EXHIBIT 10.3

 

PLEDGE AGREEMENT

 

THIS AGREEMENT is made as of June 2, 2017

 

BETWEEN:

 

ROYAL GOLD, INC., a corporation incorporated under the laws of the State of
Delaware (the "Pledgor")

 

- and -

 

THE BANK OF NOVA SCOTIA, a Canadian chartered bank, in its capacity as
administrative agent for and on behalf of the Beneficiaries (the "Secured
Party")

 

RECITALS:

 

WHEREAS the Pledgor has agreed to grant a security interest in and pledge the
Collateral in order to secure the performance of its Obligations to the
Beneficiaries.

 

AND WHEREAS the Beneficiaries have appointed and authorized the Secured Party to
act as their agent and attorney for the purpose of holding security granted by
the Pledgor.

 

NOW THEREFORE, in consideration of the premises and the covenants and agreements
herein contained and for other good and valuable consideration (the receipt and
sufficiency of which are hereby conclusively acknowledged), the parties hereto
agree as follows:

 

Article 1 - INTERPRETATION

 

1.01Definitions

 

In this Agreement, unless something in the subject matter or context is
inconsistent therewith:

 

"Account Control Agreement" means, with respect to a Securities Account, a
securities account control agreement between the Pledgor, the Secured Party and
the Securities Intermediary which maintains such Securities Account on behalf of
the Pledgor, as the same may be amended from time to time.

 

"Agreement" means this agreement, including its recitals and schedules, as
amended, modified, supplemented or restated from time to time.

 

"Beneficiaries" means, collectively, the Secured Party, the Lenders and
Affiliates of the Lenders to whom any Obligation is owed pursuant to the terms
of the Credit Documents, Hedging Agreements with such Affiliates or any account
(including cash management accounts) with such Affiliates or any documents
governing or relating to cash management services provided by such Affiliates,
and "Beneficiary" means any of them.

 

"Collateral" has the meaning set out in Section 2.01.

 

 

 

 

"Credit Agreement" means the credit agreement dated on or about the date hereof
among, inter alios, the Pledgor, as borrower, the Secured Party, as
administrative agent and the Lenders relating to the establishment of certain
credit facilities in favour of the Pledgor, as the same may be amended,
modified, supplemented or restated from time to time in accordance with the
provisions thereof.

 

"Delivery" and the corresponding term "Delivered" when used with respect to
Collateral means:

 

(a)in the case of Collateral constituting Certificated Securities, transfer
thereof to the Secured Party or its nominee by physical delivery of the Security
Certificates to the Secured Party or its nominee, such Collateral to be endorsed
for transfer or accompanied by stock powers of attorney duly executed in blank,
all in form and content satisfactory to the Secured Party;

 

(b)in the case of Collateral constituting Uncertificated Securities,
(A) registration thereof on the books and records of the issuer thereof in the
name of the Secured Party or its nominee or (B) the execution and delivery by
the issuer thereof of an effective agreement (each, an "Issuer Control
Agreement"), pursuant to which such issuer agrees that it will comply with
instructions originated by the Secured Party or its nominee without further
consent of the Pledgor or any other person;

 

(c)in the case of Collateral constituting Security Entitlements in respect of
Financial Assets deposited in or credited to a Securities Account,
(A) completion of all actions necessary to constitute the Secured Party or its
nominee the entitlement holder with respect to each such Security Entitlement or
(B) the execution and delivery by the relevant Securities Intermediary of an
effective Account Control Agreement pursuant to which such Securities
Intermediary agrees to comply with entitlement orders originated by the Secured
Party or its nominee without further consent of the Pledgor or any other person;
and

 

(d)in each case such additional or alternative procedures as may hereafter
become reasonably appropriate to grant control of, or otherwise perfect a
security interest in, any Collateral in favour of the Secured Party or its
nominee.

 

"Excluded Securities" means those Voting Securities representing in excess of
65% of the total combined voting power of each class of Voting Securities at
such time.

 

"Issuer Control Agreement" has the meaning set out in clause (b) of the
definition of "Delivery".

 

"Pledged Shares" has the meaning set out in clause (a) of the definition of
"Stock".

