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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)*
SOUTHERN PERU COPPER CORPORATION
------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01
------------------------------------------------------------------------------
(Title of Class of Securities)
843611104
----------------------------------------
(CUSIP Number)
Daniel Tellechea Salido
Administration and Finance President
Grupo Mexico, S.A. de C.V.
Baja California 200
Colonia Roma Sur
06760 Mexico City, Mexico
Tel. 011-525-574-2067
and
Daniel Tellechea Salido
Vice President and
Administration and Finance President
Grupo Minero Mexico Internacional, S.A. de C.V.
Baja California 200
Colonia Roma Sur
06760 Mexico City, Mexico
Tel. 011-525-574-2067
and
Daniel Tellechea Salido
Administration and Finance President
Controladora Minera Mexico, S.A. de C.V.
Baja California 200
Colonia Roma Sur
06760 Mexico City, Mexico
Tel. 011-525-574-2067
(Page 1 of 19 Pages)
and
Daniel Tellechea Salido
Executive Vice President and Chief Financial Officer
Americas Mining Corporation
2575 East Camelback Road, Suite 500
Phoenix, Arizona 85016
Tel. (602) 977-6500
and
Daniel Tellechea Salido
Vice President
SPHC II Incorporated
2575 East Camelback Road, Suite 500
Phoenix, Arizona 85016
Tel. (602) 977-6500
and
Douglas McAllister, Esq.
General Counsel
ASARCO Incorporated
2575 East Camelback Road, Suite 500
Phoenix, Arizona 85016
Tel. (602) 977-6500
and
Daniel Tellechea Salido
Vice President and Treasurer
Southern Peru Holdings Corporation
Baja California 200
Colonia Roma Sur
06760 Mexico City, Mexico
Tel. 011-525-574-2067
------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
copy to:
Michael L. Fitzgerald, Esq.
Sidley Austin Brown & Wood LLP
787 Seventh Avenue
New York, New York 10019
Tel. (212) 839-5300
March 31, 2003
------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g),
check the following box. /_/
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Section 240.13d-7 for
other parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
* The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on the following pages)
CUSIP No. 843611104 Page 3 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. Grupo Mexico, S.A. de C.V.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). 13-1808503
-------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
-------------------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
-------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) /_/
-------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Mexico
-------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 43,529,649
REPORTING ---------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
---------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
43,529,649
-------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
43,529,649
-------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
-------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.4% of total Common Shares,(1) 65.8% of Class A Common Stock
-------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------------------------
----------
(1) Assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis.
CUSIP No. 843611104 Page 4 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. Grupo Minero Mexico Internacional, S.A. de C.V.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
-------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
-------------------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
-------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) /_/
-------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
-------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 17,247,579
REPORTING ----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
17,247,579
-------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,247,579
-------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
-------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.6% of total Common Shares,(1) 26.2% of Class A Common Stock
-------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------------------------
----------
(1) Assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis.
CUSIP No. 843611104 Page 5 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. Controladora Minera Mexico, S.A. de C.V.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
-------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
-------------------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
-------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) /_/
-------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
-------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 17,247,579
REPORTING ----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
17,247,579
-------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
17,247,579
-------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
-------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.6% of total Common Shares,(1) 26.2% of Class A Common Stock
-------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------------------------
----------
(1) Assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis.
CUSIP No. 843611104 Page 6 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. Americas Mining Corporation
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). 86-1010884
-------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
-------------------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
-------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) /_/
-------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
-------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 43,529,649
REPORTING ----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
43,529,649
-------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
43,529,649
-------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
-------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.4% of total Common Shares,(1) 65.8% of Class A Common Stock
-------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------------------------
----------
(1) Assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis.
CUSIP No. 843611104 Page 7 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. SPHC II Incorporated
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). 13-3700414
-------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
-------------------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
-------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) /_/
-------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
-------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 43,348,949
REPORTING ----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
43,348,949
-------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
43,348,949
-------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
-------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
54.2% of total Common Shares,(1) 65.8% of Class A Common Stock
-------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------------------------
----------
(1) Assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis.
CUSIP No. 843611104 Page 8 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. ASARCO Incorporated
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). 13-4924440
-------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
-------------------------------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
-------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) /_/
-------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION New Jersey
-------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY ----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 180,700
REPORTING ----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
180,700
-------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
180,700
-------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
-------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.2% of total Common Shares(1)
-------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
-------------------------------------------------------------------------------------------
----------
(1) Assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis.
CUSIP No. 843611104 Page 9 of 19 Pages
-------------------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS. Southern Peru Holdings Corporation
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY). 13-4152060
--------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) /X/
(b) /_/
--------------------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS) OO
--------------------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) /_/
--------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
--------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY -----------------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 0
REPORTING -----------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH 0
-----------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
0
--------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
--------------------------------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) /_/
--------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
--------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
CO
--------------------------------------------------------------------------------------------
CUSIP No. 843611104 Page 10 of 19 Pages
Grupo Mexico, S.A. de C.V. ("Grupo Mexico"), Grupo Minero Mexico
International, S.A. de C.V. ("GMMI"), Controladora Minera Mexico, S.A. de C.V.
("Controladora"), Americas Mining Corporation ("AMC"), SPHC II Incorporated
("SPHC II"), ASARCO Incorporated ("ASARCO") and Southern Peru Holdings
Corporation ("SPHC") (collectively, Grupo Mexico, GMMI, Controladora, AMC,
SPHC II, ASARCO and SPHC, the "Reporting Persons") hereby amend the report on
Schedule 13D regarding shares of Southern Peru Copper Corporation (the
"Company"), originally filed on January 12, 1996, as further amended on March
6, 1996, on November 19, 1999, on October 13, 2000, on May 17, 2001, on July
16, 2001 and on February 11, 2003 (collectively with this Amendment No. 7, the
"Schedule 13D"). Unless otherwise indicated, capitalized terms used but not
defined herein shall have the same meanings assigned to them in Schedule 13D.
Item 1. Security and Issuer.
This Schedule 13D relates to Common Stock of the Company, $0.01 par
value per share ("Common Stock"), and Class A Common Stock of the Company,
$0.01 par value per share ("Class A Common Stock", together with the Common
Stock, the "Common Shares").
Item 2. Identity and Background.
Item 2 is hereby amended and supplemented by adding the following:
Annex I hereto sets forth the name, business address, present
principal occupation or employment and citizenship of each director and
executive officer of AMC. The information set forth in Annex I hereto is
incorporated herein by reference.
Annex II hereto sets forth the name, business address, present
principal occupation or employment and citizenship of each director and
executive officer of SPHC II. The information set forth in Annex II hereto is
incorporated herein by reference.
During the past five years, the Reporting Persons have not, and, to
the best of their knowledge, no person listed on Annex I hereto has been (a)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (b) a party to any civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of which such
person was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws, or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is hereby amended and supplemented by adding the following:
As previously disclosed, certain of the Reporting Persons have for
some time intended to engage in a transaction in which SPHC would sell to AMC
all of the Class A Common Stock of the Company owned by it. As previously
disclosed, on February 3, 2003, the United States District Court for the
District of Arizona approved and entered a consent decree (the "Consent
Decree") approving the terms of this transaction. Pursuant to the terms of the
Consent Decree, on March 31, 2003, AMC, ASARCO, SPHC and SPHC II entered into
a Stock Purchase Agreement (the "Stock Purchase Agreement"), a form of which
was attached as Exhibit 1 to Amendment No. 6 to this Schedule 13D, filed on
February 11, 2003, and is incorporated herein by reference, with respect to
the sale by SPHC of all of its Class A Common Stock (the "SPCC Shares") to AMC
for consideration of $765.0 million in a combination of (i) $500 million cash
(the "Cash Funding"), (ii) promissory notes in the principal amount of (A)
$123.25 million ("Note A") and (B) $100 million ("Note B") and (iii)
cancellation of $41.75 million of indebtedness. The Cash Funding was financed
using (i) borrowings under that certain Credit Agreement, dated as of February
28, 2003 (the "AMC Credit Agreement"), among AMC, as borrower, and the lenders
party thereto (the "AMC Lenders"), pursuant to which AMC borrowed $310
million, (ii) AMC's working capital and capital contributions from Grupo
Mexico and (iii) a combination of clauses (i) and (ii). A copy of the AMC
Credit Agreement is attached as Exhibit 3 hereto and is incorporated herein by
reference. The AMC Credit Agreement is secured by, among other things, a
pledge of the SPCC Shares pursuant to that certain Stock Pledge Agreement,
dated as of March 31, 2003 (the "Stock Pledge Agreement"), made by SPHC II, in
favor of the AMC
CUSIP No. 843611104 Page 11 of 19 Pages
Lenders. A copy of the Stock Pledge Agreement is attached as Exhibit 4 hereto
and is incorporated herein by reference.
Item 4. Purpose of Transaction.
Item 4 is hereby amended and supplemented by adding the following:
On March 31, 2003, the parties consummated the transactions
contemplated by the Stock Purchase Agreement, whereby AMC acquired the SPCC
Shares from SPHC and AMC contributed the SPCC Shares to its wholly-owned
subsidiary, SPHC II.
The Reporting Persons may also from time to time acquire, purchase
or sell shares of Common Stock in the open market, in privately negotiated
transactions or otherwise, hold such shares or propose changes in the
membership of the Board of Directors, as the Reporting Persons may determine
at any such time based upon its evaluation of the Company's businesses and
prospects, alternative investment opportunities and all other factors deemed
relevant. Except as described in this Item 4, as of the date of this statement
none of the Reporting Persons has any plans or has made any proposals that
relate to or would result in any action enumerated in Items 4(a) through (j)
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
Item 5 is hereby amended and supplemented by adding the following:
The Reporting Persons other than ASARCO and SPHC beneficially own
43,348,949 shares of Class A Common Stock, which are convertible on a
one-to-one basis into shares of Common Stock, representing approximately 65.8%
of the issued and outstanding shares of Class A Common Stock and approximately
54.2% of the issued and outstanding Common Stock (assuming conversion of all
outstanding shares of Class A Common Stock into Common Stock on a one-to-one
basis). The Reporting Persons other than SPHC II and SPHC also beneficially
own 180,700 shares of Common Stock, which were acquired by ASARCO through open
market transactions, the last of which occurred February 24, 2003. The shares
of Common Stock represent approximately 1.3% of the issued and outstanding
shares of Common Stock and 0.2% of the issued and outstanding Common Stock
(assuming conversion of all outstanding shares of Class A Common Stock into
Common Stock on a one-to-one basis). Other than as set forth herein, the
Reporting Persons have neither acquired nor disposed of any shares of Class A
Common Stock or Common Stock since the date of the Schedule 13D.
Grupo Mexico and AMC have shared power to vote and shared
dispositive power of 43,529,649 shares of Class A Common Stock. SPHC II has
shared power to vote and shared dispositive power of 43,348,949 shares of
Class A Common Stock. GMMI and Controladora have shared power to vote and
shared dispositive power of 17,247,579 shares of Class A Common Stock. ASARCO
has shared power to vote and shared dispositive power of 180,700 shares of
Common Stock. SPHC has shared power to vote and shared dispositive power of no
shares of Common Stock.
Except as set forth in the Schedule 13D, none of the Reporting
Persons or, to their knowledge, any of the persons listed in the Annexes
hereto (other than those individuals named in Schedule A hereto) beneficially
owns any equity security of the Company and none of the Reporting Persons or,
to their knowledge, any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any
equity security of the Company during the past 60 days.
Except as set forth in the Schedule 13D, none of the Reporting
Persons or, to their knowledge, any of the persons listed in the Annexes
hereto, has any contract, arrangement, understanding or relationships (legal
or otherwise) among the persons named in Item 2 and between such persons and
any person with respect to any securities of the Company, including but not
limited to transfer or voting of any of the securities of the Company,
finder's fee, joint ventures, loan or option arrangements, puts or calls,
guaranties of profits, division of profits or loss, or the giving or
withholding of proxies.
CUSIP No. 843611104 Page 12 of 19 Pages
Except as set forth in the Schedule 13D, no person is known to any
of the Reporting Persons or to their knowledge to have the right to receive or
the power to direct the receipt of dividends from, or proceeds from the sale
of, any shares of the Common Shares.
On March 31, 2003, each of ASARCO and SPHC ceased to be the
beneficial owner of more than five percent of the Common Shares.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
The responses to Item 3 and Item 4 are incorporated herein by
reference in their entirety. The Termination and Joint Filing Agreement, dated
April 2, 2003, among the Reporting Persons (a copy of which is attached hereto
as Exhibit 1), the Joint Filing Agreement, dated as of April 2, 2003, among
certain of the Reporting Persons (a copy of which is attached hereto as
Exhibit 2), the AMC Credit Agreement, dated as of February 28, 2003, among
AMC, as borrower, and the AMC Lenders (a copy of which is attached hereto as
Exhibit 3), and the Stock Pledge Agreement, dated as of March 31, 2003, made
by SPHC II, in favor of the AMC Lenders (a copy of which is attached hereto as
Exhibit 4), are incorporated herein by reference in their entirety.
Item 7. Material to be Filed as Exhibits.
1. Termination and Joint Filing Agreement dated April 2, 2003.
2. Joint Filing Agreement dated as of April 2, 2003.
3. Credit Agreement dated as of February 28, 2003 among Americas Mining
Corporation, as borrower, the lenders party thereto, and Banco
Inbursa, S.A., Institucion de Banca Multiple, Grupo Financiero
Inbursa, as Administrative Agent.
4. Stock Pledge Agreement, dated as of March 31, 2003, made by SPHC II
Incorporated, in favor of Banco Inbursa, S.A., Institucion de Banca
Multiple, Grupo Financiero Inbursa, as Administrative Agent for the
lenders party to the Credit Agreement dated as of February 28, 2003
among Americas Mining Corporation, as borrower, the lenders party
thereto, and Banco Inbursa, S.A., Institucion de Banca Multiple,
Grupo Financiero Inbursa, as Administrative Agent.
CUSIP No. 843611104 Page 13 of 19 Pages
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
GRUPO MEXICO, S.A. de C.V.
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Administration and Finance President
-------------------------------------------------------------
Name/Title
GRUPO MINERO MEXICO INTERNACIONAL, S.A. de C.V.
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Administration and Finance President
-------------------------------------------------------------
Name/Title
CONTROLADORA MINERA MEXICO, S.A. de C.V.
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Administration and Finance President
-------------------------------------------------------------
Name/Title
AMERICAS MINING CORPORATION
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Executive Vice President and
Chief Financial Officer
-------------------------------------------------------------------
Name/Title
SPHC II INCORPORATED
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Vice President
---------------------------------------
Name/Title
ASARCO INCORPORATED
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Executive Vice President and Chief
Financial Officer
-----------------------------------------------------------
Name/Title
SOUTHERN PERU HOLDINGS CORPORATION
April 2, 2003
-------------
Date
/s/ Daniel Tellechea Salido
---------------------------
Signature
Daniel Tellechea Salido, Vice President and Treasurer
-----------------------------------------------------
Name/Title
CUSIP No. 843611104 Page 14 of 19 Pages
The original statement shall be signed by each person on whose behalf the
statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed
with the statement: provided, however, that a power of attorney for this
purpose which is already on file with the Commission may be incorporated by
reference. The name and any title of each person who signs the statement shall
be typed or printed beneath his signature.
Attention: Intentional misstatements or omissions of fact
constitute federal criminal violations (see 18 U.S.C. 1001).
CUSIP No. 843611104 Page 15 of 19 Pages
Schedule A
BENEFICIAL OWNERSHIP OF COMMON SHARES BY CERTAIN DIRECTORS OF THE
REPORTING PERSONS
The following table sets forth the name of each director of the
Reporting Persons who beneficially owns Common Shares of the Company and the
total number of Common Shares beneficially owned by such director as of the
date of this Schedule 13D.
-----------------------------------------------
NAME COMMON SHARES
BENEFICIALLY OWNED
-----------------------------------------------
Hector Garcia de 400
Quevedo Topete
-----------------------------------------------
Xavier Garcia de 400
Quevedo Topete
-----------------------------------------------
German Larrea 800
Mota-Velasco
-----------------------------------------------
Genaro Larrea 800
Mota-Velasco
-----------------------------------------------
Daniel Tellechea Salido 800
-----------------------------------------------
Armando Ortega Gomez 200
-----------------------------------------------
CUSIP No. 843611104 Page 16 of 19 Pages
Annex I
-------
AMC
---
Directors and Executive Officers
1. DIRECTORS AND EXECUTIVE OFFICERS OF AMC. The following table sets forth
the name, principal business address, title and present principal
occupation or employment of each director and executive officer of AMC.
Each such person is a citizen of Mexico.
--------------------------------------------------------------------------------------
NAME PRINCIPAL BUSINESS TITLE PRINCIPAL
ADDRESS OCCUPATION
--------------------------------------------------------------------------------------
German Larrea Baja California 200 Chairman of the Chairman of the
Mota-Velasco 06760 Mexico City Board, Chief Board and Chief
Executive Executive
Officer and Officer of
President Grupo Mexico
--------------------------------------------------------------------------------------
Juan Sanchez Campos Eliseos 400, Fl. 19 Director Vice President
Navarro Peon 11000 Mexico City of Grupo Modelo,
S.A. de C.V.
--------------------------------------------------------------------------------------
Prudencio Lopez Vasco de Quiroga Director President of
Martinez 2121, Fl. 2 Sanvica, S.A.
01210 Mexico City de C.V.
--------------------------------------------------------------------------------------
Juan I. Gallardo Monte Caucaso Director Chairman of the
Thurlow 915, Fl. 4 Board of Grupo
11000 Mexico City Azucarero de
Mexico, S.A. de
C.V.
--------------------------------------------------------------------------------------
Carlos Giron Lamartine 730 Director Retired
Peltier 11560 Mexico City
--------------------------------------------------------------------------------------
Genaro Larrea 2575 East Camelback Road, Director President of
Mota-Velasco Suite 500 ASARCO
Phoenix, Arizona 85016
--------------------------------------------------------------------------------------
Agustin Campos Eliseos 345 Director Partner of
Santamarina V. 11560 Mexico City Santamarina y
Steta, S.C.
--------------------------------------------------------------------------------------
Daniel Tellechea Baja California 200 Director, Administration
Salido 06760 Mexico City Executive Vice and Finance
President and President of
Chief Financial Grupo Mexico
Officer
--------------------------------------------------------------------------------------
Oscar Gonzalez Av. Caminos Del Inca Director President of
Rocha 171 Lima, Peru Southern Peru
Copper
Corporation
--------------------------------------------------------------------------------------
Xavier Garcia de Baja California 200 Director, Vice President of
Quevedo Topete 06760 Mexico City President and Minera Mexico,
Chief Operating S.A. de C.V.
Officer
--------------------------------------------------------------------------------------
Alfredo Casar Bosque de Ciruelos 00 Director President and
Perez 11700 Mexico City Managing
Director of
Ferrocarril
Mexicano, S.A.
de C.V.
