EXHIBIT 10.3

 

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS
EXHIBIT.  THE REDACTIONS ARE INDICATED WITH “*[Redacted]*”.  A COMPLETE VERSION
OF THIS COMMITMENT LETTER AND EXHIBIT HAS BEEN FILED WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION.

 

July 5, 2016

 

VIA ELECTRONIC MAIL

 

RGLD Gold AG

Attention: Jason Hynes, Vice President

Baarerstrasse 71

6300 Zug

Switzerland

 

Royal Gold, Inc.

Attention: Tony Jensen, President and CEO

1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202

 

Dear Jason and Tony:

 

Further to our recent discussions, Centerra Gold Inc. (“we” or “Centerra”) has
advised each of RGLD Gold AG (“RGLD”) and Royal Gold, Inc. (“Royal Gold” and,
together with RGLD, “RG”), that we intend to acquire all of the issued and
outstanding shares of Thompson Creek Metals Company Inc. (“TCM”) (the
“Acquisition”) pursuant to an arrangement agreement (the “Arrangement
Agreement”) between Centerra and TCM. Centerra will hold TCM through a newly
formed wholly owned subsidiary (“AcquireCo”).

 

This commitment letter, together with the term sheet attached hereto as Schedule
“A” (the “Term Sheet”) is hereinafter referred to as the “Commitment Letter”.

 

The Term Sheet sets forth certain binding understandings of Centerra with each
of RGLD and Royal Gold, with regard to the amendment and continuation (the “RGLD
Amendment”), as described in the Term Sheet together with such other changes as
may be necessary to effect the Term Sheet, of the Amended and Restated Purchase
and Sale Agreement, dated December 14, 2011 (as further amended, the “Stream
Agreement”) between Terrane Metals Corp. (“Terrane”), RGLD, and, solely in
respect of certain provisions of the Stream Agreement as set forth therein,
Royal Gold and TCM, relating to the Mt. Milligan copper-gold mine, located in
British Columbia, and owned by Terrane (the “Project”).

 

RGLD, acknowledging that Centerra is entering into this Commitment Letter in
reliance thereon, hereby makes the representations and warranties set forth on
Annex 1 hereto, with respect to RGLD.

 

Royal Gold, acknowledging that Centerra is entering into this Commitment Letter
in reliance thereon, hereby makes the representations and warranties set forth
on Annex 2 hereto, with respect to Royal Gold.

 

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Centerra, acknowledging that RG is entering into this Commitment Letter in
reliance thereon, hereby makes the representations and warranties set forth on
Annex 3 hereto.

 

Subject to the terms and conditions set forth in the Term Sheet, RGLD, Royal
Gold and Centerra commit to take (or cause to be taken), simultaneously with the
closing of the Acquisition, all necessary steps to consummate the RGLD
Amendment, effective upon the closing of the Acquisition.

 

On or prior to the closing of the RGLD Amendment, RGLD shall execute and deliver
a satisfactory intercreditor agreement (the “Intercreditor Agreement”) with
Terrane and The Bank of Nova Scotia, substantially in the form and on the terms
of the intercreditor agreement dated as of November 29, 2012 entered into among
JPMorgan Chase Bank, N.A., RGLD and Terrane (the “Existing Intercreditor
Agreement”) reflecting the amendment contemplated by the RGLD Amendment and the
$325m financing contemplated between The Bank of Nova Scotia and AcquireCo. As a
statement of principle, RGLD hereby confirms its satisfaction with the substance
of the Existing Intercreditor Agreement provisions pertaining to lien priority
and subordination, enforcement, standstill and waivers, disposition and
application of proceeds of senior collateral and asset dispositions in an
insolvency proceeding and that such provisions shall in substance be
incorporated into the Intercreditor Agreement (except that RGLD shall obtain a
first priority security interest in its copper interest as described in the Term
Sheet).