 

"Pledged ULC Securities" means the Pledged Shares which are shares in the
capital of a ULC.

 

"PPSA" means the Personal Property Security Act (Alberta), including the
regulations thereunder, as now enacted or as the same may from time to time be
amended, re-enacted or replaced.

 

"Stock" means

 

(e)all Securities of RGLD Gold (Canada) ULC described in Schedule A other than
any Excluded Securities, as such Schedule may be amended, supplemented or
modified from time to time (collectively, the "Pledged Shares") owned by the
Pledgor, all Security Certificates, if any, and other instruments evidencing or
representing such Pledged Shares, and all dividends, interest, distributions,
cash, instruments and other property, income, profits and proceeds from time to
time received or receivable upon or otherwise distributed or distributable in
respect of or in exchange for any and all of the Pledged Shares;

 

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(f)all additional or substitute shares of capital stock or other equity
interests of any class of RGLD Gold (Canada) ULC from time to time issued to or
otherwise acquired by the Pledgor in any manner in respect of Pledged Shares,
the Security Certificates, if any, and other instruments representing such
additional or substitute shares, and all dividends, interests, distributions,
cash, instruments and other property, income, profits and proceeds from time to
time received or receivable upon or otherwise distributed or distributable in
respect of or in exchange for any or all of such additional or substitute
shares; and

 

(g)to the extent not otherwise included in the foregoing, all Proceeds thereof.

 

"ULC" means any unlimited company, unlimited liability company or unlimited
liability corporation or any similar entity existing under the laws of any
province or territory of Canada (including, without limitation, the Companies
Act (Nova Scotia), the Business Corporations Act (Alberta) and the Business
Corporations Act (British Columbia)) and any successor to any such entity.

 

"Voting Securities" means, at any time, Securities or Securities Entitlements of
RGLD Gold (Canada) ULC entitled, at such time, to vote for the election of
directors of RGLD Gold (Canada) ULC.

 

The terms "Certificated Security", "Financial Asset", "Proceeds", "Securities
Account", "Securities Intermediary", "Security", "Security Certificate",
"Security Entitlement", and "Uncertificated Security" and whenever used herein
have the meanings given to those terms in the PPSA.

 

1.02Definitions used in the Credit Agreement

 

Capitalized terms used herein without express definition shall, unless something
in the subject matter or context is inconsistent therewith, have the same
meanings as are ascribed to such terms in the Credit Agreement.

 

1.03Headings

 

The division of this Agreement into Articles and Sections and the insertion of
headings are for convenience of reference only and do not affect the
construction or interpretation of this Agreement. The terms "hereof",
"hereunder" and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof. Unless something in the
subject matter or context is inconsistent therewith, references herein to
Articles, Sections and Schedules are to Articles and Sections of and Schedules
to this Agreement.

 

1.04Extended Meanings

 

In this Agreement words importing the singular number only include the plural
and vice versa, words importing any gender include all genders and words
importing persons include individuals, corporations, limited and unlimited
liability companies, general and limited partnerships, associations, trusts,
unincorporated organizations, joint ventures and governmental authorities. The
term "including" means "including without limiting the generality of the
foregoing".

 

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1.05Statutory References

 

In this Agreement, unless something in the subject matter or context is
inconsistent therewith or unless otherwise herein provided, a reference to any
statute is to that statute as now enacted or as the same may from time to time
be amended, re-enacted or replaced and includes any regulation made thereunder.

 

1.06Schedules

 

The following are the Schedules to this Agreement:

 

Schedule A – List of Stock

 

Article 2 - GRANT OF SECURITY INTEREST AND PLEDGE

 

2.01Grant and Pledge of Collateral

 

As general and continuing collateral security for the payment and performance of
the Obligations, the Pledgor hereby grants to the Secured Party for the benefit
of the Beneficiaries a security interest in, and pledges to the Secured Party
for the benefit of the Beneficiaries the right, title and interest of the
Pledgor in and to, the following, whether now owned or existing or hereafter
from time to time acquired, by way of amalgamation or otherwise, in each case
relating solely to the Pledged Shares (collectively, the "Collateral"):

 