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CUSIP No. 843611104 Page 17 of 19 Pages
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NAME PRINCIPAL BUSINESS TITLE PRINCIPAL
ADDRESS OCCUPATION
--------------------------------------------------------------------------------------
Eduardo Gonzalez Insurgentes Sur 432 Director Independent
Gomez 06760 Mexico City Financial
Advisor
--------------------------------------------------------------------------------------
Ernesto Duran Baja California 200 Vice President Corporate
Trinidad 06760 Mexico City and Controller Controller of
Grupo Mexico
--------------------------------------------------------------------------------------
Hector Garcia de Baja California 200 Vice President General
Quevedo Topete 06760 Mexico City and Secretary Director for
Special Affairs
for Grupo Mexico
--------------------------------------------------------------------------------------
Armando Ortega Baja California 200 Assistant General Legal
Gomez 06760 Mexico City Secretary Director of
Grupo Mexico
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CUSIP No. 843611104 Page 18 of 19 Pages
Annex II
--------
SPHC II
-------
Directors and Executive Officers
2. DIRECTORS AND EXECUTIVE OFFICERS OF SPHC II. The following table sets
forth the name, principal business address, title and present principal
occupation or employment of each director and executive officer of SPHC
II. Each such person is a citizen of Mexico.
--------------------------------------------------------------------------------------
NAME PRINCIPAL BUSINESS TITLE PRINCIPAL
ADDRESS OCCUPATION
--------------------------------------------------------------------------------------
German Larrea Baja California 200 Chairman of the Director,
Mota-Velasco 06760 Mexico City Board of Chairman of the
Directors Board and Chief
Executive
Officer of
Grupo Mexico
--------------------------------------------------------------------------------------
Genaro Larrea 2575 East Camelback Road Director and President of
Mota-Velasco Suite 500 President ASARCO
Phoenix, Arizona 85016
--------------------------------------------------------------------------------------
Daniel Tellechea Baja California 200 Director and Administration
Salido 06760 Mexico City Vice President and Finance
President of
Grupo Mexico
--------------------------------------------------------------------------------------
Genaro Guerrero 1150 N. 7th Avenue Director, Vice President
Diaz Mercado Tucson, Arizona 85705 Treasurer and Treasurer
and Secretary of ASARCO
--------------------------------------------------------------------------------------
Ernesto Duran Baja California 200 Controller Corporate
Trinidad 06760 Mexico City Comptroller of
Grupo Mexico
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CUSIP No. 843611104 Page 19 of 19 Pages
Exhibit Index
-------------
1. Termination and Joint Filing Agreement dated April 2, 2003.
2. Joint Filing Agreement dated as of April 2, 2003.
3. Credit Agreement dated as of February 28, 2003 among Americas Mining
Corporation, as borrower, the lenders party thereto, and Banco
Inbursa, S.A., Institucion de Banca Multiple, Grupo Financiero
Inbursa, as Administrative Agent.
4. Stock Pledge Agreement, dated as of March 31, 2003, made by SPHC II
Incorporated, in favor of Banco Inbursa, S.A., Institucion de Banca
Multiple, Grupo Financiero Inbursa, as Administrative Agent for the
lenders party to the Credit Agreement dated as of February 28, 2003
among Americas Mining Corporation, as borrower, the lenders party
thereto, and Banco Inbursa, S.A., Institucion de Banca Multiple,
Grupo Financiero Inbursa, as Administrative Agent.
Exhibit 1
---------
TERMINATION AND JOINT FILING AGREEMENT
This Termination and Joint Filing Agreement (this "Agreement") is
entered into as of April 2, 2003, by and among Grupo Mexico, S.A. de C.V.
("Grupo Mexico"), Grupo Minero Mexico International, S.A. de C.V. ("GMMI"),
Controladora Minera Mexico, S.A. de C.V. ("Controladora"), Americas Mining
Corporation ("AMC"), SPHC II Incorporated ("SPHC II"), ASARCO Incorporated
("ASARCO") and Southern Peru Holdings Corporation ("SPHC") (collectively,
Grupo Mexico, GMMI, Controladora, AMC, SPHC II, ASARCO and SPHC, the "Filing
Parties").
Whereas, certain of the Filing Parties entered into that certain
Joint Filing Agreement, dated as of July 13, 2001 (the "Joint Filing
Agreement"), pursuant to which certain of the Filing Parties agreed to prepare
jointly and file timely all filings required by the Filing Parties pursuant to
Sections 13(d) and 13(g) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), with respect to their respective ownership of shares of
common stock of Southern Peru Copper Corporation and other securities
representing, or convertible into, such shares (collectively, the "Shares");
Whereas, on March 31, 2003, SPHC transferred all of its Shares to
AMC and no longer beneficially owns any Shares;
Whereas, on March 31, 2003, the SPHC transfer of all of its Shares
to AMC resulted in ASARCO no longer beneficially owning more than five percent
of the Shares;
Whereas, the Filing Parties desire to terminate the Joint Filing
Agreement and to file an amendment to their Schedule 13D Statement dated
January 12, 1996, as amended by Amendment No. 1 thereto dated March 6, 1996,
as amended by Amendment No. 2 thereto dated November 19, 1999, as amended by
Amendment No. 3 thereto dated October 13, 2000, as amended by Amendment No. 4
thereto dated May 17, 2001, as amended by Amendment No. 5 thereto dated July
16, 2001 and as amended by Amendment No. 6 thereto dated February 11, 2003
(collectively, the "Schedule 13D") relating to the Shares with the Securities
and Exchange Commission (the "Commission") with respect to the termination of
the Joint Filing Agreement; and
Whereas, pursuant to Rule 13d-1(k) promulgated by the Commission
under the Exchange Act, the Filing Parties desire to enter into this Agreement
to evidence their agreement to file jointly an amendment to the Schedule 13D
with the Commission with respect to the termination of the Joint Filing
Agreement.
NOW, THEREFORE, in consideration of the premises, the Filing Parties
agree as follows:
1. The Filing Parties hereby agree that the Joint Filing Agreement
shall be terminated and of no further force and effect upon the
execution and delivery of this Agreement on April 2, 2003 by all of
the Filing Parties.
2. The Filing Parties hereby agree to cooperate in the preparation and
filing with the Commission of an amendment to the Schedule 13D to
report jointly the termination of the Joint Filing Agreement as
evidenced by the execution and delivery of this Agreement.
3. The Filing Parties hereby agree to permit the attachment of this
Agreement as an exhibit to the amendment to the Schedule 13D to
evidence the agreement of such Filing Parties that such amendment to
the Schedule 13D is being filed on behalf of all of the Filing
Parties.
This Agreement may be executed in counterparts and each of such
counterparts taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement to
be effective as of the date first written.
Dated: April 2, 2003 GRUPO MEXICO, S.A. DE C.V.
By: /s/ Daniel Tellechea Salido
------------------------------------
Daniel Tellechea Salido,
Administration and Finance President
Dated: April 2, 2003 GRUPO MINERO MEXICO INTERNACIONAL, S.A.
de C.V.
By: /s/ Daniel Tellechea Salido
----------------------------------
Daniel Tellechea Salido,
Vice President and Administration
and Finance President
Dated: April 2, 2003 CONTROLADORA MINERA MEXICO, S.A. de C.V.
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Administration and Finance President
Dated: April 2, 2003 AMERICAS MINING CORPORATION
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Vice President and Chief Financial Officer
Dated: April 2, 2003 SPHC II INCORPORATED
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Vice President
Dated: April 2, 2003 ASARCO INCORPORATED
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Executive Vice President and Chief
Financial Officer
Dated: April 2, 2003 SOUTHERN PERU HOLDINGS CORPORATION
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Vice President and Treasurer
Exhibit 2
---------
JOINT FILING AGREEMENT
The undersigned acknowledge and agree that the foregoing statement
on Schedule 13D is filed on behalf of each of the undersigned and that all
subsequent amendments to this statement shall be filed on behalf of each of
the undersigned without the necessity of filing additional joint filing
agreements. The undersigned acknowledge that each shall be responsible for the
timely filing of such amendments, and for the completeness and accuracy of the
information concerning it contained therein, but shall not be responsible for
the completeness and accuracy of the information concerning the others, except
to the extent that it knows or has reason to believe that such information is
inaccurate.
This Agreement may be executed in counterparts and each of such
counterparts taken together shall constitute one and the same instrument.
Dated: April 2, 2003 GRUPO MEXICO, S.A. DE C.V.
By: /s/ Daniel Tellechea Salido
------------------------------------
Daniel Tellechea Salido,
Administration and Finance President
Dated: April 2, 2003 GRUPO MINERO MEXICO INTERNACIONAL, S.A. de C.V.
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Vice President and Administration
and Finance President
Dated: April 2, 2003 CONTROLADORA MINERA MEXICO, S.A. de C.V.
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Administration and Finance President
Dated: April 2, 2003 AMERICAS MINING CORPORATION
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Vice President and Chief Financial Officer
Dated: April 2, 2003 SPHC II INCORPORATED
By: /s/ Daniel Tellechea Salido
-------------------------------
Daniel Tellechea Salido,
Vice President
Exhibit 3
---------
CREDIT AGREEMENT
EXECUTION COPY
===============================================================================
U.S.$310,000,000
CREDIT AGREEMENT
among
AMERICAS MINING CORPORATION,
as Borrower,
the Several Lenders from Time to Time Parties Hereto,
and
BANCO INBURSA, S.A.,
Institucion de Banca Multiple, Grupo Financiero Inbursa,
as Administrative Agent and Lender
Dated as of February 28, 2003
=============================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS.......................................................2
1.1 Defined Terms.....................................................2
1.2 Other Definitional Provisions....................................16
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS..................................16
2.1 Commitments......................................................16
2.2 Procedure for the Loan Borrowing.................................16
2.3 Notes............................................................16
2.4 Repayment of the Loans...........................................17
2.5 [Intentionally Omitted]..........................................17
2.6 Optional Prepayments.............................................17
2.7 Mandatory Prepayments............................................17
2.8 Interest Rates and Payment Dates.................................17
2.9 Computation of Interest..........................................18
2.10 Inability to Determine Interest Rate.............................18
2.11 Pro Rata Treatment and Payments..................................18
2.12 Requirements of Law..............................................20
2.13 Taxes............................................................21
2.14 Indemnity........................................................22
2.15 Change of Lending Office.........................................23
2.16 Replacement of Lenders...........................................23
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................23
3.1 Financial Condition..............................................24
3.2 No Change........................................................25
3.3 Existence; Compliance with Law...................................25
3.4 Power; Authorization; Enforceable Obligations....................25
3.5 No Legal Bar.....................................................26
3.6 Litigation.......................................................26
3.7 No Default.......................................................26
3.8 Ownership of Property; Liens.....................................26
3.9 Intellectual Property............................................26
3.10 Taxes............................................................27
3.11 Federal Regulations..............................................27
3.12 Labor Matters....................................................27
3.13 ERISA............................................................27
3.14 Investment Company Act; Other Regulations........................28
3.15 Subsidiaries.....................................................28
3.16 Use of Proceeds..................................................28
3.17 Environmental Matters............................................28
3.18 Accuracy of Information, etc.....................................29
3.19 Security Documents...............................................29
3.20 Solvency.........................................................30
i
3.21 Direct Obligations; Pari Passu...................................30
3.22 Certain Documents................................................30
3.23 Consent Decree...................................................30
3.24 Acquired Shares..................................................30
3.25 Representations in the SPCC Stock Pledge Agreement...............31
3.26 Representations in the Acquisition Documentation and
Consent Decree Documentation.....................................31
SECTION 4. CONDITIONS PRECEDENT.............................................31
4.1 Conditions to Initial Extension of Credit........................31
4.2 Conditions to Each Extension of Credit...........................35
SECTION 5. AFFIRMATIVE COVENANTS............................................35
5.1 Financial Statements.............................................35
5.2 Certificates; Other Information..................................36
5.3 Payment of Obligations...........................................37
5.4 Maintenance of Existence; Compliance.............................37
5.5 Maintenance of Property; Insurance...............................38
5.6 Inspection of Property; Books and Records; Discussions...........38
5.7 Notices..........................................................38
5.8 Environmental Laws...............................................39
5.9 Use of Proceeds..................................................39
5.10 Consent Decree...................................................39
SECTION 6. NEGATIVE COVENANTS...............................................39
6.1 Financial Condition Covenants....................................39
6.2 Indebtedness.....................................................41
6.3 Liens............................................................42
6.4 Fundamental Changes..............................................43
6.5 Disposition of Property..........................................43
6.6 Restricted Payments..............................................43
6.7 Limitations on Modifications of Indebtedness;
Modifications to Certain Agreements..............................44
6.8 Transactions with Affiliates.....................................44
6.9 Sales and Leasebacks.............................................44
6.10 Changes in Fiscal Periods........................................45
6.11 Negative Pledge Clauses..........................................45
6.12 Clauses Restricting Subsidiary Distributions.....................45
6.13 Lines of Business................................................45
6.14 Investments......................................................45
6.15 Amendments to Acquisition Documents..............................46
SECTION 7. EVENTS OF DEFAULT................................................46
SECTION 8. THE ADMINISTRATIVE AGENT.........................................49
8.1 Appointment.......................................................49
8.2 Delegation of Duties..............................................50
ii
8.3 Exculpatory Provisions............................................50
8.4 Reliance by Administrative Agent..................................50
8.5 Notice of Default.................................................51
8.6 Non-Reliance on Administrative Agent and Other Lenders............51
8.7 Indemnification...................................................51
8.8 Administrative Agent in Its Individual Capacity...................52
8.9 Successor Administrative Agent....................................52
SECTION 9. MISCELLANEOUS....................................................53
9.1 Amendments and Waivers............................................53
9.2 Notices...........................................................53
9.3 No Waiver; Cumulative Remedies....................................54
9.4 Survival of Representations and Warranties........................55
9.5 Payment of Expenses and Taxes.....................................55
9.6 Successors and Assigns; Participations and Assignments............56
9.7 Adjustments; Set-off..............................................58
9.8 Counterparts......................................................59
9.9 Severability......................................................59
9.10 Integration......................................................59
9.11 GOVERNING LAW....................................................59
9.12 Submission To Jurisdiction; Waivers..............................59
9.13 Acknowledgements.................................................60
9.14 Releases of Guarantees and Liens.................................60
9.15 Confidentiality..................................................61
9.16 WAIVERS OF JURY TRIAL............................................61
SCHEDULES:
1.1A Commitments
3.2(c) Payment of Dividends and Distributions
3.4 Consents, Authorizations, Filings and Notices
3.6 Litigation
3.13 ERISA
3.15 Subsidiaries
6.2(c) Existing Indebtedness
6.3(e) Existing Liens
6.12 Existing Encumbrances or Restrictions
6.14 Restructuring Investments
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Compliance Certificate
Exhibit C-1 Form of SPCC Holdings Stock Pledge Agreement
Exhibit C-2 Form of SPCC Stock Pledge Agreement
Exhibit D Form of Borrowing Notice
iii
Exhibit E Form of Note
Exhibit F Form of Exemption Certificate
Exhibit G Form of Closing Certificate
Exhibit H-1 Form of Legal Opinion of Sidley Austin Brown & Wood LLP
Exhibit H-2 Form of Legal Opinion of Hans Flury
Exhibit H-3 Form of Legal Opinion of New Jersey Counsel
iv
CREDIT AGREEMENT (this "Agreement"), dated as of February 28, 2003,
among AMERICAS MINING CORPORATION, a Delaware corporation (the "Borrower"),
the several banks and other financial institutions or entities from time to
time parties to this Agreement (the "Lenders") and BANCO INBURSA, S.A.,
INSTITUCION DE BANCA MULTIPLE, GRUPO FINANCIERO INBURSA, as administrative
agent (in such capacity, the "Administrative Agent") and a Lender.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, concurrently with the execution of this Agreement, the
Borrower has entered into a Stock Purchase Agreement (the "Acquisition
Agreement") with ASARCO Incorporated, a New Jersey corporation and an indirect
subsidiary of the Borrower ("Asarco"), Southern Peru Holdings Corporation, a
Delaware corporation and a wholly-owned subsidiary of Asarco ("SPHC"), and
SPHC II Incorporated, a Delaware corporation and a wholly-owned subsidiary of
the Borrower ("SPCC Holdings"), pursuant to which the Borrower has agreed (i)
to acquire 43,348,949 shares of Class A Common Stock, par value U.S.$0.01 per
share (the "Acquired Shares") of Southern Peru Copper Corporation, a Delaware
corporation ("SPCC"), for a purchase price of approximately U.S.$765,000,000,
and (ii) immediately upon the consummation of such acquisition, to transfer
the Acquired Shares to SPCC Holdings as a capital contribution (collectively,
the "Acquisition");
WHEREAS, the United States government filed a complaint against
Asarco and SPHC, seeking to enjoin the transfer of their ownership interests
in SPCC in a suit denominated United States v. ASARCO Inc. and Southern Peru
Holdings Corporation, No. CIV-02-2079-PHX-RCB (D. Ariz.) (the "Action");
WHEREAS, the United States government, Asarco and SPHC and, for
certain limited purposes, the Borrower and Grupo Mexico, S.A. de C.V. ("Grupo
Mexico") have entered into a consent decree, including attachments and related
agreements, which has been approved, and a final judgment with respect thereto
has been entered on February 3, 2003, by Honorable Robert C. Broomfield, Chief
Judge of the United States District Court for the District of Arizona, that
resolves the claims raised by the United States government in the Action (the
"Consent Decree");
WHEREAS, the Borrower intends to finance the Acquisition and related
fees and expenses from the following sources: (i) the Borrower will obtain a
secured term loan facility in a principal amount of up to U.S.$310,000,000
pursuant to this Agreement; (ii) the Borrower and its affiliates will cancel
U.S.$41,750,000 of debt owed to them by Asarco and SPHC; (iii) the Borrower
will issue in favor of SPHC a promissory note in the amount of
U.S.$123,250,000 ("Acquisition Note A"); (iv) the Borrower will issue in favor
of SPHC a second promissory note in the amount of U.S.$100,000,000
("Acquisition Note B"; and together with the Acquisition Note A, the
"Acquisition Notes"); (v) the Borrower will obtain U.S.$50,000,000 in respect
of its participation interest in the Asarco Credit Facility (as hereinafter
defined) upon the repayment thereof as more fully described below; and (vi)
the Borrower will obtain approximately U.S.$145,000,000 from capital
contributions from its affiliates;
2
WHEREAS, as part of the transactions contemplated by the Consent
Decree, (i) a portion of the net proceeds from the Acquisition will be used by
Asarco to satisfy in full the approximately U.S.$450,000,000 of indebtedness
owed by Asarco to a consortium of lenders under the Amended and Restated
Revolving Credit Agreement dated as of December 21, 1999 (the "Asarco Credit
Facility"); (ii) Acquisition Note B, and a guarantee ("Grupo Mexico
Guarantee") thereof issued by Grupo Mexico, will be assigned and pledged to
the ASARCO Trust, an irrevocable trust established by Asarco in favor of the
United States government to satisfy certain environmental costs of Asarco (the
"Asarco Environmental Trust"); and (iii) proceeds based on ownership of the
Acquired Shares from the U.S.$0.092 per share dividend declared by the board
of directors of SPCC on January 30, 2003 will be paid to Asarco regardless of
which party is the actual shareholder of record on the date the right to such
dividend vests;
WHEREAS, after giving effect to the Acquisition, 54.08% of the
issued and outstanding shares of the capital stock of SPCC (on a fully diluted
basis), constituting 65.8% of the issued and outstanding shares of the Class A
Common Stock of SPCC (on a fully diluted basis), will be owned by SPCC
Holdings, and 100% of the issued and outstanding capital stock of SPCC
Holdings (on a fully diluted basis) will be owned by the Borrower;
WHEREAS, in order to finance, in part, the Acquisition, the Borrower
has requested the Lenders to make the loans provided for herein; and
WHEREAS, in order to induce the Lenders to enter into this
Agreement, (i) the Borrower has entered into a Stock Pledge Agreement (the
"SPCC Holdings Stock Pledge Agreement"), pursuant to which the Borrower has
agreed to pledge in favor of the Lenders all the outstanding capital stock of
SPCC Holdings, and (ii) SPCC Holdings has entered into a Stock Pledge
Agreement (the "SPCC Stock Pledge Agreement"), pursuant to which SPCC Holdings
has agreed to pledge in favor of the Lenders the Acquired Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"Acquired Shares": as defined in the preamble hereto.
