EXHIBIT 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of September 18, 2006 (this
“Amendment”), to the Existing Credit Agreement (as defined below) is made by
HECLA MINING COMPANY, a Delaware corporation (the “ Borrower”), and the Lenders
(such capitalized term and other capitalized terms used in this preamble and the
recitals below to have the meanings set forth in, or are defined by reference
in, Article I below).

W I T N E S S E T H:

WHEREAS, the Borrower, the Lenders, The Bank of Nova Scotia, as the
Administrative Agent, and N M Rothschild & Sons Limited, as Technical Agent, are
all parties to the Credit Agreement, dated as of September 12, 2005 (as amended
or otherwise modified prior to the date hereof, the “Existing Credit Agreement”,
and as amended by this Amendment and as the same may be further amended,
supplemented, amended and restated or otherwise modified from time to time, the
“Credit Agreement”);

WHEREAS, pursuant to Section 2.8 of the Credit Agreement, the Borrower has
requested that the Lenders extend the Stated Maturity Date for a period of one
year and the Lenders are willing, on the terms and subject to the conditions
hereinafter set forth, to provide such extension; and

WHEREAS, the Borrower has requested that the Lenders amend certain other
provisions of the Existing Credit Agreement and the Lenders are willing, on the
terms and subject to the conditions hereinafter set forth, to modify the
Existing Credit Agreement as set forth below;

NOW, THEREFORE, the parties hereto hereby covenant and agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1.   Certain Definitions.   The following terms when used in this
Amendment shall have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):

“Amendment” is defined in the preamble.

“Amendment Effective Date” is defined in Article III.

“Borrower” is defined in the preamble.

“Credit Agreement” is defined in the first recital.

 

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“Existing Credit Agreement” is defined in the first recital.

SECTION 1.2. Other Definitions. Terms for which meanings are provided in the
Existing Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.

ARTICLE II

AMENDMENTS TO CREDIT AGREEMENT

Effective on (and subject to the occurrence of) the Amendment Effective Date,
the provisions of the Existing Credit Agreement referred to below are hereby
amended in accordance with this Article II.

SECTION 2.1.   Amendments to Section 1.1.   Section 1.1 of the Existing Credit
Agreement is hereby amended as follows:

(a)          The definition of “Adjusted EBITDA” is hereby amended by inserting
the clause “but in an amount not to exceed $5,400,000 for Fiscal Year 2006 or
$2,600,000 for Fiscal Year 2007” at the end of clause (b)(ii) of such
definition.

(b)          The definition of “Stated Maturity Date” is hereby amended by
replacing the date “September 12, 2007” contained therein with “September 12,
2008”.

SECTION 2.2.   Amendment to Section 7.2.5.   Clause (m) of Section 7.2.5 of the
Existing Credit Agreement is hereby amended by replacing the amount “$5,400,000”
contained in clause (ii) thereof with the amount “$15,000,000”.

 

SECTION 2.3.   Amendment to Disclosure Schedule.   Item 6.8 of the Disclosure
Schedule is hereby amended by supplementing the table therein with the
Subsidiaries set forth on Annex I hereto.

 

ARTICLE III

CONDITIONS TO EFFECTIVENESS

This Amendment and the amendments contained herein shall become effective on the
date (the “Amendment Effective Date”) when each of the conditions set forth in
this Article III shall have been fulfilled to the satisfaction of the
Administrative Agent.

SECTION 3.1.   Counterparts.   The Administrative Agent shall have received
counterparts hereof executed on behalf of the Borrower and the Lenders.

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SECTION 3.2.   Affirmation and Consent.   The Administrative Agent shall have
received, with counterparts for each Lender, a duly executed copy of an
Affirmation and Consent, dated as of the Amendment Effective Date, in form and
substance satisfactory to the Administrative Agent, duly executed and delivered
by each of the Obligors (other than the Borrower).

SECTION 3.3.   Costs and Expenses, etc.   The Administrative Agent shall have
received for the account of each Lender, all fees, costs and expenses due and
payable pursuant to Sections 2.8, 3.3 and 10.3 of the Credit Agreement, if then
invoiced.

SECTION 3.4.   Satisfactory Legal Form.   The Administrative Agent and its
counsel shall have received all information, and such counterpart originals or
such certified or other copies of such materials, as the Administrative Agent or
its counsel may reasonably request, and all legal matters incident to the
effectiveness of this Amendment shall be satisfactory to the Administrative
Agent and its counsel. All documents executed or submitted pursuant hereto or in
connection herewith shall be reasonably satisfactory in form and substance to
the Administrative Agent and its counsel.

ARTICLE IV

MISCELLANEOUS

SECTION 4.1.   Cross-References.   References in this Amendment to any Article
or Section are, unless otherwise specified, to such Article or Section of this
Amendment.

SECTION 4.2.   Loan Document Pursuant to Existing Credit Agreement.   This
Amendment is a Loan Document executed pursuant to the Existing Credit Agreement
and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with all of the terms and provisions of
the Existing Credit Agreement, as amended hereby, including Article X thereof.

SECTION 4.3.   Successors and Assigns.   This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.

SECTION 4.4.   Counterparts.   This Amendment may be executed by the parties
hereto in several counterparts, each of which when executed and delivered shall
be an original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a manually executed
counterpart of this Amendment.

SECTION 4.5.   Governing Law.   THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

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SECTION 4.6.   Full Force and Effect; Limited Amendment.   Except as expressly
amended hereby, all of the representations, warranties, terms, covenants,
conditions and other provisions of the Existing Credit Agreement and the Loan
Documents shall remain unchanged and shall continue to be, and shall remain, in
full force and effect in accordance with their respective terms. The amendments
set forth herein shall be limited precisely as provided for herein to the
provisions expressly amended herein and shall not be deemed to be an amendment
to, waiver of, consent to or modification of any other term or provision of the
Existing Credit Agreement or any other Loan Document or of any transaction or
further or future action on the part of any Obligor which would require the
consent of the Lenders under the Existing Credit Agreement or any of the Loan
Documents.

SECTION 4.7.   Representations and Warranties.   In order to induce the Lenders
to execute and deliver this Amendment, the Borrower hereby represents and
warrants to the Lenders, on the Amendment Effective Date, both before and after
giving effect to this Amendment, all statements set forth in Section 5.3.1 of
the Credit Agreement are true and correct as of such date, except to the extent
that any such statement expressly relates to an earlier date (in which case such
statement was true and correct on and as of such earlier date).

 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the date first above written.

 

  HECLA MINING COMPANY       By:    /s/   Lewis E. Walde     Name:   Lewis E.
Walde
Title:     Chief Financial Officer  

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  LENDERS:

THE BANK OF NOVA SCOTIA       By:    /s/   Ray Clarke     Title:     Director  
    By:    /s/   Bob Deol     Title:     Associate       N M ROTHSCHILD & SONS
LIMITED       By:    /s/   N.A. Woods     Title:     Director       By:   
/s/   George Pyper     Title:     Assistant Director

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