(a)all Securities Accounts in the name of the Pledgor to the extent holding any
Pledged Shares, including any Pledged Shares deposited in or credited to such
Securities Accounts, including all Financial Assets, all Security Entitlements
related to such Financial Assets, and all certificates and other instruments
from time to time representing or evidencing the same, and all dividends,
interest, distributions, cash and other property from time to time received or
receivable upon or otherwise distributed or distributable in respect of or in
exchange for any or all of the foregoing, in each case relating solely to the
Pledged Shares;

 

(b)all Stock relating solely to the Pledged Shares;

 

(c)all Financial Assets relating solely to the Pledged Shares;

 

(d)all Security Entitlements relating solely to the Pledged Shares;

 

(e)all other property that may at any time be received or receivable or
otherwise distributed or distributable to or for the account of the Pledgor in
respect of, in substitution for, in addition to or in exchange for, any of the
foregoing; and

 

(f)all Proceeds in respect of the foregoing and all rights and interest of the
Pledgor in respect thereof or evidenced thereby, including all money received or
receivable from time to time by the Pledgor in connection with the sale of any
of the foregoing.

 

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2.02Security Interest Absolute

 

The Lien granted hereby and all rights of the Secured Party hereunder and all
obligations of the Pledgor hereunder are unconditional and absolute and
independent and separate from any other security for the Obligations, whether
executed by the Pledgor or any other person.

 

2.03Continuing Liability of the Pledgor

 

This Agreement and the Lien granted hereby is granted as collateral security
only and will not subject the Secured Party to, or transfer or in any way affect
or modify, any obligation or liability of the Pledgor with respect to any of the
Collateral or any transaction in connection therewith.

 

2.04Delivery of Collateral

 

Subject to section 2.05, all Collateral must be Delivered immediately to the
Secured Party or its nominee, including all security certificates, instruments
or other documents representing or evidencing the Collateral, which shall be
endorsed for transfer in blank by the Pledgor and accompanied by stock powers of
attorney duly executed in blank or other transfer documents, all as satisfactory
to the Secured Party, acting reasonably. The Secured Party may, at its option,
cause all or any of the Collateral to be registered in the name of the Secured
Party or its nominee.

 

2.05Subsequently Acquired Collateral

 

To the extent the Pledgor acquires, by way of amalgamation or otherwise, any
additional Collateral at any time or from time to time after the date hereof,
such Collateral will automatically (and without any further action being
required to be taken by the Secured Party) be subject to the Lien and pledge
created hereby. The Pledgor will take, or cause to be taken, as promptly as
practicable and, in any event within 10 days after it obtains such additional
Collateral, all steps and actions as the Secured Party, acting reasonably, deems
necessary to ensure that the additional Collateral is Delivered to the Secured
Party.

 

2.06Attachment

 

The Pledgor acknowledges that the Lien hereby created attaches upon the
execution of this Agreement (or in the case of any after-acquired property, upon
the date of acquisition by the Pledgor of any rights therein), that value has
been given by the Beneficiaries and that the Pledgor has, or in the case of
after-acquired property will have, rights in the Collateral or the power to
transfer rights in the Collateral to the Secured Party.

 

Article 3 - REPRESENTATIONS,
WARRANTIES AND COVENANTS

 

3.01Representations and Warranties of the Pledgor

 

The Pledgor represents and warrants to the Secured Party that:

 

(a)no Collateral is in the possession or control of any person asserting a claim
thereto or Lien therein, except that the Secured Party or its nominee or a
Securities Intermediary acting on its behalf may have possession or control of
the Collateral;

 

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(b)no effective financing statement or other instrument similar in effect
covering all or any part of the Collateral and made, consented to or known by
the Pledgor is on file in any recording office, except such as may have been
filed in favour of the Secured Party relating to this Agreement or except such
as has been agreed to in writing by the Secured Party or as has been released
and is being discharged pursuant to agreements executed and delivered as of even
date herewith;

 

(c)all Collateral consisting of Pledged Shares has been duly authorized and
validly issued, is outstanding as fully paid and non-assessable and, except for
the Excluded Securities or as set forth on Schedule A, constitutes all of the
issued and outstanding shares of capital stock or other equity interests of the
Pledgor in RGLD Gold (Canada) ULC;

 

(d)except to the extent previously disclosed to the Secured Party in writing,
there is no existing agreement, option, right or privilege capable of becoming
an agreement or option pursuant to which the Pledgor could be required to sell
or otherwise dispose of any of the Collateral;

 

(e)this Agreement creates a valid security interest in all of the Collateral
securing the payment of all the Obligations; the security certificates pledged
by the Pledgor hereunder are, and any securities pledged in substitution
therefor or in addition thereto will be, duly and validly pledged hereunder in
accordance with applicable Requirements of Law; and

 

(f)the Pledgor has the right to pledge the Collateral as herein provided.