"Acquisition": as defined in the preamble hereto.
"Acquisition Agreement": as defined in the preamble hereto.
"Acquisition Documentation": collectively, the Acquisition Agreement
and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection
therewith.
"Acquisition Notes": as defined in the preamble hereto.
3
"Action": as defined in the preamble hereto.
"Administrative Agent": Banco Inbursa, S.A., Institucion de Banca
Multiple, Grupo Financiero Inbursa, as the Administrative Agent for the
Lenders under this Agreement and the other Loan Documents, together with any
of its successors.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person
means the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the aggregate then
unpaid principal amount of such Lender's Loans.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": as defined in the preamble hereto.
"Alternate Rate Loans": as defined in Section 2.10.
"Applicable Margin": for each Loan, 4.75% per annum.
"Asarco": as defined in the preamble hereto.
"Asarco Credit Facility": as defined in the preamble hereto.
"Asarco Environmental Trust": as defined in the preamble hereto.
"Asset Sale": any Disposition or series of related Dispositions of
property of SPCC or any of its Subsidiaries other than (i) Dispositions to
SPCC or any of its Subsidiaries, (ii) Dispositions of obsolete or worn out
property in the ordinary course of business, (iii) Dispositions of inventory
in the ordinary course of business, and (iv) other Dispositions to the extent
that the aggregate value of the assets Disposed of in any single transaction
or related series of transactions is equal to or less than U.S.$10,000,000.
"Assignee": as defined in Section 9.6(b).
"Assignment and Acceptance": an Assignment and Acceptance,
substantially in the form of Exhibit A.
"Benefitted Lender": as defined in Section 9.7(a).
4
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as defined in the preamble hereto.
"Borrower's Knowledge": the actual knowledge of any officer,
director or executive manager (or any Person serving in any similar capacity)
of any Grupo Mexico Member.
"Borrowing Date": any Business Day specified by the Borrower in the
relevant Borrowing Notice as a date on which the Borrower requests the Lenders
to make Loans hereunder.
"Borrowing Notice": as defined in Section 2.2.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City or Mexico City, Federal District are
authorized or required by law to close, provided, that with respect to notices
and determinations in connection with, and payments of principal and interest
on, the Loans, such day is also a day for trading by and between banks in
Dollar deposits in the interbank eurodollar market.
"Capital Lease Obligations": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than U.S.$500,000,000; (c) commercial paper of an issuer
rated at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by
Moody's Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than
30 days, with respect to securities issued or fully guaranteed or insured by
the United States government; (e) securities with maturities of one year or
less from the date of acquisition
5
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory, political subdivision, taxing
authority or foreign government (as the case may be) are rated at least A by
S&P or A by Moody's; (f) securities with maturities of six months or less from
the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of
this definition; (g) money market mutual or similar funds that invest
exclusively in assets satisfying the requirements of clauses (a) through (f)
of this definition; or (h) money market funds that (i) comply with the
criteria set forth in SEC Rule 2a-7 under the Investment Company Act of 1940,
as amended, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have
portfolio assets of at least U.S.$5,000,000,000.
"Closing Date": the date on which the conditions precedent set forth
in Section 4.1 shall have been satisfied, which date shall be on or before the
Commitment Termination Date.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment": as to any Lender, the obligation of such Lender to
make a Loan to the Borrower in a principal amount not to exceed the amount set
forth under the heading "Commitment" opposite such Lender's name on Schedule
1.1A. The original aggregate amount of the Commitments is U.S.$310,000,000.
The Commitments shall automatically terminate at the earlier of (a) the making
of all the Loans on the Closing Date, (b) the close of business on the
Commitment Termination Date and (c) the date, if any, on which the Borrower
decides not to consummate the Acquisition as currently contemplated in the
Acquisition Documentation and the Consent Decree Documentation and so advises
the Administrative Agent in writing.
"Commitment Termination Date": April 9, 2003.
"Commonly Controlled Entity": an entity, whether or not
incorporated, that is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group that includes the
Borrower and that is treated as a single employer under Section 414 of the
Code.
"Compliance Certificate": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"Consent Decree": as defined in the preamble hereto.
"Consent Decree Documentation": collectively, the Consent Decree and
all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection
therewith.
"Consent Decree Transactions": all transactions contemplated in the
Consent Decree Documentation, including without limitation the transactions
set forth in Section 4.1(c) and in the preamble hereto.
6
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge
in the statement of such Consolidated Net Income for such period, the sum of
(a) income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs and (e) any extraordinary,
non-cash expenses or losses (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, non-cash losses on sales of assets outside of the ordinary course of
business as permitted hereunder), and minus, (a) to the extent included in the
statement of such Consolidated Net Income for such period, the sum of (i)
interest income, (ii) any extraordinary, unusual or non-recurring income or
gains (including, whether or not otherwise includable as a separate item in
the statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business) and (iii) any
other non-cash income and (b) any cash payments made during such period in
respect of items described in clause (e) above subsequent to the fiscal
quarter in which the relevant non-cash expenses or losses were reflected as a
charge in the statement of Consolidated Net Income, all as determined on a
consolidated basis. For the purposes of calculating Consolidated EBITDA for
any period of four consecutive fiscal quarters (each, a "Reference Period")
pursuant to any determination of the Consolidated Leverage Ratio, (i) if at
any time during such Reference Period the Borrower or any of its Subsidiaries,
or if applicable SPCC or any of its Subsidiaries, shall have made any Material
Disposition, the Consolidated EBITDA for such Reference Period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition
for such Reference Period or increased by an amount equal to the Consolidated
EBITDA (if negative) attributable thereto for such Reference Period and (ii)
if during such Reference Period the Borrower or any of its Subsidiaries, or if
applicable SPCC or any of its Subsidiaries, shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro forma effect thereto as if such Material Acquisition occurred
on the first day of such Reference Period. As used in this definition,
"Material Acquisition" means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the payment
of consideration by the Borrower and its Subsidiaries, or if applicable, SPCC
and its Subsidiaries, in excess of U.S.$10,000,000; and "Material Disposition"
means any Disposition of property or series of related Dispositions of
property that yields gross proceeds to the Borrower and its Subsidiaries, or
if applicable, SPCC and its Subsidiaries, in excess of U.S.$10,000,000.
"Consolidated Interest Coverage Ratio": for any period, the ratio of
(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period.
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries, or if applicable, SPCC and its Subsidiaries,
for such period with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries, or SPCC and its Subsidiaries, (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Swap
Agreements in respect of interest rates to the extent such net costs are
allocable to such period in accordance with GAAP).
7
"Consolidated Leverage Ratio": as at the last day of any period, the
ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for such period.
"Consolidated Net Income": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, or if applicable, SPCC
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded (a) the income (or deficit) of any
Person accrued prior to the date it becomes a Subsidiary of the Borrower, or
if applicable, SPCC, or is merged into or consolidated with the Borrower or
any of its Subsidiaries, or if applicable, SPCC or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of the
Borrower, or if applicable, SPCC) in which the Borrower or any of its
Subsidiaries, or if applicable, SPCC or any of its Subsidiaries, has an
ownership interest, except to the extent that any such income is actually
received by such Subsidiary or the Borrower, or if applicable, SPCC, in the
form of dividends or similar distributions and (c) the undistributed earnings
of any Subsidiary of the Borrower, or if applicable SPCC, to the extent that
the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any Contractual
Obligation (other than under any Loan Document) or Requirement of Law
applicable to such Subsidiary.
"Consolidated Net Worth": at any date, all amounts that would, in
conformity with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries, or if applicable, SPCC and its Subsidiaries,
under stockholders' equity at such date.
"Consolidated Total Debt": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries, or if
applicable SPCC and its Subsidiaries, at such date, determined on a
consolidated basis in accordance with GAAP.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dividend Trigger Date": any date on which the aggregate amount of
Net Unreinvested Cash Proceeds exceeds U.S.$100,000,000.
"Dollars", "U.S.$" and "$": dollars in lawful currency of the United
States.
"Environmental Laws": any and all laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating,
relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as have been, are now, or may
at any time hereafter be in effect.
8
"Environmental Permits": any and all permits, licenses, approvals,
registrations, notifications, exemptions and any other authorization required
under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Excluded SPCC Shares": as defined in Section 4.1(b) hereto.
"Excluded Subsidiary": any Subsidiary of the Borrower other than
SPCC Holdings, SPCC and SPCC's Subsidiaries.
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Federal Funds Effective Rate": 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 that is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.
"Funding Office": the office of the Administrative Agent specified
in Section 9.2 or such other office as may be specified from time to time by
the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section
6.1, GAAP shall be determined on the basis of such principles in effect on the
date hereof and consistent with those used in the preparation of the most
recent audited financial statements referred to in Section 3.1(b). In the
event that any "Accounting Change" (as defined below) shall occur and such
change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and the
Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to reflect equitably such Accounting
Changes with the desired result that the criteria for evaluating the
Borrower's financial condition shall be the same after such Accounting Changes
as if such Accounting Changes had not been made. Until such time as such an
amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Changes had not occurred. "Accounting Changes"
refers to changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or,
if applicable, the SEC.
"Governmental Authority": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
9
"Group Members": the collective reference to the Borrower, SPCC
Holdings, SPCC and SPCC's Subsidiaries.
"Grupo Mexico": Grupo Mexico, S.A. de C.V., or any successors and
assigns.
"Grupo Mexico Guarantee": as defined in the preamble hereto.
"Grupo Mexico Members": the collective reference to Grupo Mexico and
its Subsidiaries, including, without limitation, the Group Members.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of
which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary
obligations") of any other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including any obligation of the guaranteeing
person, whether or not contingent, (i) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary obligation
against loss in respect thereof; provided, however, that the term Guarantee
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a)
an amount equal to the stated or determinable amount of the primary obligation
in respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing person may be liable pursuant to the terms
of the instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the Borrower in good
faith.
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other
than current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under or in respect of
acceptances, letters of credit, surety bonds or similar arrangements, (g) the
liquidation value of all mandatorily redeemable preferred Capital Stock of
such Person, (h) all Guarantee Obligations of such Person in respect of
obligations of
10
the kind referred to in clauses (a) through (g) above, (i) all obligations of
the kind referred to in clauses (a) through (h) above secured by (or for which
the holder of such obligation has an existing right, contingent or otherwise,
to be secured by) any Lien on property (including accounts and contract
rights) owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation, and (j) for the purposes of Section
7(d) only, all obligations of such Person in respect of Swap Agreements. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness expressly provide that such Person is not liable
therefor.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks,
trademark licenses, technology, know-how and processes, and all rights to sue
at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": the last day of any Interest Period.
"Interest Period": as to any Loan, (a) initially, the period
commencing on the Borrowing Date with respect to such Loan and ending six (6)
months thereafter; and (b) thereafter, each period commencing on the last day
of the next preceding Interest Period applicable to such Loan and ending on
the numerically corresponding day in the calendar month that is six (6) months
thereafter; provided, that, the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event
such Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period 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 end on the last Business Day of a calendar month; and
(iii) no Interest Period shall extend past the Maturity Date, except
pursuant to clauses (i) and (ii) above.
"Investments": any advance, loan, extension of credit (by way of
Guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or
11
other debt securities of, or any assets constituting a business unit of, or
make any other investment in, any Person.
"Lender" or "Lenders": as defined in the preamble hereto.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease
having substantially the same economic effect as any of the foregoing).
"Loan": as defined in Section 2.1.
"Loan Documents": this Agreement, the Security Documents and the
Notes and any amendment, waiver, supplement or other modification to any of
the foregoing.
"Loan Parties": each Group Member that is a party to a Loan
Document.
"London Interbank Offered Rate" or "LIBOR": with respect to each
Interest Period pertaining to a Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period of six months
commencing on the first day of such Interest Period appearing on Page 3750 of
the Telerate screen as of 11:00 A.M., London time, two Business Days prior to
the beginning of such Interest Period. In the event that such rate does not
appear on Page 3750 of the Telerate screen (or otherwise on such screen), the
"London Interbank Offered Rate" or "LIBOR" shall be determined by reference to
such other comparable publicly available service for displaying eurodollar
rates as may be selected by the Administrative Agent or, in the absence of
such availability, by reference to the respective rates at which Dollar
deposits are offered to the Reference Banks at or about 11:00 A.M., London
time, two (2) Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where their eurodollar and foreign currency
and exchange operations are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein.
"Material Adverse Effect": a material adverse effect on (a) the
Acquisition or the validity of the Consent Decree, (b) the business, property,
operations, condition (financial or otherwise) or prospects of the Borrower or
of SPCC and its Subsidiaries taken as a whole, (c) the ability of any Loan
Party to perform its material obligations under the Loan Documents, (d) the
validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder or (e) the legality, validity, enforceability or
priority of the security interests of the Administrative Agent or Lenders
provided under each Stock Pledge Agreement.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under, and any other material that could reasonably be expected to
result in liability under, any Environmental Law.
"Maturity Date": the fifth anniversary of the Closing Date.
12
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured
by a Lien expressly permitted hereunder on any asset that is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements).
"Net Unreinvested Cash Proceeds": Net Cash Proceeds that the
Borrower (i) did not declare would be Reinvested or (ii) did declare would be
Reinvested but were not Reinvested prior to one year after the applicable
Asset Sale or Recovery Event (in the case of clause (ii), it being understood
that the Net Cash Proceeds from preceding Asset Sales and/or Recovery Events
will be deemed to be Reinvested prior to the Net Cash Proceeds from subsequent
Asset Sales and/or Recovery Events and that, if Reinvested prior to a Dividend
Trigger Date, such Net Cash Proceeds shall no longer be deemed Net
Unreinvested Cash Proceeds).
"Non-Excluded Taxes": as defined in Section 2.13(a).
"Non-U.S. Lender": as defined in Section 2.13(d).
"Note": the reference to any promissory note evidencing the payment
obligations of the Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and interest accruing after
the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including all fees, charges and disbursements of counsel to the
Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
13
"Participant": as defined in Section 9.6(c).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledged Stock": the shares of Capital Stock identified in the
applicable Stock Pledge Agreement.
"Prepayment Charge": 0.75% of the amount of the Loans to be prepaid
by the Borrower pursuant to a Prepayment Notice delivered in accordance with
Section 2.6; provided, that no such charge will result from an optional
prepayment by the Borrower if the funds used for such prepayment have been
obtained from a transaction exclusively arranged or otherwise structured by
the Administrative Agent.
"Prepayment Notice": as defined in Section 2.6.
"Pro Forma Balance Sheets": as defined in Section 3.1(a).
"Pro Forma Consolidated Balance Sheets": as defined in Section
3.1(a).
"Pro Forma Unconsolidated Balance Sheets": as defined in Section
3.1(a).
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating
to any asset of SPCC or any of its Subsidiaries.
"Register": as defined in Section 9.6(b).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reinvest": to acquire or repair assets useful in the businesses in
which SPCC and its Subsidiaries are engaged as of the Closing Date.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg.ss. 4043.
14
"Required Lenders": at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments then in effect and (b) thereafter,
aggregate unpaid principal amount of the Loans then outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject.
"Responsible Officer": the chief executive officer, president or
chief financial officer of the Borrower and, if applicable, each of its
Subsidiaries, but in any event, with respect to financial matters, the chief
financial officer of the Borrower and its Subsidiaries.
"Restricted Payments": as defined in Section 6.6.
"SEC": the United States Securities and Exchange Commission, any
successor thereto and any analogous Governmental Authority.
"Security Documents": the collective reference to the Stock Pledge
Agreements and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any property of any Person to secure
the obligations and liabilities of any Loan Party under any Loan Document,
including, without limitation, (i) the Acknowledgment in the form attached to
the SPCC Stock Pledge Agreement, executed by SPCC and (ii) the Acknowledgment
and Consent in the form attached to the SPCC Holdings Stock Pledge Agreement,
executed by SPCC Holdings.
"Single Employer Plan": any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such
date, be greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay
its debts as they mature. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of
performance if such breach gives rise to a right to payment, whether or not
such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"SPCC": as defined in the preamble hereto.
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"SPCC Charter": the Restated Certificate of Incorporation of SPCC,
as provided to the Administrative Agent.
"SPCC Holdings Stock Pledge Agreement": the stock pledge agreement
in the form and substance satisfactory to the Administrative Agent,
substantially in the form of Exhibit C-1 attached hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
"SPCC Stockholders' Agreement": the Agreement Among Certain
Stockholders of SPCC dated as of January 2, 1996, as amended by the First
Amendment thereto dated June 11, 2001, as provided to the Administrative
Agent.
"SPCC Stock Pledge Agreement": the stock pledge agreement in the
form and substance satisfactory to the Administrative Agent, substantially in
the form of Exhibit C-2 attached hereto, as the same may be amended,
supplemented or otherwise modified from time to time.
"Stock Pledge Agreements": the SPCC Stock Pledge Agreement and the
SPCC Holdings Stock Pledge Agreement.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"Swap Agreement": any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
the Borrower or any of its Subsidiaries shall be a "Swap Agreement".
"Transferee": any Assignee or Participant.
"United States" or "U.S." or "US": the United States of America.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than de minimis directors' qualifying shares
required by law or de minimis shares required by law for diversity of
ownership) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
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1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document
made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to any Group Member not defined in Section 1.1
and accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP, (ii) the words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation", (iii) the word "incur" shall be construed to mean
incur, create, issue, assume, become liable in respect of or suffer to exist
(and the words "incurred" and "incurrence" shall have correlative meanings),
(iv) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, Capital Stock, securities, revenues, accounts,
leasehold interests and contract rights, and (v) references to agreements or
other Contractual Obligations shall, unless otherwise specified, be deemed to
refer to such agreements or Contractual Obligations as amended, supplemented,
restated or otherwise modified from time to time.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import, when used in this Agreement, shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. Subject to the terms and conditions hereof, each
Lender severally agrees to make a term loan (a "Loan") in Dollars to the
Borrower on the Closing Date in a principal amount not to exceed the amount of
the Commitment of such Lender. The Commitments are not revolving in nature,
and amounts repaid or prepaid may not be reborrowed. The Commitments shall
automatically terminate at the earlier of (a) the making of all the Loans on
the Closing Date and (b) the close of business on the Commitment Termination
Date.
2.2 Procedure for the Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (the "Borrowing Notice"), which notice
must be in the form of Exhibit D and received by the Administrative Agent
prior to 10:00 A.M., New York City time, two Business Days prior to the
anticipated Closing Date, requesting that the Lenders make the Loan on the
Closing Date and specifying the amount to be borrowed. Not later than 12:00
Noon, New York City time, on the Closing Date each Lender shall make available
to the Administrative Agent at the Funding Office an amount in immediately
available funds equal to the Loan to be made by such Lender.
2.3 Notes. The Loan made by each Lender shall be additionally
evidenced by a Note representing the obligation of the Borrower to pay such
Lender the aggregate unpaid principal amount of such Loan, plus interest
thereon as provided in Section 2.8. The form of
17
Note is attached hereto as Exhibit E. The Loan Parties acknowledge and confirm
that the execution and delivery of the Notes is not and shall not be construed
as payment of the Loans.
