-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E51VUUOwVIBEhDyUK9OLHPDQQmIv0cFky/7VOgl9WSuyAVTQdVAh+4pkkGqwJQ09 sVQpYvcbL+NTQrlZB2aCuw== 0000743872-98-000020.txt : 19980817 0000743872-98-000020.hdr.sgml : 19980817 ACCESSION NUMBER: 0000743872-98-000020 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980814 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HOMESTAKE MINING CO /DE/ CENTRAL INDEX KEY: 0000743872 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 942934609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-08736 FILM NUMBER: 98687077 BUSINESS ADDRESS: STREET 1: 650 CALIFORNIA ST STREET 2: 9TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 BUSINESS PHONE: 4159818150 MAIL ADDRESS: STREET 1: 650 CALIFORNIA ST CITY: SAN FRANCISCO STATE: CA ZIP: 94108-2788 10-Q 1 FORM 10-Q QUARTER ENDED 6/30/98 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (x) Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. For the Quarterly Period Ended June 30, 1998 ( ) Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from _______ to ________ Commission File Number 1-8736 HOMESTAKE MINING COMPANY A Delaware Corporation IRS Employer Identification No. 94-2934609 650 California Street San Francisco, California 94108-2788 Telephone: (415) 981-8150 http://www.homestake.com Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ______ ----------- The number of shares of common stock outstanding as of August 7, 1998 was 211,183,900. Page 1 HOMESTAKE MINING COMPANY AND SUBSIDIARIES PART 1 - FINANCIAL INFORMATION Item 1. Financial Statements A. Condensed Consolidated Balance Sheets (unaudited) (In thousands, except per share amount)
June 30, December 31, 1998 1997 --------------- ----------------- ASSETS Current assets Cash and equivalents $ 134,219 $ 124,083 Short-term investments 149,699 141,221 Receivables 48,711 43,529 Inventories: Finished products 22,283 33,019 Ore and in process 29,999 37,811 Supplies 31,149 33,095 Deferred income and mining taxes 26,465 19,372 Other 7,669 13,154 --------------- ----------------- Total current assets 450,194 445,284 --------------- ----------------- Property, plant and equipment - at cost 2,204,344 2,222,465 Accumulated depreciation, depletion and amortization (1,271,610) (1,201,318) --------------- ----------------- Property, plant and equipment - net 932,734 1,021,147 --------------- ----------------- Investments and other assets Noncurrent investments 33,054 41,094 Other assets 89,479 102,009 --------------- ----------------- Total investments and other assets 122,533 143,103 --------------- ----------------- Total Assets $ 1,505,461 $ 1,609,534 =============== ================= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 47,015 $ 59,930 Accrued liabilities: Payroll and other compensation 27,761 23,898 Unrealized loss on foreign currency exchange contracts 28,921 20,416 Reclamation and closure costs 12,166 11,818 Other 17,151 12,509 Income and other taxes payable 9,422 277 --------------- ----------------- Total current liabilities 142,436 128,848 --------------- ----------------- Long-term liabilities Long-term debt 356,069 374,593 Other long-term obligations 143,871 152,610 --------------- ----------------- Total long-term liabilities 499,940 527,203 --------------- ----------------- Deferred income and mining taxes 146,105 161,862 Minority interests in consolidated subsidiaries 112,232 108,116 Shareholders' equity Capital stock, $1 par value per share: Preferred - 10,000 shares authorized; no shares outstanding Common - 250,000 shares authorized; shares outstanding: 1998 - 211,162; 1997 - 210,696 211,162 210,696 Other shareholders' equity 393,586 472,809 --------------- ----------------- Total shareholders' equity 604,748 683,505 --------------- ----------------- Total Liabilities and Shareholders' Equity $ 1,505,461 $ 1,609,534 =============== ================= See notes to the condensed consolidated financial statements.
2 HOMESTAKE MINING COMPANY AND SUBSIDIARIES B. Condensed Statements of Consolidated Operations (unaudited) (In thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 -------------- -------------- -------------- -------------- Revenues Gold and ore sales $ 210,687 $ 214,393 $ 405,026 $ 442,218 Sulfur and oil sales 5,665 6,842 11,798 13,794 Interest income 5,218 4,797 9,477 9,106 Gain on termination of Santa Fe merger 62,925 Other income (26,285) 28 (14,799) 15,355 -------------- -------------- -------------- -------------- 195,285 226,060 411,502 543,398 -------------- -------------- -------------- -------------- Costs and Expenses Production costs 142,749 154,831 278,306 319,721 Depreciation, depletion and amortization 37,402 34,047 73,492 73,590 Administrative and general expense 11,272 12,029 23,837 21,821 Exploration expense 11,509 18,138 21,806 30,073 Interest expense 5,216 5,413 10,328 10,281 Write-downs and other unusual charges 2,905 65,115 11,784 65,115 Business combination and integration costs 17,934 20,710 Other expense 419 2,785 798 3,427 -------------- -------------- -------------- -------------- 229,406 292,358 441,061 524,028 -------------- -------------- -------------- -------------- Income (Loss) Before Taxes and Minority Interests (34,121) (66,298) (29,559) 19,370 Income and Mining Taxes 4,878 3,858 (2,342) (31,047) Minority Interests (1,688) (2,417) (5,616) (4,924) -------------- -------------- -------------- -------------- Net Loss $ (30,931) $ (64,857) $ (37,517) $ (16,601) ============== ============== ============== ============== Net Loss Per Share - Basic and Diluted $ (0.15) $ (0.31) $ (0.18) $ (0.08) ============== ============== ============== ============== Average Shares Used in the Computation 211,060 210,567 210,860 210,534 ============== ============== ============== ============== Dividends Paid Per Common Share $ 0.05 $ 0.05 $ 0.05 $ 0.10 ============== ============== ============== ============== See notes to the condensed consolidated financial statements.
3 HOMESTAKE MINING COMPANY AND SUBSIDIARIES C. Condensed Statements of Consolidated Cash Flows (unaudited) (In thousands)
Six Months Ended June 30, 1998 1997 ----------------- ------------------ Cash Flows from Operations Net loss $ (37,517) $ (16,601) Reconciliation to net cash provided by operations: Depreciation, depletion and amortization 73,492 73,590 Write-downs 2,905 65,115 Deferred taxes, minority interests and other (21,575) 11,332 Gains on asset disposals (1,844) (17,884) Effect of changes in operating working capital items 48,311 (5,798) ----------------- ------------------ Net cash provided by operations 63,772 109,754 ----------------- ------------------ Investment Activities Increase in short-term investments (11,308) (33,630) Capital additions (33,894) (101,897) Proceeds from asset sales 7,841 15,451 Other 113 (2,603) ----------------- ------------------ Net cash used in investment activities (37,248) (122,679) ----------------- ------------------ Financing Activities Borrowings 27,917 Debt repayments (8,024) Dividends paid - Homestake (7,339) (14,670) - Plutonic (3,554) (9,768) - Prime minority interests (1,040) (1,085) Common shares issued 1,038 808 Other 2,531 2,655 ----------------- ------------------ Net cash provided by (used in) financing activities (16,388) 5,857 ----------------- ------------------ Net increase (decrease) in cash and equivalents 10,136 (7,068) Cash and equivalents, January 1 124,083 104,657 ----------------- ------------------ Cash and equivalents, June 30 $ 134,219 $ 97,589 ================= ================== See notes to the condensed consolidated financial statements.
4 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (unaudited) 1. The condensed consolidated financial statements included herein should be read in conjunction with the financial statements and notes thereto, which include information as to significant accounting policies, for the year ended December 31, 1997. Year end financial statements for the Company, restated to include Plutonic on a pooling-of-interests basis (see note 2 below), have been filed with the Securities and Exchange Commission on Form 8-K dated June 22, 1998. The information furnished in this report reflects all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the interim periods. Except as described in notes 2 through 6, such adjustments consist of items of a normal recurring nature. Results of operations for interim periods are not necessarily indicative of results for the full year. All dollar amounts are in United States dollars unless otherwise indicated. 2. On April 30, 1998 Homestake completed the acquisition of Plutonic Resources Limited ("Plutonic"), a publicly-traded Australian gold producer, by an exchange of common stock for common stock. Homestake issued 64.4 million common shares to acquire Plutonic, including 63.9 million shares in exchange for all of the Plutonic fully paid ordinary shares outstanding based on an exchange ratio of 0.34 Homestake common shares for each Plutonic fully paid ordinary share, and 0.5 million Homestake common shares for the Plutonic partly-paid shares and options outstanding. The business combination with Plutonic has been accounted for as a pooling of interests and, accordingly, Homestake's consolidated financial statements have been restated to include Plutonic for all periods. Combined and separate preacquisition results for Homestake and Plutonic for the three months ended March 31, 1998 and for the three and six months ended June 30, 1997 are as follows (in thousands):
Homestake Plutonic Historical Historical a Adjustments b Combined ------------------------------------------------------------- Three months ended March 31, 1998 Revenues $ 174,343 $ 43,624 $ (1,750) $ 216,217 Net loss (4,611) (76) (1,899) (6,586) Three months ended June 30, 1997 Revenues $ 168,659 $ 64,427 $ (7,026) $ 226,060 Net loss (16,222) (39,633) (9,002) (64,857) Six months ended June 30, 1997 Revenues $ 418,846 $ 121,035 $ 3,517 $ 543,398 Net income (loss) 33,638 (34,541) (15,698) (16,601) a) The Plutonic historical results of operations have been adjusted to reflect i) presentation of Plutonic's results of operations in accordance with United States generally accepted accounting principles and the format and classifications utilized by Homestake, and ii) translation into U.S. dollars using the average exchange rate for each period. 5 HOMESTAKE MINING COMPANY AND SUBSIDIARIES b) In combining the historical results of Homestake and Plutonic, certain adjustments were made to conform Plutonic's accounting policies to Homestake's accounting policies. The effect of these adjustments on combined net income (loss) is as follows (in thousands): Three months ended Three months ended Six months ended March 31, June 30, June 30, Increase (Decrease) 1998 1997 1997 ---------------------------------------------------------------------- Revenue recognition $ (1,293) $ (3,142) $ (1,848) Reclamation expense 474 (61) 710 Depreciation, depletion and amortization 1,141 2,102 4,204 Income taxes (1,009) 3,819 8,936 ---------------------------------------------------------------------- $ (1,899) $ (9,002) $ (15,698) ======================================================================
3. Other income for the three and six months ended June 30 is as follows (in millions):
Three Months Ended Six Months Ended June 30, June 30, ------------------------------- ------------------------------ 1998 1997 1998 1997 -------------- ------------- -------------- ------------- Gains on asset disposals $1.6 $2.5 $1.8 $17.9 Gain on sales of Rabbi Trust investments 0.3 - 4.3 - Royalty income 0.6 0.6 1.2 1.2 Foreign currency contract gains (losses) (26.5) (2.8) (22.4) (3.8) Foreign currency exchange losses on intercompany advances (4.4) (2.4) (3.5) (2.8) Other foreign currency gains (losses) 0.4 - 0.5 (0.3) Other 1.7 2.1 3.3 3.2 -------------- ------------- -------------- ------------- ($26.3) $ - ($14.8) $15.4 ============== ============= ============== =============
4. In January 1998, the Company began a major restructuring of operations at the Homestake mine in order to reduce operating costs. The Company suspended underground mining for approximately 60 days while it completed the final details of the new operating plan and readied the underground mine to begin operating on the restructured basis. Open Cut ore stockpiles continued to be processed through the mill at an accelerated rate while the underground operations were suspended. The new mine plan specifically is designed to improve the grade of ore recovered through the increased use of mechanized cut-and-fill mining methods. When fully implemented, the plan will reflect a complete reorganization of underground activities, a significant reduction in the mine's work force and a reduction in future gold production. Write-downs and other unusual expenses during the six months ended June 30, 1998 include $8.9 million ($5.9 million after tax) of costs associated with the temporary suspension of operations and the reduction of 450 employees in the work force. These costs primarily represent wage payments to the work force during the temporary shutdown 6 HOMESTAKE MINING COMPANY AND SUBSIDIARIES and severance payments and benefit costs for the severed employees, and are net of approximately $9.3 million of pension and benefit plan curtailment gains. 5. In March 1997, Santa Fe Pacific Gold Corporation terminated its previously announced merger agreement with Homestake and paid Homestake a $65 million termination fee. As a result, the Company recorded a pretax gain of $62.9 million ($47.2 million after tax), net of merger-related expenses of $2.1 million incurred in 1997. 6. In February 1997, Homestake sold its interests in the George Lake and Back River joint ventures in Canada to Kit Resources Corporation ("Kit") for $9.3 million in cash and 3.6 million shares of Kit common stock. As a result of this transaction, the Company recorded a pretax gain of $13.5 million ($8.1 million after tax) in the first quarter of 1997, which is included in other income. 7. In June 1998, Plutonic repaid $8 million of its debt outstanding under its syndicated credit facility. Borrowings outstanding at June 30, 1998 included borrowings of $95.5 million by Plutonic and $45.6 million by HGAL under the Company's then-existing credit facilities. In July 1998, the Company entered into a new United States/Canadian/Australian cross-border credit facility providing a total availability of $430 million. The new facility replaces the Company's $275 million cross-border credit facility and Plutonic's A$400 million syndicated credit facility, each of which were cancelled. Borrowings by Plutonic and HGAL under the prior credit facilities were repaid using the new facility. The new facility is available through July 14, 2003 and provides for borrowings in United States, Canadian, or Australian dollars, or gold, or a combination of these. Under the new facility, the Company pays a commitment fee ranging from 0.15% to 0.35% per annum, depending upon rating agencies' ratings for the Company's senior debt, on the unused portion of this facility. The new credit agreement requires a minimum consolidated net worth of $500 million. Interest on the HGAL and Plutonic Australian dollar borrowings under the new facility is payable quarterly and is based on the Australian Bank Bill Swap Rate plus a margin of up to 1.125%. At July 31, 1998 the interest rate was 6.22%. 8. Under the Company's foreign currency protection program, the Company has entered into a series of foreign currency option contracts which establish trading ranges within which the United States dollar may be exchanged for foreign currencies by setting minimum and maximum exchange rates. At June 30, 1998 the Company had forward currency contracts outstanding as follows (dollar amounts in thousands):
Weighted-Average Exchange Amount Covered Rates to U.S. Dollars Expiration Currency (U.S. Dollars) Put Options Call Options Dates - ------------------------------------------------------------------------------------------------------ Canadian $ 96,800 0.72 0.75 1998 Canadian 123,300 0.70 0.73 1999 Canadian 89,200 0.69 0.72 2000 Canadian 16,500 0.68 0.71 2001 Australian 50,800 0.73 0.76 1998 Australian 84,000 0.67 0.70 1999 Australian 62,600 0.65 0.68 2000 Australian 17,000 0.62 0.65 2001 ----------------- $ 540,200 =================
7 HOMESTAKE MINING COMPANY AND SUBSIDIARIES The Company delivered or financially settled during the three and six months ended June 30, 1998, 30,000 and 60,000 ounces of its North American gold production at an average price of $398 and $396 per ounce, respectively. This compares to settlements of 30,000 and 60,000 ounces at an average price of $380 and $381 per ounce during the three and six months ended June 30, 1997, respectively. The Company delivered or financially settled during the three and six months ended June 30, 1998, 55,900 and 178,900 ounces of its Australian gold production at an average price of $372 and $339 per ounce, respectively. This compares to settlements of 124,300 and 265,150 ounces at an average price for both periods of $429 per ounce during the three and six months ended June 30, 1997. During June 1998, Homestake closed out one million ounces of the Australian dollar-denominated forward gold contracts which Plutonic had entered into prior to its acquisition by Homestake. The pretax gain of $5 million realized as a result of this action was deferred and will be recorded into income as the originally designated production is sold. At June 30, 1998 the Company's gold forward sales commitments were as follows:
US $ Denominated Australian $ Denominated -------------------------------------- -------------------------------------- Average Price of Average Price of Forward Sales Forward Sales Forward Sales Forward Sales Year (ounces) (per ounce) (ounces) (US$ per ounce) - ------------- -------------------------------------- -------------------------------------- 1998 60,000 $403 60,000 $320 1999 109,900 415 2000 85,100 430 24,800 320 2001 95,000 441 24,800 320 2002 95,000 457 24,800 320 Thereafter 75,000 481 75,600 320 --------------- --------------- 520,000 210,000 =============== ===============
To provide protection against a decrease in gold prices, during the third quarter of 1997 the Company entered into a series of put and call option contracts to provide a floor price of $325 per ounce for 900,000 ounces of Homestake's expected 1998 gold production. Gold sales during the second quarter of 1998 include 225,000 ounces at an average price $325 per ounce and year-to-date revenues in 1998 include 450,000 ounces at $325 per ounce under this program. At June 30, 1998 the Company owned put options for 450,000 ounces of gold exercisable during 1998 at a price of $325 per ounce. The Company also had written call options outstanding for 450,000 ounces of gold exercisable during 1998 at a price of $325 per ounce and owned call options for 450,000 ounces of gold exercisable during 1998 at a price of $336 per ounce. At June 30, 1998 the Company also owned put options for 30,000 ounces of gold exercisable during 2000 at a price of $350 per ounce and had written call options outstanding for 15,000 ounces of gold exercisable during 2000 at an average price of $395 per ounce. In February 1998, Prime Resources Group Inc. ("Prime"), a 50.6%-owned subsidiary of the Company, adopted a gold and silver hedging policy which provides for the use of forward sales contracts for up to 40% of each of the following five year's expected annual gold and silver production at prices in excess of certain targeted prices. At June 30, 1998 Prime had forward sales outstanding for approximately 7.2 million ounces of silver during the period 1999 through 2001 at an average price of $6.28 per ounce. 8 HOMESTAKE MINING COMPANY AND SUBSIDIARIES 9. Effective January 1, 1998 the Company adopted Statement of Financial Accounting Standards No. 130 ("SFAS 130"), "Reporting Comprehensive Income." SFAS 130 establishes standards for the reporting and display of comprehensive income. The purpose of reporting comprehensive income is to present a measure of all changes in shareholders' equity that result from recognized transactions and other economic events of the period, other than transactions with shareholders in their capacity as shareholders. SFAS 130 requires that the components of comprehensive income be displayed in annual financial statements with the same prominence as other financial statements and that the total amount of comprehensive income be reported in interim periods. Homestake's comprehensive income (loss) for the three and six months ended June 30, 1998 and 1997 was as follows (in thousands):
Three months ended Six months ended June 30, June 30, 1998 1997 1998 1997 --------------------------------------------------------------- Net Loss $ (30,931) $ (64,857) $ (37,517) $ (16,601) Other Comprehensive Income (Loss) Currency translation adjustments (32,603) (28,105) (26,686) (38,383) Unrealized losses on securities (1,154) (10,298) (3,448) (15,569) --------------------------------------------------------------- Comprehensive Loss $ (64,688) $ (103,260) $ (67,651) $ (70,553) ===============================================================
In February 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 132 ("SFAS 132"), "Employers' Disclosures about Pensions and Other Postretirement Benefits." SFAS 132 revises employers' disclosures about pension and other postretirement benefit plans. It does not change the measurement or recognition of those plans. SFAS 132 standardizes the disclosure requirements for pensions and other postretirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures. SFAS 132 will be effective for the Company's financial statements for the year ended December 31, 1998. In June 1998, FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 requires that all derivatives be recognized as assets or liabilities and be measured at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivatives and whether they qualify for hedge accounting as either a fair value hedge or a cash flow hedge. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows of the hedging instruments and the hedged items. SFAS 133 is effective for fiscal years beginning after June 15, 1999 but earlier adoption is permitted. The Company currently is evaluating the impact that this requirement will have on reported operating results and financial position and has not yet determined when SFAS 133 will be adopted. 10. On May 25, 1998 Homestake announced that it had proposed to the Board of Directors of Prime, the acquisition by Homestake of the 49.4% of Prime held by the public and not already owned by Homestake. Under the terms of the offer, Prime shareholders would receive 0.675 Homestake common shares or 0.675 Homestake Canada Inc. ("HCI") Exchangeable Shares for each Prime share held by them. Each HCI Exchangeable Share would be exchangeable for one Homestake common share at any time at the option of the holder. The arrangement, which is subject to the approval of the shareholders of both Homestake and Prime, would result in the issuance of a total of 25.4 million Homestake common and 9 HOMESTAKE MINING COMPANY AND SUBSIDIARIES HCI Exchangeable Shares in exchange for the 37.6 million Prime shares held by the minority shareholders of Prime. 11. The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") imposes heavy liabilities on persons who discharge hazardous substances. The Environmental Protection Agency ("EPA") publishes a National Priorities List ("NPL") of known or threatened releases of such substances. Grants: Homestake's former uranium millsite near Grants, New Mexico is listed on the NPL. The EPA asserted that leachate from the tailings contaminated a shallow aquifer used by adjacent residential subdivisions. Homestake paid the costs of extending the municipal water supply to the affected homes and continues to operate a water injection and collection system that has significantly improved the quality of the aquifer. The Company has decommissioned and disposed of the mills and has covered the tailings impoundments at the site. The total future cost for reclamation, remediation, monitoring and maintaining compliance at the Grants site is estimated to be $17.5 million. Title X of the Energy Policy Act of 1992 (the "Act") and subsequent amendments to the Act authorized appropriations of $335 million to cover the Federal Government's share of certain costs of reclamation, decommissioning and remedial action for by-product material (primarily tailings) generated by certain licensees as an incident of uranium sales to the Federal Government. Reimbursement is subject to compliance with regulations of the Department of Energy ("DOE"), which were issued in 1994. Pursuant to the Act, the DOE is responsible for 51.2% of past and future costs of reclaiming the Grants site in accordance with Nuclear Regulatory Commission license requirements. Through June 30, 1998, Homestake had received $26 million from the DOE and the accompanying balance sheet at June 30, 1998 includes an additional receivable of $6.3 million for the DOE's share of reclamation expenditures made by Homestake through that date. Homestake believes that its share of the estimated remaining cost of reclaiming the Grants facility is fully provided in the financial statements at June 30, 1998. In 1983, the state of New Mexico made a claim against Homestake for unspecified natural resource damages resulting from the Grants tailings. New Mexico has taken no action to enforce its claim. Whitewood Creek: Whitewood Creek was a site where mining companies operating in the Black Hills of South Dakota, including Homestake, placed mine tailings (ground rock) beginning in the nineteenth century. Some tailings placed in Whitewood Creek eventually flowed into the Belle Fourche River, the Cheyenne River and Lake Oahe. Placement of mine tailings into Whitewood Creek was authorized by the laws of the United States, the Dakota territory and the State of South Dakota, and Whitewood Creek was later specifically designated by the State of South Dakota as a disposal stream for mine tailings and for the disposal of raw sewage and other municipal waste. In response to changes in legal requirements, Homestake ceased the placement of mine tailings into Whitewood Creek and for many years the Homestake mine has impounded all mine tailings that are not redeposited in the mine. Deposits of tailings along an 18-mile stretch of Whitewood Creek formerly constituted a site on the NPL. The EPA asserted that discharges of tailings by mining companies, including Homestake, contaminated the soil and streambed. Homestake signed a Consent Decree with the EPA and carried out remedial work. The site was deleted from the NPL on August 13, 1996. In the deletion notice, the EPA stated that "EPA, in 10 HOMESTAKE MINING COMPANY AND SUBSIDIARIES consultation with the State of South Dakota, have determined that the Site poses no significant threat to public health or the environment." In September, 1997 the State of South Dakota filed an action against Homestake, alleging that Homestake's disposal of mine tailings in Whitewood Creek resulted in injuries to natural resources in Whitewood Creek, the Belle Fourche River, the Cheyenne River and Lake Oahe (collectively the "NRD Site"). The complaint also alleges that the tailings constitute a continuing public nuisance. The complaint asks for abatement of the nuisance, response costs, damages in an unspecified amounts, litigation costs and interest. In November 1997, the United States government and the Cheyenne River Sioux Tribe (the "federal trustees") filed a similar action alleging injuries to natural resources and seeking response costs, damages in unspecified amounts, litigation costs and attorneys fees. In its answers, Homestake denies that there has been any continuing damage to natural resources or nuisance as a result of the placement of tailings in Whitewood Creek. Among other defenses, it is also the position of Homestake that as a result of the State of South Dakota's ownership of Whitewood Creek and state and federal designation of Whitewood Creek as an authorized disposal site, the State of South Dakota and the federal government are responsible for all past and future damages. Homestake has also counterclaimed against the State of South Dakota and the federal trustees seeking cost recoupment, contribution and indemnity. In the opinion of Homestake, there is no basis for the claims by the State of South Dakota or by the federal trustees. Homestake is also of the opinion that Homestake has valid defenses and counterclaims against the State of South Dakota and the federal trustees, and cross-claims for recovery, contribution and indemnity against other government entities and other persons who participated in ownership and/or operation of Whitewood Creek as a waste disposal site or who disposed of waste in the NRD Site. Homestake, the State of South Dakota and the Federal Trustees are engaged in settlement discussions with respect to the actions. If settlement is not achieved, Homestake intends to vigorously defend this action and to seek recovery, contribution and indemnity from the State of South Dakota and the federal trustees for past and future expenditures. Homestake also expects to seek recovery, contribution and indemnity from other government entities and other persons who participated in ownership and/or operation of Whitewood Creek as a waste disposal site or who disposed of waste in the NRD Site. Homestake does not believe that resolution of these matters will have a material effect on the business or financial condition or results of operations of Homestake. 11 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations (Unless specifically stated otherwise, the following information relates to amounts included in the consolidated financial statements without reduction for minority interests. Information for prior periods has been restated to include Plutonic which was acquired on April 30, 1998. Homestake reports per ounce production costs in accordance with the "Gold Institute Production Cost Standard.") On April 30, 1998 Homestake completed the acquisition of Plutonic Resources Limited ("Plutonic"), an Australian gold producer, by issuing 64.4 million shares with a market value of approximately $770 million. Homestake issued 63.9 million shares in exchange for all Plutonic fully paid ordinary shares outstanding based on an exchange ratio of 0.34 Homestake common shares for each Plutonic fully paid ordinary share, and 0.5 million Homestake common shares for the Plutonic partly paid shares and options outstanding. The business combination has been accounted for as a pooling of interests, and accordingly, the Company's consolidated financial statements have been restated to include Plutonic for all prior periods. RESULTS OF OPERATIONS Homestake recorded a net loss of $30.9 million or $0.15 per share during the second quarter of 1998 compared to a net loss of $64.9 million or $0.31 per share during the second quarter of 1997. The 1998 second quarter loss includes charges of $15 million ($17.9 million pretax) or $0.07 per share for business combination and integration costs related to the Plutonic acquisition and $2.6 million ($2.9 million pretax) or $0.02 per share for write-downs of exploration properties. Results for the 1997 second quarter include write-downs of $50 million ($65.1 million pretax) or $0.24 per share taken primarily at the Mt Morgans mine and the Meekatharra exploration property. Excluding the effect of nonrecurring items, the Company incurred a net loss of $13.3 million or $0.06 per share in the 1998 second quarter compared to a net loss of $14.9 million or $0.07 per share in the 1997 second quarter. The improved results reflect a substantial decline in cash costs, higher production and reduced exploration expenditures. These factors were offset in part by a significant decline in the gold price, higher mark-to-market losses on foreign currency exchange contracts, and increased depreciation, depletion and amortization expenses primarily due to higher sales volumes. Gold production in the second quarter of 1998 was 656,600 ounces compared to 626,700 ounces produced in the second quarter of 1997. During the second quarter of 1998, sales of equivalent ounces of gold increased by 14% to 693,800 ounces compared to 610,900 ounces in the second quarter of 1997. However, gold and ore sales revenue decreased to $210.7 million during the three months ended June 30, 1998 from $214.4 million in the corresponding prior year period due to a decline in the average price of gold. The Company's average realized price declined to $316 per equivalent ounce of gold in the second quarter of 1998 from $362 per equivalent ounce realized in the comparative 1997 period. In January 1998, the Company began a major restructuring of operations at the Homestake mine in order to reduce operating costs. The Company suspended underground mining for approximately 60 days while it completed the final details of the new operating plan and readied the underground mine to begin operating on the restructured basis. Open Cut ore stockpiles continued to be processed through the mill at an accelerated rate while the underground operations were suspended. The new mine plan specifically is designed to improve the grade of ore recovered through the increased use of mechanized cut-and-fill mining methods. When fully implemented, the plan will reflect a reorganization of underground activities and a significant 12 HOMESTAKE MINING COMPANY AND SUBSIDIARIES reduction in work force that will generate considerable cost savings and will increase the mine's future total earnings and cash flow. Homestake expects to invest up to $30 million by the end of 1999 in the restructuring process to purchase equipment, and upgrade facilities and infrastructure. Once the new operating plan is fully implemented by the end of 1999, annual gold production is expected to be between 150,000 and 180,000 ounces. Total cash costs for the underground operations are projected to decline to $280 per ounce from the 1997 levels of approximately $335 per ounce. Underground crews returned to work on a limited basis on March 26, 1998, and the remaining underground work force, about one-half of the size of the pre-shutdown force, returned on a phased basis through April 1998. Substantial development work is ongoing to prepare the mine to operate under the new operating plan, and production is increasing each month. Domestic gold production increased slightly to 182,600 ounces during the second quarter of 1998 from 174,600 ounces during the second quarter of 1997. The increase primarily is due to the commencement of production at the new Ruby Hill mine in Nevada, offset by the temporary suspension of mining in the underground operations at the Homestake mine. The Ruby Hill mine, which commenced commercial production effective January 1, 1998, produced 30,400 ounces of gold at a cash cost $123 per ounce during the second quarter of 1998. The mine continues to exceed initial projections due to processing 12% more tons than planned and to a higher gold recovery rate. At the Homestake mine, gold production during the second quarter of 1998 declined by 28% to 70,400 ounces compared to 97,900 ounces during the second quarter of 1997. During the temporary shut down, the mill processed an increased volume of lower-grade ore from the lower-cost Open Cut operations. The increased volume of Open Cut ore reduced the mine's average cash costs to $256 per ounce during the 1998 second quarter from $330 per ounce in the 1997 second quarter. At the McLaughlin mine, production increased to 34,800 ounces during the second quarter of 1998 from 30,900 ounces during the prior year's second quarter due to a combination of higher ore grades and an increase in mill throughput. These factors together with lower unit operating and maintenance costs resulted in a significant reduction in cash costs to $201 per ounce in 1998 from $254 per ounce in the second quarter of 1997. Homestake's share of production at the Round Mountain mine increased by 4,000 ounces to 36,500 ounces during the second quarter of 1998 from 32,500 ounces produced during the second quarter of 1997. The higher production primarily is due to production from the new 8,000 tons-per-day mill which was commissioned in late 1997. The new mill, which was constructed to process higher-grade ores, produced 6,200 ounces (Homestake's share) during the quarter. Cash costs at Round Mountain declined to $194 per ounce in the 1998 second quarter from $204 per ounce in the 1997 second quarter due to cost savings associated with the new mining plan instituted in 1997. The new pit design has led to a lower stripping ratio that has reduced unit costs and capital requirements, substantially improving earnings and cash flow over the life of the operation. Total foreign gold production during the three months ended June 30, 1998 increased 21,900 ounces or 5% to 474,000 equivalent ounces over the comparable period for the prior year. This increase in production primarily is due to a significant increase in production at the Eskay Creek and Williams mines in Canada and at the Lawlers mine in Australia. Production at the Eskay Creek mine increased to 130,000 gold equivalent ounces during the second quarter of 1998 from 100,900 gold equivalent ounces during the second quarter of 1997. Although the gold grade has been consistently above projections this year, most of the production increase can be attributed to a lower silver/gold equivalency ratio and the excellent performance from the gravity/flotation mill installed in December 1997 to process lower-grade ore. Cash costs (including third-party smelter costs) were $134 per equivalent ounce in the 1998 second quarter compared to $157 per equivalent ounce in the 1997 second quarter. The Williams mine produced 50,900 ounces of gold at a cash cost of $209 per ounce during the second quarter of 1998 compared to 42,800 ounces produced at a cash cost of $272 per ounce during the second quarter of 1997. The higher production was attributable to an increase in tons milled and an 13 HOMESTAKE MINING COMPANY AND SUBSIDIARIES increase in the ore grade. The significant decline in cash cost resulted from increased production, improved ground conditions and lower underground development costs. The David Bell mine produced 22,900 ounces at a cash cost of $180 per ounce during the second quarter of 1998 compared to 20,800 ounces produced at a cash cost of $213 per ounce during the second quarter of 1997 due to an increase in tons milled. Homestake's share of production at the Snip mine decreased to 26,800 ounces in the 1998 second quarter from 31,300 ounces in the 1997 second quarter. The decline in production reflect the mining of lower-grade ore. However, costs still declined as the impact of the lower ore grade was more than offset by lower mining and service costs. Overall Canadian operations cash cost also benefited from a four percent decline in the average Canadian/U.S. dollar exchange rate between the second quarters of 1998 and 1997. HGAL's share of production at the Kalgoorlie operations in Western Australia totaled 104,800 ounces in the second quarter of 1998 compared to 107,000 ounces in the second quarter of 1997. A small decline in mill throughput due to a planned relining of the SAG mill and an unscheduled shutdown to inspect and repair damage to the mill girth gear was offset by the mining of higher-grade ore from the Super Pit. Cash costs in 1998 declined to $219 per ounce from $279 per ounce in 1997, attributable to lower costs and the decline in value of the Australian dollar in relation to the U.S. dollar. In the second quarter of 1998, gold production at the Plutonic mine dropped to 55,700 ounces at a cash cost of $247 per ounce compared to 73,900 ounces at a cash cost of $218 per ounce in the prior year's second quarter. Plutonic is mainly an underground operation as the open pit was mined out in 1997. Mill feed from underground operations was somewhat below expectations in the last quarter as lode structures in the NW Extension were flatter and less continuous than anticipated, making mining more difficult. However, current drilling already has succeeded in defining higher-grade lode structures in areas where production will commence in the third quarter. Gold production for the latest quarter at the Darlot/Centenary mine declined to 14,700 ounces in 1998 from 16,100 ounces in the 1997 quarter as ore was sourced predominantly from the lower-grade Darlot orebody. Consequently, cash costs increased to $289 per ounce in 1998 from $271 per ounce in 1997. Development of the low-cost, high-grade Centenary deposit has been delayed somewhat as a result of a change in mining contractors. Initial production from the Centenary deposit is expected to take place by the end of the third quarter. For the second quarter of 1998, production from the Lawlers mine increased to 30,800 ounces compared to 18,500 ounces in the comparable period of the previous year. Ore grades, particularly from the New Holland South underground zone, and the recovery rate from the gravity circuit both have been higher than anticipated. As a result, cash costs declined to $203 per ounce compared to $232 per ounce in 1997. Work has commenced on a second decline to access the deeper lode structures of the New Holland South zone. Homestake's 80% share of gold production from the Mt Morgans mine was 15,100 ounces in the latest quarter at a cash cost of $222 per ounce compared to 16,500 ounces at a cost of $411 per ounce in the comparable 1997 quarter. Cash costs declined substantially despite the drop in production due to higher than expected ore grades and recoveries from stockpiled ore. The Mt Morgans mine is scheduled to cease operations in September 1998. However, recent exploration results have been very promising, and could result in extending the life of the mine if additional ore is located. Overall Australian operations cash costs per ounce also benefited from an eighteen percent decline in the average Australian/U.S. dollar exchange rate between the second quarters of 1998 and 1997. 14 HOMESTAKE MINING COMPANY AND SUBSIDIARIES At the La Falda mine in Chile, second quarter 1998 gold production increased to 12,700 ounces compared to 8,300 ounces in 1997 primarily due to higher recoveries. Cash costs declined to $191 per ounce from $203 per ounce. At present, oxide ore is being mined and heap leached while metallurgical work continues on the much larger, predominantly unoxidized Jeronimo orebody. Recent tests of bio-oxidation techniques have been encouraging and testing to determine the best method for extracting gold from the ore will continue. A decline is being developed to access the deeper sulfide ore so that a large sample of this ore can be obtained for metallurgical testing. The Company's consolidated total cash costs per ounce decreased 26 percent to $201 in the 1998 second quarter compared to $254 in the 1997 second quarter. Approximately $21 per ounce of this decline is attributable to the lower Australian and Canadian dollar exchange rates. For the six months ended June 30, 1998, the Company recorded a net loss of $37.5 million or $0.18 per share compared to a net loss of $16.6 million or $0.08 per share in 1997. The net loss for the first half of the 1998 includes $17.7 million ($20.7 million pretax) or $0.08 per share for business combination and integration costs related to the acquisition of Plutonic, $5.9 million ($8.9 million pretax) or $0.03 per share in restructuring costs relating to the Homestake mine, and $2.6 million ($2.9 million pretax) or $0.02 per share for write-downs of exploration properties. The net loss for the first six months of 1997 includes gains of $47.2 million ($62.9 million pretax) or $0.22 per share from the break-up fee received from Santa Fe Pacific Gold Corporation ("Santa Fe") upon termination of Homestake's merger agreement with Santa Fe and $8.1 million ($13.5 million pretax) or $0.04 per share from the sale of joint venture interests in two mining properties in the Northwest Territories of Canada, and an after-tax loss of $50 million ($65.1 million pretax) or $0.24 per share primarily related to the write-downs at the Mt Morgans mine and the Meekatharra exploration property. Year-to-date revenues from gold and ore sales totaled $405 million during the first six months of 1998 compared to $442.2 million during the first six months of 1997, reflecting significantly lower average realized prices partially offset by increased sales volumes. During the first half of 1998, 1,332,500 equivalent ounces of gold were sold at an average realized price of $316 per ounce compared to sales of 1,231,900 equivalent ounces of gold sold at an average realized price of $364 per ounce during the first half of 1997. The increased sales volumes primarily are due to increases in production. The Company's share of revenues from the Main Pass 299 operation in the Gulf of Mexico declined to $5.7 million during the second quarter of 1998 from $6.8 million in the second quarter of 1997, and operating losses were $1 million during the second quarter compared to losses of $0.4 million during the 1997 second quarter. Sulfur sales increased to 77,900 long tons during the 1998 second quarter from 76,700 long tons during the 1997 second quarter. However, the average realized sulfur price declined to $58 per ton during the 1998 second quarter compared to $60 per ton during the second quarter of the previous year. Oil sales also declined due to a 29% decrease in production and a 31% decrease in the average oil price per barrel. Year-to-date 1998 revenues from the Main Pass 299 operations decreased to $11.8 million compared to year-to-date 1997 revenues of $13.8 million, and year-to-date 1998 operating losses were $1.7 million compared to losses of $1 million for the year-to-date 1997 period. The 1998 results reflect lower oil prices and sales volumes, offset by lower depreciation charges following the write down of the sulfur assets at September 30, 1997. Homestake's gold hedging policy provides for the use of forward sales contracts for up to 30% of each of the following ten year's expected annual gold production at prices in excess of certain targeted prices, and the use of combinations of put and call option contracts to establish minimum floor prices while allowing participation in future increases in the price of gold. In 1997, Homestake entered into a series of put and call options which provide a floor price of $325 per 15 HOMESTAKE MINING COMPANY AND SUBSIDIARIES ounce for 900,000 ounces of 1998 production while allowing for full participation in any increase in the price of gold above $336 per ounce. Gold sales for the three and six months ended June 30, 1998 includes 225,000 and 450,000 ounces, respectively, at an average price of $325 per ounce under this program. At June 30, 1998 the Company owned put options for 450,000 ounces of gold exercisable during 1998 at a price of $325 per ounce. The Company also had written call options outstanding for 450,000 ounces of gold exercisable during 1998 at a price of $325 per ounce and owned call options for 450,000 ounces of gold exercisable during 1998 at a price of $336 per ounce. During the three and six months ended June 30, 1998 the Company delivered or financially settled 55,900 and 178,900 ounces of its Australian gold production into Australian dollar denominated forward gold contracts at average prices of $372 and $339 per ounce, respectively. During the three and six months ended June 30, 1997 the Company delivered 124,300 and 265,150 ounces of its Australian gold production into Australian dollar denominated forward gold contracts at average prices for both periods of $429 per ounce. During June 1998, the Company closed out and financially settled one million ounces of its Australian dollar-denominated forward gold contracts. The gain of $5 million realized on this arrangement was deferred and will be recorded in income as the originally designated production is delivered. At June 30, 1998 the Company had remaining commitments for 210,000 ounces of its future Australian dollar denominated forward gold contracts at an average price of $320 (A$526) per ounce. During the three and six months ended June 30, 1998 the Company delivered or financially settled 30,000 and 60,000 ounces of its North American gold production at average prices of $398 and $396 per ounce, respectively, and during the three and six months ended June 30, 1997 the Company delivered or financially settled 30,000 and 60,000 ounces of its North American gold production at average prices of $383 and $381 per ounce, respectively. At June 30, 1998 the Company had committed 520,000 ounces of its future North American gold production for sale through the year 2003 at an average price of $438 per ounce under forward sales contracts. The Company also owned put options for 30,000 ounces of gold exercisable during 2000 at a price of $350 per ounce and had written call options outstanding for 15,000 ounces of gold exercisable during 2000 at an average price of $395 per ounce. The Company's hedging activities increased revenues by approximately $13 million and $27 million in the three and six months ended June 30, 1998, respectively, and by approximately $14 million and $29 million in the three and six months ended June 30, 1997, respectively. The estimated liquidation value of the Company's hedging position at June 30, 1998 was approximately $56.9 million. In February 1998, Prime adopted a gold and silver hedging policy which provides for the use of forward sales contracts for up to 40% of each of the following five year's expected annual gold and silver production at prices in excess of certain targeted prices. At June 30, 1998 Prime had forward sales outstanding for approximately 7.2 million ounces of silver during the period 1999 through 2001 at an average price of $6.28 per ounce. A significant portion of the Company's operating expenses is incurred in Australian and Canadian currencies. The Company's profitability is impacted by fluctuations in these currencies' exchange rates relative to the United States dollar. Under the Company's foreign currency protection program, the Company has entered into a series of foreign currency option contracts which establish trading ranges within which the United States dollar may be exchanged for Australian and Canadian dollars. At June 30, 1998 the Company had a recorded net unrealized loss of $28.9 million on open contracts under this program. Other income for the six months ended June 30, 1998 includes foreign currency exchange losses of $25.4 million and gains on sales of Rabbi Trust investments of $4.3 million. Other 16 HOMESTAKE MINING COMPANY AND SUBSIDIARIES income in 1997 includes a $13.5 million gain on sale of the George Lake/Back River joint venture interests and a net foreign currency exchange losses of $6.9 million. Depreciation, depletion and amortization expense increased to $37.4 million in the second quarter of 1998 compared to $34 million during the 1997 second quarter reflecting the higher gold production, offset by reduced depreciation charges following the asset write-downs during 1997. Exploration expense for the three and six months ended June 30, 1998 was $11.5 million and $21.8 million, respectively, compared to $18.1 million and $30.1 million of the respective three and six months periods ended June 30, 1997. The Company expects to spend approximately $58 million during 1998 on exploration projects, of which 50% is expected to be spent in Australia and 30% in North America. Income and mining tax expense for the six months ended June 30, 1998 was $2.3 million compared to $31 million for the six months ended June 30, 1997. The decrease in tax expense primarily reflects taxes of $15.7 million provided during 1997 on the break-up fee received from Santa Fe upon termination of Homestake's merger agreement with Santa Fe. For the first half of 1998, the consolidated effective tax rate was a negative 8%, reflecting the geographic mix of pretax income and losses. The tax benefits related to losses incurred in the United States and Australia were more than offset by a tax expense recorded with respect to the Canadian earnings. The Company's consolidated effective income and mining tax rate will fluctuate depending on the geographical mix of pretax income. Minority interests in the income of consolidated subsidiaries increased during the first six months of 1998 to $5.6 million from $4.9 million during the first six months of 1997. The increase in minority interests primarily is attributable to higher earnings at the Eskay Creek mine which is owned by Prime Resources Group Inc., a 50.6%-owned subsidiary of the Company. The following chart details Homestake's gold production and total cash costs per ounce by location, and consolidated revenue and production costs per ounce. 17 HOMESTAKE MINING COMPANY AND SUBSIDIARIES
Production (Ounces in thousands) Three Months Ended Six Months Ended June 30, June 30, Mine (Percentage interest) 1998 1997 1998 1997 - -------------------------- -------------------------------- -------------------------------- Homestake (100) 70.4 97.9 146.4 204.3 Ruby Hill (100) 30.4 - 61.0 - McLaughlin (100) 34.8 30.9 64.9 62.5 Round Mountain (25) 36.5 32.5 69.5 60.6 Pinson (50) 4.5 6.2 10.9 12.6 Marigold (33) 6.0 7.1 12.2 14.3 -------------- -------------- -------------- -------------- Total United States 182.6 174.6 364.9 354.3 Eskay Creek (100) (1) 130.0 100.9 271.1 195.5 Williams (50) 50.9 42.8 95.6 94.2 David Bell (50) 22.9 20.8 41.1 43.8 Quarter Claim (25) 2.8 2.8 5.6 5.6 Snip (100) (2) 26.8 31.3 50.5 59.5 -------------- -------------- -------------- -------------- Total Canada 233.4 198.6 463.9 398.6 Kalgoorlie (50) 104.8 107.0 198.9 215.3 Plutonic (100) 55.7 73.9 112.0 135.0 Darlot/Centenary (100) 14.7 16.1 30.3 29.5 Lawlers (100) 30.8 18.5 62.4 28.2 Mt Morgans (80) 15.1 16.5 34.6 36.6 Peak Hill (67) 6.8 9.0 12.6 18.4 -------------- -------------- -------------- -------------- Total Australia 227.9 241.0 450.8 463.0 Agua de la Falda, Chile (100) 12.7 8.3 23.7 8.3 -------------- -------------- -------------------------------- Total Production (4) 656.6 626.7 1,303.3 1,237.2 Less Minority Interests (83.7) (69.5) (170.5) (130.1) -------------- -------------- -------------- -------------- Homestake's Share 572.9 557.2 1,132.8 1,107.1 ============== ============== ============== ============== 18 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Total Cash Costs (Dollars per ounce) Three Months Ended Six Months Ended June 30, June 30, Mine (Percentage interest) 1998 1997 1998 1997 - -------------------------- -------------------------------- -------------------------------- United States Homestake (100) $256 $330 $250 $323 Ruby Hill (100) 123 - 126 - McLaughlin (100) 201 254 216 249 Round Mountain (25) 194 204 200 219 Pinson (50) 447 372 374 342 Marigold (33) 261 257 253 243 Canada Eskay Creek (100) (3) 134 157 127 161 Williams (50) 209 272 226 251 David Bell (50) 180 213 206 203 Quarter Claim (25) 169 172 170 174 Snip (100) (3) 203 216 213 210 Australia Kalgoorlie (50) 219 279 239 276 Plutonic (100) 247 218 256 243 Darlot/Centenary (100) 289 271 312 322 Lawlers (100) 203 232 195 238 Mt Morgans (80) 222 411 227 386 Peak Hill (67) 253 251 278 245 Chile Agua de la Falda (100) 191 203 202 203 Weighted Average $201 $254 $207 $256 19 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Three Months Ended Six Months Ended June 30, June 30, Per Ounce of Gold 1998 1997 1998 1997 -------------------------------- -------------------------------- Revenue $316 $362 $316 $364 ================================ ================================ Per Ounce Costs Cash Operating Costs (5) $197 $250 $204 $252 Other Cash Costs (6) 4 4 3 4 -------------------------------- -------------------------------- Total Cash Costs 201 254 207 256 Noncash Costs (7) 56 58 56 59 -------------------------------- -------------------------------- Total Production Costs $257 $312 $263 $315 ================================ ================================ (1) Ounces produced are expressed on a gold equivalent basis. Silver is converted to gold equivalent using the ratio of the silver market price to the gold market price. Eskay Creek production includes 70,000 (56,500 in 1997) ounces of gold and 3.1 million (3.2 million in 1997) ounces of silver contained in ore and concentrates sold to smelters in the second quarter, and 143,400 (110,900 in 1997) ounces of gold and 6.3 million (6 million in 1997) ounces of silver contained in ore and concentrates sold to smelters in the year-to-date period. (2) Includes ounces of gold contained in dore and concentrates. (3) For comparison purposes, total cash costs per ounce include estimated third-party costs incurred by smelter owners and others to produce marketable gold and silver. (4) Includes 4,200 ounces and 12,500 ounces of gold produced at the Bellevue project in Western Australia during the 1997 second quarter and year-to-date periods, respectively, and 500 ounces produced at the El Hueso mine in Chile during the 1997 year-to-date period. (5) Cash operating costs are costs directly related to the physical activities of producing gold; includes mining, milling, third-party smelting and in-mine drilling expenditures that are related to production. (6) Other cash costs are costs that are not directly related to, but may result from, gold production; includes production taxes and royalties. (7) Noncash costs are costs that typically are accounted for ratably over the life of an operation; includes depreciation, depletion, accruals for final reclamation. Noncash costs do not include amortization of additions to property resulting from SFAS 109 deferred tax purchase accounting adjustments, as these additions did not involve any economic resources of the Company.
LIQUIDITY AND CAPITAL RESOURCES Cash provided by operations totaled $63.8 million during the first six months of 1998 compared to $109.8 million during the first six months of 1997. Cash provided by operations during the 1997 six-month period includes the termination fee received from Santa Fe upon termination of Homestake's merger agreement with Santa Fe, partially offset by $50 million in payments for income and mining taxes, primarily payments made in the first quarter of 1997 related to Prime's 1996 taxable income. Payments for income and mining taxes of $11.4 million (net) were made during the first six months of 1998. Working capital at June 30, 1998 amounted to $308 million, including $284 million in cash and equivalents and short-term investments. 20 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Capital additions of $33.9 million for the first half of 1998 compare to additions of $101.9 million for the first half of 1997. Capital additions during 1998 include $7 million and $6.7 million primarily for underground development work at the Plutonic and Darlot/Centenary mines, respectively, with the balance primarily related to productivity improvement projects and sustaining capital at the Company's other operating mines. Capital additions in 1997 include $30.9 million for construction and development work at the Ruby Hill mine, $22.7 million primarily for underground development and expenditures for a new gas-fired power station at the Plutonic mine, $8.3 million at the Round Mountain mine primarily for a new mill to process the higher-grade sulfide ore, $8.1 million for development work at the Darlot/Centenary mine, $7.3 million primarily for a tailings dam lift and improvements in the underground operations at the Homestake mine, and $6.3 million at the Kalgoorlie operations primarily for a decline from surface and a ventilation raise at the Mt. Charlotte mine. On March 10, 1997 Santa Fe terminated its previously announced merger agreement with Homestake and paid Homestake a $65 million termination fee. As a result, the Company recorded a pretax gain of $62.9 million ($47.2 million after tax), net of merger-related expenses of $2.1 million incurred in 1997. In February 1997, Homestake completed the sale of its interests in the George Lake and Back River joint ventures in Canada to Kit Resources Corporation ("Kit") for $9.3 million in cash and 3.6 million shares of Kit common stock. As a result of this transaction, the Company recorded a pretax gain of $13.5 million ($8.1 million after tax), which is included in other income. In June 1998, Plutonic repaid $8 million of its debt outstanding under its syndicated credit facility. Borrowings outstanding at June 30, 1998 include borrowings of $95.5 million by Plutonic and $45.6 million by HGAL under the Company's then-existing credit facilities. In July 1998, the Company entered into a new United States/Canadian/Australian cross-border credit facility providing a total availability of $430 million. The new facility replaces the Company's $275 million cross-border credit facility and Plutonic's A$400 million syndicated credit facility, both of which were cancelled. Borrowings by Plutonic and HGAL under the prior credit facilities were repaid using the new facility. The new facility is available through July 14, 2003 and provides for borrowings in United States, Canadian, or Australian dollars, or gold, or a combination of these. Under the new facility, the Company pays a commitment fee ranging from 0.15% to 0.35% per annum, depending upon rating agencies' ratings for the Company's senior debt, on the unused portion of this facility. The new credit agreement requires a minimum consolidated net worth of $500 million. Interest on the HGAL and Plutonic Australian dollar borrowings under the new facility is payable quarterly and is based on the Australian Bank Bill Swap Rate plus a margin of up to 1.125%. At July 31, 1998 the interest rate was 6.22%. In February 1997, the Company paid a cash dividend of 5 cents per share. In March 1997, the Company reduced its annual dividend rate to 10 cents per share from 20 cents per share and declared a semi-annual dividend of 5 cents per share which was paid in May 1997. In May 1998, the Company paid a semi-annual dividend of 5 cents per share. In April 1997, the Company filed with the Securities and Exchange Commission a shelf registration statement for the potential sale of up to 20 million shares of common stock. The proceeds from any such offering would be available for general corporate purposes, which could include capital expenditures, repayment of debt and future acquisitions, which have the potential to add to the Company's gold reserves and future gold production. In February 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 132 ("SFAS 132"), "Employers' Disclosures about Pensions and Other Postretirement Benefits." SFAS 132 revises employers' disclosures about pension and 21 HOMESTAKE MINING COMPANY AND SUBSIDIARIES other postretirement benefit plans. It does not change the measurement or recognition of those plans. SFAS 132 standardizes the disclosure requirements for pensions and other postretirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures. SFAS 132 will be effective for the Company's financial statements for the year ended December 31, 1998. In June 1998, FASB issued Statement of Financial Accounting Standards No. 133 ("SFAS 133"), "Accounting for Derivative Instruments and Hedging Activities." SFAS 133 requires that all derivatives be recognized as assets or liabilities and be measured at fair value. Gains or losses resulting from changes in the values of those derivatives would be accounted for depending on the use of the derivatives and whether they qualify for hedge accounting as either a fair value hedge or a cash flow hedge. The key criterion for hedge accounting is that the hedging relationship must be highly effective in achieving offsetting changes in fair value or cash flows of the hedging instruments and the hedged items. SFAS 133 is effective for fiscal years beginning after June 15, 1999 but earlier adoption is permitted. The Company currently is evaluating the impact that this requirement will have on reported operating results and financial position and has not yet determined when SFAS 133 will be adopted. Future results will be impacted by such factors as the market price of gold, silver and sulfur, the Company's ability to expand its ore reserves and the fluctuations of foreign currency exchange rates. The Company believes that the combination of cash, short-term investments, available lines of credit and future cash flows from operations will be sufficient to meet normal operating requirements, planned capital expenditures, and anticipated dividends. Prime Resources Group Inc. On May 25, 1998 Homestake announced that it had proposed to the Board of Directors of Prime, the acquisition by Homestake of the 49.4% of Prime held by the public and not already owned by Homestake. Under the terms of the offer, Prime shareholders would receive 0.675 Homestake common shares or 0.675 Homestake Canada Inc. ("HCI") exchangeable shares for each Prime share held by them. Each HCI exchangeable share would be exchangeable for one Homestake common share at any time at the option of the holder. The arrangement, which is subject to the approval of the shareholders of both Homestake and Prime, would result in the issuance of a total of 25.4 million Homestake common and HCI exchangeable shares in exchange for the 37.6 million Prime shares held by the minority shareholders of Prime. 22 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Part II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders 1) As previously reported on the Registrant's Form 8-K filed on May 12, 1998, on April 30, 1998 Registrant consummated the acquisition of Plutonic Resources Limited ("Plutonic"), a publicly-traded Australian gold producer, by an exchange of common stock for common stock. Shareholders of Registrant voted on and approved the acquisition of Plutonic at a Special Meeting of Shareholders held on April 29, 1998. Shareholder votes were as follows: Votes For Votes Against Abstentions --------- ------------- ----------- 79,505,401 1,040,836 603,751 2) At the Annual Meeting of Shareholders held on July 24, 1998, shareholders voted on and approved (i) the election of four Class II directors to serve until the 2001 Annual Meeting, and (ii) the appointment of PricewaterhouseCoopers L.L.P. as independent auditors for 1998. Shareholder votes were as follows:
(i) Election of four Class II Directors: Votes For Votes Withheld ---------------------------------------- --------- -------------- Paul McClintock 127,697,608 1,127,052 John Neerhout, Jr. 127,584,370 1,240,290 Stuart Peeler 127,631,766 1,192,894 Jack Thompson 127,667,534 1,157,126
In addition to the aforementioned directors, the following directors continued in office: M. Norman Anderson, Robert H. Clark, Jr., Douglas W. Fuerstenau, Jeffrey L. Zelms, Richard R. Burt, G. Robert Durham, Peter J. Neff and Carol A. Rae. On July 24, 1998 Harry M. Conger and Henry G. Grundstedt retired as directors. The Board of Directors has elected Jack E. Thompson to replace Mr. Conger as Chairman of the Board. Mr. Thompson will retain his responsibilities as President and Chief Executive Officer of the Company. (ii) Approval of PricewaterhouseCoopers L.L.P. as independent auditors: Votes For Votes Against Abstain --------- ------------- -------- 127,844,464 538,992 441,204 Item 5. - Other Information (a) Amendment to Bylaws On July 24, 1998 the Bylaws were amended to reduce the number of directors from 13 to 12. A copy of the Bylaws, as amended is attached as Exhibit 3.4. 23 HOMESTAKE MINING COMPANY AND SUBSIDIARIES (b) CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Certain statements contained in this Form 10-Q that are not statements of historical facts are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on beliefs of management, as well as assumptions made by and information currently available to management. Forward looking statements include those preceded by the words "believe," "estimate," "expect," "intend," "will," and similar expressions, and include estimates of future production, costs per ounce, dates of construction completion, costs of capital projects and commencement of operations. Forward looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from expected results. Some important factors and assumptions that could cause actual results to differ materially from expected results are discussed below. Those listed are not exclusive. Estimates of future production for particular properties and for the Company as a whole are derived from annual mine plans that have been developed based on mining experience, reserve estimates, assumptions regarding ground conditions and physical characteristics of ore (such as hardness and metallurgical characteristics), expected rates and costs of production, and estimated future sales prices. Actual production may vary for a variety of reasons, such as the factors described above, ore mined varying from estimates of grade and metallurgical and other characteristics, mining dilution, actions by labor, and government imposed restrictions. Estimates of production from properties and facilities not yet in production are based on similar factors but there is a greater likelihood that actual results will vary from estimates due to a lack of actual experience. Cash cost estimates are based on such things as past experience, reserve and production estimates, anticipated mining conditions, estimated costs of materials, supplies and utilities, and estimated exchange rates. Noncash cost estimates are based on total capital costs and reserve estimates, change based on actual amounts of unamortized capital, changes in reserve estimates, and changes in estimates of final reclamation. Estimates of future capital costs are based on a variety of factors and include past operating experience, estimated levels of future production, estimates by and contract terms with third party suppliers, expectations as to government and legal requirements, feasibility reports by Company personnel and outside consultants, and other factors. Capital cost estimates for new projects are subject to greater uncertainties than additional capital costs for existing operations. Estimated time for completion of capital projects is based on such factors as the Company's experience in completing capital projects, and estimates provided by and contract terms with contractors, engineers, suppliers and others involved in design and construction of projects. Estimates reflect assumptions about factors beyond the Company's control, such as the time government agencies take in processing applications, issuing permits and otherwise completing processes required under applicable laws and regulations. Actual time to completion can vary significantly from estimates. See the Company's Form 10-K Report for the year ended December 31, 1997, Part IV, "RISK FACTORS" and "CAUTIONARY STATEMENTS," for a more detailed discussion of factors that may impact on expected future results. 24 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Item 6.