 

The representations and warranties set out in this Agreement shall survive the
execution and delivery of this Agreement notwithstanding any investigations or
examinations which may be made by any of the Beneficiaries or their legal
counsel. Such representations and warranties shall survive until this Agreement
has been terminated and discharged in accordance with the Credit Agreement.

 

3.02Covenants of the Pledgor

 

The Pledgor covenants with the Secured Party that the Pledgor will:

 

(a)ensure that the representations and warranties set forth in section 3.01 will
be true and correct at all times; and

 

(b)provide to the Secured Party, promptly upon request, all information and
evidence the Secured Party may reasonably request concerning the Collateral to
enable the Secured Party to enforce the provisions hereof.

 

Article 4 - DEALING WITH COLLATERAL

 

4.01Rights and Duties of the Secured Party

 

(1)          The Secured Party may perform any of its rights and duties
hereunder by or through agents and is entitled to retain counsel and to act in
reliance upon the advice of such counsel concerning all matters pertaining to
its rights and duties hereunder.

 

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(2)          In the holding of the Collateral, the Secured Party and any nominee
on its behalf is only bound to exercise the same degree of care as it would
exercise with respect to similar property of its own of similar value held in
the same place. The Secured Party and any nominee on its behalf will be deemed
to have exercised reasonable care with respect to the custody and preservation
of the Collateral if it takes such action for that purpose as the Pledgor
reasonably requests in writing, but failure of the Secured Party or its nominee
to comply with any such request will not of itself be deemed a failure to
exercise reasonable care.

 

(3)          The powers conferred on the Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the safe custody of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Secured Party shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral and no such duties shall be implied as arising
hereunder.

 

4.02Voting Rights

 

(1)          Subject to the provisions of Section 4.02(2), the Pledgor is
entitled to exercise, either directly or, if the Collateral is registered in the
name of the Secured Party or its nominee, by power of attorney or proxy, all the
rights and powers of a holder of such Collateral, including the right to vote
from time to time exercisable in respect of the Collateral and to give proxies,
consents, ratifications and waivers in respect thereof. If the Collateral has
been registered in the name of the Secured Party or its nominee, the Secured
Party will execute and deliver (or cause to be executed and delivered) to the
Pledgor such proxies, directions and other instruments as the Pledgor may
request for the purpose of giving effect to the foregoing. No such action may be
taken if it would (i) violate or be inconsistent with the Credit Agreement or
this Agreement or any other Credit Document, (ii) have the effect of materially
reducing the value of the Collateral as security for the Obligations in a manner
prohibited by the Credit Documents, or (iii) impose any restriction on the
transferability of any of the Collateral.

 

(2)          Upon the occurrence and during the continuance of an Event of
Default, the Secured Party may give the Pledgor a notice prohibiting the Pledgor
from exercising the rights and powers of a holder of the Collateral, including
the right to vote the Collateral, at which time all such rights of the Pledgor
will cease immediately and the Secured Party will have the right to exercise the
rights and powers related to such Collateral, including the right to vote.

 

4.03Dividends and Interest Payments

 

(1)          Subject to the provisions of Section 4.03(2), the Pledgor is
entitled to receive all dividend payments or other distributions or interest
payments in respect of the Collateral. If the Collateral has been registered in
the name of the Secured Party or its nominee, the Secured Party will execute and
deliver (or cause to be executed and delivered) to the Pledgor all directions
and other instruments as the Pledgor may request for the purpose of enabling the
Pledgor to receive the dividends payments or other distributions or interest
payments that the Pledgor is authorized to receive pursuant to this Section
4.03(1).

