Document:

Hecla Mining Company Exhibit 10.11 to Form 10-Q

Exhibit 10.11

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of November 8, 2006 (this “Amendment”), to the Existing Credit Agreement (as defined below) is made by HECLA MINING COMPANY (to be known as Hecla Limited following the Reorganization (as defined below)), a Delaware corporation (the “Borrower”), 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) and The Bank of Nova Scotia, as the administrative agent (in such capacity, the “Administrative Agent”) for the Lenders, and is acknowledged and accepted by HECLA HOLDINGS INC. (to be known as
Hecla Mining Company following the Reorganization (as defined below)), a Delaware corporation (“Holdings”).

W I T N E S S E T H:

WHEREAS, the Borrower, the Lenders, 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, the Borrower has proposed a restructuring (the “Proposed Restructuring”) of the capital structure of its subsidiaries, whereby (i) the Borrower has created, and owns 100% of the issued and outstanding Capital Securities of, Holdings, (ii) Holdings has created, and owns 100% of the issued and outstanding Capital Securities of, Hecla Merger Sub Inc., a Delaware corporation and a newly formed, wholly owned Subsidiary of Holdings (“Merger Sub”), (iii) pursuant to the Agreement and Plan of Reorganization dated as of the date hereof (the “Reorganization Agreement”), among the Borrower, Holdings and Merger Sub, the Borrower will merge with and into Merger Sub, with the Borrower being the surviving corporation and
converting its capital stock into the capital stock of Holdings (collectively, the “Reorganization”), and as a result of the Reorganization, the Borrower will become a Subsidiary of Holdings, (iv) the Borrower will assign to Holdings, and Holdings will assume, the employee benefit plans of the Borrower pursuant to an Assignment and Assumption Agreement, dated as of the date hereof (the “Assignment Agreement”), by and between the Borrower and Holdings, in form and substance satisfactory to the Administrative Agent, and (v) Holdings will guarantee the Obligations; and

WHEREAS, the Borrower has requested that the Lenders amend certain provisions of the Existing Credit Agreement such that the Reorganization does not result in a Change in Control and amend certain other provisions of the Existing Credit Agreement, including amendments relating to the Proposed Restructuring, 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):

“Administrative Agent” is defined in the preamble.

“Amendment” is defined in the preamble.

“Amendment Effective Date” is defined in Article III.

“Assignment Agreement” is defined in the second recital.

“Borrower” is defined in the preamble.

“Credit Agreement” is defined in the first recital.

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

“Holdings” is defined in the second recital.

“Merger Sub” is defined in the second recital.

“Parent Guaranty” means the Parent Guaranty executed and delivered by an Authorized Officer of Holdings pursuant to the terms of this Amendment, in form and substance satisfactory to the Administrative Agent, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“Proposed Restructuring” is defined in the second recital.

“Reorganization” is defined in the second recital.

“Reorganization Agreement” is defined in the second 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 Article I. Article I of the Existing Credit Agreement is hereby amended as follows:

SECTION 2.1.1. Amendments to Section 1.1. Section 1.1 of the Existing Credit Agreement is hereby amended by 

(a)          replacing each reference to “the Borrower” with “Holdings” or “the Borrower’s” with “Holdings’”, as the case may be, appearing in each of the following definitions:  “Adjusted EBITDA”, “Capital Expenditures”, “Compliance Certificate”, “Current Liabilities”, “Designated Preferred Stock”, “EBITDA”, “Immaterial Subsidiary”, “Interest Expense”, “Lender’s Environmental Liability”, “Material Subsidiary”, “Multiemployer Plan”, “Net Income”, “Net Worth”, “Pension Plan”, “Permitted Acquisition”, “Redeemable Capital Securities”, “Restricted Payment”, “Series B Preferred
Stock”, “Small Lot Repurchase Agreement”, and “Subsidiary”; and

(b)          by inserting the following definitions in the appropriate alphabetical order in Section 1.1:

 

“Holdings” means Hecla Holdings Inc. (to be known as Hecla Mining Company following the Second Amendment Effective Date), a Delaware corporation.

 

“Parent Guaranty” means the Parent Guaranty dated as of the Second  Amendment Effective Date, executed and delivered by an Authorized Officer of Holdings, as amended, supplemented, amended and restated or otherwise modified from time to time.

 

“Second Amendment Effective Date” means November 8, 2006.

SECTION 2.1.2. Further Amendments to Section 1.1. Section 1.1 of the Existing Credit Agreement is hereby further amended as follows:

(a)          The following definitions are hereby amended and restated in their entirety to read as follows:

 

“Change in Control” means

 

 (a)         the failure of Holdings at any time to directly own beneficially and of record on a fully diluted basis 100% of the outstanding Capital Securities of the Borrower, such Capital Securities to be held free and clear of all Liens (other than Liens permitted pursuant to clause (a) of Section 7.2.3); or

 (b)         the failure of the Borrower at any time to directly own beneficially and of record on a fully diluted basis 100% of the outstanding Capital Securities of the Subsidiary Guarantor, such Capital Securities to be held free and clear of all Liens (other than Liens permitted pursuant to clause (a) of Section 7.2.3); or

 

 (c)         at any time any Person, or Persons acting in concert, shall become the “beneficial holder” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of Voting Securities of Holdings representing more than 50% of the issued and outstanding Voting Securities of Holdings; or

 

 (d)         during any period of 24 consecutive months commencing on or after the Effective Date, individuals who at the beginning of such period constituted the Board of Directors of Holdings (together with any new directors whose election to such Board or whose nomination for election by the stockholders of Holdings was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Holdings then in office; or

 

 (e)         the occurrence of any “Change of Control” (or similar term) under (and as defined in) any Subordinated Debt Document or Designated Preferred Stock Document.