 

Prior to the consummation of the RGLD Amendment, Centerra shall, upon becoming
aware of any one of the following, promptly notify RG (it being understood that
Centerra shall satisfy its notice obligations in this paragraph in respect of a
particular matter if it publicly discloses such matter): (i) the occurrence, or
failure to occur, of any event that the occurrence or failure of which has
caused or could reasonably be expected to result in Centerra’s failure to
satisfy any condition specified herein (including the Term Sheet); (ii) any
failure of Centerra to comply with or satisfy in any material respect any
covenant, condition or agreement set out in the Term Sheet to be complied with
or satisfied prior to the consummation of the RGLD Amendment; (iii) any written
notice or other communication from any governmental authority in connection with
the RGLD Amendment; and (iv) any material litigation, legal action, arbitration,
proceeding, mediation, demand, claim or investigation (collectively, “Legal
Proceedings”) commenced or, to the knowledge of Centerra, threatened against,
relating to or involving or otherwise affecting Centerra that relate to the
consummation of the Acquisition or the RGLD Amendment.

 

Prior to the consummation of the RGLD Amendment, RG shall promptly disclose its
knowledge of the following to Centerra: (i) the occurrence, or failure to occur,
of any event that the occurrence or failure of which has caused or could
reasonably be expected to result in RG’s failure to satisfy any condition
specified herein (including the Term Sheet); (ii) any failure of RG to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied prior to consummation of the RGLD Amendment;
(iii) any written notice or other communication from any governmental authority
in connection with the RGLD Amendment; and (iv) any Legal Proceedings commenced
or, to the knowledge of RG, threatened against, relating to or involving or
otherwise affecting RG that relate to the consummation of the RGLD Amendment.

 

The obligations of the parties under this Commitment Letter shall terminate upon
the earlier of (i) the closing of the RGLD Amendment, (ii) November 30, 2016 (or
such later date as Centerra and RG may agree), (iii) the date of the termination
of the Arrangement Agreement or abandonment of the Acquisition, and (iv) the
date, if any, on which the shareholders of TCM decline to approve the
Acquisition.

 

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The existence and terms and conditions of this Commitment Letter will be
publicly disclosed as part of the public announcement of the Acquisition.

 

This Commitment Letter is a binding agreement of the parties. This Commitment
Letter shall be subject to and interpreted in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein. This
Commitment Letter may not be amended or waived except by an instrument signed by
each of the parties. Each party agrees that monetary damages would not be a
sufficient remedy for any breach of this Commitment Letter and that, in addition
to all other remedies available under applicable law, any party will be entitled
to specific performance and to injunctive or other equitable relief as a remedy
for any such breach. This Commitment Letter may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
taken together will be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Commitment Letter by facsimile
(or other electronic) transmission shall be effective as delivery of a manually
executed counterpart hereof, as the case may be. Each party shall bear its own
costs and expenses associated with this Commitment Letter and any negotiation,
preparation and execution of the definitive documentation for the RGLD Amendment
and the Intercreditor Agreement.

 

Subject to and without derogating from the binding nature of this Commitment
Letter, nothing in this Commitment Letter shall: (i) limit RG’s rights and
remedies under the Stream Agreement or its related security in any manner; or
(ii) prevent RG from exercising (including asserting, protecting and enforcing)
their rights and remedies under the Stream Agreement.

 

From the date hereof until the earlier of the termination of this Commitment
Letter and the closing of the RGLD Amendment: (i) neither RG nor any of its
Affiliates shall, directly or indirectly, solicit, initiate, or encourage any
inquiries, proposals or offers from, discuss or negotiate with, provide any
non-public information to, or consider the merits of any inquiries or proposals
from, or enter into any agreement with, any person (other than Centerra)
relating to the obligations of TCM and its Affiliates under the Stream Agreement
(including any amendments to, or the termination of, the Stream Agreement); and
(ii) RG shall promptly notify Centerra in writing if any person makes any
inquiry, proposal or offer relating to the obligations of TCM and its Affiliates
under the Stream Agreement (including any amendments to, or the termination of,
the Stream Agreement).