 

(2)          Upon the occurrence and during the continuance of an Event of
Default, all rights of the Pledgor pursuant to Section 4.03(1) will cease, and
all such rights will thereupon become vested in the Secured Party, and the
Secured Party will have the sole and exclusive right and authority to receive
and retain all payments that the Pledgor would otherwise be authorized to retain
pursuant to Section 4.03(1). All money and other property received by the
Secured Party pursuant to the provisions of this Section 4.03(2) may be applied
on account of the Obligations or may be retained by the Secured Party as
additional Collateral hereunder and be applied in accordance with the provisions
of this Agreement. All payments which are received by the Pledgor contrary to
the provisions of this Section 4.03(2) will be held by the Pledgor in trust for
the benefit of the Secured Party and the other Beneficiaries, will be segregated
from other property or funds of the Pledgor and will be forthwith Delivered to
the Secured Party or its nominee to be applied on account of the Obligations or
to hold as Collateral, as the Secured Party may see fit.

 

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Article 5 - REMEDIES

 

5.01Remedies

 

(1)          Upon and after the occurrence and during the continuance of an
Event of Default that has not been either cured or waived in accordance with the
provisions of the Credit Agreement, any or all security granted hereby will, at
the option of the Secured Party, become immediately enforceable; and in addition
to any right or remedy provided by applicable Requirements of Law or any other
agreement (including the right to give entitlement orders, instructions or a
notice of exclusive control to a Securities Intermediary subject to an Account
Control Agreement or an issuer subject to an Issuer Control Agreement), the
Secured Party will have the rights and remedies set out below, all of which
rights and remedies will be enforceable successively, concurrently or both:

 

(a)transfer any part of the Collateral into the name of the Secured Party or its
nominee if it has not already done so in accordance with Section 2.04;

 

(b)take such steps as it considers desirable to maintain, preserve or protect
the Collateral;

 

(c)exercise any and all rights and remedies of the Pledgor under or in
connection with the Collateral, including voting any of the Collateral (whether
or not registered in the name of the Secured Party or its nominee) and give or
withhold all consents, waivers and ratifications in respect thereof;

 

(d)exercise all rights of conversion, exchange or subscription, or any other
rights, privileges or options pertaining to any of the Collateral, including the
right to exchange at its discretion any of the Collateral upon the amalgamation,
arrangement, merger, consolidation or other reorganization of the issuer of the
Collateral, all without liability except to account for property actually
received by the Secured Party;

 

(e)from time to time realize upon, collect, sell, transfer, assign, give options
to purchase or otherwise dispose of and deliver any Collateral in such manner as
may seem advisable to the Secured Party. For such purposes each requirement
relating thereto and prescribed by applicable Requirements of Law or otherwise
is hereby waived by the Pledgor to the extent permitted by applicable
Requirements of Law and in any offer or sale of any of the Collateral the
Secured Party is authorized to comply with any limitation or restriction in
connection with such offer or sale as the Secured Party may be advised by
counsel is necessary in order to avoid any violation of applicable Requirements
of Law, or in order to obtain any required approval of the sale or of the
purchase by any governmental or regulatory authority or other Official Body.
Such compliance will not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner nor will the Secured Party be
liable or accountable to the Pledgor for any discount allowed by reason of the
fact that such Collateral is sold in compliance with any such limitation or
restriction;

 

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(f)purchase any of the Collateral, whether in connection with a sale made under
the power of sale herein contained or pursuant to judicial proceedings or
otherwise;

 

(g)accept the Collateral in satisfaction of the Obligations upon notice to the
Pledgor of its intention to do so in the manner required by Requirements of Law;
and

 

(h)discharge any claim, Lien, encumbrance or any rights of others that may exist
or be threatened against the Collateral, and in every such case the amounts so
paid together with all reasonable costs, charges and expenses incurred in
connection therewith shall be added to the Obligations hereby secured.

 

(2)          The Secured Party may (a) grant extensions of time, (b) take and
perfect or abstain from taking and perfecting security, (c) give up securities,
(d) accept compositions or compromises, (e) grant releases and discharges, and
(f) release any part of the Collateral or otherwise deal with the Pledgor,
debtors of the Pledgor, sureties and others and with the Collateral and other
security as the Secured Party sees fit without prejudice to the liability of the
Pledgor to the Secured Party or the other Beneficiaries or their rights
hereunder.