 

“Current Assets” means the total assets which would properly be classified in accordance with Section 1.4 as consolidated current assets of Holdings and its Subsidiaries.

 

“Fixed Charge Coverage Ratio” means, at any time, the ratio of:

 

(a)  the sum, without duplication, of (i) Unrestricted Cash of Holdings and its wholly-owned Subsidiaries as of the first day of the period consisting of the most recently completed Fiscal Quarter and the three immediately preceding Fiscal Quarters (e.g., in determining the Fixed Charge Coverage Ratio as of December 31, 2006, Unrestricted Cash of Holdings and its wholly-owned Subsidiaries as of January 1, 2006 would be included to this clause (a)(i)), (ii) the portion of the Loan Commitment Amount not utilized as of the later of (A) such first day or (B) the date of this Agreement, (iii) EBITDA for such period, (iv) interest income paid in cash to Holdings and its wholly-owned Subsidiaries during such period and (v) Net Equity/Subordinated Debt Proceeds received by Holdings or the Borrower during such period (provided that the aggregate amount
of assets held by the Borrower in Venezuela or by Subsidiaries of the Borrower organized or operating in Venezuela that would otherwise be included in this clause (a) shall not exceed $4,000,000 (it being understood that the amount of EBITDA added pursuant to subclause (a)(iii) shall not be subject to such limitation)),

to

 

(b)  the sum, without duplication, of (i) Interest Expense for such period, (ii) scheduled principal repayments of Indebtedness made during such period (including, and together with, payments of Earn-Out Obligations during such period (other than payments made with Capital Securities (other than Redeemable Capital Securities) of Holdings), (iii) Capital Expenditures made during such period, (iv) idle property expenditures for such period (including, and together with, the aggregate amount expended by Holdings and its Subsidiaries during such period with respect to any litigation, labor controversy, arbitration or governmental investigation or proceeding, including in respect of any judgment or settlement relating thereto, less the amount of cash reserves set forth on the December 31, 2004 consolidated balance sheet of the Borrower and its Subsidiaries with respect to such expenditures), less
any such expenditures that were subtracted in the determination of EBITDA for such period pursuant to clause (d) of the definition thereof, (v) Restricted Payments made during such period (whether or not permitted hereunder, but excluding Restricted Payments permitted pursuant to clause (f) of Section 7.2.6) and (vi) the aggregate amount expended by the Borrower and its Subsidiaries in cash during such period in respect of Permitted Acquisitions (less the net cash proceeds of Capital Securities or Indebtedness issued in substantially concurrent transactions during such period for the purpose of financing such Permitted Acquisitions).

 

“Net Equity/Subordinated Debt Proceeds” means, with respect to (a) the sale or issuance after the Effective Date by the Borrower (and after the Second Amendment Effective Date by Holdings) of any of its Capital Securities or warrants or options to acquire such Capital Securities or the exercise of any such warrants or options or the contribution to the capital of the Borrower after the Effective Date (and of Holdings after the Second  Amendment Effective Date) or (b) the issuance after the Effective Date by the Borrower of Subordinated Debt (and after the Second Amendment Effective Date by Holdings), in each case to the extent permitted hereunder, the excess of: (i) the gross cash proceeds received by the Borrower (or Holdings as the case may be) from such sale, exercise, issuance or contribution, over (ii) all reasonable and customary underwriting commissions and legal, investment banking, brokerage and accounting and other professional fees, sales commissions and disbursements actually incurred in connection with such sale, issuance, exercise or contribution which have not been paid to Affiliates of the Borrower (or Holdings as the case may be) in connection therewith.

 

“Senior Debt” means, at any time, the outstanding principal amount of all Indebtedness of Holdings and its Subsidiaries of the type referred to in clause (a), clause (b), clause (c), clause (f) (other than Earn-out Obligations (A) that have not been reduced to a fixed amount or (B) to the extent such obligations may, in accordance with their terms, be satisfied at the sole option of the obligor thereof at any time regardless of the happening of any event by the delivery of Capital Securities (other than Redeemable Capital Securities) of Holdings), clause (g) and clause
(h), in each case of the definition of “Indebtedness” (exclusive of (i) Indebtedness secured on a first-priority basis by any restricted cash deposit in an amount not exceeding the amount of such restricted cash deposit, (ii) Subordinated Debt and (iii) to the extent constituting Indebtedness, Designated Preferred Stock, and any Contingent Liability in respect of any of the foregoing.

 

“wholly owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person all of the outstanding Capital Securities of which (other than any director’s qualifying shares or investments by foreign nationals mandated by applicable laws) is owned directly or indirectly by such Person.

(b)          The definitions of “Commitment Termination Event” is hereby amended by deleting the words “with respect to the Borrower” appearing in clause (a) thereof.

(c)          The definition of “Controlled Group” is hereby amended by replacing the words “the Borrower” appearing in each case therein with the words “Holdings and the Borrower”.

(d)          The definition of “Immaterial Subsidiary” is hereby amended by amending and restating the last sentence thereof in its entirety to read “In no event shall the Borrower or the Subsidiary Guarantor be an Immaterial Subsidiary.”

(e)          The definition of “Impermissible Qualification” is hereby amended by inserting the words “Holdings or” or “Holdings’ or” immediately preceding the words “the Borrower” or “the Borrower’s”, respectively, appearing in each instance therein other than in clause (d)(ii).

(f)           The definition of “Loan Documents” is hereby amended by inserting the words “the Parent Guaranty,” immediately after the words “each Security Agreement,” appearing therein.