2.4 Repayment of the Loans. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders the aggregate
principal amount of the Loans on the Maturity Date.
2.5 [Intentionally Omitted].
2.6 Optional Prepayments. The Borrower may at any time and from time
to time prepay the Loans, in whole or in part, without premium or penalty
(other than the relevant Prepayment Charge), upon irrevocable notice (the
"Prepayment Notice") delivered to the Administrative Agent no later than 11:00
A.M., New York City time, five Business Days prior thereto, which Prepayment
Notice shall specify the date and amount of prepayment of the Loans and the
corresponding Prepayment Charge; provided, that if a Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, the
Borrower shall also pay any amounts owing pursuant to Section 2.14. Upon
receipt of any such Prepayment Notice the Administrative Agent shall promptly
notify each relevant Lender thereof. If any such Prepayment Notice is given,
the amount specified in such Prepayment Notice shall be due and payable on the
date specified therein, together with accrued interest to such date on the
amount prepaid and the relevant Prepayment Charge. Partial prepayments of
Loans shall be in an aggregate principal amount of U.S.$1,000,000 or a whole
multiple thereof.
2.7 Mandatory Prepayments. (a) Upon the occurrence of any Asset Sale
or Recovery Event, the Borrower shall promptly deliver to the Administrative
Agent a written notice thereof, together with a calculation of the amount of
Net Cash Proceeds therefrom and a declaration regarding whether, if no Event
of Default has occurred and is continuing, such Net Cash Proceeds will be
Reinvested within one year of the occurrence of such Asset Sale or Recovery
Event.
(b) If a Dividend Trigger Date occurs, the Borrower shall (i) use
its best efforts to cause SPCC and its Subsidiaries to make Restricted
Payments to the Borrower within 30 Business Days thereafter in an aggregate
amount equal to the Net Unreinvested Cash Proceeds as of such Dividend Trigger
Date multiplied by the percentage of the Borrower's ownership interest,
whether direct or indirect, in SPCC or such applicable Subsidiary, and (ii)
apply the amount of such Restricted Payments, on the first Business Day after
receipt thereof, towards the prepayment of the Loans as set forth in Section
2.11(a).
(c) No Prepayment Charge shall apply to a prepayment pursuant to
this Section 2.7, however, if a Loan is prepaid on any day other than the last
day of the Interest Period applicable thereto, the Borrower shall also pay any
amounts owing pursuant to Section 2.14.
2.8 Interest Rates and Payment Dates. (a) Each Loan shall bear
interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the sum of the LIBOR applicable to such Interest
Period plus the Applicable Margin.
(b) If all or a portion of the principal amount of any Loan shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Loans (whether
18
or not overdue) shall bear interest at a rate per annum equal to the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions of
this Section plus 3% from the date of such non-payment until such amount is
paid in full (as well after as before judgment).
(c) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (b) of this
Section shall be payable from time to time on demand.
2.9 Computation of Interest. (a) Interest payable pursuant hereto
shall be calculated on the basis of a 360-day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of each determination of the LIBOR.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent
in determining any interest rate pursuant to Section 2.8(a).
2.10 Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(i) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR for such
Interest Period, or
(ii) the Administrative Agent shall have received notice from the
Lenders in respect of the relevant Loan that the LIBOR determined or to
be determined for such Interest Period will not adequately and fairly
reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such
Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given, any outstanding Loans shall be converted, on the last
day of the then-current Interest Period, to Loans ("Alternate Rate Loans")
bearing interest according to an interest rate convention determined in good
faith by the Administrative Agent, after consultation with the relevant
Lenders, to compensate the relevant Lenders for their cost of obtaining, as of
the commencement of the then current Interest Period, funds for such Interest
Period plus the Applicable Margin. Until such notice has been withdrawn by the
Administrative Agent, the Loans shall be continued as Alternate Rate Loans,
and the obligation of the Lenders to make and maintain Loans shall be
suspended.
2.11 Pro Rata Treatment and Payments. (a) Each borrowing by the
Borrower from the Lenders hereunder shall be made pro rata.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Loans shall be made pro rata
according to the respective
19
outstanding principal amounts of the Loans then held by the Lenders. Amounts
prepaid on account of the Loans may not be reborrowed.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for
the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in
which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.
(d) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is not made available to
the Administrative Agent by the required time on the Borrowing Date therefor,
such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon, at a rate equal to the greater of (i) the Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation, for the
period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to
any Lender with respect to any amounts owing under this paragraph shall be
conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days after such Borrowing Date, the Administrative Agent
shall also be entitled to recover such amount with interest thereon at the
rate per annum applicable to Loans, on demand, from the Borrower.
(e) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment due to be made by the
Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be
required to, in reliance upon such assumption, make available to the Lenders
their respective pro rata shares of a corresponding amount. If such payment is
not made to the Administrative Agent by the Borrower within three Business
Days after such due date, the Administrative Agent shall be entitled to
recover, on demand, from each Lender to which any amount which was made
available pursuant to the preceding sentence, such amount with interest
thereon at the rate per annum equal to the daily average Federal Funds
Effective Rate. Nothing
20
herein shall be deemed to limit the rights of the Administrative Agent or any
Lender against the Borrower.
2.12 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof, or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority, made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.13 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender (including, without limitation, the imposition
of any reserve requirement by the Board in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which
include deposits by reference to LIBOR or any category of extensions of
credit or other assets which include loans by a non-United States office
of any bank to United States residents)); or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting
into, continuing or maintaining Loans, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this paragraph, it shall promptly notify the Borrower (with a copy
to the Administrative Agent) of the event by reason of which it has become so
entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof, or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority, made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such
adoption, change, compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, after submission by
such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such
corporation for such reduction.
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(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrower shall
not be required to compensate a Lender pursuant to this Section for any
amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation
therefor; provided that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include
the period of such retroactive effect. The obligations of the Borrower
pursuant to this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.
2.13 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes
(imposed in lieu of net income taxes) imposed on the Administrative Agent or
any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or
any other Loan Document). If any such non-excluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings ("Non-Excluded Taxes") or
Other Taxes are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement,
provided, however, that the Borrower shall not be required to increase any
such amounts payable to any Lender with respect to any Non-Excluded Taxes that
are attributable to such Lender's failure to comply with the requirements of
paragraph (d) of this Section.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible, thereafter the Borrower shall send to
the Administrative Agent for its own account or for the account of the
relevant Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower
fails to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Administrative Agent and the Lenders for any incremental taxes, interest
or penalties that may become payable by the Administrative Agent or any Lender
as a result of any such failure.
(d) Each Lender (or Transferee) that is not a "U.S. Person" as
defined in Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver
to the Borrower and the
22
Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of
either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the
case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a statement substantially in the form of Exhibit F and a
Form W-8BEN, or any subsequent versions thereof or successors thereto,
properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all
payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(e) If the Administrative Agent or any Lender determines, in its
sole discretion, that it has received a refund of any Non-Excluded Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.13, it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.13 with respect to the Non-Excluded Taxes or Other Taxes
giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of the Administrative
Agent or such Lender, agrees to repay the amount paid over to the Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the
event the Administrative Agent or such Lender is required to repay such refund
to such Governmental Authority. This paragraph shall not be construed to
require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.14 Indemnity. The Borrower agrees to indemnify each Lender for,
and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or incur as a consequence of (a) default by the Borrower in making
a borrowing of Loans after the Borrower has given a notice requesting the same
in accordance with the provisions of this Agreement, (b) default by the
Borrower in making any prepayment of Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Loans on a day that is not the last day of an
Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid or not so borrowed, for the period
23
from the date of such prepayment or of such failure to borrow to the last day
of such Interest Period (or, in the case of a failure to borrow, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Margin included therein, if any) over (ii) the amount
of interest (as reasonably determined by such Lender) that would have accrued
to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this Section submitted to
the Borrower by any Lender shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
2.15 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.12 with
respect to such Lender, it will, if requested by the Borrower, use reasonable
efforts (subject to overall policy considerations of such Lender) to designate
another lending office for any Loans affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is
made on terms that, in the sole judgment of such Lender, cause such Lender and
its lending office(s) to suffer no economic, legal or regulatory disadvantage,
and provided, further, that nothing in this Section shall affect or postpone
any of the obligations of the Borrower or the rights of any Lender pursuant to
Section 2.12.
2.16 Replacement of Lenders. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.12 or 2.13(a) (provided that, with respect to amounts owing
pursuant to Section 2.13(a), such Lender requests reimbursement for amounts in
excess of amounts payable under such section at the time the Lender becomes a
party to this Agreement) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; provided that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) the replacement financial institution shall purchase, at par, all Loans
and other amounts owing to such replaced Lender on or prior to the date of
replacement, (iv) the Borrower shall be liable to such replaced Lender under
Section 2.14 if any Loan owing to such replaced Lender shall be purchased
other than on the last day of the Interest Period relating thereto, (v) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 9.6 (provided that the Borrower shall be obligated
to pay the registration and processing fee referred to therein), (vi) the
replacement financial institution, if not already a Lender, shall not be
entitled to similar reimbursement of amounts pursuant to Section 2.12 or
2.13(a), (vii) until such time as such replacement shall be consummated, the
Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.12 or 2.13(a), as the case may be, and (viii) any such replacement
shall not be deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against the replaced
Lender.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:
24
3.1 Financial Condition. (a) Each of the unaudited pro forma
consolidated balance sheets of the Borrower and its Subsidiaries as at
December 31, 2001 and December 31, 2002 (including the notes thereto) (the
"Pro Forma Consolidated Balance Sheets") and the unaudited pro forma
unconsolidated balance sheets of the Borrower as at December 31, 2001 and
December 31, 2002 (including the notes thereto) (the "Unconsolidated Pro Forma
Balance Sheets"; and together with the Pro Forma Consolidated Balance Sheets,
the "Pro Forma Balance Sheets"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events
had occurred on such date) to (i) the consummation of the Acquisition and of
each of the other Consent Decree Transactions, (ii) the Loans to be made on
the Closing Date and the use of proceeds thereof, and (iii) the payment of
fees and expenses in connection with the foregoing. The Pro Forma Balance
Sheets have been prepared based on the best information available to the
Borrower as of the date of delivery thereof, and present fairly on a pro forma
basis the estimated consolidated financial position of Borrower and its
Subsidiaries, in the case of the Pro Forma Consolidated Balance Sheets, and
the estimated unconsolidated financial position of the Borrower, in the case
of the Pro Forma Unconsolidated Balance Sheets, as at December 31, 2001 and
2002, assuming that the events specified in the preceding sentence had
actually occurred at such date.
(b) The audited consolidated balance sheets of the Borrower and its
Subsidiaries as at December 31, 2000 and 2001, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such
dates, reported on by and accompanied by an unqualified report from Arthur
Andersen LLP and Keegan, Linscott & Kenon, P.C., respectively, present fairly
the consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal years then ended. The unaudited unconsolidated balance
sheets of the Borrower as at December 31, 2000 and 2001, and the related
unconsolidated statements of income and of cash flows for the fiscal years
ended on such dates, present fairly the unconsolidated financial condition of
the Borrower as at such date, and the unconsolidated results of its operations
and its unconsolidated cash flows for the fiscal years then ended. The
unaudited consolidated balance sheet of the Borrower as at December 31, 2002,
and the related unaudited consolidated statements of income and cash flows for
the fiscal year ended on such date, present fairly the consolidated financial
condition of the Borrower as at such date, and the consolidated results of its
operations and its consolidated cash flows for the fiscal year then ended
(subject to normal year-end audit adjustments). The unaudited unconsolidated
balance sheet of the Borrower as at December 31, 2002, and the related
unaudited unconsolidated statements of income and cash flows for the fiscal
year ended on such date, present fairly the unconsolidated financial condition
of the Borrower as at such date, and the unconsolidated results of its
operations and its unconsolidated cash flows for the fiscal year then ended.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). Neither the Borrower nor any of its
Subsidiaries has any material Guarantee Obligations, contingent liabilities
and liabilities for taxes, or any long-term leases or unusual forward or
long-term commitments, including any interest rate or foreign currency
25
swap or exchange transaction or other obligation in respect of derivatives,
that are not reflected in the most recent consolidated financial statements
referred to in this paragraph. The Borrower has no material Guarantee
Obligation, contingent liability and liability for taxes, or any long-term
lease or unusual forward or long-term commitment, including any interest rate
or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, that are not reflected in the most recent
unconsolidated financial statements referred to in this paragraph. During the
period from December 31, 2002, to and including the date hereof there has been
no Disposition by the Borrower or any of its Subsidiaries of any material part
of their respective business or property.
(c) The audited consolidated balance sheets of SPCC as at December
31, 2000 and 2001, and the related consolidated statements of income and of
cash flows for the fiscal years ended on such dates, reported on by and
accompanied by an unqualified report from Arthur Andersen LLP and Deloitte and
Touche, respectively, present fairly the consolidated financial condition of
SPCC as at such date, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheet of SPCC as at December 31, 2002, and the
related unaudited consolidated statements of income and cash flows for the
fiscal year ended on such date, present fairly the consolidated financial
condition of SPCC as at such date, and the consolidated results of its
operations and its consolidated cash flows for the fiscal year then ended
(subject to normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by the aforementioned firm of accountants and disclosed
therein). Neither SPCC nor any of its Subsidiaries has any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph.
3.2 No Change. Since December 31, 2001, (a) there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect, (b) there has been no Disposition nor agreement to
carry out a Disposition by any Group Member of any material part of its
business or property, and (c) no Group Member has paid or declared any
dividends or other distributions except as set forth on Schedule 3.2(c).
3.3 Existence; Compliance with Law. Each Group Member (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the power and authority, and the
legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently
engaged, (c) is duly qualified as a foreign corporation and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification and (d) is
in compliance with all Requirements of Law, except in the case of clauses (c)
and (d) above to the extent that the failure to so qualify or to comply
therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrower, to
obtain extensions of credit hereunder. Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the
26
Borrower, to authorize the extensions of credit on the terms and conditions of
this Agreement. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person
is required for the consummation of the Acquisition or any of the other
Consent Decree Transactions, or in connection with the extensions of credit
hereunder or the execution, delivery, performance, validity or enforceability
of this Agreement or any of the Loan Documents, except consents,
authorizations, filings and notices described in Schedule 3.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect. Each Loan Document has been duly executed and delivered on
behalf of each Loan Party party thereto. This Agreement constitutes, and each
other Loan Document upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such
Loan Party in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the borrowings hereunder and the use
of the proceeds thereof, the Acquisition and the performance of each of the
other Consent Decree Transactions will not violate any Requirement of Law or
any Contractual Obligation of any Group Member and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security
Documents). No Requirement of Law or Contractual Obligation applicable to any
Group Member could reasonably be expected to have a Material Adverse Effect.
3.6 Litigation. Except as set forth in Schedule 3.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the Borrower's Knowledge, threatened by or against
any Group Member or against any of their respective properties or revenues,
(a) with respect to any of the Acquisition Documentation, the Consent Decree
Documentation or the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect, nor has any Group Member been the subject of or been advised
of any claim against such Group Member arising out of, or with respect to, any
alleged liability of or claim concerning Asarco.
3.7 No Default. No Group Member is in default under or with respect
to any of its Contractual Obligations in any respect that could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8 Ownership of Property; Liens. Each Group Member has title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other property, and none
of such property is subject to any Lien except as permitted by Section 6.3.
3.9 Intellectual Property. Each Group Member owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted. No material claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property, nor does
27
the Borrower know of any valid basis for any such claim. The use of
Intellectual Property by each Group Member does not infringe on the rights of
any Person.
3.10 Taxes. Each Group Member has filed or caused to be filed all
Federal, state and other material tax returns that are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than any taxes, fees or other charges the amount or validity
of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have
been provided on the books of the relevant Group Member); no tax Lien has been
filed, and, to the Borrower's Knowledge, no claim is being asserted, with
respect to any such tax, fee or other charge.
3.11 Federal Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for any purpose which
violates Regulation U as now and from time to time hereafter in effect or for
any purpose that violates the provisions of the Regulations of the Board.
3.12 Labor Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against any Group Member pending or, to the
Borrower's Knowledge, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.
3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Plan, and each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code. No termination of a Single Employer Plan has occurred, and
no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. Except as set forth in Schedule 3.13, the present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the
date on which this representation is made or deemed made, exceed the value of
the assets of such Plan allocable to such accrued benefits by a material
amount. Neither the Borrower nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted
or could reasonably be expected to result in a material liability under ERISA,
and neither the Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
28
3.14 Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
3.15 Subsidiaries. Except as disclosed to the Administrative Agent
by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 3.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary (other than Excluded Subsidiaries) and, as to each such Subsidiary,
the percentage of each class of Capital Stock owned by any Group Member and
(b) there are no outstanding subscriptions, options, warrants, calls, rights
or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature
relating to any Capital Stock of any Group Member, except as created by the
Loan Documents.
3.16 Use of Proceeds. The proceeds of the Loans shall be used to (a)
finance a portion of the Acquisition and (b) pay related fees and expenses.
3.17 Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) Each Group Member: (i) is, and within the period of all
applicable statutes of limitation has been, in compliance with all
applicable Environmental Laws; (ii) holds all Environmental Permits (each
of which is in full force and effect) required for any of its current or
intended operations or for any property owned, leased, or otherwise
operated by it; (iii) is, and within the period of all applicable
statutes of limitation has been, in compliance with all of its
Environmental Permits; and (iv) reasonably believes that: each of its
Environmental Permits will be timely renewed and complied with, without
material expense; any additional Environmental Permits that may be
required of any of it will be timely obtained and complied with, without
material expense; and compliance with any Environmental Law that is or is
expected to become applicable to it will be timely attained and
maintained, without material expense.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now or formerly owned, leased or
operated by any Group Member, or at any other location (including,
without limitation, any location to which Materials of Environmental
Concern have been sent for re-use or recycling or for treatment, storage,
or disposal) which could reasonably be expected to (i) give rise to
liability of any Group Member under any applicable Environmental Law or
otherwise result in costs to any Group Member, or (ii) interfere with any
Group Member's continued operations, or (iii) impair the fair saleable
value of any real property owned or leased by any Group Member.
(c) There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or
relating to any Environmental Law to which (i) any Group Member is, or to
the Borrower's Knowledge will be, named as a party that is pending or, to
the Borrower's Knowledge, threatened; or (ii) to the
29
Borrower's Knowledge, any other Person is or will be named as a party that
is pending or threatened, that could reasonably be expected to affect any
Group Member.
(d) No Group Member has received any written request for
information, or been notified that it is (i) a potentially responsible
party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act or any similar Environmental
Law, or with respect to any Materials of Environmental Concern or (ii)
the subject of any investigation under any Environmental Law or with
respect to any Materials of Environmental Concern; and to the Borrower's
Knowledge, no other Person has received any such request or notification
that could reasonably be expected to affect any Group Member.
(e) No Group Member has entered into or agreed to any consent
decree, order, or settlement or other agreement, nor is subject to any
judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum, relating to compliance with or
liability under any Environmental Law.
(f) No Group Member has assumed or retained, by contract or
operation of law, any liabilities, fixed or contingent, of any other
Person under any Environmental Law or with respect to any Material of
Environmental Concern; and, to the Borrower's Knowledge, no other Person
has entered into or is subject to any of the foregoing that could
reasonably be expected to affect any Group Member.
(g) No Group Member has acted as operator of Asarco or any of its
properties or otherwise could be held liable in whole or in part for the
liabilities of Asarco arising out of any Environmental Laws.