 

If you are in agreement with the terms and conditions set out herein (including
the Term Sheet), kindly execute and return to Centerra a copy of this Commitment
Letter as evidence of your acceptance of the foregoing not later than 3:00 p.m.,
Toronto time, on July 5, 2016.

 

[Remainder of page intentionally left blank]

 

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Yours very truly,

 

 

 

 

 

CENTERRA GOLD INC.

 

 

 

By:

/s/ Scott Perry

 

 

Name: Scott Perry

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

 

By:

/s/ Frank Herbert

 

 

Name: Frank Herbert

 

 

Title: President

 

 

 

 

 

 

AGREED TO AS OF THE DATE FIRST
WRITTEN ABOVE:

 

 

 

RGLD GOLD AG

 

 

 

 

 

By:

/s/ Jason Hynes

 

 

Name: Jason Hynes

 

 

Title: Vice President

 

 

 

 

 

 

ROYAL GOLD, INC.

 

 

 

By:

/s/ Tony Jensen

 

Name: Tony Jensen

 

Title: President & Chief Executive Officer

 

 

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SCHEDULE “A”

TERM SHEET

 

[g177801ki03i001.jpg]

 

CENTERRA GOLD INC.

 

THOMPSON CREEK METALS COMPANY INC.

 

TERRANE METALS CORP.

 

Amendment No. 3 to Stream Agreement

 

5

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July 2016

 

STRICTLY PRIVATE AND CONFIDENTIAL

 

6

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Amendment to

 

 

Stream Agreement:

 

Amendment to Amended and Restated Purchase and Sale Agreement dated as of
December 14, 2011, by and among Terrane Metals Corp., Thompson Creek Metals
Company Inc., RGLD Gold AG and Royal Gold, Inc., as amended by the First and
Second Amendments thereto.

 

 

 

 

 

Capitalized terms used and not separately defined in this term sheet have the
meanings given in the Stream Agreement.

 

 

 

 

 

Subject to the amendment contemplated by this term sheet the Stream Agreement
shall continue in full force and effect. The terms in the Stream Agreement
relating to Purchaser’s new copper interest will be substantially similar to
Purchaser’s existing gold interest in all respects, except as contemplated by
this term sheet.

 

 

 

Designated Percentage of

 

 

Produced Gold:

 

The Designated Percentage of Produced Gold on all concentrate shipments made
after the closing of the Acquisition will be modified as follows:

 

 

 

 

 

(i)             for Produced Gold in the form of concentrate, 35.00% times
*[Redacted]*,

 

 

 

 

 

(ii)          for Produced Gold in the form of doré, 35.00% times *[Redacted]*,
and

 

 

 

 

 

(iii)       for Produced Gold in any other form, 35.00%.

 

 

 

Designated Percentage

 

 

of Produced Copper:

 

(i) For produced copper in the form of concentrate, 18.75% times *[Redacted]*
and (ii) for produced copper in any other form, 18.75%. For clarity, Deliveries
of produced copper will begin two Business Days following payment from the
Offtaker for concentrate shipments made after the closing of the Acquisition.(1)

 

 

 

 

 

However, if concentrate inventories at the Project (between and including
“In-Process Inventory” and “On Vessel with

 

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(1)  Payments will not be made until final settlement.

 

7

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TCM/MTM Title” as such terms are used in the Monthly Report of Operations
provided to Purchaser)(2) as measured on the last day of the calendar month in
which the closing of the Acquisition takes place exceed 20,000 dry metric
tonnes, the following shipment *[Redacted]* shall be subject to the Stream
Agreement as in force prior to this proposed amendment.

 

 

 

Copper Purchase Price:

 

Prior to the Deposit Reduction Time, the purchase price for each metric tonne of
copper Delivered shall equal the Copper Reference Price and shall be paid or
credited as follows:

 

 

 

 

 

(i)             the portion of the Copper Reference Price that is equal to the
Copper Cash Price shall be paid in cash; and

 

 

 

 

 

(ii)          the portion of the Copper Reference Price that exceeds the Copper
Cash Price shall be credited against the Payment Deposit.