 

(3)          The Beneficiaries will not be liable or responsible for any failure
to seize, collect, realize, or obtain payment with respect to the Collateral and
are not bound to institute proceedings or to take other steps for the purpose of
seizing, collecting, realizing or obtaining possession or payment with respect
to the Collateral or for the purpose of preserving any rights of the Secured
Party, the Pledgor or any other person, in respect of the Collateral.

 

(4)          The Secured Party may apply any proceeds of realization of the
Collateral to payment of expenses in connection with the preservation and
realization of the Collateral as above described and the Secured Party shall
apply any balance of such proceeds as provided for in the Credit Agreement. If
there is any surplus remaining, the Secured Party may pay it to any person
having a claim thereto in priority to the Pledgor of whom the Secured Party has
knowledge and any balance remaining must be paid to the Pledgor. If the
disposition of the Collateral fails to satisfy the Obligations and the aforesaid
expenses, the Pledgor will be liable to pay any deficiency to the Secured Party
and the other Beneficiaries forthwith on demand.

 

5.02Payment of Expenses

 

The Secured Party may charge on its own behalf and also pay to others all
reasonable out-of-pocket expenses of the Secured Party and others, including the
fees and disbursements of any Securities Intermediary, experts or advisers
(including lawyers on a solicitor and client basis) retained by the Secured
Party, incurred in connection with realizing, collecting, selling, transferring,
delivering or obtaining payment for the Collateral, or in connection with the
administration or any amendment of this Agreement or incidental to the care,
safekeeping or otherwise of any Collateral and in every such case the amounts so
paid together with all costs, charges and expenses incurred in connection
therewith, including interest thereon at a rate per annum equal to the rate of
interest payable on Base Rate Loans outstanding pursuant to the Credit Facility
plus 2.0% per annum, shall be added to and form part of the Obligations not
otherwise taken into account. The Secured Party may deduct the amount of such
expenses from any proceeds of disposition of the Collateral.

 

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Article 6 - GENERAL

 

6.01Benefit of the Agreement

 

This Agreement will enure to the benefit of and be binding upon the respective
successors and permitted assigns of the parties.

 

6.02Conflict of Terms; Entire Agreement

 

This Agreement has been entered into pursuant to the provisions of the Credit
Agreement and is subject to all the terms and conditions thereof and, if there
is any conflict or inconsistency between the provisions of this Agreement and
the provisions of the Credit Agreement, the rights and obligations of the
parties shall be governed by the provisions of the Credit Agreement. This
Agreement together with the Credit Agreement and all other Credit Documents
constitute the entire agreement between the Pledgor and the Secured Party with
respect to the subject matter hereof. There are no representations, warranties,
terms, conditions, undertakings or collateral agreements, express, implied or
statutory, between the Secured Party and the Pledgor except as expressly set
forth therein and herein.

 

6.03Termination of Pledge

 

This Agreement and the Lien created hereunder will terminate when the Collateral
is no longer subject to the Lien in accordance with the Credit Agreement. Upon
such termination, any Collateral then in the custody of the Secured Party or its
nominee must be re-delivered to the Pledgor as soon as practicable.

 

6.04Amendments and Waivers

 

No amendment to this Agreement will be valid or binding unless set forth in
writing and duly executed by all of the parties. No waiver of any breach of any
provision of this Agreement will be effective or binding unless made in writing
and signed by the party purporting to give the same and, unless otherwise
provided in the written waiver, will be limited to the specific breach waived.

 

6.05Assignment

 

The rights of the Secured Party under this Agreement may be assigned by the
Secured Party in accordance with the terms of the Credit Agreement. The Pledgor
may not assign its obligations under this Agreement.

 

6.06Severability

 

If any provision of this Agreement is determined to be invalid or unenforceable
in whole or in part, such invalidity or unenforceability will attach only to
such provision or part thereof and the remaining part of such provision and all
other provisions hereof will continue in full force and effect.

 

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6.07Notices

 

Any demand, notice or other communication to be given in connection with this
Agreement shall be given as set out in the Credit Agreement.