(g)          Each of the definitions of “Material Adverse Effect” and “Subordinated Debt” are hereby amended by replacing the words “the Borrower” appearing therein with the words “Holdings or the Borrower”. 

(h)          The definition of “Obligor” is hereby amended by inserting the word “Holdings,” immediately preceding the words “the Borrower” appearing therein.

SECTION 2.1.3. Amendments to Section 1.4. Section 1.4 of the Existing Credit Agreement is hereby amended by (i) replacing the words “the Borrower” appearing in clause (a) thereof with the word “Holdings” and (ii) replacing the phrase “then the Borrower’s compliance” appearing therein with the phrase “then Holdings’ compliance”.

 

SECTION 2.2. Amendments to Article II. Section 2.2.2 of the Existing Credit Agreement is hereby amended by replacing the words “The Borrower shall” appearing in the first sentence thereof with the phrase “Each of Holdings and the Borrower shall”.

 

SECTION 2.3. Amendments to Article VI. Article VI of the Existing Credit Agreement is hereby amended by 

(a)          replacing each reference in such Article to “the Borrower” with “Holdings”, other than 

(i)           those references to the Borrower in Article VI as they relate to the Greens Creek Joint Venture and its properties,

(ii)          those references to the Borrower in (A) Section 6.6, (B) Section 6.8, (C) Section 6.16 and (D) Section 6.20, and

 

	
             
 	
            (iii)
 	
            as otherwise set forth in this Section 2.3.
 

(b)          replacing the words “the Borrower” appearing in the lead-in sentence to Article VI with the words “each of Holdings and the Borrower”;

(c)          amending Section 6.8 by replacing the words “Effective Date” appearing therein with “Second Amendment Effective Date”; and

(d)          amending Section 6.13 by replacing the phrase “filings made by the Borrower with the SEC” appearing therein with the phrase “filings made (a) by the Borrower on or prior to the Second Amendment Effective Date and (b) by Holdings following the Second Amendment Effective Date”.

 

SECTION 2.4. Amendments to Article VII. Article VII of the Existing Credit Agreement is hereby amended as follows: 

SECTION 2.4.1. Amendments to Section 7.1. Section 7.1 of the Existing Credit Agreement is amended by

 

(a)          replacing each reference in Section 7.1 thereof to “the Borrower” with “Holdings”, other than 

(i)           those references to the Borrower in Section 7.1 as they relate to the Greens Creek Joint Venture and its properties,

(ii)          those references to the Borrower in (A) clauses (c)(iii) and (c)(iv), (j) and (k) of Section 7.1.1, (B) the last sentence of clause (a) of Section 7.1.5, (C) clause (b) of Section 7.1.5, (D) Section 7.1.7, (E) Section 7.1.8, (F) Section 7.1.9, (G) Section 7.1.10 and (H) Section 7.1.13, 

 

(iii)         those references to the Borrower in the parenthetical appearing in the lead-in sentence of each such Section, and

 

(iv)         as otherwise
 set forth in this Section 2.4.1.

(b)          replacing the words “the Borrower” appearing in each instance in the lead-in sentence to Section 7.1 with the words “each of Holdings and the Borrower”; and

(c)          amending Sections 7.1.12 by inserting the words “Each of Holdings and” at the beginning of such Section.

SECTION 2.4.2. Amendments to Section 7.2. Section 7.2 of the Existing Credit Agreement is amended by

(a)          replacing each reference in Section 7.2 thereof to “the Borrower” with “Holdings”, other than 

(i)           those references to the Borrower in Section 7.2 as they relate to the Greens Creek Joint Venture and its properties,

(ii)          those references to the Borrower in (A) clauses (d), (i) and (j) of Section 7.2.2, (B) clause (l) of Section 7.2.5, (C) clauses (d) and (e) of Section 7.2.11 and (D) clauses (a) and (b) of Section 7.2.15, and

(iii)          as otherwise
 set forth in this Section 2.4.2.

(b)          replacing the words “the Borrower” with the words “each of Holdings and the Borrower” appearing in (i) each instance in the lead-in sentence to Section 7.2, (ii) the proviso of Section 7.2.12 and (iii) each instance in the lead-in paragraph of Section 7.2.15;

(c)          replacing the words “the Borrower” appearing in clause (b) of Section 7.2.1 with the words “Holdings or the Borrower, as the case may be,”;

(d)          replacing the words “the Borrower” with “Holdings or the Borrower” appearing in (i) clauses (f) and (g) of Section 7.2.2, (ii) clause (a) of Section 7.2.6, (iii) clause (i) of Section 7.2.8, (iv) clause (c) of Section 7.2.13;

(e)          amending and restating clause (h) of Section 7.2.2 in its entirety to read as follows:

 

Indebtedness of a Subsidiary (including a Subsidiary acquired pursuant to a Permitted Acquisition) of Holdings, other than the Borrower, provided that no Obligor is providing any credit support for, or a guarantee of, any such Indebtedness, and such Indebtedness is for all purposes non-recourse to the Obligors and their respective assets;

(f)           amending and restating clause (m) of Section 7.2.2 in its entirety to read “[Intentionally omitted]”;

(g)          amending and restating clause (k) of Section 7.2.3 in its entirety to read “[Intentionally omitted]; and”;

	
             
 	
            (h)
 	
            inserting the following sentence at the end of Section 7.2.3:
 

 

For the avoidance of doubt, notwithstanding anything herein to the contrary, Holdings will not create, incur, assume or permit to exist any Lien upon the Capital Securities of the Borrower or any Lien on any Indebtedness or accounts receivables owed by the Borrower to Holdings.