 

 

 

 

 

After the Deposit Reduction Time, the purchase price for each metric tonne of
copper Delivered shall equal the Copper Cash Price. For clarity, Deliveries of
Produced Gold and Produced Copper to the Purchaser shall reduce the outstanding
balance of the Payment Deposit for the purposes of the amended Stream Agreement.

 

 

 

Copper Cash Price:

 

15.00% of the Copper Reference Price (defined below).

 

 

 

Copper Reference Price:

 

The “LME Cash Official Price Copper” determined at the end of the second ring
session and quoted in US dollars per metric tonne (Bloomberg ticker “LOCADY LME
Comdty”).

 

 

 

Copper Delivery:

 

Delivery of copper will be by transfer of “warrants on LME Copper Grade A” (“LME
Warrants”) at an LME-approved warehouse in the United Kingdom *[Redacted]* (the
“Designated LME Warehouse”). Because an LME Warrant represents 25 metric tonnes
(+/-2%), any given delivery will be rounded down to the nearest 25 metric tonne
increment, with any un-delivered amount of copper

 

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(2)  *[Redacted]*.

 

8

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(less than 25 metric tonnes) to be added to the next delivery. Proof of
ownership will be by transfer of the LME Warrants to Purchaser via “LMEsword” or
such other electronic transfer system operated by the LME from time to time.

 

 

 

Sources of Copper:

 

Copper with warrants acquired from any LME approved warehouse. The copper
underlying the LME warrants need not come from the Project so long as the
underlying copper is at the Designated LME Warehouse.

 

 

 

Certain Covenants:

 

The Stream Agreement will include the following amendments:

 

 

 

 

 

(a)         the Cap Expiration Date referred to in Section 8.6 of the Stream
Agreement shall be the Deposit Reduction Time;

 

 

 

 

 

(b)         until (i) Deposit Reduction Time has been reached and (ii) a further
35,000 metric tonnes of copper has been delivered to Purchaser, the Vendor and
its subsidiaries will maintain a leverage ratio of total consolidated
indebtedness (excluding intercompany indebtedness, except for any intercompany
indebtedness which ranks pari passu with the Stream Agreement) to EBITDA of no
greater than 3:1;

 

 

 

 

 

(c)          at all times, intercompany indebtedness between Vendor, on the one
hand, and any Affiliate of Vendor, on the other hand, shall be unsecured;

 

 

 

 

 

(d)         if any Vendor Event of Default has occurred and is continuing, the
Vendor, or the extent any Vendor Affiliate is a counterparty to a Mineral
Offtake Agreement, such Vendor Affiliate, shall not make distributions to any
Affiliate of Vendor;

 

 

 

 

 

(e)          Purchaser shall grant to Vendor a right of first offer with respect
to any sale or assignment to a third party of its interest in the copper stream;
and

 

9

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(f)           Vendor shall grant to Purchaser a right of first offer with
respect to any sale of a Milligan Copper Right(3).

 

 

 

Closing Date:

 

Conditioned upon and effective contemporaneously with the closing of the
Acquisition, subject to satisfaction of conditions precedent and receipt of
closing deliverables set forth in this term sheet.

 

 

 

Acquisition:

 

The acquisition of TCM by a newly formed subsidiary (“AcquireCo”) of Centerra
Gold Inc. (“Centerra”) and the Note Repayment (as defined below), each pursuant
to the Arrangement Agreement (defined below), financed in accordance with the
sources and uses of funds set forth on Annex A hereto.

 

 

 

Commitment Letter:

 

The commitment letter executed by Purchaser, Royal Gold and Centerra, dated as
of July 5, 2016, to which this term sheet is attached.

 

 

 

Arrangement Agreement:

 

The arrangement agreement by and between AcquireCo and TCM, dated as of July 5,
2016, as described in the Commitment Letter, as amended from time to time.

 

 

 

New Security Interest in

 

 

Designated Percentage of

 

 

Produced Copper:

 

In addition to the existing liens of Purchaser evidenced by the Security
Agreements, Purchaser shall receive a new first priority security lien in the
Designated Percentage of Produced Copper *[Redacted]*.

