to the ______ Supplement
contains (except as noted therein) complete and correct lists (i) of the
Company’s Restricted and Unrestricted Subsidiaries as of the date hereof,
showing, as to each Subsidiary, the correct name thereof, the jurisdiction of
its organization, and the percentage of shares of each class of its capital
stock or similar equity interests outstanding owned by the Company and each
other Subsidiary, (ii) of the Company’s Affiliates, other than Restricted
Subsidiaries, and (iii) of the Company’s directors and senior officers.

 

Section 5.13. Private Offering by the Company. Neither the Company nor anyone
acting on its behalf has offered the Series __ Notes or any similar securities
for sale to, or solicited any offer to buy the Series __ Notes or any similar
securities from, or otherwise approached or negotiated in respect thereof with,
any person other than the Purchasers and not more than [_________] other
Institutional Investors, each of which has been offered the Series __ Notes at a
private sale for investment. Neither the Company nor anyone acting on its behalf
has taken, or will take, any action that would subject the issuance or sale of
the Notes to the registration requirements of section 5 of the Securities Act or
to the registration requirements of any securities or blue sky laws of any
applicable jurisdiction.

 

Exhibit 1-1

(to Supplement)

 

--------------------------------------------------------------------------------

 

 

Section 5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of the Series __ Notes to _____________________ and for
general corporate purposes. No part of the proceeds from the sale of the Series
__ Notes pursuant to the Supplement will be used, directly or indirectly, for
the purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve the Company in a violation of Regulation
X of said Board (12 CFR 224) or to involve any broker or dealer in a violation
of Regulation T of said Board (12 CFR 220). Margin stock does not constitute
more than 1% of the value of the consolidated assets of the Company and its
Restricted Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms “margin stock” and “purpose of buying or carrying”
shall have the meanings assigned to them in said Regulation U.

 

Section 5.15. Existing Indebtedness; Future Liens. Neither the Company nor any
Restricted Subsidiary is in default and no waiver of default is currently in
effect, in the payment of any principal or interest on any Indebtedness of the
Company or such Restricted Subsidiary and no event or condition exists with
respect to any Indebtedness of the Company or any Restricted Subsidiary, that
would permit (or that with notice or the lapse of time, or both, would permit)
one or more Persons to cause such Indebtedness to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.

 

[Add any additional Sections as appropriate at the time the Series __ Notes are
issued]

 

Exhibit 1-2

(to Supplement)

 

--------------------------------------------------------------------------------

 

 

[FORM OF SERIES __ NOTE]

 

HECLA MINING COMPANY

 

_____% SERIES __ SENIOR NOTE DUE _________

 

No. [_____] [Date] $[_____]  

     

For Value Received, the undersigned, Hecla Mining Company (herein called the
“Company”), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [_________], or registered assigns, the
principal sum of [__________] Dollars (or so much thereof as shall not have been
prepaid) on _________, with interest (computed on the basis of a 360-day year of
twelve 30-day months) (a) on the unpaid balance hereof at the rate of _________%
per annum from the date hereof, payable [semiannually], on the _____ day of
______ and _________ in each year, commencing with the ____ or _______ next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment of
interest and, during the continuance of an Event of Default, on such unpaid
balance and on any overdue payment of any Make Whole Amount, at a rate per annum
from time to time equal to [___________________________________], payable
[semiannually] as aforesaid (or, at the option of the registered holder hereof,
on demand).

 

Payments of principal of, interest on and any Make-Whole Amount with respect to
this Note are to be made in [lawful money of the United States of America] at
______________ in ____________, or at such other place as the Company shall have
designated by written notice to the holder of this Note as provided in the Note
Purchase Agreement referred to below.

 

This Note is one of the Series ____ Senior Notes (herein called the “Notes”)
issued pursuant to a Supplement to the Note Purchase Agreement, dated as of
[_______ ___], 2018 (as from time to time amended, supplemented or modified, the
“Note Purchase Agreement”), among the Company, the Purchasers named therein and
Additional Purchasers of Notes from time to time issued pursuant to any
Supplement to the Note Purchase Agreement. This Note and the holder hereof are
entitled equally and ratably with the holders of all other Notes of all Series
from time to time outstanding under the Note Purchase Agreement to all the
benefits provided for thereby or referred to therein. Each holder of this Note
will be deemed, by its acceptance hereof, to have (i) agreed to the
confidentiality provisions set forth in Section 20 of the Note Purchase
Agreement and (ii) made the representations set forth in Section 6.2 of the Note
Purchase Agreement. Unless otherwise indicated, capitalized terms used in this
Note shall have the respective meanings ascribed to such terms in the Note
Purchase Agreement.

 

This Note is a registered Note and, as provided in the Note Purchase Agreement,
upon surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such holder’s attorney duly authorized in writing, a new Note
of the same Series for a like principal amount will be issued to, and registered
in the name of, the transferee. Prior to due presentment for registration of
transfer, the Company may treat the person in whose name this Note is registered
as the owner hereof for the purpose of receiving payment and for all other
purposes, and the Company will not be affected by any notice to the contrary.

 

Exhibit 1-1

(to Supplement)

 

--------------------------------------------------------------------------------

 

 

The Company will make required prepayments of principal on the dates and in the
amounts specified in the Note Purchase Agreement. [This Note is not subject to
regularly scheduled prepayments of principal.] This Note is also subject to
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Note Purchase Agreement, but not otherwise.

 

If an Event of Default occurs and is continuing, the principal of this Note may
be declared or otherwise become due and payable in the manner, at the price
(including any applicable Make-Whole Amount) and with the effect provided in the
Note Purchase Agreement.

 

Pursuant to the Note Purchase Agreement and the Notation of Guaranty dated as of
[________ __], 2018, one or more Subsidiaries of the Company have absolutely and
unconditionally guaranteed payment in full of the principal of, and interest on
this Note and the performance by the Company of all of its obligations contained
in the Note Purchase Agreement all as more fully set forth in said Notation of
Guaranty.

 

This Note shall be construed and enforced in accordance with, and the rights of
the parties shall be governed by, the law of the State of New York excluding
choice-of-law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.

 

 

Hecla Mining Company

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

Exhibit 1-2

(to Supplement)