(i)            amending and restating clause (f) of Section 7.2.5 in its entirety to read as follows:

 

(i) Investments by way of contributions to capital by Holdings in any Subsidiary and (ii) Investments by way of contributions to capital or purchases of Capital Securities (i) by the Borrower in any Subsidiaries or by any Subsidiary in other Subsidiaries or (ii) by any Subsidiary in Holdings or the Borrower;

(j)            amending and restating clause (a) of Section 7.2.9 in its entirety to read as follows:

 

(i) any U.S. Subsidiary (other than the Subsidiary Guarantor) may liquidate or dissolve voluntarily into, and may merge with and into, the Borrower or any other U.S. Subsidiary (other than the Subsidiary Guarantor), (ii) any Foreign Subsidiary may liquidate or dissolve voluntarily into, and may merge with or into, any other Subsidiary (other than the Borrower or the Subsidiary Guarantor), and (iii) the assets or Capital Securities of any Subsidiary (other than the Borrower or the Subsidiary Guarantor) may be purchased or otherwise acquired by the Borrower or any other Subsidiary (other than the Subsidiary Guarantor); provided that (A) no Default has occurred and is continuing or would occur after giving effect thereto, (B) such transaction will not affect the Borrower’s ability to repay the Loans and interest thereon when due, (C) such
transaction will not affect the security interest granted under the Loan Documents in favor of the Secured Parties and (D) following such transaction, the Borrower will promptly deliver to the Administrative Agent an update of Item 6.8 of the Disclosure Schedule reflecting the new corporate structure of Holdings and its Subsidiaries; and

(k)           amending and restating the last paragraph in Section 7.2.13 in its entirety to read as follows:

 

The foregoing prohibitions shall not apply to restrictions contained (i) in any Loan Document, (ii) in the case of clause (a), any agreement governing (A) any secured Indebtedness permitted by clause (c) of Section 7.2.2 as to the cash and Cash Equivalent Investments securing such Indebtedness or (B) any Indebtedness permitted by clause (d) of Section 7.2.2 as to the assets financed with the proceeds of such Indebtedness, or (iii) in the case of clauses (a) and (c), any agreement of a Subsidiary governing Indebtedness permitted by Section 7.2.2 (provided that such
restrictions are ordinary and customary with respect to the type of Indebtedness being incurred and would not reasonably be expected to adversely affect Holdings’ or the Borrower’s ability to make payments hereunder).

 

SECTION 2.5. Amendments to Article VIII. Article VIII of the Existing Credit Agreement is hereby amended as follows:

(a)           Section 8.1.1 is hereby amended by inserting the words “or any other Obligor” immediately following the words “the Borrower” appearing therein;

(b)           Section 8.1.3 is hereby amended by (i) inserting the words “or Parent Guaranty” at the end of each of clauses (a)(i) and (a)(ii) thereof and (ii) replacing the words “the Borrower” appearing in clause (b) thereof with the words “Holdings or the Borrower, as the case may be,”

(c)           Each reference to “the Borrower” shall be replaced with “Holdings” in each of Sections 8.1.5, 8.1.6, 8.1.7 and 8.1.9.

SECTION 2.6. Amendments to Article IX. Article IX of the Existing Credit Agreement is hereby amended as follows:

(a)           Section 9.6 is hereby amended by inserting the word “Holdings and” immediately preceding the words “the Borrower” appearing therein;

(b)           Section 9.9 is hereby amended by inserting the word “, Holdings” immediately preceding the words “or the Borrower” appearing therein; and

(c)           Clause (c) of Section 9.11 is hereby amended by replacing the words “the Borrower” appearing therein with the word “Holdings”.

SECTION 2.7. Amendments to Article X. Article X of the Existing Credit Agreement is hereby amended as follows:

(a)           Section 10.1 is hereby amended by replacing the words “the Borrower” appearing in the lead-in sentence of such Section with the phrase “the Obligor or Obligors party to such Loan Document”;

(b)           Clause (f) of Section 10.1 is hereby amended and restated in its entirety to read as follows:

 

except as otherwise expressly provided in a Loan Document, release (i) any Obligor from its Obligations under the Loan Documents to which such Obligor is a party or (ii) all or substantially all of the collateral under the Loan Documents, in each case without the consent of all Lenders; or

(c)           Section 10.2 is hereby amended by inserting the word “Holdings, “ immediately preceding the words “the Borrower” appearing therein; and

(d)           Section 10.10 is hereby amended by inserting the words “Holdings and” immediately preceding the words “the Borrower” appearing therein.

SECTION 2.8. Amendment to Schedule I. Schedule I to the Credit Agreement is hereby amended by amending and restating Item 1.1, Item 6.7, Item 6.8 and Item 6.12 of the Disclosure Schedule in their entirety and replacing them with Item 1.1, Item 6.7, Item 6.8 and Item 6.12, respectively, of 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, Holdings and the Lenders. 

SECTION 3.2. Resolutions, etc. The Administrative Agent shall have received from each of the Borrower and Holdings (i) a copy of a good standing certificate, dated a date reasonably close to the Amendment Effective Date, for each such Person and (ii) a certificate, dated the Amendment Effective Date, duly executed and delivered by such Person’s Secretary or Assistant Secretary as to

(a)  resolutions of each such Person’s Board of Directors then in full force and effect authorizing, to the extent relevant, the Proposed Restructuring, the Reorganization, the execution, delivery and performance of the Reorganization Agreement, the Assignment Agreement and each Loan Document to be executed by such Person and the transactions contemplated hereby and thereby;

(b)  the incumbency and signatures of those of its officers authorized to act with respect to this Amendment and each other Loan Document to be executed by such Person; and

(c)  the full force and validity of each Organic Document of such Person and copies thereof;

upon which certificates each Secured Party may conclusively rely until it shall have received a further certificate of the Secretary or Assistant Secretary of any such Person canceling or amending its prior certificates, if any.