 

 

 

New Intercreditor Agreement:

 

Purchaser and the New Lenders will enter into the Intercreditor Agreement (as
defined in the Commitment Letter).

 

 

 

New Lenders:

 

The Lenders set forth in the New Credit Facilities.

 

 

 

New Credit Facilities:

 

US$325 million secured facility arranged by The Bank of Nova Scotia, comprised
of (i) US$75 million revolver and (ii) US$250 million term facility (the “Term
Facility”), secured by all of the assets of Acquisition Co and its subsidiaries
(including Thompson Creek and Vendor).

 

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(3)  “Milligan Copper Right” means (i) a copper royalty on production from the
Milligan Property; (ii) an amount of copper based on production from any portion
of the Milligan Property; or (iii) any participating interest in copper based on
production from the Milligan Property.

 

10

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Proceeds of the Term Facility will be used to partially finance (a) the
Acquisition and (b) repayment in full of TCM’s senior secured and unsecured
notes in accordance with their terms, and in accordance with the sources and
uses of funds set forth on Annex A hereto (the “Note Repayment”).

 

 

 

Representations and

 

 

Warranties:

 

Representations and warranties of Vendor and Thompson Creek in the Stream
Agreement with respect to incorporation and existence; corporate capacity and
authority to enter into amended Stream Agreement and new security agreement
relating to Designated Percentage of Produced Copper (collectively, “New
Agreements”); New Agreements do not breach constating documents or applicable
laws; no approvals are required to be obtained to enter into New Agreements
(except those obtained); and the New Agreements are enforceable; in each case,
as such matters relate to the Vendor and Thompson Creek (as applicable) will be
brought down as of the Closing Date but shall be qualified by the knowledge of
Centerra.

 

 

 

 

 

Representations and warranties in the Stream Agreement of Purchaser and Royal
Gold will be brought down as of the Closing Date.

 

 

 

Conditions Precedent to

 

 

the Closing:

 

To include:

 

 

 

 

 

(a)         Consummation of the transactions contemplated by this term sheet;

 

 

 

 

 

(b)         Consummation of the Acquisition in accordance with the Arrangement
Agreement;

 

 

 

 

 

(c)          Absence of any injunction or order prohibiting the consummation of
the transactions described in this term sheet;

 

 

 

 

 

(d)         All governmental approvals, if any, necessary for the consummation
of the transactions described in this term sheet shall have been obtained;

 

11

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(e)          Delivery of a legal opinion from Vendor’s external counsel and a
legal opinion from Purchaser’s and Royal Gold’s counsel in substantially the
form delivered in connection with the execution of the Stream Agreement;

 

 

 

 

 

(f)           Execution of the New Intercreditor Agreement by Purchaser and the
Bank of Nova Scotia.

 

 

 

Costs and Expenses:

 

Each party shall bear its own costs associated with the due diligence,
technical, legal, tax and accounting aspects of the transaction.

 

12

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ANNEX A

 

SOURCES AND USES OF FUNDS FOR THE ACQUISITION AND NOTE REPAYMENT

 

Set forth below is an illustrative description of the proposed sources and uses
of funds relating to the Acquisition, transaction costs and the Note Repayment.
Certain of the amounts below are estimated and necessarily will be subject to
change prior to the Acquisition closing.

 

Sources (millions of U.S. dollars)

 

 

 

Centerra cash available for Arrangement

 

$

384

 

Thompson Creek cash available post-closing of Arrangement(5)

 

$

100

 

New Credit Facilities

 

$

300

 

Proceeds from the Offering(8)

 

$

125

 

Common Shares issued to TCM Shareholders under Arrangement(10)

 

$

133

 

Stock options issued to TCM Shareholders under Arrangement

 

$

1

 

 

 

 

 

Total Sources:

 

$

1,043

 

 

Uses (millions of U.S. dollars)

 

 

 

Redemption of the TCM 2017 Notes(4)

 

$

336

 

Redemption of the TCM 2018 Notes(6)

 

$

348

 

Redemption of the TCM 2019 Notes(7)

 

$

205

 

Estimated transaction expenses(9)

 

$

20

 

Common Shares received by TCM Shareholders under Arrangement (7)

 

$

133

 

Stock options issued to TCM Shareholders under Arrangement

 

$

1

 

 

 

 

 

Total Uses:

 

$

1,043

 

 

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(4)  Represents the aggregate of (i) a redemption call price of US$331 million,
and (ii) accrued and unpaid interest of US$5 million, all pursuant to the 2017
Note Indenture.