 

6.08Additional Continuing Security

 

This Agreement and the Lien, assignment and mortgage and charge granted hereby
are in addition to and not in substitution for any other security now or
hereafter held by the Secured Party and this Agreement is a continuing agreement
and security that will remain in full force and effect until discharged by the
Secured Party.

 

6.09ULC Limitation

 

Notwithstanding any provisions to the contrary contained in this Agreement, the
Credit Agreement or any other Credit Document, the Pledgor is as of the date of
this Agreement the sole registered and beneficial owner of all Pledged ULC
Securities more particularly described in Schedule A to this Agreement and will
remain so until such time as such Pledged ULC Securities are fully and
effectively transferred into the name of the Secured Party or any other person
on the books and records of the ULC which is the issuer thereof. Nothing in this
Agreement, the Credit Agreement or any other Credit Document is intended to or
shall constitute the Secured Party, any other Beneficiary or any person other
than the Pledgor (and RGLD Holdings LLC) as a member or shareholder of any ULC
until such time as written notice is given to the Pledgor and all further steps
are taken so as to register the Secured Party or other person as holder of the
Pledged ULC Securities issued by such ULC. The granting of the pledge and Lien
pursuant to Section 2.01 is not intended to make the Secured Party or any other
Beneficiary a successor to the Pledgor as a member or shareholder of any ULC,
and neither the Secured Party, any other Beneficiary nor any of their successors
or assigns hereunder are intended to be deemed to become a member or shareholder
of any ULC by accepting this Agreement or exercising any right granted herein
unless and until such time, if any, when the Secured Party or any successor or
assign expressly becomes a registered member or shareholder of any ULC. The
Pledgor shall be entitled to receive and retain for its own account any
dividends or other distributions if any, in respect of the Collateral, and shall
have the right to vote such Pledged ULC Securities and to control the direction,
management and policies of the ULC issuing such Pledged ULC Securities to the
same extent as the Pledgor would if such Pledged ULC Securities were not pledged
to the Secured Party or to any other person pursuant hereto. To the extent any
provision hereof would have the effect of constituting the Secured Party or any
other Beneficiary to be a member or shareholder of any ULC prior to such time,
such provision shall be severed herefrom and ineffective with respect to the
relevant Pledged ULC Securities without otherwise invalidating or rendering
unenforceable this Agreement or invalidating or rendering unenforceable such
provision insofar as it relates to the Collateral other than Pledged ULC
Securities. Notwithstanding anything herein to the contrary (except to the
extent, if any, that the Secured Party or any of its successors or assigns
hereafter expressly becomes a registered member or shareholder of any ULC),
neither the Secured Party nor any of its successors or assigns are intended to
be deemed to have assumed or otherwise become liable for any debts or
obligations of any ULC. Except upon the exercise by the Secured Party or other
persons of rights to sell or otherwise dispose of Pledged ULC Securities or
other remedies in accordance with this Agreement, the Pledgor shall not cause or
permit, or enable any ULC in which it holds Pledged ULC Securities to cause or
permit, the Secured Party, any other Beneficiary or any of their successors or
assigns to: (a) be registered as member or shareholder of such ULC; (b) have any
notation entered in its favour in the share register of such ULC; (c) be held
out as member or shareholder of such ULC; (d) receive, directly or indirectly,
any dividends, property or other distributions from such ULC by reason of the
Secured Party or other person holding a Lien in the Pledged ULC Securities; or
(e) act as a member or shareholder of such ULC, or exercise any rights of a
member or shareholder of such ULC, including the right to attend a meeting of
such ULC or vote the shares of such ULC.

 

- 11 -

 

 

6.10Remedies Cumulative

 

The rights and remedies of the Secured Party hereunder are cumulative and are in
addition to and not in substitution for any other security now or hereafter held
by the Secured Party or any other rights or remedies available at law or in
equity or otherwise. No single or partial exercise by the Secured Party of any
right or remedy precludes or otherwise affects the exercise of any other right
or remedy to which the Secured Party may be entitled.