SECTION 3.3. Amendment Effective Date Certificate. The Administrative Agent shall have received the Amendment Effective Date Certificate, dated the Amendment Effective Date and duly executed and delivered by an Authorized Officer of Holdings and the Borrower, in which certificate each of Holdings and the Borrower shall agree and acknowledge that the statements made therein shall be deemed to be true and correct representations and warranties of Holdings and the Borrower as of such date, and, at the time each such certificate is delivered, such statements shall in fact be true and correct. All documents and agreements required to be appended to the Amendment Effective Date Certificate shall be in form and substance satisfactory to the Administrative Agent, shall have been executed and delivered by the requisite parties, and shall be in full force and effect.

SECTION 3.4. Solvency, etc. The Administrative Agent shall have received, with counterparts for each Lender, a certificate as to the Solvency of Holdings, duly executed and delivered by the chief financial or accounting Authorized Officer of Holdings, dated as of the Amendment Effective Date, in form and substance satisfactory to the Administrative Agent.

SECTION 3.5. Parent Guaranty. The Administrative Agent shall have received, with counterparts for each Lender, the Parent Guaranty, duly executed and delivered by an Authorized Officer of Holdings.

SECTION 3.6. 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 the Subsidiary Guarantor.

SECTION 3.7. Opinion of Counsel. The Administrative Agent shall have received an opinion, dated the Amendment Effective Date and addressed to the Administrative Agent and all Lenders, from Bell, Boyd & Lloyd LLC, counsel to the Obligors, in form and substance satisfactory to the Administrative Agent.

SECTION 3.8. Asset Transfer; Assignment Agreement; Approvals. The Administrative Agent shall have received evidence satisfactory to it that the transfer of employee benefit plans pursuant to the Assignment Agreement shall have been consummated, and shall have received a copy of the Assignment Agreement (as well as all other documentation, if any, executed or delivered in connection therewith) executed and delivered by the Borrower and Holdings, which shall be in full force and effect, and copies of all approvals or evidence of other actions required by any Governmental Authority in connection with the Proposed Restructuring, including, without limitation, the Reorganization and the transfer of the employee benefit plans, and the execution and delivery by the relevant Obligors of the Reorganization Agreement, the Assignment Agreement, this
Amendment or any other Loan Document (in each case, if any).

SECTION 3.9. 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 (if then invoiced) of the Credit Agreement.

SECTION 3.10. 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

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders and the Administrative Agent to enter into this Amendment, the Borrower and Holdings hereby represent and warrant to each Lender and the Administrative Agent, as of the Amendment Effective Date, as set forth below.

(a)          The representations and warranties set forth in Article VI of the Credit Agreement and in each other Loan Document are, in each case, true and correct (unless stated to relate solely to an earlier date, in which case such representations and warranties are true and correct as of such earlier date).

(b)          No
Default exists or has occurred and is continuing.

(c)          This Amendment and each other Loan Document, agreement or instrument to be executed and delivered by the Borrower and Holdings in connection herewith have been duly authorized, executed and delivered by all necessary action on the part of each of the Borrower and Holdings and constitute a legal, valid and binding obligation of each such Person, enforceable against it in accordance with its terms (except, in any case, as such  enforceability hereof may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by principles of equity).

(d)          The execution, delivery and performance by each Obligor of this Amendment and each other Loan Document executed or to be executed by any of them in connection herewith and the consummation of the transactions permitted or contemplated hereby (including the Proposed Restructuring and the Reorganization) are within each such Obligor’s powers, have been duly authorized by all necessary action, and do not (i) contravene any such Obligor’s Organic Documents, (ii) contravene any contractual restriction, law or governmental regulation or court decree or order binding on or affecting any such Obligor or (iii) result in, or require the creation or imposition of, any Lien (other than the Liens created under (A) the Loan Documents in favor of the Administrative Agent for
the benefit of the Secured Parties and (B) the Liens permitted under Section 7.2.3 of the Credit Agreement)) on any of such Obligor’s properties.

(e)          None of the factual information heretofore or contemporaneously furnished by the Borrower or Holdings in writing to the Administrative Agent or any Lender for purposes of or in connection with this Amendment or any transaction contemplated hereby (including the Proposed Restructuring and the Reorganization) contains any untrue statement of a material fact, or omits to state any material fact necessary to make any information not misleading.

ARTICLE V

MISCELLANEOUS

SECTION 5.1. Cross-References. References in this Amendment to any Article or Section are, unless otherwise specified, to such Article or Section of this Amendment.

SECTION 5.2. 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 5.3. Notices. All notices and other communications to Holdings provided for under any Loan Document shall be in writing or by facsimile and addressed, delivered or transmitted to Holdings at the address or facsimile number set forth on its signature page hereto, or at such other address or facsimile number as may be designated by Holdings in a notice to the other party to such Loan Document. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre paid courier service, shall be deemed given when received; any such notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the transmitter.

SECTION 5.4. 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 5.5. 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 5.6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.

SECTION 5.7. 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.

 

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

 

	
             
 	
             
 	
            BORROWER:
 
	 
	 
	
             
 	
             
 	
            HECLA MINING COMPANY (to be known as Hecla Limited)
 
	 
	
              
 	
             
 	
            By: 
 	
              
 
	
             
 	
             
 	
             
 	
            Name: Lewis E. Walde

Title: Chief Financial Officer
 

                By executing this Amendment, the undersigned hereby acknowledges and agrees to assume the rights and obligations under, and be bound by the terms of, the Credit Agreement, this Amendment and each other Loan Document to be executed by the undersigned as of the date first above written.