(a) Exhibits Method of Filing -------- ---------------- 3.4 Bylaws, as amended through July 24, 1998 Filed herewith electronically 10.1 Amended and Restated Credit Agreement, dated as of Filed herewith July 14, 1998 electronically 11 Computation of Earnings Per Share Filed herewith electronically 27.1 Financial Data Schedule - June 30, 1998 Filed herewith electronically 27.2 Financial Data Schedule - March 31, 1998 Filed herewith (restated for pooling of interests) electronically 27.3 Financial Data Schedule - periods ended March 31, June 30 Filed herewith and September 30, 1997 (restated for pooling of interests) electronically
(b) Reports on Form 8-K Three reports on Form 8-K were filed during the quarter ended June 30, 1998. The report on Form 8-K dated May 11, 1998 was submitted in order to file a press release announcing that the Registrant had completed the acquisition of Plutonic Resources Limited. The report on Form 8-K dated June 5, 1998 was submitted in order to file the following: (a) a press release announcing the Registrant's offer to acquire the Prime Resources Group Inc. minority interests and (b) the results of the special meeting regarding the acquisition of Plutonic. The report on Form 8-K dated June 22, 1998 was submitted in order to file the following: (a) a press release reporting the interim results following the acquisition of Plutonic and (b) the consolidated financial statements and supplementary data (restated to include Plutonic) for the years ended December 31, 1997, 1996 and 1995. 25 HOMESTAKE MINING COMPANY AND SUBSIDIARIES SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. HOMESTAKE MINING COMPANY Date: August 13, 1998 By: /s/ Gene G. Elam --------------- ---------------- Gene G. Elam Vice President, Finance and Chief Financial Officer 26 EX-3.4 2 BYLAWS EXHIBIT 3.4 HOMESTAKE MINING COMPANY (A DELAWARE CORPORATION) BYLAWS As amended through July 24, 1998 ARTICLE I MEETING OF STOCKHOLDERS SECTION 1. The annual meeting of the Company shall be held on such day and at such time as the Board of Directors shall determine, for the election of Directors and the transaction of such other business as properly come before such meeting. SECTION 2. Special meetings of the stockholders may be called at any time by the Chairman of the Board, by the President, by the Board of Directors of the Company, by a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority, as provided in a resolution of the Board of Directors or in the Bylaws of the Company include the power to call such meetings, or by stockholders having not less than seventy-five percent (75%) of the total voting power of all outstanding shares of stock of the Company, but such special meetings may not be called by any other person or persons; provided, however, that if and to the extent that any special meeting of stockholders may be called by any other person or persons specified in any provisions of the Restated Certificate of Incorporation or any amendment thereto, or any certificate filed under Section 151(g) of the General Corporation Law of Delaware (or its successor statute as in effect from time to time hereafter), then such special meeting may also be called by the person or persons in the manner, at the times and for the purposes so specified. SECTION 3. All notices of meetings of stockholders shall be sent or otherwise given in accordance with Section 4 of this Article I not less than ten (10) nor more than sixty (60) days before the date of the meeting. The notice shall specify the place, date and hour of the meeting and (1) in the case of a special meeting, the general nature of the business to be transacted, and no other business may be transacted, or (2) in the case of the annual meeting, those matters which the Board of Directors, at the time of giving the notice, intends to present for action by the stockholders, and (3) in the case of any meeting at which directors are to be elected, the names of the nominees intended at the time of the mailing of the notice to be presented by management for election. SECTION 4. Notice of any meeting of stockholders shall be given either personally or by mail or other written communication, charges prepaid, addressed to the stockholder at the address of the stockholder appearing on the books of the Company, or given by the stockholder to the Company for the purpose of notice. If no such address appears on the Company's books or is given, notice shall be deemed to have been given if sent to that stockholder by mail or other written communication to the Company's principal executive office, or, if published at least once in a newspaper of general circulation in the county where that office is located. Notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by telegram or other means of written communication. If any notice addressed to a stockholder at the address of that stockholder appearing on the books of the Company is returned to the Company by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the stockholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if these shall be available to the stockholder on written demand of the stockholder at the principal executive office of the Company for a period of one year from the date of the giving of the notice. An affidavit of the mailing or other means of giving any notice of any stockholders' meeting may be executed by the Secretary, any Assistant Secretary, or any transfer agent of the Company giving the notice, and if executed shall be filed and maintained in the minute book of the Company. SECTION 5. Every annual meeting and every special meeting of the stockholders shall be held at such place within or without the State of Delaware as may be designated as the place for holding such meeting by the Board of Directors. In the absence of any such designation, stockholders' meetings shall be held at the principal executive office of the Company. SECTION 6. Except as otherwise provided by statute of by the Restated Certificate of Incorporation, the presence in person or by proxy of the holders of a majority in interest of the Common Stock of the Company at the time issued and outstanding at any meeting shall constitute a quorum for the transaction of business. The stockholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. If such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have the power to adjourn the meeting from time to time until a quorum shall by present or represented. At any adjourned meeting at which a quorum shall be present or represented any business which might have been transacted at the meeting which was adjourned may be transacted and with the same effect. If after the adjournment a new record date is fixed for the adjourned meeting or if the adjournment is for more than thirty (30) days, notice of the adjourned meeting shall be given as in the case of an original meeting, but otherwise no further notice of the time and place of the adjourned meeting need be given other than by announcement at the meeting at which such adjournment is taken. SECTION 7. Except as otherwise provided by statute or by the Restated Certificate of Incorporation, every stockholder of record shall be entitled at any meeting of stockholders to one 2 vote on each matter submitted to a vote of the stockholders for every share of stock standing in the name of such person on the books of the Company and qualified to vote. The stockholders' vote shall be by written ballot unless the requirement therefor is dispensed with by the Board of Directors. On any matter other than elections of directors, any stockholder may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the stockholder fails to specify the number of shares which the stockholder is voting affirmatively, it will be conclusively presumed that the stockholder's approving vote is with respect to all shares that the stockholder is entitled to vote. If a quorum is present, the affirmative vote of the majority of the shares present in person or represented by proxy and entitled to vote on any matter shall be the act of the stockholders, unless the vote of a greater number or voting by classes is required by statute or by the Restated Certificate of Incorporation. SECTION 8. In the event the Board of Directors fixes a day for the determination of stockholders of record entitled to vote as provided in Section I of Article XIV of these Bylaws, then only persons in whose names shares entitled to vote stand on the stock records of the Company on such day shall be entitled to vote. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the business day next preceding the day notice is given or, if notice is waived, at the close of business on the business day next preceding the day on which the meeting is held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the Board of Directors fixes a new record date for the adjourned meeting, but the Board of Directors may fix a new record date for the adjourned meeting. SECTION 9. At all meetings of the stockholders, stockholders may vote either in person or by one or more agents authorized by a written proxy signed by the stockholder and filed with the Secretary of the Company. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (1) revoked by the person executing it, before the vote pursuant to that proxy, by a writing delivered to the Company stating that the proxy is revoked, or by a subsequent proxy executed by, or attendance at the meeting and voting in person by, the person executing the proxy, or (2) written notice of the death or incapacity of the maker of that proxy is received by the Company before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of three (3) years from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(c) 3 of the General Corporation Law of Delaware (or its successor statute as in effect from time to time hereafter). SECTION 10. The transactions of any meeting of stockholders, however called and noticed, and wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present either in person or by proxy, and if, either before or after a meeting, each person entitled to vote, who was not present in person or by proxy, signs a written waiver of notice or a consent to a holding of the meeting, or an approval of minutes of the meeting. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of stockholders. All such waivers, consents or approvals shall be filed with the corporate records or made a part of the minutes of the meeting. Attendance by a person at a meeting shall also constitute a waiver of notice of that meeting, except when the person objects at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened, and except that attendance at a meeting is not a waiver of any right to object to the consideration of matters required by law to be included in the notice of meeting but not so included if that objection is expressly made at the meeting. SECTION 11. No action shall be taken by the stockholders except at an annual or special meeting of the stockholders. SECTION 12. At any annual meeting of stockholders, only such business shall be conducted as shall have been brought before the annual meeting (1) by or at the direction of the chairman of the meeting or (2) by any stockholder who is a holder of record at the time of the giving of the notice provided for in this Section 12, who is entitled to vote at the meeting, and who complies with the procedures set forth in this Section 12. For business properly to be brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in proper written form to the Secretary. To be timely, a stockholder's notice must be received at the principal executive offices of the Company not less than 75 days nor more than 180 days prior to the anniversary date of the immediately preceding annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days earlier or more than 30 days later than such anniversary date, notice by the stockholder to be timely must be so received not earlier than the 180th day prior to such annual meeting and not later than the close of business on the later of the 75th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. To be in proper written form, a stockholder's notice to the Secretary shall set forth in writing as to each matter the stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; and (ii) the name and address, as they appear on the Company's books, of the stockholder proposing such business. 4 The foregoing notice requirements shall also be deemed satisfied by a stockholder if the stockholder has notified the Company of his or her intention to present a proposal at an annual meeting and such stockholder's proposal has been included in a proxy statement that has been prepared by management of the Company to solicit proxies for such annual meeting; provided, however, that if such stockholder does not appear or send a qualified representative to present such proposal at such annual meeting, the Company need not present such proposal for a vote at such meeting, notwithstanding that proxies in respect of such vote may have been received by the Company. ARTICLE II DIRECTORS SECTION 1. Subject to the limitations prescribed by statute or by the Restated Certificate of Incorporation or these Bylaws as to action to be authorized or approved by the stockholders, all the powers, rights and privileges of the Company shall be exercised by or under the direction of, and the business and affairs of the Company shall be managed under the direction of, its Board of Directors. Directors shall be elected by the stockholders of the Company, and at each election the persons receiving the greatest number of votes, up to the number of directors then to be elected, shall be the persons then elected. The election of directors is subject to any provisions in the Restated Certificate of Incorporation relating thereto, including any provisions for a classified Board. SECTION 2. Except as otherwise provided by statute or by the Restated Certificate of Incorporation, any vacancy in the Board of Directors may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected and qualified. SECTION 3. All meetings of the Board of Directors shall be held at the principal office of the Company or at any other place within or without the State of Delaware as the Board of Directors may from time to time fix therefor. Any meeting of the Board of Directors, regular or special, may be held by conference telephone or similar communication equipment, so long as all directors participating in the meeting can hear one another, and all such directors shall be deemed to be present in person at the meeting. SECTION 4. A regular meeting of the Board of Directors shall be required to be given, shall be held, if a quorum be present, in each and every year immediately after the adjournment of the annual meeting of stockholders for the purpose of electing officers and transacting such other business as might be transacted at any regular meeting of the Board. Regular meetings of the Board of Directors, of which no notice shall be required to be given, shall be held in every odd-numbered month in accordance with a schedule established by the Board of Directors from 5 time to time, except that the scheduled date of any meeting may be changed by the Chairman of the Board or the President, in the discretion of either, provided that notice of such change shall be given to all directors personally or by mail, telegraph or telephone at least one (1) week prior to such scheduled date and at least four (4) days prior to the date upon which such meeting is to be held. SECTION 5. Special meetings of the Board of Directors shall be called by the Secretary at the direction of the Chairman of the Board, the President, or a majority of the directors. Notice of the time and place of any special meeting of the Board of Directors shall be given by serving the same personally or by telephone or by telegram addressed to each director at his post office address as the same shall appear on the books of the Company at least two (2) hours before such meeting. Each member of the Board of Directors shall, by writing filed with the Secretary, designate his post office address to which notices of meetings of the Board of Directors of this Company shall be directed, and in the event of any change therein shall likewise designate his new post office address. SECTION 6. At all meetings of the Board of Directors a majority of the directors shall be necessary and sufficient to constitute a quorum for the transaction of business, and every act and decision done or made by a majority of the directors present at a regular meeting or a duly called special meeting held at which a quorum is present shall be the act of the Board of Directors, unless a greater number is required by statute or by the Restated Certificate of Incorporation. A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting. In the absence of a quorum, a majority of the directors present at any meeting may adjourn the meeting from time to time until and not past the time fixed for the next regular meeting of the Board of Directors. Notice of the time and place of holding an adjourned meeting need not be given to directors absent from the meeting which was adjourned if the time and place of the adjourned meeting are fixed at the meeting which was adjourned. SECTION 7. By resolution of the Board of Directors, a fixed sum may be allowed each director attending a meeting of the Board of Directors. Members of the Executive Committee or other committees may likewise be allowed fixed sums as determined by the Board of Directors. All directors shall be reimbursed for any reasonable expenses which they incur as such for attendance at meetings of the Board of Directors or committees or otherwise. Directors who are not also officers or employees of the Company may receive such compensation for their services as directors as may be fixed or determined by the Board of Directors. Except as provided herein, no director shall be compensated for his services as a director, but any director may serve the Company in any other capacity and receive compensation therefor. SECTION 8. The transactions of any meeting of the Board of Directors, however called and notices, and wherever held, shall be as valid as though had at a meeting duly held after 6 regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present signs a written waiver of notice and consent to holding the meeting or an approval of the minutes thereof, which waiver, consent, or approval shall be filed with the corporate records or made a part of the minutes of the meeting. Notice of a meeting shall also be deemed given to any director who attends the meeting without protesting before or at its commencement, the lack of notice to that director. Any action required or permitted to be taken by the Board of Directors may be taken without a meeting, if all members of the Board shall individually or collectively consent in writing to such action. Such written consent or consents shall be filed with the minutes of the proceedings of the Board of Directors. SECTION 9. The authorized number of Directors is hereby set at twelve until such number is changed by a Bylaw or amendment thereof duly adopted by the stockholders in accordance with the Restated Certificate of Incorporation or by the Board of Directors amending this Section Nine. The Board of Directors shall be divided into three classes of directors elected for terms of three years each. Until so changed, Class I shall consist of four directors, Class II shall consist of four directors, and Class III shall consist of four directors. SECTION 10. The Board of Directors may from time to time designate from one to three former directors of this Company as Consultants to the Board of Directors. The term of office of each such Consultant to the Board of Directors shall terminate immediately after the adjournment of each annual meeting of stockholders of the Company, or at such other time as may be determined by the Board of Directors. A Consultant to the Board of Directors may attend meetings of the Board of Directors with the privilege of participating in all discussions, but without the right to vote, and shall be eligible for appointment as Consultant to committees of the Board of Directors, but with no right to vote. Consultants shall not be included in determining the presence of a quorum. Other rights, privileges and duties of Consultants to the Board of Directors and any compensation to be paid to Consultants to the Board of Directors may be provided from time to time by resolution of the Board of Directors. ARTICLE III EXECUTIVE AND OTHER COMMITTEES SECTION 1. The Board of Directors may, by resolution or resolutions passed by a majority of the authorized number of directors, appoint from their number an Executive Committee of one or more directors, who shall make recommendations to the Board. The Executive Committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors including, without limitation, the power and authority to declare a dividend, to authorize the issuance of stock and to adopt a certificate of ownership and merger pursuant to Section 253 of the General Corporation Law of Delaware (or its successor statute as in effect from time to time hereafter); but shall not 7 have the power or authority to: (a) amend the Restated Certificate of Incorporation (except that a committee may, to the extent authorized in resolutions providing for the issuances of stock adopted by the Board of Directors as provided in Section 151(a) of the General Corporation Law of Delaware (or its successor statute as in effect from time to time hereafter), fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, distribution of assets of the Company, or the conversion into or the exchange of such shares for shares of any other class or classes or any other series of the same of any other class or classes of stock of the Company), (b) adopt an agreement of merger or consolidation under Section 251 or 252 of the General Corporation Law of Delaware (or its successor statute as in effect from time to time hereafter), (c) recommend to the stockholders the sale, lease or exchange of all or substantially all of the Company's property and assets, (d) recommend to the stockholders a dissolution of the Company or a revocation of a dissolution, or (e) amend the Bylaws of the Company. The Board of Directors shall elect a Chairman of the Executive Committee, and in his absence the Chairman of the Board shall act as Chairman of the Executive Committee, ex officio, in his place, and in the absence of the Chairman of the Executive Committee and the Chairman of the Board, the President of the Company shall act as Chairman of the Executive Committee, ex officio, in their places. SECTION 2. A majority of the Executive Committee shall constitute a quorum for the transaction of business at any meeting thereof duly called and held. The Board of Directors shall have the power to provide by resolution for regular meetings of the Executive Committee and to specify the time and place of holding such regular meetings. Special meetings of the Executive Committee may be called at any time by the Chairman of the Board, the President, or by a majority of the members of the Executive Committee and notice of all such special meetings shall be given in the manner provided in Section 5 of Article II. Meetings of the Executive Committee may be held at the principal office of the Company, or, if authorized by resolution of the Board of Directors, such meetings may, by unanimous consent of the members of the committee, be held at any other place. The Board of Directors shall have the power to prescribe rules for the government of the Executive Committee not inconsistent with the provision of these Bylaws. In the absence of any such prescription by the Board of Directors of by the Bylaws, the regular and special meetings and other actions of the Executive Committee shall be governed by the provisions of Article II applicable to meetings and actions of the Board, with such changes in the context of these Bylaws as are necessary to substitute the Executive Committee and its members for the Board of Directors and its members. SECTION 3. The Board of Directors may, by resolution or resolutions passed by a majority of the authorized number of directors, appoint from their number such other committees consisting of one or more directors as the Board of Directors may deem advisable. The Board may designate one or more directors as alternate members of any committee, who may replace any absent member at the meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have all the authority of the Board of Directors, 8 except with respect to the matters set forth in (a) through (e) of Section 1 of this Article III and shall be governed in accordance with Section 2 of this Article III. SECTION 4. The Executive and other committees shall keep records of their proceedings and report the same to the Board of Directors whenever so required. ARTICLE IV OFFICERS SECTION 1. The officers of this Company shall be a Chairman of the Board, a President, a Vice President, a Secretary, a Treasurer and a Controller, who shall be elected by and hold office at the pleasure of the Board of Directors. The Board of Directors may also elect such additional officers, if any, as it shall deem expedient, including, without limitation, one or more Executive Vice Presidents, one or more Senior Vice Presidents, one or more Vice Presidents and one or more assistant officers. Only members of the Board of Directors shall be eligible for the office of the Chairman of the Board and the office of President, but no other officer need be a member of the Board of Directors. Any two or more offices may be held by the same person. The compensation of officers shall be fixed and determined by the Board of Directors from time to time. SECTION 2. The Board of Directors, at its first meeting after each annual meeting of stockholders, shall elect a Chairman of the Board, a President, a Vice President, a Secretary, a Treasurer and a Controller and at such time or from time to time may elect or appoint such other officers and agents as it shall deem expedient. SECTION 3. Except as otherwise provided by law, or in these Bylaws, or by resolutions of the Board of Directors, each of such officers shall serve until the date appointed by these Bylaws for the next annual meeting of stockholders and until his successor is elected or appointed and shall have qualified. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors. SECTION 4. The Board of Directors, in its discretion, may require any officer, agent or employee of the Company to give security for the faithful performance of his duties in such form and amount and with or without one or more of such sureties as the Board of Directors may determine. 9 SECTION 5. Nothing in this Article IV or elsewhere in these Bylaws shall prevent the Board of Directors from authorizing, or the Company from executing, a contract for the employment of a person as an officer of the Company for a period of more than one year. ARTICLE V CHAIRMAN OF THE BOARD AND PRESIDENT SECTION 1. The Chairman of the Board shall, if present, preside at all meetings of the stockholders and of the Board of Directors, and shall have such other powers and duties as shall be prescribed by the Board of Directors or by law. He shall be a member ex officio of all committees, except the Audit, Compensation and Nominating Committees. SECTION 2. The President shall, if present and in the absence of the Chairman of the Board, preside at all meetings of the stockholders and of the Board of Directors, and shall have such other powers and duties as shall be prescribed by the Board of Directors or by law. He shall be a member ex officio of all committees, except the Audit, Compensation and Nominating Committees. ARTICLE VI POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER AND HEAD OF THE COMPANY Either the Chairman of the Board or the President, as may be determined from time to time by the Board of Directors, shall have the powers and duties of the Chief Executive Officer and head of the Company. Such powers and duties shall include the general control and management of the business and affairs of the Company; the responsibility for seeing that all orders and resolutions of the Board of Directors are carried into effect; the exclusive authority to execute bonds, mortgages and other contracts requiring a seal, under the seal of the Company, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Company; and membership ex officio in all committees, except the Audit, Compensation and Nominating Committees. ARTICLE VII EXECUTIVE VICE PRESIDENTS AND VICE PRESIDENTS 10 SECTION 1. Executive Vice Presidents, if any shall have been elected and be in office, shall have and may exercise the powers and duties of the President in the absence or inability of the latter and such other powers and duties as may be assigned to him by the Board of Directors. SECTION 2. The Vice President or Vice Presidents (including any Senior Vice Presidents) shall have and exercise the powers and duties of the Executive Vice President in the absence or inability of the President and the Executive Vice Presidents and such other powers and duties as may be assigned to them respectively by the Board of Directors. SECTION 3. The Vice President, Finance shall be the Chief Financial Officer of the Company. ARTICLE VIII SECRETARY AND ASSISTANT SECRETARIES SECTION 1. The Secretary shall have custody of the seal of the Company, and when authorized by the Board of Directors, he shall affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary. He shall attend all meetings of the stockholders and of the Board of Directors and keep the minutes of all proceedings in a book or books to be kept for that purpose at the principal office of the Company or at such other place as the Board of Directors may from time to time determine, and he shall perform like duties for the Executive and other committees when required. He shall attend to the giving and serving of all notices of the Company, and he shall perform such other duties as may be incidental to his office or as may be assigned to him by the Board of Directors, the Chairman of the Board, the President, or the officer under whose supervision he shall be. SECTION 2. It shall be the duty of the Assistant Secretaries, if any shall have been elected and be in office, to aid the Secretary in the discharge of his duties and to perform such other duties as may be assigned to them by the Board of Directors, the Chairman of the Board, the President, the Vice President, Finance, or the Secretary. ARTICLE IX TREASURER AND ASSISTANT TREASURER SECTION 1. The Treasurer shall have the care and custody of the funds and securities of the Company, except as otherwise determined by the Board of Directors, and shall deposit all such funds and securities of the Company in the name and to the credit of the Company in such depositories and places and subject to withdrawal in such manner as these Bylaws or the Board 11 of Directors may determine. Within established lines of authority, he shall be responsible for the administration of the Company's securities portfolio, pension plans, insurance and employee benefit programs, the keeping of the stock certificate book and such other books and records as the Board of Directors may direct. He shall also have charge of a stock book containing the names of the stockholders and their addresses, the number of shares of stock held by them respectively, the name and date of the certificates issued for the same, and the number and date of cancellation of every certificate surrendered for cancellation, and shall have such other powers and perform such other duties as may be conferred upon or assigned to him by the Board of Directors, the Chairman of the Board, the President, the Vice President, Finance, or the officer under whose supervision he shall be. SECTION 2. It shall be the duty of the Assistant Treasurer, if one shall have been elected and be in office, to aid the Treasurer in the discharge of his duties and perform such other duties as may be assigned to him by the Board of Directors, the Chairman of the Board, the President, the Vice President, Finance, or the Treasurer. ARTICLE X CONTROLLER AND ASSISTANT CONTROLLER SECTION 1. The Controller shall keep or cause to be kept adequate and correct accounts of the corporate properties and business transactions in books belonging to the Company, and he shall disburse the funds of the Company as ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the President and the Board of Directors, whenever they may require it, an account of all of his transactions and the financial condition of the Company. He shall be responsible for the administration of programs providing for financial management and budgetary controls of the Company, development of accounting policies and procedures, and use of data processing equipment and the preparation, review and filing of all tax and other financial reports and returns, and he shall have such other powers and perform such other duties as may be conferred upon or assigned to him by the Board of Directors, the Chairman of the Board, the President, the Vice President, Finance, or the officer under whose direct supervision he shall be. SECTION 2. It shall be the duty of the Assistant Controller, if one shall have been elected and be in office, to aid the Controller in the discharge of his duties and to perform such other duties as may be assigned to him by the Board of Directors, the Chairman of the Board, the President, the Vice President, Finance, or the Controller. SECTION 3. The Controller shall be the Chief Accounting Officer of the Company. 12 ARTICLE XI GENERAL MANAGER SECTION 1. The Board of Directors may appoint a General Manager who shall not be an officer of the Company unless the Board shall otherwise determine. SECTION 2. Subject to the supervision and direction of the Chairman of the Board or the President, and in accordance with the policies determined by the Board of Directors, the General Manager shall have power and authority to do and transact and supervise and direct such of the usual and ordinary business of the Company as may be designated by the Chairman of the Board or the President. SECTION 3. The Board of Directors may also appoint an Assistant General Manager to aid the General Manager in the performance of his duties and to perform such other duties as may be required of him by the Chairman of the Board or the President. SECTION 4. The Chairman of the Board or the President may, with the approval of the Board of Directors, appoint managers or superintendents for specific operations that are not related to or included in those assigned to the General Manager, with duties and responsibilities as may be designated by the Chairman of the Board or the President. ARTICLE XII REMOVALS, RESIGNATIONS AND VACANCIES OF DIRECTORS AND OFFICERS SECTION 1. No member of the Board of Directors may be removed without cause and except in compliance with the Company's Restated Certificate of Incorporation. SECTION 2. Any director or officer may resign his office at any time, such resignation to be made in writing and to take effect from the time of its receipt by the Company, unless a different time be fixed in the resignation, and in that event, from the time so fixed. The acceptance of a resignation shall not be required to make it effective. SECTION 3. Any officer elected or appointed by the Board of Directors may be removed at any time with or without cause by the Board of Directors. Any other officer or employee of the Company may be removed at any time with of without cause by the Board of Directors or by any committee or superior officer upon who such power of removal may be conferred by the Bylaws or by the Board of Directors. 13 SECTION 4. If the office of any director becomes vacant for any cause other than his removal or the expiration of his term of office, or if the office of any officer, agent or employee becomes vacant for any cause (other than the expiration of his term of office), such vacancy may be filled for the unexpired portion of the term, if any, by a majority of the remaining directors, though less than a quorum, or by a sole remaining director. ARTICLE XIII CERTIFICATES OF STOCK SECTION 1. Form of Certificate. Certificates for shares of stock of the Company shall be in such form and of such design as the Board of Directors shall prescribe and each certificate for shares issued by the Company shall be signed by the Chairman of the Board, or the President or the Executive Vice President or a Vice President and the Secretary or an Assistant Secretary. Any or all of the signatures on the certificate may be facsimile. If any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Company with the same effect as if such person were an officer, transfer agent or registrar at the date of issue. The certificates for shares shall be numbered and registered as they are issued. They shall exhibit the number, date of issuance, name of person to whom issued, designation, if any, the class or series of shares represented thereby, the par value of the shares or a statement that such shares are without par value. SECTION 2. Transfer of Shares. Upon surrender to the Secretary or Transfer Agent of the Company of a certificate for shares, duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, a new certificate shall be issued to the person entitled thereto and the old certificate canceled and the transaction recorded upon the books of the Company. SECTION 3. Lost Certificates. The Chairman of the Board or the President and the Secretary or the Assistant Secretary may in their discretion direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Company alleged to have been lost or destroyed upon the production by the person claiming the certificate for shares to be lost or destroyed of satisfactory evidence of the loss or destruction of such certificate or certificates and of the claimant's ownership of the shares of stock represented thereby, together with a bond in favor of the Company, with a surety satisfactory to said officers, in the amount of the then current market value of the stock represented by such allegedly lost certificate or certificates, conditioned upon such claimant and surety indemnifying and saving harmless the Company from all and every cost, charge, expense and liability which it may in any manner incur by reason of the issuance of such new certificate or certificates, and further conditioned upon their surrendering to the Company for cancellation such allegedly lost certificate or certificates in 14 the event of their subsequent discovery; or the Chairman of the Board or President or Secretary may refer any such application for the issuance of a new certificate or certificates to the Board of Directors which shall have the power to direct the issuance of a new certificate or certificates upon submission of such proof and upon such guarantee on the part of the applicant as the Board of Directors may deem satisfactory. ARTICLE XIV GENERAL PROVISIONS SECTION 1. Fixing of Record Date or Closing of Transfer Books. The Board of Directors may fix a time in the future as a record date for the determination of the stockholders entitled to notice of and to vote at any meeting or entitled to receive any dividend or distribution or any allotment of rights or to exercise any rights in respect of any other lawful action. The record date so fixed shall not be more than sixty (60) nor less than ten (10) days prior to the date of such meeting and no more than sixty (60) days prior to any other action. When a record date is so fixed, then, subject to the provisions of the General Corporation Law of Delaware, only stockholders of record at that date shall be entitled to notice of and to vote at the meeting or to receive the dividend, distribution or allotment of rights or to exercise the rights, as the case may be, notwithstanding any transfer of any shares on the books of the Company after the record date. The Board of Directors may close the books of the Company against transfer of shares during the whole or any part of the period of not more than sixty (60) days prior to the date of a stockholders' meeting, the date when the right to any distribution or allotment of rights vests, or the effective date of any change, conversion or exchange of shares. SECTION 2. Dividends. Subject to the provisions of the Restated Certificate of Incorporation relating thereto, if any, dividends may be declared by the Board of Directors at any regular or special meeting of the Board of Directors pursuant to law. Dividends may be paid in cash, in property, or in shares of capital stock, subject to any provisions of the Restated Certificate of Incorporation. SECTION 3. Reserves. Before payment of any dividend there may be set aside out of any funds of the Company available for dividends such sum or sums as the Board of Directors from time to time in their absolute discretion think appropriate as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Company, or for such other purposes as the Board of Directors shall think conducive to the interests of the Company, and the Board of Directors may abolish any such reserve in the manner in which it was created. SECTION 4. Annual Report. The Board of Directors shall cause an annual report to be sent to the stockholders not later than one hundred twenty (120) days after the close of each fiscal 15 year of the Company and at least fifteen (15) days prior to the annual meeting of stockholders to be held during the ensuing fiscal year. SECTION 5. Checks, Drafts and Notes. All checks, drafts and demands for money and notes of the Company shall be signed by such individual or individuals as the Board of Directors may from time to time designate. SECTION 6. Representation of Shares of Other Corporations. The chief executive officer or any other officer or officers authorized by the Board of Directors or the President are each authorized to vote represent, and exercise on behalf of the Company all rights incident to any and all shares of any other corporation or corporations standing in the name of the Company. The authority herein granted may be exercised either by any such officer in person or by any other person authorized so to do by proxy or power of attorney duly executed by said officer. SECTION 7. Seal. The seal of the Company shall consist of a circle bearing on its surface the inscription, "Homestake Mining Company Delaware Incorporated November 28, 1983" SECTION 8. Indemnification. (a) Right of Indemnification. To the fullest extent permitted by the General Corporation Law of Delaware, the Company shall indemnify each director and officer and may indemnify each employee or other agent of the Company against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any action, suit or proceeding arising by reason of the fact that any such person is or was a director, officer, employee or other agent of the company or is or was serving at the request of the Company as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust or other enterprise. (b) Advances of Expenses. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding arising by reason of the fact that such director or officer is or was a director or officer of the Company or was serving at the request of the Company as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust or other enterprise shall be paid by the Company in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by the Company as authorized in this Section 8. Such expenses incurred by 16 other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. The Board of Directors may, with the consent of such director, officer, employee or other agent of the Company, authorize the legal counsel of the Company to represent such person, in any action, suit or proceeding, whether or not the Company is a part to such action, suit or proceeding. (c) Procedure for Indemnification. Any indemnification or advance of expenses required hereunder shall be made promptly, and in any event within sixty (60) days after a written request therefor by a director or officer. The right to indemnification or advances as granted by this Section 8 shall be enforceable by a director or officer in any court of competent jurisdiction, if the Company denies such request, in whole or in part, or if no disposition thereof is made within sixty (60) days. The director's or officer's expenses incurred in connection with successfully establishing his right to indemnification, in whole or in part, in any such action shall also be indemnified by the Company. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of expenses where the required undertaking, if any, has been received by the Company) that the claimant has not met the standard of conduct required by law, but the failure of the Company (including its Board of Directors, its independent legal counsel and its stockholders) to have made a determination as to whether indemnification of the claimant is proper in the circumstances because he has met the applicable standard of conduct shall not be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. (d) Other Rights. The indemnification and advancement of expenses provided by or granted pursuant to this Section 8 shall not be deemed exclusive of any other rights to which a person seeking indemnification may be entitled under any law (common or statutory), agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. All rights to indemnification under this Section 8 shall be deemed to be a contract between the Company and each director and officer who serves or served in such capacity at any time while this Section 8 is in effect, and any repeal or modification of this Section 8 or relevant provision of the General Corporation Law of Delaware or any other applicable law shall not in any way diminish any rights to indemnification of such director or officer, or the obligations of the Company arising hereunder prior to such modification or repeal. (e) Insurance. The Company may, but shall not be required to, purchase and maintain insurance on behalf of any person who is or was a director or officer of the Company against any liability asserted against such person and incurred by him or on his behalf in such capacity or as a director, officer, employee or other agent of another corporation, partnership, joint venture, trust or other enterprise, for which such person is or was serving at the request of the Company, or arising out of his status as such, whether or not 17 the Company would have the power to indemnify him against such liability under the provisions of this Section 8, all as the Board of Directors may from time to time deem appropriate. (f) Definitions. For purposes of this Section 8: (i) service as a director, officer, employee or other agent of any corporation, partnership, joint venture, trust or other enterprise in which the Company, directly or indirectly, holds an interest shall be deemed to be service at the request of the Company; (ii) "the Company" shall include in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or other agents, so that any person who is or was a director, officer, employee or other agent of such constituent corporation, or is or was serving at the request of such constituent corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provision of this Section 8 with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued; (iii) "other enterprise" shall include without limitation employee benefit plans; "fines" shall include without limitation any excise taxes assessed on a person with respect to an employee benefit plan; and "serving at the request of the Company" shall include without limitation any service as a director, officer, employee or other agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; (iv) the indemnification and advancement of expenses provided by, or granted pursuant to, this Section 8 shall, unless other wise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person; (v) "expenses" shall include all direct and indirect costs, charges and attorneys' fees; and 18 (vi) "action, suit or proceeding" shall include any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, and any appeal therefrom. (g) Effect of Advances. Advances of expenses by the Company as required or authorized by this Section 8 shall not be deemed or interpreted as ratifying, approving or condoning any act or omission by any director, officer or employee of the Company in violation of standards of conduct required by law. (h) Savings Clause. If this Section 8 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify each director and officer of the Company as to expenses, judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding to the fullest extent permitted by any applicable portion of this Section 8 that shall not have been invalidated and to the fullest extent permitted by applicable law. 19 ARTICLE XV AMENDMENT OF BYLAWS These Bylaws may be amended or repealed, or new bylaws may be adopted, (a) by the affirmative vote of the stockholders entitled to exercise a majority of the voting power of the Company or (b) by the affirmative vote of the majority of the Board of Directors at any regular or special meeting. Any Bylaw adopted or amended by the stockholders may be amended or repealed by the Board of Directors. 20 EX-10 3 AMENDED CREDIT AGREEMENT EXHIBIT 10.1 AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF JULY 14, 1998 AMONG HOMESTAKE MINING COMPANY, a Delaware corporation, as Guarantor, HOMESTAKE MINING COMPANY OF CALIFORNIA, a California corporation, as U.S. Borrower, HOMESTAKE CANADA INC., an Ontario corporation, as Canadian Borrower, HOMESTAKE GOLD OF AUSTRALIA LIMITED, a South Australian corporation, and PLUTONIC RESOURCES LIMITED, a New South Wales corporation, as Australian Borrowers, THE LENDERS LISTED HEREIN, as Lenders, THE CHASE MANHATTAN BANK OF CANADA, as Canadian Administrative Agent, CHASE SECURITIES AUSTRALIA LIMITED, as Australian Administrative Agent, CHASE SECURITIES INC., as Arranger, THE CHASE MANHATTAN BANK, as Administrative Agent, and DEUTSCHE BANK A.G., as Documentation Agent HOMESTAKE MINING COMPANY HOMESTAKE MINING COMPANY OF CALIFORNIA HOMESTAKE CANADA INC. HOMESTAKE GOLD OF AUSTRALIA LIMITED PLUTONIC RESOURCES LIMITED AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS Page Section 1. DEFINITIONS...........................................................................................2 1.1 Certain Defined Terms....................................................................................2 1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement......................33 1.3 Other Definitional Provisions...........................................................................33 Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS...........................................................34 2.1 Commitments; Loans......................................................................................34 2.2 Interest on the Loans...................................................................................42 2.3 Fees....................................................................................................47 2.4 Prepayments and Reductions in Commitments; General Provisions Regarding Payments........................47 2.5 Use of Proceeds.........................................................................................52 2.6 Special Provisions Governing Eurodollar Rate Loans, Bank Bill Swap Rate Loans and Gold Loans............52 2.7 Letters of Credit.......................................................................................56 2.8 Bankers' Acceptances....................................................................................63 Section 3. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND LOANS,..................................................66 3.1 Conditions to Effectiveness.............................................................................66 3.2 Conditions to All Loans.................................................................................71 3.3 Conditions to All Letters of Credit.....................................................................72 3.4 Conditions to All Bankers' Acceptances..................................................................72 Section 4. REPRESENTATIONS AND WARRANTIES.......................................................................73 4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries...........................73 4.2 Authorization of Borrowing and Guaranty, etc............................................................74 4.3 Valid Issuance of Stock.................................................................................75 4.5 Financial Condition.....................................................................................75 i 4.6 No Material Adverse Effect; No Restricted Junior Payments...............................................76 4.7 Title to Properties; Liens..............................................................................76 4.8 Litigation; Adverse Facts...............................................................................76 4.9 Payment of Taxes........................................................................................77 4.10 Performance of Agreements; Materially Adverse Agreements................................................77 4.11 Governmental Regulation.................................................................................77 4.12 Securities Activities...................................................................................77 4.13 Employee Benefit Plans..................................................................................77 4.14 Certain Fees............................................................................................78 4.15 Environmental Protection................................................................................78 4.16 Employee Matters........................................................................................78 4.17 Solvency................................................................................................78 4.18 Compliance with Laws....................................................................................78 4.19 Disclosure..............................................................................................79 Section 5. AFFIRMATIVE COVENANTS................................................................................79 5.1 Financial Statements and Other Reports..................................................................79 5.2 Corporate Existence, etc................................................................................82 5.3 Payment of Taxes and Claims; Tax Consolidation..........................................................82 5.4 Maintenance of Properties; Insurance....................................................................83 5.5 Inspection; Lender Meeting; Reports of Subsidiaries.....................................................83 5.6 Compliance with Laws, etc...............................................................................83 5.7 Environmental Disclosure and Inspection.................................................................84 5.8 Company's Remedial Action Regarding Hazardous Materials.................................................84 5.9 Further Assurances......................................................................................85 5.10 Year 2000 Compliance....................................................................................85 Section6. NEGATIVE COVENANTS....................................................................................85 6.1 Indebtedness............................................................................................85 6.2 Liens and Related Matters...............................................................................87 6.3 Investments; Joint Ventures.............................................................................88 6.4 Contingent Obligations..................................................................................89 6.5 Restricted Junior Payments..............................................................................90 6.6 Financial Covenants.....................................................................................91 ii 6.7 Restriction on Fundamental Changes; Asset Sales; Certain Asset Transfers................................91 6.8 Transactions with Shareholders and Affiliates...........................................................92 6.9 Disposal of Material Subsidiary Stock...................................................................92 6.10 Conduct of Business.....................................................................................93 6.11 Prepayments and Amendments to Subordinated Indebtedness.................................................93 Section7.EVENTS OF DEFAULT 93 7.1 Failure to Make Payments When Due.......................................................................93 7.2 Default in Other Agreements.............................................................................94 7.3 Breach of Certain Covenants.............................................................................94 7.4 Breach of Warranty......................................................................................94 7.5 Other Defaults Under Loan Documents.....................................................................94 7.6 Involuntary Bankruptcy; Appointment of Receiver, etc....................................................94 7.7 Voluntary Bankruptcy; Appointment of Receiver, etc......................................................95 7.8 Judgments and Attachments...............................................................................96 7.9 Dissolution.............................................................................................96 7.10 Employee Benefit Plans..................................................................................96 7.11 Change in Control of Borrowers..........................................................................96 Section 8. GUARANTIES OF COMPANY AND U.S. BORROWER OF...........................................................98 8.1 Guaranty by Company.....................................................................................98 8.2 Guaranty by U.S. Borrower..............................................................................101 Section9. AGENTS...............................................................................................105 9.1 Appointment............................................................................................105 9.2 Powers; General Immunity...............................................................................105 9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness....................107 9.4 Right to Indemnity.....................................................................................107 9.5 Registered Persons Treated as Owners...................................................................108 9.6 Successor Agents.......................................................................................108 Section10. MISCELLANEOUS.......................................................................................108 10.1 Assignments of and Participations in Commitments, Loans and Letters of Credit..........................108 10.2 Expenses...............................................................................................112 10.3 Indemnity..............................................................................................112 10.4 Set Off................................................................................................113 iii 10.5 Ratable Sharing........................................................................................114 10.6 Amendments and Waivers.................................................................................114 10.7 Increased Costs; Taxes; Capital Adequacy...............................................................115 10.8 Lenders' Obligation to Mitigate; Replacement of Lender.................................................118 10.9 Independence of Covenants..............................................................................119 10.10 Notices................................................................................................119 10.11 Survival of Representations, Warranties and Agreements.................................................119 10.12 Failure or Indulgence Not Waiver; Remedies Cumulative..................................................120 10.13 Marshalling; Payments Set Aside........................................................................120 10.14 Severability...........................................................................................120 10.15 Obligations Several; Independent Nature of Lenders' Rights.............................................120 10.16 Headings...............................................................................................121 10.17 Applicable Law.........................................................................................121 10.18 Successors and Assigns.................................................................................121 10.19 Consent to Jurisdiction and Service of Process.........................................................121 10.20 Waiver of Jury Trial...................................................................................122 10.21 Confidentiality........................................................................................122 10.22 Entire Agreement.......................................................................................123 10.23 Counterparts; Effectiveness............................................................................123 10.24 Judgment Currency......................................................................................123 10.25 Change in Control......................................................................................124
iv SCHEDULES (Note: Schedules not included in electronic filing.) 2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES 4.1 LIST OF SUBSIDIARIES 4.5 CONTINGENT OBLIGATIONS AND FORWARD COMMITMENTS 4.8 LITIGATION 4.10 CERTAIN DEFAULTS 4.13 CERTAIN EMPLOYEE BENEFIT PLANS 6.1 EXISTING INDEBTEDNESS 6.2 CERTAIN EXISTING LIENS 6.3 EXISTING INVESTMENTS 6.4 EXISTING CONTINGENT OBLIGATIONS 6.8 TRANSACTIONS WITH AFFILIATES EXHIBITS I FORM OF NOTICE OF BORROWING II FORM OF NOTICE OF CONVERSION/CONTINUATION III-A FORM OF DRAFT III-B FORM OF DRAWING NOTICE IV-A FORM OF CANADIAN BORROWER NOTE IV-B FORM OF HGAL NOTE IV-C FORM OF PLUTONIC NOTE IV-D FORM OF U.S. BORROWER NOTE V FORM OF GRID GOLD ACKNOWLEDGEMENT VI FORM OF COMPLIANCE CERTIFICATE VII-A FORM OF OPINION OF THELEN, MARRIN, JOHNSON & BRIDGES VII-B FORM OF OPINION OF WAYNE KIRK, ESQ. VIII-A FORM OF OPINION OF OSLER, HOSKIN & HARCOURT VIII-B FORM OF OPINION OF MALLESONS STEPHEN JAQUES IX FORM OF OPINION OF O'MELVENY & MYERS X-A FORM OF ASSIGNMENT AND ACCEPTANCE (CANADIAN LENDER) X-B FORM OF ASSIGNMENT AND ACCEPTANCE (U.S. LENDER) X-C FORM OF ASSIGNMENT AND ACCEPTANCE (AUSTRALIAN LENDER) XI FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT XII FORM OF SUBORDINATION PROVISIONS XIII FORM OF NOTICE OF ALLOCATION v HOMESTAKE MINING COMPANY HOMESTAKE MINING COMPANY OF CALIFORNIA HOMESTAKE CANADA INC. HOMESTAKE GOLD OF AUSTRALIA LIMITED PLUTONIC RESOURCES LIMITED AMENDED AND RESTATED CREDIT AGREEMENT This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of July 14, 1998 and entered into by and among HOMESTAKE MINING COMPANY, a Delaware corporation ("Company"), HOMESTAKE MINING COMPANY OF CALIFORNIA, a California corporation ("U.S. Borrower"), HOMESTAKE CANADA INC., an Ontario corporation ("Canadian Borrower"), HOMESTAKE GOLD OF AUSTRALIA LIMITED, ACN 008 143 137, a South Australia corporation ("HGAL"), PLUTONIC RESOURCES LIMITED, ACN 006 245 629, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a "Lender" and collectively as "Lenders"), THE CHASE MANHATTAN BANK OF CANADA, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), CHASE SECURITIES AUSTRALIA LIMITED, ACN 002 888 011, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), CHASE SECURITIES INC., as Arranger ("Arranger"), THE CHASE MANHATTAN BANK, as Administrative Agent for Lenders ("Administrative Agent") and DEUTSCHE BANK A.G., as Documentation Agent ("Documentation Agent"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in subsection 1.1 of this Agreement. R E C I T A L S WHEREAS, pursuant to that certain Credit Agreement dated as of September 20, 1996 (the "Existing Credit Agreement") among Company, U.S. Borrower, Canadian Borrower, HGAL, the lenders listed on the signature pages thereof ("Existing Lenders"), Canadian Administrative Agent, Australian Administrative Agent, Administrative Agent and Canadian Imperial Bank of Commerce, as documentation agent, Existing Lenders have made certain credit facilities available to U.S. Borrower, Canadian Borrower, and HGAL in accordance with the terms thereof; and WHEREAS, Company, U.S. Borrower, Canadian Borrower and HGAL desire to refinance the Existing Credit Agreement and, among other things, add Plutonic as an Australian Borrower and increase the aggregate Overall Commitments of all Lenders to $400,000,000; and WHEREAS, for ease of reference and clarity, the parties to the Existing Credit Agreement desire to restate the Existing Credit Agreement to incorporate the amendments which were made prior to the date hereof by and among the parties to the Existing Credit Agreement and 1 the additional amendments which are made hereby, and to amend and restate the promissory notes issued by U.S. Borrower, Canadian Borrower and HGAL pursuant to the Existing Credit Agreement (the "Existing Promissory Notes"); and WHEREAS, the parties to the Existing Credit Agreement and the parties hereto expressly disclaim any intent to effect a novation or an extinguishment or discharge of the obligations under the Loan Documents as a result of entering into this Agreement and the other documents as contemplated herein, but merely intend to amend and restate such obligations. NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Company, Borrowers, Lenders, Agents and Arranger agree as follows: Section 1. DEFINITIONS 1.1 Certain Defined Terms. The following terms used in this Agreement shall have the following meanings: "Adjusted Eurodollar Rate" means, for any Interest Rate Determination Date with respect to a Eurodollar Rate Loan, the rate obtained by dividing (i) the Eurodollar Rate on such Interest Rate Determination Date by (ii) a percentage equal to 100% minus the stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) applicable generally to any member bank of the Federal Reserve System in respect of "Eurocurrency liabilities" as defined in Regulation D (or any successor category of liabilities under Regulation D). The Administrative Agent shall determine the Adjusted Eurodollar Rate and such determination shall be conclusive absent manifest error. "Administrative Agent" means Chase and any successor thereto appointed pursuant to subsection 9.6. "Affected Lender" has the meaning assigned to that term in subsection 2.6C. "Affected Loans" has the meaning assigned to that term in subsection 2.6C. "Affiliate", as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise. 2 "Agent" or "Agents" means Administrative Agent and/or Canadian Administrative Agent and/or Australian Administrative Agent and/or Documentation Agent, or any of them. "Agreement" means this Amended and Restated Credit Agreement, dated as of July 14, 1998, as it may be amended, restated, supplemented or otherwise modified from time to time. "Alternate Base Rate" means, for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of one percent) equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof, "Prime Rate" means the rate of interest per annum publicly announced from time to time by Administrative Agent as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective on the date such change is publicly announced as being effective. "Base CD Rate" means the sum of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory Reserves and (b) the Assessment Rate. "Three-Month Secondary CD Rate" means, for any day, the secondary market rate for three-month certificates of deposit reported as being in effect on such day (or, if such day shall not be a Business Day, the next preceding Business Day) by the Board through the public information telephone line of the Federal Reserve Bank of New York (which rate will, under the current practices of the Board, be published in Federal Reserve Statistical Release H.15(519) during the week following such day), or, if such rate shall not be so reported on such day or such next preceding Business Day, the average of the secondary market quotations for three month certificates of deposit of major money center banks in New York City received at approximately 10:00 a.m., New York City time, on such day (or, if such day shall not be a Business Day, on the next preceding Business Day) by Administrative Agent from three New York City negotiable certificate of deposit dealers of recognized standing selected by it. "Federal Funds Effective Rate" means, for any day, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for the day of such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by it. If for any reason Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable to ascertain the Base CD Rate or the Federal Funds Effective Rate or both for any reason, including the inability of Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) or (c), or both, of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be effective on the effective date of such change in the Prime Rate, the Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively. If any U.S. Base Rate Loans are outstanding, Administrative Agent will give to U.S. Borrower notice of any such changes promptly after the Alternate Base Rate changes; provided, however, that the failure to 3 give such notice shall not limit or otherwise affect the obligations of Company or any Borrower under this Agreement or any other Loan Document. As to any loan, the Prime Rate and the Alternate Base Rate are reference rates that vary from time to time and do not necessarily represent the lowest or best rate actually charged to any customer by Administrative Agent or any U.S. Lender for loans denominated in Dollars. Administrative Agent and U.S. Lenders may make commercial loans or other loans denominated in Dollars at rates of interest at, above or below the Prime Rate or the Alternate Base Rate. The Alternate Base Rate shall automatically change upon any date that Administrative Agent announces any change in its applicable prime rate or determines that the interest rates set forth in clauses (b) and (c) in the first sentence of this definition have changed, to the extent necessary to reflect any such change. "Applicable Administrative Agent" means (i) Administrative Agent in the case of U.S. Loans or U.S. Letters of Credit, (ii) Canadian Administrative Agent in the case of Canadian Loans, Canadian Letters of Credit or Bankers' Acceptances and (iii) Australian Administrative Agent in the case of Australian Loans or Australian Letters of Credit. "Applicable Margin" means, with respect to any Loan or Bankers' Acceptance, the applicable percentage set forth below based upon the actual or stated senior implied ratings established by S&P and Moody's, respectively, applicable on such date to the senior, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company (or, if no actual or stated senior implied ratings are in effect, the ratings one category higher than the actual ratings for subordinated, unsecured, non-credit enhanced long-term Indebtedness for borrowed money of Company): Category S&P/Moody's Rating Percentage 1 BBB+/Baa1 0.40% or above 2 BBB/Baa2 0.50% 3 BBB-/Baa3 0.625% 4 BB+/Ba1 0.875% 5 BB/Ba2 1.00% 6 BB-/Ba3 or below 1.125% For purposes of the foregoing, (i) if neither Moody's nor S&P shall have in effect a rating for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company (other than by reason of the circumstances referred to in the last sentence of this definition), then the Applicable Margin shall be based on Category 6; (ii) if only one of Moody's and S&P shall have in effect a rating for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company, then the 4 Applicable Margin shall be determined on the basis of such rating; (iii) if the ratings established or deemed to have been established by Moody's or S&P for the senior or subordinated, unsecured, long-term Indebtedness for borrowed money of Company shall fall within different Categories, the Applicable Margin shall be based on the Category corresponding to the lower rating (higher percentage); and (iv) if any rating established or deemed to have been established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of Moody's or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Applicable Margin shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody's or S&P shall change, or if any such rating agency shall cease to be in the business of rating corporate debt obligations, Company and Lenders shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system or the non-availability of ratings from such rating agency, and pending the effectiveness of any such amendment, the ratings of such rating agency most recently in effect prior to such change or cessation shall be employed in determining the Applicable Margin. "Arranger" has the meaning assigned to that term in the introductory paragraph of this Agreement. "Assessment Rate" means for any date the annual rate (rounded upwards, if necessary, to the next .01%) most recently estimated by Administrative Agent as the then-current net annual assessment rate that will be employed in determining amounts payable by Administrative Agent to the Federal Deposit Insurance Corporation (or any successor) for such date for insurance by the Federal Deposit Insurance Corporation (or such successor) of time deposits made in Dollars at Administrative Agent's domestic offices. "Asset Sale" means the sale by Company or any of its Subsidiaries to any Person other than Company or any of its Subsidiaries of (i) any of the stock of any of Company's Subsidiaries, (ii) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or (iii) any other assets (whether tangible or intangible and including intercompany Indebtedness) of Company or any of its Subsidiaries outside of the ordinary course of business; provided that (i) any sale of surplus assets (including land and mineral interests but excluding intercompany Indebtedness) not being used in the day-to-day conduct of Company's principal businesses or worn or obsolete equipment in the ordinary course of business or assets sold in the ordinary course of business in connection with the routine replacement of fixed or capital assets; (ii) any disposition of Company's interest in the oil and gas and sulphur business and any assets used in such businesses and not in Company's principal businesses; or (iii) any sale of Company's or any of its Subsidiaries' interest in Lachlan Resources N.L. shall not be deemed to be an "Asset Sale." "Assignment and Acceptance" means an Assignment and Acceptance entered into by a Lender and an Eligible Assignee, and accepted by Agents, in substantially the form of Exhibit X-A, Exhibit X-B, or Exhibit X-C annexed hereto, as applicable. 5 "Australian Administrative Agent" means Chase Securities Australia Limited, ACN 002 888 011, a company incorporated with limited liability in the Australian Capital Territory, Australia, and any successor thereto appointed pursuant to subsection 9.6. "Australian Allocation" means the portion of the Overall Commitments allocated to Australian Borrowers in Schedule 2.1 or in the most recent Notice of Allocation delivered by Borrowers and Company pursuant to subsection 2.1A. "Australian Borrowers" has the meaning assigned to that term in the introduction of this Agreement. "Australian Commitment" means the commitment of each Australian Lender (i) to make or maintain Australian Loans pursuant to subsection 2.1A, and (ii) to issue (in the case of the applicable Issuing Lender) or acquire risk participations (in the case of all other Australian Lenders) in Australian Letters of Credit pursuant to subsection 2.7 in an aggregate amount, valued in Dollar Equivalents, at no time exceeding such Australian Lender's Pro Rata Share of the Australian Allocation. "Australian Commitment Usage" means, as of any date of determination, the aggregate outstanding principal amount of (i) the Australian Loans denominated in Dollars, and (ii) the Australian Loans denominated in Australian Dollars (but valued in Dollar Equivalents as of such date of determination), and (iii) the Australian Letter of Credit Usage. "Australian Dollar Loans" means Loans denominated in and advanced to Australian Borrowers in Australian Dollars. "Australian Dollars" or "A$" means the lawful money of Australia. "Australian Exposure" means, with respect to any Australian Lender as of any date of determination, the Australian Lender Allocation of such Australian Lender or, if the Overall Commitments have been terminated, the sum of (a) the aggregate outstanding principal amount of all Australian Loans (valued in Dollar Equivalents as of such date of determination) of that Australian Lender plus (b) in the event such Australian Lender (or a Lender in its Lending Unit) is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all Australian Letters of Credit issued by such Australian Lender (or such Lender in that Lending Unit) (in each case net of any participations purchased by other Australian Lenders in such Australian Letters of Credit or any unreimbursed drawings thereunder (valued in Dollar Equivalents as of such date of determination)) plus (c) the aggregate amount of all participations purchased by that Australian Lender in any outstanding Australian Letters of Credit or any unreimbursed drawings under any Australian Letter of Credit (valued in Dollar Equivalents as of such date of determination). "Australian Lender Allocation" means, with respect to any Australian Lender, the portion of the Australian Allocation allocated to such Australian Lender. 6 "Australian Lender Pro Rata Share" means, with respect to any Australian Lender, the percentage obtained by dividing the Australian Exposure of such Australian Lender by the aggregate Australian Exposure of all Australian Lenders. "Australian Lenders" means each of the Lenders, if any, of each Lending Unit that is designated as the Australian Lender for such Lending Unit on the signature pages hereof, or in any applicable Assignment and Acceptance. "Australian Lending Office" means, in relation to any Australian Lender, its Sydney, Melbourne or Canberra Australian lending office as specified under its signature on the signature pages hereof or such other office as is specified by such Lender in a written notice to Administrative Agent, Australian Administrative Agent, and Australian Borrowers. "Australian Letter of Credit" or "Australian Letters of Credit" means Standby Letters of Credit issued, or deemed issued, by the applicable Issuing Lender for the account of Australian Borrowers pursuant to subsection 2.7. "Australian Letter of Credit Usage" means, as at any date of determination, the sum of (i) the maximum aggregate amount (in Dollar Equivalents) which is available for drawing under all Australian Letters of Credit then outstanding plus (ii) the aggregate amount (in Dollar Equivalents) of all drawings under all Australian Letters of Credit honored by the applicable Issuing Lender and not theretofore reimbursed by Australian Borrowers. "Australian Loans" means the Australian Dollar Loans and/or Dollar Loans made by Australian Lenders to Australian Borrowers pursuant to subsection 2.1A(ii). "Authorized Signor" means, in the case of any Australian Borrower, the Treasurer or the Assistant Treasurer of Company. "BA Discount Rate" means, in respect of a Bankers' Acceptance, the rate quoted by Canadian Administrative Agent at or about 10:00 a.m. (Toronto, Canada time) on the date of acceptance of such Bankers' Acceptance (based on a year of 365 days), as the discount rate at which it would purchase on such date its own bankers' acceptances having terms similar to the terms of such Bankers' Acceptance. "BA Facility" means the bankers' acceptance facility established under subsection 2.8. "BA Fee" means, in respect of a Bankers' Acceptance, a stamping fee calculated on the Face Amount and maturity of such Bankers' Acceptance at a rate per annum equal to the Applicable Margin, payable on the date of creation of such Bankers' Acceptance, calculated on the basis of a year of 365 days. "BA Usage" means, as at any date of determination, the aggregate Face Amount (in Dollar Equivalents) of all Bankers' Acceptances created by Canadian Lenders pursuant to subsection 2.8 which have not been repaid by Canadian Borrower, whether or not due and 7 whether or not held by any Lender. For purposes of this definition, any Bankers' Acceptance which has been cash collateralized in full in a manner satisfactory to Canadian Administrative Agent shall not be deemed to be outstanding. "Bank Bill Swap Rate" means, in relation to each Interest Period with respect to any Bank Bill Swap Rate Loan, the rate per cent per annum which is: (a) the average bid rate (rounded upwards, if necessary, to the nearest four decimal places) for Bills accepted by a bank having a tenor which is closest to that Interest Period and published on the "BBSY" reference page of the Reuters Monitor System at or about 10:30 a.m. (Sydney time) on the first day of that Interest Period and (b) if on that day that rate is not published by 10:30 a.m. (Sydney time), the rate determined by the Australian Administrative Agent in good faith to be the average of the buying rates being generally quoted in the market at or about that time to the Agent by each of not less than three institutions chosen by the Australian Administrative Agent which ordinarily display rates on that page at or about that time as being the rates generally quoted by them for the purchase of Bills accepted by an Australian bank for an amount equal to that Bank Bill Swap Rate Loan on that day having a tenor which is closest to that Interest Period. "Bank Bill Swap Rate Loan" means Australian Dollar Loans made by Australian Lenders pursuant to subsection 2.1A(ii) and bearing interest at rates determined by reference to the Bank Bill Swap Rate as provided in subsection 2.2A. "Bankers' Acceptance" means a Draft that has been accepted by a Canadian Lender as provided in subsection 2.8. "Bankers' Acceptance Purchase Price" means, in respect of any Bankers' Acceptance to be purchased by a Canadian Lender, the result (rounded to the nearest whole cent, with one-half of one cent being rounded up) obtained by dividing the Face Amount of such Bankers' Acceptance by the sum of one plus the product of (x) the applicable BA Discount Rate multiplied by (y) a fraction, the numerator of which is the term of maturity of such Bankers' Acceptance and the denominator of which is 365. "Bankruptcy Code" means Title 11 of the United States Code entitled "Bankruptcy", the Bankruptcy and Insolvency Act (Canada), Part 5 of the Corporations Law (Australia) or any similar statute of U.S., Canadian, Australian or other laws as now and hereafter in effect, or any successor statute. "Base Rate Loans" means Loans that bear interest at a floating rate of interest, which shall be either the Canadian Base Rate, in the case of Canadian Dollar Loans, or the Alternate Base Rate or U.S. Base Rate (Canada), as applicable, in the case of Dollar Loans. "Bills" has the same meaning as in the Bills of Exchange Act 1909 and a reference to the drawing or acceptance or endorsement of, or other dealing with, a Bill is to be interpreted in accordance with that act. "Board" means the Board of Governors of the Federal Reserve System of the United States, together with its successors. 8 "Borrower" or "Borrowers" means U.S. Borrower and/or Canadian Borrower and/or Australian Borrowers. "Business Day" means (i) for all purposes other than as covered by clauses (ii), (iii), (iv) and (v) below, any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close, (ii) with respect to all notices, determinations, fundings and payments in connection with Canadian Loans, Canadian Letters of Credit and Bankers' Acceptances, any day that is a Business Day described in clause (i) above which is not a legal holiday under the laws of the Provinces of Ontario and British Columbia, Canada or a day on which banking institutions located in such Provinces are authorized or required by law or other governmental action to close, (iii) with respect to all notices, determinations, fundings and payments in connection with Australian Loans and Australian Letters of Credit, any day that is a Business Day described in clause (i) above which is not a Saturday, Sunday or public holiday in Sydney, Melbourne and Perth, Australia, (iv) with respect to all notices, determinations, fundings and payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, any day that is a Business Day described in clause (i) above and that is also a day for trading by and between banks in Dollar deposits in the applicable interbank Eurodollar market, and (v) with respect to all notices, determinations, fundings and payments in connection with Gold Loans, any day that is a Business Day described in clause (i) above and that is also a day upon which the Price of Gold is fixed by the London Bullion Market Association. "Canadian Administrative Agent" means Chase Canada and any successor thereto appointed pursuant to subsection 9.6. "Canadian Allocation" means the portion of the Overall Commitments allocated to Canadian Borrower in Schedule 2.1 or in the most recent Notice of Allocation delivered by Borrowers and Company pursuant to subsection 2.1A. "Canadian Base Rate" means, with respect to any Canadian Dollar Loan as of any date of determination, the greater of (A) the fluctuating interest rate per annum which Canadian Administrative Agent has announced as its reference rate for determining interest chargeable by it on loans denominated in Canadian Dollars made in Canada, as in effect on such date of determination, and (B) the BA Discount Rate for such day for bankers' acceptances having a term of 30 days plus 0.625%. As to any loan, the Canadian Base Rate is a reference rate that varies from time to time and does not necessarily represent the lowest or best rate actually charged to any customer by Canadian Administrative Agent or any Canadian Lender for loans denominated in Canadian Dollars. Canadian Administrative Agent and Canadian Lenders may make commercial loans or other loans denominated in Canadian Dollars at rates of interest at, above or below the Canadian Base Rate. The Canadian Base Rate shall automatically change, without notice to Company or any Borrower, upon any date that Canadian Administrative Agent announces any change in said reference rate or determines that the prevailing BA Discount Rate for 30-day bankers' acceptances has changed to the extent necessary to reflect any such change. If any Canadian Base Rate Loans are outstanding, Canadian Administrative Agent will give 9 Canadian Borrower notice of any such change promptly after the Canadian Base Rate changes; provided, however, that the failure to give such notice shall not limit or otherwise affect the obligations of Company or any Borrower under this Agreement or any other Loan Document. "Canadian Base Rate Loans" means Canadian Dollar Loans made by Canadian Lenders pursuant to subsection 2.1A(i) and bearing interest at rates determined by reference to the Canadian Base Rate as provided in subsection 2.2A. "Canadian Borrower" has the meaning assigned to that term in the introduction of this Agreement, and includes any successor by merger or amalgamation, provided that any such successor is otherwise in compliance with this Agreement. "Canadian Commitment" means the commitment of each Canadian Lender (i) to make or maintain Canadian Loans pursuant to subsection 2.1A, (ii) to issue (in the case of the applicable Issuing Lender) or acquire risk participations (in the case of all other Canadian Lenders) in Canadian Letters of Credit pursuant to subsection 2.7, and (iii) to create and purchase Bankers' Acceptances pursuant to subsection 2.8 in an aggregate amount, valued in Dollar Equivalents, at no time exceeding such Canadian Lender's Pro Rata Share of the Canadian Allocation. "Canadian Commitment Usage" means, as of any date of determination, the aggregate outstanding principal amount of (i) the Canadian Loans denominated in Dollars, (ii) the Canadian Loans denominated in Canadian Dollars (valued in Dollar Equivalents as of such date of determination), (iii) the Canadian Letter of Credit Usage, and (iv) the BA Usage. "Canadian Dollar Loans" means Loans denominated in and advanced to Canadian Borrower in Canadian Dollars. "Canadian Dollars" or "Cdn.