 

(5)  Centerra internal estimate.

 

(6)  Represents the aggregate of (i) a redemption call price of US$340 million,
and (ii) accrued and unpaid interest of US$8 million, all pursuant to the 2018
Note Indenture.

 

(7)  Represents the aggregate of (i) a redemption call price of US$195 million,
and (ii) accrued and unpaid interest of US$10 million, all pursuant to the 2019
Note Indenture.

 

(8)  This amount does not assume the exercise (in whole or in part) of the
Over-Allotment Option.

 

(9)  Includes Underwriters’ Fee, advisory fees and financing expenses.

 

(10)  The value of the Common Shares to be issued to TCM Shareholders is
calculated on the basis of $7.30 per Common Share, being the 5-day volume
weighted average price of Centerra’s shares on the TSX as of July 4, 2016.

 

Stream Agreement Amendment – Commitment Letter

 

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ANNEX 1

 

RGLD Representations and Warranties

 

RGLD hereby represents and warrants to Centerra as follows:

 

(a)                                 it is a company validly existing and in good
standing under the laws of Switzerland;

 

(b)                                 all requisite corporate acts and proceedings
have been done and taken by it, including obtaining all requisite board of
directors’ approvals, with respect to entering into this Commitment Letter and
performing its obligations hereunder;

 

(c)                                  it has the requisite corporate power,
capacity and authority to enter into this Commitment Letter and to perform its
obligations hereunder;

 

(d)                                 this Commitment Letter and the exercise of
its rights and performance of its obligations hereunder do not and will not
(i) conflict with or result in a default under any agreement, mortgage, bond or
other instrument to which it is a party or which is binding on its assets,
(ii) conflict with its charter or bylaws, or (iii) conflict with or violate any
laws applicable to it, in each case except as would not reasonably be expected
to have, individually or in the aggregate, a material adverse effect on RGLD or
the performance of its obligations under this Commitment Letter;

 

(e)                                  it is not currently in breach or default
under any material agreement, mortgage, bond or other instrument to which it is
a party or which is binding on its assets, and no event has occurred that with
the passage of time would constitute such a breach or default, and it has no
knowledge of a material breach or default by any counterparty thereto or the
inability of any counterparty to perform its obligations thereunder, in each
case except as would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on RGLD or the performance of its
obligations under this Commitment Letter;

 

(f)                                   there is no pending, nor to the knowledge
of RGLD, threatened, Legal Proceeding against RGLD that could have the effect of
preventing, delaying, making illegal or otherwise interfering with the RGLD
Amendment;

 

(g)                                  the amended and restated purchase and sale
agreement dated as of December 14, 2011 between Terrane, RGLD, and, solely in
respect of certain provisions of the agreement as set forth therein, Royal Gold
and TCM, as amended by the first amendment to amended and restated purchase and
sale agreement dated as of August 8, 2012 and the second amendment to amended
and restated purchase and sale agreement (the “Existing Stream Agreement’) is in
full force and effect, unamended as of the date hereof and no breach or default
by Royal Gold or RGLD, or to the knowledge of RGLD, by Vendor of any term,
condition, covenant or obligation thereunder has occurred and is continuing as
of the date hereof;

 

(h)                                 the Gold Recovery Condition and the
Throughput Condition have been satisfied in accordance with the terms of the
Existing Stream Agreement and the Determination Date has occurred prior to the
date hereof (capitalized terms used in this paragraph and not otherwise defined
herein have the same meaning as in the Existing Steam Agreement);

 