 

 

	
             
 	
             
 	
            HOLDINGS:

 
 
	
             
 	
             
 	
            HECLA HOLDINGS INC. (to be known as Hecla Mining Company)
 
	 
	 
	
              
 	
             
 	
            By: 
 	
              
 
	
             
 	
             
 	
             
 	
            Name:

Title:
 

 

 

	
             
 	
            Address:
 	
            6500 Mineral Drive

Suite 200

Coeur d’Alene, Idaho 83815
 
	
             
 	
             
 	
             
 
	
             
 	
            Facsimile No.:

Attention:
 	
            (208) 292-5509

Lewis E. Walde
 

	
             
 	
             
 	
            THE BANK OF NOVA SCOTIA,
   as Administrative Agent
 
	 
	 
	
              
 	
             
 	
            By: 
 	
              
 
	
             
 	
             
 	
             
 	
            Title:
 

	
             
 	
             
 	
            LENDERS:

 
 
	
             
 	
             
 	
            THE BANK OF NOVA SCOTIA

 
 
	
              
 	
             
 	
            By: 
 	
              
 
	
             
 	
             
 	
             
 	
            Title:
 

 

 

	
             
 	
             
 	
            N M ROTHSCHILD & SONS LIMITED

 
 
	
              
 	
             
 	
            By: 
 	
              
 
	
             
 	
             
 	
             
 	
            Title:
 

 

	
             
 	
             
 	
            By: 
 	
             
 
	
             
 	
             
 	
             
 	
            Title:Hecla Mining Company Exhibit 10.12 to Form 10-Q

Exhibit 10.12

 

PARENT GUARANTY

This PARENT GUARANTY (as amended, supplemented, amended and restated or otherwise modified from time to time, this “Guaranty”), dated as of November 8, 2006, is made by HECLA HOLDINGS INC. (to be known as Hecla Mining Company), a Delaware corporation (the “Guarantor”) in favor of THE BANK OF NOVA SCOTIA (“Scotia Capital”), as administrative agent (together with its successor(s) thereto in such capacity, the “Administrative Agent”) for each of the Secured Parties (capitalized terms used herein have the meanings set forth in or incorporated by reference in Article I).

W I T N E S S E T H:

WHEREAS, pursuant to a Credit Agreement, dated as of September 12, 2005 (as amended, supplemented, amended and restated or otherwise modified prior to the date hereof, the “Existing Credit Agreement”), among Hecla Mining Company (to be known as Hecla Limited), a Delaware corporation (the “Borrower”), the Lenders, the Administrative Agent, N M Rothschild & Sons Limited (“Rothschild”), as Technical Agent, and Scotia Capital and Rothschild, as Arrangers, the Lenders and the Issuer have extended Commitments to make Credit Extensions to the Borrower; 

WHEREAS, pursuant to a Second Amendment to Credit Agreement, dated as of November 8, 2006 (the “Second Amendment”; the Existing Credit Agreement, as amended by the Second Amendment is hereinafter referred to as the “Credit Agreement”), among the Borrower, the Lenders and the Administrative Agent, and acknowledged and accepted by the Guarantor, the Guarantor has agreed to be bound by the terms of, the Credit Agreement and each other Loan Document to be executed by the Guarantor; 

WHEREAS, as a condition precedent to the effectiveness of the Second Amendment, the Guarantor is required to execute and deliver this Guaranty; and

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor agrees, for the benefit of each Secured Party, as follows:

ARTICLE I

DEFINITIONS

 

SECTION 1.1. Certain Terms. The following terms (whether or not underscored) when used in this Guaranty, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof):

“Administrative Agent” is defined in the preamble.

 

“Borrower” is defined in the first recital.

“Credit Agreement” is defined in the first recital.

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

“Guarantor” is defined in the preamble.

“Guaranty” is defined in the preamble.

“Rothschild” is defined in the first recital.

“Scotia Capital” is defined in the first recital.

“Second Amendment” is defined in the second recital.

SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Guaranty, including its preamble and recitals, have the meanings provided in the Credit Agreement.

ARTICLE II

GUARANTY PROVISIONS

 

SECTION 2.1. Guaranty. The Guarantor hereby absolutely, unconditionally and irrevocably

(a)  guarantees the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations of each Obligor now or hereafter existing, whether for principal, interest (including interest accruing at the then applicable rate provided in the Credit Agreement after the occurrence of any Default set forth in Section 8.1.9 of the Credit Agreement, whether or not a claim for post-filing or post-petition interest is allowed under applicable law following the institution of a proceeding under bankruptcy, insolvency or similar laws), fees, Reimbursement Obligations or expenses (including all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. §362(a), and the operation of Sections 502(b) and 506(b)
of the United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)); and

(b)  indemnifies and holds harmless each Secured Party for any and all costs and expenses (including reasonable attorneys’ fees and expenses) incurred by such Secured Party in enforcing any rights under this Guaranty;

provided, however, that the Guarantor shall only be liable under this Guaranty for the maximum amount of such liability that can be hereby incurred without rendering this Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount. This Guaranty constitutes a guaranty of payment when due and not of collection, and the Guarantor specifically agrees that it shall not be necessary or required that any Secured Party exercise any right, assert any claim or demand or enforce any remedy whatsoever  

 

against any Obligor or any other Person before or as
a condition to the obligations of the Guarantor hereunder.