$" means the lawful money of Canada. "Canadian Exposure" means with respect to any Canadian Lender as of any date of determination, the Canadian Lender Allocation of such Canadian Lender or, if the Overall Commitments have been terminated, the sum of (a) the aggregate outstanding principal amount of all Canadian Loans (valued in Dollar Equivalents as of such date of determination) of that Canadian Lender plus (b) in the event such Canadian Lender (or a Lender in its Lending Unit) is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all Canadian Letters of Credit issued by such Canadian Lender (or such Lender in that Lending Unit) (in each case net of any participations purchased by other Canadian Lenders in such Canadian Letters of Credit or any unreimbursed drawings thereunder (valued in Dollar Equivalents as of such date of determination)) plus (c) the aggregate amount of all participations purchased by that Canadian Lender in any outstanding Canadian Letters of Credit or any unreimbursed drawings under any Canadian Letter of Credit (valued in Dollar Equivalents as of such date of determination) plus (d) the BA Usage of that Canadian Lender. "Canadian Lender Allocation" means, with respect to any Canadian Lender, the portion of the Canadian Allocation allocated to such Canadian Lender. 10 "Canadian Lender Pro Rata Share" means, with respect to any Canadian Lender, the percentage obtained by dividing the Canadian Exposure of such Canadian Lender by the aggregate Canadian Exposure of all Canadian Lenders. "Canadian Lenders" means each of the Lenders, if any, of each Lending Unit, that is designated as the Canadian Lender for such Lending Unit on the signature pages hereof, or in any applicable Assignment and Acceptance. "Canadian Lending Office" means, in relation to any Canadian Lender, its Canadian lending office as specified under its signature on the signature pages hereof or such other office as is specified by such Lender in a written notice to Administrative Agent, Canadian Administrative Agent and Canadian Borrower. "Canadian Letter of Credit" or "Canadian Letters of Credit" means Standby Letters of Credit issued, or deemed issued, by the applicable Issuing Lender for the account of Canadian Borrower pursuant to subsection 2.7. "Canadian Letter of Credit Usage" means, as at any date of determination, the sum of (i) the maximum aggregate amount (in Dollar Equivalents) which is available for drawing under all Canadian Letters of Credit then outstanding plus (ii) the aggregate amount (in Dollar Equivalents) of all drawings under all Canadian Letters of Credit honored by the applicable Issuing Lender and not theretofore reimbursed by Canadian Borrower. "Canadian Loans" means the Canadian Dollar Loans and/or Dollar Loans made by Canadian Lenders to Canadian Borrower pursuant to subsection 2.1A(i). "Capital Lease", as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is or should be accounted for as an asset, with a corresponding liability, on the balance sheet of that Person. "Cash" means money, currency or a credit balance in a Deposit Account. "Chase" means The Chase Manhattan Bank. "Chase Canada" means The Chase Manhattan Bank of Canada, a bank named in Schedule II to the Bank Act (Canada). "Commitment" means commitments of the Lender(s) of each Lending Unit to make Canadian Loans (if such Lending Unit includes a Canadian Lender), to make U.S. Loans, to make Australian Loans (if such Lending Unit includes an Australian Lender), to participate in Letters of Credit, and, in the case of the Canadian Lender (if any), to create and purchase Bankers Acceptances in an aggregate amount for each Lending Unit as set forth on Schedule 2.1, as such amount may be adjusted from time to time pursuant to the provisions of this Agreement. 11 "Commitment Fee Percentage" means on any date the applicable percentage set forth below based upon the actual or stated senior implied ratings established by S&P and Moody's, respectively, applicable on such date to the senior, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company (or, if no actual or stated senior implied ratings are in effect, the ratings one category higher than the ratings for subordinated, unsecured, non-credit enhanced long-term Indebtedness for borrowed money of Company`): Category S&P/Moody's Rating Percentage -------- ------------------ ---------- 1 BBB+/Baa1 or above 0.15% 2 BBB/Baa2 0.1875% 3 BBB-/Baa3 0.20% 4 BB+/Ba1 0.25% 5 BB/Ba2 0.30% 6 BB-/Ba3 or below 0.35% For purposes of the foregoing, (i) if neither Moody's nor S&P shall have in effect a rating for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company (other than by reason of the circumstances referred to in the last sentence of this definition), then the Commitment Fee Percentage shall be based on Category 6; (ii) if only one of Moody's and S&P shall have in effect a rating for senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company, then the Commitment Fee Percentage shall be determined on the basis of such rating; (iii) if the ratings established or deemed to have been established by Moody's or S&P for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company shall fall within different Categories, the Commitment Fee Percentage shall be based on the Category corresponding to the lower rating (higher percentage); and (iv) if any rating established or deemed to have been established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of Moody's or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Commitment Fee Percentage shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody's or S&P shall change, or if either of such rating agencies shall cease to be in the business of rating corporate debt obligations, Company and Lenders shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system or the non-availability of ratings from such rating agency, and pending the effectiveness of any such amendment, the ratings of such rating agency most recently in effect prior to such change or cessation shall be employed in determining the Commitment Fee Percentage. "Commitment Termination Date" means July 14, 2003. 12 "Commitment Usage means, as applicable, a Lending Unit's Australian Commitment Usage, Canadian Commitment Usage, or U.S. Commitment Usage. "Company" has the meaning assigned to that term in the introduction to this Agreement. "Company Change of Control" has the meaning assigned to that term in subsection 10.25A. "Compliance Certificate" means a certificate substantially in the form of Exhibit VI annexed hereto delivered to Lenders by Company and Borrowers pursuant to subsection 5.1(iii). "Consolidated EBITDA" means, for any period, without duplication, the sum of the amounts for such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense, (iii) total depreciation and amortization expense and (iv) all non-cash writedowns (other than writedowns that constitute advance recognition of future cash expenditures) reflected in Consolidated Net Income after December 31, 1997, as reported in Company's consolidated statement of earnings in conformity with GAAP. "Consolidated Interest Expense" means, for any period, total interest expense without deduction of any interest income received by Company and its Subsidiaries for such period as reported in Company's consolidated statement of earnings in conformity with GAAP. "Consolidated Net Income" means, for any period, the net income (or loss) of Company and its Subsidiaries before any income and mining taxes and minority interest adjustments on a consolidated basis, as reported in Company's consolidated statement of earnings in conformity with GAAP. "Consolidated Net Worth" means, as at any date of determination, the shareholder's equity of Company and its Subsidiaries plus the amount of all non-cash writedowns (other than items that constitute advance recognition of future cash expenditures) made after December 31, 1997, as reported in Company's consolidated balance sheet in conformity with GAAP. "Consolidated Total Debt" means, as at any date of determination, the aggregate amount of all Indebtedness of Company and its Subsidiaries plus (without duplication) the aggregate amount of all Contingent Obligations of Company and its Subsidiaries (other than Contingent Obligations in the form of guarantees, letters of credit and surety bonds, in each case securing reclamation and other performance obligations in the ordinary course of business); provided that the obligations (contingent or otherwise) of Company or any of its Subsidiaries under any Interest Rate Protection Agreement, Currency Protection Agreement, or any option, forward sales contract or futures contract designed to protect Company and its Subsidiaries from fluctuations in interest rates, currency values or the Price of Gold shall be valued collectively on a net aggregate mark to market basis where a net aggregate mark to market value for all obligations under such Interest Rate Protection Agreements, Currency Protection Agreements, options and 13 contracts greater than zero shall not be deducted from the sum of the aggregate amounts of Indebtedness and Contingent Obligation used to calculate Consolidated Total Debt and a net aggregate mark to market value for all obligations under such Interest Rate Protection Agreements, Currency Protection Agreements, options and contracts of less than zero shall be added to the sum of the aggregate amounts of Indebtedness and Contingent Obligations to calculate Consolidated Total Debt. Notwithstanding the foregoing, no aggregate mark-to-market loss is to be included as Consolidated Total Debt to the extent it has been included in the calculation of Consolidated Net Worth and principal and interest payable in respect of the Subordinated Debentures shall not be included in the calculation of Consolidated Net Worth if such Subordinated Debentures shall have become irrevocably defeased in a manner satisfactory to Administrative Agent. "Contingent Obligation", as applied to any Person, means any direct or indirect liability, contingent or otherwise, of that Person (i) with respect to any Indebtedness, lease, dividend or other obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings, or (iii) under Interest Rate Protection Agreements, Currency Protection Agreements and options, forward sales contracts and futures contracts designed to protect Company and its Subsidiaries from fluctuations in interest rates, currency values or the Price of Gold. Contingent Obligations shall include, without limitation, (a) the direct or indirect guaranty, endorsement (otherwise than for collection or deposit in the ordinary course of business), co-making, discounting with recourse or sale with recourse by such Person of the obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (Y) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (X) or (Y) of this sentence, the primary purpose or intent thereof is as described in the preceding sentence. The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited. "Contractual Obligation", as applied to any Person, means any provision of any Securities issued by that Person or of any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject. "Contractual Obligations" shall include the Subordinated Debentures and the New Subordinated Indebtedness. "Covered Tax" means any Tax that is not an Excluded Tax. 14 "Currency Protection Agreement" means any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement or arrangement designed to protect Company or any of its Subsidiaries against fluctuations in currency values. "Date of Determination" means each date on which a Notice of Borrowing or Notice of Conversion/Continuation is given, and the date of any acceleration of the Obligations. "Delivered" or "Delivery" to a particular party means that such party receiving Gold hereunder has received confirmation from the bullion depository designated hereunder by such party that it is holding Gold for such party's account in an allocated or unallocated account. "Deposit Account" means a demand, time, savings, passbook or like account with a bank, savings and loan association, credit union or like organization, other than an account evidenced by a negotiable certificate of deposit. "Dollar Equivalents" means (i) with respect to the amount of any Loan funded in Canadian Dollars or with respect to the aggregate amount which is available for drawing, or which is drawn under, any Canadian Letter of Credit denominated in Canadian Dollars or the Face Amount of any Bankers' Acceptances, the amount of Dollars which is equivalent to such amount of Canadian Dollars determined at the rate of exchange quoted by The Bank of Canada at 12:00 Noon (New York time) on the most recent Date of Determination for the spot purchase in the foreign exchange market of Dollars with an equivalent amount of Canadian Dollars, (ii) with respect to the amount of any Loan funded in Australian Dollars or with respect to the aggregate amount which is available for drawing, or which is drawn under, any Australian Letter of Credit denominated in Australian Dollars, the amount of Dollars which is equivalent to such amount of Australian Dollars determined at the spot rate calculated by the Australian Administrative Agent as the "United States Dollar hedge settlement rate (vs. Australian Dollars)" that appears on the HSRA page on the Reuters Screen under the heading "US Dollar hedge settlement rate" (or any page that can reasonably be considered a replacement page) at 9:45 A.M. (Sydney time) on the most recent Date of Determination for the spot purchase in the foreign exchange market of Dollars with an equivalent amount of Australian Dollars or (iii) with respect to the amount of any Loan funded in Gold, the amount in Dollars which is the product of the number of Ounces of Gold comprising such Loan multiplied by the Price of Gold as in effect on the most recent Date of Determination. "Dollar Loans" means Loans denominated and advanced to any Borrower in Dollars. "Dollars" and the sign "$" mean the lawful money of the United States of America. "Draft" means, at any time, a bill of exchange in substantially the form of Exhibit III-A annexed hereto, or in substantially the form customarily used by the applicable Canadian Lender, in each case drawn by Canadian Borrower on a Canadian Lender and bearing such distinguishing letters and numbers as such Canadian Lender may determine, but which at such 15 time, except as otherwise provided herein, has not been accepted by such Canadian Lender as a Bankers' Acceptance. "Drawing Date" means any Business Day fixed pursuant to subsection 2.8 for the creation of Bankers' Acceptances. "Drawing Notice" has the meaning assigned to that term in subsection 2.8B. "Deutsche Bank" means Deutsche Bank AG. "Effective Date" means the date on or before July 14, 1998 on which the conditions set forth in subsection 3.1 are satisfied or waived. "Eligible Assignee" means (A)(i) a commercial bank or trust company organized under the laws of the United States or any state thereof; (ii) a savings and loan association or savings bank organized under the laws of the United States or any state thereof; (iii) a commercial bank or trust company organized under the laws of any other country or a political subdivision thereof; provided that (x) such bank or trust company is acting through a branch or agency located in the United States or (y) such bank or trust company is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country; and (iv) any other entity which is an "accredited investor" (as defined in Regulation D under the Securities Act) which extends credit or buys loans funded in Dollars, Canadian Dollars, Australian Dollars and Gold as one of its businesses, in each case (under clauses (i) through (iv) above) that is reasonably acceptable to the Applicable Administrative Agent and Administrative Agent; and (B) any Lender and any Affiliate of any Lender; provided that no Affiliate of Company shall be an Eligible Assignee; and provided further that such Eligible Assignee must have at the time of determination unimpaired capital and surplus of not less than $100,000,000. "Employee Benefit Plan" means any "employee benefit plan" as defined in Section 3(3) of ERISA that is subject to Title I of ERISA (a) that is, or was within the past six years, maintained or contributed to by Company or any of its ERISA Affiliates and (b) with respect to which Company or any of its ERISA Affiliates retains any liability. "Environmental Claim" means any notice of violation, claim, demand, abatement order or other order or direction (conditional or otherwise) by any governmental authority or any Person for any damage, including, without limitation, personal injury (including sickness, disease or death), tangible or intangible property damage, contribution, indemnity, indirect or consequential damages, damage to the environment, nuisance, pollution, contamination or other adverse effects on the environment, or for fines, penalties or restrictions, in each case relating to, resulting from or in connection with Hazardous Materials and relating to Company, any of its Subsidiaries, any Affiliates of Company or any Facility. "Environmental Laws" means all statutes, ordinances, orders, rules, regulations or decrees relating to (i) environmental matters, including, without limitation, those relating to fines, injunctions, penalties, damages, contribution, cost recovery compensation, losses or injuries 16 resulting from the Release or threatened Release of Hazardous Materials, (ii) the generation, use, storage, transportation or disposal of Hazardous Materials, or (iii) occupational safety and health, industrial hygiene, land use or the protection of human, plant or animal health or welfare, in any manner applicable to Company or any of its Subsidiaries or any or their respective properties. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor statute. "ERISA Affiliate", as applied to any Person, means (i) any corporation which is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) which is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member. "ERISA Event" means (i) a "reportable event" within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a material required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any material required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Company or any of its ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in material liability pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which would reasonably be expected to constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of material liability on Company or any of its ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the complete or partial withdrawal by Company or any of its ERISA Affiliates (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan, or the receipt by Company or any of its ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA, in any such case if such event would reasonably be expected to result in material liability to Company or its ERISA Affiliates; (viii) the occurrence of an act or omission which could give rise to the imposition on Company or any of its ERISA Affiliates of material fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any 17 Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against Company or any of its ERISA Affiliates in connection with any such Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan. "Eurodollar Rate" means, for any Interest Rate Determination Date with respect to a Eurodollar Rate Loan, the rate (expressed as a percentage per annum) which is the arithmetic mean (rounded upwards, if necessary, to the next 1/16 of one percent) of the offered rates for Dollar deposits for a period equal to the Interest Period for such Eurodollar Rate Loan that appears on the LIBO page on the Reuters Screen (or any page that can reasonably be considered a replacement page) at approximately 11:00 a.m., London time, on such Interest Rate Determination Date. If the rate set forth above is not available on the Reuters Screen, such rate shall be the rate (rounded upwards, if necessary, to the next 1/16 of one percent) equal to the arithmetic mean of the respective rates per annum at which Dollar deposits approximately equal in principal amount to such Eurodollar Rate Loan and for a maturity comparable to such Interest Period are offered in immediately available funds to the London branches of the Reference Lenders in the London interbank market at approximately 11:00 a.m., London time, on such Interest Rate Determination Date. The Administrative Agent shall determine the Eurodollar Rate and such determination shall be conclusive absent manifest error. "Eurodollar Rate Loans" means Dollar Loans bearing interest at rates determined by reference to the Adjusted Eurodollar Rate or the Eurodollar Rate, as the case may be, as provided in subsection 2.2A. "Event of Default" means each of the events set forth in Section 7. "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute. "Excluded Tax" means any of the following taxes, levies, imposts, duties, deductions, withholdings or charges, and all liabilities with respect thereto: taxes (without regard to whether such taxes are collected by withholding or otherwise) imposed by a government or taxing authority (and any interest, additions to tax, penalties, fines or other charges in respect thereof other than those arising from a breach by Company or any Borrower of its obligations hereunder) on any Lender or any Agent that (i) are imposed on, based on or measured by gross or net income or gross or net receipts (including, without limitation, capital gains taxes, excess profits taxes, minimum taxes, alternative minimum taxes and taxes on tax preference items) or (ii) are capital, net worth, intangible, excise, franchise, doing business, accumulated earnings, personal holding company, or similar taxes other than franchise, doing business or similar taxes imposed solely as a result of the transactions contemplated hereby. 18 "Existing Credit Agreement" has the meaning assigned to that term in the recitals of this Agreement. "Existing Lenders" has the meaning assigned to that term in the recitals of this Agreement. "Existing Promissory Notes" has the meaning assigned to that term in the recitals of this Agreement. "Exposure" means the Australian Exposure, the Canadian Exposure and/or the U.S. Exposure. "Face Amount" means, in respect of a Draft or a Bankers' Acceptance, as the case may be, the amount payable to the holder thereof on its maturity. "Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by it. "Fiscal Year" means the fiscal year of Company ending on December 31 of each calendar year. "Funding Date" means the date of the funding of a Loan. "GAAP" means, subject to the limitations on the application thereof set forth in subsection 1.2, generally accepted accounting principles set forth in 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 may be approved by a significant segment of the United States accounting profession, in each case as the same are applicable to the circumstances as of the date of determination. "Gold" means unallocated or pool account gold or refined gold in bar form (which bears the stamp of a smelter and assayer from the good delivery list of the London Bullion Market Association, as such terms are understood in the gold trade) of a purity (i.e. the ratio of fine gold per 1,000 parts of gold, expressed to the fourth decimal place) of at least .9950 or such other ratio as U.S. Borrower and U.S. Lenders may agree with respect to any Gold Loan. "Gold Advance Date" means, in relation to any outstanding Gold Loan (including any Gold Loan that has been continued for successive Interest Periods), the date upon which such Gold Loan initially was funded. 19 "Gold Loan" means a loan of Gold made by U.S. Lenders to U.S. Borrower hereunder and upon which interest shall accrue at the Gold Rate. "Gold Rate" means, with respect to any Gold Loan advanced by any U.S. Lender for any Interest Period applicable thereto, the rate of interest per annum, calculated on the basis of a 360 day year (rounded upwards, if necessary, to the next 1/16% of one percent) equal to the greater of (i) the Applicable Margin, and (ii) the Eurodollar Rate plus the Applicable Margin less the mean rate quoted in the London Interbank Forward Bullion Market as set forth on the Reuters GOFO page at 11:00 A.M. (London Time) two Business Days prior to the first day of such Interest Period. If the rate set forth above is not available on the Reuters GOFO page, the Gold Rate shall be the rate of interest per annum, calculated on the basis of a 360 day year, equal to the arithmetic average (rounded upwards, if necessary, to the next 1/16% of one percent) of the rates offered by the Gold Rate Reference Lenders two Business Days prior to the first day of the applicable Interest Period. "Gold Rate Reference Lenders" means Chase and Deutsche Bank. "Governmental Authorization" means any permit, license, authorization, plan, directive, consent order or consent decree of or from any federal, state or local governmental authority, agency or court. "Government Acts" has the meaning assigned to that term in subsection 2.7H. "Grid Gold Acknowledgement" means an acknowledgement by U.S. Borrower substantially in the form of Exhibit V annexed hereto. "Hazardous Materials" means any pollutant, contaminant, toxic or hazardous substance, toxic or hazardous material, toxic or hazardous constituent or toxic or hazardous waste, as such terms are defined in or pursuant to any Environmental Law. "HCI Exchangeable Stock" means capital stock of Canadian Borrower which conveys voting rights with respect to the Company, is exchangeable and redeemable, under certain circumstances, for Company common stock, and is satisfactory to the Administrative Agent. "HGAL" has the meaning assigned to that term in the introduc- tion to this agreement. "Indebtedness", as applied to any Person, means (i) all indebtedness for borrowed money or gold loans, (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation owed for all or any part of the deferred purchase price of property or services, which purchase price is (A) due more than 180 days from the date of incurrence of the obligation in respect thereof or (B) evidenced by a note or similar written instrument, and (v) all obligations of the type described in clauses (i) through (iv) above secured by any Lien on any 20 property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person. Obligations under Interest Rate Protection Agreements, Currency Protection Agreements, and options, forward sales contracts and futures contracts designed to protect Company and its Subsidiaries from fluctuations in interest rates, currency values or the Price of Gold (excluding any Gold Loans) constitute Contingent Obligations and not Indebtedness. "Indemnitee" has the meaning assigned to that term in subsec- tion 10.3. "Intellectual Property" means all patents, trademarks, tradenames, copyrights, technology, know-how and processes used in or necessary for the conduct of the business of Company and its Subsidiaries as currently conducted that are material to the condition (financial or otherwise), business or operations of Company and its Subsidiaries, taken as a whole. "Interest Payment Date" means (i) with respect to any Base Rate Loan, March 31, June 30, September 30 and December 31 of each year, commencing on the first such date to occur after the Effective Date, and (ii) with respect to any Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan, the last day of each Interest Period applicable to such Loan; provided that in the case of each Interest Period of longer than three months or 90 days, as the case may be, "Interest Payment Date" shall also include each three month or 90 day, as the case may be, anniversary of the commencement of such Interest Period. "Interest Period" means (i) with respect to each Eurodollar Rate Loan or Bank Bill Swap Rate Loan, a period of one, two, three or six months, and (ii) with respect to each Gold Loan, a period of 30, 60, 90 or 180 days and any other period (subject to availability to each U.S. Lender), in each case as selected by the applicable Borrower pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation; provided that, subject to the provisions of subsection 2.6C, no Interest Period in respect of any Gold Loan may be selected by U.S. Borrower if any U.S. Lender is for any reason unable to fund a Gold Loan having such Interest Period. "Interest Rate Determination Date" means each date for calculating the Adjusted Eurodollar Rate, the Eurodollar Rate or the Gold Rate for purposes of determining the interest rate in respect of an Interest Period. The Interest Rate Determination Date shall be the second Business Day prior to the first day of the related Interest Period. "Interest Rate Protection Agreement" means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, synthetic cap agreement or other similar agreement or arrangement designed to protect Company or any of its Subsidiaries against fluctuations in interest rates. "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter. "Investment" means (i) any direct or indirect purchase or other acquisition by Company or any of its Subsidiaries of, or of a beneficial interest in, stock or other Securities of any other Person, or (ii) any direct or indirect loan, advance (other than advances to current or 21 former employees or directors pursuant to employee benefit plans, programs or employment arrangements or otherwise for moving, entertainment and travel expenses, drawing accounts and similar expenditures in each case in the ordinary course of business) or capital contribution by Company or any of its Subsidiaries to any other Person (other than a Subsidiary of Company) including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. A contribution of undeveloped real property or other mineral interests to a Joint Venture shall not be deemed to be a capital contribution to any other Person. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto less the amount of all cash received as repayment of principal or return of capital, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment. "Issuing Lender" means (i) with respect to any U.S. Letter of Credit or any Australian Letter of Credit, Chase, and (ii) with respect to any Canadian Letter of Credit, Chase Canada. "Joint Venture" means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form. "Lender" and "Lenders" means the persons identified as "Lenders" and listed on the signature pages of this Agreement, together with their successors and permitted assigns pursuant to subsection 10.1; provided that the term "Lenders", when used in the context of a particular Commitment, shall mean Lenders having that Commitment. "Lending Office" means, in relation to any Lender that is a Canadian Lender, such Lender's Canadian Lending Office; in relation to any Lender that is an Australian Lender, such Lender's Australian Lending Office; in relation to any Lender that is a U.S. Lender, such Lender's U.S. Lending Office; or in relation to any Lender that is two or more of a U.S. Lender, a Canadian Lender and/or an Australian Lender, such Lender's U.S. Lending Office, insofar as borrowings and payments relating to U.S. Loans or U.S. Letters of Credit are concerned, Canadian Lending Office, insofar as borrowings and payments relating to Canadian Loans, Canadian Letters of Credit or Bankers' Acceptances are concerned, or Australian Lending Office, insofar as borrowings and payments relating to Australian Loans or Australian Letters of Credit are concerned. "Lending Unit" means (i) any U.S. Lender, (ii) its affiliated Canadian Lender (if any), and (iii) its affiliated Australian Lender (if any), as set forth on the signature pages hereof or in any applicable Assignment and Acceptance. "Letter of Credit" or "Letters of Credit" means Standby Letters of Credit issued, or deemed issued, by the applicable Issuing Lender for the account of any Borrower pursuant to subsection 2.7A. "Letter of Credit Fee Percentage" means the applicable percentage set forth below based upon the actual or stated senior implied ratings established by S&P and Moody's, respectively, applicable on such date to the senior, unsecured, non-credit enhanced, long-term 22 Indebtedness for borrowed money of Company (or, if no actual or stated senior implied ratings are in effect, the ratings one category higher than the ratings for subordinated, unsecured, non-credit enhanced long-term Indebtedness for borrowed money of Company):
Category S&P/Moody's Rating Percentage -------- ------------------ ---------- 1 BBB+/Baa1 or above 0.40% 2 BBB/Baa2 0.50% 3 BBB-/Baa3 0.625% 4 BB+/Ba1 0.875% 5 BB/Ba2 1.00% 6 BB-/Ba3 or below 1.125%
For purposes of the foregoing, (i) if neither Moody's nor S&P shall have in effect a rating for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company (other than by reason of the circumstances referred to in the last sentence of this definition), then the Letter of Credit Fee Percentage shall be based on Category 6; (ii) if only one of Moody's and S&P shall have in effect a rating for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company, then the Letter of Credit Fee Percentage shall be determined on the basis of such rating; (iii) if the ratings established or deemed to have been established by Moody's or S&P for the senior or subordinated, unsecured, non-credit enhanced, long-term Indebtedness for borrowed money of Company, shall fall within different Categories, the Letter of Credit Fee Percentage shall be based on the Category corresponding to the lower rating (higher percentage); and (iv) if any rating established or deemed to have been established by Moody's or S&P shall be changed (other than as a result of a change in the rating system of Moody's or S&P), such change shall be effective as of the date on which it is first announced by the applicable rating agency. Each change in the Letter of Credit Fee Percentage shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change. If the rating system of Moody's or S&P shall change, or if any such rating agency shall cease to be in the business of rating corporate debt obligations, Company and Lenders shall negotiate in good faith to amend the references to specific ratings in this definition to reflect such changed rating system or the non-availability of ratings from such rating agency, and pending the effectiveness of any such amendment, the ratings of such rating agency most recently in effect prior to such change or cessation shall be employed in determining the Letter of Credit Fee Percentage. "Letter of Credit Usage" means the Australian Letter of Credit Usage, the Canadian Letter of Credit Usage and/or the U.S. Letter of Credit Usage. 23 "Lien" means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing. "Lien" shall not include any arrangement with respect to Joint Ventures where legal title to assets in which the Company or Borrower or their Subsidiaries have a beneficial interest is held in the name of the operator or another participant in such Joint Venture or in the name of the Joint Venture if such arrangement is not for the purpose of securing Indebtedness (other than Indebtedness that may arise in respect of a participant's lien or an operator's lien). "Loan" or "Loans" means any Canadian Loans, any Australian Loans, any U.S. Loans, or any combination thereof. "Loan Documents" means this Agreement, any applications, reimbursement agreements and other documents or certificates executed in favor of any Issuing Lender relating to the Letters of Credit, any Notes, any Drafts, any Bankers' Acceptances and any Grid Gold Acknowledgements. "Margin Stock" has the meaning assigned to that term in Regulation U of the Board as in effect from time to time. "Marketable Securities" means corporate cash investments with a weighted average portfolio maturity of two years or less, consisting of (i) marketable direct obligations issued or unconditionally guaranteed by the United States Government or Canadian Government or the Commonwealth of Australia or issued by any agency thereof and backed by the full faith and credit of the United States or Canada or the Commonwealth of Australia thereof; (ii) marketable direct obligations issued by any state of the United States of America or any Province of Canada or any state or territory of the Commonwealth of Australia or any political subdivision of any such state, Province or territory or any public instrumentality thereof at the time of acquisition having the highest rating obtainable from S&P, Moody's or Dominion Bond Rating Service; (iii) commercial paper at the time of acquisition having a rating of at least A-1 (or A-2, provided such commercial paper has a rating of at least P-1 from Moody's) from S&P, at least P-1 (or P-2, provided such commercial paper has a rating of at least A-1 from S&P) from Moody's or least R-1 (Middle) from Dominion Bond Rating Service and, any of the preceding ratings may be met by an attached letter of credit from a bank or municipal bond insurance; (iv) certificates of deposit or bankers' acceptances issued by any commercial bank or trust company organized under the laws of the United States of America or any state thereof or the District of Columbia or under the laws of Canada or any Province thereof or under the laws of the Commonwealth of Australia or any state or territory thereof or any non-U.S. commercial bank which at the time of acquisition is ranked among the 100 largest banks in the world (by assets as ranked by the American Banker Journal), and rated B/C or better by IBCA or KBW rating service and having at least one of the credit ratings identified in clause (iii) above (or higher credit ratings) obtainable from S&P, Moody's or Dominion Bond Rating Service; (v) Eurodollar time deposits purchased directly from any commercial bank or trust company described in clause (iv) above; and (vi) repurchase agreements and reverse repurchase agreements with any commercial bank or trust company 24 described in clause (iv) above or with any financial institution whose commercial paper at the time of acquisition has a rating of at least A-1 from S&P or whose long-term Indebtedness at the time of acquisition has a rating of at least Aa, relating to marketable direct obligations issued or unconditionally guarantied by the United States Government or Government of Canada or the Government of the Commonwealth of Australia or issued by any agency thereof and backed by the full faith and credit of the United States or Canada or the Commonwealth of Australia; and (vii) indebtedness of any corporation at the time of acquisition rated A1 or AA by S&P or equivalent rating service. "Material Adverse Effect" means (i) a material adverse effect upon the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company, Company and its Subsidiaries, taken as a whole, or any Borrower, and in the case of any ERISA Event, the ERISA Affiliates of Company taken as a whole, or (ii) a material adverse effect on the ability of Company or any Borrower to perform, or of any Agent or Lenders to enforce, the Obligations. "Material Subsidiary" means any Borrower, any Subsidiary that owns any assets constituting a portion of the Mining Group and any other Subsidiary (i) whose total assets at the end of any fiscal quarter of Company equal more than 10% of the Consolidated Net Worth of Company and its Subsidiaries as at the end of such quarter or (ii) whose total revenue for any Fiscal Year of Company equals more than 10% of the consolidated revenues of the Company and its Subsidiaries for such Fiscal Year determined in accordance with GAAP. A Subsidiary that is or becomes a Material Subsidiary shall not cease to be a Material Subsidiary if it subsequently fails to meet either of the two preceding requirements without the consent of the Requisite Lenders. The Material Subsidiaries as of the Effective Date are identified in Schedule 4.1 annexed hereto. "Mining Group" means the currently producing mines, part or all of which are owned by Company or any of its Subsidiaries or Joint Ventures. "Moody's" means Moody's Investors Service, Inc. "Multiemployer Plan" means a "multiemployer plan", as defined in Section 3(37) of ERISA, (i)(a) to which Company or any of its ERISA Affiliates is contributing, or within the past six years has contributed, or (b) to which Company or any of its ERISA Affiliates has, or within the past six years has had, an obligation to contribute, and (ii) with respect to which Company or any of its ERISA Affiliates retains any liability. "New Subordinated Indebtedness" means up to $300 million of Indebtedness of Company or Canadian Borrower (and any guaranties of such Indebtedness) issued after the Effective Date, having a maturity of not less than five years, convertible into common stock of Company, that, in part, refinances the Subordinated Debentures, and that is subordinated to the Obligations (including any guaranty of the Obligations) on terms and conditions approved in writing by the Administrative Agent. 25 "Non-Recourse Debt" means indebtedness for borrowed money or gold loans the repayment of which, by its express contract terms, may be enforced only by foreclosure or other realization on any collateral security therefor and as to which the obligor thereon shall not otherwise have any personal liability. "Notes" means the promissory notes of Borrowers issued to Lenders pursuant to subsection 2.1D, substantially in the forms of Exhibit IV-A (in the case of Canadian Borrower), Exhibit IV-B and Exhibit IV-C (in the case of Australian Borrowers), and Exhibit IV-D (in the case of U.S. Borrower) annexed hereto, and as they may be further amended, supplemented or otherwise modified from time to time. "Notice of Allocation" means a notice substantially in the form of Exhibit XIII annexed hereto delivered by Borrowers pursuant to subsection 2.1A for the purpose of allocating the Overall Commitments among the Canadian Allocation, the Australian Allocation and the U.S. Allocation. "Notice of Borrowing" means a notice substantially in the form of Exhibit I annexed hereto delivered by the applicable Borrower to the Applicable Administrative Agent and Administrative Agent pursuant to subsection 2.1B with respect to a proposed borrowing of Loans. "Notice of Conversion/Continuation" means a notice substantially in the form of Exhibit II annexed hereto delivered by the applicable Borrower to the Applicable Administrative Agent and Administrative Agent pursuant to subsection 2.2D with respect to a proposed conversion or continuation of the applicable basis for determining the interest rate with respect to the Loans specified therein. "Notice of Issuance of Letter of Credit" means a notice in the form of Exhibit XI annexed hereto, delivered by a Borrower to the Applicable Administrative Agent and Administrative Agent pursuant to subsection 2.7B with appropriate insertions and deletions, with respect to the proposed issuance or amendment of a Letter of Credit. "Obligations" means all obligations of every nature of Company and each Borrower from time to time owed to Agents, Arranger, Lenders or any of them under the Loan Documents, whether for principal, interest, reimbursement of amounts drawn under or cash collateralization of Letters of Credit, payment at maturity or cash collateralization of Bankers' Acceptances, fees, expenses, indemnification or otherwise. "Officers' Certificate" means, as applied to any corporation, a certificate executed on behalf of such corporation by its chairman of the board (if an officer) or its president or one of its vice presidents and by its chief financial officer or its treasurer or, with respect to any Australian Borrower, any director, secretary or Authorized Signor of such Australian Borrower; provided that every Officers' Certificate with respect to the compliance with a condition precedent to the making of any Loans or the issuance of any Letter of Credit or the creation and purchase of any Bankers' Acceptance hereunder shall include (i) a statement that the officer or officers, directors, secretary or Authorized Signor making or giving such Officers' Certificate have read such condition and any definitions or other provisions contained in this Agreement 26 relating thereto, (ii) a statement that, in the opinion of the signer(s), they have made or have caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not such condition has been complied with, and (iii) a statement as to whether, in the opinion of the signers, such condition has been complied with. "Operating Lease" means, as applied to any Person, any lease (including, without limitation, leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) that is not a Capital Lease other than any such lease under which that Person is the lessor. "Ounce" or "Ounces" means a fine troy ounce or fine troy ounces. "Overall Commitments" means the aggregate Commitments of all of the Lending Units. "PBGC" means the Pension Benefit Guaranty Corporation (or any successor thereto). "Pension Plan" means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA. "Permitted Encumbrances" means the following types of Liens: (i) Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by subsection 5.3, other than any Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to Section 302(f) or 4068 of ERISA, or deposits or pledges to obtain the release of any such liens; (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen and other Liens imposed by law and Liens of smelters, refiners and other processors of ore, minerals and other products thereof, in each case where incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, or deposits or pledges to obtain the release of any such Liens if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor; (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); (iv) any attachment or judgment Lien not constituting an Event of Default under subsection 7.8; 27 (v) leases or subleases granted to others not interfering in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries; (vi) easements, rights-of-way, restrictions, minor defects, encroachments or irregularities in title and other similar charges or encumbrances or defects in title to property not interfering in any material respect with the ordinary conduct of the business of Company or any of its Subsidiaries; (vii) any interest or title of a lessor or sublessor under any lease not prohibited by this Agreement; (viii) precautionary filings relating solely to leases permitted by this Agreement; (ix) mineral, oil, gas, and geothermal leases, licenses, grazing leases, timber cutting rights, easements, minimum royalties and rents, delayed rentals, work commitments, production royalties, profit interests, surface owner interests, extralateral rights, and rights of subadjacent and lateral support burdening any properties of Company or any of its Subsidiaries; (x) the paramount rights of the United States of America or any other governmental authority in and to any unpatented mining or mill site claims or leases held by Company or any of its Subsidiaries; (xi) the reservations, limitations, provisos, and conditions, if any, expressed in any original grants from the Crown; (xii) Liens of Joint Venture participants and operators on properties being developed or operated by Joint Ventures securing the respective obligations of the joint venturers or participants to advance funds or reimburse advances of funds or to perform obligations under the applicable joint venture agreements; (xiii) Liens in favor of Company or Borrowers; and (xiv) Liens or deposits or pledges to secure the performance by Company, Borrowers or their Subsidiaries or Joint Ventures with respect to the remediation, reclamation or stabilization of disturbed properties currently or formerly owned or leased by Company, Borrowers or their Subsidiaries or Joint Ventures; provided that any such Liens attach only to the property to be remediated, reclaimed or stabilized; and provided further that Company shall have first used its best efforts to cause a letter of credit to be issued or deliver a guaranty to assure performance in lieu of granting such Liens or making such deposits or pledges; and provided further such Liens, deposits or pledges are promptly released upon satisfaction of such remediation, reclamation or stabilization obligation. 28 excluding, however, in any case prior to the Prime Acquisition Date, any such Liens granted or created by Company or any of its Subsidiaries (other than Prime) on or with respect to their properties or assets to secure any obligations of Prime at any time that Indebtedness permitted under subsection 6.1(vi) is outstanding. "Person" means natural persons, corporations, limited partnerships, general partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and governments and agencies and political subdivisions thereof. "Plutonic" has the meaning assigned to that term in the intro- duction to this Agreement. "Plutonic Acquisition" means the transaction pursuant to which Plutonic became a wholly-owned Subsidiary of Company, which transaction was completed on or about April 30, 1998. "Plutonic Acquisition Documents" means each of the agreements to which Plutonic and Company, or any of Company's Subsidiaries or Affiliates, are parties that effectuated or is related to the Plutonic Acquisition, as amended through the date hereof. "Plutonic Credit Facility" means the $A400 million Syndicated Debt Facilities Agreement dated as of June 23, 1997 among Plutonic Finance Pty Ltd; certain Guarantors, certain Arrangers, certain Lenders and Chase Securities Australia Limited, as Agent. "Potential Event of Default" means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default. "Price of Gold" means, on any day, and except as provided in the next sentence, the price per Ounce of Gold collectively set by the fixing members of the London Bullion Market Association in the afternoon (London time) of such day, (including an amount, if any, equal to the premium and any other additional amounts that would be payable in the applicable market in connection with a purchase of Gold). If there is no such fixing, then (a) if such day is any day other than a Saturday, Sunday or holiday in London, the "Price of Gold" shall be the publicly quoted price in Dollars per Ounce of Gold on such other accessible international bullion market as may be selected by Administrative Agent or (b) if no such quotation is available, or such day is a Saturday, a Sunday or a holiday in London, the "Price of Gold" shall be the last price so set by the fixing members of the London Bullion Market Association. "Prime" means Prime Resources Group, Inc., a British Columbia corporation, approximately 50.6% of the capital stock of which, on the Effective Date, is owned directly or indirectly by Canadian Borrower, together with its Subsidiaries. "Prime Acquisition Date" means the date upon which Company or one of its wholly owned Subsidiaries acquire all of the capital stock of Prime not owned by Company and its wholly owned Subsidiaries. 29 "Pro Rata Share" means, with respect to any Lending Unit (and of any Lender(s) constituting such Lending Unit), the percentage obtained by dividing (x) the Commitment of that Lending Unit by (y) the aggregate amount of the Overall Commitments, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to subsection 10.1B. The initial Pro Rata Share of each Lending Unit (and of any Lender(s) constituting such Lending Unit) is set forth opposite the name of that Lending Unit in Schedule 2.1 annexed hereto. "Purchase Money Security Interest" means any security interest, however denominated, on any property created or retained at the time of acquisition of such property in order to secure all or any part of the acquisition cost thereof or in order to secure all or any Indebtedness incurred for the purpose of financing or refinancing (without increasing the then outstanding amount) such Indebtedness. "Reference Lenders" means Chase, and Deutsche Bank. "Register" has the meaning assigned to that term in subsection 10.1.F. "Regulation D" means Regulation D of the Board, as in effect from time to time. "Release" means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of Hazardous Materials into the environment (including, without limitation, the abandonment or disposal of any barrels, containers or other closed receptacles containing any Hazardous Materials), or into or out of any Facility, including the movement of any Hazardous Material through the air, soil, surface water, groundwater or property. "Requisite Lenders" means prior to an acceleration of the Obligations, Lending Units having or holding 51% or more of the sum of the Overall Commitments of all Lending Units and upon and after an acceleration of the Obligations, Lending Units having or holding 51% or more of the total aggregate Exposure outstanding. "Responsible Officer" means, with respect to any Person, any one of the chairman of the board (if an officer), president, vice presidents, chief financial officer and treasurer of such Person or, with respect to any Australian Borrower, any director, secretary or Authorized Signor of such Australian Borrower. "Restricted Junior Payment" means (i) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock of Company, Canadian Borrower or any Wholly-owned Subsidiary of Company, other than any redemption or other payment where the consideration is common stock of Company, (ii) any payment of dividends to shareholders by Canadian Borrower or any Wholly-owned Subsidiary of Company, and (iii) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to any Subordinated Indebtedness. For purposes of this definition, "Wholly-owned Subsidiary" means any Subsidiary of which the 30 Company owns, directly or indirectly, all of the economic and voting interest, provided that directors qualifying shares shall not be deemed outstanding for purposes of this definition. "S&P" means Standard & Poor's Ratings Group - a McGraw Hill Company. "Securities" means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise, or in general any instruments commonly known as "securities" or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing. "Securities Act" means the Securities Act of 1933, as amended from time to time, and any successor statute. "Solvent" means, with respect to any Person, that as of the date of determination (i) the then fair saleable value of the property of such Person as a going concern is (y) greater than the total amount of liabilities (including anticipated Contingent Obligations and other contingent liabilities only to the extent of the probable liability with respect to such Contingent Obligations and other contingent liabilities) of such Person and (z) greater than the amount that will be required to pay the probable liabilities of such Person's then existing debts as they become absolute and matured; (ii) such Person's capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person does not intend to incur, or believe that it will incur, debts beyond its ability to pay such debts as they become due. "Standby Letter of Credit" means any standby letter of credit or similar instrument issued for the purpose of supporting (i) Indebtedness of Company or any of its Subsidiaries in respect of industrial revenue or development bonds or financings, (ii) workers' compensation liabilities of Company or any of its Subsidiaries, (iii) the obligations of third party insurers of Company or any of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring third party insurers, (iv) obligations with respect to Capital Leases or Operating Leases of Company or any of its Subsidiaries, (v) performance, payment, deposit or surety obligations of Company or any of its Subsidiaries, in any case if required by law or governmental rule or regulation or agreement in accordance with custom and practice in the industry, (vi) obligations of Company or any of its Subsidiaries imposed by statute or by a court of competent jurisdiction to post appeal bonds or other security in connection with litigation appeals, and (vii) other obligations of Company or any of its Subsidiaries approved by Administrative Agent in its sole discretion; provided that Standby Letters of Credit may not be issued for the purpose of supporting trade payables. "Statutory Reserves" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board and any other banking authority to which Administrative Agent is subject for new negotiable non-personal time deposits in Dollars 31 of over $100,000 with maturities approximately equal to three months. Such reserve percentages shall include those imposed pursuant to such Regulation D of the Board. Statutory Reserves shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "Subordinated Debentures" means Company's 5.5% Convertible Subordinated Notes due 2000 in the aggregate original principal amount of $150,000,000. "Subordinated Indebtedness" means (i) the Subordinated Debentures and the New Subordinated Indebtedness, and (ii) any other Indebtedness of Company or any of its Subsidiaries that is subordinated to the Obligations (including any guaranty of the Obligations) on terms and conditions approved in writing by Requisite Lenders. "Subsidiary" means, with respect to any Person, any corporation, partnership, association, Joint Venture or other business entity of which 50% or more of the total voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the Person or Persons (whether directors, managers, trustees or other Persons performing similar functions) having the power to direct or cause the direction of the management and policies thereof 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. "Tax" or "Taxes" means any present or future tax, levy, impost, duty, charge, fee, deduction or withholding of any nature and whatever called, by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or assessed. "Tax Transferee" means any Person who acquires any interest in the Loans (whether or not by operation of law) or the office to which a Lender or any Agent has transferred its Loans for purposes of determining where the Loans are made, accounted for or booked. "Total Utilization of Overall Commitments" means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Loans (valued in Dollar Equivalents as of such date of determination), plus (ii) the Canadian Letter of Credit Usage, plus (iii) the Australian Letter of Credit Usage, plus (iv) the U.S. Letter of Credit Usage, plus (v) the BA Usage. "U.S. Allocation" means the portion of the Overall Commitments allocated to U.S. Borrowers in Schedule 2.1 or in the most recent Notice of Allocation delivered by Borrowers and Company pursuant to subsection 2.1A. "U.S. Base Rate (Canada)" means the rate of interest per annum equal to the greater of (i) the rate which the principal office of the Canadian Administrative Agent in Toronto, Ontario announces from time to time as its "base rate" and which is its reference rate of interest for loans in U.S. Dollars to its Canadian borrowers; and (ii) 1/2 of 1% above the U.S. Federal Funds Rate, adjusted automatically with each change in such rate all without the necessity of any notice to Canadian Borrower or any other Person. 32 "U.S. Base Rate (Canada) Loans" means Dollar Loans made by Canadian Lenders pursuant to subsection 2.1A(i) and bearing interest at rates determined by reference to the U.S. Base Rate (Canada) as provided in subsection 2.2A. "U.S. Base Rate Loans" means Dollar Loans made by U.S. Lenders pursuant to subsection 2.1A(iii) and bearing interest at rates determined by reference to the Alternate Base Rate as provided in subsection 2.2A. "U.S. Borrower Account" means that certain account with the Administrative Agent, care of Agent Bank Services Group, 140 E. 45th Street, New York, New York, 10017, Clearing Account Number 323508308, maintained at Chase. "U.S. Commitment" means the commitment of each U.S. Lender (i) to make or maintain U.S. Loans pursuant to subsection 2.1A, and (ii) to issue (in the case of the applicable Issuing Lender) or acquire risk participations in (in the case of all other U.S. Lenders) U.S. Letters of Credit pursuant to subsection 2.7 in an aggregate amount, valued in Dollar Equivalents, at no time exceeding such U.S. Lender's Pro Rata Share of the U.S. Allocation. "U.S. Commitment Usage" means, as of any date of determination, the aggregate outstanding principal amount of (i) the U.S. Loans that are Dollar Loans, and (ii) the U.S. Loans that are Gold Loans (valued in Dollar Equivalents based on the Price of Gold as of such date of determination) plus the U.S. Letter of Credit Usage. "U.S. Exposure" means with respect to any U.S. Lender as of any date of determination, the U.S. Allocation of such U.S. Lender or, if the Overall Commitments have been terminated, the sum of (a) the aggregate outstanding principal amount of all U.S. Loans (valued in Dollar Equivalents as of such date of determination) of that U.S. Lender plus (b) in the event such U.S. Lender (or a Lender in its Lending Unit) is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all U.S. Letters of Credit issued by such U.S. Lender (or such Lender in that Lending Unit) (in each case net of any participations purchased by other U.S. Lenders in such U.S. Letters of Credit or any unreimbursed drawings thereunder valued in Dollar Equivalents as of such date of determination) plus (c) the aggregate amount of all participations purchased by that U.S. Lender in any outstanding U.S. Letters of Credit or any unreimbursed drawings under any U.S. Letter of Credit (valued in Dollar Equivalents as of such date of determination). "U.S. Lender Allocation" means, with respect to any U.S. Lender, the portion of the U.S. Allocation allocated to such U.S. Lender. "U.S. Lender Pro Rata Share" means, with respect to any U.S. Lender, the percentage obtained by dividing the U.S. Exposure of such U.S. Lender by the aggregate U.S. Exposure of all U.S. Lenders. "U.S. Lenders" means each of the Lenders of each Lending Unit designated as the U.S. Lender for such Lending Unit on the signature pages hereof or in any applicable Assignment and Acceptance. 33 "U.S. Lending Office" means, in relation to any U.S. Lender, its U.S. lending office as specified under its signature on the signature pages hereof or such other office as is specified by such Lender in a written notice to Administrative Agent and U.S. Borrower. "U.S. Letter of Credit" or "U.S. Letters of Credit" means Standby Letters of Credit issued, or deemed issued, by the applicable Issuing Lender for the account of U.S. Borrower pursuant to subsection 2.7. "U.S. Letter of Credit Usage" means, as at any date of determination, the sum of (i) the maximum aggregate amount which is available for drawing under all U.S. Letters of Credit then outstanding, plus (ii) the aggregate amount of all drawings under all U.S. Letters of Credit honored by the applicable Issuing Lender and not theretofore reimbursed by Borrowers. "U.S. Loans" means Dollar Loans and/or Gold Loans made by U.S. Lenders to U.S. Borrower pursuant to subsection 2.1A(iii). 1.2 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement. Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP. Financial statements and other information required to be delivered by Company to Lenders pursuant to clauses (i), (ii) and (xi) of subsection 5.1 shall be prepared in accordance with GAAP as in effect at the time of such preparation. If any changes in accounting principles from those used in the preparation of the financial statements referred to in subsection 4.5 hereafter occasioned by the promulgation of rules, regulations, pronouncements and opinions by or required by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants (or successors thereto or agencies with similar functions) result in a change in the method of calculation of financial covenants, standards or terms found in Sections 1, 5 and 6 hereof, the parties hereto agree to enter into negotiations in order to amend such provisions so as to equitably reflect such changes with the desired result that the criteria for evaluating Company's consolidated financial condition shall be the same after such changes as if such changes had not been made. 1.3 Other Definitional Provisions. References to "Sections" and "subsections" shall be to Sections and subsections, respectively, of this Agreement unless otherwise specifically provided. Any of the terms defined in subsection 1.1 may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS 2.1 Commitments; Loans. 34 A. Commitments. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company and Borrowers herein set forth, each Lender hereby severally agrees to make the Loans described in this subsection 2.1A that are, pursuant to the terms of this subsection 2.1A, to be made by such Lender. The commitments of the Lenders to make such Loans consist of the Canadian Commitments of the Canadian Lenders, the Australian Commitments of the Australian Lenders and the U.S. Commitments of the U.S. Lenders, such commitments being more fully described below. Initially, the amount of each Lending Unit's U.S. Commitment, Canadian Commitment, and Australian Commitment are set forth opposite its name on Schedule 2.1 and the aggregate amount of the U.S. Commitments of all Lending Units shall be $430,000,000, the aggregate amount of the Canadian Commitments of all Lending Units shall be $380,000,000, and the aggregate amount of the Australian Commitments of all Lending Units shall be $340,000,000. Company and Borrowers shall initially allocate the Overall Commitments to Canadian Borrower, Australian Borrowers and U.S. Borrower, subject to the provisions of this Agreement. The initial amounts of the Canadian Allocation, the Australian Allocation and the U.S. Allocation and initial Canadian Lender Pro Rata Share, Australian Lender Pro Rata Share, U.S. Lender Pro Rata Share, and Pro Rata Share of each Lender are set forth on Schedule 2.1. Company and Borrowers may, effective as of the first Business Day of each June and December, commencing on December 1, 1998, change the amount of the Overall Commitments allocated to the Canadian Allocation, the Australian Allocation and the U.S. Allocation and the allocation among the Lenders by delivering an irrevocable Notice of Allocation to Administrative Agent at least 14 days and not more than 60 days prior to date upon which such allocation is to be effective; provided that (1) such allocation shall be reasonably acceptable to the Administrative Agent, (2) such allocation shall maximize, to the greatest extent possible, the Commitment of each Lender available to each Borrower, (3) the aggregate amount of the Canadian Allocation, the Australian Allocation and the U.S. Allocation of each Lending Unit shall not exceed its Commitment, (4) the Canadian Allocation for each Lending Unit may not exceed its Canadian Commitment and may not be reduced to an amount that is less than the outstanding Canadian Commitment Usage of such Lending Unit, (5) the Australian Allocation for each Lending Unit may not exceed its Australian Commitment and may not be reduced to an amount that is less than the outstanding Australian Commitment Usage of such Lending Unit, and (6) the U.S. Allocation for each Lending Unit may not exceed its U.S. Commitment and may not be reduced to an amount that is less than the outstanding U.S. Commitment Usage of such Lending Unit. Administrative Agent shall promptly notify each Lender of any proposed change in the allocation of the Commitments or of any proposed change in any Lending Unit's Australian Lender Pro Rata Share, Canadian Lender Pro Rata Share, or U.S. Lender Pro Rata Share. The aggregate amount of the Overall Commitments may be permanently reduced from time to time in accordance with subsection 2.4. (i) Canadian Borrower Loans. The Canadian Lender, if any, of each Lending Unit severally agrees, subject to the limitations set forth below with respect to the maximum amount of Canadian Loans permitted to be outstanding from time to time, to lend to Canadian Borrower from time to time during the period from the Effective Date to but excluding the Commitment Termination Date Dollars and/or Canadian Dollars, in an aggregate amount, when valued in Dollar Equivalents and combined with the BA Usage of such Canadian Lender and its Canadian Lender 35 Pro Rata Share of the Canadian Letter of Credit Usage, not exceeding the lesser of (a) its Canadian Lender Pro Rata Share of the Canadian Allocation as in effect from time to time and (b) the Commitment of its Lending Unit, to be used for the purposes identified in subsection 2.5A. (ii) Australian Loans. The Australian Lender, if any, of each Lending Unit severally agrees, subject to the limitations set forth below with respect to the maximum amount of Australian Loans permitted to be outstanding from time to time, to lend to Australian Borrowers severally and from time to time during the period from the Effective Date to but excluding the Commitment Termination Date Dollars and/or Australian Dollars, in an aggregate amount, when valued in Dollar Equivalents, and combined with its Australian Lender Pro Rata Share of the Australian Letter of Credit Usage, not exceeding the lesser of (a) its Australian Lender Pro Rata Share of the Australian Allocation as in effect from time to time and (b) the Commitment of its Lending Unit, to be used for the purposes identified in subsection 2.5A. (iii) U.S. Loans. The U.S. Lender of each Lending Unit severally agrees, subject to the limitations set forth below with respect to the maximum amount of U.S. Loans permitted to be outstanding from time to time, to lend to U.S. Borrower from time to time during the period from the Effective Date to but excluding the Commitment Termination Date Dollars and/or Gold, in an aggregate amount, when valued in Dollar Equivalents, and combined with its U.S. Lender Pro Rata Share of the U.S. Letter of Credit Usage, not exceeding the lesser of (a) its U.S. Lender Pro Rata Share of the U.S. Allocation as in effect from time to time and (b) the Commitment of its Lending Unit, to be used for the purposes identified in subsection 2.5A. (iv) Lending Unit Commitments. Each Lending Unit agrees to maintain a U.S. Commitment and either an Australian Commitment or a Canadian Commitment. Each Lending Unit maintaining a U.S. Commitment and an Australian Commitment also hereby agrees to maintain a Canadian Commitment unless the maintenance of, or any advances of funds under, such Canadian Commitment would result in the imposition of withholding taxes on any payments to be received by such Lending Unit as a result of such Canadian Commitment. Each Lending Unit maintaining a U.S. Commitment and a Canadian Commitment also hereby agrees to maintain an Australian Commitment unless the maintenance of, or any advances of funds under, such Australian Commitment would result in the imposition of withholding taxes on any payments to be received by such Lending Unit as a result of such Australian Commitment. (v) Additional Limitations on Loans. The amounts of the Canadian Allocation, the Australian Allocation, the U.S. Allocation, and the Overall Commitments shall be reduced from time to time by the amount of any reductions thereto made pursuant to subsection 2.4A. Each Lending Unit's Commitment and the Canadian 36 Commitment, if any, the Australian Commitment, if any, and the U.S. Commitment of such Lending Unit's Canadian Lender, Australian Lender and U.S. Lender, respectively, shall expire on the Commitment Termination Date and all Loans and all other amounts owed hereunder with respect to Loans, Bankers' Acceptances, Letters of Credit and Overall Commitments shall be paid in full no later than that date. Amounts borrowed under this subsection 2.1A may be repaid and reborrowed to but excluding the Commitment Termination Date. Anything contained in this Agreement to the contrary notwithstanding, the Loans and the Overall Commitments shall be subject to the following limitations: (a) Subject to the provisions of subsection 2.4A(iii), the Total Utilization of Overall Commitments shall not at any time exceed the Overall Commitments then in effect; (b) Subject to the provisions of subsection 2.4A(iii), each Lending Unit's U.S. Lender Pro Rata Share of the U.S Commitment Usage shall not at any time exceed such Lending Unit's U.S. Allocation and U.S. Commitment then in effect; (c) Subject to the provisions of subsection 2.4A(iii), each Lending Unit's Australian Lender Pro Rata Share of the Australian Commitment Usage shall not at any time exceed such Lending Unit's Australian Allocation and Australian Commitment then in effect; (d) Subject to the provisions of subsection 2.4A(iii), each Lending Unit's Canadian Lender Pro Rata Share of the Canadian Commitment Usage shall not at any time exceed such Lending Unit's Canadian Allocation and Canadian Commitment then in effect; (e) Subject to the provisions of subsection 2.4A(iii), neither the aggregate amount of the Canadian Exposure for all Canadian Lenders nor the aggregate amount of the Canadian Commitments for all Canadian Lenders shall, in either case, at any time exceed the Canadian Allocation then in effect; (f) Subject to the provisions of subsection 2.4A(iii), neither the aggregate amount of the Australian Exposure for all Australian Lenders nor the aggregate amount of the Australian Commitments for all Australian Lenders shall, in either case, at any time exceed the Australian Allocation then in effect; (g) Subject to the provisions of subsection 2.4A(iii), neither the aggregate amount of the U.S. Exposure for all U.S. Lenders nor the aggregate amount of the U.S. Commitments for all U.S. Lenders shall, in either case, at any time exceed the U.S. Allocation then in effect; 37 (h) The amount otherwise available for borrowing under the Overall Commitments as of any time of determination shall be reduced by the Total Utilization of Overall Commitments; (i) Canadian Borrower shall not request or borrow Canadian Dollar Loans if, immediately after giving effect to such borrowing, the aggregate outstanding principal amount of Canadian Loans and the Canadian Letter of Credit Usage and the BA Usage, when valued in Dollar Equivalents, would exceed 95% of the Canadian Allocation then in effect; (j) Australian Borrowers shall not request or borrow Australian Dollar Loans if, immediately after giving effect to such borrowing, the aggregate outstanding principal amount of Australian Loans and the Australian Letter of Credit Usage, when valued in Dollar Equivalents, would exceed 95% of the Australian Allocation then in effect; (k) U.S. Borrower shall not request any Gold Loans if, immediately after giving effect to such borrowing, the aggregate outstanding amount of Gold Loans advanced to U.S. Borrower would exceed 750,000 Ounces; and (l) For purposes of computing compliance with the foregoing clauses (a) through (k), any extension of credit hereunder the proceeds of which are used on the same day to repay another extension of credit hereunder shall not be treated as an increase in the utilization of the Overall Commitments on such day. B. Borrowing Mechanics. Loans made on any Funding Date (other than Loans made pursuant to subsection 2.7C for the purpose of reimbursing any Issuing Lender for the amount of a drawing under a Letter of Credit issued by it or Loans made (or deemed made) pursuant to subsection 2.8F for the purpose of reimbursing any Canadian Lender for the Face Amount of any matured Bankers' Acceptance) shall be in an aggregate minimum amount of (i) $5,000,000 and integral multiples of $1,000,000 in excess of that amount, in the case of Dollar Loans, (ii) Cdn.$5,000,000 and integral multiples of Cdn.$1,000,000 in excess of that amount, in the case of Canadian Dollar Loans, (iii) A$5,000,000 and integral multiples of A$1,000,000 in excess of that amount, in the case of Australian Dollar Loans, and (iv) 10,000 Ounces and integral multiples of 2,000 Ounces in excess of that amount, in the case of Gold Loans. Whenever a Borrower desires that Lenders make Loans it shall deliver a Notice of Borrowing (i) in the case of U.S. Base Rate Loans, to Administrative Agent no later than 11:00 A.M. (New York time) at least one Business Day in advance of the proposed Funding Date, (ii) in the case of Eurodollar Rate Loans or Gold Loans to be made to U.S. Borrower, to Administrative Agent no later than 11:00 A.M. (New York time) at least three Business Days in advance of the proposed Funding Date, (iii) in the case of Eurodollar Rate Loans to be made to Canadian Borrower, to Canadian Administrative Agent and Administrative Agent no later than 11:00 A.M. (Toronto time) at least three Business Days in advance of the proposed Funding Date, (iv) in the case of Eurodollar Rate Loans to be made to Australian Borrowers, to Australian Administrative Agent and Administrative Agent no later than 12:00 Noon (Sydney time) at least three Business Days in 38 advance of the proposed Funding Date, (v) in the case of U.S. Base Rate (Canada) Loans and Canadian Base Rate Loans, to Canadian Administrative Agent and Administrative Agent no later than 11:00 A.M. (Toronto time) at least one Business Day in advance of the proposed Funding Date, and (vi) in the case of Bank Bill Swap Rate Loans, to Australian Administrative Agent and Administrative Agent no later than 12:00 Noon (Sydney time) at least two Business Days in advance of the proposed Funding Date; provided that, notwithstanding anything to the contrary, a Borrower may deliver a Notice of Borrowing to Administrative Agent at least two Business Days in advance of the Effective Date in the case of the initial Loans. The Notice of Borrowing shall specify (i) the Borrower(s) requesting the proposed Loans, (ii) the proposed Funding Date (which shall be a Business Day), (iii) whether such Loans will be denominated in Canadian Dollars, Australian Dollars, Dollars or Ounces of Gold, (iv) in the case of Dollar Loans, whether such Dollar Loans are to be U.S. Base Rate Loans, U.S. Base Rate (Canada) Loans or Eurodollar Rate Loans, (v) in the case of Gold Loans, whether U.S. Borrower is requesting that the amount of such Loan be converted into Dollars (based on the Price of Gold as in effect two Business Days prior to the proposed Funding Date) or that an amount of Gold constituting such Loan be Delivered, and if so where, (vi) in the case of Gold Loans to be funded in Gold, whether U.S. Borrower is requesting to pay interest during the initial Interest Period on such Gold Loan in Dollars or in Gold, and, if payable in Dollars, the basis for calculating the amount according to one of the alternatives specified in subsection 2.2F, and (vii) in the case of Eurodollar Rate Loans, Bank Bill Swap Rate Loans, or Gold Loans, the requested Interest Period. Each such Notice of Borrowing shall also show the calculation of the Canadian Commitment Usage, the Australian Commitment Usage, the U.S. Commitment Usage and the Total Utilization of Overall Commitments after giving effect to the proposed borrowing, which calculation shall demonstrate compliance with the limitations on Loans set forth in subsection 2.1A(v). Loans may be continued as or converted into Loans denominated in the same currency (or in the case of Gold Loans, Ounces of Gold) in the manner provided in subsection 2.2D. In lieu of delivering the above-described Notice of Borrowing, the applicable Borrower may give the Applicable Administrative Agent and Administrative Agent telephonic notice by the required time of any proposed borrowing under this subsection 2.1B; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Borrowing to the Applicable Administrative Agent and Administrative Agent on or before the applicable Funding Date. Neither any Agent nor any Lender shall incur any liability to any Borrower in acting upon any telephonic notice referred to above that Administrative Agent or the Applicable Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of such Borrower or for otherwise acting in good faith under this subsection 2.1B, and upon funding of Loans by Lenders in accordance with this Agreement pursuant to any such telephonic notice such Borrower shall have effected Loans hereunder to such Borrower. Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Borrowing for a Eurodollar Rate Loan, a Base Rate Loan, a Bank Bill Swap Rate Loan or a Gold Loan (or telephonic notice in lieu thereof) shall be irrevocable when given, and the Borrower delivering such Notice of Borrowing shall be bound to make a borrowing in accordance therewith. 39 C. Disbursement of Funds. (i) Canadian Borrower Loans. All Loans requested by Canadian Borrower under this Agreement shall be made by Canadian Lenders simultaneously and proportionately to their respective Canadian Lender Pro Rata Shares. Promptly after receipt by Canadian Administrative Agent and Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof) from Canadian Borrower, Canadian Administrative Agent shall notify each Canadian Lender of the proposed borrowing and the details thereof. Each Canadian Lender shall make the amount of its Loan available in the appropriate currency to Canadian Administrative Agent, in same day funds at Canadian Administrative Agent's Lending Office not later than 1:00 P.M. (New York time) on the applicable Funding Date. Upon satisfaction or waiver of the conditions precedent specified in subsections 3.1 (in the case of the initial Loans) and 3.2 (in the case of all Loans), Canadian Administrative Agent shall make the proceeds of such Canadian Loans, in the appropriate currency, available to Canadian Borrower on the applicable Funding Date by causing an amount of same day funds equal to the proceeds of all such Loans received by Canadian Administrative Agent from Canadian Lenders to be credited to the account of Canadian Borrower at Canadian Administrative Agent's Lending Office. (ii) Australian Borrowers Loans. All Loans requested by Australian Borrowers under this Agreement shall be made by Australian Lenders simultaneously and proportionately to their respective Australian Lender Pro Rata Shares. Promptly after receipt by Australian Administrative Agent and Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof) from Australian Borrowers, Australian Administrative Agent shall notify each Australian Lender of the proposed borrowing and the details thereof. Each Australian Lender shall make the amount of its Loan available in the appropriate currency to Australian Administrative Agent, in same day funds at Australian Administrative Agent's Lending Office not later than 12:00 Noon (Sydney time) on the applicable Funding Date. Upon satisfaction or waiver of the conditions precedent specified in subsections 3.1 (in the case of the initial Loans) and 3.2 (in the case of all Loans), Australian Administrative Agent shall make the proceeds of such Australian Loans, in the appropriate currency, available to the applicable Australian Borrower, on the applicable Funding Date by causing an amount of same day funds equal to the proceeds of all such Loans received by Australian Administrative Agent from Australian Lenders to be credited to the account of Australian Borrowers at Australian Administrative Agent's Lending Office. (iii) U.S. Borrower Loans. All Loans requested by U.S. Borrower under this Agreement shall be made by U.S. Lenders simultaneously and proportionately to their respective U.S. Lender Pro Rata Shares. Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1B (or telephonic notice in lieu thereof) from U.S. Borrower, Administrative Agent shall 40 notify each U.S. Lender of the proposed borrowing and the details thereof. Each U.S. Lender shall make the amount of its Loan (other than any Gold Loan to be funded in Gold) available in Dollars to Administrative Agent in same day funds at Administrative Agent's Lending Office not later than 1:00 P.M. (New York time) on the applicable Funding Date. In the case of any Gold Loan to be funded in Gold, each U.S. Lender shall make the amount of its Gold Loan available in Gold to Administrative Agent by Delivery of such Gold not later than 11:00 A.M. (London time) on the applicable Funding Date to the Administrative Agent's account with J.P. Morgan, London, England, or such other London bullion account as may be designated by Administrative Agent by notice to U.S. Lenders from time to time not later than three Business Days prior to the applicable Funding Date. Upon satisfaction or waiver of the conditions precedent specified in subsections 3.1 (in the case of the initial Loans) and 3.2 (in the case of all Loans), Administrative Agent shall make the proceeds of such Loans in Dollars or Gold, as the case may be, available to U.S. Borrower on the applicable Funding Date by (a) in the case of Loans in Dollars, causing an amount of same day funds equal to the proceeds of all such Loans received by Administrative Agent from U.S. Lenders to be credited to the U.S. Borrower Account or (b) in the case of Gold Loans, either (1) advancing the Dollar Equivalent of such Gold Loans, which shall be calculated based on the Price of Gold as in effect on the second Business Day preceding the applicable Funding Date, and causing an amount of same day funds equal to such amount of Dollars to be credited to the U.S. Borrower Account or (2) effecting the Delivery of Gold comprising such Gold Loans to a location mutually agreed upon by U.S. Borrower and Administrative Agent and set forth in the Notice of Borrowing. (iv) Failure to Fund Loans. No Lender shall be responsible for any default by any other Lender in that other Lender's obligation to make a Loan requested hereunder nor shall the Commitment of any Lender to make the particular type of Loan requested be increased or decreased as a result of a default by any other Lender in that other Lender's obligation to make a Loan requested hereunder. Unless the Applicable Administrative Agent shall have been notified by any Lender prior to the Funding Date for any Loans to be funded by such Lender that such Lender does not intend to make available to the Applicable Administrative Agent the amount of such Lender's Loan requested on such Funding Date, the Applicable Administrative Agent may assume that such Lender has made such amount available to the Applicable Administrative Agent on such Funding Date and the Applicable Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to the applicable Borrower a corresponding amount on such Funding Date. If such corresponding amount is not in fact made available to the Applicable Administrative Agent by such Lender, the Applicable Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to the Applicable Administrative Agent, at the customary rate set by the Applicable Administrative Agent for the 41 correction of errors among banks for three Business Days and thereafter at the Canadian Base Rate plus 1.0% or, if less, at the customary rate set by the Canadian Administrative Agent for the correction of errors among banks, in the case of any Canadian Dollar Loan, the Bank Bill Swap Rate for a one month Interest Period, in the case of any Australian Dollar Loans, the Alternate Base Rate, in the case of any Dollar Loan made by any U.S. Lender or Australian Lender, the U.S. Base Rate (Canada), in the case of any Dollar Loan made by any Canadian Lender, or the applicable Gold Rate, in the case of any Gold Loan. If such Lender does not pay such corresponding amount forthwith upon the Applicable Administrative Agent's demand therefor, the Applicable Administrative Agent shall promptly notify the applicable Borrower and such Borrower shall immediately pay such corresponding amount to the Applicable Administrative Agent together with interest thereon, for each day from such Funding Date until the date such amount is paid to the Applicable Administrative Agent, at the rate then applicable to Canadian Base Rate Loans plus 1.0% or, if less, at the customary rate set by the Canadian Administrative Agent for the correction of errors among banks, in the case of any Canadian Dollar Loan, the rate then applicable to the Bank Bill Rate Swap Loans for a one month Interest Period in the case of any Australian Dollar Loan, the rate then applicable to Base Rate Loans, in the case of any Dollar Loan or the applicable Gold Rate, in the case of any Gold Loan. In all of the foregoing instances, such interest in respect of any Gold Loan shall be payable in Dollars and shall be calculated daily in accordance with the provisions of subsection 2.2F. Nothing in this subsection 2.1C shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights that any Borrower may have against any Lender as a result of any default by such Lender hereunder. (v) Confirmation of Delivery, Risk of Loss, Delivery Charges. Unless the Administrative Agent receives notice from the U.S. Borrower within seven Business Days of U.S. Borrower's receipt of any Gold, the quantity and quality of the Gold so received shall be deemed to be as set forth in the Administrative Agent's delivery order. If there is any discrepancy in the amount or quality of Gold actually Delivered, the amount of such difference shall be settled in Dollars (based on the Dollar Equivalent on the date of Delivery of the Gold required to be advanced hereunder and the Gold actually Delivered) promptly after the Delivery thereof. U.S. Borrower assumes all risk of loss, theft or detention of or damage to any Gold Delivered hereunder from the date U.S. Borrower receives Delivery of such Gold until the date of its return by Delivery to the Administrative Agent. U.S. Borrower shall pay all costs and charges (including costs and expenses of collection, shipment, cartage, warehousing, packaging, refining, converting or insurance and any applicable location premiums) directly relating to the physical Delivery of Gold pursuant to this Agreement incurred on and after request for Delivery of Gold by U.S. Borrower until return of Gold by U.S. Borrower at the required location. 42 D. Note Option. If so requested by any Lender by written notice to the applicable Borrower (with a copy to Administrative Agent), the Borrower to whom such request is made shall execute and deliver to such Lender (within three Business Days of such Borrower's receipt of such notice) a promissory note substantially in the form of Exhibit IV-A to this Agreement to evidence such Lender's Canadian Loans, in the form of Exhibit IV-B or Exhibit IV-C to this Agreement to evidence such Lender's Australian Loans, in the form of Exhibit IV-D to this Agreement to evidence such Lender's U.S. Loans (other than Gold Loans), or a Grid Gold Acknowledgement in the form of Exhibit V to this Agreement to evidence such Lender's Gold Loans. E. Risk Participations. The Lenders intend that after an acceleration of the Obligations pursuant to Section 7, the ratio for each Lending Unit of the aggregate Exposure of the Borrowers to such Lending Unit to the aggregate Exposure of the Borrowers to all Lending Units shall equal such Lending Unit's Pro Rata Share. Accordingly, immediately upon the acceleration of the Obligations pursuant to Section 7, each Canadian Loan, each Australian Loan and each Obligation relating thereto shall be deemed to be a Dollar Loan in an amount equal to the Dollar Equivalent of such Canadian Loan, Australian Loans or other Obligations, as applicable, and accordingly the liability of the Borrowers to pay and the right of the Lenders to receive payment of all Canadian Loans, Australian Loans and Obligations relating thereto shall thereupon be to pay or to receive, respectively, Dollar in the amounts so determined. At such time, the Administrative Agent shall determine for which Lending Units, if any, the ratio of the aggregate Exposure of the Borrowers to such Lending Unit to the aggregate Exposure of the Borrowers to all Lending Units is less than such Lending Unit's Pro Rata Share (such Lending Unit is herein called "Purchasing Lending Unit"), and for which Lending Units, if any, the ratio of the aggregate exposure of the Borrowers to such Lending Unit to the aggregate Exposure of the Borrowers to all Lending Units is greater than such Lending Unit's Pro Rata Share (such Lending Unit is herein called a "Selling Lending Unit). Promptly after such determination is made, notwithstanding the allocation of the Commitment of any Lending Unit as among the Canadian Commitments, the Australian Commitments and the U.S. Commitments, each Purchasing Lending Unit shall purchase from the Selling Lending Units, and each Selling Lending Unit shall sell to each Purchasing Lending Unit, for cash and without representation or warranty, a portion of the outstanding Loans from such Selling Lending Unit, and if necessary to achieve the objective of this Section, each Purchasing Lending Unit shall also purchase risk participations in respect of a portion of such Selling Lending Unit's liability for outstanding Bankers' Acceptances, Letters of Credit and Gold Loans, such that each Lending Unit's share of the aggregate Exposure of the Borrowers shall equal its Pro Rata Share. The amounts and particulars of the purchases and sales of the Loans, Bankers' acceptances, Letters of Credit and Gold Loans for the purpose of the foregoing arrangements shall be determined in each case by the Administrative Agent upon consultation with the applicable Lending Units, and the administrative Agent shall have the power to execute any documentation as attorney for any Lender in order to complete any transaction required by this Section. The foregoing arrangements may require a Borrower to make payments pursuant to Section 10.7 that it would not have been required to make in the absence of such arrangements. 2.2 Interest on the Loans. 43 A. Rate of Interest. Subject to the provisions of subsections 2.6 and 10.7, each Loan shall bear interest on the unpaid principal amount thereof from the date made through maturity (whether by acceleration or otherwise) at a rate determined by reference to: (i) the Alternate Base Rate, the U.S. Base Rate (Canada), the Eurodollar Rate or the Adjusted Eurodollar Rate in the case of any Dollar Loan; (ii) the Canadian Base Rate in the case of any Canadian Dollar Loan; (iii) the Bank Bill Swap Rate in the case of an Australian Dollar Loan; or (iv) the Gold Rate in the case of any Gold Loan. The applicable basis for determining the rate of interest with respect to any Loan shall be selected by the applicable Borrower initially at the time a Notice of Borrowing is given with respect to such Loan pursuant to subsection 2.1B. The basis for determining the interest rate with respect to any Loan may be changed from time to time pursuant to subsection 2.2D. Subject to the provisions of subsections 2.2E and 10.7, the Loans shall bear interest through maturity as follows: (i) if a U.S. Base Rate Loan, then at the Alternate Base Rate per annum; (ii) if a Canadian Base Rate Loan, then at the Canadian Base Rate per annum; (iii) if a U.S. Base Rate (Canada) Loan, then at the U.S. Base Rate (Canada) per annum; (iv) if a Bank Bill Swap Rate Loan, then at the sum of the Bank Bill Swap Rate plus the Applicable Margin per annum; (v) if a Eurodollar Rate Loan that is a U.S. Loan or an Australian Loan, then at the sum of the Adjusted Eurodollar Rate plus the Applicable Margin per annum; (vi) if a Eurodollar Rate Loan that is a Canadian Loan, then at the sum of the Eurodollar Rate plus the Applicable Margin per annum; or (vii) if a Gold Loan, then at the Gold Rate per annum; B. Interest Periods. In connection with each Eurodollar Rate Loan, each Bank Bill Swap Rate Loan and each Gold Loan, the applicable Borrower may, pursuant to the applicable Notice of Borrowing or Notice of Conversion/Continuation, as the case may be, select an Interest Period to be applicable to such Loan; provided that: (i) the initial Interest Period for any Eurodollar Rate Loan, Bank Bill Swap Rate Loan, or Gold Loan shall commence on the Funding Date of such Loan, in the case of a Loan initially made as a Eurodollar Rate Loan, a Bank Bill Swap Rate Loan, or a Gold Loan, or on the date specified in the applicable Notice of Conversion/Continuation, in the case of any Loan converted into a Eurodollar Rate Loan; 44 (ii) in the case of immediately successive Interest Periods applicable to any Eurodollar Rate Loan, Bank Bill Swap Rate Loan, or Gold Loan continued as such pursuant to a Notice of Conversion/Continuation, each such successive Interest Period shall commence on the day on which the preceding Interest Period expires; (iii) if an Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that, in the case of a Eurodollar Rate Loan, if any Interest Period would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; (iv) any Interest Period for a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (v) of this subsection 2.2B, end on the last Business Day of a calendar month; (v) no Interest Period with respect to any Loan shall extend beyond the Commitment Termination Date; and (vi) there shall be no more than five Interest Periods relating to Eurodollar Rate Loans outstanding at any time, there shall be no more than five Interest Periods relating to Bank Bill Swap Rate Loans outstanding at any time and there shall be no more than five Interest Periods relating to Gold Loans outstanding at any time. C. Interest Payments; Currencies. Subject to the provisions of subsection 2.2E, interest on each Loan shall be payable in arrears on and to each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and at maturity. All payments of interest shall be paid to the Applicable Administrative Agent in accordance with the provisions of subsection 2.4B. Interest payable on any Loan denominated in a currency shall be payable in the same currency. Interest payable on any Gold Loan shall be payable, at U.S. Borrower's option, in (a) Gold or (b) Dollars in amounts determined in accordance with the provisions of 2.2F. U.S. Borrower shall advise Administrative Agent of its intention to pay interest on Gold Loans in Gold in the applicable Notice of Borrowing or Notice of Conversion/Continuation; provided that Administrative Agent shall, notwithstanding any request of U.S. Borrower to pay such interest in Gold, have the right to require that interest with respect to any Gold Loan be paid in Dollars by notice given on or before the related Funding Date in the case of the initial Interest Period, and prior to the date of continuation, in the case of a continuation. If U.S. Borrower fails timely to advise Administrative Agent of its desire to pay accrued interest in Gold, U.S. Borrower shall be deemed to have elected to pay such interest in Dollars. D. Conversion or Continuation. Subject to the provisions of subsection 2.6, (i) each of U.S. Borrower and Canadian Borrower shall have the option to convert at any time all 45 or any part of its outstanding Dollar Loans equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount from Dollar Loans bearing interest at a rate determined by reference to one basis to Dollar Loans bearing interest at a rate determined by reference to an alternative basis, (ii) each Borrower shall have the option, upon the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to continue all or any portion of such Eurodollar Rate Loan equal to $5,000,000 and integral multiples of $1,000,000 in excess of that amount as a Eurodollar Rate Loan, (iii) Australian Borrowers shall have the option, upon the expiration of any Interest Period applicable to a Bank Bill Swap Rate Loan, to continue all or any portion of such Bank Bill Swap Rate Loan equal to A$5,000,000 and integral multiples of A$1,000,000 in excess of that amount as a Bank Bill Swap Rate Loan, (iv) U.S. Borrower shall have the option, upon the expiration of any Interest Period applicable to a Gold Loan, to continue all or any portion of such Gold Loan equal to 10,000 Ounces and integral multiples of 2,000 Ounces in excess of that amount as a Gold Loan; provided, however, that a Eurodollar Rate Loan may only be converted into a U.S. Base Rate Loan or a U.S. Base Rate (Canada) Loan, as applicable, on the expiration date of an Interest Period applicable thereto; provided further that, subject to the following proviso, no Loan may be made as or converted into a U.S. Base Rate Loan or a U.S. Base Rate (Canada) Loan during the period from December 24 of any year to and including January 7 of the immediately succeeding year for the purpose of investing in securities bearing interest at a rate determined by reference to any other basis for the purpose of arbitrage or speculation; and provided still further that no Loan may be converted into, or continued as, a Eurodollar Rate Loan (except that Australian Borrowers may continue Eurodollar Rate Loans with a period of one month), or a Bank Bill Swap Rate Loan with a period in excess of one month, or a Gold Loan at any time that a Potential Event of Default or an Event of Default has occurred and is continuing. The applicable Borrower shall deliver a Notice of Conversion/Continuation (i) in the case of a conversion to a U.S. Base Rate Loan, to Administrative Agent no later than 12:00 Noon (New York time) at least one Business Day in advance of the proposed conversion/continuation date, (ii) in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan made to U.S. Borrower or a continuation of a Gold Loan made to U.S. Borrower, to Administrative Agent, no later than 12:00 Noon (New York time) at least three Business Days in advance of the proposed conversion/continuation date, (iii) in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan made to Canadian Borrower, to Canadian Administrative Agent and Administrative Agent no later than 11:00 A.M. (Toronto time) at least three Business Days in advance of the proposed conversion/continuation date, (iv) in the case of a conversion to a U.S. Base Rate (Canada) Loan, to Canadian Administrative Agent and Administrative Agent no later than 11:00 A.M. (Toronto time) at least one Business Day in advance of the proposed conversion/continuation date, (v) in the case of a continuation of a Eurodollar Rate Loan made to Australian Borrowers, or a continuation of a Bank Bill Swap Rate Loan made to Australian Borrowers, to Australian Administrative Agent and Administrative Agent no later than 12:00 Noon (Sydney time) at least three Business Days in advance of the proposed conversion/continuation date. A Notice of Conversion/Continuation shall specify (i) the applicable Borrower, (ii) the proposed conversion/continuation date (which shall be a Business Day), (iii) the amount of the Loan to be converted/continued, (iv) the nature of the proposed conversion/continuation, (v) in the case of a conversion to or a continuation of a Eurodollar Rate Loan or a continuation of a Bank Bill Swap Rate Loan or a Gold Loan, the requested Interest 46 Period, (vi) in the case of the continuation of a Gold Loan, whether U.S. Borrower is requesting to pay interest in Dollars or in Gold, and if payable in Dollars, the basis for calculating the amount according to one of the alternatives specified in subsection 2.2F, and (vii) in the case of a conversion to or a continuation of a Eurodollar Rate Loan (except by Australian Borrowers) or a continuation of a Gold Loan, that no Potential Event of Default or Event of Default has occurred and is continuing. In lieu of delivering the above-described Notice of Conversion/Continuation, the applicable Borrower may give Administrative Agent and the Applicable Administrative Agent telephonic notice by the required time of any proposed conversion/continuation under this subsection 2.2D; provided that such notice shall be promptly confirmed in writing by delivery of a Notice of Conversion/Continuation to Administrative Agent and the Applicable Administrative Agent on or before the proposed conversion/continuation date. Neither any Agent nor any Lender shall incur any liability to any Borrower in acting upon any telephonic notice referred to above that Administrative Agent or the Applicable Administrative Agent believes in good faith to have been given by a duly authorized officer or other person authorized to act on behalf of such Borrower or for otherwise acting in good faith under this subsection 2.2D, and upon conversion or continuation of the applicable basis for determining the interest rate with respect to any Loans in accordance with this Agreement pursuant to any such telephonic notice, such Borrower shall have effected a conversion or continuation, as the case may be, hereunder. Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of a Eurodollar Rate Loan or a continuation of a Bank Bill Swap Rate Loan or a Gold Loan (or telephonic notice in lieu thereof) shall be irrevocable when given, and the Borrower delivering such Notice of Conversion/Continuation shall be bound to effect a conversion or continuation in accordance therewith. If any Borrower fails to submit a Notice of Conversion/Continuation with respect to any maturing Eurodollar Rate Loans or Bank Bill Swap Rate Loans in accordance with the forgoing provisions of this subsection 2.2D, then upon the expiration of the Interest Period for such Eurodollar Rate Loans or Bank Bill Swap Rate Loans, as applicable, such Loans shall (i) if no Event of Default or Potential Event of Default shall have occurred and be continuing, automatically continue as Eurodollar Rate Loans or Bank Bill Swap Rate Loans, as applicable, in each case with an Interest Period of one month and (ii) if an Event of Default or Potential Event of Default shall have occurred and be continuing, automatically be converted into U.S. Base Rate Loans or U.S. Base Rate (Canada) Loans, as applicable, in the case of U.S. Loans and Canadian Loans, or continue as Eurodollar Rate Loans or Bank Bill Swap Rate Loans with an Interest Period of one month in the case of Australian Loans. If U.S. Borrower fails to submit a Notice of Conversion/Continuation with respect to any maturing Gold Loans in accordance with the forgoing provisions of this subsection 2.2D, then upon the expiration of the Interest Period for such Gold Loans, such Loans shall automatically be continued as Gold Loans having a 30-day Interest Period. Upon the continuation (including automatic continuation) of any Loan, the Applicable Administrative Agent shall notify Company and the applicable Borrower of such continuation; provided, however, that the failure to give such notice shall not limit or otherwise 47 affect the obligations of Company or any Borrower under this Agreement or any other Loan Document. E. Post-Maturity Interest. Any principal payments on the Loans not paid when due and, to the extent permitted by applicable law, any interest payments on the Loans owed hereunder not paid when due, in each case whether at stated maturity, by notice of prepayment, by acceleration or otherwise, shall thereafter bear interest (including post-petition interest in any proceeding under the Bankruptcy Code or other applicable bankruptcy laws) payable on demand at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement in respect of such Loans (or in the case of any fees or other amounts, a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement for U.S. Base Rate Loans); provided that, in the case of Eurodollar Rate Loans or Gold Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective, such Eurodollar Rate Loans or Gold Loans (in the case of Gold Loans, by converting the outstanding amount of such Loans into Dollars based on the Price of Gold as in effect on such expiration date) shall thereupon become U.S. Base Rate Loans or U.S. Base Rate (Canada) Loans, as applicable, and shall thereafter bear interest payable upon demand at a rate which is 2% per annum in excess of the interest rate otherwise payable under this Agreement at such time for U.S. Base Rate Loans or U.S. Base Rate (Canada) Loans, respectively, as applicable, except that in the case of Australian Borrowers, such Eurodollar Rate Loans shall be continued as Eurodollar Rate Loans with an Interest Period of one month, and provided further that in the case of Bank Bill Swap Rate Loans, such Bank Bill Swap Rate Loans shall continue as Bank Bill Swap Rate Loans with an Interest Period of one month. Payment or acceptance of the increased rates of interest provided for in this subsection 2.2E is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of any Agent or any Lender. F. Computation of Interest. Interest on the Loans denominated in currency shall be computed, in the case of Base Rate Loans and Bank Bill Swap Rate Loans, on the basis of a 365-day or 366-day year, as the case may be, or in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues, and shall be determined daily with respect to the amount of such Loans outstanding each day during such period. Interest on each Gold Loan shall be computed on the basis of a 360-day year and the actual number of days elapsed in the period during which it accrues and shall be determined daily (i) in the case of interest to be paid in Gold, with respect to the number of Ounces of Gold outstanding under such Gold Loan on each day during such period, or (ii) in the case of interest to be paid in Dollars, with respect to the average of the daily values (such values being equal to the number of Ounces of such Gold Loan multiplied by the Price of Gold) of such Gold Loan, in Dollar Equivalents (determined daily unless U.S. Borrower requests in its Notice of Borrowing or Notice of Conversion/Continuation that the Price of Gold be fixed at the Price of Gold on the second Business Day prior to the related Interest Period for the purpose of determining accrued interest during the applicable Interest Period and Requisite Lenders have not objected on or before the commencement of such Interest Period, in their sole discretion, to use such fixed price for such purpose during such period), for each day during such period. In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest 48 Period applicable to such Loan or, with respect to a Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Loan being converted to a Eurodollar Rate Loan, the date of conversion to such Eurodollar Rate Loan, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day's interest shall be paid on that Loan. For the purposes of this Agreement, whenever interest is calculated on the basis of a year of 360 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate as so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360. 2.3 Fees. A. Commitment Fees. Borrowers jointly and severally agree to pay to Administrative Agent (i) for distribution to each Canadian Lender, in proportion to that Lender's Canadian Lender Pro Rata Share of the Canadian Allocation, commitment fees for the period from and after the Effective Date to and excluding the Commitment Termination Date, equal to the quarterly average of the daily excess of the Canadian Allocation over the Canadian Commitment Usage (in Dollar Equivalents) multiplied by the applicable Commitment Fee Percentage per annum, (ii) for distribution to each Australian Lender, in proportion to that Lender's Australian Lender Pro Rata Share of the Australian Allocation, commitment fees for the period from and after the Effective Date to and excluding the Commitment Termination Date equal to the quarterly average of the daily excess of the Australian Allocation over the Australian Commitment Usage (in Dollar Equivalents) multiplied by the applicable Commitment Fee Percentage per annum, and (iii) for distribution to each U.S. Lender, in proportion to that Lender's U.S. Lender Pro Rata Share of the U.S. Allocation, commitment fees for the period from and after the Effective Date to and excluding the Commitment Termination Date, equal to the quarterly average of the daily excess of the U.S. Allocation over the U.S. Commitment Usage multiplied by the applicable Commitment Fee Percentage per annum; all such commitment fees to be payable in Dollars, quarterly in arrears on March 1, June 1, September 1, and December 1 of each year and on the Commitment Termination Date and to be calculated on the basis of a 360-day year and the actual number of days elapsed; provided that notwithstanding the foregoing, the commitment fees payable to each Canadian Lender shall be paid to the Canadian Administrative Agent. Reductions in the amounts available for borrowing under the Commitments arising from the operation of the limitations set forth in clauses (a), (b), (c), (d), (e), (f) (g), (h), (i) and (j) of subsection 2.1A(v) shall not constitute usages of Commitments for purposes of this subsection 2.3A and shall not reduce the amount of the commitment fees that are payable under this subsection 2.3A. B. Other Fees. Company and Borrowers agree to pay to Administrative Agent, Arranger and Issuing Lenders the fees agreed to, and in the amounts and at the times, set forth in writing among Company, Borrowers, Administrative Agent, Arranger and Issuing Lenders. 49 2.4 Prepayments and Reductions in Commitments; General Provisions Regarding Payments. A. Prepayments; Reductions in Commitments; Cash Collateralization of Standby Letters of Credit and Bankers' Acceptances. (i) Voluntary Prepayments. Each Borrower may, upon not less than one Business Day's (in the case of Base Rate Loans), two Business Days' (in the case of Bank Bill Swap Rate Loans) or three Business Days' (in the case of Eurodollar Rate Loans or Gold Loans) prior written notice to the Applicable Administrative Agent and Administrative Agent (which notice the Applicable Administrative Agent will promptly transmit by telecopy, telegram, telex or telephone to each U.S. Lender, Canadian Lender or Australian Lender, as appropriate), at any time and from time to time prepay any Loans in whole or in part on any Business Day (a) in an aggregate minimum amount of $2,500,000 and integral multiples of $500,000 in excess of that amount in the case of Dollar Loans, (b) in an aggregate minimum amount of Cdn.$2,500,000 and integral multiples of Cdn.$500,000 in excess of that amount in the case of Canadian Dollar Loans, (c) in an aggregate minimum amount of A$2,500,000 and integral multiples of A$500,000 in excess of that amount in the case of Australian Dollar Loans, or (d) in an aggregate minimum amount of 10,000 Ounces and integral multiples of 2,000 Ounces in excess of that amount in the case of Gold Loans; provided, however, that if a Eurodollar Rate Loan, a Bank Bill Swap Rate Loan or a Gold Loan is prepaid on a date other than the last day of the Interest Period applicable thereto, the Borrower making such prepayment shall be liable for any payments required by subsection 2.6D. Notice of prepayment having been given as aforesaid, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein. Any such voluntary prepayment shall be applied as specified in subsection 2.4A(iv). (ii) Voluntary Reductions of Commitments. Borrowers may, upon not less than three Business Days' prior written notice to Administrative Agent (which notice Administrative Agent will promptly transmit by telecopy, telegram, telex or telephone to each Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Overall Commitments in an amount up to the amount by which the Overall Commitments exceed the Total Utilization of Overall Commitments at the time of such proposed termination or reduction; provided that any such partial reduction of the Overall Commitments shall be in an aggregate minimum amount of $2,500,000 and integral multiples of $500,000 in excess of that amount; and provided further that no reduction shall reduce the Canadian Allocation to any amount that is less than the Canadian Commitment Usage, the Australian Allocation to any amount that is less than the Australian Commitment Usage or the U.S. Allocation to an amount that is less than the U.S. Commitment Usage. Borrowers' notice to Administrative Agent shall designate the date (which shall be a Business Day) of such termination or 50 reduction, the amount of any partial reduction and the allocation of any reduction among the Canadian Allocation, the Australian Allocation and the U.S. Allocation, and such termination or reduction of the Overall Commitments shall be effective on the date specified in Borrowers' notice and shall reduce the Commitment of each Lending Unit proportionately to its Pro Rata Share and such partial reduction and allocation of such reduction shall be made so that (i) the Australian Allocation shall not exceed the Australian Commitment, (ii) the Canadian Allocation shall not exceed the Canadian Commitment and (iii) the U.S. Allocation shall not exceed the U.S. Commitment. (iii) Mandatory Prepayments of Loans. (a) If on any date (A) the sum of (1) the outstanding amount of all Loans denominated in currency (valued in Dollar Equivalents as of the most recent Date of Determination), (2) the BA Usage plus the Canadian Letter of Credit Usage (valued in Dollar Equivalents as of the most recent Date of Determination), (3) the Australian Letter of Credit Usage (valued in Dollar Equivalents as of the most recent Date of Determination), (4) the U.S. Letter of Credit Usage and (5) the outstanding amount of all Gold Loans (valued in Dollar Equivalents based upon the Price of Gold as of such date) (such sum being the "Aggregate Dollar Equivalent Loan Amount") exceeds the Overall Commitments in effect on such date, (B) the portion of the Aggregate Dollar Equivalent Loan Amount relating to the Canadian Borrower exceeds the Canadian Allocation, (C) the portion of the Aggregate Dollar Equivalent Loan Amount relating to the Australian Borrowers exceeds the Australian Allocation, or (D) the portion of the Aggregate Dollar Equivalent Loan Amount relating to the U.S. Borrower exceeds the U.S. Allocation, then, subject to the provisions of the immediately succeeding sentence, Borrowers shall prepay Loans and/or reduce the outstanding BA Usage, Canadian Letter of Credit Usage, Australian Letter of Credit Usage, or U.S. Letter of Credit Usage (it being agreed and understood that, for the purposes of this subsection 2.4A(iii), BA Usage, Canadian Letter of Credit Usage, Australian Letter of Credit Usage and U.S. Letter of Credit Usage shall be reduced to the extent that the applicable Borrower has cash collateralized its reimbursement obligations under outstanding Bankers' Acceptances or Letters of Credit pursuant to arrangements satisfactory to Administrative Agent and the applicable Issuing Lender) in an amount equal to any such excess; provided that if any such excess exists, and to the extent that any such excess results from an average net increase of less than 50% in the outstanding amount of all Gold Loans (valued in Dollar Equivalents based upon the Price of Gold as of such date) since the second Business Day prior to the related Gold Advance Dates for such Gold Loans because of changes in the Price of Gold, until the Total Utilization of Overall Commitments equals 125% of the Overall Commitments, Borrowers shall not be so required to prepay Loans and/or reduce the outstanding BA Usage, Canadian Letter of Credit Usage, Australian Letter of Credit Usage or U.S. Letter of Credit Usage to such extent. Notwithstanding the foregoing, Borrowers shall not be required to prepay the Gold Loans if 51 Borrowers pledge cash, U.S. Treasury securities or Gold as collateral to Administrative Agent for the benefit of the Lenders in an amount equal to the amount of Gold Loans that would otherwise be required to be prepaid in accordance with this subsection 2.4A(iii) pursuant to arrangements in form and substance satisfactory to Administrative Agent. Any such mandatory prepayments shall be applied as specified in subsection 2.4A(iv)(c). (b) Borrowers shall also prepay the Loans as required pursuant to subsection 10.25 upon the occurrence of a Company Change of Control. (iv) Application of Prepayments. (a) Application of Voluntary Prepayments. Any voluntary prepayments by Borrowers pursuant to subsection 2.4A(i) shall be applied to the Loans of each Borrower as specified by Borrowers; (b) Application of Mandatory Prepayments. Any mandatory prepayments by Borrowers pursuant to subsection 2.4A(iii)(b) shall be applied to repay outstanding Loans and to reduce permanently the Overall Commitments (allocated ratably to the Canadian Allocation, the Australian Allocation and the U.S. Allocation unless otherwise specified by Borrowers); and (c) Application of Prepayments to Base Rate Loans, Bank Bill Swap Rate Loans and Eurodollar Rate Loans. Any prepayment by or for the benefit of a Borrower shall be applied first to Base Rate Loans of such Borrower to the full extent thereof before application to Bank Bill Swap Rate Loans and Eurodollar Rate Loans of such Borrower, in each case in a manner which minimizes the amount of any payments required to be made by the applicable Borrower pursuant to subsection 2.6D. B. General Provisions Regarding Payments. (i) Manner and Time of Payment. Borrowers shall make all payments in respect of any Loan denominated in any currency in the same currency, and shall make all payments in respect of Gold Loans in Dollars or, if a Borrower so elects and, with respect to interest, the U.S. Administrative Agent does not require payment in Dollars, Gold. If U.S. Borrower does not deliver to the Administrative Agent at least two Business Days' prior written notice of its intention to repay a Gold Loan in Gold, U.S. Borrower shall be deemed to have elected to repay such Loan in Dollars. If the principal amount of any Gold Loan is to be repaid in Dollars, the corresponding amount of Dollars to be repaid shall equal the Dollar Equivalent of the amount of Gold constituting such Gold Loan determined as of the second Business Day preceding the repayment date. (a) Currency Payments by U.S. Borrower. All currency payments by U.S. Borrower of principal and interest in respect of (1) Dollar Loans, (2) Gold 52 Loans to be repaid in Dollars, (3) Letters of Credit, and (4) fees and other Obligations hereunder and under any Notes or Grid Gold Acknowledgements shall be made in Dollars, in same day funds and without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 12:00 Noon (New York time) on the date due at Administrative Agent's Lending Office to the U.S. Borrower Account. (b) Payments by Canadian Borrower. All payments by Canadian Borrower of principal and interest in respect of (1) Loans, (2) Letters of Credit, (3) Bankers' Acceptances, and (4) any other fees and Obligations hereunder and under any Notes shall be made in the same currency as incurred, in same day funds and without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Canadian Administrative Agent not later than 12:00 Noon (Toronto time) on the date due at Canadian Administrative Agent's Lending Office. (c) Payments by Australian Borrowers. All payments by Australian Borrowers of principal and interest in respect of (1) Loans, (2) Letters of Credit, and (3) any other fees and Obligations hereunder and under any Notes shall be made in the same currency as incurred, in same day funds and without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Australian Administrative Agent not later than 12:00 Noon (Sydney time) on the date due at Australian Administrative Agent's Lending Office. (d) Gold Payments. All payments of Gold shall be made by Delivery of such Gold by U.S. Borrower to the Administrative Agent's account with J.P. Morgan, London, England, or such other bullion depository as may be designated by the Applicable Administrative Agent from time to time, before 12:00 Noon (London time) on the day specified for payment. Funds or Gold received by the Applicable Administrative Agent or Administrative Agent after the times specified above on the due dates specified above shall be deemed to have been paid by Borrowers on the next succeeding Business Day. |(ii) Application of Payments to Principal and Interest. All payments in respect of the principal amount of any Loan shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments shall be applied to the payment of interest before application to principal. |(iii) Apportionment of Payments. Aggregate principal and interest payments shall be apportioned among all outstanding Loans to which such payments relate, in each case proportionately to each Lending Unit's respective Australian Lender Pro Rata Share, Canadian Lender Pro Rata Share or U.S. Lender Pro Rata share, as applicable, of such Loans. Subject to the last sentence of subsection 2.7D, the Applicable Administrative Agent or Administrative Agent, as the case may be, shall promptly distribute to each Lender, at its Lending Office or at such other address as such Lender may request, its proportionate share of all such payments received by the 53 Applicable Administrative Agent (or any Issuing Lender) or Administrative Agent, as the case may be, and the commitment fees of such Lender when received by the Applicable Administrative Agent or Administrative Agent, as the case may be, pursuant to subsection 2.3. Notwithstanding the foregoing provisions of this subsection 2.4B(iii), if, pursuant to the provisions of subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if any Affected Lender makes U.S. Base Rate Loans in lieu of its share of any Eurodollar Rate Loans, the Applicable Administrative Agent or Administrative Agent, as the case may be, shall give effect thereto in apportioning payments received thereafter. |(iv) Payments on Business Days. Whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day, but not later than the Commitment Termination Date, and such extension of time shall be included in the computation of the payment of interest hereunder or of the commitment fees hereunder, as the case may be. (v) Notation of Payment. Each Lender agrees that before disposing of any Note or Grid Gold Acknowledgement held by it, or any part thereof (other than by granting participations therein), that Lender will make a notation thereon of all Loans evidenced by that Note or Grid Gold Acknowledgement and all principal payments previously made thereon and of the date to which interest thereon has been paid; provided that the failure to make (or any error in the making of) a notation of any Loan made under such Note or Grid Gold Acknowledgement shall not limit, increase or otherwise affect the obligations of any Borrower hereunder or under such Note or Grid Gold Acknowledgement with respect to any Loan or any payments of principal or interest on such Note or Grid Gold Acknowledgement. 2.5 Use of Proceeds. A. Loans. The proceeds of the initial Loans shall be used by Borrowers to repay all amounts owing under the Existing Credit Agreement on the Effective Date and repay any amounts owing under the Plutonic Credit Facility and the proceeds of the Loans shall be used by Borrowers to provide for the working capital requirements of Borrowers and their respective Subsidiaries, to provide for general corporate purposes and to pay fees and expenses related to the transactions contemplated hereby. B. Margin Regulations. No portion of the proceeds of any borrowing under this Agreement shall be used by any Borrower, Company or any of its Subsidiaries in any manner that might cause the borrowing or the application of such proceeds to violate Regulation T, Regulation U or Regulation X of the Board or any other regulation of the Board or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of proceeds. 54 2.6 Special Provisions Governing Eurodollar Rate Loans, Bank Bill Swap Rate Loans and Gold Loans. Notwithstanding any other provision of this Agreement to the contrary, the provisions set forth in this subsection 2.6 shall govern with respect to Eurodollar Rate Loans, Bank Bill Swap Rate Loans and Gold Loans as to the matters covered. A. Determination of Eurodollar Rate, Bank Bill Swap Rate and Gold Rate. (i) Eurodollar Rate Loans. As soon as practicable after 10:00 A.M. (New York time) on any Interest Rate Determination Date with respect to any Eurodollar Rate Loan, Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to such Eurodollar Rate Loan for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to the applicable Borrower and each applicable Lender. |(ii) Gold Loans. As soon as practicable after 10:00 A.M. (New York time) on the Interest Rate Determination Date with respect to any Gold Loan, Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding upon all parties) the interest rate that shall apply to such Gold Loan for which an interest rate is then being determined for the applicable Interest Period, and Administrative Agent shall promptly give notice thereof (in writing or by telephone confirmed in writing) to U.S. Borrower and each applicable Lender. |(iii) Bank Bill Swap Rate Loans. As soon as practicable after 11:00 A.M. (Sydney time) on any proposed Funding Date or proposed continuation date, as applicable, with respect to any Bank Bill Swap Rate Loan, Australian Administrative Agent shall determine (which determination shall, absent manifest error, be final, conclusive and binding on all parties) the interest rate that shall apply to such Bank Bill Swap Rate Loan for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Australian Borrowers and each applicable Lender. B. Inability to Determine Applicable Interest Rate. If the Applicable Administrative Agent shall have determined (which determination shall be final and conclusive and binding upon all parties hereto) on any Interest Rate Determination Date that by reason of circumstances affecting the London interbank market or because no Reference Lender is able to provide its quotation of a rate, in the case of Eurodollar Rate Loans, or affecting the international precious metals markets or because no Gold Rate Reference Lender is able to provide its quotation of a rate, in the case of Gold Loans, adequate and fair means do not exist for ascertaining the interest rate applicable to such Loans, the Applicable Administrative Agent shall on such date give notice (by telecopy or by telephone confirmed in writing) to Borrowers and each Lender of such 55 determination, whereupon (i) no Loans may be made as, or continued or converted to, Eurodollar Rate Loans or made or continued as Gold Loans until such time as the Applicable Administrative Agent notifies Borrowers and Lenders that the circumstances giving rise to such notice no longer exist, and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by any Borrower with respect to the Loans in respect of which such determination was made shall be deemed to be rescinded by such Borrower. C. Illegality or Impracticability of Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans. If on any date any Lender shall have determined (which determination shall be final and conclusive and binding upon all parties hereto but shall be made only after consultation with Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans, as the case may be, (i) has become unlawful as a result of compliance by such Lender with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith would not be unlawful) or (ii) has become impracticable, or would cause such Lender material hardship, as a result of contingencies occurring after the date of this Agreement which materially and adversely affect the London interbank market (in the case of Eurodollar Rate Loans), the international precious metals markets (in the case of Gold Loans), the bills of exchange market (in the case of Bank Bill Swap Rate Loans) or the position of such Lender in any such market, then, and in any such event, such Lender shall be an "Affected Lender" and it shall on that day give notice (by telecopy or by telephone confirmed in writing) to Borrowers and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other Lender). Thereafter, (a) the obligation of the Affected Lender to make Loans as, or to convert Loans to or continue Loans as, Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans, as the case may be, shall be suspended until such notice shall be withdrawn by the Affected Lender, (b) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan, a Bank Bill Swap Rate Loan or a Gold Loan then being requested by a Borrower pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) (i) a U.S. Base Rate Loan if the Borrower is the U.S. Borrower, (ii) a U.S. Base Rate (Canada) Loan if the Borrower is Canadian Borrower, and (iii) if one of the Borrowers is an Australian Borrower, at the election of such Australian Borrower made within one Business Day of receipt of notice from the Affected Lender, a Bank Bill Swap Rate Loan with a period of one month (if that option is available) or a Loan in Dollars bearing interest at the Australian Administrative Agent's cost of funds as reasonably determined by Administrative Agent, plus the Applicable Margin (such Loan bearing interest at the Bank Bill Swap Rate if no timely election is made), (c) the Affected Lender's obligation to maintain its outstanding Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans, as the case may be (the "Affected Loans"), shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or if earlier when required by law, and (d) the Affected Loans shall automatically convert on the date of such termination to (i) a U.S. Base Rate Loan if the Borrower is the U.S. Borrower, (ii) a U.S. Base Rate (Canada) Loan if the Borrower is Canadian Borrower, and (iii) if one of the Borrowers is an Australian Borrower, at the election of such Australian Borrower made within one Business Day of receipt of notice from the Affected Lender, a Bank Bill Swap 56 Rate Loan with a period of one month (if that option is available) or a Loan in Dollars bearing interest at the Alternate Base Rate (such Loan bearing interest at the Alternate Base Rate if no timely election is made). Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan, a Bank Bill Swap Rate Loan or a Gold Loan then being requested by any Borrower pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, such Borrower shall have the option, subject to the provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by giving notice (by telecopy or by telephone confirmed in writing) to Administrative Agent and the Applicable Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission the Applicable Administrative Agent shall promptly transmit to each other applicable Lender). Except as provided in the immediately preceding sentence, nothing in this subsection 2.6C shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert or continue Loans as, Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans in accordance with the terms of this Agreement. Borrowers shall have the right upon 20 days' notice to each Lender and upon consent by the Applicable Administrative Agents, which consent shall not be unreasonably withheld, and so long as no Potential Event of Default or Event of Default shall have occurred, to substitute Eligible Assignees for the Affected Lender and any Lender that belongs to the Affected Lender's Lending Unit hereunder; provided such substitute Lenders, taken together, will constitute a Lending Unit. If Borrowers select such substituted Lenders, the Affected Lender, and any other Lender belonging to the Affected Lender's Lending Unit, shall assign their Notes, Grid Gold Acknowledgements and rights under this Agreement to such substitute Lenders in accordance with subsection 10.1B (but without the payment of any recordation fee) for the amount due on prepayment pursuant to subsection 2.4(A)(i) together with any amounts that may be due pursuant to subsection 2.6D. D. Compensation For Breakage or Non-Commencement of Interest Periods. Any Borrower having borrowed, or having delivered a Notice of Borrowing or a Notice of Conversion/Continuation to request to borrow, convert or continue, any Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan shall compensate each Lender, upon written request by that Lender (which request shall set forth the basis for requesting such amounts), for all reasonable losses, expenses and liabilities (including, without limitation, any interest paid by that Lender to lenders of funds (or Gold in the case of Gold Loans) borrowed by it to make or carry its Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans, as the case may be) (including loss of anticipated profits) sustained by that Lender in connection with the liquidation or re-employment of such funds (or Gold), which that Lender may sustain: (i) if for any reason (other than a default by that Lender) the borrowing of the Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan requested by such Borrower does not occur on a date specified therefor in such Notice of Borrowing or a telephonic request for borrowing, or the conversion to or continuation requested by such Borrower of any Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan does not occur on a date specified therefor in a Notice of Conversion/Continuation or a telephonic request for conversion or continuation, (ii) if any prepayment or conversion of any Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans made to such Borrower by such Lender occurs on a date that is not the last day of an Interest Period applicable to that Loan, 57 (iii) if any prepayment of any such Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans is not made on any date specified in a notice of prepayment given by such Borrower, or (iv) as a consequence of any other default by such Borrower to repay its Eurodollar Rate Loans, Bank Bill Swap Rate Loans or Gold Loans when required by the terms of this Agreement. E. Booking of Eurodollar Rate Loans. Subject to the provisions of subsection 10.8, any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of that Lender. F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of all amounts payable to a Lender under this subsection 2.6 and under subsection 10.7A shall be made as though that Lender had actually funded each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the rate obtained pursuant to the definition of Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity comparable to the relevant Interest Period and through the transfer of such Eurodollar deposit from an offshore office of that Lender to a domestic office of that Lender in the United States of America, Canada or Australia; provided, however, that each Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit and the foregoing assumptions shall be utilized only for the purposes of calculating amounts payable under this subsection 2.6 and under subsection 10.7A. G. Eurodollar Rate Loans, Bank Bill Swap Rate Loans and Gold Loans After Default. Except as provided in subsection 2.2D, after the occurrence of and during the continuation of a Potential Event of Default or an Event of Default, (i) Borrowers may not elect to have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan, Bank Bill Swap Rate Loan or Gold Loan after the expiration of any Interest Period then in effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by a Borrower with respect to a requested borrowing or conversion/continuation that has not yet occurred shall be deemed to be rescinded by such Borrower. 2.7 Letters of Credit A. Letters of Credit. Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company and Borrowers set forth herein, each Borrower may request, in accordance with the provisions of this subsection 2.7A, that on and after the Effective Date the applicable Issuing Lender issue Letters of Credit for the account of such Borrower denominated in (i) Dollars (in the case of U.S. Borrower), (ii) Canadian Dollars or Dollars (in the case of Canadian Borrower) or (iii) Australian Dollars or Dollars (in the case of Australian Borrowers). Such Letters of Credit shall be issued solely for the purpose of supporting the obligations of Borrowers and their respective Subsidiaries. Issuances of Letters of Credit shall be subject to the following limitations: (i) No Borrower shall request any Letter of Credit if, after giving effect to such issuance, (a) the Total Utilization of Overall Commitments would exceed the Overall Commitments, (b) the Canadian Commitment Usage would exceed the 58 Canadian Allocation, (c) the Australian Commitment Usage would exceed the Australian Allocation, (d) the U.S. Commitment Usage would exceed the U.S. Allocation, (e) the Letter of Credit Usage would exceed $125,000,000, or (f) any Lending Unit's Pro Rata Share of the Total Utilization of Overall Commitments after giving effect to such issuance would exceed such Lending Unit's Commitment then in effect; and (ii) In no event shall any Issuing Lender issue, reissue, amend or permit the extension of: (x) any Letter of Credit having an expiration date (including after giving effect to any extension) later than the Commitment Termination Date in effect at the time of issuance, reissuance, amendment or extension (automatic or otherwise) thereof; (y) subject to the foregoing clause (x), any Letter of Credit having an expiration date more than one year after its date of issuance; provided that subject to the foregoing clause (x), this clause (y) shall not prevent such Issuing Lender from agreeing that a Letter of Credit will automatically be extended annually for a period not to exceed one year if such Issuing Lender does not cancel such extension. It shall be a condition precedent to the issuance of any Letter of Credit in accordance with the provisions of this subsection 2.7 that each condition set forth in subsection 3.3 shall have been satisfied. Immediately upon the issuance of each Letter of Credit, each Canadian Lender, in the case of any Letter of Credit issued for the account of Canadian Borrower, each Australian Lender, in the case of any Letter of Credit issued for the account of Australian Borrowers, or each U.S. Lender, in the case of any Letter of Credit issued for the account of U.S. Borrower, shall be deemed to, and hereby agrees to, have irrevocably purchased from the applicable Issuing Lender an undivided and continuing participation in such Letter of Credit and drawings thereunder in an amount equal to such Lender's Australian Lender Pro Rata Share, Canadian Lender Pro Rata Share or U.S. Lender Pro Rata Share, as applicable, of the maximum amount which is or at any time may become available to be drawn thereunder. The applicable Issuing Lender may upon the occurrence of an Event of Default and the acceleration of the maturity of the Loans, provide for the deposit of funds in an account to secure payment to the beneficiary and any funds so deposited shall be paid to the beneficiary of the Letter of Credit if conditions to such payment are satisfied or returned to the applicable Issuing Lender for distribution to Lenders (or, if all Obligations shall have been indefeasibly paid in full, to the applicable Borrower) if no payment to the beneficiary has been made and 30 days after the final date available for drawings under the Letter of Credit has passed. Each payment or deposit of funds by the applicable Issuing Lender as provided in this paragraph shall be treated for all purposes of this Agreement as a drawing duly honored by the applicable Issuing Lender under the related Letter of Credit. B. Notice of Issuance. Whenever Canadian Borrower desires the issuance of a Letter of Credit, it shall deliver to Canadian Administrative Agent and Administrative Agent a 60 Notice of Issuance of Letter of Credit in the form of Exhibit XI hereto no later than 1:00 P.M. (Toronto time) at least five Business Days or such shorter period as may be agreed to by the applicable Issuing Lender in any particular instance, in advance of the proposed date of issuance. Whenever an Australian Borrower desires the issuance of a Letter of Credit, it shall deliver to Australian Administrative Agent and Administrative Agent a Notice of Issuance of Letter of Credit in the form of Exhibit XI hereto no later than 1:00 P.M. (Sydney time) at least five Business Days or such shorter period as may be agreed to by the applicable Issuing Lender in any particular instance, in advance of the proposed date of issuance. Whenever U.S. Borrower desires the issuance of a Letter of Credit, it shall deliver to Administrative Agent a Notice of Issuance of Letter of Credit in the form of Exhibit XI hereto no later than 1:00 P.M. (New York time) at least five Business Days or such shorter period as may be agreed to by the applicable Issuing Lender in any particular instance, in advance of the proposed date of issuance. Each Notice of Issuance of Letter of Credit shall specify (i) the Borrower, (ii) the proposed date of issuance (which shall be a Business Day), (iii) the face amount of the Letter of Credit, (iv) the expiration date of the Letter of Credit, (v) the name and address of the beneficiary, (vi) a summary of the purpose and the verbatim text of such Letter of Credit, and (vii) a precise description of the documents and the proposed text of any certificate to be presented by the beneficiary which, if presented by the beneficiary prior to the expiration date of the Letter of Credit, would require the applicable Issuing Lender to make payment under the Letter of Credit; provided that the applicable Issuing Lender, in its sole reasonable judgment, may require changes in any such documents and certificates; and provided further that no Letter of Credit shall require payment against a conforming draft to be made thereunder on the same Business Day that such draft is presented if such presentation is made after 11:00 A.M. (New York time, Toronto time or Sydney time, as applicable,) on such Business Day. Promptly upon the issuance of a Letter of Credit, the applicable Issuing Lender shall notify the applicable Lenders of the applicable Borrower of such issuance and the details thereof. In determining whether to pay under any Letter of Credit, the applicable Issuing Lender shall be responsible only to determine that the documents and certificates required to be delivered under that Letter of Credit have been delivered and that they comply on their face with the requirements of that Letter of Credit. C. Payment of Amounts Drawn Under Letters of Credit. In the event of any drawing under any Letter of Credit by the beneficiary thereof, the applicable Issuing Lender shall promptly notify the Borrower for whose account such Letter of Credit was issued, and such Borrower shall reimburse the applicable Issuing Lender on the date on which such drawing is honored in the same currency as the drawing in an amount in same day funds equal to the amount of such drawing; provided that, anything contained in this Agreement to the contrary notwithstanding, (i) unless such Borrower shall have notified the Applicable Administrative Agent prior to 11:00 A.M. (New York Toronto or Sydney time, as applicable,) on the Business Day immediately prior to the date of such drawing that such Borrower intends to reimburse the applicable Issuing Lender for the amount of such drawing with funds other than the proceeds of Loans, such Borrower shall be deemed to have (1) in the case of Canadian Borrower, given a Notice of Borrowing to Canadian Administrative Agent and Administrative Agent requesting Canadian Lenders to make Canadian Loans (which shall be U.S. Base Rate (Canada) Loans or Canadian Base Rate Loans denominated in the same currency as the drawing) to the extent of the unused Canadian Allocation on the date on which such drawing is honored in an amount equal to 60 the amount of such drawing or, (2) in the case of Australian Borrowers, given a Notice of Borrowing to Australian Administrative Agent and Administrative Agent requesting Australian Lenders to make Australian Loans (which shall be Bank Bill Swap Rate Loans or Eurodollar Rate Loans with a one month interest period) to the extent of the unused Australian Allocation on the date on which such drawing is honored in an amount equal to the amount of such drawing and (3) in the case of U.S. Borrower, given a Notice of Borrowing to Administrative Agent requesting U.S. Lenders to make U.S. Loans (which shall be U.S. Base Rate Loans) to the extent of the unused U.S. Allocation on the date on which such drawing is honored in an amount equal to the amount of such drawing, and (ii) subject to satisfaction or waiver of the conditions specified in subsection 3.2, such Lenders shall, on the date of such drawing, make such Loans in the aggregate amount of such drawing, the proceeds of which shall be applied directly by the Applicable Administrative Agent to reimburse the applicable Issuing Lender for the amount of such drawing; and provided further that, if Loans are required to be made and for any reason proceeds of Loans are not received by the applicable Issuing Lender on such date in an amount equal to the amount of such drawing, the applicable Borrower shall reimburse the applicable Issuing Lender, on the Business Day immediately following the date of such drawing, in an amount in same day funds (and in the same currency as the unreimbursed drawing) equal to the excess of the amount of such drawing over the amount of such Loans which are so received, plus accrued interest on such amount at the rate set forth in subsection 2.7E(ii). D. Payment by Lenders with Respect to Letters of Credit. If any Borrower shall fail to reimburse the applicable Issuing Lender as provided in subsection 2.7C in an amount equal to the amount of any drawing honored by the applicable Issuing Lender under a Letter of Credit issued by the applicable Issuing Lender for the account of such Borrower, the applicable Issuing Lender shall promptly notify the Applicable Administrative Agent and the Applicable Administrative Agent shall promptly notify Administrative Agent and each applicable Lender of the unreimbursed amount of such drawing, the currency in which such drawing was funded, and of such Lender's respective participation therein, which participation shall be equal to such Lender's Canadian Lender Pro Rata Share, Australian Lender Pro Rata Share or U.S. Lender Pro Rata Share, as applicable, of the unreimbursed amount of such drawing. Each applicable Lender shall make available to the applicable Issuing Lender an amount equal to its respective participation in same day funds and in the same currency as the drawing, at the office of the applicable Issuing Lender specified in such notice, not later than 1:00 P.M. (New York, Toronto or Sydney time, as applicable) on the day such notice is given to such Lender by the Applicable Administrative Agent. If any applicable Lender fails to make available to the applicable Issuing Lender the amount of such Lender's participation in such Letter of Credit as provided in this subsection 2.7D, the applicable Issuing Lender shall be entitled to recover such amount on demand from such Lender together with interest at the customary rate set by the applicable Issuing Lender for the correction of errors among banks for three Business Days and thereafter at the Canadian Base Rate, in the case of Canadian Dollar drawings, the Bank Bill Swap Rate for a one month Interest Period in the case of Australian Dollar drawings or the Alternate Base Rate, in the case of Dollar drawings by U.S. Borrower and Australian Borrowers, and U.S. Base Rate (Canada) in the case of Dollar drawings by Canadian Borrower. Nothing in this subsection 2.7 shall be deemed to prejudice the right of any Lender to recover from the applicable Issuing Lender any amounts made available by such Lender to the applicable Issuing Lender pursuant to this \ 61 subsection 2.7D if the payment with respect to a Letter of Credit by the applicable Issuing Lender in respect of which payment was made by such Lender constituted gross negligence or willful misconduct on the part of the applicable Issuing Lender, as finally determined by a court of competent jurisdiction. The applicable Issuing Lender shall distribute to the Applicable Administrative Agent for distribution to each other Lender which has paid all amounts payable by it under this subsection 2.7D with respect to any Letter of Credit issued by the applicable Issuing Lender such other Lender's Canadian Lender Pro Rata Share, Australian Lender Pro Rata Share or U.S. Lender Pro Rata Share, as applicable, of all payments received by the applicable Issuing Lender from any Borrower in reimbursement of drawings honored by the applicable Issuing Lender under such Letter of Credit when such payments are received. Notwithstanding anything to the contrary herein, each Lender that has paid all amounts payable by it under this subsection 2.7D shall have a direct right to reimbursement of such amounts from the applicable Borrower, subject to the procedures for reimbursing Lenders set forth in this subsection 2.7. E. Compensation. Each Borrower agrees to pay, without duplication, the following amounts to the applicable Issuing Lender with respect to each Letter of Credit issued by the applicable Issuing Lender for the account of such Borrower: (i) with respect to each Letter of Credit, a letter of credit fee payable to the applicable Issuing Lender equal to applicable Letter of Credit Fee Percentage of the maximum amount available from time to time to be drawn under such Letter of Credit, calculated on the basis of a 360-day year, in the case of Letters of Credit issued for the account of U.S. Borrower or Australian Borrowers, or a 365 or 366-day year (as applicable) in the case of Letters of Credit issued for the account of Canadian Borrower, and, in each case, the actual number of days elapsed and payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year in immediately available funds and in the same currency as the Letter of Credit; (ii) with respect to drawings made under any Letter of Credit, interest, payable on demand in immediately available funds and in the same currency as the drawing, on the amount paid by the applicable Issuing Lender in respect of each such drawing from the date of the drawing through the date such amount is reimbursed by the applicable Borrower (but only if not reimbursed when due) at a rate which is 2% per annum in excess of the rate of interest otherwise payable under this Agreement for Canadian Base Rate Loans, in the case of any Canadian Dollar drawings, the Bank Bill Swap Rate for a one month Interest Period, in the case of Australian Dollar drawings or U.S. Base Rate Loans, in the case of any Dollar drawings by U.S. Borrower and Australian Borrowers, or U.S. Base Rate (Canada) Loans in the case of any Dollar drawings by Canadian Borrower; and (iii) with respect to the issuance, amendment or transfer of each Letter of Credit and each drawing made thereunder, documentary and processing charges in accordance with the applicable Issuing Lender's standard schedule for such charges in effect at the time of such issuance, amendment, transfer or drawing, as 62 the case may be, or as otherwise agreed by Issuing Lender, Company and Borrowers. Promptly upon receipt by the applicable Issuing Lender of any amount described in subdivision (i) or (ii) of this subsection 2.7E, the applicable Issuing Lender shall distribute to the Applicable Administrative Agent for distribution to each Canadian Lender, Australian Lender or U.S. Lender, as the case may be, its Canadian Lender Pro Rata Share, Australian Lender Pro Rata Share or U.S. Lender Pro Rata Share, as applicable, of such amount. F. Obligations Absolute. The obligation of each Borrower to reimburse any Issuing Lender for drawings made under the Letters of Credit issued for such Borrower's account and the obligations of Lenders under subsection 2.7D shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including, without limitation, the following circumstances: (i) any lack of validity or enforceability of any Letter of Credit; (ii) the existence of any claim, set-off, defense or other right the applicable Borrower may have at any time against a beneficiary or any transferee of any Letter of Credit (or any persons or entities for whom any such transferee may be acting), any Issuing Lender, any Agent, any Lender or any other Person, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between such Borrower or any of its Subsidiaries and the beneficiary for which the Letter of Credit was procured); (iii) any draft, demand, certificate or other document presented under any Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect; (iv) payment by any Issuing Lender against a demand, draft or certificate or other document which does not comply with the terms of such Letter of Credit unless such Issuing Lender failed to exercise reasonable care in ascertaining whether such document appeared on its face to comply in all material respects with such terms; (v) any other circumstance or happening whatsoever, which is similar to any of the foregoing; or (vi) the fact that an Event of Default or a Potential Event of Default shall have occurred and be continuing. G. Additional Payments. If by reason of (a) any change in applicable law, regulation, rule, decree or regulatory requirement or any change in the interpretation or application by any judicial or regulatory authority of any law, regulation, rule, decree or regulatory requirement or (b) compliance by any Issuing Lender or any Lender with any direction, 63 request or requirement (whether or not having the force of law) of any governmental or monetary authority including, without limitation, Regulation D: (i) any reserve, deposit or similar requirement is or shall be applicable, imposed or modified in respect of any Letters of Credit issued by any Issuing Lender or participations therein purchased by any Lender; or (ii) there shall be imposed on any Issuing Lender or any Lender any other condition regarding this subsection 2.7, any Letter of Credit or any participation therein; and the result of the foregoing is to directly or indirectly increase the cost to any Issuing Lender or any Lender of issuing, making or maintaining any Letter of Credit or of purchasing or maintaining any participation therein, or to reduce the amount receivable in respect thereof by any Issuing Lender or any Lender, then and in any such case such Issuing Lender or such Lender may notify the Borrower for whose account such Letter of Credit was issued and such Borrower shall pay within ten days of receipt of notice such amounts as such Issuing Lender or such Lender may specify pursuant to the certificate described below to be necessary to compensate such Issuing Lender or such Lender for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at a rate equal at all times to the Alternate Base Rate per annum. The determination by any Issuing Lender or any Lender, as the case may be, of any amount due pursuant to this subsection 2.7G as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest error, be final and conclusive and binding on all of the parties hereto. H. Indemnification; Nature of Issuing Lender's Duties. In addition to amounts payable as elsewhere provided in this subsection 2.7, each Borrower hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable attorneys' fees) which such Issuing Lender may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit for the account of such Borrower, or (ii) the failure of any Issuing Lender to honor a drawing under any such Letter of Credit as a result of any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (all such acts or omissions herein called "Government Acts"). As between any Issuing Lender and any Borrower for whose account any Issuing Lender issues any Letter of Credit, such Borrower assumes all risks of the acts and omissions of or misuse of any such Letter of Credit by the beneficiary of any such Letter of Credit. In furtherance and not in limitation of the foregoing, no Issuing Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy, genuineness or legal effect of any document submitted by any party in connection with the application for and issuance of such Letters of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign any such Letter of Credit or the rights or benefits thereunder or proceeds 64 thereof, in whole or in part, which may prove to be invalid or ineffective for any reason; (iii) for failure of the beneficiary of any such Letter of Credit to comply fully with the conditions required in order to draw upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for errors in interpretation of technical terms; (vi) for any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any such Letter of Credit or of the proceeds thereof; (vii) for the misapplication by the beneficiary of any such Letter of Credit of the proceeds of any drawing under such Letter of Credit; and (viii) for any consequences arising from causes beyond the control of any Issuing Lender, including, without limitation, any Government Acts. None of the above shall affect, impair, or prevent the vesting of any Issuing Lender's rights or powers hereunder. In furtherance and extension and not in limitation of the specific provisions hereinabove set forth, any action taken or omitted by any Issuing Lender under or in connection with the Letters of Credit issued by it or the related certificates, if taken or omitted in good faith and without gross negligence or willful misconduct as finally determined by a court of competent jurisdiction, shall not put such Issuing Lender under any resulting liability to any Borrower or Company. Notwithstanding anything to the contrary contained in this subsection 2.7, no Borrower shall have any obligation to indemnify any Issuing Lender in respect of any liability incurred by such Issuing Lender arising out of the gross negligence or willful misconduct of such Issuing Lender, as finally determined by a court of competent jurisdiction, or out of the wrongful dishonor by such Issuing Lender of proper demand for payment made under the Letters of Credit issued by it; provided that payment against a draft or demand presented after the expiration date of any Letter of Credit shall be deemed to constitute gross negligence. I. Computation of Interest. Interest payable pursuant to subsection 2.7 shall be computed on the basis of a 360-day year and the actual number of days elapsed in the period during which it accrues. For the purposes of this subsection 2.7I, whenever interest is calculated on the basis of a year of 360 days, each rate of interest determined pursuant to such calculation expressed as an annual rate for the purposes of the Interest Act (Canada) is equivalent to such rate as so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by 360. 2.8 Bankers' Acceptances. A. Bankers' Acceptance Commitment. Canadian Borrower may request pursuant to this subsection 2.8, from time to time during the period from the Effective Date to but excluding the Commitment Termination Date, that each Canadian Lender create Bankers' Acceptances by accepting Drafts from Canadian Borrower in an aggregate amount not exceeding such Canadian Lender's Canadian Lender Pro Rata Share of the aggregate Face Amount of the Bankers' Acceptances to be created on any Drawing Date; provided that Canadian Borrower shall not request the creation of any Bankers' Acceptance if, after giving effect thereto, (a) the Total Utilization of Overall Commitments would exceed the Overall Commitments then in effect, or 65 (b) the Canadian Commitment Usage would exceed the Canadian Allocation then in effect, and no Canadian Lender shall have any obligation to create any Bankers' Acceptance if, after giving effect thereto, (a) the Total Utilization of Overall Commitments of its Lending Unit would exceed such Lending Unit's Commitment, or (b) its Canadian Commitment Usage would exceed its Canadian Commitment or its Canadian Lender Pro Rata Share of the Canadian Allocation. Each Canadian Lender shall also purchase Bankers' Acceptances created by it as more particularly specified in this subsection 2.8. The aggregate Face Amount of the Bankers' Acceptances to be created on any Drawing Date shall be not less than Cdn. $5,000,000 and shall be in integral multiples of Cdn.$1,000,000 in excess thereof. If apportionment of Bankers' Acceptances among the Canadian Lenders cannot be made on a ratable basis in even multiples of Cdn.$100,000, Canadian Administrative Agent shall round the allocations among Canadian Lenders up or down to the nearest Cdn.$100,000. B. Drawing Notice. Bankers' Acceptances shall be created on two Business Days' prior written notice given not later than 11:00 A.M. (Toronto time), by Canadian Borrower to Canadian Administrative Agent, which shall give each Canadian Lender prompt notice thereof and of such Canadian Lender's ratable portion of the aggregate Face Amount of the Drafts to be accepted (and purchased) by such Canadian Lender. Each such notice (a "Drawing Notice") shall be in substantially the form of Exhibit III-B annexed hereto or by telephone confirmed promptly in writing, containing the same information as would be contained in a Drawing Notice, and shall specify therein (i) the Drawing Date; (ii) the aggregate Face Amount of Drafts to be accepted (and purchased); and (iii) the maturity date for such Drafts (it being agreed and understood that Canadian Borrower shall not request a maturity date for Drafts which would be subsequent to the Commitment Termination Date). Neither Canadian Administrative Agent nor any Canadian Lender shall incur any liability to Company or any Borrower in acting on any telephonic notice referred to above that Canadian Administrative Agent or such Canadian Lender believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of Canadian Borrower or for otherwise acting in good faith under this subsection 2.8, and upon the creation and purchase of Bankers' Acceptances pursuant to any such telephonic notice, Canadian Borrower shall be liable with respect thereto as provided herein. Each Drawing Notice shall be irrevocable and binding on Canadian Borrower. Canadian Borrower shall indemnify each Canadian Lender against any loss or expense incurred by such Canadian Lender as a result of any failure by Canadian Borrower to fulfill or honor before the applicable Drawing Date the applicable conditions set forth in this subsection 2.8 or subsection 3.4 if as a result of such failure, the requested Bankers' Acceptances are not created and/or purchased on such Drawing Date. 66 C. Form of Bankers' Acceptances. Each Draft presented by Canadian Borrower shall (i) be an integral multiple of Cdn.$100,000; (ii) be dated the date of acceptance thereof by the applicable Canadian Lender; (iii) mature and be payable by Canadian Borrower on a Business Day which occurs 30, 60, 90 or, if available to each Canadian Lender, 180 days after the date thereof; (iv) be substantially in the form of Exhibit III-A annexed hereto; and (iv) be otherwise consistent with the provisions of this Agreement relating to the amounts and maturity dates thereof. The acceptance endorsed by a Canadian Lender on any Draft shall be substantially in the form of the endorsement set forth in Exhibit III-A annexed hereto or such other form as may be agreed by Canadian Borrower and such Canadian Lender. Canadian Borrower hereby renounces, and shall not claim, any days of grace for the payment of any Bankers' Acceptances. D. Acceptance and Purchase of Drafts. Not later than 11:00 A.M. (Toronto time) on an applicable Drawing Date, each Canadian Lender shall complete Drafts, dated such Drawing Date, with the maturity date and denominations specified in the applicable Drawing Notice, and following fulfillment of any applicable conditions and as specified in the applicable Drawing Notice, shall accept such Drafts and purchase the Bankers' Acceptances thereby created for the applicable Bankers' Acceptance Purchase Price. Canadian Borrower hereby authorizes each Canadian Lender to deduct from the amount to be remitted by it to the Canadian Administrative Agent in respect of the Bankers' Acceptance Purchase Price or other purchase price of any Bankers' Acceptance created by it the BA Fee in respect of such Bankers' Acceptance. The failure of any Canadian Lender to create and purchase or deliver Bankers' Acceptances shall not relieve such Canadian Lender of its obligation, if any, to create and purchase or deliver Bankers' Acceptances hereunder, but a Canadian Lender shall not be responsible for the failure of any other Canadian Lender to create and purchase or deliver Bankers' Acceptances on any Drawing Date. E. Payment of the Banker's Acceptance Purchase Price and Other Purchase Price. Subject to subsection 2.8B and satisfaction of the conditions set forth in subsection 3.4, each Canadian Lender shall, (i) before 12:00 noon (Toronto time) on the applicable Drawing Date in the case of the Bankers' Acceptance Purchase Price for each Bankers' Acceptance purchased by it or (ii) upon receipt by it on the applicable Drawing Date of the purchase price payable by a third party in respect of any Bankers' Acceptance created by it and purchased by such third party, pay or cause to be paid such amount by depositing or causing to be deposited such amount (less the applicable BA Fee as aforesaid) to such account maintained by Canadian Administrative Agent as shall have been notified to such Canadian Lender by Canadian 67 Administrative Agent, in Canadian Dollars in same day funds. Promptly upon receipt of such funds, Canadian Administrative Agent shall make such funds available to Canadian Borrower by debiting such account (or causing such account to be debited), and (a) by crediting Canadian Borrower's account, as specified by Canadian Borrower in writing to Canadian Administrative Agent prior thereto, maintained with Canadian Administrative Agent (or causing such account to be credited) with like funds in the aggregate amount of such funds or (b) by wiring such funds in such amount to the account of Canadian Borrower with another financial institution specified prior thereto by Canadian Borrower in writing to Canadian Administrative Agent. Bankers' Acceptances purchased by a Canadian Lender hereunder may be held by it for its own account until maturity or sold by it at any time prior thereto in any relevant market therefor in Canada, in such Canadian Lender's sole discretion. F. Payment at Maturity. Canadian Borrower shall pay to the applicable Canadian Lender, and there shall become due and payable, at 12:00 noon (Toronto time) on the maturity date for each Bankers' Acceptance, an amount in Canadian Dollars in same day funds equal to the Face Amount of such Bankers' Acceptance. The obligation of Canadian Borrower to make such payment shall not be prejudiced by the fact that the holder of any such Bankers' Acceptance is the Canadian Lender that accepted such Bankers' Acceptance. If Canadian Borrower fails to pay to the applicable Canadian Lender the Face Amount of any Bankers' Acceptance as required by the preceding paragraph, Canadian Borrower shall be deemed to have given a Notice of Borrowing to Canadian Administrative Agent and Administrative Agent requesting such Canadian Lender to make a Canadian Base Rate Loan on the date that such payment is due and payable, and thereupon such Canadian Lender shall, as of such date, make such Canadian Base Rate Loan to Canadian Borrower, the proceeds of which shall be applied directly to reimburse such Canadian Lender for the Face Amount of such Bankers' Acceptance paid by it. Canadian Administrative Agent will give to Canadian Borrower notice of any such action promptly after any such action; provided, however, that the failure to give such notice shall not limit or otherwise affect the obligations of Company or any Borrower under this Agreement or any other Loan Document. Bankers' Acceptances may not be prepaid. G. Powers of Attorney. To enable Canadian Lenders to complete Drafts and create and purchase Bankers' Acceptances in the manner specified in this subsection 2.8, Canadian Borrower shall supply each Canadian Lender with an irrevocable Power of Attorney satisfactory in form and content to the Canadian Administrative Agent, duly endorsed and executed on behalf of Canadian Borrower allowing Canadian Lenders to take such actions. Notwithstanding that any of the individuals whose signature appears on any Power of Attorney may no longer hold office at the date thereof or at any time thereafter, any Power of Attorney so signed shall be valid and binding upon Canadian Borrower. 