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(i)                                     the outstanding balance of the Payment
Deposit (as defined in the Existing Stream Agreement) provided under separate
cover of letter dated on or about the date hereof is true and correct as of the
date set forth in such letter;

 

(j)                                    no approvals are required to be obtained
by it in connection with the execution and delivery or the performance by it of
this Commitment Letter or the transactions contemplated hereby;

 

(k)                                 this Commitment Letter has been duly and
validly executed and delivered by it and constitutes a legal, valid and binding
obligation of it, enforceable against it in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium or
similar laws affecting creditors’ rights generally and by general equity
principles;

 

(l)                                     it has not suffered an Insolvency Event
and it is not now aware of any circumstance which, with notice or the passage of
time, or both, would give rise to an Insolvency Event with respect to it. For
purposes of this Commitment Letter, and “Insolvency Event” shall mean, for any
entity or person, (a) the winding up, dissolution, administration or
reorganisation (by way of voluntary arrangement, scheme of arrangement or
otherwise) of that entity or person, a composition, compromise, assignment or
arrangement with creditors generally of that entity or person, (b) the making of
any proposal in relation to such entity or person under any applicable
bankruptcy, insolvency or similar Law, save for any proposal which is determined
by such entity or person, acting in good faith, to be vexatious and/or frivolous
and is dismissed within sixty (60) days, (c) the making of an assignment in
bankruptcy or any other assignment by such entity or person for the benefit of
creditors under applicable bankruptcy, insolvency or similar law, (d) such
entity or person becoming an insolvent person within the meaning of Bankruptcy
and Insolvency Act (Canada) or other applicable bankruptcy, insolvency,
reorganization, relief of debtors or similar laws affecting the enforcement of
creditors’ rights generally, (e) such entity or person becoming the voluntary or
involuntary subject of any proceedings under any applicable
bankruptcy, insolvency or similar Law, including the Companies’ Creditors
Arrangement Act (Canada), which proceedings remain un-discharged for a period of
ninety (90) days, (f) a receiver or receiver/manager, trustee, custodian,
sequestrator, liquidator, administrator, administrative receiver, compulsory
manager or other entity or person with similar powers is appointed for all or
any substantial part of the revenue, assets, property or business of such entity
or person and such receiver, receiver/manager, trustee, custodian, sequestrator,
liquidator, administrator, administrative receiver, compulsory manager or other
entity or person remains un-discharged for a period of ninety (90) days, or
(g) if the corporate existence of such entity or person is terminated by
voluntary or involuntary dissolution or winding-up (other than by way of a
solvent amalgamation, plan of arrangement or reorganization), or any analogous
proceedings or steps in any jurisdiction; and

 

(m)                             it enters into and performs this Commitment
Letter on its own account and not as trustee or a nominee of any other person.

 

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ANNEX 2

 

Royal Gold Representations and Warranties

 

Royal Gold hereby represents and warrants to Centerra as follows:

 

(a)                                 it is a company validly existing and in good
standing under the laws of State of Delaware;

 

(b)                                 all requisite corporate acts and proceedings
have been done and taken by it, including obtaining all requisite board of
directors’ approvals, with respect to entering into this Commitment Letter and
performing its obligations hereunder;

 

(c)                                  it has the requisite corporate power,
capacity and authority to enter into this Commitment Letter and to perform its
obligations hereunder;

 

(d)                                 this Commitment Letter and the exercise of
its rights and performance of its obligations hereunder do not and will not
(i) conflict with or result in a default under any agreement, mortgage, bond or
other instrument to which it is a party or which is binding on its assets,
(ii) conflict with its charter or bylaws, or (iii) conflict with or violate any
laws applicable to it, in each case except as would not reasonably be expected
to have, individually or in the aggregate, a material adverse effect on Royal
Gold or the performance of its obligations under this Commitment Letter;

 