3.18 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement furnished by or on behalf of any Group Member to the
Administrative Agent or the Lenders, or any of them, for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, contained as of the date such statement, information, document or
certificate was so furnished, any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading. The projections and pro forma financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. There is no fact known to any Group Member that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, or in any other
documents, certificates and statements furnished to the Administrative Agent
and the Lenders for use in connection with the transactions contemplated
hereby and by the other Loan Documents.
3.19 Security Documents. Each Stock Pledge Agreement is effective to
create in favor of the Administrative Agent, for the benefit of the Lenders, a
legal, valid and
30
enforceable security interest in the Pledged Stock described therein and
proceeds thereof. When stock certificates representing the Pledged Stock
described therein are delivered to the Administrative Agent with stock powers
duly endorsed in blank, each Stock Pledge Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Pledged Stock and the proceeds thereof, as security
for the Obligations (as defined in the Stock Pledge Agreements), in favor of
the Administrative Agent, for the ratable benefit of the Lenders, prior and
superior in right to any other Person enforceable in accordance with the terms
thereof against all creditors of the Pledgor (as defined in the Stock Pledge
Agreements) and any Persons purporting to purchase any shares of such Pledged
Stock.
3.20 Solvency. Each Group Member is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
3.21 Direct Obligations; Pari Passu. The Borrower's obligations
under this Agreement and the Notes constitute direct and unconditional
obligations of the Borrower which rank, and will at all times rank, at least
pari passu in right of payment to, and senior in right of collateral security
(to the extent of the Pledged Stock, as described in each Stock Pledge
Agreement) to, all other Indebtedness of the Borrower (other than Indebtedness
permitted under Section 6.2(e) which may rank pari passu in right of
collateral security).
3.22 Certain Documents. The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Consent Decree
Documentation and the Acquisition Documentation, including any amendments,
supplements or modifications with respect to any of the foregoing.
3.23 Consent Decree. (a) The Consent Decree has been duly entered as
a final judgment by the Honorable Robert C. Broomfield, Chief Judge of the
United States District Court for the District of Arizona, and is in full force
and effect and is binding upon the parties thereto in accordance with its
terms, (b) all the conditions set forth in the Consent Decree have been
satisfied and (c) the Consent Decree has not been stayed, modified or amended
in any manner that could reasonably be expected to have a Material Adverse
Effect.
3.24 Acquired Shares. After giving effect to the Acquisition, SPCC
Holdings will be the record and beneficial owner of, and will have good and
marketable title to, the Acquired Shares, free and clear of any and all Liens
or options in favor of, or claims of, any other Person, except the security
interest created by the SPCC Stock Pledge Agreement. The Acquired Shares
constitute (a) 65.8% of the issued and outstanding shares of SPCC's Class A
Common Stock (on a fully diluted basis), which entitle SPCC Holdings to the
voting rights of Class A Common Stock as set forth in the SPCC Charter, and
(b) as of the Closing Date, 54.08% of the issued and outstanding shares of all
classes of SPCC's Capital Stock (on a fully diluted basis). All the Acquired
Shares have been duly and validly issued and are fully paid and nonassessable.
There are no restrictions upon the voting rights associated with, or upon the
transfer of, any of the Acquired Shares, other than pursuant to the SPCC Stock
Pledge Agreement, the SPCC Stockholders' Agreement and the SPCC Charter.
31
3.25 Representations in the SPCC Stock Pledge Agreement. As of the
date hereof, the representations and warranties contained in the SPCC Stock
Pledge Agreement made by SPCC Holdings are true and correct in all respects
and are hereby deemed made by the Borrower as though such representations and
warranties were set forth in their entirety herein.
3.26 Representations in the Acquisition Documentation and Consent
Decree Documentation. As of the date hereof, the representations and
warranties contained in the Acquisition Documentation and in the Consent
Decree Documentation (whether made by the Borrower or any other party thereto
that is affiliated with the Borrower, including without limitation Asarco) are
true and correct in all respects and are hereby made by the Borrower as though
such representations and warranties were set forth in their entirety herein.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make a Loan requested to be made by it is subject to the
satisfaction, prior to or concurrently with the making of such Loan on the
Closing Date, of the following conditions precedent:
(a) Credit Agreement; Other Loan Documents. The Administrative Agent
shall have received (i) this Agreement duly executed and delivered by the
Administrative Agent, the Borrower and each Person listed on Schedule
1.1A, (ii) for the account of each Lender, a Note conforming to the
requirements hereof and executed by a duly authorized officer of the
Borrower, (iii) the SPCC Stock Pledge Agreement, duly executed and
delivered by SPCC Holdings, (iv) the SPCC Holdings Stock Pledge
Agreement, duly executed and delivered by the Borrower, (v) an
Acknowledgment and Consent in the form attached to the SPCC Holdings
Stock Pledge Agreement, duly executed and delivered by SPCC Holdings, and
(vi) an Acknowledgment in the form attached to the SPCC Stock Pledge
Agreement, duly executed and delivered by SPCC; and each of these Loan
Documents shall be in full force and effect.
(b) Acquisition, etc. The Borrower shall have (i) acquired
43,348,949 shares of Class A Common Stock of SPCC, representing 65.8% of
the issued and outstanding shares of the Class A Common Stock of SPCC (on
a fully diluted basis) and, as of the Closing Date, 54.08% of the issued
and outstanding Capital Stock of SPCC (on a fully diluted basis), and
(ii) transferred such Class A Common Stock to SPCC Holdings as a capital
contribution, on terms and conditions satisfactory to the Lenders. The
Lenders acknowledge that an Excluded Subsidiary owns 186,500 shares of
the common stock of SPCC, representing, as of the Closing Date,
approximately 0.2333% of the issued and outstanding Capital Stock of
SPCC, which shares will not be transferred in the Acquisition (the
"Excluded SPCC Shares"). The Administrative Agent shall have received,
with a copy for each Lender:
(i) a copy of the executed Acquisition Agreement and each of
the other Acquisition Documentation, together with any supplements
thereto or amendments or other modifications thereof, certified as
to authenticity by a Responsible Officer of the Borrower. All
conditions thereunder shall have been satisfied, in each case in
accordance with the Acquisition Agreement and terms
32
and conditions reasonably satisfactory to the Lenders. The
Acquisition Agreement and each of the other Acquisition Documentation
and each amendment, supplement or other modification thereto shall be
in form and substance satisfactory to the Lenders;
(ii) copies of all consents (including, without limitation,
landlords' and other consents), in each case certified as to
authenticity by a Responsible Officer or by such other Person as may
be acceptable to the Administrative Agent, required under any
Requirement of Law or Contractual Obligation of any Grupo Mexico
Member in connection with the Acquisition, the continuing operations
of the Group Members or the execution, delivery and performance by
each Loan Party (and the validity and enforceability against each
Loan Party) of each of the Loan Documents, and all such consents,
licenses and approvals shall be in full force and effect and
satisfactory in form and substance to the Lenders, and any
applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority that would
restrain, prevent or otherwise impose adverse conditions on the
Acquisition or the financing contemplated hereby;
(iii) No action or proceeding shall be pending or threatened
challenging or seeking to (x) restrain or prohibit the purchase and
sale of the Acquired Shares, the terms of the Consent Decree or any
of the other transactions contemplated thereby or (y) impose
material limitations on the ability of the Borrower or SPCC Holdings
effectively to exercise full rights of ownership of the Acquired
Shares, other than pursuant to limitations set forth in the SPCC
Stock Pledge Agreement; nor shall there be any statute, rule,
regulation, judgment, order or injunction enacted, entered,
enforced, promulgated or deemed applicable to the transactions
contemplated by the Acquisition Agreement or any other action by any
Governmental Authority that is reasonably likely to result, directly
or indirectly, in any of the foregoing consequences.
(c) Consent Decree. The Administrative Agent shall have received a
copy of the executed Consent Decree and each of the other Consent Decree
Documentation, certified as to authenticity by a Responsible Officer or
by such other Person as may be acceptable to the Administrative Agent,
and the Consent Decree shall be in full force and effect and satisfactory
in form and substance to the Lenders, and all conditions thereunder shall
have been satisfied, in each case in accordance with the Consent Decree
and on terms and conditions reasonably satisfactory to the Lenders,
including, without limitation, the evidence of the occurrence of each of
the following:
(i) SPHC shall have transferred its entire ownership interest
in SPCC to the Borrower;
(ii) the Borrower shall have paid to Asarco and/or SPHC
U.S.$500,000,000 from the net proceeds of the Loans, the repayment
of its participation interest under the Asarco Credit Facility and
capital contributions as described in the Recitals hereto;
33
(iii) Asarco and/or SPHC shall have satisfied in full its
indebtedness under the Asarco Credit Facility;
(iv) the Borrower and/or its affiliates shall have cancelled
the U.S.$41,750,000 claim of debt they have against Asarco and/or
SPHC (and an additional U.S.$50,000,000 if such amount is loaned to
Asarco in accordance with the Consent Decree; provided that the
purchase price referred to in clause (ii) above shall be reduced by
the same amount);
(v) the Borrower shall have executed and delivered to SPHC the
Acquisition Note A;
(vi) the Borrower shall have executed and delivered to SPHC the
Acquisition Note B;
(vii) Grupo Mexico shall have executed the Grupo Mexico
Guarantee;
(viii) SPHC shall have irrevocably assigned any and all
interest it has in the Acquisition Note B and the Grupo Mexico
Guarantee to Asarco;
(ix) Asarco shall have created the Asarco Environmental Trust;
(x) Asarco shall have executed a security agreement in favor of
the United States government which provides the United States
government a security interest in the Acquisition Note B and the
Grupo Mexico Guarantee; and
(xi) Asarco shall have irrevocably assigned any and all
interest it has in the Acquisition Note B and the Grupo Mexico
Guarantee to the Asarco Environmental Trust.
(d) Pro Forma Balance Sheets; Financial Statements. The
Administrative Agent shall have received (i) the Pro Forma Consolidated
Balance Sheets, (ii) audited consolidated financial statements of the
Borrower and of SPCC for the 2000 and 2001 fiscal years, (iii) unaudited
consolidated financial statements of the Borrower and of SPCC for the
fiscal year ended December 31, 2002, and (iv) unaudited interim
consolidated financial statements of the Borrower and of SPCC for each
fiscal quarter ended after the date of the latest applicable financial
statements delivered pursuant to clause (iii) above as to which such
financial statements are available, and such unaudited financial
statements shall not, in the reasonable judgment of the Lenders, reflect
any material adverse change in the consolidated financial condition of
the Borrower or SPCC, as applicable, since December 31, 2001. The
Administrative Agent shall have also received (i) the Pro Forma
Unconsolidated Balance Sheets, (ii) unaudited unconsolidated financial
statements of the Borrower for the 2000, 2001 and 2002 fiscal years and
(iii) unaudited interim unconsolidated financial statements of the
Borrower for each fiscal quarter ended after the date of the latest
applicable financial statements delivered pursuant to clause (ii) above
as to which such financial statements are available, and such unaudited
interim financial statements shall not, in the reasonable judgment of the
34
Lenders, reflect any material adverse change in the unconsolidated
financial condition of the Borrower since December 31, 2001.
(e) Fees. The Lenders and the Administrative Agent shall have
received all fees required to be paid, and all expenses for which
invoices have been presented (including the reasonable fees and expenses
of legal counsel), on or before the Closing Date. All such amounts will
be paid with proceeds of Loans made on the Closing Date and will be
reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.
(f) Closing Certificate; Certified Certificate of Incorporation;
Good Standing Certificates. The Administrative Agent shall have received
(i) a certificate of each of the Borrower and SPCC Holdings, dated the
Closing Date, substantially in the form of Exhibit G, with appropriate
insertions and attachments, including the certificate of incorporation of
such Loan Party certified by the relevant authority of the jurisdiction
of organization of such Loan Party, and (ii) a long form good standing
certificate for each such Loan Party from its jurisdiction of
organization.
(g) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Sidley Austin Brown & Wood LLP,
special New York counsel to the Grupo Mexico Members, substantially
in the form of Exhibit H-1;
(ii) the legal opinion of Hans Flury, Peruvian in-house counsel
of SPCC, substantially in the form of Exhibit H-2;
(iii) the legal opinion of New Jersey in-house counsel to
Asarco satisfactory to the Administrative Agent, substantially in
the form of Exhibit H-3; and
(iv) the legal opinion of Simpson Thacher & Bartlett, New York
counsel to the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement and, in the case of the
legal opinions referred to in clauses (i), (ii) and (iii) above, the
Acquisition Agreement and the Consent Decree as the Administrative Agent
may reasonably require.
(h) Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificates representing the shares of Capital Stock
pledged pursuant to each Stock Pledge Agreement, together with an undated
stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, which pledged ownership
interests under the SPCC Stock Pledge Agreement shall constitute 65.8% of
the issued and outstanding shares of SPCC's Class A Common Stock (on a
fully diluted basis) and 54.08% of the issued and outstanding Capital
Stock of SPCC (on a fully diluted basis).
35
(i) Filings, Registrations and Recordings. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of
the Administrative Agent, for the benefit of the Lenders, a perfected
Lien on the Pledged Stock, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
6.3), shall be in proper form for filing, registration or recordation.
4.2 Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
A borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date of such borrowing that the conditions
contained in this Section 4.2 have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, the Borrower shall and shall cause each of its
Subsidiaries (other than Excluded Subsidiaries) to:
5.1 Financial Statements. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheet of the Borrower as at the end of such year and
the related audited consolidated statements of income and of cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by Deloitte & Touche or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the audited
unconsolidated balance sheet of the Borrower as at the end of such year
and the related audited unconsolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the
figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the
scope of the audit, by
36
Deloitte & Touche or other independent certified public accountants of
nationally recognized standing;
(c) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and
the portion of the fiscal year through the end of such quarter, setting
forth in each case in comparative form the figures for the previous year,
certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
(d) as soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited unconsolidated balance sheet of the
Borrower as at the end of such quarter and the related unaudited
unconsolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit adjustments);
(e) as soon as available, but in any event within 90 days after the
end of each fiscal year of SPCC, a copy of the audited consolidated
balance sheet of SPCC and its consolidated Subsidiaries as at the end of
such year and the related audited consolidated statements of income and
of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by Deloitte & Touche or other independent
certified public accountants of nationally recognized standing; and
(f) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of SPCC, the unaudited consolidated balance sheet of SPCC and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with
GAAP applied (except as approved by such accountants or officer, as the case
may be, and disclosed in reasonable detail therein) consistently throughout
the periods reflected therein and with prior periods.
5.2 Certificates; Other Information. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (d), to the relevant Lender):
37
(a) (i) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a), (b) and (e), a certificate of the
independent certified public accountants reporting on such financial
statements stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate, and (ii) concurrently with the delivery of
the financial statements referred to in Section 5.1(c), (d) and (f), a
certificate of the internal accountants of the Borrower and its
Subsidiaries or of SPCC, as applicable, stating that in preparing such
financial statements no knowledge was obtained of any Default or Event of
Default;
(b) concurrently with the delivery of any financial statements
pursuant to Section 5.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
each Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition contained
in this Agreement and the other Loan Documents to which it is a party to
be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and (ii) a Compliance Certificate
containing all information and calculations necessary for determining
compliance by each Group Member with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal
year of the Borrower, as the case may be, and (iii) to the extent not
previously disclosed to the Administrative Agent, a description of any
change in the jurisdiction of organization of any Group Member and a list
of any Intellectual Property acquired by any Group Member since the date
of the most recent report delivered pursuant to this clause (y) (or, in
the case of the first such report so delivered, since the Closing Date);
(c) to the extent not duplicative with information previously
disclosed to the Administrative Agent pursuant to clauses (a) or (b)
above, within 5 days after the same are sent, copies of all financial
statements and reports that SPCC or the Borrower, if applicable, sends to
the holders of any class of its public debt or equity securities and,
within 5 days after the same are filed, copies of all financial
statements and reports that SPCC or the Borrower may make to, or file
with, the SEC, the Bolsa Mexicana de Valores, S.A. de C.V., The New York
Stock Exchange or the Bolsa de Valores de Lima, or any successor thereto;
and
(d) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the relevant Group Member.
5.4 Maintenance of Existence; Compliance. (a) (i) Preserve, renew
and keep in full force and effect its organizational existence and (ii) take
all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business,
38
except, in each case, as otherwise permitted by Section 6.4; and (b) comply
with all Contractual Obligations and Requirements of Law.
5.5 Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in its business in good working order and condition, ordinary
wear and tear excepted and (b) maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks (but including in any event public liability,
product liability and business interruption) as are usually insured against in
the same general area by companies engaged in the same or a similar business.
5.6 Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities and (b) permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Group Member
with officers and employees of the Group Members and with their independent
certified public accountants.
5.7 Notices. Promptly, and in any event no later than two Business
Days after Borrower's Knowledge thereof (except for clause (d) below), give
notice to the Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of any Group Member or (ii) litigation, investigation or
proceeding that may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, that in either case could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member: (i) in
which the amount involved is U.S.$20,000,000 or more and not covered by
insurance, (ii) in which injunctive or similar relief is sought or (iii)
which relates to any Loan Document;
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower's Knowledge thereof or after the
Borrower has reason to know thereof: (i) the occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or
a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower
or any Commonly Controlled Entity or any Multiemployer Plan with respect
to the withdrawal from, or the termination, Reorganization or Insolvency
of, any Plan; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
39
Each notice pursuant to this Section 5.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower and/or the relevant Subsidiary
proposes to take with respect thereto.
5.8 Environmental Laws. (a) Comply in all material respects with,
and ensure compliance in all material respects by all tenants and subtenants,
if any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.
(c) Generate, use, treat, store, release, dispose of, and otherwise
manage Hazardous Materials in a manner that would not reasonably be expected
to result in a material liability to, or materially affect any real property
owned or operated by, any Group Member; and take reasonable efforts to prevent
any other Person from generating, using, treating, storing, releasing,
disposing of, or otherwise managing Hazardous Materials in a manner that would
reasonably be expected to result in a material liability to, or materially
affect any real property owned or operated by, any Group Member.
5.9 Use of Proceeds. Use the proceeds of the Loans solely for the
purposes represented in Section 3.16.
5.10 Consent Decree. Comply, and cause each of its Subsidiaries to
comply, with the terms and conditions of the Acquisition Documentation, and
the Consent Decree Documentation to the extent related to the Acquisition.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, the Borrower shall not, and shall not permit
any Subsidiary (other than Excluded Subsidiaries), to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Consolidated Leverage Ratio of the Borrower. Permit the
Consolidated Leverage Ratio of the Borrower as at the last day of any period
of four consecutive fiscal quarters of the Borrower ending with any fiscal
quarter set forth below to exceed the ratio set forth below opposite such
fiscal quarter:
Consolidated
Fiscal Quarter Ending Leverage Ratio
--------------------- --------------
December 31, 2003 7.50
40
March 31, 2004 6.50
June 30, 2004 6.50
September 30, 2004 6.50
December 31, 2004 6.50
March 31, 2005 4.50
June 30, 2005 4.50
September 30, 2005 4.50
December 31, 2005 4.50
March 31, 2006 4.50
June 30, 2006 4.50
September 30, 2006 4.50
December 31, 2006 4.50
March 31, 2007 4.50
June 30, 2007 4.50
September 30, 2007 4.50
December 31, 2007 4.50
(b) Consolidated Interest Coverage Ratio of the Borrower. Permit the
Consolidated Interest Coverage Ratio of the Borrower for any period of four
consecutive fiscal quarters of the Borrower (or, if less, the number of full
fiscal quarters subsequent to the Closing Date) ending with any fiscal quarter
set forth below to be less than the ratio set forth below opposite such fiscal
quarter:
Consolidated
Fiscal Quarter Ending Interest Coverage Ratio
--------------------- -----------------------
December 31, 2003 1.75
March 31, 2004 2.25
June 30, 2004 2.25
September 30, 2004 2.25
December 31, 2004 2.25
March 31, 2005 2.50
June 30, 2005 2.50
September 30, 2005 2.50
December 31, 2005 2.50
March 31, 2006 3.00
June 30, 2006 3.00
September 30, 2006 3.00
December 31, 2006 3.00
March 31, 2007 3.00
June 30, 2007 3.00
September 30, 2007 3.00
December 31, 2007 3.00
(c) Consolidated Net Worth of the Borrower. Permit Consolidated Net
Worth of the Borrower at any time to be less than the sum of (i)
U.S.$600,000,000, (ii) 50% of cumulative Consolidated Net Income of the
Borrower for each fiscal quarter of the Borrower (beginning with the fiscal
quarter ending March 31, 2003) for which its Consolidated Net Income is
41
positive, (iii) 100% of the Net Cash Proceeds of any offering by the Borrower
of common equity consummated after the Closing Date and (iv) 100% of any
capital contribution made to the Borrower or any of its Subsidiaries after the
Closing Date by any holder of the Borrower's Capital Stock.