68 H. Circumstances Making Bankers' Acceptances Unavailable. If Canadian Administrative Agent determines in good faith, which determination shall be final, conclusive and binding upon Canadian Borrower, and notifies Canadian Borrower and each Canadian Lender that, by reason of circumstances affecting the money market (i) there is no market for Bankers' Acceptances; or (ii) the demand for Bankers' Acceptances is insufficient to allow the sale or trading of the Bankers' Acceptances created and purchased hereunder; then: (i) the right of Canadian Borrower to request that Bankers' Acceptances be created hereunder shall be suspended until Canadian Administrative Agent determines that the circumstances causing such suspension no longer exist and Canadian Administrative Agent so notifies the Canadian Borrower; and (ii) any Drawing Notice which is outstanding shall be cancelled and the Bankers' Acceptances requested therein shall not be created. I. Use of Proceeds of Bankers' Acceptances. The proceeds of any Bankers' Acceptance created under this subsection 2.8 shall be used by Canadian Borrower for working capital purposes and general corporate purposes. Section 3. CONDITIONS TO EFFECTIVENESS OF AGREEMENT AND LOANS, LETTERS OF CREDIT AND BANKERS' ACCEPTANCES 3.1 Conditions to Effectiveness. The effectiveness of this Agreement is subject to the prior or concurrent satisfaction of the following conditions: A. Company Documents. On or before the Effective Date, Company shall deliver or cause to be delivered to Lenders (or to Administrative Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) the following, each, unless otherwise noted, dated the Effective Date: (i) Certified copies of its Certificate of Incorporation, together with a good standing certificate from the Secretary of State of the States of Delaware and California, each dated a recent date prior to the Effective Date; (ii) Copies of its Bylaws, certified as of the Effective Date by its corporate secretary or an assistant secretary; (iii) Resolutions of its Board of Directors approving and authorizing the execution, delivery and performance of this Agreement and any other Loan Documents to which it is a party, certified as of the Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment; 69 (iv) Signature and incumbency certificates of its officers executing this Agreement and any other Loan Documents to which it is a party; (v) Executed originals of this Agreement and any other Loan Documents to which it is a party; and (vi) Such other documents as any Lender through Administrative Agent may reasonably request. B. Canadian Borrower Documents. On or before the Effective Date, Canadian Borrower shall deliver or cause to be delivered to Lenders (or to Administrative Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) the following, each, unless otherwise noted, dated the Effective Date: (i) Certified or notarial copies of Canadian Borrower's Certificate of Incorporation, together with evidence of its corporate status in the Provinces of Ontario and British Columbia, each dated a recent date prior to the Effective Date; (ii) Copies of Canadian Borrower's Bylaws, certified as of the Effective Date by its corporate secretary or an assistant secretary; (iii) Resolutions of Canadian Borrower's Board of Directors approving and authorizing the execution, delivery and performance of this Agreement and any other Loan Documents to which it is a party, certified as of the Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) Signature and incumbency certificates of Canadian Borrower's officers executing this Agreement and any other Loan Documents to which it is a party; (v) Executed originals of this Agreement, any Notes requested by Lenders and any other Loan Documents to which Canadian Borrower is a party; and (vi) Such other documents as any Lender through Administrative Agent may reasonably request. C. Australian Borrowers Documents. On or before the Effective Date, each Australian Borrower shall deliver or cause to be delivered to Lenders (or to Administrative Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) the following, each, unless otherwise noted, dated the Effective Date: (i) Certified copies of such Australian Borrower's Certificate of Incorporation and Articles of Association, each dated a recent date prior to the Effective Date; (ii) Resolutions of such Australian Borrower's Board of Directors (a) approving and authorizing the execution, delivery and performance of this Agreement and any other Loan Documents to which it is a party, and (b) 70 authorizing each Authorized Signor to sign on behalf of, and thereby bind, such Australian Borrower, certified as of the Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment; (iii) Signature and incumbency certificates of such Australian Borrower's directors, officers and Authorized Signors executing this Agreement and any other Loan Documents to which it is a party; (iv) Executed originals of this Agreement, any Notes requested by Lenders and any other Loan Documents to which such Australian Borrower is a party; and (v) Such other documents as any Lender through Administrative Agent may reasonably request. D. U.S. Borrower Documents. On or before the Effective Date, U.S. Borrower shall deliver or cause to be delivered to Lenders (or to Administrative Agent for Lenders with sufficient originally executed copies, where appropriate, for each Lender and its counsel) the following, each, unless otherwise noted, dated the Effective Date: (i) Certified copies of U.S. Borrower's Articles of Incorporation, together with good standing certificates from the Secretary of State of the States of California, Nevada and South Dakota, each dated a recent date prior to the Effective Date; (ii) Copies of U.S. Borrower's Bylaws, certified as of the Effective Date by its corporate secretary or an assistant secretary; (iii) Resolutions of U.S. Borrower's Board of Directors approving and authorizing the execution, delivery and performance of this Agreement and any other Loan Documents to which it is a party, certified as of the Effective Date by its corporate secretary or an assistant secretary as being in full force and effect without modification or amendment; (iv) Signature and incumbency certificates of U.S. Borrower's officers executing this Agreement and any other Loan Documents to which it is a party; (v) Executed originals of this Agreement, any Notes and any Grid Gold Acknowledgements requested by Lenders and any other Loan Documents to which U.S. Borrower is a party; and (vi) Such other documents as any Lender through Administrative Agent may reasonably request. E. Opinions of Company's and Borrowers' Counsel. Administrative Agent on behalf of Lenders, with sufficient originally executed copies for each Lender, shall have received (i) originally executed copies of one or more favorable written opinions of (a) Thelen, 71 Reid & Priest, counsel for Company and U.S. Borrower, and (b) Wayne Kirk, Vice President and General Counsel of Company and U.S. Borrower, each in form and substance reasonably satisfactory to Administrative Agent and its counsel, each dated as of the Effective Date and setting forth substantially the matters in the opinions designated in Exhibits VII-A and VII-B, respectively, annexed hereto and as to such other matters as Administrative Agent may reasonably request, (ii) originally executed copies of one or more favorable written opinions of Osler, Hoskin & Harcourt, counsel for Canadian Borrower, in form and substance reasonably satisfactory to Administrative Agent and its counsel, dated as of the Effective Date and setting forth substantially the matters designated in Exhibit VIII-A annexed hereto and as to such other matters as Administrative Agent may reasonably request, and (iii) originally executed copies of one or more favorable written opinions of Mallesons Stephen Jaques, counsel for Australian Borrowers, in form and substance reasonably satisfactory to Administrative Agent and its counsel, dated as of the Effective Date and setting forth substantially the matters designated in Exhibit VIII-B annexed hereto and as to such other matters as Administrative Agent may reasonably request. F. Opinions of Administrative Agent's Counsel. Administrative Agent on behalf of Lenders, with sufficient originally executed copies for each Lender, shall have received originally executed copies of one or more favorable written opinions of O'Melveny & Myers, counsel to Administrative Agent, dated as of the Effective Date, substantially in the form of Exhibit IX annexed hereto and as to such other matters as Administrative Agent may reasonably request. G. Fees. Company shall have paid to Administrative Agent for distribution (as appropriate) to Administrative Agent, Arranger and Lenders the fees payable on the Effective Date referred to in subsection 2.3. H. No Material Adverse Effect; New Disclosures. Since December 31, 1997, there shall not have occurred any change, or development or event involving a prospective change, which in either case, in the opinion of Lenders has had or could have a Material Adverse Effect, and Administrative Agent and Documentation Agent shall not have become aware of any previously undisclosed information that is material and adverse with respect to (i) the business, assets, operations, condition (financial or otherwise) or prospects of Company, Company and its Subsidiaries taken as a whole, or any Borrower, or (ii) Company's or any Borrower's ability to perform, or the ability of Lenders to enforce, any of the Obligations. I. Representations and Warranties; Performance of Agreements. Company and each Borrower shall have delivered to Administrative Agent an Officers' Certificate, in form and substance satisfactory to Administrative Agent, to the effect that the representations and warranties in Section 4 hereof are true, correct and complete in all material respects on and as of the Effective Date to the same extent as though made on and as of that date and that Company and each Borrower has performed in all material respects all agreements and satisfied all conditions which each Loan Document provides shall be performed or satisfied by it on or before the Effective Date except as otherwise disclosed to and agreed to in writing by Administrative Agent and Requisite Lenders. 72 J. No Disruption of Financial and Capital Markets or Price of Gold. There shall have been no material adverse change since June 2, 1998 to the syndication markets for credit facilities similar in nature to the credit facilities provided herein, and there shall not have occurred and be continuing a material disruption of or material adverse change in financial, banking or capital markets that would have an adverse effect on such syndication market, in each case as determined by Administrative Agent and Arranger in their reasonable discretion. Additionally, there shall have been no material adverse change in the price of gold prevailing in international markets that would have a Material Adverse Effect. K. Company's Consolidated Net Worth. Administrative Agent shall have received evidence satisfactory to it that Company's Consolidated Net Worth is not less than $500,000,000. L. Completion of Proceedings. All corporate and other proceedings taken or to be taken in connection with the transactions contemplated hereby and all documents incidental thereto not previously found acceptable by Administrative Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in form and substance to Administrative Agent and its counsel, and Administrative Agent and its counsel shall have received all such counterpart originals or certified copies of such documents as they may reasonably request. M. Termination of the Plutonic Credit Agreement. Administrative Agent shall have received evidence satisfactory to it that the Plutonic Credit Agreement and all borrowings and commitments thereunder shall have been terminated and that the Company shall have issued irrevocable instructions to cause to be applied borrowings hereunder up to $175 million of the Overall Commitments to repay in full all outstanding obligations thereunder. N. Delivery of Compliance Certificate. Company shall have delivered to Administrative Agent a Compliance Certificate demonstrating in reasonable detail compliance during and at the end of Company's most recent fiscal quarter with the restrictions contained in subsections 6.1, 6.2, 6.3, 6.4, 6.6 and 6.7; O. Acquisition. All aspects of the Plutonic Acquisition shall have been consummated substantially in accordance with the Plutonic Acquisition Documents and the Administration Agent shall have received copies of the Plutonic Acquisition Documents. P. Financial Statements. The Lenders shall have received: (i) copies of the Company's annual reports on Form 10-K for the periods ending December 31, 1996 and December 31, 1997, and quarterly report on Form 10-Q for the period ending March 31, 1998; (ii) audited consolidated supplementary financial statements of Company, including Plutonic, for the fiscal years ended December 31, 1996 and 1997 prepared in conformity with GAAP; 73 (iii) unaudited consolidated summarized income statement and balance sheet of Company, including Plutonic, for the first quarter of 1998 prepared in conformity with GAAP; and (iv) unaudited consolidated summarized income statement and balance sheet of Company, including Plutonic, for the most recent month ending at least 45 days prior to the Effective Date prepared in conformity with GAAP. Q. Solvency. The Administrative Agent and the Lenders shall have received a certificate of the chief financial officer or treasurer of Company substantially in the form of Exhibit XIV supporting the conclusions that, after giving effect to the transactions contemplated hereby, the Borrowers will not be insolvent nor rendered insolvent by the indebtedness incurred in connection therewith, or be left with unreasonably small capital with which to engage in their businesses, or have incurred debts beyond its ability to pay such debts as they mature. R. Other Documents. Each of Company, Canadian Borrower, Australian Borrowers and U.S. Borrower shall have delivered to Administrative Agent such other documents as any Lender through Administrative Agent may reasonably request. 3.2 Conditions to All Loans. The obligations of Lenders to make Loans on each Funding Date are subject to the following further conditions precedent: A. The Applicable Administrative Agent and Administrative Agent shall have received before that Funding Date, in accordance with the provisions of subsection 2.1B, an originally executed Notice of Borrowing signed by a Responsible Officer of the applicable Borrower, or by any executive officer of the applicable Borrower designated by any Responsible Officer on behalf of the applicable Borrower, in a writing delivered to the Applicable Administrative Agent and Administrative Agent. B. As of that Funding Date: (i) The representations and warranties contained herein and in the other Loan Documents shall be true, correct and complete in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent that changes in the facts and conditions on which such representations and warranties are based are required or permitted under this Agreement; (ii) No event shall have occurred and be continuing or would result from the consummation of the borrowing contemplated by such Notice of Borrowing that would constitute an Event of Default or a Potential Event of Default; (iii) Company and each Borrower shall have performed in all material respects all agreements and satisfied all conditions which this Agreement and the other 74 Loan Documents provide shall be performed or satisfied by it on or before that Funding Date; (iv) There shall not be pending or, to the knowledge of Company or any Borrower, threatened, any action, suit, proceeding, governmental investigation or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries, and there shall have occurred no development in any such action, suit, proceeding, governmental investigation or arbitration, that, in either event, in the opinion of Requisite Lenders, would reasonably be expected to have a Material Adverse Effect, unless disclosed to and consented to by Requisite Lenders; and no injunction or other restraining order shall have been issued and no hearing to cause an injunction or other restraining order to be issued shall be pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated by this Agreement or the making of Loans, the issuance of Letters of Credit or the creation and purchase of Bankers' Acceptances hereunder; and (v) No Company Change of Control shall have occurred. 3.3 Conditions to All Letters of Credit. The obligation of any Issuing Lender to issue, extend or renew any Letter of Credit hereunder is subject to prior or concurrent satisfaction of all of the following conditions: A. On or before the date of issuance, extension or renewal of any Letter of Credit hereunder, the applicable Issuing Lender shall have received, in accordance with the provisions of subsection 2.7B, a Notice of Issuance of Letter of Credit relating to the proposed Letter of Credit, all other information specified in subsection 2.7B and such other documents as the applicable Issuing Lender may reasonably require in connection with the issuance, extension or renewal of such Letter of Credit. B. On or before the date of issuance, extension or renewal of such Letter of Credit, each of the conditions set forth in subsection 3.1 shall have been satisfied as of the Effective Date, and, on such date of issuance, extension or renewal, all conditions precedent described in subsection 3.2B shall be satisfied to the same extent as though the issuance, extension or renewal of such Letter of Credit were the making of a Loan and the date of issuance, extension or renewal of such Letter of Credit were a Funding Date. 3.4 Conditions to All Bankers' Acceptances. The creation of any Bankers' Acceptance hereunder is subject to the following conditions precedent: A. On or before the date of the creation of any Bankers' Acceptance, Canadian Administrative Agent shall have received, in accordance with the provisions of subsection 2.8, 75 an originally executed Drawing Notice, signed by any executive officer or vice president of Canadian Borrower. B. On the date of the creation of any Bankers' Acceptance, each of the conditions set forth in subsection 3.1 shall have been satisfied as of the Effective Date, and, on such date of creation, all conditions precedent described in subsection 3.2B shall be satisfied to the same extent as if the creation of such Bankers' Acceptance were the making of a Loan and the Drawing Date were a Funding Date. Section 4. REPRESENTATIONS AND WARRANTIES In order to induce Lenders to enter into this Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of Credit, to induce Lenders to purchase participations in Letters of Credit, and to induce Canadian Lenders to create and purchase Bankers' Acceptances, Company and each Borrower jointly and severally represent and warrant to each Lender that the following statements are true, correct and complete: 4.1 Organization, Powers, Qualification, Good Standing, Business and Subsidiaries. A. Organization and Powers. Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Canadian Borrower is a corporation duly organized and validly existing under the laws of the Province of Ontario. U.S. Borrower is a corporation duly organized, validly existing and in good standing under the laws of the State of California. HGAL is a corporation duly organized and validly existing under the laws of South Australia. Plutonic is a corporation duly organized and validly existing under the laws of New South Wales. Each of Company and each Borrower has all requisite corporate power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party, to carry out the transactions contemplated thereby and to issue and pay any Notes and any Grid Gold Acknowledgements to be issued by it. B. Qualification and Good Standing. Each of Company and each of its Subsidiaries is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, except in jurisdictions where the failure to be so qualified or in good standing has not had and will not have a Material Adverse Effect. C. Conduct of Business. Company and its Subsidiaries are engaged only in the businesses permitted to be engaged in pursuant to subsection 6.10. D. Subsidiaries. All of the Subsidiaries of Company as of the Effective Date (other than Joint Ventures that do not have an interest in any of the currently producing mines in the Mining Group) are identified in Schedule 4.1 annexed hereto. The capital stock of each of the Material Subsidiaries of Company that is a corporation identified in Schedule 4.1 annexed hereto is duly authorized, validly issued, fully paid and nonassessable and none of such capital stock constitutes Margin Stock. Each of the Material Subsidiaries of Company identified in 76 Schedule 4.1 annexed hereto that is a corporation is validly existing and in good standing under the laws of its respective jurisdiction of incorporation set forth therein, has full corporate power and authority to own its assets and properties and to operate its business as presently owned and conducted, and is qualified to do business and in good standing in every jurisdiction where its assets are located and wherever necessary to carry out its business and operations, in each case except where failure to be so qualified or in good standing or a lack of such corporate power and authority has not had and will not have a Material Adverse Effect. Schedule 4.1 annexed hereto correctly sets forth the ownership interest of Company in each of its Subsidiaries identified therein. 4.2 Authorization of Borrowing and Guaranty, etc. A. Authorization of Borrowing and Guaranty. The execution, delivery and performance of this Agreement and any other Loan Documents and the issuance, delivery and payment of the Notes and the Grid Gold Acknowledgements have been duly authorized by all necessary corporate action on the part of Company and each Borrower, as the case may be. B. No Conflict. The execution, delivery and performance by Company and Borrowers of this Agreement and any other Loan Documents, the issuance, delivery and payment of the Notes or any Grid Gold Acknowledgments by Borrowers, the issuance and sale of the New Subordinated Indebtedness by Company and the incurrence and repayment of extensions of credit pursuant to the Loan Documents have not, do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Company or any of its Subsidiaries, the Certificate or Articles of Incorporation or Bylaws or other charter documents of Company or any of its Subsidiaries or any order, judgment or decree of any court or other agency of government binding on Company or any of its Subsidiaries, (ii) conflict with, result in a material breach of or constitute (with due notice or lapse of time or both) a material default under any Contractual Obligation of Company or any of its Subsidiaries, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Company or any of its Subsidiaries (other than any Liens created under any of the Loan Documents in favor of Administrative Agent on behalf of Lenders), or (iv) require any approval of stockholders of Company or any of its Subsidiaries or any approval or consent of any Person under any Contractual Obligation of Company or any of its Subsidiaries, except for consents obtained on or before the Effective Date and disclosed in writing to Lenders. C. Governmental Consents. The execution, delivery and performance by Company and each Borrower, as the case may be, of the Loan Documents, the issuance, delivery and payment of the Notes and Grid Gold Acknowledgements and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent or approval of, or notice to, or other action to, with or by, any federal, state or other governmental authority or regulatory body. D. Binding Obligation. This Agreement and each other Loan Document has been duly executed and delivered by Company and each Borrower, and each Note and each Grid Gold Acknowledgement delivered to any Lender has been duly issued by the applicable 77 Borrower, and each such Loan Document is the legally valid and binding obligation of Company and each Borrower, as the case may be, enforceable against Company and each Borrower, as the case may be, in accordance with its respective terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability. 4.3 Valid Issuance of Stock. The Company Common Stock is duly and validly issued, fully paid and nonassessable. Except for rights under Company's Stockholders Rights Agreement dated as of October 16, 1987, as amended, and holders of directors or employee stock options and share rights and holders of delayed delivery agreements of Canadian Borrower or the Subordinated Debentures, the New Subordinated Indebtedness and the HCI Exchangeable Stock, no stockholder of Company has or will have any preemptive rights to subscribe for any additional equity Securities of Company. The Company Common Stock, when issued and sold, was either registered or qualified under applicable federal and state securities laws or exempt therefrom. 4.4 Subordinated Indebtedness. A. The Subordinated Debentures have been duly authorized and validly issued by Company and constitute the legally valid and binding obligations of Company enforceable against Company in accordance with their terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability. B. The New Subordinated Indebtedness, when issued, will be duly authorized and validly issued by Canadian Borrower or the Company and constitute the legally valid and binding obligations of Canadian Borrower enforceable against Canadian Borrower in or of the Company enforceable against the Company accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally or by equitable principles relating to enforceability. C. The Subordinated Indebtedness, when issued and sold, was either registered or qualified under applicable federal and state securities laws or exempt therefrom. The subordination provisions of the Subordinated Debentures and the New Subordinated Indebtedness are, or when issued will be, enforceable against the holders of the Subordinated Debentures and the New Subordinated Indebtedness, respectively. The Obligations constitute "Senior Debt" under the indentures pursuant to which the Subordinated Debentures and the New Subordinated Indebtedness have been or will be issued. 4.5 Financial Condition. Company has heretofore delivered to Lenders, at Lenders' request, the following financial statements and information: (i) the audited consolidated balance sheet of Company and its Subsidiaries as at December 31, 1997 and the related consolidated statements of income, stockholders' equity and cash flows of Company and its Subsidiaries for the Fiscal Year then 78 ended, and (ii) the unaudited consolidated summarized balance sheet of Company and its Subsidiaries as at March 31, 1998 and the related unaudited consolidated summarized statement of income of Company and its Subsidiaries for the three months then ended. All such statements were prepared in conformity with GAAP and fairly present the financial position (on a consolidated basis) of the entities described in such financial statements as at the respective dates thereof and the results of operations and, where applicable, cash flows (on a consolidated basis) of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments. Except as disclosed in Schedule 4.5 annexed hereto, Company does not have any Contingent Obligation, or liability for any taxes, long-term lease or unusual forward or long-term financial commitment that is not reflected in the most recent financial statements delivered to Lenders or the notes thereto, if any, or otherwise permitted under subsection 6.4 and which in any such case is material in relation to the business, operations, properties, assets or condition (financial or otherwise) of Company and its Subsidiaries, taken as a whole. 4.6 No Material Adverse Effect; No Restricted Junior Payments. Since December 31, 1997, no event or change has occurred that has caused or evidences, either in any case or in the aggregate, a Material Adverse Effect. Neither Company nor any of its Subsidiaries has directly or indirectly declared, ordered, paid or made, or set apart any sum or property for, any Restricted Junior Payment or agreed to do so except as permitted by subsection 6.5. 4.7 Title to Properties; Liens. Company and its Subsidiaries have good, sufficient and legal title, subject to Permitted Encumbrances, to all of their respective properties and assets reflected in the most recent financial statements delivered to Lenders, except for (a) assets held in Joint Ventures where the operator or another participant or the Joint Venture may hold legal title but Company or one of its Subsidiaries holds a beneficial ownership interest therein, (b) assets disposed of since the date of such financial statements in the ordinary course of business, (c) as otherwise permitted under subsection 6.7, and (d) such defects that have not had, or would not reasonably be expected to result in, a Material Adverse Effect. Except for Permitted Encumbrances and except as otherwise permitted by this Agreement, all such properties and assets are free and clear of Liens. 4.8 Litigation; Adverse Facts. Except as described in Schedule 4.8 or in the Company's Annual Report on Form 10-K for 1997, there is no action, suit, proceeding, arbitration or governmental investigation (whether or not purportedly on behalf of Company or any of its Subsidiaries) at law or in equity or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, pending or, to the knowledge of Company, threatened against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries (i) that has had, or would reasonably be expected to result in, a Material Adverse Effect or (ii) that seeks to enjoin or otherwise challenge any of the transactions contemplated by this Agreement or the enforceability of this Agreement. Neither Company nor 79 any of its Subsidiaries is (i) in violation of any applicable law that has had, or would reasonably be expected to result in, a Material Adverse Effect, or (ii) subject to or in default with respect to any final judgment, writ, injunction, decree, rule or regulation of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that has had, or would reasonably be expected to result in, a Material Adverse Effect. 4.9 Payment of Taxes. Except to the extent permitted by subsection 5.3, all material taxes, assessments, fees and other governmental charges upon Company and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises which are due and payable have been paid. Company knows of no proposed tax assessment against Company or any of its Subsidiaries that has had or would have a Material Adverse Effect, which is not being actively contested by Company or such Subsidiary in good faith and by appropriate proceedings; provided that such reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor. 4.10 Performance of Agreements; Materially Adverse Agreements. A. Except as described in Schedule 4.10, neither Company nor any of its Subsidiaries is in default in the performance, observance or fulfillment of any of the material obligations, covenants or conditions contained in any of its Contractual Obligations, and no condition exists that, with the giving of notice or the lapse of time or both, would constitute such a default, except where the consequences, direct or indirect, of such default or defaults, if any, has not had and would not have a Material Adverse Effect. B. Neither Company nor any of its Subsidiaries is a party to or is otherwise subject to any agreement or instrument or any charter or other internal restriction which has had or will have, individually or in the aggregate, a Material Adverse Effect. 4.11 Governmental Regulation. Neither Company nor any of its Subsidiaries is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or the Investment Company Act of 1940 or under any other Canadian, Commonwealth of Australia or U.S. federal or state statute or regulation which may limit its ability to incur Indebtedness for borrowed money. 4.12 Securities Activities. Neither Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. 80 4.13 Employee Benefit Plans. A. Company and each of its ERISA Affiliates are in compliance with all applicable provisions and requirements of ERISA and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed all their obligations under each Employee Benefit Plan, where failure to comply and perform such obligations would reasonably be expected to have a Material Adverse Effect. B. Except as set forth on Schedule 4.13 annexed hereto, no ERISA Event has occurred or is reasonably expected to occur which would reasonably be expected to have a Material Adverse Effect. C. Except to the extent required under Section 601 of ERISA or Section 4980B of the Internal Revenue Code or except as described on Schedule 4.13 annexed hereto, no Employee Benefit Plan of Company or any of its Subsidiaries provides health or welfare benefits (through the purchase of insurance or otherwise) for any retired or former employees of Company or any of its ERISA Affiliates. D. As of the most recent valuation date for any Pension Plan, the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities) as set forth in the most recent actuarial report prepared for such Pension Plan, does not exceed $20,000,000. 4.14 Certain Fees. No broker's or finder's fee or commission will be payable with respect to this Agreement or any of the transactions contemplated hereby. 4.15 Environmental Protection. Except as heretofore disclosed in writing by Company to Lenders or otherwise disclosed in Company's Annual Report on Form 10-K for its 1997 fiscal year, no event or condition has occurred with respect to Company or any of its Subsidiaries relating to any Environmental Laws or Release of Hazardous Materials which, individually, or in the aggregate, has had or would have a Material Adverse Effect. 4.16 Employee Matters. There is no strike or work stoppage in existence or, to Company's knowledge, threatened involving Company or any of its Subsidiaries that has had or would reasonably be expected to have a Material Adverse Effect. 4.17 Solvency. Company and its Subsidiaries, taken as a whole, and each of Borrowers are Solvent. 81 4.18 Compliance with Laws. The businesses and operations of Company and its Subsidiaries comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, except to the extent that noncompliance would not reasonably be expected to cause a Material Adverse Effect. 4.19 Disclosure. No representation or warranty of Company or any of its Subsidiaries contained in any Loan Document, or in any other document, certificate or written statement furnished to Lenders by or on behalf of Company or any of its Subsidiaries for use in connection with the transactions contemplated by this Agreement contains any untrue statement of a material fact or omits to state a material fact (known to Company or any Borrower, in the case of any document not furnished by it) necessary in order to make the statements contained herein or therein not misleading in light of the circumstances in which the same were made. Any projections and pro forma financial information contained in such materials are based upon good faith estimates and assumptions believed by Company and Borrowers to be reasonable at the time made, it being recognized by Lenders that such projections as to future events are not to be viewed as facts and that actual results during the period or periods covered by any such projections may differ from the projected results. There is no fact known (or which should upon the reasonable exercise of diligence be known) to Company or any Borrower (other than matters of a general economic nature) that has had, or would reasonably be expected to result in, a Material Adverse Effect and that has not been disclosed herein or in such other documents, certificates and statements furnished to Lenders for use in connection with the transactions contemplated hereby. Section 5. AFFIRMATIVE COVENANTS Company and each Borrower severally covenant and agree that, so long as any of the Overall Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations, the cancellation or expiration of all Letters of Credit and Bankers' Acceptances and the reimbursement of all amounts drawn thereunder, Company and each Borrower shall perform all covenants in this Section 5 to be performed by it (including in the case of any Borrower, covenants applicable to it in its capacity as a Subsidiary of Company), and Company and each Borrower shall cause each of their respective Subsidiaries to perform, all covenants in this Section 5 applicable to each such Subsidiary. 5.1 Financial Statements and Other Reports. Company shall maintain, and cause each of its Subsidiaries to maintain, a system of accounting established and administered in accordance with sound business practices to permit preparation of consolidated financial statements in conformity with GAAP. Company shall deliver to Lenders: (i) Quarterly Financials: as soon as available and in any event within 50 days after the end of each fiscal quarter of each Fiscal Year (beginning with the fiscal 82 quarter ending June 30, 1998), the consolidated balance sheets of Company and its Subsidiaries as at the end of such fiscal quarter and the related consolidated statements of income and cash flows of Company and its Subsidiaries for such fiscal quarter and for the period from the beginning of the then current Fiscal Year to the end of such fiscal quarter, all in reasonable detail and certified by the chief financial officer or chief accounting officer of Company that they fairly present the consolidated financial condition of Company and its Subsidiaries as at the dates indicated and the results of their operations and the cash flows of Company and its Subsidiaries for the periods indicated, subject to changes resulting from audit and normal year-end adjustments; (ii) Year-End Financials: as soon as available and in any event within 90 days after the end of each Fiscal Year, the consolidated balance sheets of Company and its Subsidiaries, Canadian Borrower and its Subsidiaries and each Australian Borrower and its Subsidiaries as at the end of such Fiscal Year and the related consolidated statements of income, stockholders' equity and cash flows of Company and its Subsidiaries, Canadian Borrower and its Subsidiaries and each Australian Borrower and its Subsidiaries for such Fiscal Year, all in reasonable detail and certified by the chief financial officer or chief accounting officer of Company that they present fairly in all material respects the consolidated financial condition of Company and its Subsidiaries, Canadian Borrower and its Subsidiaries and each Australian Borrower and its Subsidiaries as at the dates indicated and the results of their operations and their cash flows for the periods indicated; (iii) Officers' and Compliance Certificates: together with each delivery of consolidated financial statements of Company and its Subsidiaries pursuant to subdivisions (i) and (ii) above, (a) an Officers' Certificate of Company and each Borrower stating that the signers have reviewed the terms of this Agreement and have made, or caused to be made under their supervision, a review in reasonable detail of the transactions and condition of Company and its Subsidiaries during the accounting period covered by such financial statements and that such review has not disclosed the existence during or at the end of such accounting period, and that the signers do not have knowledge of the existence as at the date of such Officers' Certificate, of any condition or event that constitutes an Event of Default or Potential Event of Default, or, if any such condition or event existed or exists, specifying the nature and period of existence thereof and what action Company or any Borrower has taken, is taking and proposes to take with respect thereto; and (b) a Compliance Certificate demonstrating in reasonable detail compliance during and at the end of the applicable accounting periods with the restrictions contained in subsections 6.1, 6.2, 6.3, 6.4, 6.6 and 6.7; (iv) Accountants' Reports: promptly upon receipt thereof (unless restricted by applicable professional standards), copies of all reports submitted to Company by independent certified public accountants in connection with each annual, interim or 83 special audit of the financial statements of Company and its Subsidiaries made by such accountants, including, without limitation, any comment letter submitted by such accountants to management in connection with their annual audit; (v) Monthly Business Report: promptly upon their becoming available (but in no event later than 45 days after the last day of each month, or 90 days, in the case of the last month of each Fiscal Year), the monthly business report relating to Company's and its Subsidiaries' operations prepared internally for Company's management; (vi) SEC Filings and Press Releases: (a) promptly upon their becoming available, copies of (1) all financial statements, reports, notices and proxy statements sent or made available generally by Company to its security holders, (2) all regular and periodic reports and all registration statements (other than on Form S-8 or a similar form) and prospectuses, if any, filed by Company or any of its Subsidiaries with the Securities and Exchange Commission or any national securities exchange (including, without limitation, Company's Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998), and (b) concurrently with or immediately following their being made available to intended recipients, all press releases and other statements made available generally by Company to the public concerning material developments in the business of Company or any of its Subsidiaries; (vii) Events of Default, etc.: promptly upon any Responsible Officer of Company or any Borrower obtaining knowledge (a) of any condition or event that constitutes an Event of Default or Potential Event of Default, or becoming aware that any Lender, or any Agent has given any notice or taken any other action with respect to a claimed Event of Default or Potential Event of Default, (b) that any Person has given any notice to Company or any of its Subsidiaries or taken any other action with respect to a claimed default or event or condition of the type referred to in subsection 7.2, (c) of any condition or event that would be required to be disclosed in a current report filed by Company with the Securities and Exchange Commission on Form 8-K (Items 1, 2, 4 and 6 of such Form as in effect on the date hereof) (information required to be disclosed on Form 8-K shall be sent to Lenders when sent for filing with the Securities and Exchange Commission), or (d) of the occurrence of any event or change that has caused or evidences, either individually or in the aggregate, a Material Adverse Effect, an Officers' Certificate specifying the nature and period of existence of such condition, event or change, or specifying the notice given or action taken by any such Person and the nature of such claimed Event of Default, Potential Event of Default, default, event or condition, and what action Company and each Borrower has taken, is taking and proposes to take with respect thereto; (viii) Litigation: promptly upon any Responsible Officer of Company or any Borrower obtaining knowledge of (X) the institution of, or threat of, any action, 84 suit, proceeding, governmental investigation or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries (collectively, "Proceedings") not previously disclosed in writing by Company to Lenders or (Y) any material development in any Proceeding that, in the case of either clause (X) or (Y) could reasonably be expected to cause a Material Adverse Effect, written notice thereof together with a summary of such Proceedings or material development; (ix) ERISA Events: promptly upon becoming aware of the occurrence of or forthcoming occurrence of any ERISA Event which could reasonably be expected to cause a Material Adverse Effect, a written notice specifying the nature thereof, what action Company or any of its ERISA Affiliates has taken, is taking or proposes to take with respect thereto and, when known, any action taken or threatened by the Internal Revenue Service, the Department of Labor or the PBGC with respect thereto; (x) ERISA Notices: with reasonable promptness, copies of (a) all notices received by Company or any of its ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event which could reasonably be expected to cause a Material Adverse Effect; and (b) such other documents or governmental reports or filings relating to any Employee Benefit Plan as Administrative Agent shall reasonably request; (xi) Financial Plans: as soon as practicable and in any event no later than 90 days after the beginning of each Fiscal Year, (a) a copy of Company's annual budget promptly after approval thereof by Company's Board of Directors, (b) a forecast of the amount of capital expenditures anticipated for such Fiscal Year, and (c) such other information and projections as any Lender may reasonably request, all in form and substance satisfactory to Requisite Lenders; (xii) Environmental Audits and Reports: promptly after completion thereof (or receipt from an independent consultant in the case of an audit conducted by Persons who are not employees of Company or any of its Subsidiaries), copies of all final environmental audits and reports, whether prepared by personnel of Company or any of its Subsidiaries or by independent consultants, with respect to significant environmental matters at any Facility or which relate to an Environmental Claim which would reasonably be expected to result in a Material Adverse Effect; and (xiii) Other Information: with reasonable promptness, such other information and data with respect to Company or any of its Subsidiaries as from time to time may be reasonably requested by any Lender. 85 5.2 Corporate Existence, etc. Except as permitted under subsection 6.7, Company will, and will cause each of its Material Subsidiaries to, at all times preserve and keep in full force and effect its corporate existence and all rights and franchises material to the business of Company and its Subsidiaries, taken as a whole. 5.3 Payment of Taxes and Claims; Tax Consolidation. A. Company will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty accrues thereon, and all claims (including, without limitation, claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto, except for such taxes, assessments, governmental charges and claims which in the aggregate do not exceed $3,000,000; provided that no such charge or claim need be paid if being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and if such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor. B. Company will not, nor will it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax return with any Person (other than Company or any of its Subsidiaries) for any period ending on or after the Effective Date. 5.4 Maintenance of Properties; Insurance. Company will, and will cause each of its Subsidiaries to, maintain or cause to be maintained in good repair, working order and condition, ordinary wear and tear excepted, all material properties used in the business of Company and its Subsidiaries, taken as a whole, or any Borrower (including, without limitation, Intellectual Property) and from time to time will make or cause to be made all appropriate repairs, renewals and replacements thereof. Company will maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and businesses of its Subsidiaries against loss or damage of the kinds customarily carried or maintained under similar circumstances by corporations of established reputation engaged in similar activities in the countries where such properties or businesses are located. 5.5 Inspection; Lender Meeting; Reports of Subsidiaries. Company and Borrowers shall, and shall cause each of their respective Subsidiaries to, permit any authorized representatives designated by any Lender, at the expense of such Lender, to visit and inspect any of the properties of Company, any Borrower or any of their respective Subsidiaries, including its and their financial and accounting records, and, subject to the provisions of subsection 10.21, to make copies and take extracts therefrom, and to discuss its and their affairs, finances and accounts with its and their officers, all upon reasonable notice and 86 at such reasonable times during normal business hours and as often as may be reasonably requested. Without in any way limiting the foregoing, Company will, upon the request of Administrative Agent or Requisite Lenders, participate in a meeting of Agents and Lenders once during each Fiscal Year to be held at Company's corporate offices (or such other location as may be agreed to by Company and Administrative Agent) at such time as may be agreed to by Company and Administrative Agent. Until the Prime Acquisition Date, Company shall cause Lenders to be added to the lists maintained by Prime of Persons to receive reports of the type described in subsection 5.1(vi). 5.6 Compliance with Laws, etc. Company shall, and shall cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations and orders of any governmental authority, noncompliance with which in any case or in the aggregate would reasonably be expected to cause a Material Adverse Effect. 5.7 Environmental Disclosure and Inspection. A. Company shall, and shall cause each of its Subsidiaries to, exercise all due diligence in order to comply with all Environmental Laws where failure to do so would reasonably be expected to result in a Material Adverse Effect. B. Company shall promptly advise Lenders in writing and in reasonable detail of (i) any Release of any Hazardous Materials that would reasonably be expected to result in a Material Adverse Effect, (ii) any and all written communications with respect to any Environmental Claims that would reasonably be expected to result in a Material Adverse Effect, (iii) any remedial action taken by or at the direction of Company in response to (x) any Hazardous Materials on, under or about any Facility, the existence of which would reasonably be expected to result in an Environmental Claim having a Material Adverse Effect, or (y) any Environmental Claim that would reasonably be expected to result in a Material Adverse Effect, (iv) Company's discovery of any occurrence or condition on any real property adjoining or in the vicinity of any Facility that could cause such Facility or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use thereof under any Environmental Laws and which would reasonably be expected to result in a Material Adverse Effect, and (v) any request for information from any governmental agency that indicates such agency is investigating whether Company or any of its Subsidiaries may be potentially responsible for a Release of Hazardous Materials, the remediation of which would reasonably be expected to have a Material Adverse Effect. C. Company shall promptly notify Lenders of any proposed acquisition of stock, assets, or property by Company or any of its Subsidiaries that would reasonably be expected to expose Company or any of its Subsidiaries to, or result in, Environmental Claims that would reasonably be 87 expected to result in a Material Adverse Effect or that would reasonably be expected to have an adverse effect on any material Governmental Authorization then held by Company or any of its Subsidiaries. D. Company shall provide copies of such documents or information as Administrative Agent may reasonably request in relation to any matters disclosed pursuant to this subsection 5.7. 5.8 Company's Remedial Action Regarding Hazardous Materials. Company shall promptly take, and shall cause each of its Subsidiaries promptly to take, any and all necessary remedial action in connection with the presence, storage, use, disposal, transportation or Release of any Hazardous Materials on, under or about any Facility in order to comply with all applicable Environmental Laws and undisputed Governmental Authorizations where failure to comply would reasonably be expected to result in a Material Adverse Effect. If Company or any of its Subsidiaries undertakes any remedial action with respect to any Hazardous Materials on, under or about any Facility, Company or such Subsidiary shall conduct and complete such remedial action in material compliance with all applicable material Environmental Laws, and in accordance with the policies, orders and directives of all federal, state and local governmental authorities except when, and only to the extent that, Company's or such Subsidiary's liability, including with respect to such presence, storage, use, disposal, transportation or discharge of any Hazardous Materials, or the jurisdiction or the authority or the validity or the applicability of the Environmental Laws or the policies, orders or directions is being contested in good faith by Company or such Subsidiary. 5.9 Further Assurances. At any time or from time to time upon the request of Administrative Agent, Company and Borrowers shall execute and deliver such further documents and do such other acts and things as Administrative Agent may reasonably request in order to effect fully the purposes of this Agreement and to provide for payment of the Obligations in accordance with the terms of this Agreement, the Notes and the Grid Gold Acknowledgements. 5.10 Year 2000 Compliance. Any reprogramming required to permit the proper functioning, in and following the year 2000, of (i) the Company's and each Borrower's computer systems and (ii) equipment containing embedded microchips (including systems and equipment supplied by others or with which the Company's or any Borrower's systems interface) and the testing of all such systems and equipment, as so reprogrammed, will be completed by October 1, 1999, or, with respect to financial systems, July 1, 1999, except where the failure to complete such programming could not reasonably be expected to have a Material Adverse Effect. The cost to the Company or any Borrower of such reprogramming and testing and of the reasonably foreseeable consequences of year 2000 to the Company or any Borrower (including, without limitation, reprogramming errors and the failure of others' systems or equipment) will not result in an Event of Default or a Material Adverse Effect. Except for such of the reprogramming referred to in the preceding sentence as may be necessary, the computer and management information systems of the 88 Company and each Borrower and its Subsidiaries are and, with ordinary course upgrading and maintenance, will continue for the term of this Agreement to be, sufficient to permit Company and each Borrower to conduct its business without a Material Adverse Effect. Section 6. NEGATIVE COVENANTS Company and each Borrower severally covenant and agree that, so long as any of the Overall Commitments hereunder shall remain in effect and until payment in full of all of the Loans and other Obligations, the cancellation or expiration of all Letters of Credit and Bankers' Acceptances and the reimbursement of all amounts drawn thereunder, Company and each Borrower shall perform all covenants in this Section 6 to be performed by it (including, in the case of any Borrower, covenants applicable to it in its capacity as a Subsidiary of Company), and Company and each Borrower shall cause each of their respective Subsidiaries to perform all covenants in this Section 6 applicable to such Subsidiary. 6.1 Indebtedness. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except: (i) Company and Borrowers may become and remain liable with respect to their respective Obligations; (ii) Company and its Subsidiaries may become and remain liable with respect to Indebtedness arising in respect of Contingent Obligations permitted by subsection 6.4; (iii) Company may become and remain liable with respect to Indebtedness to any of its Subsidiaries, and any Subsidiary of Company (other than Agua de la Falda S.A., Lachlan Resources N.L. and , prior to the Prime Acquisition Date, Prime) may become and remain liable with respect to Indebtedness to Company or any other Subsidiary of Company and Agua de la Falda S.A., Lachlan Resources N.L. and, prior to the Prime Acquisition Date, Prime may become and remain liable with respect to Indebtedness to Company or any other Subsidiary of Company up to a maximum of $50,000,000 aggregate principal amount (for all such companies) at any time outstanding; provided that all such intercompany Indebtedness shall be subordinated on the same terms as the subordination provisions of subsection 8.1B in right of payment to the payment in full of the Obligations; (iv) Company and its Subsidiaries, as applicable, may remain liable with respect to Indebtedness described in Schedule 6.1 annexed hereto; (v) Company may become and remain liable with respect to the Subordinated Debentures; 89 (vi) Company or Canadian Borrower may become and remain liable with respect to the New Subordinated Indebtedness; (vii) Agua de la Falda S.A., Lachlan Resources N.L. and, prior to the Prime Acquisition Date, Prime, may become and remain liable with respect to any amount of Indebtedness incurred in the ordinary course of business, which Indebtedness may be secured by Liens on the assets and properties of such company; provided that the holders of such Indebtedness have no recourse against Company or any of its Subsidiaries other than the company incurring such Indebtedness, including, without limitation, any recourse that would arise by reason of any direct financial guaranty or any letter of credit or performance or solvency guaranties, representations or warranties made or entered into in connection with the incurrence or creation of such Indebtedness; (viii) (a) Australian Borrowers, Canadian Borrower, (prior to the Prime Acquisition Date) Prime, and any Subsidiary of Company (other than U.S. Borrower) that does not own assets included in the Mining Group may become and remain liable with respect to Indebtedness secured solely by Liens on (i) assets and properties owned on the Effective Date that are undeveloped or (ii) assets and properties where such assets and properties or the Subsidiary of Company owning such assets and properties are acquired after the Effective Date and not adjacent to or relating to any Mining Group properties existing as of the Effective Date and (b) U.S. Borrower may become and remain liable with respect to Indebtedness secured solely by Liens on assets and properties owned on the Effective Date that are undeveloped; provided that the aggregate principal amount of Indebtedness outstanding pursuant to clauses (a) and (b) above shall not at any time exceed $500,000,000 in the aggregate; provided further that Requisite Lenders shall be satisfied that such Indebtedness outstanding pursuant to clause (a) or (b) above is Non-Recourse Debt; (ix) (a) Subsidiaries of Borrowers may become and remain liable with respect to additional Indebtedness in an aggregate outstanding principal amount not at any time exceeding $50,000,000 and (b) Borrowers may become and remain liable with respect to additional Indebtedness in an aggregate outstanding principal amount not at any time exceeding $170,000,000 less the then outstanding principal amount of Indebtedness of Subsidiaries of Borrowers pursuant to clause (a) above; and (x) Company and its Subsidiaries may become and remain liable in respect of any refinancing or extension of any Indebtedness described in this subsection 6.1 for amounts not exceeding the principal amounts of the Indebtedness so refunded or extended and with maturities no earlier than such Indebtedness and if secured, only by the property theretofore securing such Indebtedness; provided that amounts refinancing such Indebtedness shall be included in the calculation of any 90 numerical limitations in the relevant clause of this subsection 6.1 pursuant to which such Indebtedness was originally permitted. 6.2 Liens and Related Matters. A. Prohibition on Liens. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, assume or permit to exist any Lien on or with respect to any property or asset of any kind (including any document or instrument in respect of goods or accounts receivable) of Company or any of its Subsidiaries, whether now owned or hereafter acquired, or any income or profits therefrom, or file or permit the filing of, or permit to remain in effect, any financing statement or other similar notice of any Lien with respect to any such property, asset, income or profits, except: (i) Permitted Encumbrances; (ii) Liens described in Schedule 6.2 annexed hereto; (iii) Purchase Money Security Interests securing up to an aggregate principal amount of $100,000,000 at any time of Indebtedness permitted to be outstanding under subsection 6.1(ix); and (iv) Liens securing Indebtedness permitted to be outstanding under subsections 6.1(vii) and (viii), and as provided in subsection 6.1(x). B. Equitable Lien in Favor of Lenders. If Company or any of its Subsidiaries shall create or assume any Lien upon any of its properties or assets, whether now owned or hereafter acquired, to secure Indebtedness other than Liens excepted by the provisions of subsection 6.2A, it shall make or cause to be made effective provision whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness secured thereby as long as any such other Indebtedness shall be so secured; provided that, notwithstanding the foregoing, this covenant shall not be construed as a consent by Requisite Lenders to the creation or assumption of any such Lien not permitted by the provisions of subsection 6.2A. C. No Restrictions on Subsidiary Distributions to Company or Other Subsidiaries. Except as set forth in Schedule 6.2, and except in respect of Indebtedness permitted by subsections 6.1(vii) and (viii) and also, with respect to clause (iv) below, except with respect to properties dedicated under Joint Ventures and in respect of Indebtedness secured by Purchase Money Security Interests, and except for permitted refinancings of such Indebtedness, and as provided herein, Company will not, and will not permit any of its Subsidiaries to, create or otherwise cause or suffer to exist or become effective any consensual prohibition of any kind on the ability of any such Subsidiary to (i) pay dividends or make any other distributions on any of such Subsidiary's capital stock owned by Company or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed by such Subsidiary to Company or any other Subsidiary of Company, (iii) make loans or advances to Company or any other Subsidiary of Company, or (iv) transfer any of its property or assets to Company or any other Subsidiary of 91 Company; provided that any restrictions based on financial or other tests (not effectively acting as prohibitions) shall not be deemed prohibitions. 6.3 Investments; Joint Ventures. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, make or own any Investment in any Person, including any Joint Venture, except: (i) Company and its Subsidiaries may make and own Investments in Marketable Securities; (ii) Company and its Subsidiaries may make intercompany loans to the extent permitted under subsection 6.1(iii); (iii) [Reserved]; (iv) Company and its Subsidiaries may continue to own the Investments owned by them and described in Schedule 6.3 annexed hereto or, if not described in Schedule 6.3, in the aggregate not exceeding $20,000,000; (v) Company and its Subsidiaries may continue to own and make Investments in or make acquisitions of businesses substantially similar to those currently conducted by Company or in related industries and Borrowers and their Subsidiaries may make Investments in new and existing Subsidiaries; provided that any such Investments are permitted by the provisions of subsection 6.7(v); (vi) Borrowers and their respective Subsidiaries may acquire and retain ownership of Investments in connection with Asset Sales permitted by subsection 6.7(iv); provided that the aggregate net amount of all such Investments described in this subsection 6.3(vi) shall not at any time exceed $100,000,000; and provided further, however, that for purposes of compliance with this subsection 6.3(vi) Asset Sales involving the simultaneous receipt of notes and sale of such notes to a third party shall be excluded; (vii) Company and its Subsidiaries may make and own Investments received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (viii) Company and its Subsidiaries may make and own Investments with respect to Contingent Obligations which are permitted by subsection 6.4; and 92 (ix) Company and its Subsidiaries may make and continue to own Investments in, and may make and own Investments resulting from capital calls, buyout obligations or similar requirements in respect of, Joint Ventures in the ordinary course of business. 6.4 Contingent Obligations. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create or become or remain liable with respect to any Contingent Obligation, except: (i) Company and its Subsidiaries may become and remain liable with respect to Contingent Obligations (a) in respect of Letters of Credit, or (b) set forth in this Agreement; (ii) Company and its Subsidiaries may become and remain liable with respect to Contingent Obligations under Interest Rate Protection Agreements having a notional principal amount not exceeding $100,000,000 with respect to Indebtedness permitted under subsection 6.1; (iii) Company and its Subsidiaries may become and remain liable with respect to Contingent Obligations in respect of customary indemnification and purchase price adjustment obligations incurred in connection with sales of assets permitted under subsection 6.7; (iv) Company and its Subsidiaries may guarantee any obligations of their respective Subsidiaries (including Joint Ventures) provided that the aggregate amount guaranteed does not exceed $200,000,000; (v) Company and U.S. Borrower, as applicable, may become and remain liable with respect to guaranties of New Subordinated Indebtedness that are subordinated to the Obligations; (vi) Company and its Subsidiaries, as applicable, may remain liable with respect to Contingent Obligations described in Schedule 6.4 annexed hereto; (vii) Company and its Subsidiaries may become and remain liable with respect to gold futures, options or forward sales contracts and Currency Protection Agreements or similar arrangements designed to protect Company or any of its Subsidiaries against fluctuations in the price of Gold or the relative exchange rates for currencies in accordance with current industry practice or the past practices of Company and its Subsidiaries and in the ordinary course of the Company's and its Subsidiaries' business; (viii) Company and its Subsidiaries may become and remain liable with respect to (a) standby letters of credit with respect to pollution control bonds identified on Schedule 6.4 and refinancings thereof and Contingent Obligations in respect of 93 standby letters of credit, surety bonds and guaranties securing reclamation and other performance obligations under contracts, permits, statutes and regulations and made in the ordinary course of business, but not including Indebtedness or Contingent Obligations of Company and its Subsidiaries for borrowed money or as described in subsection 6.4(vi), and (b) standby letters of credit and surety bonds securing Indebtedness or Contingent Obligations of Company and its Subsidiaries for borrowed money or to support Contingent Obligations described in subsections 6.4(ii) through (iv) and subsection 6.4(vi) in an aggregate amount not exceeding $100,000,000 at any time, it being understood that all letters of credit and surety bonds for which Company and its Subsidiaries are liable shall be permitted only under subsection 6.4(i) or this subsection 6.4(vii); and (ix) Company and its Subsidiaries may become liable for reimbursement obligations to providers of credit enhancement for the New Subordinated Indebtedness; provided such reimbursement obligations are subordinated to repayment of the Obligations on the same terms as the New Subordinated Indebtedness. 6.5 Restricted Junior Payments. Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted Junior Payment; provided that (i) so long as (a) no Event of Default or (b) Potential Event of Default under subsections 7.1 or 7.6, shall have occurred and be continuing, or result from such payment, (w) Company and its Subsidiaries may make scheduled payments of interest on the Subordinated Debentures and the New Subordinated Indebtedness in accordance with their terms from all available sources, (x) Company and its Subsidiaries may pay principal and interest on Subordinated Indebtedness other than the Subordinated Debentures and the New Subordinated Indebtedness, (y) Subsidiaries may pay dividends to their respective shareholders, and (z) Company and Subsidiaries may redeem their capital stock, (ii) so long as no Event of Default or Potential Event of Default shall have occurred and be continuing or result from such payment, Company and its Subsidiaries may redeem the Subordinated Debentures and the New Subordinated Indebtedness, (iii) Company and its Subsidiaries may redeem outstanding HCI Exchangeable Stock by the issuance of Company common stock and pay accrued and unpaid dividends on outstanding HCI Exchangeable Stock and (iv) Company and its Subsidiaries may make Restricted Junior Payments if the proceeds of such payments are used to cure an Event of Default or Potential Event of Default and no Event of Default or Potential Event of Default will result from the making of such payment. 6.6 Financial Covenants. A. Minimum Consolidated Net Worth. Company shall not permit Consolidated Net Worth at any time to be less than $500,000,000. 94 B. Leverage Ratio. Company shall not permit the ratio of (i) Consolidated Total Debt to (ii) the sum of Consolidated Net Worth plus Consolidated Total Debt at any time to exceed 0.50 to 1.00. C. Interest Coverage Ratio. Company shall not permit the ratio of Consolidated EBITDA to Consolidated Interest Expense at the end of any fiscal quarter after December 31, 1997 for the four fiscal quarter period then ended (or three quarter fiscal period, in the case of the quarter ending September 30, 1998) to be less than 3.50 to 1.00. 6.7 Restriction on Fundamental Changes; Asset Sales; Certain Asset Transfers. A. Company shall not, and shall not permit any of its Subsidiaries to, enter into any transaction of merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose of, in one transaction or a series of transactions, all or any substantial part of its business, property or fixed assets, whether now owned or hereafter acquired, or acquire by purchase or otherwise all or substantially all the business, property or fixed assets of, or stock or other evidence of beneficial ownership of, any Person, except: (i) any Subsidiary of Company may be merged, consolidated or amalgamated with or into any Borrower or any Subsidiary of any Borrower, or be liquidated, wound up or dissolved, or all or any part of its business, property or assets may be conveyed, sold, leased, transferred or otherwise disposed of, in one transaction or a series of transactions, to any Borrower or any Subsidiary of any Borrower; provided that, in the case of such a merger, consolidation or amalgamation with any Borrower, such Borrower shall be the continuing or surviving corporation and provided further that immediately after giving effect to such merger, consolidation or amalgamation, no Potential Event of Default or Event of Default shall have occurred and be continuing; (ii) [Reserved.] (iii) subject to subsection 6.10, Company and its Subsidiaries may sell or otherwise dispose of assets in transactions that do not constitute Asset Sales; (iv) Company and its Subsidiaries may make Asset Sales; provided that the consideration received for such assets shall be in an amount at least equal to the fair market value thereof and that such Asset Sales do not involve the sale or other disposition, in one transaction or a series of transactions, of all or any substantial part of the business, property or fixed assets of the Company and its Subsidiaries; and provided, further, that after any such Asset Sales no Potential Event of Default or Event of Default shall have occurred and be continuing; and (v) Company and its Subsidiaries may acquire Securities or assets of another Person, including existing Subsidiaries, or create additional Subsidiaries; provided 95 that after giving effect to such acquisition, Company and its Subsidiaries will be in compliance with all covenants set forth in Sections 5 and 6. B. Company shall not, and shall not permit any of its Subsidiaries to, convey, sell, lease, sub-lease, or transfer any assets to Lachlan Resources, N.L except in the ordinary course of business and on an arms-length basis. 6.8 Transactions with Shareholders and Affiliates. Except as set forth in Schedule 6.8, Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with any holder of 5% or more of any class of equity Securities of Company or with any Affiliate of Company or of any such holder, on terms that are less favorable to Company or that Subsidiary, as the case may be, than those that might be obtained at the time from Persons who are not such a holder or Affiliate; provided that the foregoing restriction shall not apply to (i) any transaction between Company and any of its wholly-owned Subsidiaries or between any of its wholly-owned Subsidiaries or (ii) reasonable and customary fees paid to members of the Boards of Directors of Company and its Subsidiaries. 6.9 Disposal of Material Subsidiary Stock. Except for any disposition or sale of capital stock or other equity Securities of any of its Material Subsidiaries in compliance with the provisions of subsections 6.7(i) and (iv), and the issuance and any redemption of HCI Exchangeable Stock permitted by subsection 6.5, Company shall not: (i) directly or indirectly sell, assign, pledge or otherwise encumber or dispose of any shares of capital stock or other equity Securities of any of its Material Subsidiaries, except to qualify directors if required by applicable law; or (ii) permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise encumber or dispose of any shares of capital stock or other equity Securities of any of its Material Subsidiaries (including such Subsidiary), except to Company, another Subsidiary of Company, or to qualify directors if required by applicable law; provided, however, that nothing contained in this Agreement shall (a) prior to the Prime Acquisition Date, prohibit or otherwise limit the ability of Prime to sell securities issued by it, (b) permit the capital stock of any Borrower (other than 10% of the Canadian Borrower) to be sold or disposed of, or (c) prohibit Investments by venturers in Joint Ventures permitted by subsection 6.3(ix). 96 6.10 Conduct of Business. From and after the Effective Date, Company shall not, and shall not permit any of its Subsidiaries to, engage in any business other than the businesses engaged in by Company and its Subsidiaries on the Effective Date and similar or related businesses. 6.11 Prepayments and Amendments to Subordinated Indebtedness. Company shall not, and shall not permit any of its Subsidiaries to, amend or otherwise change the terms of any Subordinated Debentures or New Subordinated Indebtedness, or make any payment consistent with an amendment thereof or change thereto, if the effect of such amendment or change is to increase the interest rate on such Subordinated Debentures or New Subordinated Indebtedness, change (to earlier dates) any dates upon which payments of principal or interest are due thereon, change any event of default or condition to an event of default with respect thereto (other than to eliminate any such event of default), change the redemption, prepayment or defeasance provisions thereof, change the subordination provisions thereof (or of any guaranty thereof), or change any collateral therefor (other than to release such collateral), or if the effect of such amendment or change, together with all other amendments or changes made, is to increase materially the obligations of the obligor thereunder or to confer any additional rights on the holders of such Subordinated Debentures or New Subordinated Indebtedness (or a trustee or other representative on their behalf) which would be adverse to Company, any Borrower or Lenders except as permitted pursuant to subsection 6.5(iii). Section 7. EVENTS OF DEFAULT IF any of the following conditions or events ("Events of Default") shall occur: 7.1 Failure to Make Payments When Due. (i) Failure to pay any installment of principal of any Loan when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise; (ii) failure to pay when due any amount payable to any Issuing Lender in reimbursement of any drawing under any Letter of Credit issued pursuant to subsection 2.7; (iii) failure to pay when due any Bankers' Acceptance created pursuant to subsection 2.8 at maturity; or (iv) failure to pay any interest on any Loan or any fee or any other Obligation within five days after the date due; or 7.2 Default in Other Agreements. (i) Failure of Company or any of its Subsidiaries to pay when due (a) any principal of or interest on any Indebtedness (other than Indebtedness referred to in subsection 7.1) in an individual principal amount of $5,000,000 or more or (b) any Contingent Obligation in an 97 individual principal or face amount of $5,000,000 or more or notional principal amount of $20,000,000 or more, in each case beyond the end of any grace period provided therefor; or (ii) the occurrence of any event specified in (a) any evidence of any Indebtedness in an individual principal amount of $5,000,000 or more or any Contingent Obligation in an individual principal or face amount of $5,000,000 or more or notional principal amount of $20,000,000 or more, or (b) any loan agreement, mortgage, indenture or other agreement relating to such Indebtedness or Contingent Obligation(s), in each case if the effect of such event is to cause a default that would cause, or to permit the holder or holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to cause, that Indebtedness or Contingent Obligation(s) to become or be declared due and payable prior to its stated maturity or the stated maturity of any underlying obligation, as the case may be; or 7.3 Breach of Certain Covenants. Failure of Company or any Borrower, as the case may be, to perform or comply with any term or condition contained in subsection 2.4, 2.5 or 5.2 or Section 6 of this Agreement; or 7.4 Breach of Warranty. Any representation, warranty, certification or other statement made by Company or any of its Subsidiaries in any Loan Document or in any statement or certificate at any time given by Company or any of its Subsidiaries in writing pursuant hereto or thereto or in connection herewith or therewith shall be false in any material respect on the date as of which made; or 7.5 Other Defaults Under Loan Documents. Company or any Borrower, as the case may be, shall default in the performance of or compliance with any term contained in this Agreement or any of the other Loan Documents, other than any such term referred to in any other subsection of this Section 7, and such default shall not have been remedied or waived within 30 days after the earlier of (i) a Responsible Officer of Company or any Borrower becoming aware of such default or (ii) receipt by Company or any Borrower of notice from any Agent or any Lender of such default; or 7.6 Involuntary Bankruptcy; Appointment of Receiver, etc. (i) A court having jurisdiction in the premises shall enter a decree or order for relief in respect of Company, any Borrower or any of Company's Subsidiaries (other than Subsidiaries operating outside of the United States, Canada and Australia and not constituting Material Subsidiaries ("Minor Foreign Subsidiaries")) in an involuntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, which decree or order is not stayed; or any other similar relief shall be granted under any applicable federal or state law and not stayed; or 98 (ii) an involuntary case shall be commenced against Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries) under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect; or a decree or order of a court having jurisdiction in the premises for the appointment of a receiver, administrator, liquidator, sequestrator, trustee, custodian or other officer having similar powers over Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries), or over all or a substantial part of its property, shall have been entered; or there shall have occurred the involuntary appointment of an interim receiver, administrator, trustee or other custodian of Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries) for all or a substantial part of its property; or a warrant of attachment, execution or similar process shall have been issued against any substantial part of the property of Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries), and any such event described in this clause (ii) shall continue for 60 days unless dismissed, bonded or discharged; or 7.7 Voluntary Bankruptcy; Appointment of Receiver, etc. (i) Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries) shall have an order for relief entered with respect to it or commence a voluntary case under the Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar law now or hereafter in effect, or shall consent to the entry of an order for relief in an involuntary case, or to the conversion of an involuntary case to a voluntary case, under any such law, or shall consent to the appointment of or taking possession by a receiver, administrator, trustee or other custodian for all or a substantial part of its property; or Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries) shall make a general assignment for the benefit of creditors; or (ii) Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries) shall be unable or shall fail, or shall admit in writing its inability, to generally pay its debts as such debts become due; or the Board of Directors of Company, any Borrower or any of Company's Subsidiaries (other than Minor Foreign Subsidiaries) (or any committee thereof) shall adopt any resolution or otherwise authorize any action to approve any of the actions referred to in clause (i) above or this clause (ii); or 7.8 Judgments and Attachments. Any money judgment, writ or warrant of attachment or similar process involving (i) in any individual case an amount in excess of $5,000,000 or (ii) in the aggregate at any time an amount in excess of $10,000,000 (in either case not adequately covered by insurance as to which a solvent and unaffiliated insurance company has acknowledged coverage) shall be entered or filed against Company, any Borrower or any Material Subsidiaries or any of their respective assets (or 99 shall be entered against any of Company's other Subsidiaries and Company or any Material Subsidiary shall be or become liable therefor) and shall remain undischarged, unvacated, unbonded or unstayed for a period of 60 days (or in any event later than five days prior to the date of any proposed sale thereunder); or 7.9 Dissolution. Except as permitted by subsection 6.7, any order, judgment or decree shall be entered against Company, any Borrower or any Material Subsidiary decreeing the dissolution or split up of Company, any Borrower or any Material Subsidiary and such order shall remain undischarged or unstayed for a period in excess of 30 days; or 7.10 Employee Benefit Plans. There shall occur one or more ERISA Events which results in or would reasonably be expected to result in liability of Company or any of its ERISA Affiliates in an individual amount in excess of $10,000,000 or in an aggregate amount in excess of $20,000,000 during the term of this Agreement; or there shall exist an amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities) as set forth in the most recent actuarial report prepared for such Pension Plans, which exceeds $40,000,000; or 7.11 Change in Control of Borrowers. Company shall fail to own all of the issued and outstanding capital stock of U.S. Borrower, or U.S. Borrower shall fail to own at least 90% of the issued and outstanding capital stock of Canadian Borrower (other than HCI Exchangeable Stock), or Company and U.S. Borrower shall fail to collectively own all of the issued and outstanding capital stock of Australian Borrower; or 7.12 Invalidity of Guaranty The Company Guaranty contained in subsection 8.1 or the U.S. Borrower Guaranty contained in subsection 8.2 for any reason, other than the satisfaction in full of all Obligations, ceases to be in full force and effect (other than in accordance with its terms) or is declared null and void, or any Borrower contests the validity or enforceability of any Loan Document or denies that it has any further liability, including without limitation with respect to future advances by Lenders, under any Loan Document to which it gives notice to such effect: THEN (i) upon the occurrence and during the continuance of any Event of Default described in the foregoing subsections 7.6 or 7.7 each of (w) the unpaid principal amount of and accrued interest on the Loans, (x) an amount equal to the maximum amount which may at any time be drawn under all Letters of Credit then outstanding (whether or not any beneficiary under any 100 Letter of Credit shall have presented, or shall be entitled at such time to present, the drafts or other documents required to draw under such Letter of Credit), (y) an amount equal to the Face Amount of all outstanding Bankers' Acceptances, and (z) all other Obligations shall automatically become immediately due and payable, without presentment, demand, protest or other requirements of any kind, all of which are hereby expressly waived by Company and each Borrower and the obligation of each Lender to make any Loan, the obligation of each Issuing Lender to issue any Letter of Credit hereunder and the obligation of each Canadian Lender to create or purchase Bankers' Acceptances hereunder shall thereupon terminate, and (ii) upon the occurrence and during the continuation of any other Event of Default, Administrative Agent shall, upon the written request of Requisite Lenders, by written notice to Company and each Borrower, declare all of the Loans to be, and an amount equal to the amounts described in clauses (w) through (z) above to be, and the same shall forthwith become, due and payable, together with accrued interest thereon, and the obligation of each Lender to make any Loan, the obligation of each Issuing Lender to issue any Letter of Credit hereunder and the obligation of each Canadian Lender to create or purchase Bankers' Acceptances hereunder shall thereupon terminate; provided that the foregoing shall not affect in any way the obligations of Lenders to purchase from each Issuing Lender participations in the unreimbursed amount of any drawings under any Letters of Credit as provided in subsection 2.7 or to purchase the participations provided for in subsection 2.1E or 2.7. So long as any Letter of Credit shall remain outstanding, any amounts described in clause (x) above with respect to such Letter of Credit, when received by the applicable Issuing Lender, shall be held by the applicable Issuing Lender pursuant to such documentation as the applicable Issuing Lender shall request, as cash collateral for the obligation of the applicable Borrower to reimburse the applicable Issuing Lender in the event of any drawing under such Letter of Credit, and so much of such funds shall at all times remain on deposit as cash collateral as aforesaid as shall equal the maximum amount available at any time for drawing under all Letters of Credit (the "Maximum Available Amount"); provided that, in the event of cancellation or expiration of any Letter of Credit or any reduction in the Maximum Available Amount, the applicable Issuing Lender shall apply the difference between the Maximum Available Amount immediately prior to such cancellation, expiration or reduction and the Maximum Available Amount immediately after such cancellation or reduction, first, to the payment in full of the outstanding Obligations, and second, to Company or the applicable Borrower or to such other Person who may be lawfully entitled to receive such funds or as a court of competent jurisdiction may direct. Any amounts described in clause (y) above, when received by Canadian Administrative Agent, shall be held by Canadian Administrative Agent in a collateral account over which Canadian Administrative Agent shall have sole dominion and control upon terms that are customary to cash collateral accounts maintained with Canadian Administrative Agent, as cash collateral for the obligation of Canadian Borrower to pay the amount of such Bankers' Acceptances at maturity, and at the maturity of each such Bankers' Acceptance, Canadian Administrative Agent shall apply such amounts held pursuant to the terms of the collateral account agreement to the payment thereof. Canadian Borrower hereby grants Canadian Administrative Agent a security interest in any such collateral account and all funds on deposit therein. 