 

6.11Continued Perfection

 

The Pledgor agrees that it will not take any actions or fail to perform any of
its duties or obligations under this Agreement so that after giving effect to
such action or inaction the Secured Party will cease to have, or with the
passage of time cease to have, a perfected security interest in any of the
Collateral. The Pledgor hereby further authorizes the Secured Party to file one
or more financing statements or financing change statements, and amendments
thereto, relative to all or any part of the Collateral (without the signature of
the Pledgor where required by applicable Requirements of Law).

 

6.12Further Assurances

 

The Pledgor must at its expense from time to time do, execute and deliver, or
cause to be done, executed and delivered, all such financing statements, further
assignments, documents, agreements, acts, matters and things as may be
reasonably requested by the Secured Party for the purpose of giving effect to
this Agreement or for the purpose of establishing compliance with the
representations, warranties and covenants herein contained.

 

6.13Power of Attorney

 

The Pledgor hereby irrevocably constitutes and appoints the Secured Party and
any officer or agent thereof the true and lawful attorney of the Pledgor upon
the occurrence of an Event of Default which is continuing, with full power of
substitution, to do, make and execute all such statements, assignments,
documents, agreements, acts, matters or things with the right to use the name of
the Pledgor whenever and wherever the officer or agent may deem necessary or
expedient and from time to time to exercise all rights and powers and to perform
all acts of ownership in respect to the Collateral in accordance with this
Agreement, such power being coupled with an interest.

 

6.14Discharge

 

The Pledgor will not be discharged from any of the Obligations or from this
Agreement except in accordance with the Credit Agreement.

 

6.15Governing Law

 

This Agreement is governed by and will be construed in accordance with the laws
of the Province of Alberta and the laws of Canada applicable therein.

 

- 12 -

 

 

6.16Attornment

 

For the purpose of all legal proceedings this Agreement will be deemed to have
been performed in the Province of Alberta and the courts of the Province of
Alberta will have non-exclusive jurisdiction to entertain any action arising
under this Agreement. The Pledgor hereby attorns to the non-exclusive
jurisdiction of the courts of the Province of Alberta. Notwithstanding the
foregoing, nothing herein shall be construed nor operate to limit the right of
the Pledgor, the Secured Party or any other Beneficiary to commence any action
or proceeding relating hereto in any other jurisdiction, nor to limit the right
of the courts of any other jurisdiction to take jurisdiction over any action,
proceeding or matter relating hereto.

 

6.17Counterparts

 

This Agreement 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.

 

6.18No Release

 

The loss, injury or destruction of any of the Collateral shall not operate in
any manner to release or discharge the Pledgor from any of its Obligations.

 

6.19No Obligation to Act

 

Notwithstanding any provision of this Agreement or any other Credit Document or
the operation, application or effect hereof, the Secured Party, the other
Beneficiaries, or any representative or agent acting for or on behalf of the
foregoing, shall not have any obligation whatsoever to exercise or refrain from
exercising any right, power, privilege or interest hereunder or to receive or
claim any benefit hereunder.

 

6.20Waiver of Financing Statement, etc.

 

The Pledgor hereby waives the right to receive from the Secured Party or the
other Beneficiaries a copy of any financing statement, financing change
statement or other statement or document filed or registered at any time in
respect of this Agreement or any verification statement or other statement or
document issued by any registry that confirms or evidences registration of or
relates to this Agreement.

 

6.21Electronic Execution

 

Any party may deliver an executed signature page to this Agreement by electronic
transmission and such delivery will be as effective as delivery of a manually
executed copy of the Agreement by such party.

 

6.22Executed Copy

 

The Pledgor acknowledges receipt of a fully executed copy of this Agreement.

 

Signature page follows

 

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IN WITNESS WHEREOF the parties hereto have executed this Agreement.

 

  ROYAL GOLD, INC., a Delaware corporation         Per: /s/ Stefan Wenger    
Name:  Stefan Wenger     Title:  Chief Financial Officer and Treasurer        
THE BANK OF NOVA SCOTIA, as Secured Party         Per: /s/ Clement Yu    
Name:  Clement Yu     Title:  Director

 

 

 

 

Schedule A

 

List of Stock

 

Pledged Share Issuer   Number and Class of
Pledged Shares   Percent of Pledged Shares
Owned by Pledgor RGLD Gold (Canada) ULC   86,801 common shares under certificate
C-3   100%