(d) Consolidated Leverage Ratio of SPCC. Permit the Consolidated
Leverage Ratio of SPCC as at the last day of any period of four consecutive
fiscal quarters of SPCC ending with any fiscal quarter set forth below to
exceed 2.5x.
(e) Consolidated Interest Coverage Ratio of SPCC. Permit the
Consolidated Interest Coverage Ratio of SPCC for any period of four
consecutive fiscal quarters of SPCC (or, if less, the number of full fiscal
quarters subsequent to the Closing Date) ending with any fiscal quarter set
forth below to be less than 6.0x.
(f) Consolidated Net Worth of SPCC. Permit Consolidated Net Worth of
SPCC at any time to be less than the sum of (i) U.S.$900,000,000, (ii) 50% of
cumulative Consolidated Net Income of SPCC for each fiscal quarter of SPCC
(beginning with the fiscal quarter ending March 31, 2003) for which its
Consolidated Net Income is positive, (iii) 100% of the Net Cash Proceeds of
any offering by SPCC of common equity consummated after the Closing Date and
(iv) 100% of any capital contribution made to SPCC or any of its Subsidiaries
after the Closing Date by any holder of SPCC's Capital Stock.
6.2 Indebtedness. Without the prior written consent of the Required
Lenders, create, issue, incur, assume, become liable in respect of or suffer
to exist any Indebtedness except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any other Group Member;
(c) Indebtedness outstanding on the date hereof and listed on
Schedule 6.2(c) and any refinancings, refundings, renewals or extensions
thereof (without increasing, or shortening the maturity of, the principal
amount thereof);
(d) Indebtedness of the Borrower evidenced by the Acquisition Notes
issued by the Borrower pursuant to the Acquisition Agreement in an aggregate
principal amount not to exceed U.S.$223,250,000;
(e) Indebtedness of the Borrower secured, directly or indirectly, by
Pledged Stock as described in each Stock Pledge Agreement, provided that (i)
the Loans hereunder shall rank at least pari passu in right of payment and
collateral security to all such indebtedness, (ii) the aggregate amount of
such Indebtedness (including, without limitation, the Loans hereunder) shall
not exceed U.S.$400,000,000 at any one time, and (iii) no Default or Event of
Default shall have occurred and be continuing at the time of incurrence of any
such Indebtedness and after giving effect thereto; and
(f) Indebtedness of SPCC or any of its Subsidiaries.
42
6.3 Liens. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except:
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP;
(b) pledges or deposits upon any property of SPCC or any of its
Subsidiaries in connection with workers' compensation, unemployment insurance
and other social security legislation;
(c) deposits made by SPCC or any of its Subsidiaries to secure the
performance of bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of SPCC or any of its Subsidiaries of a like nature incurred in
the ordinary course of business;
(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred by SPCC or any of its Subsidiaries in the ordinary
course of business that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of SPCC or any of its Subsidiaries;
(e) Liens upon any property of SPCC or any of its Subsidiaries in
existence on the date hereof listed on Schedule 6.3(e), securing Indebtedness
permitted by Section 6.2(c), provided that no such Lien is spread to cover any
additional property after the Closing Date and that the amount of Indebtedness
secured thereby is not increased;
(f) Liens upon any property of SPCC or any of its Subsidiaries
securing Indebtedness of SPCC or any of its Subsidiaries to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall be
created substantially simultaneously with the acquisition of such fixed or
capital assets, (ii) such Liens do not at any time encumber any property other
than the property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(g) Liens created pursuant to the Security Documents;
(h) any interest or title of a lessor under any lease entered into
by SPCC or any of its Subsidiaries in the ordinary course of its business and
covering only the assets so leased;
(i) Liens on the Pledged Stock as described in each of the Stock
Pledge Agreements securing Indebtedness of the Borrower incurred pursuant to
Section 6.2(e), provided that (i) such Liens shall be pari passu with the
Liens established in favor of the Lenders under the Stock Pledge Agreements,
and (ii) the aggregate amount of Indebtedness secured by such Liens
(including, without limitation, the Loans hereunder) shall not exceed
U.S.$400,000,000 at any one time;
(j) Liens on the shares of Capital Stock of Minera Mexico, S.A. de
C.V. owned by the Borrower incurred in connection with the restructuring of
Indebtedness of such Person
43
and/or its Subsidiaries, as set forth in Schedule 6.14 hereto, provided that
no Group Member shall have incurred any Indebtedness relating thereto and
provided further that, at the time of the incurrence of such Liens, after
giving effect thereto, no Default or Event of Default shall have occurred and
be continuing; and
(k) Liens upon any property of SPCC or any of its Subsidiaries not
otherwise permitted by this Section so long as neither (i) the aggregate
outstanding principal amount of the obligations secured thereby nor (ii) the
aggregate fair market value (determined as of the date such Lien is incurred)
of the assets subject thereto, together with the aggregate outstanding
principal amount or the aggregate fair market value, as applicable, of all
other Liens upon any property of SPCC and its Subsidiaries permitted under
this Section 6.3(k), exceeds U.S.$50,000,000.
6.4 Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of all or substantially all of its
property or business, except that any Investment expressly permitted by
Section 6.14 may be structured as a merger, consolidation or amalgamation.
6.5 Disposition of Property. (a) Dispose of any property of the
Borrower, whether now owned or hereafter acquired, without the prior written
consent of the Required Lenders; or issue, sell or transfer any shares of the
Capital Stock of the Borrower or SPCC Holdings, without the prior written
consent of the Required Lenders, which consent shall not be unreasonably
withheld.
(b) Issue or sell (i) any shares of the Capital Stock of SPCC unless
the shares of Capital Stock of SPCC pledged under the SPCC Stock Pledge
Agreement constitutes, after giving effect to such issuance or sale, at least
53.0% of the outstanding Capital Stock of SPCC (on a fully diluted basis) and
65.8% of the outstanding Class A Common Stock of SPCC (on a fully diluted
basis) or (ii) any shares of the Capital Stock of any of SPCC's Subsidiaries
except to its immediate parent corporation.
(c) Carry out an Asset Sale of any property of SPCC or any of its
Subsidiaries, whether now owned or hereafter acquired, unless the Net
Unreinvested Cash Proceeds thereform are used to prepay the Loans to the
extent required under Section 2.7.
6.6 Restricted Payments. Declare or pay any dividend on, or make any
payment on account of, or set apart assets for a sinking or other analogous
fund for, the purchase, redemption, defeasance, retirement or other
acquisition, of any Capital Stock of any Group Member, whether now or
hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations
of any Group Member (collectively, "Restricted Payments"), except that:
(a) so long as, before and after giving effect thereto, no Default
or Event of Default shall have occurred and be continuing, SPCC Holdings may
make Restricted Payments to the Borrower; and
44
(b) SPCC may make Restricted Payments ratably to SPCC Holdings and
the other stockholders of SPCC; and
(c) any of SPCC's Subsidiaries may make Restricted Payments to its
direct corporate parent; and
(d) proceeds based on ownership of the Acquired Shares from the
U.S.$0.092 per share dividend declared by the board of directors of SPCC on
January 30, 2003 will be paid to Asarco to the extent required under the
Consent Decree, regardless of whether the Acquired Shares were owned, directly
or indirectly, by Asarco at the time the right to such dividends vested; and
(e) so long as (i) before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing, and (ii)
cash in an amount equal to the next following interest payment on the Loans is
segregated and set aside in escrow for the benefit of the Lenders, the
Borrower may pay dividends.
6.7 Limitations on Modifications of Indebtedness; Modifications to
Certain Agreements. Make any voluntary or optional payment or prepayment
(excluding regularly scheduled payments and prepayments arising out of the
default or acceleration of such Indebtedness) on, or redemption or acquisition
for value of (including, without limitation, by way of depositing with the
trustee with respect thereto money or securities before due for the purpose of
paying when due), any existing Indebtedness of the Borrower with a scheduled
maturity date as of the date hereof after the Maturity Date; or amend, modify
or change, or permit the amendment, modification or change of, any provision
of its charter documents, estatutos sociales, by-laws or other organizational
documents, except to the extent such amendment, modification or change would
not reasonably be expected to have a Material Adverse Effect, provided that
such amendment, modification or change shall, in any event, be previously
approved in writing by the Administrative Agent, such consent not to be
unreasonably withheld.
6.8 Transactions with Affiliates. Other than as expressly
contemplated in the Acquisition Documentation, enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with
any Affiliate unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of business of the relevant Group Member
and (c) upon fair and reasonable terms no less favorable to the relevant Group
Member than it would obtain in a comparable arm's-length transaction with a
Person that is not an Affiliate.
6.9 Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by any Group Member of real or personal property
that has been or is to be sold or transferred by such Group Member to such
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of such
Group Member.
45
6.10 Changes in Fiscal Periods. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's
method of determining fiscal quarters.
6.11 Negative Pledge Clauses. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of the
Borrower or SPCC Holdings to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
to secure its obligations under the Loan Documents to which it is a party
other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
6.12 Clauses Restricting Subsidiary Distributions. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction
on the ability of any Subsidiary of the Borrower (other than Excluded
Subsidiaries) to (a) make Restricted Payments in respect of any Capital Stock
of such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or
any other Group Member, (b) make loans or advances to, or other Investments
in, the Borrower or any other Group Member or (c) transfer any of its assets
to the Borrower or any other Group Member, except for such encumbrances or
restrictions (X) existing under or by reason of (i) any restrictions existing
under the Loan Documents and (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital
Stock or assets of such Subsidiary, (Y) on loans, advances, Investments or
transfers from a Group Member to any of such Group Member's Subsidiaries and
(Z) existing on the date hereof and set forth on Schedule 6.12 hereto.
6.13 Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries (or, in the case of any other Group Member, in which SPCC and
SPCC's Subsidiaries) are engaged on the date of this Agreement or that are
reasonably related thereto.
6.14 Investments. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "Investments"), except the following (in the
case of the following clauses (b) through (f) to the extent such Investments
are not made in Asarco or any of its Subsidiaries):
(a) extensions of trade credit in the ordinary course of business
(provided that the aggregate amount of any such extensions to Asarco and its
Subsidiaries shall not exceed U.S.$5,000,000 at any time);
(b) Investments in Cash Equivalents;
(c) loans and advances to employees of any Group Member in the
ordinary course of business (including for travel, entertainment and
relocation expenses) in an aggregate amount for all Group Members not to
exceed U.S.$1,000,000 at any one time outstanding;
46
(d) so long as before and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing, Investments by the
Borrower in Minera Mexico, S.A. de C.V. or any of its Subsidiaries in
connection with the restructuring of Indebtedness of any such Person and its
Subsidiaries, as set forth in Schedule 6.14 hereto, provided that (i) all such
Investments are made from, and only to the extent of, capital contributions
received by the Borrower specifically for such purposes (evidence of which
shall be provided to the Administrative Agent prior to any such Investment)
and (ii) the aggregate amount of such Investments does not exceed
U.S.$127,750,000 (up to U.S.$110,000,000 in cash and U.S.$17,750,000 in debt
forgiveness);
(e) Investments from SPCC to any Wholly Owned Subsidiary of SPCC;
and
(f) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or SPCC or any of SPCC's Subsidiaries in
an aggregate amount (valued at cost) not to exceed U.S.$20,000,000 during the
term of this Agreement.
6.15 Amendments to Acquisition Documents. Amend, supplement or
otherwise modify the terms and conditions of the Acquisition Documentation, or
the provisions of the Consent Decree Documentation relating thereto, without
the Administrative Agent's prior written consent, which shall not be
unreasonably withheld or delayed.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any Loan
when due in accordance with the terms hereof; or (ii) the Borrower shall fail
to pay any interest on any Loan within 15 days after such interest becomes due
in accordance with the terms hereof (provided, however, that such 15 day cure
period shall not be available if the Borrower shall have failed to pay such
interest on the applicable Interest Payment Date (without taking into account
any applicable cure periods) for two (2) consecutive Interest Payment Dates);
or (iii) the Borrower shall fail to pay any other amount payable hereunder or
under any other Loan Document within three (3) days after any such other
amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or as
of the date made or deemed made; or
(c) the Borrower shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 5.4(a), Sections
5.7(a) and 5.9 or Section 6 of this Agreement or either Pledgor under the
Stock Pledge Agreements shall default in the observance or performance of any
agreement contained in Section 4.5 under such agreements; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a
47
period of thirty (30) days after notice to the Borrower from the
Administrative Agent or the Required Lenders; or
(e) any Group Member shall (i) default in making any payment of any
principal of any Indebtedness (including any Guarantee Obligation, but
excluding the Loans) on the scheduled or original due date with respect
thereto; or (ii) default in making any payment of any interest on any such
Indebtedness beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or beneficiary of such Indebtedness (or a trustee or
agent on behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided that a default, event or condition
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at any
time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing with respect
to Indebtedness the outstanding principal amount of which exceeds in the
aggregate U.S.$20,000,000; or
(f) (i) any Group Member shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or any Group
Member shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against any Group Member any case, proceeding or
other action of a nature referred to in clause (i) above that (A) results in
the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against any Group Member any case, proceeding
or other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its assets
that results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) any Group Member shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) any
Group Member shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan or any
Lien in favor of the PBGC or a Plan shall arise on the assets of any Group
Member or any Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee appointed, or
a trustee shall be
48
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee
is, in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any Group
Member or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan
or (vi) any other event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could,
in the sole judgment of the Required Lenders, reasonably be expected to have a
Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against any
Group Member involving in the aggregate a liability (not paid or fully covered
by insurance as to which the relevant insurance company has acknowledged
coverage) of U.S.$20,000,000 or more, and all such judgments or decrees shall
not have been vacated, discharged, stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) the Pledged Stock under the SPCC Stock Pledge Agreement shall at
any time constitute less than 65.8% of the issued and outstanding shares of
Class A Common Stock of SPCC (on a fully diluted basis) or less than 53.0% of
the issued and outstanding Capital Stock of SPCC (on a fully diluted basis);
or
(k) after the first anniversary of the date hereof, Grupo Mexico or
any of its Affiliates (as defined in the SPCC Charter) shall acquire or own,
without the prior written consent of the Required Lenders, any shares of the
Capital Stock of SPCC (other than the Excluded SPCC Shares), unless such
shares have been or, upon their acquisition, are immediately pledged, to the
Administrative Agent's reasonable satisfaction, in favor of the Administrative
Agent as collateral for the obligations of the Borrower hereunder (it being
understood that this clause (k) shall not affect any Group Member's obligation
to pledge shares of SPCC or SPCC Holdings, whether now owned or hereafter
acquired, under the Stock Pledge Agreements); provided, that if the SPCC
Charter shall have been amended, in form and substance satisfactory to the
Administrative Agent, to conform Section 4.9 of the SPCC Charter to Section
4.2 of the SPCC Stockholders' Agreement such that all of the outstanding
shares of Class A Common Stock of SPCC shall automatically convert to shares
of Common Stock of SPCC if the Class A Common Stock (without considering the
Common Stock) owned by Founding Stockholders and their respective Affiliates
shall represent less than 35% of the outstanding Common Shares (as such terms
are defined in the SPCC Charter) of SPCC, then, the reference in this clause
(k) to "any shares of Capital Stock of SPCC" shall be thereafter deemed to
refer to "any shares of Class A Common Stock of SPCC"; and provided, further,
that this clause (k) shall be null and void and of no further effect if SPCC
shall have agreed in writing, in form and substance satisfactory to the
Administrative Agent, to consent and grant to the Administrative Agent
registration rights on the same terms as set forth in the SPCC Stock Pledge
49
Agreement, which rights shall be exercisable at such time and upon the request
of the Administrative Agent of registration of all or a portion of the Pledged
Stock pursuant to the SPCC Stock Pledge Agreement; or
(l) The Consent Decree shall cease, for any reason, to be in full
force and effect, or any Loan Party or any Affiliate of any Loan Party shall
so assert; or
(m) Phelps Dodge Overseas Capital Corporation, Cerro Trading
Company, Inc. and their respective Affiliates (or permitted successors under
the SPCC Charter) shall in the aggregate own 33.5% or more of the outstanding
Common Shares (as such terms are defined in the SPCC Charter) of SPCC;
provided, that if the SPCC Charter shall have been amended, in form and
substance satisfactory to the Administrative Agent, to conform Section 4.9 of
the SPCC Charter to Section 4.2 of the SPCC Stockholders' Agreement such that
all of the outstanding shares of Class A Common Stock of SPCC shall
automatically convert to shares of Common Stock of SPCC if the Class A Common
Stock (without considering the Common Stock) owned by Founding Stockholders
and their respective Affiliates shall represent less than 35% of the
outstanding Common Shares (as such terms are defined in the SPCC Charter) of
SPCC, then, for purpose of calculating the percentage ownership for this
clause (m) of Phelps Dodge Overseas Capital Corporation, Cerro Trading Company
and their respective Affiliates (or permitted successors under the SPCC
Charter), all shares of Common Stock owned by such Persons shall be excluded;
and provided, further, that this clause (m) shall be null and void and of no
further effect if SPCC shall have agreed in writing, in form and substance
satisfactory to the Administrative Agent, to consent and grant to the
Administrative Agent registration rights on the same terms as set forth in the
SPCC Stock Pledge Agreement, which rights shall be exercisable at such time
and upon the request of the Administrative Agent of registration of all or
portion of a the Pledged Stock pursuant to the SPCC Stock Pledge Agreement;
then, and in any such event, (A) if such event is an Event of Default
specified in clause (i) or (ii) of paragraph (f) above with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents shall immediately become due and
payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Required
Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the other Loan Documents to be due and payable forthwith, whereupon the same
shall immediately become due and payable. Except as expressly provided above
in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrower.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan
50
Documents, and each such Lender irrevocably authorizes the Administrative
Agent, in such capacity, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may execute any
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. Neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by any Loan Party or
any officer thereof contained in this Agreement or any other Loan Document or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
8.4 Reliance by Administrative Agent. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons. The Administrative
Agent may deem and treat the payee of any Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders (or, if so
specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all
cases be fully protected in acting, or in
51
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Loans.