101 At any time that an Event of Default is continuing and the principal of any Gold Loan has been declared to be immediately due and payable, each U.S. Lender shall be entitled, for and on behalf of U.S. Borrower, to purchase in accordance with its normal procedures a number of Ounces of Gold equal to the number of Ounces of Gold then comprising such Gold Loan, and to apply the Gold so purchased to pay such Gold Loan. The all-in costs to any U.S. Lender of purchasing such Gold, provided that any costs incurred are reasonable in the circumstances, shall be deemed to be a U.S. Base Rate Loan to U.S. Borrower. A certificate of a U.S. Lender as to any such all-in costs shall be prima facie evidence of the costs to such U.S. Lender of making such purchase. Section 8. GUARANTIES OF COMPANY AND U.S. BORROWER OF OBLIGATIONS In order to induce Lenders to enter into this Agreement and to make the Loans to Borrowers hereunder and to issue Letters of Credit for the account of Borrowers hereunder and, in the case of Canadian Lender, create and purchase Bankers' Acceptances, each of Company and U.S. Borrower hereby agrees as follows: 8.1 Guaranty by Company A. Guaranty. As consideration for Lenders agreeing to enter into this Agreement and to extend the Overall Commitments hereunder, Company hereby unconditionally and irrevocably guarantees, as primary obligor and not merely as a surety, and jointly and severally with U.S. Borrower as it relates to the Obligations of Canadian Borrower and Australian Borrowers, the due and punctual payment when due (whether by required prepayment, declaration, demand or otherwise) (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a) or operation of any such stay under applicable Canadian and/or Australian law) of all Obligations of Borrowers (including, without limitation, interest which, but for the filing of a petition in bankruptcy with respect to U.S. Borrower, or a similar action with respect to Canadian Borrower or any Australian Borrower, would accrue on such Obligations). For purposes of this Section 8, the obligations of Company under this subsection 8.1 are referred to as this "Company Guaranty." B. Terms of Company Guaranty Company agrees that the Obligations of any Borrower may be extended or renewed, and the Loans repaid and reborrowed in whole or in part, without notice or further assent from it, and that it will remain bound upon this Company Guaranty notwithstanding any extension, renewal or other alteration of any such Obligation or repayment and reborrowing of the Loans. Company waives presentation of, demand of, payment from and protest of any Obligation of any Borrower and also waives notice of protest for nonpayment. The obligations of Company under this Company Guaranty shall not be affected by, and Company hereby waives its rights (to the extent permitted by law) in connection with: 102 (a) the failure of any Agent or any Lender to assert any claim or demand or to enforce any right or remedy against any Borrower or Company under the provisions of this Agreement or any other agreement or otherwise, (b) any extension or renewal of any provision thereof, (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement or any instrument executed pursuant hereto, (d) the release of any security held by any Agent or any Lender for the Obligations of any Borrower, (e) the failure of any Agent or any Lender to exercise any right or remedy against any other guarantor of the Obligations of any Borrower, (f) any Agent or any Lender taking and holding security or collateral for the payment of this Company Guaranty, any other guaranties of the Obligations or other liabilities of any Borrower and the Obligations guarantied hereby, and exchanging, enforcing, waiving and releasing any such security or collateral, (g) any Agent or any Lender applying any such security or collateral and directing the order or manner of sale thereof as such Agent or such Lender in its discretion may determine, (h) any Agent or any Lender settling, releasing, compromising, collecting or otherwise liquidating the Obligations and any security or collateral therefor in any manner determined by such Agent or such Lender, or (i) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this guaranty, including without limitation, the provisions of California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2846, 2849, 2850, 2899 and 3433. Without limiting the generality of the foregoing or any other provision of this Company Guaranty, Company hereby waives any rights, defenses and benefits which might otherwise be available to Company under California Civil Code Sections 2787 to 2855, inclusive, and any successor sections. Company acknowledges and agrees that all waivers of defenses arising from any impairment of Company's rights of subrogation, reimbursement, contribution and indemnification and waivers of any other rights, privileges, defenses or protections available to Company by reasons of Sections 2787 to 2855, inclusive, of the California Civil Code are intended by Company to be effective to the maximum extent permitted by Section 2856 of the California Civil Code and other applicable law. Company further agrees that this Company Guaranty constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be had by 103 any Lender, any Agent or any other Person to any security held for payment of the Obligations of any Borrower or to any balance of any deposit account or credit on the books of any Lender, any Agent or any other Person in favor of any Borrower or any other Person. The obligations of Company under this Company Guaranty shall not be subject to any reduction, limitation, impairment or termination for any reason, including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations, discharge of any Borrower from the Obligations in a bankruptcy or similar proceeding or otherwise. Without limiting the generality of the foregoing, the obligations of Company under this Company Guaranty shall not be discharged or impaired or otherwise affected by the failure of any Agent or any Lender to assert any claim or demand or to enforce any remedy under this Agreement, any Loan Document or any other agreement, by any waiver or modification of any provision thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations of any Borrower, or by any other act or thing or omission or delay to do any other act or thing that may or might in any manner or to any extent vary the risk of Company or would otherwise operate as a discharge of Company as a matter of law or equity other than indefeasible payment in full of all Obligations. Any Agent and any Lender may, at their election, foreclose on any security held by such Agent or such Lender by one or more judicial or nonjudicial sales, or exercise any other right or remedy any Agent or any Lender may have against any Borrower or any security without affecting or impairing in any way the liability of Company hereunder except to the extent the Obligations have been indefeasibly paid. Company waives any defense arising out of such election by any Agent or any Lender, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of Company against any Borrower or any security, so long as such Agent or such Lender act in a commercially reasonable manner. Company further agrees that this Company Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Obligation of any Borrower is rescinded or must otherwise be restored by any Agent or any Lender upon the bankruptcy or reorganization of any Borrower or otherwise. Company further agrees, in furtherance of the foregoing and not in limitation of any other right that any Agent or any Lender may have at law or in equity against Company by virtue hereof, upon the failure of any Borrower to pay any of its Obligations when and as the same shall become due (whether by required prepayment, declaration, demand or otherwise), Company will forthwith pay, or cause to be paid, in cash, to Administrative Agent an amount equal to the sum of the unpaid principal amount of such Obligations, accrued and unpaid interest on such Obligations and all other unpaid Obligations of such Borrower to any Agent or any Lender. Company hereby irrevocably agrees to waive, until the Obligations have been paid in full and the Commitments shall have terminated, any exercise of any right of subrogation, contribution, indemnity or otherwise against any Borrower that may arise out of or be caused by 104 this Company Guaranty, all rights and/or claims which may arise against any Borrower by reason of this Company Guaranty, any right to enforce any remedy that any Agent or any Lender now has or may hereafter have against any Borrower and any benefit of, and any right to participate in, any security now or hereafter held by any Agent or any Lender. Any Indebtedness of any of Company's Subsidiaries held by Company is hereby subordinated in right of payment to the Obligations on the terms of this paragraph. Upon the occurrence and during the continuation of an Event of Default, no distribution of assets in respect of any such Indebtedness (including any payment of principal, interest or fees or any repurchase, redemption or setoff of such Indebtedness against other Indebtedness owing to Company or payment received as a result of other Indebtedness being subordinated to such Indebtedness) may be made until indefeasible payment in full in cash of all Obligations. If, notwithstanding the preceding sentence, any such distribution of assets shall be collected or received by Company after the occurrence and during the continuation of an Event of Default, such distribution of assets shall be paid over to Administrative Agent for the benefit of Lenders to be held as collateral and then or thereafter credited and applied against the Obligations but without impairing or limiting in any manner the liability of Company under any other provision of this Section 8. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon any failure of any Borrower to pay its Obligations when due (whether by required prepayment, declaration, demand or otherwise) and consequent acceleration of the Obligations pursuant to Section 7, any Agent and any Lender, upon the consent of Administrative Agent and Requisite Lenders, is hereby authorized by Company at any time or from time to time, without notice to Company or to any other Person, any such notice being hereby expressly waived to the extent permitted by applicable law, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time owing by such Agent or such Lender to or for the credit or the account of Company against and on account of the obligations and liabilities of Company to such Agent or such Lender under this Company Guaranty, including, but not limited to, all such obligations and liabilities with respect to all claims of any nature or description arising out of or connected with this Agreement, this Company Guaranty or the Letters of Credit or Bankers' Acceptances or any of the other Loan Documents, irrespective of whether or not such Agent or such Lender or Administrative Agent, with respect to any Obligation owed under the Letters of Credit, Bankers' Acceptances or this Agreement, shall have made any demand hereunder. 8.2 Guaranty by U.S. Borrower A. Guaranty. As consideration for Lenders agreeing to enter into this Agreement and to extend the Overall Commitments hereunder, U.S. Borrower hereby unconditionally and irrevocably guarantees, as a primary obligor and not merely as a surety, and jointly and severally with Company as it relates to the Obligations of Canadian Borrower and Australian Borrowers, the due and punctual payment when due (whether by required prepayment, declaration, demand or otherwise) (including amounts that would become due but for the 105 operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a) or operation of any such stay under applicable Canadian and/or Australian law) of all Obligations of Canadian Borrower and Australian Borrowers (including, without limitation, interest which, but for the filing of a petition in bankruptcy or a similar action with respect to Canadian Borrower or any Australian Borrower, would accrue on such Obligations). For purposes of this Section 8, the obligations of U.S. Borrower under this subsection 8.2 are referred to as this "U.S. Borrower Guaranty." B. Terms of U.S. Borrower Guaranty U.S. Borrower agrees that the Obligations of Canadian Borrower and Australian Borrowers may be extended or renewed, and the Loans repaid and reborrowed in whole or in part, without notice or further assent from it, and that it will remain bound upon this U.S. Borrower Guaranty notwithstanding any extension, renewal or other alteration of any such Obligation or repayment and reborrowing of the Loans. U.S. Borrower waives presentation of, demand of, payment from and protest of any Obligation of Canadian Borrower or any Australian Borrower and also waives notice of protest for nonpayment. The obligations of U.S. Borrower under this U.S. Borrower Guaranty shall not be affected by, and U.S. Borrower hereby waives its rights (to the extent permitted by law) in connection with: (a) the failure of any Agent or any Lender to assert any claim or demand or to enforce any right or remedy against Canadian Borrower, any Australian Borrower or U.S. Borrower under the provisions of this Agreement or any other agreement or otherwise, (b) any extension or renewal of any provision thereof, (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Agreement or any instrument executed pursuant hereto, (d) the release of any security held by any Agent or any Lender for the Obligations of Canadian Borrower or any Australian Borrower, (e) the failure of any Agent or any Lender to exercise any right or remedy against any other guarantor of the Obligations of Canadian Borrower or any Australian Borrower, (f) any Agent or any Lender taking and holding security or collateral for the payment of this U.S. Borrower Guaranty, any other guaranties of the Obligations or other liabilities of Canadian Borrower or any Australian Borrower and the Obligations guarantied hereby, and exchanging, enforcing, waiving and releasing any such security or collateral, 106 (g) any Agent or any Lender applying any such security or collateral and directing the order or manner of sale thereof as such Agent or such Lender in its discretion may determine, (h) any Agent or any Lender settling, releasing, compromising, collecting or otherwise liquidating the Obligations of Canadian Borrower or any Australian Borrower and any security or collateral therefor in any manner determined by such Agent or such Lender, or (i) any defenses or benefits that may be derived from or afforded by law which limit the liability of or exonerate guarantors or sureties, or which may conflict with the terms of this guaranty, including without limitation, the provisions of California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2846, 2849, 2850, 2899 and 3433. Without limiting the generality of the foregoing or any other provision of this U.S. Borrower Guaranty, U.S. Borrower hereby waives any rights, defenses and benefits which might otherwise be available to U.S. Borrower under California Civil Code Sections 2787 to 2855, inclusive, and any successor sections. U.S. Borrower acknowledges and agrees that all waivers of defenses arising from any impairment of U.S. Borrower's rights of subrogation, reimbursement, contribution and indemnification and waivers of any other rights, privileges, defenses or protections available to U.S. Borrower by reasons of Sections 2787 to 2855, inclusive, of the California Civil Code are intended by U.S. Borrower to be effective to the maximum extent permitted by Section 2856 of the California Civil Code and other applicable law. U.S. Borrower further agrees that this U.S. Borrower Guaranty constitutes a guaranty of payment when due and not of collection and waives any right to require that any resort be had by any Lender, any Agent or any other Person to any security held for payment of the Obligations of Canadian Borrower or any Australian Borrower or to any balance of any deposit account or credit on the books of any Lender, any Agent or any other Person in favor of Canadian Borrower or any Australian Borrower or any other Person. The obligations of U.S. Borrower under this U.S. Borrower Guaranty shall not be subject to any reduction, limitation, impairment or termination for any reason, including, without limitation, any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Obligations, discharge of Canadian Borrower or any Australian Borrower from the Obligations in a bankruptcy or similar proceeding or otherwise. Without limiting the generality of the foregoing, the obligations of U.S. Borrower under this U.S. Borrower Guaranty shall not be discharged or impaired or otherwise affected by the failure of any Agent or any Lender to assert any claim or demand or to enforce any remedy under this Agreement, any Loan Document or any other agreement, by any waiver or modification of any provision thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations of Canadian Borrower or any Australian Borrower, or by any other act or thing or omission or delay to do any other act or thing that may or might in any manner or to any extent 107 vary the risk of U.S. Borrower or would otherwise operate as a discharge of U.S. Borrower as a matter of law or equity other than indefeasible payment in full of all Obligations. Any Agent and any Lender may, at their election, foreclose on any security held by such Agent or such Lender by one or more judicial or nonjudicial sales, or exercise any other right or remedy any Agent or any Lender may have against Canadian Borrower or any Australian Borrower or any security without affecting or impairing in any way the liability of U.S. Borrower hereunder except to the extent the Obligations of Canadian Borrower and Australian Borrowers have been indefeasibly paid. U.S. Borrower waives any defense arising out of such election by any Agent or any Lender, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of U.S. Borrower against Canadian Borrower or any Australian Borrower or any security, so long as any Agent or such Lender act in a commercially reasonable manner. U.S. Borrower further agrees that this U.S. Borrower Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Obligation of Canadian Borrower or any Australian Borrower is rescinded or must otherwise be restored by any Agent or any Lender upon the bankruptcy or reorganization of Canadian Borrower or any Australian Borrower or otherwise. U.S. Borrower further agrees, in furtherance of the foregoing and not in limitation of any other right that any Agent or any Lender may have at law or in equity against Company by virtue hereof, upon the failure of Canadian Borrower or any Australian Borrower to pay any of its Obligations when and as the same shall become due (whether by required prepayment, declaration, demand or otherwise), U.S. Borrower will forthwith pay, or cause to be paid, in cash, to Administrative Agent an amount equal to the sum of the unpaid principal amount of such Obligations, accrued and unpaid interest on such Obligations and all other unpaid Obligations of Canadian Borrower and Australian Borrowers to any Agent or any Lender. U.S. Borrower hereby irrevocably waives, until the Obligations have been paid in full and the Commitments shall have terminated, any right of subrogation, contribution, indemnity or otherwise against Canadian Borrower or any Australian Borrower that may arise out of or be caused by this U.S. Borrower Guaranty, all rights and/or claims which may arise against Canadian Borrower or any Australian Borrower by reason of this U.S. Borrower Guaranty, any right to enforce any remedy that any Agent or any Lender now has or may hereafter have against Canadian Borrower or any Australian Borrower and any benefit of, and any right to participate in, any security now or hereafter held by any Agent or any Lender. Any Indebtedness of Company or any of its Subsidiaries held by U.S. Borrower is hereby subordinated in right of payment to the Obligations on the terms of this paragraph. Upon the occurrence and during the continuation of an Event of Default, no distribution of assets in respect of any such Indebtedness (including any payment of principal, interest or fees or any repurchase, redemption or setoff of such Indebtedness against other Indebtedness owing to U.S. Borrower or payment received as a result of other Indebtedness being subordinated to such Indebtedness) may be made until indefeasible payment in full in cash of all Obligations. If, 108 notwithstanding the preceding sentence, any such distribution of assets shall be collected or received by U.S. Borrower after the occurrence and during the continuation of an Event of Default, such distribution of assets shall be paid over to Administrative Agent for the benefit of Lenders to be held as collateral and then or thereafter credited and applied against the Obligations but without impairing or limiting in any manner the liability of U.S. Borrower under any other provision of this Section 8. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon any failure of Canadian Borrower or any Australian Borrower to pay its Obligations when due (whether by required prepayment, declaration, demand or otherwise) and consequent acceleration of the Obligations pursuant to Section 7, any Agent and any Lender, upon the consent of Administrative Agent and Requisite Lenders, is hereby authorized by U.S. Borrower at any time or from time to time, without notice to U.S. Borrower or to any other Person, any such notice being hereby expressly waived to the extent permitted by applicable law, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time owing by such Agent or such Lender to or for the credit or the account of U.S. Borrower against and on account of the obligations and liabilities of U.S. Borrower to such Agent or such Lender under this U.S. Borrower Guaranty, including, but not limited to, all such obligations and liabilities with respect to all claims of any nature or description arising out of or connected with this Agreement, this U.S. Borrower Guaranty or the Letters of Credit or Bankers' Acceptances or any of the other Loan Documents, irrespective of whether or not such Agent or such Lender or Administrative Agent, with respect to any Obligation owed under the Letters of Credit, Bankers' Acceptances or this Agreement, shall have made any demand hereunder. Section 9. AGENTS 9.1 Appointment. Chase is hereby appointed Administrative Agent under this Agreement and under the other Loan Documents by each Lender, Chase Canada is hereby appointed Canadian Administrative Agent under this Agreement and under the other Loan Documents by each Lender, Chase Securities Australia Limited is hereby appointed Australian Administrative Agent under this Agreement and under the other Loan Documents by each Lender and Deutsche Bank is hereby appointed Documentation Agent under this Agreement and under the other Loan Documents by each Lender. Each Lender hereby authorizes each Agent to act as its agents in accordance with the terms of this Agreement and the other Loan Documents. Each Agent agrees to act upon the express conditions contained in this Agreement and the other Loan Documents, as applicable. Except as expressly set forth in this Section 9, the provisions of this Section 9 are solely for the benefit of Agents and Lenders, and neither Company nor any Borrower shall have any rights as a third party beneficiary of any of the provisions hereof, but Company and Borrowers shall have the rights expressly granted to them in subsection 9.6. In performing its functions and duties under this Agreement, each Agent shall act solely as an agent of Lenders and 109 does not assume and shall not be deemed to have assumed any obligation towards or relationship of agency or trust with or for Company or any Borrower or any of Company's Subsidiaries. 9.2 Powers; General Immunity. A. Duties Specified. Each Lender irrevocably authorizes each Agent to take such action on such Lender's behalf and to exercise such powers under this Agreement and under the other Loan Documents as are specifically delegated to such Agent by the terms hereof and thereof, together with such powers as are reasonably incidental thereto. Each Agent shall have only those duties and responsibilities that are expressly specified in this Agreement and the other Loan Documents and each such Agent may perform such duties by or through its agents or employees. No Agent shall have, by reason of this Agreement or any of the other Loan Documents, a fiduciary relationship in respect of any Lender; and nothing in this Agreement or any of the other Loan Documents, express or implied, is intended to or shall be so construed as to impose upon such Agent any obligations in respect of this Agreement or any of the other Loan Documents except as expressly set forth herein or therein. B. No Responsibility for Certain Matters. No Agent shall be responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Agreement or any other Loan Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made available by any Agent to Lenders or by or on behalf of Company or Borrowers to such Agent or any Lender in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of Company, any Borrower or any other Person liable for the payment of any Obligations, nor shall any Agent be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or Bankers' Acceptances or the use of Letters of Credit or as to the existence or possible existence of any Event of Default or Potential Event of Default. Anything contained in this Agreement to the contrary notwithstanding, no Agent shall have any liability arising from confirmations of the amount of outstanding Loans or the Canadian Letter of Credit Usage, the U.S. Letter of Credit Usage, the Australian Letter of Credit Usage, the BA Usage or the component amounts thereof. C. Exculpatory Provisions. No Agent and none of its officers, directors, employees or agents shall be liable to Lenders for any action taken or omitted by such Agent hereunder or in connection herewith except to the extent caused by its or their gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction. If any Agent shall request instructions from Lenders with respect to any act or action (including the failure to take an action) in connection with this Agreement or any of the other Loan Documents, such Agent shall be entitled to refrain from such act or taking such action unless and until such Agent shall have received instructions from Requisite Lenders or all Lenders, as the case may be. Without prejudice to the generality of the foregoing, (i) each Agent shall be entitled to rely, and shall be fully protected in relying, upon any communication, instrument or document believed to be 110 genuine and correct and to have been signed or sent by the proper person or persons, and shall be entitled to rely and shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for Company and Borrower and Company's Subsidiaries), accountants, experts and other professional advisors selected by any of them; and (ii) no Lender shall have any right of action whatsoever against any Agent as a result of such Agent acting or (where so instructed) refraining from acting under this Agreement or any of the other Loan Documents in accordance with the instructions of Requisite Lenders or all Lenders, as the case may be. Each Agent shall be entitled to refrain from exercising any power, discretion or authority vested in it under this Agreement or any of the other Loan Documents unless and until it has obtained the instructions of Requisite Lenders or all Lenders, as the case may be. D. Agents Entitled to Act as Lenders. The agency hereby created shall in no way impair or affect any of the rights and powers of, or impose any duties or obligations upon, any Agent in its individual capacity as a Lender under this Agreement. With respect to its participation in the Loans, Letters of Credit and Bankers' Acceptances, each Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not performing the duties and functions delegated to it hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless the context clearly otherwise indicates, include each Agent in its individual capacity. Each Agent and each of its Affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust, financial advisory or other business with Company, any Borrower or any of Company's Affiliates as if it were not performing the duties specified herein, and may accept fees and other consideration from Company and Borrowers for services in connection with this Agreement and otherwise without having to account for the same to Lenders. 9.3 Representations and Warranties; No Responsibility For Appraisal of Creditworthiness. Each Lender represents and warrants that it has made its own independent investigation of the financial condition and affairs of Company, each Borrower and Company's Subsidiaries in connection with the making of the Loans hereunder and the issuance of Letters of Credit hereunder and such Lender's purchasing of participations in such Letters of Credit and, in the case of each Canadian Lender, the creation and purchase of Bankers' Acceptances, and that it has made and shall continue to make its own appraisal of the creditworthiness of Company, each Borrower and Company's Subsidiaries. No Agent shall have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Lenders or to provide any Lender with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or the issuance of the Letters of Credit or the creation and purchase of Bankers' Acceptances or at any time or times thereafter, and no Agent shall have any responsibility with respect to the accuracy of or the completeness of any information provided to Lenders. 111 9.4 Right to Indemnity. The Lenders of each Lending Unit in proportion to their Lending Unit's Pro Rata Share, severally with the Lenders of each other Lending Unit agree to indemnify each Agent (and their respective directors, officers, employees and agents), to the extent that such Agent (or any of their respective directors, officers, employees and agents) shall not have been reimbursed by Company or Borrowers, for and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses (including, without limitation, counsel fees and disbursements) or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against such Agent (or their respective directors, officers, employees and agents) in performing its duties hereunder or under this Agreement or the other Loan Documents or otherwise in its capacity as such Agent in any way relating to or arising out of this Agreement or the other Loan Documents; provided that no Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from such Agent's (or any such director's, officer's, employee's or agent's) gross negligence or willful misconduct, as finally determined by a court of competent jurisdiction. If any indemnity furnished to any Agent for any purpose shall, in the opinion of such Agent, be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished but shall not include any losses suffered by an Agent under subsection 2.1C(iv) or otherwise as a result of another Lender's default hereunder. 9.5 Registered Persons Treated as Owners. Each Agent may deem and treat the Persons listed as Lenders in the Register as the owners of the corresponding Loans or participations in Letters of Credit or Bankers' Acceptances listed therein for all purposes hereof unless and until an Assignment and Acceptance effecting the assignment or transfer thereof shall have been accepted by Administrative Agent and recorded in the Register as provided in subsection 10.1B(ii) of this Agreement. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, transferee or assignee of the corresponding Loan or participation in Letters of Credit or Bankers' Acceptance. 9.6 Successor Agents. Any Agent may resign at any time by giving 30 days' prior written notice thereof to Lenders, Company and Borrowers, and such Agent may be removed at any time with or without cause by an instrument or concurrent instruments in writing delivered to Company, Borrowers, such Agent and Administrative Agent as the case may be, and signed by Requisite Lenders. Upon any such notice of resignation or any such removal, Requisite Lenders shall have the right, upon five Business Days' notice to Company and Borrowers, to appoint a successor Agent; provided that if such proposed successor Agent is not a Lender, Company and Borrowers shall have the right to approve such appointment (which approval may not be unreasonably withheld or delayed). Upon the acceptance of any appointment as an Agent hereunder by a 112 successor Agent, that successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring or removed Agent and the retiring or removed Agent shall be discharged from its duties and obligations under this Agreement. After any retiring or removed Agent's resignation or removal hereunder as an Agent, the provisions of this subsection 9.6 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was such an Agent under this Agreement. Section 10. MISCELLANEOUS 10.1 Assignments of and Participations in Commitments, Loans and Letters of Credit. A. General. The Lenders in each Lending Unit shall have the right at any time to (i) sell, assign, transfer or negotiate to any Eligible Assignee and its Affiliates which, subject to the provisions of subsection 2.1(A)(iv) and subsection 2.1E, has (a) a Canadian Lending Office for borrowings and payments relating to Canadian Loans and Bankers' Acceptances, if such Lending Unit has a Canadian Commitment, (b) an Australian Lending Office for borrowings and payments relating to Australian Loans, if such Lending Unit has an Australian Commitment, and (c) a U.S. Lending Office for borrowings and payments relating to U.S. Loans, and may have a Canadian Commitment or Australian Commitment even if such Lending Unit does not have such Commitments or (ii) sell participations to any Person in, all or any part of any Loan or Loans made by it or its Overall Commitments or its Letters of Credit or participations therein, or any other interest herein or in any other Obligations owed to it; provided that no such assignment or participation shall, without the consent of Company and Borrowers, require Company or any Borrower to file a registration statement with the Securities and Exchange Commission or apply to qualify such assignment or participation under the securities laws of any jurisdiction; and provided, further that for greater certainty, Bankers' Acceptances purchased by a Canadian Lender may be held or sold by it in its absolute discretion as provided in subsection 2.8E. Except as otherwise provided in this subsection 10.1, no Lender shall, as between any Borrower and such Lender, be relieved of any of its obligations hereunder as a result of any sale, assignment, transfer or negotiation of, or any granting of participations in, all or any part of the Loans, the Overall Commitments, Letters of Credit or participations therein or Bankers' Acceptances or the other Obligations owed to such Lender. B. Assignments. (i) Amounts and Terms of Assignments. Each Loan, Commitment or other Obligation to be assigned pursuant to subsection 10.1A may (a) be assigned in any amount (of a constant and not a varying percentage) to another Lender, or to an Affiliate of the assigning Lender or another Lender, with the giving of notice to Company, Borrowers and Administrative Agent or (b) be assigned in an amount (of a constant and not a varying percentage) of not less than $5,000,000 (or such lesser amount as shall constitute the aggregate amount of all Loans, Overall Commitments, Letters of Credit or participations therein, and other Obligations of the assigning Lender) to any other Eligible Assignee with the giving of notice to Company, 113 Borrowers and Agents and in the case of assignment to any other Eligible Assignee, with the consent of Company, Borrowers and Administrative Agent for an assignment made by a Lender other than Administrative Agent, and with the consent of Company and Borrowers for an assignment made by Administrative Agent, which consent of Company, Borrowers and Administrative Agent shall not be unreasonably withheld, and which consent of Company and Borrowers shall not be required upon the occurrence and during the continuance of an Event of Default; provided that all such assignments by any Lender shall be permitted only if the Canadian Lender, if any, Australian Lender, if any, and U.S. Lender of each Lending Unit simultaneously assign the same proportionate shares of their outstanding Loans, participations in Letters of Credit, and Overall Commitments to assignees that will respectively constitute the Canadian Lender, Australian Lender and the U.S. Lender of a Lending Unit for the purposes of this Agreement. To the extent of any such assignment in accordance with either clause (a) or (b) above, the assigning Lender shall be relieved of its obligations with respect to its Loans, Overall Commitments, Letters of Credit or participations therein or other Obligations or the portion thereof so assigned provided that the assigning Lender shall continue to have rights of indemnity under subsections 10.2, 10.3 and 10.7. The parties to each such assignment shall execute and deliver to Administrative Agent, for its acceptance and recording in the Register, an Assignment and Acceptance, together with a processing and recordation fee of $3,500, and such certificates, documents or other evidence, if any, with respect to United States federal, Canadian and Australian income tax withholding matters as the assignee under such Assignment and Acceptance may be required to deliver to Administrative Agent pursuant to subsection 10.7B(iii). Upon such execution, delivery and acceptance, from and after the effective date specified in such Assignment and Acceptance, (y) the assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender hereunder, and (z) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto). The Overall Commitments hereunder shall be modified to reflect the Commitment of such assignee and any remaining Commitment of such assigning Lender and, if any such assignment occurs after the issuance of a Note or a Grid Gold Acknowledgement to the assigning Lender hereunder, if requested pursuant to subsection 2.1E, new Notes and Grid Gold Acknowledgements shall, upon surrender of the assigning Lender's Notes or Grid Gold Acknowledgements, be issued to the assignee and to the assigning Lender, substantially in the forms of Exhibit IV-A, Exhibit IV-B, Exhibit IV-C, Exhibit IV-D or Exhibit V annexed hereto, as the case may be, with appropriate insertions, to reflect the new Overall Commitments of the assignee and the assigning Lender. 114 (ii) Acceptance by Administrative Agent; Recordation in Register. Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an assignee representing that it is an Eligible Assignee meeting the requirements of subsection 10.1A, together with the processing and recordation fee referred to in subsection 10.1B(i) and any certificates, documents or other evidence with respect to United States federal, Canadian and Australian income tax withholding matters that such assignee may be required to deliver to Administrative Agent pursuant to subsection 10.7B(iii), Administrative Agent shall, if such Assignment and Acceptance has been completed and is in substantially the form of Exhibit X-A, Exhibit X-B, or Exhibit X-C annexed hereto, as applicable and if Administrative Agent, Company and Borrowers have consented to the assignment evidenced thereby (in each case to the extent such consent is required pursuant to subsection 10.1B(i)), (a) accept such Assignment and Acceptance by executing a counterpart thereof as provided therein (which acceptance shall evidence any required consent of Administrative Agent to such assignment), (b) record the information contained therein in the Register, and (c) give prompt notice thereof to Company, Borrowers and the Applicable Administrative Agent. Administrative Agent shall maintain a copy of each Assignment and Acceptance delivered to and accepted by it as provided in this subsection 10.1B(ii). C. Participations. The holder of any participation, other than an Affiliate of the Lender granting such participation, shall not be entitled to require such Lender to take or omit to take any action hereunder except action directly affecting (i) the extension of the regularly scheduled maturity of any portion of the principal amount of or interest on any Loan or any commitment fees allocated to such participation, (ii) the release of Company or U.S. Borrower from its obligations under Section 8 or (iii) a reduction of the principal amount of or the rate of interest payable on any Loan, a reduction in the Face Amount, amount of discount or fee on any Bankers' Acceptance, or payments due in repayment of draws under Letters of Credit allocated to such participation, and all amounts payable by any Borrower or Company hereunder shall be determined as if such Lender had not sold such participation. Company and each Borrower hereby acknowledges and agrees that, only for purposes of subsections 2.6D, 10.5 and 10.7, any participation will give rise to a direct obligation of Borrowers and Company to the participant and the participant shall be considered to be a "Lender"; provided that no participant shall be entitled to receive any greater amount pursuant to subsection 2.6D or 10.7 than the transferor Lender would have been entitled to receive in respect of the amount of the participation effected by such transferor Lender to such participant had no such participation occurred. Company, Borrowers, Agents and the other Lenders shall continue to deal solely with such Lender in connection with such Lender's rights and obligations under the Loan Documents. D. Information. Each Lender may furnish any information concerning Company and its Subsidiaries in the possession of that Lender from time to time to assignees and participants (including prospective assignees and participants), subject to subsection 10.21. E. Federal Reserve Bank. Nothing in this subsection 10.1 shall prevent or prohibit any Lender from pledging its rights (but not its obligations to make Loans and to issue or 115 participate in Letters of Credit or to create and purchase Bankers' Acceptances) under this Agreement and/or its Loans, participations in Letters of Credit, Bankers' Acceptances and/or Notes hereunder to a Federal Reserve Bank. F. The Register. (i) Administrative Agent and the Applicable Administrative Agent shall maintain, at its Lending Office, a register for the recordation of the names and addresses of Lenders and the Commitment and Loans of each Lender from time to time (the "Register"). Borrowers, Agents and Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Company, any Borrower, any Agent or any Lender at any reasonable time and from time to time upon reasonable prior notice. (ii) Administrative Agent and the Applicable Administrative Agent shall record in the Register the Commitment and the Loans from time to time of each Lender and each repayment or prepayment in respect of the principal amount of the Loans of each Lender. Any such recordation shall be conclusive and binding on Company and each Lender, absent manifest error; provided that failure to make any such recordation, or any error in such recordation, shall not affect any Borrower's Obligations in respect of the applicable Loans. (iii) Each Lender may record on its internal records (including, without limitation, any promissory note described in subsection 2.1E) the amount of each Loan made by it and each payment in respect thereof; provided that in the event of any inconsistency between the Register and any Lender's records, the recordations in the Register shall govern, absent manifest error. At the request of Company, Administrative Agent will provide to Company not more than once a month, a copy of the Register. G. Stamp Taxes and Other Duties, Expenses. Notwithstanding any other provisions of this Agreement, Company and Borrowers shall have no liability to pay stamp taxes, duties and other costs, taxes, fees, charges or other expenses which may be assessed or incurred at the time of, and as a result of, any assignment or participation made pursuant to this subsection 10.1. 10.2 Expenses. Whether or not the transactions contemplated hereby shall be consummated, Company and Borrowers jointly and severally agree to pay promptly (i) all the actual and reasonable costs and expenses of preparation of the Loan Documents; (ii) all the costs of furnishing all opinions by counsel for Company or any Borrower (including, without limitation, any opinions reasonably requested by Lenders as to any legal matters arising hereunder) and of 116 Company's or any Borrower's performance of and compliance with all agreements and conditions on its part to be performed or complied with under this Agreement and the other Loan Documents including, without limitation, with respect to confirming compliance with environmental and insurance requirements; (iii) the reasonable fees, expenses and disbursements of counsel to any Agent or Arranger in connection with the negotiation, preparation, execution and administration of the Loan Documents, the Letters of Credit, the Bankers' Acceptances and the Loans and any consents, amendments, waivers or other modifications hereto or thereto and any other documents or matters requested by Company or any Borrower; (iv) all other actual and reasonable costs and expenses incurred by any Agent or Arranger in connection with the negotiation, preparation and execution of the Loan Documents and the transactions contemplated hereby and thereby; and (v) after the occurrence and during the continuation of an Event of Default, all costs and expenses, including reasonable attorneys' fees, excluding in-house counsel, and costs of settlement, incurred by any Agent, Arranger and Lenders in enforcing any Obligations of or in collecting any payments due from Company or any Borrower hereunder or under the other Loan Documents by reason of such Event of Default or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings. 10.3 Indemnity. In addition to the payment of expenses pursuant to subsection 10.2, whether or not the transactions contemplated hereby shall be consummated, Company and Borrowers jointly and severally agree to defend, indemnify, pay and hold harmless each Agent, Arranger and Lenders, and the officers, directors, employees, counsel, agents and affiliates of such Agent, Arranger and Lenders (collectively called the "Indemnitees") from and against any and all other liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel for such Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto), whether based on any federal, state or foreign laws, statutes, rules or regulations (including, without limitation, securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby (including, without limitation, Lenders' agreement to make the Loans or create and purchase Bankers' Acceptances hereunder or the use or intended use of the proceeds of any of the Loans or Bankers' Acceptances or the issuance of Letters of Credit hereunder and Lenders' agreement to purchase participations therein as provided for herein, or the use or intended use of the Letters of Credit) or the statements contained in any commitment letter delivered by any Lender to Company or any Borrower with respect thereto (collectively called the "Indemnified Liabilities"); provided that neither Company nor any Borrower shall have any obligation to any Indemnitee hereunder with respect to any Indemnified Liabilities to the extent such Indemnified Liabilities arise from the gross negligence or willful misconduct of that Indemnitee as finally determined by a court of competent jurisdiction; provided further, that, subject to the hold 117 harmless provisions of this subsection 10.3, Company shall be subrogated to all rights that any such Indemnitee may have in respect of any person or persons whose acts or failure to act resulted in the indemnified liability and the Indemnitee shall, upon receipt of payment for all Indemnified Liabilities payable to such Indemnitee, assign to Company the rights with respect to such Indemnified Liabilities such Indemnitee may have against any person or persons whose acts or failure to act resulted in the indemnified liability; and provided still further that any exercise of rights of subrogation shall be withheld until payment of all of the related Indemnified Liabilities. To the extent that the undertaking to defend, indemnify, pay and hold harmless set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, Company and each Borrower shall contribute the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any of them, subject however to the limitations contained in the last clause of the preceding sentence. 10.4 Set Off. In addition to any rights now or hereafter granted under applicable law and not by way of limitation of any such rights, upon the occurrence of any Event of Default each Agent and each Lender is hereby authorized by Company and each Borrower at any time or from time to time, without notice to Company or such Borrower or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and to apply any and all deposits (general or special, including, but not limited to, Indebtedness evidenced by certificates of deposit, whether matured or unmatured, but not including trust accounts) and any other Indebtedness at any time held or owing by such Agent or such Lender to or for the credit or the account of Company or such Borrower, as the case may be, against and on account of the obligations and liabilities then due and payable of Company or such Borrower, as the case may be, to such Agent or such Lender under this Agreement, and any Notes, any Grid Gold Acknowledgements, any Letters of Credit and participations therein, and any Bankers' Acceptances, including, but not limited to, all claims of any nature or description arising out of or connected with this Agreement, the Notes, the Grid Gold Acknowledgements, the Letters of Credit and participations therein, any Bankers' Acceptances or any other Loan Document, irrespective of whether or not such Agent or such Lender shall have made any demand hereunder. 10.5 Ratable Sharing. Subject to the provisions of subsection 2.1E, Lenders hereby agree among themselves that if any of them shall, whether by voluntary payment, by realization upon security, through the exercise of any right of set-off or banker's lien, by counterclaim or cross action or by the enforcement of any right under the Loan Documents or under Letters of Credit or Bankers' Acceptances or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of Obligations of any Borrower then due and owing to that Lender (collectively, the "Aggregate Amounts Due" to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due of such Borrower to such other Lender, then the Lender receiving such proportionately greater payment shall (i) notify Administrative Agent and each 118 other Lender of the receipt of such payment and (ii) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due of such Borrower to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due of such Borrower to them; provided that if all or part of such proportionately greater payment received by such purchasing Lender is thereafter recovered from such Lender upon the bankruptcy or reorganization of Company, any Borrower or otherwise, those purchases shall be rescinded and the purchase prices paid for such participations shall be returned to such purchasing Lender ratably to the extent of such recovery, but without interest. Company and each Borrower expressly consents to the foregoing arrangement and agrees that any holder of a participation so purchased may exercise any and all rights of banker's lien, set-off or counterclaim with respect to any and all monies owing by Company or such Borrower to that holder with respect thereto as fully as if that holder were owed the amount of the participation held by that holder. 10.6 Amendments and Waivers. No amendment, modification, termination or waiver of any provision of this Agreement or of the Notes or consent to any departure by Company or any Borrower therefrom, shall in any event be effective without the written concurrence of Requisite Lenders; provided that any amendment, modification, termination or waiver of or with respect to: increases in the amount of the Overall Commitments or any Lending Unit's Commitments or decreases in the principal amount of the Loans or, interest accrued thereon; each Canadian Lender's Pro Rata Share, Australian Lender's Pro Rata Share, U.S. Lender's Pro Rata Share, or each Lender's Pro Rata Share; the definitions of "Requisite Lenders," "Bankers' Acceptances Purchase Price" (to the extent such change in definition results in an increase of such purchase price) and "Commitment Termination Date"; any provision expressly requiring the approval or concurrence of all Lenders; the scheduled final maturity dates of the Loans or the maturity dates of any Bankers' Acceptances; the dates on which interest or any fees are payable; decreases in the interest rates borne by the Loans; decreases in the amount or type of any fee on any Bankers' Acceptances; decreases of any amounts payable in respect of the Letters of Credit pursuant to subsections 2.7E(i) and (ii) or in the amount of any fees payable to all Lenders hereunder; the maximum duration of Interest Periods, the provisions of Section 8 or any release of Company or U.S. Borrower from its guaranty obligations thereunder; and the provisions contained in subsection 7.1 and this subsection 10.6 shall be effective only if evidenced by a writing signed by or on behalf of all Lenders. In addition, (i) any amendment, modification, termination or waiver of any of the provisions contained in Section 3 shall be effective only if evidenced by a writing signed by or on behalf of Administrative Agent and Requisite Lenders, (ii) no amendment, modification, termination or waiver of any provision of any Note, Bankers' Acceptance or Grid Gold Acknowledgement shall be effective without the written concurrence of the holder of that Note, Bankers' Acceptance or Grid Gold Acknowledgement, and (iii) no amendment, modification, termination or waiver of any provision of Section 9 or of any other provision of this Agreement expressly requiring the approval or concurrence of any Agent shall be effective without the written concurrence of such Agent. Administrative Agent may, but shall have no obligation to, with the concurrence of any Lender, execute amendments, modifications, waivers or consents on 119 behalf of that Lender. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which it was given. No notice to or demand on Company or any Borrower in any case shall entitle Company or any Borrower to any other or further notice or demand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordance with this subsection 10.6 shall be binding upon each Lender at the time outstanding, each future Lender and, if signed by Company or any Borrower, on Company and such Borrower, as the case may be. 10.7 Increased Costs; Taxes; Capital Adequacy. A. Compensation for Increased Costs and Taxes. If any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority in each case that is adopted after the Effective Date or compliance by such Lender with any guideline, request or directive issued or made after the Effective Date by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law): (i) subjects such Lender (or its Lending Office) to any additional Tax (other than any Excluded Taxes) with respect to this Agreement or any of the Loans, Letters of Credit (or participations therein), any risk participations purchased or sold pursuant to subsection 2.1E or Bankers' Acceptances or any of its obligations hereunder, or changes the basis of taxation of payments to such Lender (or its Lending Office) of any Obligation (except for changes in Excluded Taxes); (ii) imposes, modifies or holds applicable any reserve (including without limitation any marginal, emergency, supplemental, special or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Adjusted Eurodollar Rate); or (iii) imposes any other condition on or affecting such Lender (or its applicable Lending Office) or its obligations hereunder or the London interbank market, precious metals market, bankers' acceptances market or bills of exchange market; and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining Loans, Letters of Credit (or participations therein) or Bankers' Acceptances hereunder or to reduce any amount received or receivable by such Lender (or its Lending Office) with respect thereto; then, in any such case, Borrowers and Company shall be jointly and severally obligated to promptly pay to such Lender, upon written demand and receipt 120 of the written notice referred to below, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as may be necessary to compensate such Lender on an after-tax basis for any such increased cost or reduction in amounts received or receivable hereunder. Such Lender shall deliver to Company and Borrowers a written notice, setting forth in reasonable detail the basis for calculating the additional amounts owed to such Lender under this subsection 10.7A, which statement shall be conclusive and binding upon all parties hereto absent manifest error. Notwithstanding anything contained in this subsection 10.7A or subsection 10.7B, if any Lender is unable to make any Loans in the applicable currency or in Gold and such inability is not due to circumstances described in subsection 2.6A or 2.6B or any other similar circumstances, then any withholding taxes or any other costs directly resulting from such inability shall be for the account of such Lender. B. Withholding of Taxes. (i) Payments to Be Free and Clear. All sums payable by Borrowers and Company under this Agreement and the other Loan Documents to such Lender shall be paid free and clear of and without any deduction or withholding on account of any Covered Tax imposed, levied, collected, withheld or assessed by or within the United States of America, Australia or Canada or any political subdivision in or of the United States of America, Australia or Canada or any other jurisdiction from which a payment is made by or on behalf of Company or any Borrower or by any federation or organization of which the United States of America, Australia or Canada or any such jurisdiction is a member at the time of payment. (ii) Withholding in respect of Payments. If Company, any Borrower or any other Person is required by law to make any deduction or withholding on account of any Covered Tax from any sum paid or payable by Company or such Borrower to any Agent, Arranger or any Lender under any of the Loan Documents: (a) Company and Borrowers shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Company or any Borrower becomes aware of it; (b) Company or such Borrower, as the case may be, shall pay any such Covered Tax before the date on which penalties attach thereto, such payment to be made (if the liability to pay is imposed on Company or such Borrower) for its own account or (if that liability is imposed on such Agent, Arranger or such Lender, as the case may be) on behalf of and in the name of such Agent, Arranger or such Lender; (c) the sum payable by Company or such Borrower in respect of which the relevant deduction, withholding or payment is required shall be increased to the extent necessary to ensure that, after the making of that deduction, withholding or 121 payment, such Agent, Arranger or such Lender, as the case may be, receives on the due date and retains (free from any liability in respect of any such deduction, withholding or payment) a net sum equal to what it would have received and so retained had no such deduction, withholding or payment in respect of Covered Taxes been required or made; and (d) within 30 days after paying any sum from which it is required by law to make any deduction or withholding, and within 30 days after the due date of payment of any Tax which it is required by clause (b) above to pay, Company and Borrowers shall deliver to Administrative Agent evidence reasonably satisfactory to the other affected parties of such deduction, withholding or payment and of the remittance thereof to the relevant taxing or other authority; (iii) U.S. Tax Certificates. Each Lender that is organized under the laws of any jurisdiction other than the United States or any state or other political subdivision thereof shall deliver to Administrative Agent for transmission to U.S. Borrower, on or prior to the Effective Date (in the case of each Lender listed on the signature pages hereof) or on the date of the Assignment and Acceptance pursuant to which it becomes a Lender (in the case of each other Lender), and at such other times as may be necessary in the determination of Company or any Borrower or Administrative Agent (each in the reasonable exercise of its discretion), such certificates, documents or other evidence, properly and accurately completed and duly executed by such Lender (including, without limitation, Internal Revenue Service Form 1001 or Form 4224 or any other certificate or statement of exemption required by Treasury Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any successor thereto) to establish that such Lender is not subject to deduction or withholding of United States federal income tax under Section 1441 or 1442 of the Internal Revenue Code or otherwise (or under any comparable provisions of any successor statute) and each Lender shall deliver to Administrative Agent for transmission to the relevant Borrower or Borrowers any such additional certificates, documents or other evidence as may at such time be required by applicable United States, Australian or Canadian federal or state or provincial law if required to establish that such Lender is not subject to deduction or withholding under United States, Australian or Canadian tax laws with respect to any payments to such Lender of principal, interest, fees or other amounts payable under any of the Loan Documents. Neither Company nor any Borrower shall be required to pay any additional amount to any such Lender under clause (c) of subsection 10.7B(ii) if such Lender shall have failed to satisfy the requirements of the immediately preceding sentence; provided that if such Lender shall have satisfied such requirements on or prior to the Effective Date (in the case of each Lender listed on the signature pages hereof) or on the date of the Assignment and Acceptance pursuant to which it became a Lender (in the case of each other Lender), nothing in this subsection 10.7B(iii) shall relieve Company or any Borrower of any obligation to pay any additional amounts pursuant to clause (c) of subsection 10.7B(ii) in the event that, as a result of any change in applicable law after the Effective Date or the date of the applicable Assignment and Acceptance, as the case may be, such Lender is no longer properly entitled to deliver certificates, documents or other evidence at a subsequent date establishing the fact that such 122 Lender is not subject to withholding as described in the immediately preceding sentence. C. Capital Adequacy Adjustment. If any Lender shall have determined in good faith that the adoption, effectiveness, phase-in or applicability (excluding any adoption, effectiveness, phase-in or applicability published as of the Effective Date and currently scheduled to take effect) after the Effective Date of any law, rule or regulation (or any provision thereof) regarding capital adequacy, or any change therein or in the interpretation or administration thereof after the Effective Date by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its applicable lending office) with any guideline, request or directive regarding capital adequacy (whether or not having the force of law) of any such governmental authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender's Loans or Commitment or Letters of Credit or participations therein or Bankers' Acceptances or other obligations hereunder to a level below that which such Lender or such controlling corporation could have achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within ten Business Days after written demand by such Lender (with a copy of such demand to Administrative Agent), Company and Borrowers shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation for such reduction. 10.8 Lenders' Obligation to Mitigate; Replacement of Lender. Each Lender agrees that, as promptly as practicable after the officer of such Lender responsible for administering the Loans under this Agreement becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender as provided in subsection 2.6C or that would entitle such Lender to receive payments under subsection 10.7A or 10.7C, it will, to the extent not inconsistent with such Lender's internal policies, use reasonable efforts (i) to make, fund or maintain the Commitment of such Lender or the affected Loans or Bankers' Acceptances of such Lender through another lending office of such Lender, or (ii) to take such other measures as such Lender may deem reasonable, if as a result thereof the circumstances which would cause such Lender to be an Affected Lender as provided in subsection 2.6C would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender pursuant to subsection 10.7A or 10.7C would be materially reduced and if, as determined by such Lender in its sole discretion, the making, funding or maintaining of such Commitment or Loans or Bankers' Acceptances through such other lending office or in accordance with such other measures, as the case may be, would not otherwise adversely affect such Commitment or Loans or Bankers' Acceptances or the interests of such Lender; provided that such Lender will not be obligated to utilize such other lending office pursuant to this subsection 10.8 unless Borrowers agree to pay all reasonable expenses incurred by such Lender in utilizing such other lending office. A certificate as to the amount of any such expenses payable by Borrowers pursuant to this subsection 10.8 (setting forth in reasonable detail 123 the basis for requesting such amount) submitted by such Lender to Borrowers shall be conclusive absent manifest or demonstrable error. If any Lender becomes entitled to receive payments under subsection 10.7A or 10.7C, Borrowers have the right at any time to treat such Lender as an Affected Lender and to substitute one or more Eligible Assignees for such Lender as provided in subsection 2.6C. 10.9 Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or condition is not permitted by any of such covenants, the fact that it would be permitted by an exception to, or would otherwise be within the limitations of, another covenant shall not avoid the occurrence of an Event of Default or Potential Event of Default if such action is taken or condition exists. 10.10 Notices. Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States, Australian or Canadian mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of telecopy or telex if delivered or received on a Business Day or on the first Business Day after delivery or receipt if delivered or received on a day that is not a Business Day. For the purposes hereof, the address of each party hereto shall be as set forth under such party's name on the signature pages hereof or (i) as to Company, any Borrower, any Agent and Arranger, such other address as shall be designated by such Person in a written notice delivered to the other parties hereto and (ii) as to each other party, such other address as shall be designated by such party in a written notice delivered to Administrative Agent. 10.11 Survival of Representations, Warranties and Agreements. A. All representations, warranties and agreements made herein, shall survive the execution and delivery of this Agreement, the making of the Loans hereunder, the issuance of the Letters of Credit and the creation and purchase of Bankers' Acceptances. B. Notwithstanding anything in this Agreement or implied by law to the contrary, the agreements of Company set forth in subsections 2.6D, 10.2, 10.3, 10.4, 10.7, 10.13 and 10.24 and the agreements of Lenders set forth in subsections 9.2C, 9.4, 10.4, 10.5, 10.7B(iii), and 10.24 shall survive, but this Agreement shall otherwise terminate, upon the termination of the Overall Commitments, payment of all Obligations (other than contingent amounts pursuant to subsections 2.1E, 2.6D, 10.2, 10.3, 10.7 and 10.24 not at such time claimed or due and payable), the cancellation or expiration of the Letters of Credit, the cancellation or maturity of all Bankers' Acceptances and the reimbursement of any amounts drawn thereunder; provided that this Agreement shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by any 124 Agent or any Lender upon the bankruptcy or reorganization of Company or any Borrower or otherwise. 10.12 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the part of any Lender in the exercise of any power, right or privilege hereunder or under a Loan, Note, Letter of Credit or Bankers' Acceptances shall impair such power, right or privilege or be construed to be a waiver of any default or acquiescence therein, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other power, right or privilege. All rights and remedies existing under this Agreement, the Notes, the Letters of Credit, the Bankers' Acceptances and the other Loan Documents are cumulative to, and not exclusive of, any rights or remedies otherwise available. 10.13 Marshalling; Payments Set Aside. Neither any Agent, Arranger nor any Lender shall be under any obligation to marshal any assets in favor of Company, any Borrower or any other party or against or in payment of any or all of the Obligations. To the extent that Company or any Borrower makes a payment or payments to any Agent, Arranger or Lenders, or any Agent or Lenders enforce any security interests or exercise their rights of setoff, and such payment or payments or the proceeds of such enforcement or setoff or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, any other state or federal law, common law or any equitable cause, then, to the extent of such recovery, the obligation or part thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related thereto, shall be revived and continued in full force and effect as if such payment or payments had not been made or such enforcement or setoff had not occurred. 10.14 Severability. In case any provision in or obligation under this Agreement, the Notes, the Bankers' Acceptances or the Grid Gold Acknowledgments shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 10.15 Obligations Several; Independent Nature of Lenders' Rights. The obligations of Lenders hereunder are several and no Lender shall be responsible for the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any other Loan Document, and no action taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a partnership, an association, a joint venture or any other kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and independent debt, and each Lender shall be, subject to the limitations on the right to terminate Commitments and accelerate outstandings contained in Section 7, entitled to protect and enforce 125 its rights arising out of this Agreement and it shall not be necessary for any other Lender to be joined as an additional party in any proceeding for such purpose. 10.16 Headings. Section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect. 10.17 Applicable Law. THIS AGREEMENT AND THE NOTES AND THE LEGAL RELATIONS AMONG THE PARTIES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDITS (1993) REVISION, INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK. EACH BANKERS' ACCEPTANCE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF CANADA. 10.18 Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of the parties hereto and the successors and assigns of Agents, Arranger and Lenders. The terms and provisions of this Agreement shall inure to the benefit of any assignee or transferee of any of the Obligations, and in the event of any such transfer or assignment the rights and privileges herein conferred upon Agents, Arranger and Lenders shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. Neither Company's nor any Borrower's rights or obligations hereunder nor any interest therein may be assigned or delegated by Company or any Borrower without the prior written consent of all Lenders. Lenders' rights of assignment are subject to subsection 10.1. 10.19 Consent to Jurisdiction and Service of Process. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND 126 UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION. Company and each Borrower designates and appoints CT Corporation System, and such other Persons as may hereafter be selected by Company and each Borrower irrevocably agreeing in writing to so serve, as its agent to receive on its behalf service of all process in any such proceedings in any such court, such service being hereby acknowledged by Company and each Borrower to be effective and binding service in every respect. A copy of any such process so served shall be mailed by registered mail to Company at its address as provided in subsection 10.10; provided that, unless otherwise provided by applicable law, any failure to mail such copy shall not affect the validity of service of such process. If any agent appointed by Company or any Borrower refuses to accept service, Company and each Borrower hereby agree that service of process sufficient for personal jurisdiction in any action against Company or any Borrower may be made by registered or certified mail, return receipt requested, to Company at its address as provided in subsection 10.10, and Company and each Borrower hereby acknowledge that such service shall be effective and binding in every respect if timely received. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of any party to bring proceedings against any party in the courts of any other jurisdiction. 10.20 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including, without limitation, contract claims, tort claims, breach of duty claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into a business relationship, that each has already relied on this waiver in entering into this Agreement, and that each will continue to rely on this waiver in their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE OBLIGATIONS. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. 127 10.21 Confidentiality. Each Lender shall hold all non-public information obtained pursuant to the requirements of this Agreement which has been identified as confidential by Company or any Borrower in accordance with such Lender's customary procedures for handling its own confidential information of this nature and in accordance with safe and sound banking practices, it being understood and agreed by Company and Borrowers that Lenders may disclose such information (i) to their accountants and legal counsel in connection with their ongoing review of the credit extended under this Agreement and (ii) to any bona fide or prospective assignee, transferee or participant in connection with the contemplated assignment or transfer by such Lender of any Loans, Bankers' Acceptances, participations in Letters of Credit or any participation therein or as required (provided that in each case of disclosure under (i) and (ii), the disclosing party shall advise such persons of the non-public nature of the information and secure from such persons in advance of disclosure that such persons will treat the information as confidential in accordance with its customary procedures for handling confidential information, subject to the disclosure provisions herein), (iii) to any governmental agency or representative thereof upon its reasonable request, or (iv) pursuant to legal process (provided that in the case of disclosure under (iii) (other than regulatory reviews in the ordinary course of business) and (iv), the disclosing party shall advise Company (unless such disclosure is prohibited by such governmental agency or legal process) of such intended disclosure as soon as possible in advance if feasible and otherwise as soon as possible thereafter and shall cooperate with Company, at Company's expense, in any reasonable effort by Company to prevent disclosure of such information); provided that in no event shall any Lender be obligated or required to return any materials furnished by Company or any of its Subsidiaries. 10.22 Entire Agreement. This Agreement, taken together with all of the other Loan Documents and all certificates and other documents delivered by Company to Administrative Agent and Lenders pursuant to the Loan Documents, and any letters among Company, Borrowers, any Agent and/or Arranger relating to fees, embodies the entire agreement and supersedes all prior agreements, written and oral, relating to the subject matter hereof. 10.23 Counterparts; Effectiveness. This Agreement and any amendments, waivers, consents or supplements hereto or in connection herewith may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. This Agreement shall become effective upon the execution of a counterpart hereof by each of the parties hereto and receipt by Company and Administrative Agent of written or telephonic notification of such execution and authorization of delivery thereof. 128 10.24 Judgment Currency. If for the purposes of obtaining a judgment in any court it is necessary to convert a sum due hereunder or under any other Loan Document in any currency (the "Original Currency") into another currency (the "Other Currency"), the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be the rate of exchange used in calculating Dollar Equivalents on the Business Day preceding that on which final judgment is given. The obligation of Company and each Borrower in respect of any sum due in the Original Currency from it to any Agent or any Lender hereunder or under any other Loan Document shall, notwithstanding any judgment in any Other Currency, be discharged only to the extent that on the Business Day following receipt by such Agent or such Lender of any sum adjudged to be so due in such Other Currency such Agent or such Lender may in accordance with normal banking procedures purchase the Original Currency with such Other Currency; if the amount of the Original Currency so purchased is less than the sum originally due to such Lender in the Original Currency, Company and Borrowers agree, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent or such Lender against such loss, and if the amount of the Original Currency so purchased exceeds the sum originally due to any Lender in the Original Currency, such Agent or such Lender agrees to remit to Company or the applicable Borrower, as the case may be, such excess. 10.25 Change in Control. A. If individuals who on the Effective Date were members of the board of directors of Company (together with any new directors whose election to such board of directors or whose nomination for election by the shareholders of Company was approved by a vote of a majority of the directors then still in office who were either directors on the Effective Date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of such board of directors then in office; or if a "Change of Control" as defined in the indenture pursuant to which the Subordinated Debentures or pursuant to which the New Subordinated Indebtedness will be issued shall have occurred; or if any Person or any two or more Persons acting in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act), directly or indirectly, of Securities of Company (or other Securities convertible into such Securities) representing 30% or more of the combined voting power of all Securities of Company entitled to vote in the election of directors, there shall be deemed to have occurred a "Company Change of Control." B. If a Change of Control shall occur, automatically and without any notice to Company and Borrowers, the Overall Commitments, and all Commitments and obligations of Lenders hereunder shall terminate, and two Business Days thereafter, all Obligations under this Agreement shall become payable in full, including any amounts that may be due pursuant to subsection 2.6D. Failure to pay all Obligations on the date due and failure to secure the cancellation of all Letters of Credit and Bankers' Acceptances then outstanding shall constitute an Event of Default 129 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. Company: HOMESTAKE MINING COMPANY By: ____________________________ Title: ____________________________ Notice Address: Homestake Mining Company 650 California Street San Francisco, California 94108-2788 Attn: Treasurer Fax: (415) 397-5038 U.S. Borrower: HOMESTAKE MINING COMPANY OF CALIFORNIA By: ___________________________ Title: ___________________________ Notice Address: Homestake Mining Company of California 650 California Street San Francisco, California 94108-2788 Attn: Treasurer Fax: (415) 397-5038 Canadian Borrower: HOMESTAKE CANADA INC. By: ____________________________ Titel: ____________________________ Notice Address: Homestake Canada Inc. c/o Homestake Mining Company 650 California Street San Francisco, California 94108-2788 Attn: Treasurer Fax: (415) 397-5038 Australian Borrowers: HOMESTAKE GOLD OF AUSTRALIA LIMITED By: ____________________________ Title: ____________________________ Notice Address: Homestake Gold of Australia Limited c/o Homestake Mining Company 650 California Street San Francisco, California 94108-2788 Attn: Treasurer Fax: (415) 397-5038 PLUTONIC RESOURCES LIMITED By: ____________________________ Title: ____________________________ Notice Address: Plutonic Resources Limited c/o Homestake Mining Company 650 California Street San Francisco, California 94108-2788 Attn: Treasurer Fax: (415) 397-5038 LENDERS: THE CHASE MANHATTAN BANK, individually, as a U.S. Lender, as an Issuing Lender, and as Administrative Agent By: ____________________________ Title: ____________________________ Notice Address: The Chase Manhattan Bank 270 Park Avenue New York, NY 10017 Attention: James Ramage Fax: (212) 270-4724 With copies to Loan Services Group 1 Chase Manhattan Plaza New York, NY 10081 THE CHASE MANHATTAN BANK OF CANADA, individually, as a Canadian Lender, as an Issuing Lender, and as Canadian Administrative Agent By: ____________________________ Title: ____________________________ Notice Address: The Chase Manhattan Bank of Canada 100 King Street West, Suite 6900 Toronto, Ontario M5X 1A4 Canada CHASE SECURITIES AUSTRALIA LIMITED, as Australian Administrative Agent By: ____________________________ Title: ____________________________ Notice Address: Level 35, AAP Centre 259 George Street Sydney 2000, Australia THE CHASE MANHATTAN BANK, as an Australian Lender By: ____________________________ Title: ____________________________ Notice Address: Level 35, AAP Centre 259 George Street Sydney 2000, Australia ARRANGER: CHASE SECURITIES INC., as Arranger By: ____________________________ Title: ____________________________ CREDIT SUISSE FIRST BOSTON, as a U.S. Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Credit Suisse First Boston 11 Madison Avenue, 20th Floor New York, NY 10010-3692 Attention: J. Scott Karro Fax: (212) 325-8314 CREDIT SUISSE FIRST BOSTON, as an Australian Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Credit Suisse First Boston 101 Collins Street Melbourne, Victoria 3000 Australia Attention: Michael Tierney Tel: 3 9653 3434 Fax: 3 9653 3444 CREDIT SUISSE FIRST BOSTON CANADA, as a Canadian Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Credit Suisse First Boston Canada 525 University Avenue Toronto, Ontario M5G 2K6 Attention: Alain Daoust Tel: (416) 351-3663 Fax: (416) 351-3671 UBS AG, STAMFORD BRANCH, as a U.S. Lender By: ___________________________ Title: ___________________________ By: ___________________________ Title: ___________________________ Notice Address: UBS AG, Stamford Branch 677 Washington Blvd., 8N Stanford, CT 06901 Attention: Dan Nolan Fax: (203) 719-4176 UBS AG, STAMFORD BRANCH, as a Canadian Lender By: ___________________________ Title: ___________________________ By: ___________________________ Title: ___________________________ Notice Address: UBS AG, Stamford Branch 677 Washington Blvd., 8N Stanford, CT 06901 Attention: Dan Nolan Fax: (203) 719-4176 UBS AG, STAMFORD BRANCH, as an Australian Lender By: ___________________________ Title: ___________________________ By: ___________________________ Title: ___________________________ Notice Address: UBS AG, Stamford Branch 677 Washington Blvd., 8N Stanford, CT 06901 Attention: Dan Nolan Fax: (203) 719-4176 DEUTSCHE BANK AG, New York Branch and/or Cayman Islands Branch,as a U.S. Lender By: ___________________________ Title: ___________________________ Notice Address: Deutsche Bank N.A. 31 West 52nd Street New York, NY 10019 Attention: John Calvert Fax: (212) 469-3632 DEUTSCHE BANK AG, ARBN 064 165 162, as an Australian Lender By: ___________________________ Title: ___________________________ Notice Address: Deutsche Bank Sydney Level 18, 225 George Street Sydney Australia Attention: Peter Field Fax: 612-9252-2364 DEUTSCHE BANK CANADA, as a Canadian Lender By: ____________________________ Title: ____________________________ Notice Address: Deutsche Bank Canada 222 Bay Street, Suite 1200 Toronto, Ontario M5K 1H6 Canada Attention: Rod O'Hara Fax: (416) 682-8444 REPUBLIC NATIONAL BANK OF NEW YORK, as a U.S. Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Republic National Bank of New York 452 Fifth Avenue New York, NY 10018 Attention: Jeffrey Roth Fax: (212) 525-6581 REPUBLIC NATIONAL BANK OF NEW YORK (CANADA), as a Canadian Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Republic National Bank 150 Bloor Street West Suite M100 Toronto, Ontario M5S 2Y5 Attention: Anthony Matrundola Fax: (416) 968-7669 REPUBLIC MASE AUSTRALIA LIMITED, as an Australian Lender By: ____________________________ Title: ____________________________ Notice Address: Republic Mase Australia Limited Level 6, AMP Centre 50 Bridge Street Sydney, NSW 2000, Australia Attention: Anthony Wallace Fax: 61-2-235-0950 NM ROTHSCHILD & SONS LIMITED, as a U.S. Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: NM Rothschild & Sons Limited New Court St. Swithin's Lane London EC4P 4DU Attention: Ian Harding Fax: 0171-280-5139 NM ROTHSCHILD & SONS LIMITED, as a Canadian Lender By: ___________________________ Title: ___________________________ By: ___________________________ Title: ___________________________ Notice Address: NM Rothschild & Sons Limited New Court St. Swithin's Lane London EC4P 4DU Attention: Ian Harding Fax: 0171-280-5139 MELLON BANK, N.A., as a U.S. Lender By: ___________________________ Title: ___________________________ Notice Address: Mellon Bank, N.A. 400 S. Hope Street, 5th Floor Los Angeles, CA 90071-2806 Attention: Lawrence Ivey Fax: (213) 629-0492 MELLON BANK CANADA, as a Canadian Lender By: ___________________________ Title: ___________________________ Notice Address: Mellon Bank Canada 77 King Street West, Suite 3200 Toronto, Ontario M5K 1K2 Attention: Ed McGrath Fax: (416) 860-2409 THE BANK OF NOVA SCOTIA, as a U.S. Lender By: ___________________________ Title: ___________________________ Notice Address: The Bank of Nova Scotia 44 King Street West, 16th Floor Toronto, Ontario Canada M5H 1H1 Attention: Michael Eddy Fax: (416) 866-2010 THE BANK OF NOVA SCOTIA, as a Canadian Lender By: ___________________________ Title: ___________________________ Notice Address: The Bank of Nova Scotia 44 King Street West, 16th Floor Toronto, Ontario Canada M5H 1H1 Attention: Michael Eddy Fax: (416) 866-2010 BANKERS TRUST COMPANY, as a U.S. Lender By: ___________________________ Title: ___________________________ Notice Address: Bankers Trust Company 130 Liberty Street, 14th Floor New York, New York 10006 Attention: Varig Patel Fax: (212) 250-8693 BT BANK OF CANADA, as a Canadian Lender By: ____________________________ Title: ____________________________ Notice Address: BT Bank of Canada 17/F North Tower Royal Bank Plaza 200 Bay Street Toronto, Ontario Canada M5J 2J2 Attention: Marcellus Leung Fax: (416) 865-9931 BANKERS TRUST AUSTRALIA LIMITED, as an Australian Lender By: ____________________________ Title: ____________________________ Notice Address: The Chifley Tower 2 Chifley Square Sydney, N.S.W. 2000 Australia Attention: Stephen Land SOCIETE GENERALE, as a U.S. Lender By: ____________________________ Title: ____________________________ Notice Address: Societe Generale 2029 Century Park East, Suite 2900 Los Angeles, CA 90067 Attention: Blaine Shaun Fax: (310) 551-1537 SOCIETE GENERALE, as a Canadian Lender By: ____________________________ Title: ____________________________ Notice Address: Societe Generale 2029 Century Park East, Suite 2900 Los Angeles, CA 90067 Attention: Blaine Shaun Fax: (310)551-1537 DRESDNER BANK AG Australian Branch, as an Australian Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Dresdner Bank, A.G. Level 20, 2 Market Street Sydney, Australia NSW 2000 Attention: Anthony Hawke Fax: 61-2-92862068 DRESDNER BANK AG New York and Grand Cayman Islands Branches, as a U.S. Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Dresdner Bank AG 75 Wall Street, 25th Floor New York, NY 10005 Attention: Doug Sherrod Fax: (212) 429-2192 CIBC, INC., as a U.S. Lender By: ___________________________ Title: ___________________________ Notice Address: CIBC, Inc. 425 Lexington , 8th Floor New York, NY 10017 Attention: Howard Palmer Fax: (212) 856-3761 CANADIAN IMPERIAL BANK OF COMMERCE, as a Canadian Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Canadian Imperial Bank of Commerce 161 Bay Street, 7th Floor Toronto, Ontario M5J 2S8 Canada Attention: Rob McCrossan Fax: (416) 594-8537 SOCIETE GENERALE AUSTRALIA LIMITED, as an Australian Lender By: ____________________________ Title: ____________________________ By: ____________________________ Title: ____________________________ Notice Address: Societe Generale Australia Limited 350 George Street Sydney, NSW 2000 Australia Attention: Charles Loxton Fax: (612) 9235-3941 AUSTRALIAN AND NEW ZEALAND BANKING GROUP LIMITED, as a U.S. Lender and an Australian Lender By: ____________________________ Title: ____________________________ Notice Address: Australian and New Zealand Banking Group Limited 1177 Avenue of the Americas, 6th Floor New York, New York 10036 Attention: Stephen Christenson Fax: (212) 801-9131 ANZ INVESTMENT BANKING, as a U.S. and Australian Lender By: ____________________________ Title: ____________________________ Notice Address: ANZ Investment Bank 1177 Avenue of the Americas, 6th Floor New York, NY 10036 Attention: Barbara Paxton CITICORP USA, INC., as a U.S. Lender By: ____________________________ Title: ____________________________ Notice Address: Citibank, N.A. 399 Park Avenue 4th Floor, Zone 1 New York, NY 10043 Attention: Raymond Dunning Fax: 212-832-9857 CITIBANK CANADA, as a Canadian Lender By: ____________________________ Title: ____________________________ Notice Address: Citibank Place 123 Front Street West, Suite 1900 Toronto, Ontario M5J 2M3 Attention: Margaret Gillies Fax: 416-947-5650 CITIBANK, N.A., as an Australian Lender By: ___________________________ Title: ___________________________ Notice Address: Level 26, 101 Collins Street Melbourne 3000 Victoria, Australia Attention: Dale Murphy Fax: 613-9653-7301 EXHIBIT I FORM OF NOTICE OF BORROWING Pursuant to that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, modified or supplemented from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"), this represents the request of [U.S. Borrower/Canadian Borrower/HGAL/Plutonic] (hereinafter the "Applicable Borrower") to borrow on _____________, ____ (the "Funding Date") from [U.S./Canadian/Australian] Lenders, in accordance with their applicable Pro Rata Shares, Loans in the amount of [$/Cdn.$/A.$____________/____ Ounces of Gold], which Loans shall be [U.S. Base Rate/U.S. Base Rate (Canada)/Canadian Base Rate/Eurodollar Rate/Bank Bill Swap Rate/Gold] Loans. [This further represents U.S. Borrower's request that the amount of the Gold Loan hereby requested be converted into Dollars based on the Price of Gold in effect the second Business Day preceding the Funding Date/Gold constituting such Loan be delivered to U.S. Borrower]. [If the Gold Loan is to be funded in Gold, U.S. Borrower hereby requests that the interest on such Gold Loan be payable in [Gold][Dollars] based on the [average of the daily values of such Loan, in Dollar Equivalents/the Price of Gold on the second Business Day preceding the Funding Date.] [The initial Interest Period for such Loans is requested to be a [one/two/three/six month][30/60/90/180 day] period.] The proceeds of such Loans are to be deposited in the Applicable Borrower's [account at Administrative Agent's [Canadian/U.S./Australian] Lending Office/bullion account maintained with _________________, at its office located at ___________________]. The undersigned officer/director/Authorized Signor, to the best of his or her knowledge, and the Applicable Borrower certify that: I-1 (i) The representations and warranties contained in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent that changes in the facts and conditions on which such representations and warranties were based are required or permitted under the Credit Agreement; (ii) No event has occurred and is continuing or would result from the consummation of the borrowing contemplated hereby that would constitute an Event of Default or a Potential Event of Default; (iii) The Company and each Borrower have performed in all material respects all agreements and satisfied all conditions which the Credit Agreement and other Loan Documents provide shall be performed or satisfied by it on or before the date hereof; (iv) There is no pending or, to the knowledge of Company or any Borrower, threatened, any action, suit, proceeding, governmental investigation or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries and there has occurred no development in any such action, suit, proceeding, governmental investigation or arbitration that, in either event, would reasonably be expected to have a Material Adverse Effect, unless disclosed to and consented to by Requisite Lenders; and no injunction or other restraining order has been issued and no hearing to cause an injunction or other restraining order to be issued is pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated by the Credit Agreement or the making of Loans, the issuance of Letters of Credit or the creation and purchase of Bankers' Acceptances thereunder; (v) No Company Change of Control has occurred; and (vi) After giving effect to the proposed Loan, the Borrowers are in compliance with each of the clauses (a) through (k) set forth in subsection 2.1A. DATED: ____________________ [HOMESTAKE MINING COMPANY OF CALIFORNIA/HOMESTAKE CANADA INC./HOMESTAKE GOLD OF AUSTRALIA LIMITED/PLUTONIC RESOURCES LIMITED] By: __________________________ Title: ________________________ I-2 EXHIBIT II FORM OF NOTICE OF CONVERSION/CONTINUATION Pursuant to that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, modified or supplemented from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"), this represents [U.S. Borrower's/Canadian Borrower's/HGAL's/Plutonic's] request to [Select A or B: [A: convert $_________ in principal amount of presently outstanding Loans that are [U.S. Base/U.S. Base (Canada)/Canadian Base/Eurodollar] Rate Loans to [U.S. Base/U.S. Base (Canada)/Canadian Base/Eurodollar] Rate Loans on ____________, ____. [The initial Interest Period for such Eurodollar Rate Loans is requested to be a [one/two/three/six] month period.]] [B: continue as [Eurodollar/Gold/Bank Bill Swap] Rate Loans [$_________/________Ounces] in principal amount of presently outstanding Loans with a final Interest Payment Date of ____________, ____. The Interest Period for such [Eurodollar/Gold/Bank Bill Swap] Rate Loans commencing on such final Interest Payment Date is requested to be a [one/two/three/six month] [30/60/90/180 day] period.] U.S. Borrower hereby requests that the Interest on such Gold Loan be payable in [Gold] [Dollars] based on the [average of the daily values of such Loan, in Dollar Equivalents/the Price of Gold on the second Business Day preceding the first day of the Interest Period hereby requested].] [For Conversions to Eurodollar Rate Loans or Continuations of Eurodollar/Gold/Bank Bill Swap Rate Loans (other than continuations of Loans by Australian Borrower) Only: The undersigned officer, director, or Authorized Signor to the best of his or her knowledge, and [U.S. Borrower/Canadian Borrower/HGAL/Plutonic] certify that no Event of Default or Potential Event of Default has occurred and is continuing under the Credit Agreement.] II-1 DATED: ____________________ [HOMESTAKE MINING COMPANY OF CALIFORNIA/HOMESTAKE CANADA INC./ HOMESTAKE GOLD OF AUSTRALIA LIMITED/ PLUTONIC RESOURCES LIMITED] By: __________________________ Title: ________________________ II-2 EXHIBIT III-A [FORM OF DRAFT] BANKERS' ACCEPTANCE Due _______________ 19__ ACCEPTATION BANCAIRE Echeant le NO. B.A. IL.0000 _____________, Canada ____________________ 19__ On/Le ___________________ 19__ without grace, for value received, pay to the order of the undersigned drawer the sum of/sans jours de grace et contra valeur, payez a l'ordre du tireur soussigne la somme de ____________________ dollars ($_____________) To/A - [Name of Lender] ___________, Canada HOMESTAKE CANADA INC. Per: par:_______________________ Authorized signature Signature Autorisee [FORM OF ACCEPTANCE] ACCEPTED/ACCEPTE date/le________________________________________________19__ Payable at [INSERT LOCATION]/payable a ________ [Name of Lender] Per: par:____________________ Authorized signature Signature Autorisee Per: par:____________________ Authorized Signature Signature Autorisee III-A-1 EXHIBIT III-B [FORM OF DRAWING NOTICE] ------------, ----- The Chase Manhattan Bank, as Administrative Agent Attention: _____________________________ and The Chase Manhattan Bank of Canada, as Canadian Administrative Agent Attention: _____________________________ Ladies and Gentlemen: Pursuant to that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, modified or supplemented from time to time, being the "Credit Agreement," the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation, Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation, Plutonic Resources Limited, a New South Wales corporation, the financial institutions listed therein as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc., as Arranger for Lenders, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), The Chase Manhattan Bank, as Administrative Agent for Lenders, the undersigned Canadian Borrower's notice, given pursuant to subsection 2.8B of the Credit Agreement, requesting a Drawing under the Credit Agreement on the date, in the amount and having the term set forth below: 1. The Drawing Date, which is a Business Day, is ___________, _____; 2. The aggregate Face Amount of Drafts to be accepted is Cdn. $_______________; and 3. The maturity date for such Drafts is ___________, ____, which represents a term to maturity of approximately [30/60/90/180] days. III-B-1 The undersigned officers, to the best of their knowledge, and the undersigned Canadian Borrower and Company, each hereby certifies that: (i) The representations and warranties contained in the Credit Agreement and the other Loan Documents (which representations and warranties in the case of any Canadian Borrower shall be limited to such Canadian Borrower and its Subsidiaries) are true, correct and complete in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent that changes in the facts and conditions on which such representations and warranties were based are required or permitted under the Credit Agreement; (ii) No event has occurred and is continuing or would result from the consummation of the drawing contemplated hereby that would constitute an Event of Default or a Potential Event of Default; (iii) The Company and each Borrower have performed in all material respects all agreements and satisfied all conditions which the Credit Agreement and other Loan Documents provide shall be performed or satisfied by it on or before the date hereof; (iv) There is no pending or, to the knowledge of Company or any Borrower, threatened, action, suit, proceeding, governmental investigation or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries and there has occurred no development in any such action, suit, proceeding, governmental investigation or arbitration that, in either event, would reasonably be expected to have a Material Adverse Effect, unless disclosed to and consented to by Requisite Lenders; and no injunction or other restraining order to be issued is pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages to obtain relief as a result of, the transactions contemplated by the Credit Agreement or the making of Loans, the issuance of Letters of Credit or the creation and purchase of Bankers' Acceptances thereunder; (v) No Company Change of Control has occurred; (vi) After giving effect to the proposed Drawing, the Total Utilization of Commitments does not exceed the Overall Commitment then in effect and the Canadian Commitment Usage does not exceed the Canadian Allocation then in effect. III-B-2 HOMESTAKE CANADA INC. By ________________________ Name:__________________ Title:_________________ Acknowledged and consented to as of the date hereof. HOMESTAKE MINING COMPANY By __________________________ Name:_____________________ Title:____________________ III-B-3 EXHIBIT IV-A FORM OF NOTE HOMESTAKE CANADA INC. PROMISSORY NOTE DUE JULY , 2003 $1 2 3 FOR VALUE RECEIVED, HOMESTAKE CANADA INC., an Ontario corporation ("Canadian Borrower"), promises to pay to the order of [NAME OF LENDER] ("Payee"), on or before July , 2003, the lesser of (x) 4 ($[1]) and (y) the unpaid principal amount of all advances made by Payee to Canadian Borrower as Loans under the Credit Agreement referred to below. Canadian Borrower also promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at the rates and at the times which shall be determined in accordance with the provisions of that certain Amended and Restated Credit Agreement dated as of July , 1998 by and among Homestake Mining Company, a Delaware corporation, Homestake Mining Company of California, a California corporation, Homestake Canada Inc., an Ontario corporation, Homestake Gold of Australia Limited, a South Australia corporation, Plutonic Resources Limited, a New South Wales corporation, the financial institutions listed therein as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc. as Arranger for Lenders, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined). This Note is one of Canadian Borrower's "Notes" which in the aggregate may evidence up to $430,000,000 principal amount of Loans and is issued pursuant to and entitled to the benefits of the Credit Agreement, to which reference is hereby made for a more complete statement of the terms and conditions under which the Loans evidenced hereby were made and are to be repaid. All payments of principal and interest in respect of this Note shall be made in the same currency (which shall be Dollars or Canadian Dollars) as the Loans in respect of IV-A-1 which such payments are being made, in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and shall be delivered to Canadian Administrative Agent at the Canadian Administrative Agent's Lending Office at such times as are provided for in the Credit Agreement. Until notified in writing of the transfer of this Note, Canadian Borrower, Canadian Administrative Agent, and Administrative Agent shall be entitled to deem Payee, or such Person who has been so identified by the transferor in writing to Canadian Borrower, Canadian Administrative Agent, and Administrative Agent as the holder of this Note, as the owner and holder of this Note. Each of Payee and any subsequent holder of this Note agrees, by its acceptance hereof, that before disposing of this Note or any part hereof it will make a notation hereon of all Loans evidenced by this Note and all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make a notation of any payment made on this Note shall not limit or otherwise affect the obligations of Canadian Borrower hereunder with respect to payments of principal of or interest on this Note. Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, but not later than July , 2003, and such extension of time shall be included in the computation of the payment of interest on this Note. This Note is subject to mandatory prepayment and to prepayment at the option of Canadian Borrower as provided in subsection 2.4A of the Credit Agreement. THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement. The terms of this Note are subject to amendment only in the manner provided in the Credit Agreement. This Note is subject to restrictions on transfer or assignment as provided in subsections 10.1 and 10.18 of the Credit Agreement. No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement shall alter or impair the obligations of Canadian Borrower, which are absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, and in the currency herein prescribed. Canadian Borrower promises to pay all costs and expenses, including reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement, incurred in the collection and enforcement of this Note. Canadian Borrower and any IV-A-2 endorsers of this Note hereby consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. IN WITNESS WHEREOF, Canadian Borrower has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above. HOMESTAKE CANADA INC. By: __________________ Title: _______________ IV-A-3 TRANSACTIONS ON NOTE Amount of Loan Amount of Type of Loan This Date Principal Paid Date Made This Date This Date Outstanding Principal Balance Notation This Date Made By IV-A-4 EXHIBIT IV-B FORM OF NOTE HOMESTAKE GOLD OF AUSTRALIA LIMITED PROMISSORY NOTE DUE JULY , 2003 $5 6 7 FOR VALUE RECEIVED, HOMESTAKE GOLD OF AUSTRALIA LIMITED, a South Australia corporation ("HGAL"), hereby promises to pay to the order of [NAME OF LENDER] ("Payee"), on or before July , 2003, the lesser of (x) 8 ($[1]) and (y) the unpaid principal amount of all advances made by Payee to HGAL as Loans under the Credit Agreement referred to below. HGAL also promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at the rates and at the times which shall be determined in accordance with the provisions of that certain Amended and Restated Credit Agreement dated as of July , 1998 by and among Homestake Mining Company, a Delaware corporation, Homestake Mining Company of California, a California corporation, Homestake Canada Inc., an Ontario corporation, Homestake Gold of Australia Limited, a South Australia corporation, Plutonic Resources Limited, a New South Wales corporation, the financial institutions listed therein as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc. as Arranger for Lenders, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined). This Note is one of HGAL's "Notes" which in the aggregate may evidence up to $430,000,000 principal amount of Loans and is issued pursuant to and entitled to the benefits of the Credit Agreement, to which reference is hereby made for a more complete statement of the terms and conditions under which the Loans evidenced hereby were made and are to be repaid. All payments of principal and interest in respect of this Note shall be made in the same currency (which shall be Dollars or Australian Dollars) as the Loans in respect of IV-B-1 which such payments are being made, in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and shall be delivered to Australian Administrative Agent at Australian Administrative Agent's Lending Office at such times as are provided for in the Credit Agreement. Until notified in writing of the transfer of this Note, HGAL, Australian Administrative Agent, and Administrative Agent shall be entitled to deem Payee, or such Person who has been so identified by the transferor in writing to HGAL, Australian Administrative Agent, and Administrative Agent as the holder of this Note, as the owner and holder of this Note. Each of Payee and any subsequent holder of this Note agrees, by its acceptance hereof, that before disposing of this Note or any part hereof it will make a notation hereon of all Loans evidenced by this Note and all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make a notation of any payment made on this Note shall not limit or otherwise affect the obligations of HGAL hereunder with respect to payments of principal of or interest on this Note. Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, but not later than July , 2003, and such extension of time shall be included in the computation of the payment of interest on this Note. This Note is subject to mandatory prepayment and to prepayment at the option of HGAL as provided in subsection 2.4A of the Credit Agreement. THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement. The terms of this Note are subject to amendment only in the manner provided in the Credit Agreement. This Note is subject to restrictions on transfer or assignment as provided in subsections 10.1 and 10.18 of the Credit Agreement. No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement shall alter or impair the obligations of HGAL, which are absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, and in the currency herein prescribed. HGAL promises to pay all costs and expenses, including reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement, incurred in the collection and enforcement of this Note. HGAL and any endorsers of this Note hereby consent to IV-B-2 renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. IN WITNESS WHEREOF, HGAL has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above. HOMESTAKE GOLD OF AUSTRALIA LIMITED By: __________________________ Title: ________________________ IV-B-3 TRANSACTIONS ON NOTE Amount of Loan Amount of Type of Loan Made Made This Date Principal Paid Date This Date This Date Outstanding Principal Balance Notation This Date Made By IV-B-4 EXHIBIT IV-C FORM OF NOTE PLUTONIC RESOURCES LIMITED PROMISSORY NOTE DUE JULY , 2003 $13 14 15 FOR VALUE RECEIVED, PLUTONIC RESOURCES LIMITED, a New South Wales corporation ("Plutonic"), hereby promises to pay to the order of [NAME OF LENDER] ("Payee"), on or before July , 2003, the lesser of (x) 16 ($[1]) and (y) the unpaid principal amount of all advances made by Payee to Plutonic as Loans under the Credit Agreement referred to below. Plutonic also promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at the rates and at the times which shall be determined in accordance with the provisions of that certain Amended and Restated Credit Agreement dated as of July , 1998 by and among Homestake Mining Company, a Delaware corporation, Homestake Mining Company of California, a California corporation, Homestake Canada Inc., an Ontario corporation, Homestake Gold of Australia Limited, a South Australia corporation, Plutonic Resources Limited, a New South Wales corporation, the financial institutions listed therein as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc. as Arranger for Lenders, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined). This Note is one of Plutonic's "Notes" which in the aggregate may evidence up to $430,000,000 principal amount of Loans and is issued pursuant to and entitled to the benefits of the Credit Agreement, to which reference is hereby made for a more complete statement of the terms and conditions under which the Loans evidenced hereby were made and are to be repaid. All payments of principal and interest in respect of this Note shall be made in the same currency (which shall be Dollars or Australian Dollars) as the Loans in respect of which such payments are being made, in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and shall be delivered to Australian Administrative Agent at Australian Administrative Agent's Lending Office at such times as are provided for in the Credit Agreement. Until notified in writing of the transfer of this Note, Plutonic, Australian Administrative Agent, and Administrative Agent shall be entitled to deem Payee, or such Person who has been so identified by the transferor in writing to Plutonic, Australian Administrative Agent, and Administrative Agent as the holder of this Note, as the owner and holder of this Note. Each of Payee and any subsequent holder of this Note agrees, by its acceptance hereof, that before disposing of this Note or any part hereof it will make a notation hereon of all Loans evidenced by this Note and all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make a notation of any payment made on this Note shall not limit or otherwise affect the obligations of Plutonic hereunder with respect to payments of principal of or interest on this Note. Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, but not later than July , 2003, and such extension of time shall be included in the computation of the payment of interest on this Note. This Note is subject to mandatory prepayment and to prepayment at the option of Plutonic as provided in subsection 2.4A of the Credit Agreement. THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement. The terms of this Note are subject to amendment only in the manner provided in the Credit Agreement. This Note is subject to restrictions on transfer or assignment as provided in subsections 10.1 and 10.18 of the Credit Agreement. No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement shall alter or impair the obligations of Plutonic, which are absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, and in the currency herein prescribed. Plutonic promises to pay all costs and expenses, including reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement, incurred in the collection and enforcement of this Note. Plutonic and any endorsers of this Note hereby IV-C-4 consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. IN WITNESS WHEREOF, Plutonic has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above. PLUTONIC RESOURCES LIMITED By:_____________________ Title:__________________ IV-C-4 TRANSACTIONS ON NOTE Amount of Loan Amount of Type of Loan Made Made This Date Principal Paid Date This Date This Date Outstanding Principal Balance Notation This Date Made By IV-C-4 EXHIBIT IV-D FORM OF NOTE HOMESTAKE MINING COMPANY OF CALIFORNIA PROMISSORY NOTE DUE JULY , 2003 $17 18 19 FOR VALUE RECEIVED, HOMESTAKE MINING COMPANY OF CALIFORNIA, a California corporation ("U.S. Borrower"), promises to pay to the order of [NAME OF LENDER] ("Payee"), on or before July , 2003, the lesser of (x) 20 ($[1]) and (y) the unpaid principal amount of all advances made by Payee to U.S. Borrower as Loans under the Credit Agreement referred to below. U.S. Borrower also promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at the rates and at the times which shall be determined in accordance with the provisions of that certain Amended and Restated Credit Agreement dated as of July , 1998 by and among Homestake Mining Company, a Delaware corporation, Homestake Mining Company of California, a California corporation, Homestake Canada Inc., an Ontario corporation, Homestake Gold of Australia Limited, a South Australia corporation, Plutonic Resources Limited, a New South Wales corporation, the financial institutions listed therein as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc. as Arranger for Lenders, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined). This Note is one of U.S. Borrower's "Notes" which in the aggregate may evidence up to $430,000,000 principal amount of Loans and is issued pursuant to and entitled to the benefits of the Credit Agreement, to which reference is hereby made for a more complete statement of the terms and conditions under which the Loans evidenced hereby were made and are to be repaid. All payments of principal and interest in respect of this Note shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or IV-D-1 condition, and shall be delivered to Administrative Agent at Administrative Agent's U.S. Lending Office at such times as are provided in the Credit Agreement. Until notified in writing of the transfer of this Note, U.S. Borrower and Administrative Agent shall be entitled to deem Payee, or such Person who has been so identified by the transferor in writing to U.S. Borrower and Administrative Agent as the holder of this Note, as the owner and holder of this Note. Each of Payee and any subsequent holder of this Note agrees, by its acceptance hereof, that before disposing of this Note or any part hereof it will make a notation hereon of all Loans evidenced by this Note and all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make a notation of any payment made on this Note shall not limit or otherwise affect the obligations of U.S. Borrower hereunder with respect to payments of principal of or interest on this Note. Whenever any payment on this Note shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, but not later than July , 2003, and such extension of time shall be included in the computation of the payment of interest on this Note. This Note is subject to mandatory prepayment and to prepayment at the option of U.S. Borrower as provided in subsection 2.4A of the Credit Agreement. THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Note, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement. The terms of this Note are subject to amendment only in the manner provided in the Credit Agreement. This Note is subject to restrictions on transfer or assignment as provided in subsections 10.1 and 10.18 of the Credit Agreement. No reference herein to the Credit Agreement and no provision of this Note or the Credit Agreement shall alter or impair the obligations of U.S. Borrower, which are absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, and in the currency herein prescribed. U.S. Borrower promises to pay all costs and expenses, including reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement, incurred in the collection and enforcement of this Note. U.S. Borrower and any endorsers of this Note hereby consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand and notice of every kind IV-D-2 and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. IN WITNESS WHEREOF, U.S. Borrower has caused this Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above. HOMESTAKE MINING COMPANY OF CALIFORNIA By: __________________________ Title: ________________________ IV-D-3 TRANSACTIONS ON NOTE Amount of Loan Amount of Type of Loan Made Made This Date Principal Paid Date This Date This Date Outstanding Principal Balance Notation This Date Made By IV-D-4 EXHIBIT V FORM OF GRID GOLD ACKNOWLEDGEMENT HOMESTAKE MINING COMPANY OF CALIFORNIA CREDIT GOLD OBLIGATION DUE JULY , 2003 21 22 FOR VALUE RECEIVED, HOMESTAKE MINING COMPANY OF CALIFORNIA, a California corporation ("U.S. Borrower"), promises to pay to the order of [NAME OF LENDER] ("Payee"), on or before July , 2003, the number of Ounces of Gold advanced from time to time by Payee to Borrower as Gold Loans under the Credit Agreement referred to below. U.S. Borrower also promises to pay interest on the unpaid principal amount hereof, from the date hereof until paid in full, at the rates and at the times which shall be determined in accordance with the provisions of that certain Amended and Restated Credit Agreement dated as of July , 1998 by and among Homestake Mining Company, a Delaware corporation, Homestake Mining Company of California, a California corporation, Homestake Canada Inc., an Ontario corporation, Homestake Gold of Australia Limited, a South Australia corporation, Plutonic Resources Limited, a New South Wales corporation, the financial institutions listed therein as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders, Chase Securities Australia Limited, as Australian Administrative Agent for Lenders, Chase Securities Inc. , as Arranger for Lenders, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined). This Grid Gold Acknowledgement (this "Acknowledgement") is one of U.S. Borrower's "Grid Gold Acknowledgements" which in the aggregate may evidence up to 750,000 Ounces of Gold and is issued pursuant to and entitled to the benefits of the Credit Agreement, to which reference is hereby made for a more complete statement of the terms and conditions under which the Gold Loans evidenced hereby were made and are to be repaid. All payments of principal and interest in respect of this Acknowledgement shall be made in accordance with the provisions of the Credit Agreement, in Gold or in Dollars, in same day funds, without defense, setoff or counterclaim, free of any restriction or V-1 condition, and shall be delivered, if paid in Dollars, to the Administrative Agent's Lending Office or, if paid in Gold, Administrative Agent's account with J.P. Morgan, London, England, or such other bullion depository as may be designated by Administrative Agent from time to time, before 12:00 Noon (London time) on the day specified for payment. Until notified in writing of the transfer of this Acknowledgement, U.S. Borrower and Administrative Agent shall be entitled to deem Payee, or such Person who has been so identified by the transferor in writing to U.S. Borrower and Administrative Agent as the holder of this Acknowledgement, as the owner and holder of this Acknowledgment. Each of Payee and any subsequent holder of this Acknowledgement agrees, by its acceptance hereof, that before disposing of this Acknowledgement or any part hereof it will make a notation hereon of all Loans evidenced by this Acknowledgement and all principal payments previously made hereunder and of the date to which interest hereon has been paid; provided, however, that the failure to make a notation of any payment made on this Acknowledgement shall not limit or otherwise affect the obligations of U.S. Borrower hereunder with respect to payments of principal of or interest on this Acknowledgement. Unless Administrative Agent receives notice from U.S. Borrower within seven Business Days of U.S. Borrower's receipt of any Gold, the quantity and quality of the Gold so received shall be deemed to be as set forth in Administrative Agent's delivery order. If there is any discrepancy in the amount or quality of Gold actually Delivered, the amount of such difference shall be settled in Dollars (based on the Dollar Equivalent on the date of Delivery of the Gold required to be advanced hereunder and the Gold actually Delivered) promptly after the Delivery thereof. U.S. Borrower assumes all risk of loss, theft or detention of or damage to any Gold Delivered hereunder from the date U.S. Borrower receives Delivery of such Gold until the date of its return by Delivery to Administrative Agent. Whenever any payment on this Acknowledgement shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day, but not later than July , 2003 and such extension of time shall be included in the computation of the payment of interest on this Acknowledgement. This Acknowledgement is subject to mandatory prepayment and to prepayment at the option of U.S. Borrower as provided in subsection 2.4A of the Credit Agreement. THE CREDIT AGREEMENT AND THIS ACKNOWLEDGEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this Acknowledgement, together with all accrued and unpaid interest thereon, may become, or may be declared to be, due and payable in the manner, upon the conditions and with the effect provided in the Credit Agreement. V-2 The terms of this Acknowledgement are subject to amendment only in the manner provided in the Credit Agreement. This Acknowledgement is subject to restrictions on transfer or assignment as provided in subsections 10.1 and 10.18 of the Credit Agreement. No reference herein to the Credit Agreement and no provision of this Acknowledgement or the Credit Agreement shall alter or impair the obligations of U.S. Borrower, which are absolute and unconditional, to pay the principal of and interest on this Acknowledgement at the place, at the respective times, and in the currency herein prescribed. U.S. Borrower promises to pay all costs and expenses, including reasonable attorneys' fees, all as provided in subsection 10.2 of the Credit Agreement, incurred in the collection and enforcement of this Acknowledgement. U.S. Borrower and any endorsers of this Acknowledgement hereby consent to renewals and extensions of time at or after the maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand and notice of every kind and, to the full extent permitted by law, the right to plead any statute of limitations as a defense to any demand hereunder. IN WITNESS WHEREOF, U.S. Borrower has caused this Acknowledgement to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first written above. HOMESTAKE MINING COMPANY OF CALIFORNIA By: __________________________ Title: ________________________ V-3 TRANSACTIONS ON GRID GOLD ACKNOWLEDGEMENT Amount of Loan Amount of Type of Loan Made Made This Date Principal Paid Date This Date This Date Outstanding Principal Balance Notation This Date Made By V-4 EXHIBIT VI FORM OF COMPLIANCE CERTIFICATE THE UNDERSIGNED HEREBY CERTIFY THAT: (1) We are the duly elected [President/Vice President] and [Chief Financial Officer/Treasurer/Controller] of each of Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower") and Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), [Directors/Secretary/Authorized Signor] of Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), and [Directors/Secretary/Authorized Signor] of Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"); (2) We have reviewed the terms of that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, modified or supplemented from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined in this Certificate (including Attachment No. 1 annexed hereto and made a part hereof) being used in this Certificate as therein defined), by and among Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"), and we have made, or have caused to be made under our supervision, a review in reasonable detail of the transactions and condition of Company, U.S. Borrower, Canadian Borrower, HGAL and Plutonic and their respective Subsidiaries during the accounting period covered by the attached financial statements; (3) The examination described in paragraph (2) above did not disclose, and we have no knowledge of, the existence of any condition or event which VI-1 constitutes an Event of Default or Potential Event of Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Certificate[, except as set forth below]; [Set forth [below] [in a separate attachment to this Certificate] are all exceptions to paragraph (3) above listing, in detail, the nature of the condition or event, the period during which it has existed and the action which Company, U.S. Borrower, Canadian Borrower, HGAL and/or Plutonic has taken, is taking, or proposes to take with respect to each such condition or event: [ ] (4) Company, U.S. Borrower, Canadian Borrower, HGAL, and Plutonic are in compliance with the restrictions contained in subsections 6.1 through 6.11 of the Credit Agreement [except that [describe any instances where not in compliance]]; and (5) There have been no changes to the Subsidiaries of Company and the Borrowers identified in Schedule 4.1 during the period covered by this Compliance Certificate [except that [describe changes to Schedule 4.1]]. The foregoing certifications, together with the computations set forth in Attachment No. 1 annexed hereto and made a part hereof and the financial statements delivered with this Certificate in support hereof, are made and delivered this __________ day of __________, ____ pursuant to subsection 5.1(iii) of the Credit Agreement. HOMESTAKE MINING COMPANY By: ________________________ Title: _____________________ By: ________________________ Title: _____________________ HOMESTAKE MINING COMPANY OF CALIFORNIA By: ________________________ Title: _____________________ By: ________________________ Title: _____________________ VI-2 HOMESTAKE CANADA INC. By: ________________________ Title: _____________________ By: ________________________ Title: _____________________ HOMESTAKE GOLD OF AUSTRALIA LIMITED By: ________________________ Title: _____________________ By: ________________________ Title: _____________________ PLUTONIC RESOURCES LIMITED By: ________________________ Title: _____________________ By: ________________________ Title: _____________________ VI-3 ATTACHMENT NO. 1 TO COMPLIANCE CERTIFICATE This Attachment No. 1 is attached to and made a part of a Compliance Certificate dated as of ____________, ____ and pertains to the period from ____________, ____ to ____________, ____. Subsection references herein relate to subsections of the Credit 955910098Agreement.
A. Indebtedness: 1. Aggregate principal amount of Indebtedness of Agua de la Falda S.A., Lachlan Resources N.L and Prime to Company or any other subsidiary of Company under subsection 6.1(iii): $_____________ 2. Maximum aggregate principal amount of Indebtedness of Agua de la Falda S.A., Lachlan Resources N.L. and Prime to Company or any other Subsidiary of Company (prior to Prime Acquisition Date) permitted under subsection 6.1(iii): $50,000,000 3. Nonrecourse Debt of (a) Prime (prior to Prime Acquisition Date), Australian Borrowers, Canadian Borrower and any Subsidiary of Company (other than U.S. Borrower) to the extent such Indebtedness is secured solely by Liens on assets and properties owned on the Effective Date that are undeveloped, and (b) U.S. Borrower secured solely by Liens on assets and properties owned on the Effective Date that are undeveloped permitted under subsection 6.1(viii): $_____________ 4. Maximum amount of Non-Recourse Debt Indebtedness permitted under subsection 6.1(viii): $500,000,000 5. Additional Indebtedness of Subsidiaries of Borrowers permitted under subsection 6.1(ix)(a): $______________ VI-4 6. Maximum amount of additional Indebtedness of Subsidiaries of Borrowers permitted under subsection 6.1(ix)(a): $50,000,000 7. Additional Indebtedness of Borrowers permitted under subsection 6.1(ix)(b): $______________ 8. Maximum amount of additional Indebtedness of Borrowers permitted under subsection 6.1(ix)(b): $170,000,000 less the amount listed in B. Liens: 1. Indebtedness secured by Purchase Money Security Interests permitted under subsection 6.2(iii): $_____________ 2. Maximum amount of Indebtedness secured by Purchase Money Security Interests permitted under subsection 6.2(iii): $100,000,000 C. Investments: 1. Investments (other than Investments described in Schedule 6.3) Company and its Subsidiaries are permitted to continue to own under subsection 6.3(iv): $_____________ 2. Maximum aggregate amount of all Investments (other than Investments described in Schedule 6.3) Company and its Subsidiaries are permitted to continue to own under subsection 6.3(iv): $20,000,000 3. Investments acquired in connection with Asset Sales permitted under subsection 6.3(vi): $_____________ 4. Maximum aggregate amount of all Investments in connection with Asset Sales permitted under subsection 6.3(vi): $100,000,000 VI-5 D. Contingent Obligations: 1. Aggregate notional principal amount of Interest Rate Protection Agreements permitted under subsection 6.4(ii): $_____________ 2. Maximum notional principal amount of Interest Rate Protection Agreements permitted under subsection 6.4(ii): $100,000,000 3. Aggregate amount guarantied by Company and its Subsidiaries under guaranties of any obligations of Company's Subsidiaries (including Joint Ventures) permitted under subsection 6.4(iv): $_____________ 4. Maximum aggregate amount permitted to be guaranteed under subsection 6.4(iv): $200,000,000 5. Aggregate amount outstanding under standby letters of credit and surety bonds securing Indebtedness or Contingent Obligations of Company and its Subsidiaries permitted under subsection 6.4(viii)(b): $____________ 6. Maximum amount of aggregate liability under all such standby letters of credit and surety bonds under subsection 6.4(viii)(b): $100,000,000 E. Minimum Consolidated Net Worth (as of __________, ____) 1. Company's current Consolidated Net Worth: $_____________ 2. Minimum Consolidated Net Worth required under the Credit Agreement: $500,000,000 F. Maximum Leverage Ratio (as of __________, _____) 1. Consolidated Total Debt: $_____________ 2. Consolidated Net Worth: $_____________ 3. Ratio of F.1 to F.1 + F.2: _____ to 1.00 VI-6 4. Maximum Leverage Ratio permitted under subsection 6.6B: 0.50 to 1.00 G. Interest Coverage Ratio (as of __________, _____) 1. Consolidated Net Income $_____________ 2. Consolidated Interest Expense $_____________ 3. Total depreciation and amortization expense $_____________ 4. Total Non-Cash Writedowns other than writedowns that constitute recognition of future cash expenditures reflected in Consolidated Net Income after December 31, 1997 $_____________ 5. Consolidated EBITDA $_____________ (sum of G.1 through G.4) 6. Consolidated Interest Expense $_____________ 7. Ratio of G.5 to G.6 _____ to 1.00 8. Minimum Coverage Ratio permitted under subsection 6.6C 3.50 to 1.00
VI-7 EXHIBIT VII-A FORM OF OPINION OF THELEN, MARRIN, JOHNSON & BRIDGES VII-A-1 July __, 1998 The Chase Manhattan Bank of Canada, as Canadian Administrative Agent 150 King Street West 16th Floor Box 68 Toronto Ontario Canada MSH 1J9 and Chase Securities Australia Limited, as Australian Administrative Agent Level 35 AAP Center 259 George Street Sydney NSW Australia 2000 and Chase Securities Inc., as Arranger 270 Park Avenue New York, NY 10017 and The Chase Manhattan Bank, as Administrative Agent 1 Chase Manhattan Plaza New York, NY 10081 and and the Lenders Listed on Schedule I Hereto Re: Credit Agreement dated July , 1998 among Homestake Mining Company, Homestake Mining Company of California, Homestake Canada Inc., Homestake Gold of Australia Limited, Plutonic Resources Limited, the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, and The Chase Manhattan Bank, as Administrative Agent VII-A-2 Ladies and Gentlemen: We have acted as special New York counsel to Homestake Mining Company, a Delaware corporation (the "Company"), Homestake Mining Company of California, a California corporation (the "U.S. Borrower"), Homestake Canada Inc., an Ontario corporation (the "Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), and Plutonic Resources Limited ("Plutonic", and collectively with HGAL, "Australian Borrowers") in connection with the execution and delivery of the Credit Agreement dated as July , 1998, among the Company, the U.S. Borrower, the Canadian Borrower, the Australian Borrowers, the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, and The Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement"), and certain transactions relating thereto. All terms used herein that are defined in the Credit Agreement have the respective meanings specified in the Credit Agreement. This letter is being delivered to you in satisfaction of the condition set forth in subsection 3.1E of the Credit Agreement and with the understanding that you are entering into the Credit Agreement in reliance on the opinions expressed herein. In our capacity as such counsel, we have examined the originals, or copies identified to our satisfaction as being true copies, of such records, documents or other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. These records, documents and instruments include the following: (a) The Certificates or Articles of Incorporation of the Company and the U.S. Borrower; (b) The By-Laws of the Company and the U.S. Borrower; (c) Certain records of proceedings and actions of the Board of Directors of the Company and the U.S. Borrower; (d) The Credit Agreement and the Exhibits and Schedules annexed thereto; (e) The Notes and Grid Gold Acknowledgements; and (f) The forms of Drafts. We have relied with respect to certain factual matters, upon the certificates of certain officers of each of the Company and the U.S. Borrower, copies of which are being delivered to you herewith, and upon the representations and warranties of the Company and the Borrowers contained in the Credit Agreement. VII-A-3 We have also been furnished with, and have relied upon, evidence or advice satisfactory to us from the offices of the Secretaries of State of California and Delaware as appropriate, with respect to the good standing of the Company or the U.S. Borrower. In addition, we have obtained and relied upon such certificates and assurances from public officials as we have deemed necessary, desirable or appropriate to render the opinions herein. We have assumed the genuineness and authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as copies, drafts or forms. In making our examination of documents executed or to be executed by Persons other than the Company or the U.S. Borrower we have assumed that such other Persons had or have the power to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action and execution and delivery of such documents by such Persons and the validity and binding effect thereof in relation to such Persons. We have investigated such questions of law for the purpose of rendering this opinion as we have deemed necessary, including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System. We are opining herein as to the effect on the subject transaction of only the federal laws of the United States, the laws of the States of New York and California and the general corporate law of the State of Delaware. On the basis of the foregoing, and in reliance thereon, and subject to the limitations, qualifications and exceptions set forth below, we are of the opinion that: 1. Each of the Company and the U.S. Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own and operate its properties and to execute, deliver and perform the Credit Agreement and, in the case of the U.S. Borrower, the Notes and the Grid Gold Acknowledgements and to carry out the transactions contemplated thereby. 2. The execution, delivery and performance of the Credit Agreement by each of the Company and the U.S. Borrower have been duly authorized by all necessary corporate action on the part of the Company or such Borrower, as the case may be. The issuance of the Notes and the Grid Gold Acknowledgements by the U.S. Borrower has been duly authorized by all necessary corporate action on the part of such Borrower. 3. Assuming the due execution and delivery of the Credit Agreement by the Company and each Borrower, the Credit Agreement constitutes the legally valid and binding obligation of the Company and each Borrower enforceable against the Company and each Borrower in accordance with its terms. Assuming the due issuance of the Notes, Grid Gold Acknowledgements and Bankers' Acceptances by each Borrower, each of the Notes, Grid Gold Acknowledgements and Bankers' Acceptances constitutes the legally valid and binding obligation of the Borrower issuing the same enforceable against such Borrower in accordance with its terms. VII-A-4 4. It is not necessary in connection with the execution and delivery of the Credit Agreement by the Company or the Borrowers or the issuance of the Notes, Grid Gold Acknowledgements and Bankers' Acceptances by the Borrowers to register the Credit Agreement, the Notes, the Grid Gold Acknowledgements or the Bankers' Acceptances under the Securities Act of 1933 or to qualify an indenture in respect of the Notes under the Trust Indenture Act of 1939, as amended. 5. None of the execution and delivery of the Credit Agreement by the Company and the Borrowers, the issuance of the Notes, Grid Gold Acknowledgements or Bankers' Acceptances by the Borrowers, the consummation of the transactions contemplated by the Credit Agreement, or the compliance with the terms and conditions thereof by the Company or the Borrowers, as the case may be, conflicts with, results in a breach or a violation of, or constitutes a default under, any of the terms, conditions or provisions of (y) the Certificate or Articles of Incorporation or By-Laws of the Company or the U.S. Borrower, or (z) any present United States federal or New York statute, rule or regulation that is binding on the Company or any Borrower. 6. No governmental consents, approvals, registrations, declarations or filings are required to be obtained or made by the Company or any Borrower in connection with the execution and delivery of the Credit Agreement or, in the case of the Borrowers, the Notes, Grid Gold Acknowledgements or Bankers' Acceptances except as have already been obtained. 7. The making of the Loans and the application of the proceeds thereof as provided in the Credit Agreement do not violate or require filings under Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. 8. All Obligations of Company under the Credit Agreement are within the definition of "Senior Debt" in the indenture pursuant to which the Subordinated Debentures have been issued. Our opinion as to enforceability of the Credit Agreement, the Notes, Grid Gold Acknowledgements and Bankers' Acceptances is qualified by and subject to: (a) limitations imposed by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally, and laws relating to fraudulent transfers or conveyances, preferences and equitable subordination; (b) general principles of equity, including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law); (c) the qualification that certain remedial provisions of the Credit Agreement may be unenforceable in whole or in part, but such document VII-A-5 contains adequate provisions for practical realization of the benefits purported to be created thereby; (d) the unenforceability under certain circumstances of provisions purporting to release or exculpate any party from liability for its acts or omissions, or purporting to impose a duty upon any party to indemnify any other party when any claimed damages result from the gross negligence or willful misconduct of the party seeking such indemnity; (e) the unenforceability under certain circumstances of waivers, and provisions imposing liquidated damages, late payment charges or forfeitures, if such amounts are determined to be penalties in light of the actual damages incurred; (f) the qualification that any money judgment rendered by a court in the State of New York or California will be payable in United States dollars. This opinion is being delivered upon the express instructions of each of the Company and the Borrowers to the Agents, the Arranger and the Lenders and their permitted assignees and participants and is solely for their benefit in connection with the above transactions. This opinion may not be relied upon for any other purpose, or relied upon by any other person, firm or corporation for any purpose, without our prior written consent; provided, however, that each of the Agents, the Arranger and the Lenders, and their permitted assigns and participants, may provide this opinion (i) to bank examiners and other regulatory authorities should they so request or in connection with their normal examinations, (ii) to its respective independent auditors and attorneys, (iii) pursuant to order or legal process of any court or governmental agency, (iv) in connection with any action to which it is a party arising out of the transactions contemplated by the Credit Agreement, or (v) to prospective assignees of, or participants in, all or any portion of its Loans, Bankers' Acceptances, participations in Letters of Credit or Overall Commitment under the Credit Agreement. Very truly yours, VII-A-6 SCHEDULE I VII-A-7 EXHIBIT VII-B FORM OF OPINION OF WAYNE KIRK, ESQ. July __, 1998 The Chase Manhattan Bank of Canada, as Canadian Administrative Agent 150 King Street West 16th Floor Box 68 Toronto Ontario Canada MSH 1J9 and Chase Securities Australia Limited, as Australian Administrative Agent Level 35 AAP Center 259 George Street Sydney NSW Australia 2000 and Chase Securities Inc., as Arranger 270 Park Avenue New York, NY 10017 and The Chase Manhattan Bank, as Administrative Agent 1 Chase Manhattan Plaza New York, NY 10081 and the Lenders Listed on Schedule I Hereto Re: Credit Agreement dated July , 1998 among Homestake Mining Company, Homestake Mining Company of California, Homestake Canada Inc., Homestake Gold of Australia Limited, Plutonic Resources Limited. the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, and The Chase Manhattan Bank, as Administrative Agent VII-B-1 Ladies and Gentlemen: I have acted as counsel to Homestake Mining Company, a Delaware corporation (the "Company"), Homestake Mining Company of California, a California corporation (the "U.S. Borrower"), Homestake Canada Inc., an Ontario corporation (the "Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), and Plutonic Resources Limited ("Plutonic"; and collectively with HGAL, the "Australian Borrowers" and, together with the U.S. Borrower and the Canadian Borrower, the "Borrowers"), in connection with the execution and delivery of the Credit Agreement dated as July , 1998, among the Company, the U.S. Borrower, the Canadian Borrower, the Australian Borrower, the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, and The Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement"), and certain transactions relating thereto. All terms used herein that are defined in the Credit Agreement have the respective meanings specified in the Credit Agreement. This letter is being delivered to you in satisfaction of the condition set forth in subsection 3.1E of the Credit Agreement and with the understanding that you are entering into the Credit Agreement in reliance on the opinions expressed herein. In my capacity as Vice President, General Counsel and Corporate Secretary of the Company and counsel to the Company and the Borrowers, I have personally supervised the actions of the Company and the Borrowers in connection with the authorization, execution and delivery of the Credit Agreement and the Exhibits and Schedules thereto, the Notes and the Grid Gold Acknowledgements. In my capacity as counsel to the Company and the Borrowers, I have examined the originals, or copies identified to my satisfaction as being true copies, of such records, documents or other instruments as in my judgment are necessary or appropriate to enable me to render the opinions expressed below. These records, documents and instruments include the following: (a) The Certificates or Articles of Incorporation and the Articles of Association of the Company, the U.S. Borrower, the Canadian Borrower and the Australian Borrowers; (b) The By-Laws of the Company, the U.S. Borrower, the Canadian Borrower and the Australian Borrowers; (c) Certain records of proceedings and actions of the Board of Directors of the Company, the U.S. Borrower, the Canadian Borrower and the Australian Borrowers; (d) The Credit Agreement and the Exhibits and Schedules annexed thereto; (e) The Notes and Grid Gold Acknowledgements; VII-B-2 (f) The form of Drafts; and (g) The material indentures, mortgages, contracts and agreements of the Company and the Borrowers identified in the Opinion Certificates referred to below. I have been furnished with, and have relied upon, the certificates of certain officers of each of the Company, the U.S. Borrower, the Canadian Borrower, HGAL, and Plutonic (each an "Opinion Certificate") with respect to certain factual matters, copies of which are being delivered to you herewith. Attached to such Opinion Certificates are, among other things, listings certified by the Persons executing such Opinion Certificates to be all of the indentures, mortgages, deeds of trust, material pledge and security agreements, bank loans, credit agreements and other material evidences of indebtedness of the Company, the U.S. Borrower, the Canadian Borrower, HGAL, and Plutonic (collectively, the "Debt Agreements") and listings certified by the Persons executing such Opinion Certificates to be all of the other agreements by which the Company, the U.S. Borrower, the Canadian Borrower, HGAL, or Plutonic is or will be, after the execution of the documents referred to herein, a party or by which the Company, the U.S. Borrower, the Canadian Borrower, HGAL, or Plutonic or any of their respective properties are bound or affected and which are certified to be material to the business, operations or properties of the Company, the U.S. Borrower, the Canadian Borrower , HGAL, or Plutonic (collectively, the "Material Agreements"). I have no reason to believe that the Agents, the Arranger or the Lenders and I are not entitled to rely upon the certificates and the representations and warranties referred to above. I have also been furnished with, and have relied upon, evidence or advice satisfactory to me from the offices of the Secretaries of State of California and Delaware and the Ministry of Consumer and Commercial Relations of Ontario, [need entity for Australian certification] as appropriate, with respect to the good standing or corporate status of the Company, the U.S. Borrower, the Canadian Borrower, HGAL, and Plutonic. In addition, I have obtained and relied upon such other certificates and assurances from public officials as I have deemed necessary, desirable or appropriate to render the opinions herein, copies of which have been delivered to Administrative Agent. I have assumed the genuineness and authenticity of all documents submitted to me as originals and the conformity to originals of all documents submitted to me as copies, drafts or forms. In making my examination of documents executed or to be executed by Persons other than the Company, the U.S. Borrower, the Canadian Borrower or the Australian Borrowers, I have assumed that such other Persons had or have the power to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action and execution and delivery of such documents by such Persons and the validity and binding effect thereof in relation to such Persons. I have investigated such questions of law for the purpose of rendering this opinion as I have deemed necessary, including, without limitation, Regulations G, T, U and X of the Board of Governors of the Federal Reserve System. I am opining herein as to the effect on the subject transaction of the federal laws of the United States, the laws of the State of California and, in respect only of the general corporation law, the laws of the State of Delaware. VII-B-3 On the basis of the foregoing, and in reliance thereon, and subject to the limitations, qualifications and exceptions set forth below, I am of the opinion that: 1. Each of the Company and the Borrowers is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation and has all requisite corporate power and authority to own and operate its properties and to carry on its business as now conducted, to execute, deliver and perform the Credit Agreement and, in the case of the Borrowers, the Notes, the Grid Gold Acknowledgements and the Bankers' Acceptances, and to carry out the transactions contemplated thereby. 2. Each of the Company and the Borrowers has not failed to qualify to do business as a foreign corporation in any state or province where the consequence of failure to be so qualified would have a material adverse effect on the Company's or any Borrower's business, operations or properties. 3. The execution, delivery and performance of the Credit Agreement by each of the Company and the Borrowers have been duly authorized by all necessary corporate action on the part of the Company and the Borrowers. The issuance of the Notes, the Grid Gold Acknowledgements and the Bankers' Acceptances by each Borrower has been duly authorized by all necessary corporate action on the part of such Borrower. 4. The Credit Agreement has been duly executed and delivered by the Company and each Borrower. The Notes and Grid Gold Acknowledgements have been duly issued by the Borrowers. 5. It is not necessary in connection with the execution and delivery of the Credit Agreement by the Company or the Borrowers or the issuance of the Notes, the Grid Gold Acknowledgements and the Bankers' Acceptances by the Borrowers to register the Credit Agreement, the Notes, the Grid Gold Acknowledgements or the Bankers' Acceptances under the Securities Act of 1933 or to qualify an indenture in respect of the Notes under the Trust Indenture Act of 1939, as amended. 6. None of the execution and delivery of the Credit Agreement by the Company and the Borrowers, the issuance of the Notes, Grid Gold Acknowledgements and Bankers' Acceptances by the Borrowers, the consummation of the transactions contemplated by the Credit Agreement, or the compliance with the terms and conditions thereof by the Company or the Borrowers, as the case may be, (A) conflicts with, results in a breach or a violation of, or constitutes a default under, any of the terms, conditions or provisions of (w) the Certificate or Articles of Incorporation, Articles of Association or By-Laws of the Company or the Borrowers, (x) any Debt Agreement or Material Agreement, (y) any order, writ, judgment or decree to which, to my knowledge, the Company or any Borrower is a party or by which, to my knowledge, any of their respective properties or assets are bound and which is material to the Company or any Borrower, or (z) any present United States federal or California statute, rule or regulation that is binding on the Company or any Borrower, or VII-B-4 (B) results in the creation of any Lien upon any of the properties or assets of the Company or any Borrower under any agreement referred to in clause (x) above. 7. To my knowledge, there is no action, suit or proceeding pending or threatened against or affecting the Company or any Borrower at law or in equity before any court, arbitrator or administrative or governmental body (a) in which an order has been entered preventing the making of any of the Loans or other extensions of credit under the Credit Agreement, or (b) that could, either individually or in the aggregate, have a material adverse effect on the ability of the Company or any Borrower to perform its obligations under the Credit Agreement or, in the case of any Borrower, the Notes, the Grid Gold Acknowledgements or the Bankers' Acceptances to which it is a party or the financial condition of the Company and its Subsidiaries, taken as a whole, or any Borrower. 8. Neither the Company nor any Borrower is an "investment company" or a company "controlled" by an "investment company" as such terms are defined in the Investment Company Act of 1940, as amended, or subject to regulation under the Public Utility Holding Company Act of 1935, as amended, the Federal Power Act, as amended, the Interstate Commerce Act, as amended, or any federal or state statute or regulation limiting its ability to incur Indebtedness with respect to money borrowed or to create Liens on any of its properties or assets to secure such Indebtedness. 9. No United States federal or California governmental consents, approvals, registrations, declarations or filings are required to be obtained or made by the Company or any Borrower in connection with the execution and delivery of the Credit Agreement or, in the case of the Borrowers, the Notes, Grid Gold Acknowledgements or Bankers' Acceptances except as have already been obtained. 10. The making of the Loans and the application of the proceeds thereof as provided in the Credit Agreement do not violate or require filings under Regulation G, T, U or X of the Board of Governors of the Federal Reserve System. 11. All Obligations of Company under the Credit Agreement are within the definition of "Senior Debt" in the indenture pursuant to which the Subordinated Debentures have been issued. This opinion is being delivered upon the express instructions of each of the Company and the Borrowers to the Agents, the Arranger and the Lenders, and their permitted assignees and participants, and is solely for their benefit in connection with the above transactions. This opinion may not be relied upon for any other purpose, or relied upon by any other person, firm or corporation for any purpose, without prior written consent; provided, however, that each of the Agents, the Arranger and the Lenders, and their permitted assignees and participants, may provide this opinion (i) to bank examiners and other regulatory authorities should they so request or in connection with their normal examinations, (ii) to its respective independent auditors and attorneys, (iii) pursuant to order or legal process of any court or governmental agency, (iv) in connection with any action to which it is a party arising out of the transactions contemplated by the Credit Agreement, or (v) to prospective VII-B-5 assignees of, or participants in, all or any portion of its Loans, Bankers' Acceptances, participations in Letters of Credit or Overall Commitment under the Credit Agreement. Very truly yours, VII-B-6 SCHEDULE I VII-B-7 EXHIBIT VIII-A FORM OF OPINION OF OSLER, HOSKIN & HARCOURT July __, 1998 The Chase Manhattan Bank of Canada, as Canadian Administrative Agent 150 King Street West 16th Floor Box 68 Toronto Ontario MSH 1J9 Canada and Chase Securities Australia Limited, as Australian Administrative Agent Level 35 AAP Center 259 George Street Sydney NSW Australia 2000 and Chase Securities Inc., as Arranger 270 Park Avenue New York, NY 10017 and The Chase Manhattan Bank, as Administrative Agent 1 Chase Manhattan Plaza New York, NY 10081 and the Lenders Listed on Schedule I Hereto Re: Credit Agreement dated as of July , 1998 among Homestake Mining Company, Homestake Mining Company of California, Homestake Canada Inc., Homestake Gold of Australia Limited, Plutonic Resources Limited the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, and The Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement") VIII-A-1 Dear Sirs/Mesdames: We have acted as Canadian counsel to Homestake Canada Inc. (the "Canadian Borrower") in connection with the execution and delivery of the above-noted Credit Agreement and certain transactions relating thereto. All terms used herein that are defined in the Credit Agreement have the respective meanings specified in the Credit Agreement. This letter is being delivered to you in satisfaction of the condition set forth in subsection 3.1E of the Credit Agreement and with the understanding that you are entering into the Credit Agreement in reliance on the opinions expressed herein. In our capacity as such counsel, we have examined the originals, or copies identified to our satisfaction as being true copies, of such records, documents or other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. These records, documents and instruments include the following: (a) The Re-stated Articles of Incorporation and amendments thereto (collectively, the "Articles of Incorporation") of the Canadian Borrower; (b) The By-Laws of the Canadian Borrower; (c) Certain records of proceedings and actions of the Board of Directors of the Canadian Borrower; (d) The Credit Agreement and the Exhibits and Schedules annexed thereto; (e) The Notes and Grid Gold Acknowledgements; and (f) The form of Drafts. We have been furnished with, and have relied upon, a certificate of incumbency of the Canadian Borrower setting forth the directors and officers of the Canadian Borrower and certain of their respective signatures. We have also been furnished with, and have relied upon, such certificates from public officials as we have deemed necessary, desirable or appropriate to render the opinions herein. We have assumed the genuineness and authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as copies, drafts or forms. In making our examination of documents executed or to be executed by Persons other than the Canadian Borrower we have assumed that such other Persons had or have the power to enter into and perform all their respective obligations thereunder (including without limitation the legal capacity of all such Persons who are individuals) and have also assumed the due authorization by all requisite action and execution and delivery of such documents by such Persons and the validity and binding effect thereof in relation to such Persons. VIII-A-2 We have investigated such questions of law for the purpose of rendering this opinion as we have deemed necessary. We are solicitors qualified to carry on the practice of law in the Province of Ontario and we express no opinion as to any laws, or any matters governed by any laws, other than the laws of the Province of Ontario and the federal laws of Canada applicable in the Province of Ontario. On the basis of the foregoing and subject to the qualifications set forth below, we are of the opinion that: 1. The Canadian Borrower is a corporation duly incorporated and validly existing under the laws of the Province of Ontario and has all the powers of a natural person including all requisite corporate power and authority (i) to own and lease its properties and assets; (ii) to carry on its business as presently conducted; and (iii) to execute, deliver and perform the Credit Agreement, the Notes issued by the Canadian Borrower (the "Canadian Notes"), the Grid Gold Acknowledgements issued by the Canadian Borrower (the "Canadian Grid Gold Acknowledgements") and all Bankers' Acceptances sold by it from time to time and to carry out the transactions contemplated thereby. 2. The Canadian Borrower is registered as an extra-provincial corporation in the Province of British Columbia. 3. The execution, delivery and performance of the Credit Agreement and the issuance of the Canadian Notes, the Canadian Grid Gold Acknowledgements and from time to time Banker's Acceptances by the Canadian Borrower have been duly authorized by all necessary corporate action on the part of the Canadian Borrower, and the Credit Agreement, the Canadian Notes and the Canadian Grid Gold Acknowledgements have been duly executed and delivered by the Canadian Borrower. 4. (a) The choice of the law of the State of New York, without giving effect to the conflicts of laws rules thereof, as the governing law of the Credit Agreement, the Canadian Notes, the Canadian Grid Gold Acknowledgements and the Bankers' Acceptances is a valid and effective choice of law under the laws of the Province of Ontario. (b) In proceedings brought before a court of competent jurisdiction in the Province of Ontario, the laws of the State of New York would, to the extent specifically pleaded and proved with respect to the Credit Agreement, the Canadian Notes, the Canadian Grid Gold Acknowledgements or the Bankers' Acceptances as a fact by expert evidence, be recognized and applied by such court to all issues which are to be determined in accordance with such laws, except that in any such proceedings, such court (i) will apply those laws of the Province of Ontario which it characterizes as procedural and will not apply those laws of the State of New York as such court characterizes as procedural; and (ii) will not apply those laws of the State of New York which a court of the Province of Ontario would characterize as revenue, expropriatory, penal or similar laws or the application of which would be inconsistent with public policy, as such term is applied by such court. VIII-A-3 (c) No provision of the Credit Agreement, the Canadian Notes, the Canadian Grid Gold Acknowledgements or the Bankers' Acceptances is inconsistent with public policy, as such term is applied by the courts of the Province of Ontario. (d) The submission in the Credit Agreement by the Canadian Borrower to the non-exclusive jurisdiction of the courts of the State of New York is binding and enforceable against the Canadian Borrower. 5. None of the execution and delivery of the Credit Agreement by the Canadian Borrower, the issuance of the Canadian Notes, the Canadian Grid Gold Acknowledgements and the Bankers' Acceptances by the Canadian Borrower, the consummation of the transactions contemplated by the Credit Agreement, or the compliance with the terms and conditions thereof by the Canadian Borrower conflicts with, results in a breach or a violation of, or constitutes a default under, any of the terms, conditions or provisions of the Articles of Incorporation or By-Laws of the Canadian Borrower, or any statute, rule or regulation of the Province of Ontario or the federal government of Canada applicable therein that is binding on the Canadian Borrower. 6. We have not been retained by the Canadian Borrower in connection with any action, suit or proceeding pending or presently threatened against or affecting the Canadian Borrower at law or in equity before any court, arbitrator or administrative or governmental body. 7. No consent, approval, registration, declaration or filing of the Province of Ontario or the federal government of Canada applicable therein are required to be obtained or made by the Canadian Borrower in connection with the execution, delivery and performance by the Canadian Borrower or the enforceability against the Canadian Borrower of the Credit Agreement, the Notes, the Grid Gold Acknowledgements or the Bankers' Acceptances. 8. In any bankruptcy proceeding under the Bankruptcy and Insolvency Act (Canada), the obligation of payment of the Canadian Borrower under the Credit Agreement, the Canadian Notes, the Canadian Grid Gold Acknowledgement and the outstanding Bankers' Acceptances will rank at least pari passu with the claims of all other creditors of the Canadian Borrower which are not secured or preferred creditors of the Canadian Borrower within the meaning of that statute or which are not otherwise entitled to priority by statute. 9. The Canadian Borrower is not entitled to claim immunity from legal process of the enforcement of any judgement of a court of competent jurisdiction, whether generally or in relation to any specific assets. 10. A final and conclusive judgement in personam granted by a court of competent jurisdiction in the State of New York may be enforced in an Ontario court by an action or counterclaim for the amount due under such judgement, provided that: VIII-A-4 (a) the judgement was obtained after proper service of process under New York law in connection with the action in which the jurisdiction was obtained; (b) the New York court acted within its jurisdiction under New York law; (c) the judgement is final and conclusive, and no stay of execution has been ordered by the New York law; (d) the judgement is not impeachable as void or voidable or otherwise ineffective under New York law; (e) the judgement was not obtained by fraud or any manner contrary to the rules of natural justice, the judgement and the enforcement thereof are not inconsistent with public policy (as such term is applied by the Ontario court); (f) the judgement is for a fixed sum of money which is not to be determined at a future time, and the enforcement of the judgement in the Province of Ontario does not constitute, directly or indirectly, the enforcement of laws characterized by the applicable Ontario court as being of revenue, expropriatory, penal, or public law nature; (g) no new admissible evidence relevant to the action which was the subject matter of the judgement is discovered or arises prior to the enforcement of the judgement by the Ontario court; (h) the action to enforce the judgment is commenced against the judgement debtor in the Ontario court within the applicable limitation period; and (i) the Ontario court may give judgement in Canadian currency only. This opinion is being delivered upon the express instructions of the Canadian Borrower to the Agents, Arranger and the Lenders and their permitted assignees and participants and is solely for their benefit in connection with the above transactions. This opinion may not be relied upon for any other purpose, or relied upon by any other person, firm or corporation for any purpose, without our prior written consent; provided, however, that each of the Agents, Arranger and the Lenders and their permitted assignees and participants may provide this opinion (i) to bank examiners and other regulatory authorities should they so request or in connection with their normal examinations, (ii) to its respective independent auditors and attorneys, (iii) pursuant to order or legal process of any court or governmental agency or other binding statutory requirement, (iv) in connection with any action to which it is a party arising out of the transactions contemplated by the Credit Agreement, or (v) to prospective assignees of, or participants in, all or any portion of its VIII-A-5 Loans, Bankers' Acceptances, participations in Letters or Credit or Overall Commitment under the Credit Agreement. Yours very truly, VIII-A-6 SCHEDULE I VIII-A-7 EXHIBIT VIII-B FORM OF OPINION OF MALLESONS STEPHEN JAQUES July __, 1998 The Chase Manhattan Bank of Canada, as Canadian Administrative Agent 150 King Street West 16th Floor Box 68 Toronto Ontario MSH 1J9 Canada and Chase Securities Australia Limited, as Australian Administrative Agent Level 35 AAP Center 259 George Street Sydney NSW Australia 2000 and Chase Securities Inc., as Arranger 270 Park Avenue New York, NY 10017 and The Chase Manhattan Bank, as Administrative Agent 1 Chase Manhattan Plaza New York, NY 10081 and the Lenders Listed on Schedule I Hereto Re: Credit Agreement dated as of July , 1998 among Homestake Mining Company, Homestake Mining Company of California, Homestake Canada Inc., Homestake Gold of Australia Limited, Plutonic Resources Limited, the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, and The Chase Manhattan Bank, as Administrative Agent (the "Credit Agreement") VIII-B-1 Ladies and Gentlemen: We have acted as Australian counsel to Homestake Gold of Australia Limited ("HGAL") and Plutonic Resources Limited ("Plutonic"; and collectively with HGAL, "Australian Borrowers") in connection with the execution and delivery of the above-noted Credit Agreement and certain transactions relating thereto. All terms used herein that are defined in the Credit Agreement have the respective meanings specified in the Credit Agreement. This letter is being delivered to you in satisfaction of the condition set forth in subsection 3.1E of the Credit Agreement and with the understanding that you are entering into the Credit Agreement in reliance on the opinions expressed herein. In our capacity as such counsel, we have examined the originals, or copies identified to our satisfaction as being true copies, of such records, documents or other instruments as in our judgment are necessary or appropriate to enable us to render the opinions expressed below. These records, documents and instruments include the following: (a) The Certificates of Incorporation of the Australian Borrowers; (b) The Memoranda and Articles of Association of the Australian Borrowers; (c) Certain records of proceedings and actions of the Board of Directors of the Australian Borrowers; (d) The Credit Agreement and the Exhibits and Schedules annexed thereto; and (e) The Notes and Grid Gold Acknowledgements. We have been furnished with, and have relied upon, certificates of incumbency of the Australian Borrowers setting forth the directors and officers of the Australian Borrowers authorized to sign documents in connection with the Credit Agreement and their respective signatures. We have conducted a search of the Australian Borrowers at the Australian Securities Commission on [insert date] and relied on the correctness of the results of that search. We have assumed the genuineness and authenticity of all documents submitted to us as originals and the conformity to originals of all documents submitted to us as copies, drafts or forms. In making our examination of documents executed or to be executed by Persons other than the Australian Borrowers we have assumed that such other Persons had or have the power to enter into and perform all obligations thereunder (including without limitation the legal capacity of all such Persons who are individuals) and have also assumed the due authorization by all requisite action and execution and delivery of such documents by such Persons and the validity and binding effect thereof in relation to such Persons. VIII-B-2 We have investigated such questions of law for the purpose of rendering this opinion as we have deemed necessary. We are [solicitors] qualified to carry on the practice of law in the Commonwealth of Australia and we express no opinion as to any laws, or any matters governed by any laws, other than the laws of the Commonwealth of Australia and its States and Territories. On the basis of the foregoing, and in reliance thereon, and subject to the limitations, qualifications and exceptions set forth below, we are of the opinion that: 1. The Australian Borrowers are corporations duly incorporated and validly existing under the laws of the Commonwealth of Australia and its States and Territories and has all the powers of a natural person including all requisite corporate power and authority (i) to own and lease their properties and assets; (ii) to carry on its business; and (iii) to execute, deliver and perform the Credit Agreement, the Notes and the Grid Gold Acknowledgements and to carry out the transactions contemplated thereby. 