SECTION 2.2. Reinstatement, etc. The Guarantor hereby agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations is invalidated, declared to be fraudulent or preferential, set aside, rescinded or must otherwise be restored by any Secured Party, including upon the occurrence of any Default set forth in Section 8.1.9 of the Credit Agreement or otherwise, all as though such payment had not been made.

SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until the Termination Date has occurred. The Guarantor guarantees that the Obligations will be paid strictly in accordance with the terms of each Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Secured Party with respect thereto. The liability of the Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of:

(a)  any lack of validity, legality or enforceability of any Loan Document;

(b)  the failure of any Secured Party

(i)  to assert any claim or demand or to enforce any right or remedy against any Obligor or any other Person (including any other guarantor) under the provisions of any Loan Document or otherwise, or

(ii)  to exercise any right or remedy against any other guarantor of, or collateral securing, any Obligations;

(c)  any change in the time, manner or place of payment of, or in any other term of, all or any part of the Obligations, or any other extension, compromise or renewal of any Obligation;

(d)  any reduction, limitation, impairment or termination of any Obligations for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Obligations or otherwise;

(e)  any amendment to, rescission, waiver, or other modification of, or any consent to or departure from, any of the terms of any Loan Document;

(f)  any addition, exchange or release of any collateral or of any Person that is (or will become) a guarantor of the Obligations, or any surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition to, or consent to or 

 

departure from, any other guaranty held by any Secured Party securing any of the Obligations; or

(g)  any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any Obligor, any surety or any guarantor.

SECTION 2.4. Setoff. The Guarantor hereby irrevocably authorizes the Administrative Agent and each other Secured Party, without the requirement that any notice be given to the Guarantor (such notice being expressly waived by the Guarantor), upon the occurrence and during the continuance of any Default described in Section 8.1.9 of the Credit Agreement or, with the consent of the Required Lenders, upon the occurrence and during the continuance of any other Event of Default, to set-off and appropriate and apply to the payment of the Obligations (whether or not then due, and whether or not any Secured Party has made any demand for payment of the Obligations), any and all balances, credits, deposits, accounts or moneys of the Guarantor then or thereafter maintained with such Secured Party; provided,
however, that any such appropriation and application shall be subject to the provisions of Section 4.8 of the Credit Agreement. Each Secured Party agrees to notify the Guarantor and the Administrative Agent after any such setoff and application made by such Secured Party; provided further, however, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Secured Party under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Secured Party may have.

SECTION 2.5. Waiver, etc. The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations and this Guaranty and any requirement that any Secured Party secure, perfect or insure any Lien, or any property subject thereto, or exhaust any right or take any action against any Obligor or any other Person (including any other guarantor) or entity or any collateral securing the Obligations, as the case may be.

SECTION 2.6. Postponement of Subrogation, etc. The Guarantor agrees that it will not exercise any rights which it may acquire by way of rights of subrogation under any Loan Document to which it is a party, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement from any Obligor, in respect of any payment made under any Loan Document or otherwise, until following the Termination Date. Any amount paid to the Guarantor on account of any such subrogation rights prior to the Termination Date shall be held in trust for the benefit of the Secured Parties and shall immediately be paid and turned over to the Administrative Agent for the benefit of the Secured Parties in the exact form received by the Guarantor (duly endorsed in favor of the Administrative Agent, if required), to be credited and applied against the
Obligations, whether matured or unmatured, in accordance with Section 2.7; provided, however, that if the Guarantor has made payment to the Secured Parties of all or any part of the Obligations and the Termination Date has occurred, then at the Guarantor’s request, the Administrative Agent (on behalf of the Secured Parties) will, at the expense of the Guarantor, execute and deliver to the Guarantor appropriate documents (without recourse and without representation or warranty) necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations resulting from such payment. In furtherance of the foregoing, at all times prior to the Termination Date, the Guarantor shall refrain from taking any action or 

 

commencing any proceeding against any Obligor (or its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in respect of payments made under this Guaranty to any Secured Party.

SECTION 2.7. Payments; Application. The Guarantor hereby agrees with each Secured Party that

(a)  all payments made by the Guarantor hereunder will be made in Dollars to the Administrative Agent, without set-off, counterclaim or other defense and in accordance with Sections 4.6 and 4.7 of the Credit Agreement, free and clear of and without deduction for any Taxes, the Guarantor hereby agreeing to comply with and be bound by the provisions of Sections 4.6 and 4.7 of the Credit Agreement in respect of all payments made by it hereunder and the provisions of which Sections are hereby incorporated into and made a part of this Guaranty by this reference as if set forth herein; provided, that references to the “Borrower” in such Sections shall be deemed to be references to the Guarantor, and references to “this Agreement” in such Sections shall be deemed to be references to this Guaranty; and

(b)  all payments made hereunder shall be applied upon receipt as set forth in Section 4.7 of the Credit Agreement.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

In order to induce the Secured Parties to continue to make Credit Extensions under the Credit Agreement, the Guarantor represents and warrants to each Secured Party as set forth below.

SECTION 3.1. Credit Agreement Representations and Warranties. The representations and warranties contained in Article VI of the Credit Agreement (as of the dates required to be made under the Credit Agreement), insofar as the representations and warranties contained therein are applicable to the Guarantor and its properties, are true and correct in all material respects, each such representation and warranty set forth in such Article (insofar as applicable as aforesaid) and all other terms of the Credit Agreement to which reference is made therein, together with all related definitions and ancillary provisions, being hereby incorporated into this Guaranty by this reference as though specifically set forth in this Article.