(e)                                  it is not currently in breach or default
under any material agreement, mortgage, bond or other instrument to which it is
a party or which is binding on its assets, and no event has occurred that with
the passage of time would constitute such a breach or default, and it has no
knowledge of a material breach or default by any counterparty thereto or the
inability of any counterparty to perform its obligations thereunder, in each
case except as would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on Royal Gold or the performance of its
obligations under this Commitment Letter;

 

(f)                                   there is no pending, nor to the knowledge
of Royal Gold, threatened, Legal Proceeding against Royal Gold that could have
the effect of preventing, delaying, making illegal or otherwise interfering with
the RGLD Amendment;

 

(g)                                  the amended and restated purchase and sale
agreement dated as of December 14, 2011 between Terrane, RGLD, and, solely in
respect of certain provisions of the agreement as set forth therein, Royal Gold
and TCM, as amended by the first amendment to amended and restated purchase and
sale agreement dated as of August 8, 2012 and the second amendment to amended
and restated purchase and sale agreement (the “Existing Stream Agreement’) is in
full force and effect, unamended as of the date hereof and no breach or default
by Royal Gold or RGLD or, to the knowledge of Royal Gold, by Vendor of any term,
condition, covenant or obligation thereunder has occurred and is continuing as
of the date hereof;

 

(h)                                 no approvals are required to be obtained by
it in connection with the execution and delivery or the performance by it of
this Commitment Letter or the transactions contemplated hereby;

 

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(i)                                     this Commitment Letter has been duly and
validly executed and delivered by it and constitutes a legal, valid and binding
obligation of it, enforceable against it in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium or
similar laws affecting creditors’ rights generally and by general equity
principles;

 

(j)                                    it has not suffered an Insolvency Event
and it is not now aware of any circumstance which, with notice or the passage of
time, or both, would give rise to an Insolvency Event with respect to it; and

 

(k)                                 it enters into and performs this Commitment
Letter on its own account and not as trustee or a nominee of any other person or
entity.

 

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ANNEX 3

 

Centerra Representations and Warranties

 

Centerra hereby represents and warrants to the RG as follows:

 

(a)                                 it is a company validly existing and in good
standing under the laws of Canada;

 

(b)                                 all requisite corporate acts and proceedings
have been done and taken by it, including obtaining all requisite board of
directors’ approvals, with respect to entering into this Commitment Letter and
performing its obligations hereunder;

 

(c)                                  it has the requisite corporate power,
capacity and authority to enter into this Commitment Letter and to perform its
obligations hereunder;

 

(d)                                 this Commitment Letter and the exercise of
its rights and performance of its obligations hereunder do not and will not
(i) conflict with or result in a default under any agreement, mortgage, bond or
other instrument to which it is a party or which is binding on its assets,
(ii) conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case except as would not reasonably
be expected to have, individually or in the aggregate, a material adverse effect
on the performance of its obligations under this Commitment Letter;

 

(e)                                  it is not currently in breach or default
under any material agreement, mortgage, bond or other instrument to which it is
a party or which is binding on its assets, and no event has occurred that with
the passage of time would constitute such a breach or default, and it has no
knowledge of a material breach or default by any counterparty thereto or the
inability of any counterparty to perform its obligations thereunder, in each
case except as would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the performance of its obligations under
this Commitment Letter;

 

(f)                                   there is no pending, nor to the knowledge
of Centerra, threatened, Legal Proceeding against Centerra that would have the
effect of prohibiting, materially delaying or making illegal the RGLD Amendment;

 

(g)                                  no approvals are required to be obtained by
it in connection with the execution and delivery or the performance by it of
this Commitment Letter or the transactions contemplated hereby;

 

(h)                                 this Commitment Letter has been duly and
validly executed and delivered by it and constitutes a legal, valid and binding
obligation of it, enforceable against it in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, moratorium or
similar laws affecting creditors’ rights generally and by general equity
principles;

 

(i)                                     it has not suffered an Insolvency Event
and it is not now aware of any circumstance which, with notice or the passage of
time, or both, would give rise to an Insolvency Event with respect to it; and

 

(j)                                    it enters into and performs this
Commitment Letter on its own account and not as trustee or a nominee of any
other person or entity.

 

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