2. The execution, delivery and performance of the Credit Agreement and the issuance of the Notes and the Grid Gold Acknowledgements by the Australian Borrowers have been duly authorized by all necessary corporate action on the part of the Australian Borrowers and have been validly executed by the Australian Borrowers. 3. The Credit Agreement, the Notes and the Grid Gold Acknowledgements constitute valid and legally binding and enforceable obligations of the Australian Borrowers in accordance with their respective terms. 4. (a) The choice of the law of the State of New York, without giving effect to the conflicts of laws rules thereof, as the governing law of the Credit Agreement, the Notes and the Grid Gold Acknowledgements is a valid and effective choice of law under the laws of the Commonwealth of Australia and its States and Territories. (b) In proceedings brought before a court of competent jurisdiction in the Commonwealth of Australia, the laws of the State of New York would, to the extent specifically pleaded and proved as a fact by expert evidence, be recognized and applied by such court to all issues which, under the conflicts of laws rules of the Commonwealth of Australia, are to be determined in accordance with the proper or governing law of contract, except that in any such proceedings, [such court (i) will apply those laws of the Commonwealth of Australia which it characterizes as procedural and will not apply those laws of the State of New York as such court characterizes as procedural; (ii) will not apply those laws of the State of New York which a court of the Commonwealth of Australia would characterize as revenue, expropriatory, penal or similar laws or the application of which would be inconsistent with public policy, as such term is applied by such court; and (iii) may only give judgment in Australian dollars.] VIII-B-3 (c) No provision of the Credit Agreement, the Notes or the Grid Gold Acknowledgements is inconsistent with public policy, as such term is applied by the courts of the Commonwealth of Australia. (d) The submission in the Credit Agreement by the Australian Borrowers to the non-exclusive jurisdiction of the courts of the State of New York is legal, valid and binding. 5. None of the execution and delivery of the Credit Agreement by the Australian Borrowers, the issuance of the Notes and the Grid Gold Acknowledgements by the Australian Borrowers, the consummation of the transactions contemplated by the Credit Agreement, or the compliance with the terms and conditions thereof by the Australian Borrowers conflicts with, results in a breach or a violation of, or constitutes a default under, any of the terms, conditions or provisions of the Memoranda and Articles of Association of the Australian Borrowers, or any statute, rule or regulation of the Commonwealth of Australia and its States and Territories that is binding on the Australian Borrower. 6. We have not been retained by the Australian Borrowers in connection with any action, suit or proceeding pending or threatened against or affecting the Australian Borrowers at law or in equity before any court, arbitrator or administrative or governmental body. 7. No federal Australian governmental consents, approvals, registrations, declarations or filings are required to be obtained or made by the Australian Borrowers in connection with the execution, delivery or performance of the Australian Borrowers' obligations under the Credit Agreement, the Notes or the Grid Gold Acknowledgements in order to ensure the legality, enforceability or admissibility of the documents or for any reason whatsoever. 8. No ad valorem stamp duty or similar documentary tax or duty in or of any State or Territory of the Commonwealth of Australia will be applicable with respect to the execution and delivery of the Credit Agreement, the Notes or the Grid Gold Acknowledgements and the performance by the Australian Borrowers of its obligations under those documents. 9. The monetary obligations of the Australian Borrowers under the Credit Agreement, the Notes and the Grid Gold Acknowledgements rank pari passu with all other unsecured, unsubordinated indebtedness of the Australian Borrowers, other than obligations preferred by law. 10. Based only on searches referred to above, no winding up orders have been made or resolutions passed for the winding up of the Australian Borrowers. VIII-B-4 11. The Australian Borrowers does not enjoy any immunity from suit in the Courts of the Commonwealth of Australia or its States and Territories and its assets are not exempt from execution. This opinion is being delivered upon the express instructions of the Australian Borrowers to the Agents, Arranger and the Lenders and their permitted assignees and participants and is solely for their benefit in connection with the above transactions. This opinion may not be relied upon for any other purpose, or relied upon by any other person, firm or corporation for any purpose, without our prior written consent; provided, however, that each of the Agents, Arranger and the Lenders and their permitted assignees and participants may provide this opinion (i) to bank examiners and other regulatory authorities should they so request or in connection with their normal examinations, (ii) to its respective independent auditors and attorneys, (iii) pursuant to order or legal process of any court or governmental agency, (iv) in connection with any action to which it is a party arising out of the transactions contemplated by the Credit Agreement, or (v) to prospective assignees of, or participants in, all or any portion of its Loans, Bankers' Acceptances, participations in Letters or Credit or Overall Commitment under the Credit Agreement. Yours very truly, VIII-B-5 SCHEDULE I VIII-B-6 EXHIBIT IX FORM OF OPINION OF O'MELVENY & MYERS LLP [O'M&M Letterhead] July ----- 1 9 9 8 149,000-004 The Chase Manhattan Bank of Canada, as Canadian Administrative Agent 150 King Street West 16th Floor Box 68 Toronto Ontario MSH 1J9 Canada and Chase Securities Australia Limited, as Australian Administrative Agent Level 35 AAP Center 259 George Street Sydney NSW Australia 2000 and The Chase Manhattan Bank as Administrative Agent 270 Park Avenue New York, NY 10017 and Deutsche Bank A.G. as Documentation Agent 31 West 52nd Street New York, NY 10019 IX-1 and the Lenders Listed on Schedule I Hereto Re: Credit Agreement dated as of July , 1998 among Homestake Mining Company, Homestake Mining Company of California, Homestake Canada Inc., Homestake Gold of Australia Limited, Plutonic Resources Limited, the Lenders named therein, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G. as Documentation Agent and The Chase Manhattan Bank, as Administrative Agent Ladies and Gentlemen: We have acted as counsel to The Chase Manhattan Bank, as Administrative Agent (in such capacity, "Administrative Agent"), in connection with the preparation and delivery of that certain Credit Agreement dated as of July 14, 1998 (the "Credit Agreement") among Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers") the financial institutions listed therein as the Lenders (collectively, "Lenders"), the Agents named therein (including the Administrative Agent) and the Arranger named therein and in connection with the preparation and delivery of certain related documents. We have participated in various conferences with representatives of the Company, U.S. Borrower, Canadian Borrower, and Australian Borrowers and with your representatives and Blake, Cassels & Graydon, Canadian counsel for the Agents, and Mallesons Stephen Jaques, Australian counsel for the Agents, during which the Credit Agreement and related matters have been discussed, and we have also participated in the meeting held on the date hereof incident to the occurrence of the Effective Date under the Credit Agreement. We have reviewed the forms of the Credit Agreement and the exhibits thereto, including the promissory notes delivered by U.S. Borrower, Canadian Borrower, HGAL, and Plutonic, which forms are annexed thereto, and the U.S. Grid Gold Acknowledgement, which form is annexed thereto, and the opinions of Wayne Kirk, Esq., General Counsel of Company, Thelen, Reid & Priest, special New York counsel to Company and Borrowers, Osler, Hoskin & Harcourt, special Canadian counsel to Canadian Borrower, and Mallesons Stephen Jaques, special Australian counsel to Australian Borrowers (collectively, the "Opinions"), and the officers' certificates and other documents delivered on the Effective Date. IX-2 We have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals or copies and the due authority of all persons executing the same, and we have relied as to factual matters on the documents that we have reviewed. Based on and subject to the foregoing, we are of the opinion that the Credit Agreement constitutes the legally valid and binding obligation of the Company and the Borrowers, enforceable against the Company and the Borrowers in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting creditors' rights generally (including, without limitation, fraudulent conveyance laws) and by general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law. Our opinion in the preceding paragraph as to the enforceability of the Credit Agreement is subject to: (i) public policy considerations, statutes or court decisions that may limit the rights of a party to obtain indemnification against its own gross negligence, willful misconduct or unlawful conduct; (ii) the unenforceability under certain circumstances of broadly or vaguely stated waivers or waivers of rights granted by law where the waivers are against public policy or prohibited by law; (iii) the unenforceability under certain circumstances of provisions appointing one party as attorney-in-fact for an adverse party; (iv) the unenforceability under certain circumstances of choice of law provisions; and (v) the unenforceability under certain circumstances of rights of set-off granted to a Lender in respect of amounts owing by an Affiliate of such Lender or with respect to loans in which participations have been granted purported to be provided for in the Credit Agreement. We express no opinion as to the effect of non-compliance by you with any state or federal laws or regulations applicable to the transactions contemplated by the Credit Agreement because of the nature of your business. We advise you that provisions of the Credit Agreement which provide for jurisdiction of the courts of New York may not be binding on the courts in the forum(s) selected or excluded. IX-3 In addition, although we have not independently considered all of the matters covered by the Opinions to the extent necessary to enable us to express the conclusions therein stated, we believe that the Opinions and the officers' certificates and other documents delivered in connection with the execution and delivery of, and as conditions to the effectiveness of, the Credit Agreement are substantially responsive to the requirements of the Credit Agreement. The law covered by this opinion is limited to the present federal law of the United States and the present law of the State of New York. We express no opinion as to the laws of any other jurisdiction and no opinion regarding the statutes, administrative decisions, rules or regulations of any county, municipality or special political subdivision or other local authority. We express no opinion concerning federal or state securities laws or regulations. This opinion is furnished by us as counsel for the Administrative Agent and may be relied upon by you only in connection with the Credit Agreement. It may not be used or relied upon by you for any other purpose or by any other person for any purpose whatsoever without in each instance our prior written consent. You may, however, deliver a copy of this opinion to permitted assignees under the Credit Agreement in connection with such assignment, and such assignees may rely on this opinion as if it were addressed and had been delivered to them on the date hereof. Respectfully submitted, IX-4 EXHIBIT X-A FORM OF ASSIGNMENT AND ACCEPTANCE (CANADIAN LENDER) ASSIGNMENT AND ACCEPTANCE This ASSIGNMENT AND ACCEPTANCE (this "Agreement") is dated as of ____________, ____ and entered into by and between [NAME OF LENDER] ("Assignor") and _____________________ ("Assignee"). RECITALS WHEREAS, Assignor has entered into that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined) with Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"); WHEREAS, Assignor is a Canadian Lender under the Credit Agreement and Assignee will, upon giving effect to this Agreement, likewise be a Canadian Lender; WHEREAS, Assignor has a Commitment under the Credit Agreement pursuant to which Assignor is required (i) to make Loans to Canadian Borrower pursuant to subsection 2.1A(i) of the Credit Agreement; (ii) to purchase participations in Canadian Letters of Credit pursuant to subsection 2.7D of the Credit Agreement (any such participations in any such Letters of Credit outstanding as of the date hereof being the "Assignor Participations"); and (iii) to create and accept Bankers' Acceptances pursuant to subsection 2.8A of the Credit Agreement. [WHEREAS, Assignor has issued certain outstanding Canadian Letters of Credit (the "Assignor Letters of Credit") pursuant to subsection 3.3 of the Credit Agreement;][INSERT IF THE CHASE MANHATTAN BANK OF CANADA IS X-A-1 ASSIGNOR AND CANADIAN LETTERS OF CREDIT ARE OUTSTANDING TO CANADIAN BORROWER] WHEREAS, Assignor desires to assign to Assignee its rights and obligations as a Canadian Lender under the Credit Agreement and the other Loan Documents with respect to all or a portion of Assignor's Canadian Commitment, including its commitment to create and accept Bankers' Acceptances, and any Canadian Loans and Bankers' Acceptances or Assignor Participations outstanding thereunder [and to sell to Assignee a participation in the Assignor Letters of Credit (the "Assignee Participation") equal to the participation required to be purchased therein pursuant to subsection 2.7D of the Credit Agreement], and Assignee has agreed to assume the obligations of Assignor under the Loan Documents to the extent of the rights and obligations so assigned [and to purchase the Assignee Participation]; and [WHEREAS, Assignor is also the [U.S./Australian] Lender for its Lending Unit, and Assignor is concurrently herewith entering into an Assignment and Acceptance with [Name of Assignee or Assignee's U.S./Australian affiliate] (the "[U.S./Australian] Assignee") whereby Assignor is assigning to the [U.S./Australian] Assignee that portion of its rights and obligations with respect to its [U.S./Australian] Commitment which corresponds to the Percentage, as defined below;] [WHEREAS, Assignor's Lending Unit consists of the Assignor and [Name of U.S./Australian Lender of Assignor's Lending Unit] ("Assignor's Lending Unit Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith entering into an Assignment and Acceptance with [Name of Assignee or Assignee's U.S./Australian affiliate] (the "[U.S./Australian] Assignee") whereby Assignor's Lending Unit Affiliate is assigning to the [U.S./Australian] Assignee that portion of its rights and obligations with respect to its [U.S./Australian] Commitment which corresponds to the Percentage, as defined below;] NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows: SECTION 1. Assignment and Assumption. (a) Assignor hereby assigns to Assignee, effective upon the receipt of the consideration set forth in Section 1(c) and Administrative Agent's receipt of any processing and recordation fee required under subsection 10.1B of the Credit Agreement, without recourse, representation or warranty (except as expressly set forth herein), an undivided _____% interest (the "Percentage") in all of Assignor's rights and obligations as a Lender arising under the Credit Agreement and the other Loan Documents relating to Assignor's Canadian Commitment, including its commitment to create and accept Bankers' Acceptances, and any Canadian Loans and Bankers' Acceptances and Assignor Participations outstanding thereunder [and concurrently therewith sells to Assignee, without recourse, representation or warranty (except as expressly set forth herein), the Assignee Participation]. X-A-2 (b) Assignee hereby assumes from Assignor, and Assignor is hereby expressly and absolutely released from, the Percentage of all of Assignor's obligations arising under the Loan Documents relating to Assignor's Canadian Commitment, including its commitment to create and accept Bankers' Acceptances, and any Canadian Loans and Bankers' Acceptances and Assignor Participations outstanding thereunder, including without limitation all such obligations with respect to any Canadian Loans to be made and any participations in Canadian Letters of Credit to be purchased, pursuant to the Credit Agreement [, and Assignee hereby purchases from Assignor the Assignee Participation]. (c) Notwithstanding any provisions of this Agreement to the contrary, each of the Assignor and Assignee hereby acknowledges and confirms its understanding and agreement that the Canadian Commitments of the Canadian Lenders under the Credit Agreement may from time to time be increased or decreased by the Borrowers in accordance with subsection 2.1A of the Credit Agreement through changes in the Canadian Allocation or the addition of Lenders with Canadian Commitments, provided that the Canadian Allocation may not at any time exceed the aggregate amount of the Overall Commitment of all Lending Units then in effect. Each of the Assignor and Assignee acknowledges that the Percentage interest in the Canadian Commitment being assigned and assumed hereunder equals the Assignee's Canadian Lender Pro Rata Share, as set forth on Annex II attached hereto, of the Overall Commitment as in effect on and after the date upon which this Agreement becomes effective. (d) Assignor hereby represents and warrants that as of the effective date of this Agreement the respective amounts of unpaid principal, accrued but unpaid interest, accrued but unpaid fees, and discounts and BA Fees relating to Bankers' Acceptances, in each case with respect to the Percentage of Assignor's rights under the Credit Agreement relating to Assignor's Canadian Commitment and Canadian Allocation and any Canadian Loans and Bankers' Acceptances and Assignor Participations outstanding thereunder [and with respect to the Assignee Participation] are as set forth on Annex I attached hereto. In consideration of Assignor's assignment, Assignee hereby agrees to pay to Assignor, on the effective date of this Agreement, the amount(s) of $_________________ [and Cdn.$_______________] in immediately available funds by wire transfer to Assignor's office at ________________________________________. (e) Assignor and Assignee hereby agree that Annex II attached hereto sets forth the amount of the Canadian Commitment and Canadian Allocation, any Canadian Loans and Bankers' Acceptances and participations by Assignee in any Canadian Letters of Credit outstanding under the Commitment and the Canadian Lender Pro Rata Share of Assignee after giving effect to the assignment and assumption [and the sale and purchase] described above. (f) Assignor and Assignee hereby agree that, upon giving effect to the assignment and assumption [and the sale and purchase] described above, Assignee shall be a party to the Credit Agreement as a Canadian Lender thereunder, and shall have all of the rights and obligations under the Loan Documents of, and shall be deemed to have made all of X-A-3 the covenants and agreements contained in the Loan Documents made by, a Canadian Lender having the Canadian Commitment and Canadian Allocation, the outstanding Canadian Loans, the outstanding Bankers' Acceptances, the aggregate participation in outstanding Canadian Letters of Credit and the Canadian Lender Pro Rata Share of Assignee as reflected on Annex II attached hereto. Assignee hereby acknowledges and agrees that the agreement set forth in this subsection 1(f) is expressly made for the benefit of Company, Borrowers, Canadian Administrative Agent, Administrative Agent, Assignor and the other Lenders and their respective successors and permitted assigns. (g) Assignor and Assignee hereby acknowledge and confirm their understanding and intent that (i) this Agreement shall effect [(A)] the assignment by Assignor and the assumption by Assignee of the Percentage of Assignor's rights and obligations with respect to Assignor's Canadian Commitment and Canadian Allocation, including its commitment to create and accept Bankers' Acceptances, and any Canadian Loans and Bankers' Acceptances and Assignor Participations outstanding thereunder and all rights and obligations under the Loan Documents with respect thereto [and (B) the sale by Assignor and the purchase by Assignee of the Assignee Participation], (ii) any other assignments by Assignor of a portion of its rights and obligations with respect to Assignor's Canadian Commitment and Canadian Allocation, including its commitment to create and accept Bankers' Acceptances, and any Canadian Loans and Bankers' Acceptances or Assignor Participations outstanding thereunder [, and any other sales by Assignor of participations in the Assignor Letters of Credit,] shall have no effect on the Canadian Commitment and Canadian Allocation, including its commitment to create and accept Bankers' Acceptances, the outstanding Canadian Loans, the outstanding Bankers' Acceptances, or the aggregate participation in outstanding Canadian Letters of Credit or Canadian Lender Pro Rata Share of Assignee set forth on Annex II attached hereto, and (iii) from and after the effective date of this Agreement, Administrative Agent shall make all payments under the Credit Agreement in respect of the Percentage interest assigned hereby [and the Assignee Participation] (including without limitation all payments of principal and accrued but unpaid interest and commitment and letter of credit fees with respect thereto) to Assignee, whether such amounts (in the case of such interest and fees) have accrued prior to the effective date of this Agreement or subsequent thereto. SECTION 2. Certain Representations, Warranties and Agreements. (a) Assignor represents and warrants that it is the legal and beneficial owner of the Percentage interest being assigned by it hereunder [and of the Assignee Participation] and that such interest [is] [and the Assignee Participation are] free and clear of any adverse claim. (b) Assignor shall not be responsible to Assignee for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of any of the Loan Documents or for any representations, warranties, recitals or statements made therein or made in any written or oral statement or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by Assignor to Assignee or X-A-4 by or on behalf of Company or any Borrower to Assignor or Assignee in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of the Company or any Borrower or any other Person liable for the payment of any Obligations, nor shall Assignor be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or the use of the Letters of Credit or the use of Bankers' Acceptances or as to the existence or possible existence of any Event of Default or Potential Event of Default. (c) Assignee represents and warrants that it is an Eligible Assignee; that it has experience and expertise in the making of loans such as the Loans; that it has acquired its Percentage interest for its own account and not with any present intention of selling all or any portion of such interest; and that it has received, reviewed and approved copies of all Loan Documents. (d) Assignee represents and warrants that it has made its own independent investigation of the financial condition and affairs of Company and each of the Borrowers and their respective Subsidiaries in connection with the assignment evidenced by this Agreement and that it has made and shall continue to make its own appraisal of the creditworthiness of the Company and the Borrowers. Assignor shall not have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Assignee or to provide Assignee with any credit or other information with respect thereto, whether coming into its possession before the making of the initial Loans or at any time or times thereafter, and Assignor shall not have any responsibility with respect to the accuracy of or the completeness of any information provided to Assignee. (e) Each party to this Agreement represents and warrants to the other party hereto that it has full power and authority to enter into this Agreement and to perform its obligations hereunder in accordance with the provisions hereof, that this Agreement has been duly authorized, executed and delivered by such party and that this Agreement constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and by general principles of equity. SECTION 3. Miscellaneous. (a) Each party to this Agreement hereby agrees from time to time, upon request of the other party hereto, to take such additional actions and to execute and deliver such additional documents and instruments as such other party may reasonably request to effect the transactions contemplated by, and to carry out the intent of, this Agreement. (b) Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except by an instrument in writing signed by the party against whom enforcement of such change, waiver, discharge or termination is sought. X-A-5 (c) Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States mail or Canadian mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of telecopy or telex, or four Business Days after depositing it in the United States mail (or five Business Days after depositing it in the Canadian mail), registered or certified, with postage prepaid and properly addressed; provided that notices to Administrative Agent shall not be effective until received. For the purposes hereof, the address of each party hereto shall be as set forth under such party's name on the signature page hereof or, as to either party, such other address as shall be designated by such party in a written notice delivered to the other party hereto. In addition, the address of Assignee set forth below its name on the signature page hereof shall serve as the initial notice address of Assignee for purposes of subsection 10.11 of the Credit Agreement. (d) This Agreement shall not effect an assignment of any rights or obligations relating to the U.S. Commitment or Australian Commitment of any Lender. Assignor and Assignee acknowledge and confirm (i) that concurrently herewith U.S. Assignee is entering into an Assignment and Acceptance with the U.S. Lender of Assignor's Lending Unit whereby U.S. Assignee shall be assigned and assume all rights and obligations of Assignor's Lending Unit with respect to that portion of such Lending Unit's U.S. Commitment which corresponds to the Percentage hereunder, and (ii) that concurrently herewith Australian Assignee is entering into an Assignment and Acceptance with the Australian Lender of Assignor's Lending Unit, if any, whereby Australian Assignee shall be assigned and assume all rights and obligations of Assignor's Lending Unit, if any, with respect to that portion of such Lending Unit's Australian Commitment, if any, which corresponds to the Percentage hereunder. Assignee agrees that U.S. Assignee shall for all purposes be the U.S. Lender of Assignee's Lending Unit and that Australian Assignee, if any, shall for all purposes be the Australian Lender of Assignee's Lending Unit, if any, and that the Commitment of such Lending Unit shall equal the Assignee's Pro Rata Share (as set forth on Annex 1 annexed hereto) of the aggregate Overall Commitment of all Lending Units as in effect at any time on and after the date this Amendment becomes effective. (e) The parties hereto acknowledge the provisions of subsection 2.2F of the Credit Agreement relating to disclosure under the Interest Act (Canada) and agree that the provisions thereof shall apply to the disclosure and calculation of nominal and effective rates of interest payable hereunder as if such provisions were set forth herein. (f) In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. (g) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. X-A-6 (h) This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. (i) This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. (j) This Agreement shall become effective upon the execution of a counterpart hereof by each of Assignor and Assignee and the execution of a counterpart hereof by Company and Borrowers (as evidence of their consent hereto in accordance with subsection 10.1B(i) of the Credit Agreement) and Administrative Agent (as evidence of its acceptance hereof in accordance with subsection 10.1B(ii) of the Credit Agreement) and the receipt by Assignor, Assignee, Canadian Administrative Agent and Administrative Agent of originals or telecopies of such counterparts and authorization of delivery thereof. (k) Assignee hereby appoints The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as Documentation Agent and The Chase Manhattan Bank, as Administrative Agent, under the Credit Agreement and the other Loan Documents, to exercise such powers as are specified in Section 9 of the Credit Agreement and to be entitled to such protections and indemnities as are afforded thereunder. [(l) Assignee hereby agrees to deliver to Canadian Borrower upon request such certificates, documents or other evidence as may be required from time to time, properly completed and duly executed by Assignee, to establish the basis for any applicable exemption from or a reduction of Taxes with respect to any payment to Assignee of principal, interest, fees, commissions, or any other amount payable under this Agreement, the Credit Agreement or otherwise in respect of the Canadian Loans.] [INSERT IF ASSIGNEE IS ORGANIZED UNDER THE LAWS OF ANY JURISDICTION OTHER THAN CANADA OR ANY PROVINCE THEREOF OR IS NOT RESIDENT IN CANADA.] (m) Each of the parties to this Agreement hereby waives its rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement or any dealings between them relating to the transactions contemplated by this Agreement. [Remainder of page intentionally left blank] X-A-7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. [NAME OF ASSIGNOR] [NAME OF ASSIGNEE] By: By: Title: Title: Notice Address: Notice Address: =========================== =========================== - --------------------------- --------------------------- Consented to in accordance with Accepted in accordance with subsection 10.1B(i) of the Credit subsection 10.1B(ii) of the Agreement Credit Agreement HOMESTAKE MINING COMPANY THE CHASE MANHATTAN BANK, as Administrative Agent By: By: Title: Title: HOMESTAKE MINING COMPANY OF CALIFORNIA By: Title: HOMESTAKE CANADA INC. By: Title: HOMESTAKE GOLD OF AUSTRALIA LIMITED By: Title: PLUTONIC RESOURCES LIMITED By: Title: Receipt Acknowledged: THE CHASE MANHATTAN BANK OF CANADA, as Canadian Administrative Agent By: Title: ANNEX I AMOUNTS OUTSTANDING Outstanding Principal Amount: Loans: Dollar Loans: $_________ Canadian Dollar Loans: $_________ Total: $_________ Accrued But Unpaid Interest: $_________ Accrued But Unpaid Fees: $_________ Total Principal, Interest and Fees: $_________ Outstanding Bankers' Acceptance Face Amount: $_________ Discount: $_________ BA Fees: $_________ ANNEX II ASSIGNEE'S CANADIAN COMMITMENT, CANADIAN ALLOCATION, OUTSTANDING CANADIAN LOANS, AGGREGATE PARTICIPATION IN OUTSTANDING CANADIAN LETTERS OF CREDIT AND PRO RATA SHARE AFTER ASSIGNMENT Canadian Commitment: Current Canadian Allocation $_________ Aggregate Overall Commitment $_________ Canadian Lender Pro Rata Share _____% Current Canadian Commitment $_________ Outstanding Loans: Dollar Loans $_________ Canadian Dollar Loans $_________ Outstanding Bankers' Acceptance Face Amount: $_________ Aggregate participation in outstanding Canadian Letters of Credit: Dollar Letters of Credit $_________ Canadian Dollar Letters of Credit $_________ Pro Rata Share ______% EXHIBIT X-B FORM OF ASSIGNMENT AND ACCEPTANCE (U.S. LENDER) ASSIGNMENT AND ACCEPTANCE This ASSIGNMENT AND ACCEPTANCE (this "Agreement") is dated as of ____________, ____ and entered into by and between [NAME OF LENDER] ("Assignor") and _____________________ ("Assignee"). RECITALS WHEREAS, Assignor has entered into that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, supplemented or otherwise modified to the date hereof and as it may hereafter be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined) with Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"); WHEREAS, Assignor is a U.S. Lender under the Credit Agreement and Assignee will, upon giving effect to this Agreement, likewise be a U.S. Lender; WHEREAS, Assignor has a Commitment under the Credit Agreement pursuant to which Assignor is required (i) to make Loans to U.S. Borrower pursuant to subsection 2.1A(iii) of the Credit Agreement; and (ii) to purchase participations in U.S. Letters of Credit pursuant to subsection 2.7D of the Credit Agreement (any such participations in any such Letters of Credit outstanding as of the date hereof being the "Assignor Participations"); [WHEREAS, Assignor has issued certain outstanding U.S. Letters of Credit (the "Assignor Letters of Credit") pursuant to subsection 3.3 of the Credit Agreement;] [INSERT IF THE CHASE MANHATTAN BANK IS ASSIGNOR AND U.S. LETTERS OF CREDIT ARE OUTSTANDING TO U.S. BORROWER] X-B-1 WHEREAS, Assignor desires to assign to Assignee its rights and obligations as a U.S. Lender under the Credit Agreement and the other Loan Documents with respect to all or a portion of Assignor's U.S. Commitment and any U.S. Loans or Assignor Participations outstanding thereunder [and to sell to Assignee a participation in the Assignor Letters of Credit (the "Assignee Participation") equal to the participation required to be purchased therein pursuant to subsection 2.7D of the Credit Agreement], and Assignee has agreed to assume the obligations of Assignor under the Loan Documents to the extent of the rights and obligations so assigned [and to purchase the Assignee Participation]; and [WHEREAS, Assignor is also the [Canadian/Australian] Lender for its Lending Unit, and Assignor is, concurrently herewith entering into an Assignment and Acceptance with [Name of Assignee or Assignee's Canadian/Australian affiliate] (the "[Canadian/Australian] Assignee") whereby Assignor is assigning to the [Canadian/Australian] Assignee that portion of its rights and obligations with respect to its [Canadian/Australian] Commitment which corresponds to the Percentage, as defined below;] [WHEREAS, Assignor's Lending Unit consists of the Assignor and [Name of Canadian/Australian Lender of Assignor's Lending Unit] ("Assignor's Lending Unit Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith entering into an Assignment and Acceptance with [Name of Assignee or Assignee's Canadian/Australian affiliate] (the "[Canadian/Australian] Assignee") whereby Assignor's Lending Unit Affiliate is assigning to the [Canadian/Australian] Assignee that portion of its rights and obligations with respect to its [Canadian/Australian] Commitment which corresponds to the Percentage, as defined below;] NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows: SECTION 1. Assignment and Assumption. (a) Assignor hereby assigns to Assignee, effective upon the receipt of the consideration set forth in Section 1(c) and Administrative Agent's receipt of any processing and recordation fee required under subsection 10.1B of the Credit Agreement, without recourse, representation or warranty (except as expressly set forth herein), an undivided _____% interest (the "Percentage") in all of Assignor's rights and obligations as a Lender arising under the Credit Agreement and the other Loan Documents relating to Assignor's U.S. Commitment and any U.S. Loans and Assignor Participations outstanding thereunder [and concurrently therewith sells to Assignee, without recourse, representation or warranty (except as expressly set forth herein), the Assignee Participation]. (b) Assignee hereby assumes from Assignor, and Assignor is hereby expressly and absolutely released from, the Percentage of all of Assignor's obligations arising under the Loan Documents relating to Assignor's U.S. Commitment and any U.S. Loans and Assignor Participations outstanding thereunder, including without limitation all such obligations with respect to any U.S. Loans to be made and any participations in U.S. Letters X-B-2 of Credit to be purchased, pursuant to the Credit Agreement [, and Assignee hereby purchases from Assignor the Assignee Participation]. (c) Notwithstanding any provisions of this Agreement to the contrary, each of the Assignor and Assignee hereby acknowledges and confirms its understanding and agreement that the U.S. Commitments of the U.S. Lenders under the Credit Agreement may from time to time be increased or decreased by the Borrowers in accordance with subsection 2.1A of the Credit Agreement through changes in the U.S. Allocation, provided that the U.S. Allocation may not at any time exceed the aggregate amount of the Overall Commitment of all Lending Units then in effect. Each of the Assignor and Assignee acknowledges that the Percentage interest in the U.S. Commitment being assigned and assumed hereunder equals the Assignee's U.S. Lender Pro Rata Share, as set forth on Annex II attached hereto, of the U.S. Allocation of the Overall Commitment as in effect on and after the date upon which this Agreement becomes effective. (d) Assignor hereby represents and warrants that as of the effective date of this Agreement the respective amounts of unpaid principal, accrued but unpaid interest and accrued but unpaid fees with respect to the Percentage of Assignor's rights under the Credit Agreement relating to Assignor's U.S. Commitment and U.S. Allocation and any U.S. Loans and Assignor Participations outstanding thereunder [and with respect to the Assignee Participation] are as set forth on Annex I attached hereto. In consideration of Assignor assignment, Assignee hereby agrees to pay to Assignor, on the effective date of this Agreement, the amount of $_________________ in immediately available funds by wire transfer to Assignor's office at - -----------------------------------------------------------. (e) Assignor and Assignee hereby agree that Annex II attached hereto sets forth the amount of the U.S. Commitment and U.S. Allocation, any U.S. Loans and participations by Assignee in any U.S. Letters of Credit outstanding under the Commitment and the U.S. Lender Pro Rata Share of Assignee after giving effect to the assignment and assumption [and the sale and purchase] described above. (f) Assignor and Assignee hereby agree that, upon giving effect to the assignment and assumption [and the sale and purchase] described above, Assignee shall be a party to the Credit Agreement as a U.S. Lender thereunder, and shall have all of the rights and obligations under the Loan Documents of, and shall be deemed to have made all of the covenants and agreements contained in the Loan Documents made by, a U.S. Lender having the U.S. Commitment and U.S. Allocation, the outstanding U.S. Loans, the aggregate participation in outstanding U.S. Letters of Credit and the U.S. Lender Pro Rata Share of Assignee as reflected on Annex II attached hereto. Assignee hereby acknowledges and agrees that the agreement set forth in this subsection 1(f) is expressly made for the benefit of Company, Borrowers, Administrative Agent, Assignor and the other Lenders and their respective successors and permitted assigns. (g) Assignor and Assignee hereby acknowledge and confirm their understanding and intent that (i) this Agreement shall effect [(A)] the assignment by Assignor X-B-3 and the assumption by Assignee of the Percentage of Assignor's rights and obligations with respect to Assignor's U.S. Commitment and U.S. Allocation and any U.S. Loans and Assignor Participations outstanding thereunder and all rights and obligations under the Loan Documents with respect thereto [and (B) the sale by Assignor and the purchase by Assignee of the Assignee Participation], (ii) any other assignments by Assignor of a portion of its rights and obligations with respect to Assignor's U.S. Commitment and U.S. Allocation and any U.S. Loans or Assignor Participations outstanding thereunder [, and any other sales by Assignor of participations in the Assignor Letters of Credit,] shall have no effect on U.S. Commitment, the outstanding U.S. Loans, the aggregate participation in outstanding U.S. Letters of Credit or U.S. Lender Pro Rata Share of Assignee set forth on Annex II attached hereto, and (iii) from and after the effective date of this Agreement, Administrative Agent shall make all payments under the Credit Agreement in respect of the Percentage interest assigned hereby [and the Assignee Participation] (including without limitation all payments of principal and accrued but unpaid interest and commitment and letter of credit fees with respect thereto) to Assignee, whether such amounts (in the case of such interest and fees) have accrued prior to the effective date of this Agreement or subsequent thereto. SECTION 2. Certain Representations, Warranties and Agreements. (a) Assignor represents and warrants that it is the legal and beneficial owner of the Percentage interest being assigned by it hereunder [and of the Assignee Participation] and that such interest [is] [and the Assignee Participation are] free and clear of any adverse claim. (b) Assignor shall not be responsible to Assignee for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of any of the Loan Documents or for any representations, warranties, recitals or statements made therein or made in any written or oral statement or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by Assignor to Assignee or by or on behalf of Company or any Borrower to Assignor or Assignee in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of the Company or any Borrower or any other Person liable for the payment of any Obligations, nor shall Assignor be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or the use of the Letters of Credit or as to the existence or possible existence of any Event of Default or Potential Event of Default. (c) Assignee represents and warrants that it is an Eligible Assignee; that it has experience and expertise in the making of loans such as the Loans; that it has acquired its Percentage interest for its own account and not with any present intention of selling all or any portion of such interest; and that it has received, reviewed and approved copies of all Loan Documents. (d) Assignee represents and warrants that it has made its own independent investigation of the financial condition and affairs of Company and each of the Borrowers X-B-4 and their respective Subsidiaries in connection with the assignment evidenced by this Agreement and that it has made and shall continue to make its own appraisal of the creditworthiness of the Company and the Borrowers. Assignor shall not have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Assignee or to provide Assignee with any credit or other information with respect thereto, whether coming into its possession before the making of the initial Loans or at any time or times thereafter, and Assignor shall not have any responsibility with respect to the accuracy of or the completeness of any information provided to Assignee. (e) Each party to this Agreement represents and warrants to the other party hereto that it has full power and authority to enter into this Agreement and to perform its obligations hereunder in accordance with the provisions hereof, that this Agreement has been duly authorized, executed and delivered by such party and that this Agreement constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and by general principles of equity. SECTION 3. Miscellaneous. (a) Each party to this Agreement hereby agrees from time to time, upon request of the other party hereto, to take such additional actions and to execute and deliver such additional documents and instruments as such other party may reasonably request to effect the transactions contemplated by, and to carry out the intent of, this Agreement. (b) Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except by an instrument in writing signed by the party against whom enforcement of such change, waiver, discharge or termination is sought. (c) Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of telecopy or telex, or four Business Days after depositing it in the United States mail, registered or certified, with postage prepaid and properly addressed; provided that notices to Administrative Agent shall not be effective until received. For the purposes hereof, the address of each party hereto shall be as set forth under such party's name on the signature page hereof or, as to either party, such other address as shall be designated by such party in a written notice delivered to the other party hereto. In addition, the address of Assignee set forth below its name on the signature page hereof shall serve as the initial notice address of Assignee for purposes of subsection 10.11 of the Credit Agreement. (d) This Agreement shall not effect an assignment of any rights or obligations relating to the Canadian Commitment or Australian Commitment of any Lender. Assignor and Assignee acknowledge and confirm (i) that concurrently herewith, Canadian Assignee is entering into an Assignment and Acceptance with the Canadian Lender of X-B-5 Assignor's Lending Unit whereby Canadian Assignee shall be assigned and assume all rights and obligations of Assignor's Lending Unit with respect to that portion of such Lending Unit's Canadian Commitment which corresponds to the Percentage hereunder, and (ii) that concurrently herewith, Australian Assignee is entering into an Assignment and Acceptance with the Australian Lender of Assignor's Lending Unit, if any, whereby Australian Assignee shall be assigned and assume all rights and obligations of Assignor's Lending Unit, if any, with respect to that portion of such Lending Unit's Australian Commitment which corresponds to the Percentage hereunder. Assignee agrees that Canadian Assignee, if any, shall for all purposes be the Canadian Lender of Assignee's Lending Unit, Australian Assignee shall for all purposes be the Australian Lender of Assignee's Lending Unit, if any, and that the Commitment of such Lending Unit shall equal the Assignee's Pro Rata Share (as set forth on Annex 1 annexed hereto) of the aggregate Overall Commitment of all Lending Units as in effect at any time on and after the date this Amendment becomes effective. (e) In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. (f) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. (g) This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. (h) This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. (i) This Agreement shall become effective upon the execution of a counterpart hereof by each of Assignor and Assignee and the execution of a counterpart hereof by Company and Borrowers (as evidence of their consent hereto in accordance with subsection 10.1B(i) of the Credit Agreement) and Administrative Agent (as evidence of its acceptance hereof in accordance with subsection 10.1B(ii) of the Credit Agreement), and the receipt by Assignor, Assignee and Administrative Agent of originals or telecopies of such counterparts and authorization of delivery thereof. (j) Assignee hereby appoints The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as Documentation Agent, and The Chase Manhattan Bank as Administrative Agent, under the Credit Agreement and the other Loan Documents, to exercise such powers as are specified in X-B-6 Section 9 of the Credit Agreement and to be entitled to such protections and indemnities as are afforded thereunder. [(k) Assignee hereby agrees to deliver to U.S. Borrower such certificates, documents or other evidence, properly and accurately completed and duly executed by Assignee (including, without limitation, Internal Revenue Service Form 1001 or Form 4224 or any other certificate or statement of exemption required by Treasury Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any successor thereto) to establish that Assignee is not subject to deduction or withholding of United States federal income tax under Section 1441 or 1442 of the Internal Revenue Code or otherwise (or under any comparable provisions of any successor statute).] [INSERT IF ASSIGNEE IS ORGANIZED UNDER THE LAWS OF ANY JURISDICTION OTHER THAN THE UNITED STATES OR ANY STATE THEREOF OR IS NOT RESIDENT IN THE UNITED STATES.] (l) Each of the parties to this Agreement hereby waives its rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement or any dealings between them relating to the transactions contemplated by this Agreement. [Remainder of page intentionally left blank] X-B-7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. [NAME OF ASSIGNOR] [NAME OF ASSIGNEE] By: By: Title: Title: Notice Address: Notice Address: =========================== =========================== - --------------------------- --------------------------- Consented to in accordance with Accepted in accordance with subsection 10.1B(i) of subsection 10.1B(ii) of the the Credit Agreement Credit Agreement HOMESTAKE MINING COMPANY THE CHASE MANHATTAN BANK, as Administrative Agent By: By: Title: Title: HOMESTAKE MINING COMPANY OF CALIFORNIA By: Title: HOMESTAKE CANADA INC. By: Title: HOMESTAKE GOLD OF AUSTRALIA LIMITED By: Title: PLUTONIC RESOURCES LIMITED By: Title: ANNEX I AMOUNTS OUTSTANDING Outstanding Principal Amount: Loans: Dollar Loans: $_________ Gold Loans: _____Ounces (interest to be paid in [Gold][Dollars based on [a Price of Gold equal to $____ per Ounce/Average daily value, in Dollar Equivalents]]). Total: $_________ Accrued But Unpaid Interest: $_________ Accrued But Unpaid Fees: $_________ Total Principal, Interest and Fees: $_________ ANNEX II ASSIGNEE'S U.S. COMMITMENT, U.S. ALLOCATION, OUTSTANDING U.S. LOANS, AGGREGATE PARTICIPATION IN OUTSTANDING U.S. LETTERS OF CREDIT AND PRO RATA SHARE AFTER ASSIGNMENT U.S. Commitment: Current U.S. Allocation $_________ Aggregate Overall Commitment $_________ U.S. Lender Pro Rata Share _____% Current U.S. Commitment $_________ Outstanding Loans: Dollar Loans $_________ Gold Loans ______Ounces Aggregate participation in outstanding U.S. Letters of Credit: $_________ Pro Rata Share ______% EXHIBIT X-C FORM OF ASSIGNMENT AND ACCEPTANCE (AUSTRALIAN LENDER) ASSIGNMENT AND ACCEPTANCE This ASSIGNMENT AND ACCEPTANCE (this "Agreement") is dated as of ____________, ____ and entered into by and between [NAME OF LENDER] ("Assignor") and _____________________ ("Assignee"). RECITALS WHEREAS, Assignor has entered into that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, supplemented or otherwise modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined) with Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"); WHEREAS, Assignor is an Australian Lender under the Credit Agreement and Assignee will, upon giving effect to this Agreement, likewise be an Australian Lender; WHEREAS, Assignor has a Commitment under the Credit Agreement pursuant to which Assignor is required (i) to make Loans to Australian Borrowers pursuant to subsection 2.1A(ii) of the Credit Agreement; and (ii) to purchase participations in Australian Letters of Credit pursuant to subsection 2.7D of the Credit Agreement (any such participations in any such Letters of Credit outstanding as of the date hereof being the "Assignor Participations"); WHEREAS, Assignor has issued certain outstanding Australian Letters of Credit (the "Assignor Letters of Credit") pursuant to subsection 3.3 of the Credit Agreement; [INSERT IF THE CHASE MANHATTAN BANK IS ASSIGNOR AND AUSTRALIAN LETTERS OF CREDIT ARE OUTSTANDING TO AUSTRALIAN BORROWERS]; X-C-1 WHEREAS, Assignor desires to assign to Assignee its rights and obligations as an Australian Lender under the Credit Agreement and the other Loan Documents with respect to all or a portion of Assignor's Australian Commitment and any Australian Loans or Assignor Participations outstanding thereunder [and to sell to Assignee a participation in the Assignor Letters of Credit (the "Assignee Participation") equal to the participation required to be purchased therein pursuant to subsection 2.7D of the Credit Agreement], and Assignee has agreed to assume the obligations of Assignor under the Loan Documents to the extent of the rights and obligations so assigned [and to purchase the Assignee Participation]; and [WHEREAS, Assignor is both the Australian Lender and the [U.S./Canadian] Lender for its Lending Unit, and Assignor is, concurrently herewith entering into an Assignment and Acceptance with [Name of Assignee or Assignee's U.S./Canadian affiliate] (the "[U.S./Canadian] Assignee") whereby Assignor is assigning to the [U.S./Canadian] Assignee that portion of its rights and obligations with respect to its [U.S./Canadian] Commitment which corresponds to the Percentage, as defined below;] [WHEREAS, Assignor's Lending Unit consists of the Assignor and [Name of U.S./Canadian Lender of Assignor's Lending Unit] ("Assignor's Lending Unit Affiliate"), and Assignor's Lending Unit Affiliate is concurrently herewith entering into an Assignment and Acceptance with [Name of Assignee or Assignee's U.S./Canadian affiliate] (the "[U.S./Canadian] Assignee") whereby Assignor's Lending Unit Affiliate is assigning to the [U.S./Canadian] Assignee that portion of its rights and obligations with respect to its [U.S./Canadian] Commitment which corresponds to the Percentage, as defined below;] NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties hereto hereby agree as follows: SECTION 1. Assignment and Assumption. (a) Assignor hereby assigns to Assignee, effective upon the receipt of the consideration set forth in Section 1(c) and Administrative Agent's receipt of any processing and recordation fee required under subsection 10.1B of the Credit Agreement, without recourse, representation or warranty (except as expressly set forth herein), an undivided _____% interest (the "Percentage") in all of Assignor's rights and obligations as a Lender arising under the Credit Agreement and the other Loan Documents relating to Assignor's Australian Commitment and any Australian Loans and Assignor Participations outstanding thereunder [and concurrently therewith sells to Assignee, without recourse, representation or warranty (except as expressly set forth herein), the Assignee Participation]. (b) Assignee hereby assumes from Assignor, and Assignor is hereby expressly and absolutely released from, the Percentage of all of Assignor's obligations arising under the Loan Documents relating to Assignor's Australian Commitment and any Australian Loans and Assignor Participations outstanding thereunder, including without limitation all such obligations with respect to any Australian Loans to be made and any participations in Australian Letters of Credit to be purchased, pursuant to the Credit Agreement [, and Assignee hereby purchases from Assignor the Assignee Participation]. X-C-2 (c) Notwithstanding any provisions of this Agreement to the contrary, each of the Assignor and Assignee hereby acknowledges and confirms its understanding and agreement that the Australian Commitments of the Australian Lenders under the Credit Agreement may from time to time be increased or decreased by the Borrowers in accordance with subsection 2.1A of the Credit Agreement through changes in the Australian Allocation or the addition of Lenders with Australian Commitments, provided that the Australian Allocation may not at any time exceed the aggregate amount of the Overall Commitment of all Lending Units then in effect. Each of the Assignor and Assignee acknowledges that the Percentage interest in the Australian Commitment being assigned and assumed hereunder equals the Assignee's Australian Lender Pro Rata Share, as set forth on Annex II attached hereto, of the Australian Allocation of the Overall Commitment as in effect on and after the date upon which this Agreement becomes effective. (d) Assignor hereby represents and warrants that as of the effective date of this Agreement the respective amounts of unpaid principal, accrued but unpaid interest and accrued but unpaid fees with respect to the Percentage of Assignor's rights under the Credit Agreement relating to Assignor's Australian Commitment and Australian Allocation and any Australian Loans and Assignor Participations outstanding thereunder [and with respect to the Assignee Participation] are as set forth on Annex I attached hereto. In consideration of Assignor's assignment, Assignee hereby agrees to pay to Assignor, on the effective date of this Agreement, the amount of $_________________ in immediately available funds by wire transfer to Assignor's office at ___________________________________________________________. (e) Assignor and Assignee hereby agree that Annex II attached hereto sets forth the amount of the Australian Commitment and Australian Allocation, any Australian Loans, and participations by Assignee in any Australian Letters of Credit outstanding under the Commitment and the Australian Lender Pro Rata Share of Assignee after giving effect to the assignment and assumption [and the sale and purchase] described above. (f) Assignor and Assignee hereby agree that, upon giving effect to the assignment and assumption [and the sale and purchase] described above, Assignee shall be a party to the Credit Agreement as an Australian Lender thereunder, and shall have all of the rights and obligations under the Loan Documents of, and shall be deemed to have made all of the covenants and agreements contained in the Loan Documents made by, an Australian Lender having the Australian Commitment and Australian Allocation, the outstanding Australian Loans, the aggregate participation in outstanding Australian Letters of Credit and the Australian Lender Pro Rata Share of Assignee as reflected on Annex II attached hereto. Assignee hereby acknowledges and agrees that the agreement set forth in this subsection 1(f) is expressly made for the benefit of Company, Borrowers, Australian Administrative Agent, Administrative Agent, Assignor and the other Lenders and their respective successors and permitted assigns. (g) Assignor and Assignee hereby acknowledge and confirm their understanding and intent that (i) this Agreement shall effect [(A)] the assignment by Assignor X-C-3 and the assumption by Assignee of the Percentage of Assignor's rights and obligations with respect to Assignor's Australian Commitment and Australian Allocation and any Australian Loans and Assignor Participations outstanding thereunder and all rights and obligations under the Loan Documents with respect thereto [and (B) the sale by Assignor and the purchase by Assignee of the Assignee Participation], (ii) any other assignments by Assignor of a portion of its rights and obligations with respect to Assignor's Australian Commitment and Australian Allocation and any Australian Loans or Assignor Participations outstanding thereunder [, and any other sales by Assignor of participations in the Assignor Letters of Credit,] shall have no effect on Australian Commitment and Australian Allocation, the outstanding Australian Loans, the aggregate participation in outstanding Australian Letters of Credit or Australian Lender Pro Rata Share of Assignee set forth on Annex II attached hereto, and (iii) from and after the effective date of this Agreement, Administrative Agent shall make all payments under the Credit Agreement in respect of the Percentage interest assigned hereby [and the Assignee Participation] (including without limitation all payments of principal and accrued but unpaid interest and commitment and letter of credit fees with respect thereto) to Assignee, whether such amounts (in the case of such interest and fees) have accrued prior to the effective date of this Agreement or subsequent thereto. SECTION 2. Certain Representations, Warranties and Agreements. (a) Assignor represents and warrants that it is the legal and beneficial owner of the Percentage interest being assigned by it hereunder [and of the Assignee Participation] and that such interest [is] [and the Assignee Participation are] free and clear of any adverse claim. (b) Assignor shall not be responsible to Assignee for the execution, effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of any of the Loan Documents or for any representations, warranties, recitals or statements made therein or made in any written or oral statement or in any financial or other statements, instruments, reports or certificates or any other documents furnished or made by Assignor to Assignee or by or on behalf of Company or any Borrower to Assignor or Assignee in connection with the Loan Documents and the transactions contemplated thereby or for the financial condition or business affairs of the Company or any Borrower or any other Person liable for the payment of any Obligations, nor shall Assignor be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained in any of the Loan Documents or as to the use of the proceeds of the Loans or the use of the Letters of Credit or as to the existence or possible existence of any Event of Default or Potential Event of Default. (c) Assignee represents and warrants that it is an Eligible Assignee; that it has experience and expertise in the making of loans such as the Loans; that it has acquired its Percentage interest for its own account and not with any present intention of selling all or any portion of such interest; and that it has received, reviewed and approved copies of all Loan Documents. X-C-4 (d) Assignee represents and warrants that it has made its own independent investigation of the financial condition and affairs of Company and each of the Borrowers and their respective Subsidiaries in connection with the assignment evidenced by this Agreement and that it has made and shall continue to make its own appraisal of the creditworthiness of the Company and the Borrowers. Assignor shall not have any duty or responsibility, either initially or on a continuing basis, to make any such investigation or any such appraisal on behalf of Assignee or to provide Assignee with any credit or other information with respect thereto, whether coming into its possession before the making of the initial Loans or at any time or times thereafter, and Assignor shall not have any responsibility with respect to the accuracy of or the completeness of any information provided to Assignee. (e) Each party to this Agreement represents and warrants to the other party hereto that it has full power and authority to enter into this Agreement and to perform its obligations hereunder in accordance with the provisions hereof, that this Agreement has been duly authorized, executed and delivered by such party and that this Agreement constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and by general principles of equity. SECTION 3. Miscellaneous. (a) Each party to this Agreement hereby agrees from time to time, upon request of the other party hereto, to take such additional actions and to execute and deliver such additional documents and instruments as such other party may reasonably request to effect the transactions contemplated by, and to carry out the intent of, this Agreement. (b) Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except by an instrument in writing signed by the party against whom enforcement of such change, waiver, discharge or termination is sought. (c) Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and may be personally served, telecopied, telexed or sent by United States mail or Australian mail or courier service and shall be deemed to have been given when delivered in person or by courier service, upon receipt of telecopy or telex, or four Business Days after depositing it in the United States mail (or five Business Days after depositing it in the Australian mail), registered or certified, with postage prepaid and properly addressed; provided that notices to Administrative Agent shall not be effective until received. For the purposes hereof, the address of each party hereto shall be as set forth under such party's name on the signature page hereof or, as to either party, such other address as shall be designated by such party in a written notice delivered to the other party hereto. In addition, the address of Assignee set forth below its name on the signature page hereof shall serve as the initial notice address of Assignee for purposes of subsection 10.11 of the Credit Agreement. X-C-5 (d) This Agreement shall not effect an assignment of any rights or obligations relating to the U.S. Commitment or Canadian Commitment of any Lender. Assignor and Assignee acknowledge and confirm (i) that concurrently herewith, U.S. Assignee is entering into an Assignment and Acceptance with the U.S. Lender of Assignor's Lending Unit whereby U.S. Assignee shall be assigned and assume all rights and obligations of Assignor's Lending Unit with respect to that portion of such Lending Unit's U.S. Commitment which corresponds to the Percentage hereunder, and (ii) that concurrently herewith, Canadian Assignee is entering into an Assignment and Acceptance with the Canadian Lender of Assignor's Lending Unit, if any, whereby Canadian Assignee shall be assigned and assume all rights and obligations of Assignor's Lending Unit, if any, with respect to that portion of such Lending Unit's Canadian Commitment, if any, which corresponds to the Percentage hereunder. Assignee agrees that U.S. Assignee shall for all purposes be the U.S. Lender of Assignee's Lending Unit, Australian Assignee shall for all purposes be the Australian Lender of Assignee's Lending Unit, if any, and that the Commitment of such Lending Unit shall equal the Assignee's Pro Rata Share (as set forth on Annex 1 annexed hereto) of the aggregate Overall Commitment of all Lending Units as in effect at any time on and after the date this Amendment becomes effective. (e) In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. (f) THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. (g) This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. (h) This Agreement may be executed in one or more counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument; signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are physically attached to the same document. (i) This Agreement shall become effective upon the execution of a counterpart hereof by each of Assignor and Assignee and the execution of a counterpart hereof by Company and Borrowers (as evidence of their consent hereto in accordance with subsection 10.1B(i) of the Credit Agreement) and Administrative Agent (as evidence of its acceptance hereof in accordance with subsection 10.1B(ii) of the Credit Agreement), and the receipt by Assignor, Assignee, Australian Administrative Agent and Administrative Agent of originals or telecopies of such counterparts and authorization of delivery thereof. X-C-6 (j) Assignee hereby appoints The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as Documentation Agent, and The Chase Manhattan Bank as Administrative Agent, under the Credit Agreement and the other Loan Documents, to exercise such powers as are specified in Section 9 of the Credit Agreement and to be entitled to such protections and indemnities as are afforded thereunder. [(k) Assignee hereby agrees to deliver to applicable Australian Borrower such certificates, documents or other evidence, properly and accurately completed and duly executed by Assignee, to establish the basis for any applicable exemption from or a reduction of Taxes with respect to any payment to Assignee or principal, interest, fees, commissions, or any other amount payable under this Agreement, the Credit Agreement or otherwise in respect of the Australian Loans.] [INSERT IF ASSIGNEE IS ORGANIZED UNDER THE LAWS OF ANY JURISDICTION OTHER THAN AUSTRALIA OR ANY STATE THEREOF OR IS NOT RESIDENT IN AUSTRALIA.] (l) Each of the parties to this Agreement hereby waives its rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement or any dealings between them relating to the transactions contemplated by this Agreement. [Remainder of page intentionally left blank] X-C-7 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above. [NAME OF ASSIGNOR] [NAME OF ASSIGNEE] By: By: Title: Title: Notice Address: Notice Address: =========================== =========================== - --------------------------- --------------------------- Consented to in accordance with Accepted in accordance with subsection 10.1B(ii) of subsection 10.1B(i) of the Credit Agreement the Credit Agreement HOMESTAKE MINING COMPANY THE CHASE MANHATTAN BANK, as Administrative Agent By: By: Title: Title: HOMESTAKE MINING COMPANY OF CALIFORNIA By: Title: HOMESTAKE CANADA INC. By: Title: HOMESTAKE GOLD OF AUSTRALIA LIMITED By: Title: PLUTONIC RESOURCES LIMITED By: Title: Receipt Acknowledged: CHASE SECURITIES AUSTRALIA LIMITED, as Australian Administrative Agent By: Title: ANNEX I [NAME OF BORROWER] AMOUNTS OUTSTANDING Outstanding Principal Amount: Loans: Dollar Loans: $_________ Australian Dollar Loans:$_________ Total: $_________ Accrued But Unpaid Interest: $_________ Accrued But Unpaid Fees: $_________ Total Principal, Interest and Fees: $_________ ANNEX II [NAME OF BORROWER] ASSIGNEE'S AUSTRALIAN COMMITMENT, AUSTRALIAN ALLOCATION, OUTSTANDING AUSTRALIAN LOANS, AGGREGATE PARTICIPATION IN OUTSTANDING AUSTRALIAN LETTERS OF CREDIT AND PRO RATA SHARE AFTER ASSIGNMENT Australian Commitment: Current Australian Allocation $_________ Aggregate Overall Commitment $_________ Australian Lender Pro Rata Share _____% Current Australian Commitment $_________ Outstanding Loans: Dollar Loans $_________ Australian Dollar Loans $_________ Aggregate participation in outstanding Australian Letters of Credit: $_________ outstanding U.S. Letters of Credit $_________ Pro Rata Share ______% EXHIBIT XI FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT Pursuant to that certain Amended and Restated Credit Agreement dated as of July , 1998 (said Credit Agreement, as it may be amended, supplemented or modified from time to time, being the "Credit Agreement", the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Homestake Mining Company, a Delaware corporation ("Company"), Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, a South Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic"; and collectively with HGAL, "Australian Borrowers"), the financial institutions listed therein as Lenders ("Lenders"), The Chase Manhattan Bank of Canada, as Canadian Administrative Agent for Lenders ("Canadian Administrative Agent"), Chase Securities Australia Limited, as Australian Administrative Agent for Lenders ("Australian Administrative Agent"), Chase Securities Inc., as Arranger for Lenders ("Arranger"), Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent for Lenders ("Administrative Agent"), this represents [U.S. Borrower's/Canadian Borrower's/HGAL's/Plutonic's] request that [The Chase Manhattan Bank/The Chase Manhattan Bank of Canada] issue a Standby Letter of Credit on ___________, ____ in the face amount of _________________ [Dollars/Canadian Dollars/Australian Dollars] with an expiration date of ____________, ____. The beneficiary of such proposed Letter of Credit shall be [Name of Beneficiary] and such beneficiary's address is _________________________ ________________________________. Attached hereto is the verbatim text of such proposed Letter of Credit and a precise description of the proposed text of any certificate to be presented by such beneficiary which, if presented by such beneficiary prior to the expiration date of the Letter of Credit, would require [The Chase Manhattan Bank/The Chase Manhattan Bank of Canada] to make payment under the Letter of Credit. The undersigned officer, director, or Authorized Signor to the best of his or her knowledge, and [U.S. Borrower/Canadian Borrower/HGAL/Plutonic] certify that: (i) The representations and warranties contained in the Credit Agreement and the other Loan Documents are true, correct and complete in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent that changes in the facts and conditions on which such representations and warranties were based are required or permitted under the Credit Agreement; (ii) No event has occurred and is continuing or would result from the consummation of the borrowing contemplated hereby that would constitute an Event of Default or a Potential Event of Default; XI-1 (iii) The Company and each Borrower have performed in all material respects all agreements and satisfied all conditions which the Credit Agreement and other Loan Documents provide shall be performed or satisfied by it on or before the date hereof; (iv) There is no pending or, to the knowledge of Company or any Borrower, threatened, any action, suit, proceeding, governmental investigation or arbitration against or affecting Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries and there has occurred no development in any such action, suit, proceeding, governmental investigation or arbitration that, in either event, would reasonably be expected to have a Material Adverse Effect, unless disclosed to and consented to by Requisite Lenders; and no injunction or other restraining order has been issued and no hearing to cause an injunction or other restraining order to be issued is pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated by the Credit Agreement or the making of Loans, the issuance of Letters of Credit or the creation and purchase of Bankers' Acceptances thereunder; (v) No Company Change of Control has occurred; and (vi) After giving effect to the issuance of the proposed Letter of Credit, the Borrowers are in compliance with each of the clauses (a) through (f) set forth in subsection 2.7A(i). DATED: ____________________ [HOMESTAKE MINING COMPANY OF CALIFORNIA/HOMESTAKE CANADA INC./HOMESTAKE GOLD OF AUSTRALIA LIMITED/PLUTONIC RESOURCES LIMITED] By: __________________________ Title: ________________________ XI-2 EXHIBIT XII FORM OF SUBORDINATION PROVISIONS All obligations of [Name of Borrower] under this Promissory Note ("Note") are hereby subordinated in right of payment to all "Obligations," as defined in that certain Amended and Restated Credit Agreement dated as of July __, 1998 among Homestake Mining Company, a Delaware corporation, as Guarantor, Homestake Mining Company of California, a California corporation, as U.S. Borrower, and Homestake Canada Inc., an Ontario corporation, as Canadian Borrower, Homestake Gold of Australia, an Australian corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation, ("Plutonic", and, collectively with HGAL "Australian Borrowers"), the financial institutions named therein as lenders, The Chase Manhattan Bank of Canada, as Canadian Administration Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent, as that Credit Agreement may be amended, modified or supplemented from time to time, and any successors, replacements or renewals thereof (the "Credit Agreement") on the terms of this paragraph. Upon the occurrence and during the continuation of an "Event of Default" (as defined in the Credit Agreement), no distribution of assets in respect of any such Indebtedness (including any payment of principal, interest or fees or any repurchase, redemption or setoff of such Note against other indebtedness owing to [Name of Borrower] or payment received as a result of other indebtedness being subordinated to such Indebtedness) may be made until indefeasible payment in full in cash of all Obligations. If, notwithstanding the preceding sentence, any such distribution of assets shall be collected or received by [Name of Lender] after the occurrence and during the continuation of an Event of Default, such distribution of assets shall be paid over to "Administrative Agent" for the benefit of "Lenders" (each as defined in the Credit Agreement) to he held as collateral and then or thereafter credited and applied against the Obligations but without impairing or limiting in any manner the liability of [Name of Borrower] under any provision of the Credit Agreement or of [Name of Lender] under this paragraph. The foregoing notwithstanding, such distribution may be made if the proceeds thereof are used to cure an Event of Default or Potential Event of Default and No Event of Default or Potential Event of Default will result from the making of such distribution. [Name of Lender] shall duly and promptly take such action as the Administrative Agent may reasonably request or permit the Administrative Agent, upon the occurrence of an Event of Default, (i) to collect on the Note for the account of the Lenders and to file appropriate claims or proofs of claim in respect of the Note, (ii) to vote the claims represented by the Note in any insolvency proceeding involving [Name of Borrower], (iii) to execute and deliver to the Administrative Agent such powers of attorney, assignments, or other instruments as it may reasonably request in order to enable it to enforce any and all claims with respect to, and any security interests and other liens securing payment of, the XII-1 Note, and (iv) to collect and receive any and all payments or distributions which may be payable or deliverable upon or with respect to the Note. Effective this _____ day of __________, 19__. [NAME OF BORROWER] By: __________________________ Title: _______________________ [NAME OF LENDER] By: __________________________ Title: _______________________ XII-2 EXHIBIT XIII FORM OF NOTICE OF ALLOCATION (To be delivered at least 14 days and no more than 60 days in advance and not to be effective prior to December 1, 1998) Pursuant to that certain Amended and Restated Credit Agreement, dated as of July , 1998 (said Credit Agreement, as it may be amended, modified or supplemented from time to time, the "Credit Agreement," the terms defined therein and not otherwise defined herein being used herein as therein defined), by and among Homestake Mining Company, a Delaware corporation, as Guarantor, Homestake Mining Company of California, a California corporation ("U.S. Borrower"), Homestake Canada Inc., an Ontario corporation ("Canadian Borrower"), Homestake Gold of Australia Limited, an Australia corporation ("HGAL"), Plutonic Resources Limited, a New South Wales corporation ("Plutonic", and collectively with HGAL, "Australian Borrowers"), (Australian Borrowers, together with U.S. Borrower and Canadian Borrower, "Borrowers"), the financial institutions listed therein, as Lenders, The Chase Manhattan Bank of Canada, as Canadian Administrative Agent, Chase Securities Australia Limited, as Australian Administrative Agent, Chase Securities Inc., as Arranger, Deutsche Bank A.G., as Documentation Agent for Lenders ("Documentation Agent"), and The Chase Manhattan Bank, as Administrative Agent, this represents Borrowers' request that the aggregate amount of the Overall Commitment, which is currently $_________________, effective as of _______________ 1, _____ and upon acceptance of Administrative Agent, be allocated among the Canadian Allocation, the Australian Allocation and the U.S. Allocation as set forth in Schedule I attached hereto, such allocations to remain in effect until such time as Borrowers deliver a Notice of Allocation accepted by Administrative Agent in accordance with the provisions of subsection 2.1A of the Credit Agreement for the purpose of changing such allocations. The undersigned officers and Borrowers hereby certify that, after giving effect to the allocation requested hereby, (1) such allocation maximizes, to the greatest extent possible, the Commitment of each Lender available to each Borrower, (2) the aggregate Exposure of each Lending Unit shall not exceed its commitment, (3) the Canadian Allocation for each Lending Unit may not exceed its Canadian Commitment and may not be reduced to an amount that is less than the outstanding Canadian Commitment Usage of such Lending Unit, (4) the Australian Allocation for each Lending Unit may not exceed its Australian Commitment and may not be reduced to an amount that is less than the outstanding Australian Commitment Usage of such Lending Unit, and (5) the U.S. Allocation for each Lending Unit may not exceed its U.S. Commitment and may not be reduced to an amount that is less than the outstanding U.S. Commitment Usage of such Lending Unit. XIII-1 DATED: ____________________ HOMESTAKE MINING COMPANY OF CALIFORNIA By:_________________________ Name:_______________________ Title:______________________ HOMESTAKE CANADA INC. By:_________________________ Name:_______________________ Title:______________________ HOMESTAKE GOLD OF AUSTRALIA LIMITED By:_________________________ Name:_______________________ Title:______________________ PLUTONIC RESOURCES LIMITED By:_________________________ Name:_______________________ Title:______________________ ACCEPTED: ADMINISTRATIVE AGENT By: _______________________ XIII-2 Name: _____________________ Title: ______________________ XIII-3 EX-11 4 EARNINGS PER SHARE EXHIBIT 11 HOMESTAKE MINING COMPANY AND SUBSIDIARIES Computation of Earnings Per Share (unaudited) (In thousands, except per share amounts)
Three Months Ended Six Months Ended June 30, June 30, BASIC 1998 1997 1998 1997 ------------- ------------- ------------- ------------- Earnings: Net loss applicable to basic earnings per share calculation $ (30,931) $ (64,857) $ (37,517) $ (16,601) ============= ============= ============= ============= Weighted average number of shares outstanding 211,060 210,567 210,860 210,534 ============= ============= ============= ============= Net loss per share - basic $ (0.15) $ (0.31) $ (0.18) $ (0.08) ============= ============= ============= ============= DILUTED Earnings: Net loss $ (30,931) $ (64,857) $ (37,517) $ (16,601) Add: Interest relating to 5.5% convertible subordinated notes, net of tax 1,629 1,629 3,259 3,259 Amortization of issuance costs relating to 5.5% convertible subordinated notes, net of tax 110 110 221 221 ------------- ------------- ------------- ------------- Net loss applicable to fully diluted earnings per share calculation $ (29,192) $ (63,118) $ (34,037) $ (13,121) ============= ============= ============= ============= Weighted average number of shares outstanding: Common shares 211,060 210,567 210,860 210,534 Additional average shares assuming conversion of 5.5% convertible subordinated notes 6,505 6,505 6,505 6,505 ------------- ------------- ------------- ------------- 217,565 217,072 217,365 217,039 ============= ============= ============= ============= Net loss per share - diluted (a) $ (0.13) $ (0.29) $ (0.16) $ (0.06) ============= ============= ============= ============= (a) This calculation is submitted in accordance with Regulation S-K item 601 (b)(11) although it is contrary to paragraph 13 of SFAS 128 because it produces an anti-dilutive result. Diluted net loss per share computed in accordance with SFAS 128 was the same as basic earnings per share.
EX-27.1 5 FDS FOR JUNE 30, 1998
5 This schedule contains summary financial information extracted from the Consolidated Balance Sheet at June 30, 1998 and the related Statement of Consolidated Operations for the six months ended June 30, 1998 and is qualified in its entirety by reference to such financial statements. 1,000 6-MOS DEC-31-1998 JUN-30-1998 134,219 149,699 48,711 0 83,431 450,194 2,204,344 1,271,610 1,505,461 142,436 356,069 0 0 211,162 393,586 1,505,461 416,824 411,502 351,798 375,635 55,098 0 10,328 (29,559) 2,342 (37,517) 0 0 0 (37,517) (0.18) (0.18) Includes Production costs and Depreciation, depletion and amortization from the Statement of Consolidated Operations. Includes Production costs, Depreciation, depletion and amortization and Administrative and general expense from the Statement of Consolidated Operations. Includes Exploration expense, Write-downs and other unusual charges, Business combination and integration costs and Other expense from the Statement of Consolidated Operations.
EX-27.2 6 FDS FOR 3/31/98 RESTATED FOR POOLING OF INTERESTS
5 This schedule contains summary financial information from the Consolidated Balance Sheet at March 31, 1998 and the related Statement of Consolidated Operations for the three months ended March 31, 1998, restated to reflect the April 30, 1998 pooling of interests with Plutonic Resources Limited. 1,000 3-MOS DEC-31-1998 MAR-31-1998 153,219 120,288 48,124 0 99,310 454,283 2,380,611 1,367,545 1,609,709 145,537 377,264 0 0 210,623 459,390 1,609,709 200,472 216,217 171,647 184,212 22,331 0 5,112 4,562 7,220 (6,586) 0 0 0 (6,586) (0.03) (0.03) Includes Production costs and Depreciation, depletion and amortization from the Statement of Consolidated Operations. Includes Production costs, Depreciation, depletion and amortization and Administrative and general expense from the Statement of Consolidated Operations. Includes Exploration expense, Write-downs and other unusual charges, Business combination and integration costs and Other expense from the Statement of Consolidated Operations.
EX-27.3 7 1997 QTRLY FDSS RESTATED FOR POOLING OF INTERESTS
5 This schedule contains summary financial information from the Consolidated Balance Sheets at March 31, 1997, June 30, 1997 and September 30, 1997 and the related Statements of Consolidated Operations for the three, six and nine months ended March 31, 1997, June 30, 1997 and September 30, 1997, respectively, restated to reflect the April 30, 1998 pooling of interests with Plutonic Resources Limited. 1,000 3-MOS 6-MOS 9-MOS DEC-31-1997 DEC-31-1997 DEC-31-1997 MAR-31-1997 JUN-30-1997 SEP-30-1997 178,929 97,589 78,366 115,202 163,788 168,882 52,624 42,122 37,897 0 0 0 140,423 128,118 136,387 511,757 454,144 448,855 2,315,637 2,311,166 2,299,986 1,040,457 1,064,013 1,192,567 1,977,937 1,853,690 1,709,692 232,028 131,981 132,975 253,714 347,255 344,294 0 0 0 0 0 0 210,475 210,475 210,491 821,961 718,725 568,287 1,977,937 1,853,690 1,709,692 234,777 456,012 666,340 317,338 543,398 761,135 204,433 393,311 577,401 214,225 415,132 611,738 12,577 98,615 303,896 0 0 0 4,868 10,281 14,778 85,668 19,370 (169,277) 34,905 31,047 (3,343) 48,256 (16,601) (172,162) 0 0 0 0 0 0 0 0 0 48,256 (16,601) (172,162) 0.23 (0.08) (0.82) 0.23 (0.08) (0.82) Includes Production costs and Depreciation, depletion and amortization from the Statement of Consolidated Operations. Includes Production costs, Depreciation, depletion and amortization, and Administrative and general expense from Statement of Consolidated Operations. Includes Exploration expense, Write-downs and other unusual charges, and Other expense from Statement of Consolidated Operations.
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