SECTION 3.2. Financial Condition, etc. The Guarantor has knowledge of each other Obligor’s financial condition and affairs and that it has adequate means to obtain from each such Obligor on an ongoing basis information relating thereto and to such Obligor’s ability to pay and perform the Obligations, and agrees to assume the responsibility for keeping, and to keep, so informed for so long as this Guaranty is in effect. The Guarantor acknowledges and agrees that the Secured Parties shall have no obligation to investigate the financial condition or affairs of any Obligor for the benefit of the Guarantor nor to advise the Guarantor of any fact respecting, or any change in, the financial condition or affairs of any other Obligor that might become known to any Secured Party at any time, whether or not such Secured Party knows or believes or has 

reason to know or believe that any such fact or change is unknown to the Guarantor, or might (or does) materially increase the risk of the Guarantor as guarantor, or might (or would) affect the willingness of the Guarantor to continue as a guarantor of the Obligations.

SECTION 3.3. Best Interests. It is in the best interests of the Guarantor to execute this Guaranty inasmuch as the Guarantor will derive substantial direct and indirect benefits from the Credit Extensions made from time to time to the Borrower by the Lenders and the Issuers pursuant to the Credit Agreement, and the Guarantor agrees that the Secured Parties are relying on this representation in agreeing to make Credit Extensions to the Borrower.

ARTICLE IV

COVENANTS, ETC.

 

The Guarantor covenants and agrees
that, at all times prior to the Termination Date, it will perform, comply with and be bound by all of the agreements, covenants
and obligations contained in the Credit Agreement (including Article VII and Section 8.1.9 of the Credit Agreement) which are
applicable to the Guarantor or its properties, each such agreement, covenant and obligation contained in the Credit Agreement and
all other terms of the Credit Agreement to which reference is made in this Article, together with all related definitions and
ancillary provisions, being hereby incorporated into this Guaranty by this reference as though specifically set forth in this
Article.

ARTICLE V

MISCELLANEOUS PROVISIONS

 

SECTION 5.1. Loan
Document. This Guaranty is a Loan Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof,
including Article X thereof.

SECTION 5.2. Binding on Successors, Transferees and Assigns; Assignment. This Guaranty shall remain in full force and effect until the Termination Date has occurred, shall be binding upon the Guarantor and its successors, transferees and assigns and shall inure to the benefit of and be enforceable by each Secured Party and its successors, transferees and assigns; provided, however, that the Guarantor may not (unless otherwise permitted under the terms of the Credit Agreement) assign any of its obligations hereunder without the prior written consent of all Lenders.

SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision of this Guaranty, nor consent to any departure by the Guarantor from its obligations under this Guaranty, shall in any event be effective unless the same shall be in writing and signed by the Administrative Agent (on behalf of the Lenders or the Required Lenders, as the case may be, pursuant to Section 10.1 of the Credit Agreement) and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

 

SECTION 5.4. Notices. All notices and other communications provided for hereunder shall be in writing or by facsimile and addressed, delivered or transmitted to the appropriate party at the address or facsimile number of such party specified in the Credit Agreement, or set forth on the signature pages hereto, or at such other address or facsimile number as may be designated by such party in a notice to the other party. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when received; any such notice, if transmitted by facsimile, shall be deemed given when the confirmation of transmission thereof is received by the transmitter.

SECTION 5.5. Release of Guarantor. Upon the occurrence of the Termination Date, this Guaranty and all obligations of the Guarantor hereunder shall terminate, without delivery of any instrument or performance of any act by any party. 

SECTION 5.6. No Waiver; Remedies. In addition to, and not in limitation of, Sections 2.3 and 2.5, no failure on the part of any Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

SECTION 5.7. Section Captions. Section captions used in this Guaranty are for convenience of reference only, and shall not affect the construction of this Guaranty.

SECTION 5.8. Severability. Wherever possible each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty.

SECTION 5.9. Governing Law, Entire Agreement, etc. THIS GUARANTY WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). This Guaranty and the other Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter thereof and supersede any prior agreements, written or oral, with respect thereto.

SECTION 5.10. Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUER OR THE GUARANTOR IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE 

 

ADMINISTRATIVE AGENT’S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED FOR THE GUARANTOR ON ITS SIGNATURE PAGE HERETO. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.

SECTION 5.11. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT (ON BEHALF OF ITSELF AND EACH OTHER SECURED PARTY)
AND THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, EACH LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, SUCH LENDER, THE ISSUER OR THE GUARANTOR IN CONNECTION THEREWITH. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS
A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH LENDER AND THE ISSUER ENTERING INTO
THE LOAN DOCUMENTS.

SECTION 5.12. Counterparts. This Guaranty may be executed by the parties hereto in several counterparts, each of which shall be deemed to 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 Guaranty by facsimile shall be effective as delivery of an original executed counterpart of this Guaranty.

 

IN WITNESS WHEREOF, the Guarantor
has caused this Guaranty to be duly executed and delivered by its Authorized Officer as of the date first above
written.

HECLA HOLDINGS INC. (to be known as Hecla Mining Company)

 

By:_________________________________

	
             
 	
            Name:
 

	
             
 	
            Title:
 

	
             
 	
            Address:  
 	
            6500 Mineral Drive
 

	
             
 	
            Suite 200
 

	
             
 	
            Coeur d’Alene, Idaho 83815
 

 

Facsimile No.:      (208) 292-5509

	
             
 	
            Attention:  
 	
            Lewis E. Walde
 

 

 

ACCEPTED AND AGREED FOR ITSELF

AND ON BEHALF OF THE SECURED PARTIES:

THE BANK OF NOVA SCOTIA,

  as Administrative Agent

 

By:_________________________________

	
             
 	
            Title:

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