8.5 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
8.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act
by the Administrative Agent hereafter taken, including any review of the
affairs of a Loan Party or any affiliate of a Loan Party, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of
the Loan Parties and their affiliates and made its own decision to make its
Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
8.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
52
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against the Administrative Agent
in any way relating to, or arising out of, the Commitments, this Agreement,
any of the other Loan Documents or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection
with any of the foregoing; provided that no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements that
are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the Administrative Agent's gross negligence
or willful misconduct. The agreements in this Section shall survive the
payment of the Loans and all other amounts payable hereunder.
8.8 Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with any Loan Party as
though the Administrative Agent were not an agent. With respect to its Loans
made or renewed by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the
terms "Lender" and "Lenders" shall include the Administrative Agent in its
individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default with respect to the Borrower
shall have occurred and be continuing) be subject to approval by the Borrower
(which approval shall not be unreasonably withheld or delayed), whereupon such
successor agent shall succeed to the rights, powers and duties of the agent,
and the term "Administrative Agent" shall mean such successor agent effective
upon such appointment and approval, and the former Administrative Agent's
rights, powers and duties as Administrative Agent shall be terminated, without
any other or further act or deed on the part of such former Administrative
Agent or any of the parties to this Agreement or any holders of the Loans. If
no successor agent has accepted appointment as Administrative Agent by the
date that is 10 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such
time, if any, as the Required Lenders appoint a successor agent as provided
for above. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
53
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof, may be amended, supplemented or
modified except in accordance with the provisions of this Section 9.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to
time, (a) enter into written amendments, supplements or modifications hereto
and to the other Loan Documents for the purpose of adding any provisions to
this Agreement or the other Loan Documents or changing in any manner the
rights of the Lenders or of the Loan Parties hereunder or thereunder or (b)
waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any
of the requirements of this Agreement or the other Loan Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall (i)
forgive the principal amount or extend the final scheduled date of maturity of
any Loan, extend the scheduled date of any amortization payment in respect of
any Loan, reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof, without the written consent
of each Lender directly affected thereby; (ii) eliminate or reduce the voting
rights of any Lender under this Section 9.1 without the written consent of
such Lender; (iii) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan
Documents, release all or substantially all of the Pledged Stock from any of
the Security Documents, in each case without the written consent of all
Lenders; (iv) amend, modify or waive any provision of Section 2.10 without the
written consent of the Required Lenders; (v) reduce the amount of Net Cash
Proceeds required to be applied to prepay Loans under this Agreement without
the written consent of the Required Lenders; (vi) reduce the percentage
specified in the definition of Required Lenders with respect to any Facility
without the written consent of all Lenders under such Facility; or (vii)
amend, modify or waive any provision of Section 8 without the written consent
of the Administrative Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and
shall be binding upon the Loan Parties, the Lenders, the Administrative Agent
and all future holders of the Loans. In the case of any waiver, the Loan
Parties, the Lenders and the Administrative Agent shall be restored to their
former position and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time
to time outstanding thereunder and the accrued interest and fees in respect
thereof to share ratably in the benefits of this Agreement and the other Loan
Documents with the Loans and the accrued interest and fees in respect thereof
and (b) to include appropriately the Lenders holding such Loans in any
determination of the Required Lenders.
9.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise
54
expressly provided herein, shall be deemed to have been duly given or made
when delivered, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of telecopy notice, when received, addressed
as follows in the case of the Borrower and the Administrative Agent, and as
set forth in an administrative questionnaire delivered to the Administrative
Agent in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:
Borrower: 2575 East Camelback Road, Suite 500
Phoenix, Arizona, 65016
United States
Attention: Hector Nieto Castilla
Telecopy: (602) 977-6500
Telephone: (602) 977-6706
Administrative Agent: Insurgentes Sur No. 3500, Piso 1
Col. Pena Pobre
14060 Mexico, D.F.
Mexico
Attention: Luis Frias Humphrey /
Direccion de Banca Corporativa
Telecopy: 011-52-55-5596-8603
Telephone: 011-52-55-5625-4900
With a copy to: Raul
Humberto Zepeda Ruiz / Direccion Juridica
Telecopy: 011-52-55-5325-0579
Telephone: 011-52-55-5238-0610
Administrative Agent's
Payment Office: Bank: JP Morgan Chase
ABA No.: 021 000 021
Credit Account No.: 400 475 464
Beneficiary: Banco Inbursa, S.A.
Ref: AMC Loan
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or
the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or
55
privilege hereunder or under the other Loan Documents shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
making of the Loans and other extensions of credit hereunder.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its reasonable and documented
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification
to, this Agreement and the other Loan Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable fees and disbursements of counsel to the Administrative Agent
and filing and recording fees and expenses and custodian fees with respect to
the certificates of the shares of the Pledged Stock, with statements with
respect to the foregoing to be submitted to the Borrower prior to the Closing
Date (in the case of amounts to be paid on the Closing Date) and from time to
time thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender and the Administrative Agent for all its reasonable and documented
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such
other documents, including the reasonable fees and disbursements of counsel
(including the reasonable allocated fees and expenses of in-house counsel) to
each Lender and of counsel to the Administrative Agent, (c) to pay, indemnify,
and hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and
hold each Lender and the Administrative Agent and their respective officers,
directors, employees, affiliates, agents and controlling persons (each, an
"Indemnitee") harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including
any of the foregoing relating to the use of proceeds of the Loans or the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of any Grupo Mexico Member or any real property
owned or leased by any Grupo Mexico Member and the reasonable fees and
expenses of legal counsel in connection with claims, actions or proceedings by
any Indemnitee against any Loan Party under any Loan Document (all the
foregoing in this clause (d), collectively, the "Indemnified Liabilities"),
provided that the Borrower shall have no obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a
56
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
Without limiting the foregoing, and to the extent permitted by applicable law,
the Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries to waive, all rights
for contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee.
All amounts due under this Section 9.5 shall be payable not later than 10 days
after written demand therefor. Statements payable by the Borrower pursuant to
this Section 9.5 shall be submitted to Hector Nieto Castilla (Telephone No.
(602) 977-6706) (Telecopy No. (602) 977-6500), at the address of the Borrower
set forth in Section 9.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative
Agent. The agreements in this Section 9.5 shall survive repayment of the Loans
and all other amounts payable hereunder.
9.6 Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that (i) the Borrower may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance
with this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee")
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitments and the Loans at the time owing to it)
with the prior written consent (such consent not to be unreasonably withheld)
of the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment to an Assignee that is a Lender
immediately prior to giving effect to such assignment.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender, an affiliate of
a Lender or an assignment of the entire remaining amount of the assigning
Lender's Commitments or Loans hereunder, the amount of the Commitments or
Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less
than U.S.$5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that (1) no such consent of the
Borrower shall be required if an Event of Default has occurred and is
continuing and (2) such amounts shall be aggregated in respect of each
Lender and its affiliates;
(B) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of U.S.$3,500;
57
(C) the Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an administrative questionnaire; and
(D) An Assignee shall not be entitled to receive any greater payment
under Section 2.12 or 2.13 than the assignor Lender would have been
entitled to receive with respect to the assigned interest, unless the
assignment is made with the Borrower's prior written consent.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Acceptance the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.12, 2.13, 2.14 and 9.5). Any assignment or transfer
by a Lender of rights or obligations under this Agreement that does not comply
with this Section 9.6 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an
Administrative Agent of the Borrower, shall maintain at one of its offices a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall
be conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.
(v) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower or the
Administrative Agent, sell participations to one or more banks, financial
institutions or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans owing to it); provided that (A) such
Lender's obligations under this Agreement shall remain unchanged, (B) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (C) the Borrower, the Administrative Agent
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and
58
obligations under this Agreement. Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the
sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver that (1) requires
the consent of each Lender directly affected thereby pursuant to the proviso
to the second sentence of Section 9.1 and (2) directly affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.12, 2.13
and 2.14 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section. To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.7(b) as though it were a Lender, provided such
Participant shall be subject to Section 9.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.12 or 2.13 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower's prior written consent. Any Participant that is a Non-U.S.
Lender shall not be entitled to the benefits of Section 2.13 unless such
Participant complies with Section 2.13(d).
(d) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment
of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or Assignee for such Lender as a
party hereto.
(e) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
9.7 Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender or to the Lenders under a particular Facility, if any Lender (a
"Benefitted Lender") shall, at any time after the Loans and other amounts
payable hereunder shall immediately become due and payable pursuant to Section
7, receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7(e), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
59
(b) In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to
set off and appropriate and apply against such amount any and all deposits
(general or special, time or demand, provisional or final), in any currency,
and any other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured, at
any time held or owing by such Lender or any branch or agency thereof to or
for the credit or the account of the Borrower, as the case may be. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent after any
such setoff and application made by such Lender, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
9.8 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
9.9 Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the
Administrative Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
9.12 Submission To Jurisdiction; Waivers. Each of the parties hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State
of New York, the courts of the United States for the Southern District of New
York, and appellate courts from any thereof;
60
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Borrower at
its address set forth in Section 9.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
9.13 Acknowledgements. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among the Borrower and the Lenders.
9.14 Releases of Guarantees and Liens. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 9.1) to take any action requested by the Borrower having the effect
of releasing any Pledged Stock or guarantee obligations (i) to the extent
necessary to permit consummation of any transaction not prohibited by any Loan
Document or that has been consented to in accordance with Section 9.1 or (ii)
under the circumstances described in paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations and the
other obligations under the Loan Documents shall have been paid in full and
the Commitments have been terminated, the Pledged Stock shall be released from
the Liens created by the Security Documents, and the Security Documents and
all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the
Security
61
Documents shall terminate, all without delivery of any instrument or
performance of any act by any Person.
9.15 Confidentiality. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it
by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; provided that nothing herein shall prevent the
Administrative Agent or any Lender from disclosing any such information (a) to
the Administrative Agent, any other Lender or any affiliate thereof, (b)
subject to an agreement to comply with the provisions of this Section, to any
actual or prospective Transferee or any direct or indirect counterparty to any
Swap Agreement (or any professional advisor to such counterparty), (c) to its
employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its affiliates, (d) upon the request or demand of
any Governmental Authority, (e) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with
any litigation or similar proceeding, (g) that has been publicly disclosed,
(h) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access
to information about a Lender's investment portfolio in connection with
ratings issued with respect to such Lender, or (i) in connection with the
exercise of any remedy hereunder or under any other Loan Document.
9.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
AMERICAS MINING CORPORATION, as
Borrower
By:
---------------------------------
Name:
Title:
BANCO INBURSA, S.A., INSTITUCION DE BANCA
MULTIPLE, GRUPO FINANCIERO INBURSA, as
Administrative Agent and a Lender
By:
---------------------------------
Name:
Title:
Exhibit 4
---------
STOCK PLEDGE AGREEMENT
-----------===================================================================
STOCK PLEDGE AGREEMENT
made by
SPHC II INCORPORATED
in favor of
BANCO INBURSA, S.A.,
Institucion de Banca Multiple, Grupo Financiero Inbursa,
as Administrative Agent
Dated as of March 31, 2003
==============================================================================
Table of Contents
Page
Section 1. DEFINED TERMS....................................................1
1.1 Definitions......................................................1
1.2 Other Definitional Provisions....................................2
Section 2. PLEDGE; GRANT OF SECURITY INTEREST...............................3
Section 3. REPRESENTATIONS AND WARRANTIES...................................3
3.1 Title; No Other Liens............................................3
3.2 Perfected First Priority Liens...................................3
3.3 Capital Stock; Nonassessable.....................................3
3.4 Authorization; No Contravention..................................4
Section 4. COVENANTS........................................................4
4.1 Payment of Obligations...........................................4
4.2 Maintenance of Perfected Security Interest; Further
Documentation....................................................4
4.3 Notices..........................................................5
4.4 Distributions....................................................5
4.5 Negative Covenants...............................................5
4.6 Securities Laws..................................................6
Section 5. REMEDIAL PROVISIONS..............................................6
5.1 Events of Default................................................6
5.2 Proceeds to be Turned Over To Administrative Agent...............6
5.3 Application of Proceeds..........................................7
5.4 Code and Other Remedies..........................................7
5.5 Registration Rights..............................................8
5.6 Deficiency.......................................................9
Section 6. THE ADMINISTRATIVE AGENT.........................................9
6.1 Administrative Agent's Appointment as
Attorney-in-Fact, etc............................................9
6.2 Duty of Administrative Agent....................................10
6.3 Execution of Financing Statements...............................11
6.4 Authority of Administrative Agent...............................11
Section 7. MISCELLANEOUS...................................................11
7.1 Amendments in Writing...........................................11
7.2 Notices.........................................................11
7.3 No Waiver by Course of Conduct; Cumulative Remedies.............11
7.4 Enforcement Expenses; Indemnification...........................11
7.5 Successors and Assigns..........................................12
7.6 Set-Off.........................................................12
7.7 Counterparts....................................................12
7.8 Severability....................................................12
7.9 Section Headings................................................12
7.10 Integration.....................................................13
7.11 GOVERNING LAW...................................................13
i
7.12 Submission To Jurisdiction; Waivers.............................13
7.13 Acknowledgements................................................13
7.14 Releases........................................................13
7.15 WAIVER OF JURY TRIAL............................................14
SCHEDULES
Schedule 1 Pledged Stock
ii
STOCK PLEDGE AGREEMENT
STOCK PLEDGE AGREEMENT, dated as of March 31, 2003, made by SPHC II
Incorporated, a Delaware corporation (the "Pledgor"), in favor of Banco
Inbursa, S.A., Institucion de Banca Multiple, Grupo Financiero Inbursa, as
Administrative Agent (in such capacity, the "Administrative Agent") for the
banks and other financial institutions or entities (the "Lenders") from time
to time parties to the Credit Agreement, dated as of February 28, 2003 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Americas Mining Corporation (the "Borrower"), the Lenders
and the Administrative Agent.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms
and subject to the conditions set forth therein;
WHEREAS, in accordance with the Credit Agreement, the Borrower
shall, simultaneously with the extension of credit thereunder, use the net
proceeds therefrom to finance a portion of the purchase price for the
acquisition of 43,348,949 shares of Class A Common Stock of Southern Peru
Copper Corporation, a Delaware corporation ("SPCC"), by the Borrower;
WHEREAS, the Pledgor is a wholly owned subsidiary of the Borrower
and, upon consummation of such acquisition, the Borrower will transfer the
acquired capital stock of SPCC to the Pledgor as a capital contribution;
WHEREAS, the Pledgor will derive substantial direct and indirect
benefit from the making of the extension of credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under
the Credit Agreement that the Pledgor shall have executed and delivered this
Agreement to the Administrative Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, the Pledgor hereby agrees with the Administrative Agent,
for the ratable benefit of the Lenders, as follows:
Section 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Stock Pledge Agreement, as the same
may be amended, supplemented or otherwise modified from time to
time.
"Collateral": as defined in Section 2.
"Collateral Account": any collateral account established by the
Administrative Agent as provided in Section 5.2 or 5.3.
"New York UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Obligations": the collective reference to the unpaid principal of
and interest on the Loans and all other obligations and liabilities of the
Borrower and the Pledgor (including, without limitation, interest accruing at
the then applicable rate provided in the Credit Agreement after the maturity
of the Loans and interest accruing at the then applicable rate provided in the
Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower or the Pledgor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the Administrative
Agent or any Lender, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this Agreement,
the other Loan Documents or any other document made, delivered or given in
connection with any of the foregoing, in each case whether on account of
principal, interest, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all reasonable and documented fees and
disbursements of counsel to the Administrative Agent or to the Lenders that
are required to be paid by the Borrower or the Pledgor pursuant to the terms
of any of the foregoing agreements).
"Pledged Stock": the shares of Class A Common Stock of SPCC listed
on Schedule 1 together with any other shares certificates, options or rights
of any nature whatsoever in respect of the Capital Stock of SPCC that may be
issued or granted to, or held by, the Pledgor while this Agreement is in
effect. The Administrative Agent acknowledges that, as of the date hereof, the
Borrower and/or its affiliates (other than the Pledgor) own, in the aggregate,
186,500 shares of common stock, par value $0.01 per share, of SPCC, which
shares (i) represent approximately 0.2333% of such common stock outstanding as
of the date hereof and (ii) are not subject to the pledge hereunder (the
"Excluded SPCC Shares").
"Proceeds": all "proceeds" as such term is defined in Section
9-102(a)(64) of the New York UCC and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Stock, collections
thereon or distributions or payments with respect thereto.
"Securities Act": the Securities Act of 1933, as amended.
"SPCC Charter": as defined in Section 3.3(a).
"SPCC Stockholders' Agreement": as defined in Section 3.3(c).
"Stock Powers": as defined in Section 2.
"Structured Foreclosure Period": as defined in Section 5.4(b).
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
2
Section 2. PLEDGE; GRANT OF SECURITY INTEREST
The Pledgor hereby assigns and transfers to the Administrative
Agent, and hereby grants to the Administrative Agent, for the ratable benefit
of the Lenders, a security interest in, all of the following property now
owned or at any time hereafter acquired by the Pledgor or in which the Pledgor
now has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations:
(a) all Pledged Stock; and
(b) to the extent not otherwise included, all Proceeds and products
of the foregoing.
The Pledgor herewith delivers to the Administrative Agent all of
such Pledged Stock which is in existence on the date hereof, accompanied by
appropriate undated stock powers covering each certificate representing one or
more shares of the Pledged Stock (the "Stock Powers") duly executed in blank.
Section 3. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, the Pledgor hereby represents and
warrants to the Administrative Agent and each Lender that:
3.1 Title; No Other Liens. The Pledgor is the record and beneficial owner
of, and has good and marketable title to, the Pledged Stock pledged by it
hereunder, and owns each item of Collateral, free and clear of any and all
Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or
of record in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Lenders, pursuant to this
Agreement.
3.2 Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon physical delivery of the certificates
representing the Pledged Stock, together with the related Stock Powers,
constitute valid perfected security interests in all of the Collateral in
favor of the Administrative Agent, for the ratable benefit of the Lenders, as
collateral security for the Obligations, enforceable in accordance with the
terms hereof against all creditors of the Pledgor and any Persons purporting
to purchase any Collateral from the Pledgor and (b) are prior to any and all
other Liens on the Collateral. The Stock Powers are duly executed and give the
Administrative Agent the authority they purport to confer.
3.3 Capital Stock; Nonassessable. (a) The shares of Pledged Stock pledged
by the Pledgor hereunder constitute, as of the Closing Date, 65.8% of the
issued and outstanding shares of SPCC's Class A Common Stock (on a fully
diluted basis), which entitle the Pledgor to the voting rights of Class A
Common Stock shares as set forth in the Restated Certificate of Incorporation
of SPCC (the "SPCC Charter"), and 54.08% of the issued and outstanding shares
of all classes of the SPCC's Capital Stock (on a fully diluted basis).
(b) All the shares of the Pledged Stock have been duly and validly issued
and are fully paid and nonassessable.
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(c) There are no restrictions upon the voting rights associated with, or
upon the transfer of, any of the Pledged Stock, other than pursuant to this
Agreement, the SPCC Charter and the Agreement Among Certain Stockholders of
SPCC dated January 2, 1996 among SPCC and certain of its Stockholders (as
amended from time to time, the "SPCC Stockholders' Agreement").
3.4 Authorization; No Contravention. (a) The Pledgor has the corporate
power and authority and the legal right to execute and deliver, to perform its
obligations under, and to create the perfected security interests on the
Collateral owned by it pursuant to, this Agreement and has taken all necessary
corporate action to authorize its execution, delivery and performance of, and
to create the perfected security interests on the Collateral owned by it
pursuant to, this Agreement;
(b) The execution, delivery and performance of this Agreement by the
Pledgor will not violate any provision of any Requirement of Law or
Contractual Obligation of the Borrower, the Pledgor or SPCC (including,
without limitation, the SPCC Charter and the SPCC Stockholders' Agreement) and
will not result in the creation or imposition of any Lien on any of the
properties or revenues of the Borrower, the Pledgor or SPCC pursuant to any
Requirement of Law or Contractual Obligation, except as contemplated hereby;
and
(c) No consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of
the Borrower, the Pledgor or SPCC), is required in connection with the
execution, delivery, performance, validity or enforceability of this
Agreement.
The representations and warranties in this Section 3 shall be deemed
to have been made by the Pledgor on each date that an extension of credit is
made by any of the Lenders under the Credit Agreement as though made hereunder
on and as of such date.
Section 4. COVENANTS
The Pledgor covenants and agrees with the Administrative Agent and the
Lenders that, from and after the date of this Agreement until the Obligations
shall have been paid in full and the Commitments shall have terminated:
4.1 Payment of Obligations. The Pledgor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the Collateral,
except that no such charge need be paid if the amount or validity thereof is
currently being contested in good faith by appropriate proceedings, reserves
in conformity with GAAP with respect thereto have been provided on the books
of the Pledgor and such proceedings could not reasonably be expected to result
in the sale, forfeiture or loss of any material portion of the Collateral or
any interest therein.
4.2 Maintenance of Perfected Security Interest; Further Documentation.
(a) The Pledgor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 3.2 and shall defend such security interest against the claims and
demands of all Persons whomsoever, subject to the rights of the Pledgor under
Section 6.3(i) of the Credit Agreement to create a Lien on the Collateral.
(b) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and deliver, and have
4
recorded, such further instruments and documents and take such further actions
as the Administrative Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, (i) filing any
financing or continuation statements under the Uniform Commercial Code (or
other similar laws) in effect in any jurisdiction with respect to the security
interests created hereby and (ii) taking any actions necessary to enable the
Administrative Agent to obtain "control" (within the meaning of the applicable
Uniform Commercial Code) with respect thereto.
4.3 Notices. The Pledgor will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby) on any of the
Collateral which would adversely affect the ability of the Administrative
Agent to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
4.4 Distributions. If the Pledgor shall become entitled to receive or
shall receive any certificate (including, without limitation, any certificate
representing a dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued
in connection with any reorganization), option or rights in respect of the
Capital Stock of any issuer, whether in addition to, in substitution of, as a
conversion of, or in exchange for any shares of the Pledged Stock, or
otherwise in respect thereof, the Pledgor shall accept the same as the agent
of the Administrative Agent, hold the same in trust for the Administrative
Agent and deliver the same forthwith to the Administrative Agent in the exact
form received, duly indorsed by the Pledgor to the Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by the Pledgor and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent,
subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Stock upon the
liquidation or dissolution of SPCC shall be paid over to the Administrative
Agent to be held by it hereunder as additional collateral security for the
Obligations, and in case any distribution of capital shall be made on or in
respect of the Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of SPCC or pursuant to the reorganization
thereof, the property so distributed shall be subject to a perfected security
interest in favor of the Administrative Agent or, at the sole discretion of
the Administrative Agent, delivered to the Administrative Agent to be held by
it hereunder, as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of the Pledged
Stock shall be received by the Pledgor, the Pledgor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Administrative Agent, segregated from other funds of
the Pledgor, as additional collateral security for the Obligations.
4.5 Negative Covenants(a) . Without the prior written consent of the
Administrative Agent, the Pledgor will not (i) vote to enable, or take any
other action to permit, SPCC to issue any Capital Stock of any nature or to
issue any other securities convertible into or granting the right to purchase
or exchange for any Capital Stock of any nature of SPCC, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Pledged Stock or Proceeds thereof (except pursuant to a transaction
expressly permitted by the Credit Agreement), (iii) create, incur or permit to
exist any Lien or option in favor of, or any claim of any Person with respect
to, any of the Pledged Stock or Proceeds thereof, or any interest therein,
except for the security interests created by this Agreement and Liens
permitted pursuant to Section 6.3(i) of the Credit Agreement; (iv) enter into
any agreement or undertaking
5
restricting the right or ability of the Pledgor or the Administrative Agent to
own, sell, assign or transfer any of the Pledged Stock or Proceeds thereof, or
to exercise voting or any other rights associated therewith; (v) or elect to
convert the Pledged Stock into shares of common stock of SPCC pursuant to
Section 4.9 of the SPCC Charter; or (vi) amend the SPCC Stockholders'
Agreement.
4.6 Securities Laws. The Pledgor shall cause SPCC to comply with the
reporting requirements under the Securities Exchange Act of 1934, as amended.
Section 5. REMEDIAL PROVISIONS
5.1 Events of Default. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
Pledgor of the Administrative Agent's intent to exercise its corresponding
rights pursuant to Section 5.1(b), the Pledgor shall be permitted to receive
all cash dividends paid in respect of the Pledged Stock, in each case paid in
the normal course of business of SPCC and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate or other organizational rights with respect to the Pledged Stock;
provided, however, that no vote shall be cast or corporate or other
organizational right exercised or other action taken which, in the
Administrative Agent's reasonable judgment, would impair the Pledged Stock or
which would be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights
to the Pledgor, (i) the Administrative Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Stock and make application thereof to the Obligations in such order as
the Administrative Agent may determine, and (ii) any or all of the Pledged
Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise
(x) all voting, corporate and other rights pertaining to such Pledged Stock at
any meeting of shareholders of SPCC or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Stock as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its
discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
or other organizational structure of SPCC, or upon the exercise by the Pledgor
or the Administrative Agent of any right, privilege or option pertaining to
such Pledged Stock, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Stock with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to the Pledgor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.
(c) The Pledgor hereby authorizes and instructs SPCC to (i) comply with
any instruction received by it from the Administrative Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from the Pledgor, and the Pledgor agrees that SPCC shall
be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledgor directly to the Administrative Agent.
5.2 Proceeds to be Turned Over To Administrative Agent. If an Event of
Default shall occur and be continuing, all Proceeds received by the Pledgor
consisting of cash, checks and other near-cash items shall be held by the
Pledgor in trust for the Administrative Agent and the Lenders, segregated from
6
other funds of the Pledgor, and shall, forthwith upon receipt by the Pledgor,
be turned over to the Administrative Agent in the exact form received by the
Pledgor (duly indorsed by the Pledgor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent hereunder shall
be held by the Administrative Agent in a Collateral Account maintained under
its sole dominion and control. All Proceeds while held by the Administrative
Agent in a Collateral Account (or by the Pledgor in trust for the
Administrative Agent and the Lenders) shall continue to be held as collateral
security for all the Obligations and shall not constitute payment thereof
until applied as provided in Section 5.3.
5.3 Application of Proceeds. At such intervals as may be agreed upon by
the Pledgor and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds
constituting Collateral, whether or not held in any Collateral Account, in
payment of the Obligations in such order as the Administrative Agent may
elect, and any part of such funds which the Administrative Agent elects not so
to apply and deems not required as collateral security for the Obligations
shall be paid over from time to time by the Administrative Agent to the
Pledgor or to whomsoever may be lawfully entitled to receive the same. Any
balance of such Proceeds remaining after the Obligations shall have been paid
in full and the Commitments shall have terminated shall be paid over to the
Pledgor or to whomsoever may be lawfully entitled to receive the same.
5.4 Code and Other Remedies. (a) If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality
of the foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon the Pledgor
or any other Person (all and each of which demands, defenses, advertisements
and notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase,
or otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or any Lender or elsewhere upon such terms and conditions
as it may deem advisable and at such prices as it may deem best, for cash or
on credit or for future delivery without assumption of any credit risk. The
Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in the Pledgor, which right or equity is
hereby waived and released. The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 5.4, after
deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements, to the payment in whole or in
part of the Obligations, in such order as the Administrative Agent may elect,
and only after such application and after the payment by the Administrative
Agent of any other amount required by any provision of law, including, without
limitation, Section 9-615(a)(3) of the New York UCC, need the Administrative
Agent account for the surplus, if any, to the Pledgor. To the extent permitted
by applicable law, the Pledgor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
7
(b) Notwithstanding anything contained herein to the contrary, so
long as: (A) the ratio of (i) the market value (determined by the average of
the daily market prices of shares of Common Stock of SPCC for the preceding 30
consecutive trading days) of the Pledged Stock to (ii) the Obligations shall
not, at any time, be less than 1.5; and (B) the Founding Stockholders and
their Affiliates (or permitted successors under the SPCC Charter) own
(excluding the Pledged Stock and the Excluded SPCC Shares) less than 30% of
the outstanding Common Shares (as such terms are defined in the SPCC Charter)
of SPCC , provided, that if the SPCC Charter shall have been amended, in form
and substance satisfactory to the Administrative Agent, to conform Section 4.9
of the SPCC Charter to Section 4.2 of the SPCC Stockholders' Agreement such
that all of the outstanding shares of Class A Common Stock of SPCC shall
automatically convert to shares of Common Stock of SPCC if the Class A Common
Stock (without considering the Common Stock) owned by Founding Stockholders
and their respective Affiliates shall represent less than 35% of the
outstanding Common Shares (as such terms are defined in the SPCC Charter) of
SPCC, then, for purpose of calculating the percentage ownership for this
clause (B) of the Founding Stockholders and their respective Affiliates (or
permitted successors under the SPCC Charter), all shares of Common Stock owned
by such Persons shall be excluded, and provided, further, that this clause (B)
shall be null and void and of no further effect if SPCC shall have agreed in
writing, in form and substance satisfactory to the Administrative Agent, to
consent and grant to the Administrative Agent registration rights on the same
terms as set forth in Section 5.5, which rights shall be exercisable at such
time and upon the request of the Administrative Agent of registration of all
or a portion of the Pledged Stock pursuant to Section 5.5; the Administrative
Agent shall not, during the first 90 days after the occurrence of an Event of
Default and the giving of notice by the Administrative Agent of its intent to
sell the Pledged Stock (the "Structured Foreclosure Period"), sell the Pledged
Stock without the prior consent of the Pledgor, which consent shall not be
unreasonably withheld. During the Structured Foreclosure Period, the Pledgor
and the Borrower shall use their best efforts to identify a suitable purchaser
for the Pledged Stock.
5.5 Registration Rights. (a) If the Administrative Agent shall determine
to exercise its right to sell any or all of the Pledged Stock pursuant to
Section 5.4, and if in the opinion of the Administrative Agent it is necessary
or advisable to have the Pledged Stock, or that portion thereof to be sold,
registered under the provisions of the Securities Act, the Pledgor will use
its best efforts to cause SPCC thereof to (i) execute and deliver, and cause
the directors and officers of SPCC to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as
may be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) to file a registration statement
relating thereto under the provisions of the Securities Act as promptly as
practicable, and in no event later than 5 days after the end of the Structured
Foreclosure Period, (iii) use its best efforts to cause such registration
statement to become effective within 60 days after the end of the Structured
Foreclosure Period and to remain effective for a period of one year from the
date of the first public offering of the Pledged Stock, or that portion
thereof to be sold, and (iv) make all amendments thereto and/or to the related
prospectus which, in the opinion of the Administrative Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto. The Pledgor agrees to cause SPCC to comply with the provisions of the
securities or "Blue Sky" laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act. The Pledgor shall use its best efforts to cause the number of shares of
common stock authorized for trading on the New York Stock Exchange to be
sufficient to cover the Pledged Stock upon conversion into shares of common
stock of SPCC in accordance with the SPCC Charter.
(b) The Pledgor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Stock, by reason of certain
prohibitions contained in the Securities Act and
8
applicable state securities laws or otherwise, and may be compelled to resort
to one or more private sales thereof to a restricted group of purchasers which
will be obliged to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the distribution or
resale thereof. The Pledgor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable than if such sale were a
public sale and, notwithstanding such circumstances, agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner. Subject to Section 5.4(b), the Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit SPCC to register such securities for public sale under the
Securities Act, or under applicable state securities laws, even if SPCC would
agree to do so.
(c) The Pledgor agrees to use its best efforts to do or cause to be done
all such other acts as may be necessary to make such sale or sales of all or
any portion of the Pledged Stock pursuant to this Section 5.5 valid and
binding and in compliance with any and all other applicable Requirements of
Law. The Pledgor further agrees that a breach of any of the covenants
contained in this Section 5.5 will cause irreparable injury to the
Administrative Agent and the Lenders, that the Administrative Agent and the
Lenders have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 5.5 shall
be specifically enforceable against the Pledgor, and the Pledgor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default
has occurred under the Credit Agreement.
5.6 Deficiency. The Pledgor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient
to pay the Obligations and the fees and disbursements of any attorneys
employed by the Administrative Agent or any Lender to collect such deficiency.
Section 6. THE ADMINISTRATIVE AGENT
6.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a) The
Pledgor hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of the Pledgor and in the name of the Pledgor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, the
Pledgor hereby gives the Administrative Agent the power and right, on behalf
of the Pledgor, without notice to or assent by the Pledgor, to do any or all
of the following:
(i) in the name of the Pledgor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due with
respect to any Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate
by the Administrative Agent for the purpose of collecting any and all
such moneys due with respect to any Collateral whenever payable;
(ii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
9
(iii) execute, in connection with any sale provided for in Section
5.4 or 5.5, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(iv) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of Collateral; (3)
commence and prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the Collateral
or any portion thereof and to enforce any other right in respect of any
Collateral; (4) defend any suit, action or proceeding brought against the
Pledgor with respect to any Collateral; (5) settle, compromise or adjust
any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem
appropriate; and (6) subject to Section 5.4(b), generally, sell,
transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes,
and do, at the Administrative Agent's option and the Pledgor's expense,
at any time, or from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent's and the Lenders' security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as the Pledgor might do.
Anything in this Section 6.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 6.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If the Pledgor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the Pledgor, shall be payable by the Pledgor to the
Administrative Agent on demand.
(d) The Pledgor hereby ratifies all that said attorneys shall lawfully do
or cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby
are released.
6.2 Duty of Administrative Agent. The Administrative Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect
or realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of the Pledgor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the
Collateral and shall not impose any duty upon the Administrative Agent or any
10
Lender to exercise any such powers. The Administrative Agent and the Lenders
shall be accountable only for amounts that they actually receive as a result
of the exercise of such powers, and neither they nor any of their officers,
directors, employees or agents shall be responsible to the Pledgor for any act
or failure to act hereunder, except for their own gross negligence or willful
misconduct.
6.3 Execution of Financing Statements. Pursuant to any applicable law,
the Pledgor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of the Pledgor in such form and in
such offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. The
Pledgor hereby ratifies and authorizes the filing by the Administrative Agent
of any financing statement with respect to the Collateral made prior to the
date hereof.
6.4 Authority of Administrative Agent. The Pledgor acknowledges that the
rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise
or non-exercise by the Administrative Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Administrative Agent and
the Lenders, be governed by the Credit Agreement and by such other agreements
with respect thereto as may exist from time to time among them, but, as
between the Administrative Agent and the Pledgor, the Administrative Agent
shall be conclusively presumed to be acting as agent for the Lenders with full
and valid authority so to act or refrain from acting, and the Pledgor shall
not be under any obligation, or entitlement, to make any inquiry respecting
such authority.
Section 7. MISCELLANEOUS
7.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 9.1 of the Credit Agreement.
7.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or the Pledgor hereunder shall be effected in the manner
provided for in Section 9.2 of the Credit Agreement (in the case of the
Pledgor, as provided for the Borrower).
7.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced
in any Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
7.4 Enforcement Expenses; Indemnification. (a) The Pledgor agrees to pay
or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in enforcing or preserving any rights under this Agreement
and the other Loan Documents, including, without limitation,
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the fees and disbursements of counsel (including the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent.
(b) The Pledgor agrees to pay, and to save the Administrative Agent and
the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) The agreements in this Section 7.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
7.5 Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns;
provided that the Pledgor may not assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent
of the Administrative Agent.
7.6 Set-Off. The Pledgor hereby irrevocably authorizes the Administrative
Agent and each Lender at any time and from time to time while an Event of
Default pursuant to Section 7 of the Credit Agreement shall have occurred and
be continuing, without notice to the Pledgor, any such notice being expressly
waived by the Pledgor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Administrative Agent or such
Lender to or for the credit or the account of the Pledgor, or any part thereof
in such amounts as the Administrative Agent or such Lender may elect, against
and on account of the obligations and liabilities of the Pledgor to the
Administrative Agent or such Lender hereunder and claims of every nature and
description of the Administrative Agent or such Lender against the Pledgor, in
any currency, whether arising hereunder, under the Credit Agreement, any other
Loan Document or otherwise, as the Administrative Agent or such Lender may
elect, whether or not the Administrative Agent or any Lender has made any
demand for payment and although such obligations, liabilities and claims may
be contingent or unmatured. The Administrative Agent and each Lender shall
notify the Pledgor promptly of any such set-off and the application made by
the Administrative Agent or such Lender of the proceeds thereof, provided that
the failure to give such notice shall not affect the validity of such set-off
and application. The rights of the Administrative Agent and each Lender under
this Section 7.6 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Administrative Agent or
such Lender may have.
7.7 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
7.8 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.9 Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
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7.10 Integration. This Agreement and the other Loan Documents represent
the agreement of the Pledgor, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth
or referred to herein or in the other Loan Documents.
7.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
7.12 Submission To Jurisdiction; Waivers. The Pledgor hereby irrevocably
and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof,
to the non-exclusive general jurisdiction of the courts of the State of New
York, the courts of the United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;
(c) agrees that service of process in any such action or proceeding may
be effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Pledgor at its
address referred to in Section 7.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service
of process in any other manner permitted by law or shall limit the right to
sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
7.13 Acknowledgements. The Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Pledgor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship
between the Pledgor, and the Administrative Agent and Lenders, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Pledgor and the Lenders.
7.14 Releases. (a) At such time as the Loans, the other Obligations shall
have been paid in full, and the Commitments have been terminated, the
Collateral shall be released from the Liens created
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hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and the
Pledgor hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Pledgor. At the request and sole expense of the Pledgor
following any such termination, the Administrative Agent shall deliver to the
Pledgor any Collateral held by the Administrative Agent hereunder, and execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by the Pledgor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of the Pledgor,
shall execute and deliver to the Pledgor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby
on such Collateral.
7.15 WAIVER OF JURY TRIAL. THE PLEDGOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
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IN WITNESS WHEREOF, each of the undersigned has caused this Stock Pledge
Agreement to be duly executed and delivered as of the date first above
written.
SPHC II INCORPORATED
By:
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Name:
Title:
BANCO INBURSA, S.A., Institucion de
Banca Multiple, Grupo Financiero
Inbursa, as Administrative Agent
By:
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Name:
Title:
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Schedule 1
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DESCRIPTION OF PLEDGED STOCK
Issuer Class of Stock Stock Certificate No. No. of Shares
--------------------- -------------------- ------------------------- ------------------
Southern Peru Copper Class A Common No. 1 43,348,949
Corporation Stock
ACKNOWLEDGEMENT
The undersigned hereby acknowledges receipt of a copy of the Stock
Pledge Agreement dated as of March 31, 2003 (the "Agreement") made by SPHC II
Incorporated for the benefit of Banco Inbursa, S.A., Institucion de Banca
Multiple, Grupo Financiero Inbursa, as Administrative Agent.
SOUTHERN PERU COPPER CORPORATION
By:_______________________________________
Name:
Title:
Address for Notices:
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Fax: