Exhibit 10.20

EXECUTION COPY

ALLIED NEVADA GOLD CORP.

as Borrower

and

THE BANK OF NOVA SCOTIA

as Lead Arranger and Administrative Agent

and

THE SEVERAL LENDERS

FROM TIME TO TIME PARTIES HERETO

 

 

CREDIT AGREEMENT

 

 

Dated as of May 17, 2011

 

LOGO [g266036exdcovpg001.jpg]

Fasken Martineau DuMoulin LLP

Toronto, Ontario

Credit Agreement

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TABLE OF CONTENTS

 

         Page  

ARTICLE 1

 

INTERPRETATION

     1   

1.1

 

Defined Terms

     1   

1.2

 

Other Usages

     25   

1.3

 

Plural and Singular

     25   

1.4

 

Headings

     25   

1.5

 

Currency

     25   

1.6

 

Applicable Law

     25   

1.7

 

Time of the Essence

     25   

1.8

 

Non-Banking Days

     25   

1.9

 

Consents and Approvals

     26   

1.10

 

Amount of Credit

     26   

1.11

 

Schedules

     26   

1.12

 

Extension of Credit

     26   

1.13

 

Accounting Terms – GAAP

     26   

1.14

 

Rule of Construction

     26   

1.15

 

Successors and Permitted Assigns of Parties

     26   

1.16

 

Meaning of Include

     26   

ARTICLE 2

 

CREDIT FACILITY

     27   

2.1

 

Establishment of Credit Facility

     27   

2.2

 

Lenders’ Commitments

     27   

2.3

 

Reduction of Credit Facility

     27   

2.4

 

Termination of Credit Facility

     27   

ARTICLE 3

 

GENERAL PROVISIONS RELATING TO CREDITS

     28   

3.1

 

Types of Credit Availments

     28   

3.2

 

Funding of Loans

     28   

3.3

 

Failure of Lender to Fund Loan

     29   

3.4

 

Timing of Credit Availments

     29   

3.5

 

Inability to Fund LIBOR Loan in the United States

     29   

3.6

 

Time and Place of Payments

     30   

3.7

 

Remittance of Payments

     30   

3.8

 

Evidence of Indebtedness

     31   

3.9

 

General Provisions Relating to All Letters

     31   

3.10

 

Notice Periods

     34   

3.11

 

Administrative Agent’s Discretion to Allocate

     34   

3.12

 

Cost of Funds

     34   

ARTICLE 4

 

DRAWDOWNS

     35   

4.1

 

Drawdown Notice

     35   

ARTICLE 5

 

ROLLOVERS

     36   

5.1

 

LIBOR Loans

     36   

5.2

 

Rollover Notice

     36   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

5.3

 

Rollover by Lenders

     36   

ARTICLE 6

 

CONVERSIONS

     36   

6.1

 

Converting Loan to Other Type of Loan

     36   

6.2

 

Conversion Notice

     37   

6.3

 

Absence of Notice

     37   

6.4

 

Conversion by Lenders

     37   

ARTICLE 7

 

INTEREST AND FEES

     37   

7.1

 

Interest Rates

     37   

7.2

 

Calculation and Payment of Interest

     38   

7.3

 

General Interest Rules

     38   

7.4

 

Selection of Interest Periods

     39   

7.5

 

Standby Fees

     39   

7.6

 

Letter Fees

     39   

7.7

 

Applicable Rate Adjustment

     39   

ARTICLE 8

 

RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS

     40   

8.1

 

Conditions of Credit

     40   

8.2

 

Change of Circumstances

     40   

8.3

 

Failure to Fund as a Result of Change of Circumstances

     42   

8.4

 

Indemnity Relating to Credits

     43   

8.5

 

Indemnity for Transactional and Environmental Liability

     43   

8.6

 

Gross-Up for Taxes

     45   

ARTICLE 9

 

REPAYMENTS AND PREPAYMENTS

     48   

9.1

 

Repayment of Credit Facility

     48   

9.2

 

Voluntary Prepayments under Credit Facility

     48   

9.3

 

Prepayment Notice

     48   

9.4

 

Reimbursement or Conversion on Presentation of Letters

     49   

9.5

 

Letters Subject to an Order

     50   

9.6

 

Currency of Repayment

     50   

ARTICLE 10

 

REPRESENTATIONS AND WARRANTIES

     51   

10.1

 

Representations and Warranties

     51   

10.2

 

Survival of Representations and Warranties

     57   

ARTICLE 11

 

COVENANTS

     57   

11.1

 

Affirmative Covenants

     57   

11.2

 

Restrictive Covenants

     64   

11.3

 

Performance of Covenants by Administrative Agent

     66   

ARTICLE 12

 

CONDITIONS PRECEDENT TO OBTAINING CREDIT

     66   

12.1

 

Conditions Precedent to All Credit

     66   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

12.2

 

Conditions Precedent to Initial Extension of Credit

     67   

12.3

 

Waiver

     69   

ARTICLE 13

 

DEFAULT AND REMEDIES

     69   

13.1

 

Events of Default

     69   

13.2

 

Refund of Overpayments

     72   

13.3

 

Remedies Cumulative

     73   

13.4

 

Set-Off

     73   

ARTICLE 14

 

THE ADMINISTRATIVE AGENT

     74   

14.1

 

Appointment and Authorization of Administrative Agent

     74   

14.2

 

Interest Holders

     74   

14.3

 

Consultation with Counsel

     74   

14.4

 

Documents

     74   

14.5

 

Administrative Agent as Finance Party

     74   

14.6

 

Responsibility of Administrative Agent

     75   

14.7

 

Action by Administrative Agent

     75   

14.8

 

Notice of Events of Default

     75   

14.9

 

Responsibility Disclaimed

     76   

14.10

 

Indemnification

     76   

14.11

 

Credit Decision

     76   

14.12

 

Successor Administrative Agent

     77   

14.13

 

Delegation by Administrative Agent

     77   

14.14

 

Waivers and Amendments

     77   

14.15

 

Determination by Administrative Agent Conclusive and Binding

     79   

14.16

 

Adjustments among Lenders after Acceleration

     79   

14.17

 

Redistribution of Payment

     80   

14.18

 

Distribution of Notices

     80   

14.19

 

Other Security Not Permitted

     80   

14.20

 

Discharge of Security

     80   

14.21

 

Determination of Exposures

     80   

14.22

 

Decision to Enforce Security

     81   

14.23

 

Enforcement

     81   

14.24

 

Application of Cash Proceeds of Realization

     81   

14.25

 

Survival

     82   

ARTICLE 15

 

MISCELLANEOUS

     82   

15.1

 

Notices

     82   

15.2

 

Severability

     83   

15.3

 

Counterparts

     83   

15.4

 

Successors and Assigns

     83   

15.5

 

Assignment

     83   

15.6

 

Entire Agreement

     85   

 

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TABLE OF CONTENTS

(continued)

 

         Page  

15.7

 

Further Assurances

     85   

15.8

 

Judgment Currency

     85   

15.9

 

Waivers of Jury Trial

     86   

15.10

 

USA Patriot Act

     86   

SCHEDULE A

 

LENDERS AND INDIVIDUAL COMMITMENTS

     1   

SCHEDULE B

 

COMPLIANCE CERTIFICATE

     1   

SCHEDULE C

 

FORM OF ASSIGNMENT

     1   

SCHEDULE D

 

FORM OF DRAWDOWN NOTICE

     1   

SCHEDULE E

 

FORM OF ROLLOVER NOTICE

     1   

SCHEDULE F

 

FORM OF CONVERSION NOTICE

     1   

SCHEDULE G

 

CORPORATE STRUCTURE

     1   

SCHEDULE H

 

APPLICABLE RATES

  

SCHEDULE I

 

SECURITY DOCUMENTS

     1   

SCHEDULE J

 

QUALIFIED AFFILIATE INSTRUMENT OF ADHESION

     1   

SCHEDULE K

 

SHARE CAPITAL OF GUARANTORS

     1   

SCHEDULE L

 

PRINCIPAL PLACES OF BUSINESS; LOCATIONS OF ASSETS

     1   

SCHEDULE M

 

REIMBURSEMENT INSTRUMENT

     1   

 

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CREDIT AGREEMENT dated as of May 17, 2011 between Allied Nevada Gold Corp., a
corporation incorporated under the laws of the State of Delaware (the
“Borrower”), the lending institutions from time to time parties hereto as
Lenders (each a “Lender” and, collectively, the “Lenders”) and The Bank of Nova
Scotia, as Administrative Agent.

WHEREAS the Borrower has requested the Lenders to provide to it a certain credit
facility for the purposes set forth in Section 11.1(c);

AND WHEREAS the Lenders are each willing to provide such credit facility to the
Borrower for the aforementioned purposes upon the terms and conditions contained
herein;

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements herein contained and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree as follows:

ARTICLE 1

INTERPRETATION

1.1 Defined Terms

The following defined terms shall for all purposes of this agreement, or any
amendment, substitution, supplement, replacement, restatement or addition
hereto, have the following respective meanings unless the context otherwise
specifies or requires or unless otherwise defined herein:

“Acquisition” means:

 

  (a) if the acquisition is a share purchase, the Borrower shall Control the
entity being acquired immediately following the completion of such acquisition
but not before; or

 

  (b) if the acquisition is an asset purchase, all or substantially all of the
assets of the vendor (or of a division or unit of the vendor) are being
acquired.

“Additional Guarantor” means any direct or indirect Material Subsidiary of the
Borrower which has become a Guarantor pursuant to Section 11.1(v).

“Administrative Agent” means The Bank of Nova Scotia, in its capacity as
administrative agent of the Lenders, and any successor thereto pursuant to
Section 14.12.

“Affiliate” means an affiliated body corporate and, for the purposes of this
agreement, (i) one body corporate is affiliated with another body corporate if
one such body corporate is the Subsidiary of the other or both are Subsidiaries
of the same body corporate or each of them is Controlled by the same Person and
(ii) if two bodies corporate are affiliated with the same body corporate at the
same time, they are deemed to be affiliated with each other; for greater
certainty for the purposes of this definition, “body corporate” shall include a
chartered bank.

 

Credit Agreement

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“Allied VGH” means Allied VGH Inc., a corporation incorporated under the laws of
Nevada.

“Alternate Base Rate Canada” means, at any particular time, the variable rate of
interest per annum, calculated on the basis of a year of 365 or 366 days, as the
case may be, which is equal to the greater of (a) the Base Rate Canada at such
time, (b) the aggregate of (i) the Federal Funds Effective Rate at such time and
(ii)  1/2 of 1% per annum and (c) LIBOR plus 1.00%.

“Applicable Law” means (a) any domestic or foreign statute, law (including
common and civil law), treaty, code, ordinance, rule, regulation, restriction or
by-law (zoning or otherwise); (b) any judgement, order, writ, injunction,
decision, ruling, decree or award; (c) any regulatory policy, practice, request,
guideline or directive; or (d) any franchise, licence, qualification,
authorization, consent, exemption, waiver, right, permit or other approval of
any Official Body; in each case having the force of law and binding on or
affecting the Person referred to in the context in which the term is used or
binding on or affecting the property of such Person.

“Applicable Rate” means, for a particular Fiscal Quarter, the rate per annum
used to determine the interest rate on various types of Loans, the rate used to
calculate standby fees pursuant to Section 7.5 or the rate used to calculate
Letter fees pursuant to Section 7.6, in each case by reference to the range in
which the Leverage Ratio for the second immediately preceding Fiscal Quarter
falls as set forth in Schedule H hereto, provided that (i) changes in the
Applicable Rate shall be effective as set forth in Section 7.7, (ii) changes in
the Applicable Rate shall apply, as at the effective dates of such changes, to
LIBOR Loans outstanding on such dates, but only for those portions of applicable
terms or Interest Periods falling within those times during which the changes in
the Applicable Rate are effective, as provided above. The Applicable Rate up to
and including the last day of the Fiscal Quarter immediately following the
second full Fiscal Quarter following the date of the execution and delivery of
this agreement shall be set at Level 1.

“Available Credit” means, at any particular time and with respect to the Credit
Facility, the amount, if any, by which the Credit Limit at such time exceeds the
amount of credit outstanding under the Credit Facility at such time.

“Banking Day” means (x) any day, other than Saturday and Sunday, on which banks
generally are open for business in Reno, Nevada, Toronto, Ontario and New York,
New York and London, England and (y) when used in respect of LIBOR Loans, means
any such day which is also a day on which banks generally are open for business
in London, England and on which transactions can be carried on in the London
interbank market.

 

Credit Agreement

 

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“Base Rate Loan” means monies lent by the Lenders to the Borrower hereunder and
upon which interest accrues at a rate referable to the Alternate Base Rate
Canada.

“Branch of Account” means the main branch of the Administrative Agent located at
Scotia Plaza, 44 King Street West, Toronto, Ontario, or such other branch of the
Administrative Agent located in Canada or the United States as the Borrower and
the Administrative Agent may agree upon.

“Calculation Date” means each March 31, June 30, September 30 and December 31
falling after the date of this agreement.

“Capital Lease”, as applied to any Person, shall mean any lease of any property
(whether real, personal or mixed and including, without limitation, equipment)
by that Person as lessee that, in conformity with generally accepted accounting
principles, is, or is required to be, accounted for as a finance lease
obligation on the balance sheet of that Person.

“Capital Reorganization” means any change in the issued and outstanding Shares
of a Company.

“Cash Equivalents” means (i) securities issued or directly and fully guaranteed
or insured by the governments of the United States or Canada or any agency or
instrumentality thereof with maturities of 12 months or less from the date of
acquisition, (ii) certificates of deposit, time deposits and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers’ acceptances with maturities not exceeding one year and overnight bank
deposits, in each case with any commercial bank incorporated in the United
States or Canada having capital and surplus in excess of $500,000,000,
(iii) repurchase obligations for underlying securities of the types described in
clauses (i) and (ii) entered into with any financial institution meeting the
qualifications specified in clause (ii) above, (iv) investment funds investing
at least 95% of their assets in securities of the types described in clauses
(i) to (iii) above and (v) readily marketable direct obligations issued by the
United States or Canada or any political subdivision thereof having one of the
two highest rating categories obtainable from either Moody’s, or S&P with
maturities of 24 months or less from the date of acquisition.

“Cash Proceeds of Realization” means the aggregate of (i) all Proceeds of
Realization in the form of cash and (ii) all cash proceeds of the sale or
disposition of non-cash Proceeds of Realization, in each case expressed in
United States dollars.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 of the United States, as amended by the Superfund
Amendments and Reauthorization Act and as further amended from time to time, and
any successor statute and including all regulations issued under all such
statutes.

 

Credit Agreement

 

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“Change in Law” means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any Applicable Law,
(b) any change in any Applicable Law or in the administration, interpretation or
application thereof by any Official Body or (c) the making or issuance of any
Applicable Law by any Official Body.

“Change of Control” means and shall be deemed to have occurred if any Person or
group of Persons “acting jointly or in concert” (as contemplated by the
Securities Act (Ontario)), shall at any time have acquired (i) direct or
indirect beneficial ownership of Shares of the Borrower having attributed to it
a majority of the outstanding votes attached to all of the issued and
outstanding Voting Shares of the Borrower or (ii) the right or the ability by
voting power, contract or otherwise to elect or designate for election a
majority of the directors of the Borrower.

“Code” means the Internal Revenue Code of 1986 of the United States, as amended
from time to time, and any successor statute and including all regulations
issued under all such statutes.

“Companies” means, collectively, the Borrower and each Subsidiary of the
Borrower and “Company” means any one of the Companies.

“Control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
ownership of voting equity, by contract or otherwise and “Controlled” shall have
a similar meaning.

“Conversion Notice” shall have the meaning ascribed thereto in Section 6.2.

“Corporate Reorganization” means any change in the legal existence of any
Company (other than a Capital Reorganization) including by way of amalgamation,
merger, winding up, continuance or plan of arrangement.

“Credit Documents” means this agreement, the Guarantees, the Fee Letter, the
Security Documents, the Postponement and Subordination Undertaking and all
instruments and agreements executed and delivered by the Obligors in favour of
the Finance Parties from time to time in connection with this agreement or any
other Credit Document, but specifically excluding the Qualified Risk Management
Agreements.

“Credit Facility” means the revolving term credit facility established by the
Lenders in favour of the Borrower pursuant to Section 2.1.

“Credit Facility Repayment Date” means the date on which all Secured Obligations
owing by the Obligors to the Finance Parties or any of them, or remaining unpaid
to the Finance Parties or any of them, under the Credit Agreement have been
satisfied in full and the Credit Facility has terminated pursuant to
Section 2.4.

 

Credit Agreement

 

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“Credit Limit” means $30,000,000 (as such amount may be reduced pursuant to
Section 2.3).

“Default” means any event which is or which, with the passage of time, the
giving of notice or both, would be an Event of Default.

“Deposit Accounts” means the Borrower’s bank accounts maintained by The Bank of
Nova Scotia.

“Derivative Exposure” in relation to any Person (the “relevant party”) and any
counterparty of the relevant party at any time means the amount which would be
payable by the relevant party to that counterparty, or by that counterparty to
the relevant party, as the case may be, pursuant to all Risk Management
Agreements entered into between them and in effect at that time if the
transactions governed thereby were to be terminated as the result of the early
termination thereof. If the Derivative Exposure would be payable by the relevant
party to the counterparty of the relevant party at the relevant time of
determination, it is referred to herein as “Out-of-the-Money Derivative
Exposure”.

“Designated Account” means, with respect to transactions in a particular
currency for the Borrower, the account of the Borrower maintained by the
Administrative Agent at the Branch of Account for the purposes of transactions
in such currency under this Agreement.

“Direct Obligors” means the Persons owing the Direct Secured Obligations to the
Finance Parties.

“Direct Secured Obligations” means the Secured Obligations of an Obligor, under
this Agreement, the Fee Letter and any Qualified Risk Management Agreements.

“Distribution” means:

 

  (a) the declaration, payment or setting aside for payment of any dividend or
other distribution on or in respect of any shares in the capital of the
Borrower, other than a dividend declared, paid or set aside for payment by the
Borrower which is payable in shares of the Borrower;

 

  (b) the redemption, retraction, purchase, retirement or other acquisition, in
whole or in part, of any shares in the capital of the Borrower or any
securities, instruments or contractual rights capable of being converted into,
exchanged or exercised for shares in the capital of the Borrower, including,
without limitation, options, warrants, conversion or exchange privileges and
similar rights; and

 

  (c) the payment or prepayment of interest or the repayment or prepayment of
principal with respect to any consolidated Indebtedness of the Borrower which is
subordinated to the Secured Obligations.

 

Credit Agreement

 

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“$” denotes U.S. dollars.

“Draft” means any draft, bill of exchange, receipt, acceptance, demand or other
request for payment drawn or issued under or in respect of a Letter.

“Drawdown Notice” shall have the meaning ascribed thereto in Section 4.1.

“EBITDA” means, for any particular Fiscal Quarter, Net Income for such Fiscal
Quarter:

 

  (a) plus consolidated income and mining tax expenses for such Fiscal Quarter;

 

  (b) plus Interest Expenses for such Fiscal Quarter;

 

  (c) minus Interest Income for such Fiscal Quarter;

 

  (d) minus (to the extent otherwise included) any extraordinary or unusual
gains and unrealized gains for such Fiscal Quarter;

 

  (e) plus (to the extent otherwise deducted) any extraordinary or unusual
losses and unrealized losses for such Fiscal Quarter;

 

  (f) minus (to the extent otherwise included) any gain over book value arising
in favour of a Company on any disposal of any business or asset (not being a
disposal made in the ordinary course of business) during such Fiscal Quarter;

 

  (g) plus (to the extent otherwise deducted) any loss against book value
incurred by a Company on the disposal of any business or asset (not being a
disposal made in the ordinary course of business) during such Fiscal Quarter;

 

  (h) plus (to the extent otherwise deducted) depreciation of fixed assets and
amortization of goodwill or intangible assets during such Fiscal Quarter;

 

  (i) plus (to the extent otherwise deducted) the amount of capital expenditures
and other expenditures in respect of exploration activities during such Fiscal
Quarter;

 

  (j) plus (to the extent otherwise deducted) other non-cash expenses deducted
in calculating Net Income, including non-cash stock expenses relating to
stock-based compensation, and non-cash unrealized losses incurred in connection
with Risk Management Agreements during such Fiscal Quarter;

 

  (k) minus (to the extent otherwise included) any non-cash unrealized gains
incurred in connection with Risk Management Agreements during such Fiscal
Quarter;

 

Credit Agreement

 

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  (1) minus (to the extent otherwise included) any non-cash gains from
operations held for sale and any foreign exchange gains during such Fiscal
Quarter; and

 

  (m) plus (to the extent otherwise deducted) any non-cash losses from
operations held for sale and any foreign exchange losses during such Fiscal
Quarter.

The calculation of EBITDA shall be adjusted for non-cash revenues and expenses
of the Borrower on a consolidated basis including, without limitation, deferred
revenue and the difference between accrued and cash reclamation costs.

“Enforcement Date” means:

 

  (a) the date on which the Administrative Agent notifies the Borrower, pursuant
to Section 13.1, that all Secured Obligations of the Borrower to the Lenders
hereunder have become immediately due and payable or on which such Secured
Obligations automatically become due and payable pursuant to Section 13.1,
whichever occurs first; or

 

  (b) if all Secured Obligations of the Borrower to the Lenders hereunder has
been repaid in full and all Individual Commitments of the Lenders hereunder have
terminated, the date on which a Qualified Risk Management Lender notifies an
Obligor that all Indebtedness of the Borrower to such Qualified Risk Management
Lender under the relevant Qualified Risk Management Agreement has become
immediately due and payable or on which such Indebtedness automatically becomes
due and payable, whichever occurs first.

“Environment” means soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life and any other environmental medium
or natural resource.

“Environmental Law” means any Legal Requirement that addresses, is related to or
is otherwise concerned with environmental, health or safety issues, including
any Legal Requirement relating to any emissions, discharges, releases or
threatened releases of Hazardous Materials into the Environment, including
ambient air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, existence, treatment, storage,
disposal, transport, handling, clean-up or control of Hazardous Materials,
including CERCLA, each as amended from time to time.

“Equity” means, at any particular time, the amount which would, in accordance
with generally accepted accounting principles, be classified on the consolidated
balance sheet of the Borrower at such time as shareholders’ equity of the
Borrower.

 

Credit Agreement

 

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“ERISA” means the Employee Retirement Income Security Act of 1974 of the United
States, as amended from time to time, and any successor statute and including
all regulations issued under all such statutes.

“ERISA Affiliate” shall mean Person that is a member of a group of which the
Borrower is a member and which group is treated as a single employer under
Section 414(b), (c) or (m) of the Code, Section 4001 of ERISA or as a result of
the Borrower or a Subsidiary of the Borrower being or having been a general
partner of such Person.

“ERISA Companies” means the Borrower and the ERISA Affiliates and “ERISA
Company” means any of the ERISA Companies.

“Event of Default” means any one of the events set forth in Section 13.1.

“Exchange Equivalent” means as of any particular date, with reference to any
amount (the “original amount”) expressed in a particular currency (the “original
currency”), the amount expressed in another currency which would be required to
buy the original amount of the original currency using the quoted spot rates at
which the principal office in New York of the Administrative Agent offers to
provide such other currency in exchange for such original currency at 12:00 noon
(New York time) on such date.

“Excluded Taxes” means, with respect to any Lender or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) taxes imposed on or measured by its net income, and franchise taxes imposed
on it (in lieu of net income taxes), by the jurisdiction (or any political
subdivision thereof) under the laws of which such recipient is organized or in
which its principal office is located or, in the case of any Lender, in which
its applicable lending office is located, (b) any branch profits taxes or any
similar tax imposed by any jurisdiction in which the relevant Lender is located,
(c) for any period with respect to which a Lender has failed to provide the
Borrower with the forms, certificates or other documents required by
Section 8.6(i) Reference source not found, any Indemnified Taxes imposed solely
by reason of such failure, and (d) any Indemnified Taxes imposed solely by
reason of a Lender voluntarily effecting a change in its jurisdiction of
principal operations after the date that it became a Lender (unless such Taxes
are imposed after such change in jurisdiction by reason of any Change in Law
occurring after and not by reason of the change in jurisdiction).

“Exposure” means, with respect to a particular Finance Party at a particular
time, the amount of the Secured Obligations owing to such Finance Party at such
time, determined by such Finance Party in good faith in accordance with
Section 14.21.

“Federal Funds Effective Rate” means, for any particular day, the variable rate
of interest per annum, calculated on the basis of a year of 365 days (or 366
days in the case of a leap year) and for the actual number of days elapsed,
equal to the weighted average of the rates on overnight federal funds
transactions with

 

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members of the Federal Reserve System arranged by Federal Funds brokers as
published for such day (or, if such day is not a Banking Day, for the next
preceding Banking Day) by the Federal Reserve Bank of New York or, for any
Banking Day on which such rate is not so published by the Federal Reserve Bank
of New York, the average of the quotations for such day for such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.

“Fee Letter” means the fee letter dated May 17, 2011 entered into between The
Bank of Nova Scotia and the Borrower.

“Finance Documents” means the Credit Documents and the Qualified Risk Management
Agreements.

“Finance Parties” means the Administrative Agent, the Lenders, the Issuing
Lender and the Qualified Risk Management Lenders.

“Financial Letter” means a standby letter of credit or guarantee in a form
satisfactory to the Issuing Lender and issued by the Issuing Lender at the
request of the Borrower in favour of a third party to secure the payment of an
obligation that is a “direct credit substitute” within the meaning of the
Guideline A-1 – Capital Adequacy Requirement of the Office of the Superintendent
of Financial Institutions Canada, as determined by the Issuing Lender (“direct
credit substitutes” include standby letters of credit serving as financial
guarantees).

“Fiscal Quarter” means any of the three-month periods ending on the last day of
March, June, September and December in each Fiscal Year.

“Fiscal Year” means the twelve-month period ending on the last day of December
in each year.

“F.R.S. Board” means the Board of Governors of the Federal Reserve System of the
United States or any successor thereto.

“generally accepted accounting principles” or “GAAP” means generally accepted
accounting principles in effect in the United States from time to time
consistently applied, as recommended by the American Institute of Certified
Public Accountants or, after notice thereof has been provided by the Borrower to
the Administrative Agent, such other United States generally accepted accounting
principles as may be adopted by the Borrower in replacement thereof.

“Guarantees” means the one or more guarantees to be entered into by the
Guarantors in favour of the Administrative Agent for the benefit of the Finance
Parties, each in form and substance satisfactory to the Administrative Agent as
the same may be amended, modified, supplemented or replaced from time to time,
and pursuant to which each Obligor shall guarantee on a full recourse basis the
Direct Secured Obligations of each other Obligor under this Agreement, each Fee
Letter and any Qualified Risk Management Agreements.

 

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“Guarantors” means Allied VGH and Hycroft Resources and each Additional
Guarantor pursuant to Section 11.1 (x).

“Hazardous Materials” means any waste, chemical or other substance that is
hazardous, radioactive, toxic, a pollutant or a contaminant, or that is
regulated, listed, defined, designated, or classified, or otherwise determined
to be, as such under or pursuant to any Environmental Law, including any mixture
or solution thereof, and specifically including petroleum and all derivatives
thereof or synthetic substitutes thereof, asbestos or asbestos-containing
materials, urea formaldehyde foam insulation, transformers or other equipment
that contain polychlorinated biphenyls, and radon gas.

“Hycroft Mine” means Hycroft Resources’ gold and silver mine located 54 miles
west of Winnemucca, Nevada along the border of Humboldt and Pershing Counties,
all as more fully described in the Borrower’s Form 10-K filed with the United
States Securities and Exchange Commission for the Fiscal Year ended December 31,
2010.

“Hycroft Resources” means Hycroft Resources & Development, Inc., a corporation
incorporated under the laws of Nevada.

“Indebtedness” of any Person means, without duplication, (i) indebtedness of
such Person for borrowed money or for the deferred purchase price of property
and services, other than trade payables incurred in the ordinary course of
business

and payable in accordance with customary practices, (ii) other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(iii) obligations of such Person under any Capital Lease (iv) contingent
obligations of such Person in respect of any letter of credit, bank guarantee or
surety bond, (v) to the extent accelerated, the Out-of-the-Money Derivative
Exposure of such Person, and (vi) the contingent obligations of such Person
under any guarantee or other agreement assuring payment of any obligations of
any Person of the type described in the foregoing clauses (i) to (v) (for
greater certainty, the contingent obligations assuring payment of any
Out-of-the-Money Derivative Exposure will only be treated as Indebtedness if
such Out-of-the-Money Derivative Exposure has in fact been accelerated).
Indebtedness for purposes of calculating the ratios in Sections 11.1(n), (o) and
(p) shall not include any Indebtedness under clause (iv) above (other than any
Secured Obligations) that is cash collateralized.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Individual Commitment” means, with respect to a particular Lender, the amount
set forth in Schedule A attached hereto, as reduced or amended from time to time
pursuant to, as applicable, Sections 2.2, 2.3, 8.3 and 15.5 as the individual
commitment of such Lender with respect to the Credit Facility, provided that,
upon the termination of the Credit Facility pursuant to Section 2.4, the
Individual Commitment of each Lender with respect to the Credit Facility shall
thereafter be equal to the Individual Commitment of such Lender under the Credit
Facility immediately prior to the termination of the Credit Facility.

 

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“Intellectual Property” shall mean all issued patents and patent applications,
industrial design registrations, trade-marks, registrations and applications
therefor, trade-names and styles, logos, copyright registrations and
applications therefor, all of the foregoing owned by or licensed to any Obligor
and used in or necessary to the operation of its business.

“Interest Coverage Ratio” means, for any particular period, the ratio of Rolling
EBITDA for such period to the Rolling Interest Expenses for such period.

“Interest Expenses” means, for any particular period, the amount which would, in
accordance with generally accepted accounting principles, be classified on the
consolidated income statement of the Borrower for such period as gross interest
expenses (including, for greater certainty, issuance fees with respect to
Letters).

“Interest Income” means, for any particular period, the amount which would, in
accordance with generally accepted accounting principles, be classified on the
consolidated income statement of the Borrower for such period as interest
accrued due to the Borrower during such period whether or not paid.

“Interest Period” means, in the case of any LIBOR Loan, the applicable period
for which interest on such LIBOR Loan shall be calculated pursuant to Article 7.

“Investment” shall mean any advance, loan, extension of credit or capital
contribution to, purchase of Shares, bonds, notes, debentures or other
securities of, or any other investment made in, any Person but shall exclude any
Acquisition, any acquisition of tangible personal property and any capital or
exploration expenditures. The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity, or
distributions or dividends paid, thereon and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair value of such property at the time
of such Investment, as determined in good faith by the Borrower.

“Investment Accounts” means the investment accounts maintained by the Borrower
with The Bank of Nova Scotia.

“Issuing Lender” means The Bank of Nova Scotia or any other Lender selected by
the Administrative Agent and acceptable to the Borrower who assumes in writing
the obligation of issuing Letters under the Credit Facility on behalf of the
Lenders.

“Legal Requirement” means any requirement under federal, state, local,
municipal, foreign, international, multinational or other administrative order,
constitution, ordinance, regulation, statute or treaty having the force of law.

 

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“Lenders” means the individual financial institutions set out and described in
Schedule A, as amended from time to time and “Lender” means any of the Lenders.
After the Credit Facility Repayment Date, “Lender” shall mean each Person that
was a Lender immediately prior to the Credit Facility Repayment Date but only
for so long as such Person is a Qualified Risk Management Lender.

“Letters” means Financial Letters or Non-Financial Letters issued by the Issuing
Lender at the request, and on the credit, of the Borrower, each being
denominated in United States dollars and being issued to a named beneficiary
acceptable to the Issuing Lender and in each case having a term of not more than
one year and being renewable in the sole discretion of the Issuing Lender and
otherwise all such Letters being otherwise in a form satisfactory to the Issuing
Lender.

“Leverage Ratio” means, for any particular period, the ratio of (i) Total Debt
at the last day of such Fiscal Quarter to (ii) Rolling EBITDA for such period.

“LIBOR” means, with respect to any Interest Period applicable to a LIBOR Loan,
the per annum rate of interest determined by the Administrative Agent, based on
a three hundred sixty (360) day year as the rate for deposits in United States
dollars appearing on the display referred to as the “LIBOR 01 Page” (or any
display substituted therefor) of Reuter Monitor Money Rates Service for a period
equal to the number of days in the applicable Interest Period, at or about 11:00
a.m. (London, England time) on the second Banking Day prior to the first day of
such Interest Period. If such “LIBOR 01 Page” is not available, then “LIBOR”
shall mean, with respect to any such Interest Period, the per annum rate of
interest, based on a three hundred sixty (360) day year (rounded upwards, if
necessary, to the nearest 1/100th of one percent) determined by the
Administrative Agent at approximately 11:00 a.m. (London, England time) (or so
soon thereafter as practicable) on the second Banking Day prior to the first day
of such Interest Period offered to the Administrative Agent by leading banks in
the London interbank market for the placing of United States dollar deposits
with the Administrative Agent having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the Pro Rata Share of the
Administrative Agent in respect of the applicable LIBOR Loan.

“LIBOR Loans” means monies lent by the Lenders to the Borrower in United States
dollars and upon which interest accrues at a rate referable to LIBOR and “LIBOR
Loan” means any one of the LIBOR Loans.

“Lien” means any deed of trust, mortgage, charge, hypothec, assignment, pledge,
lien, vendor’s privilege, vendor’s right of reclamation or other security
interest or encumbrance of whatever kind or nature, regardless of form and
whether consensual or arising by law (statutory or otherwise), that secures the
payment of any indebtedness or liability or the observance or performance of any
obligation.

“Loans” means Base Rate Loans and LIBOR Loans.

 

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“Majority Lenders” (i) means, with respect to a matter relating to the Credit
Facility, such group of Lenders (and, if there is more than one Lender, at least
two Lenders) whose Individual Commitments with respect to the Credit Facility
aggregate at least two-thirds of the Total Commitment Amount and (ii) means, at
any time during the continuance of an Event of Default, such group of Finance
Parties which have aggregate Exposure in an amount at least two-thirds of the
aggregate Exposure of all of the Finance Parties at such time.

“Material Adverse Change” and “Material Adverse Effect” each mean any material
adverse change in or material adverse effect on (i) the business, operations,
affairs, assets or properties or financial condition of the Companies, taken as
a whole, (ii) the ability of the Obligors, taken as a whole, to observe, perform
and or comply with their obligations under any of the Credit Documents; or
(iii) the rights and remedies of, as applicable, the Administrative Agent or any
Lender under any of the Credit Documents.

“Material Agreements” means any agreement which if terminated could reasonably
be expected to have a Material Adverse Effect.

“Material Subsidiary” means Hycroft Resources and any Subsidiary, present or
future, of the Borrower, established or acquired by the Borrower or a Subsidiary
of the Borrower, which owns, directly or indirectly, any Shares in Hycroft
Resources.

“Maturity Date” means May 17, 2014.

“Measurement Period” means the period of three calendar months commencing on
each January 1, April 1, July 1 and October 1 of each calendar year.

“Mineral Title Opinion” means the mineral status report of Erwin & Thompson LLP
dated June 3, 2010.

“Mining Claims” means the unpatented mining claims relating to the Hycroft Mine.

“Moody’s” means Moody’s Investors Service, Inc. or any successor by merger or
consolidation to its business.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 3(37) of
ERISA, any “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, or
any “multiple employer plan” within the meaning of Section 210 of ERISA or IRC
Section 413(c), or any “multiple employer welfare arrangement,” as defined in
ERISA Section 3(40) to which any ERISA Company is making or accruing an
obligation to make contributions, or has within any of the preceding five plan
years made or accrued an obligation to make contributions.

 

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“Net Income” means, for any particular period, the amount which would, in
accordance with generally accepted accounting principles, be classified on the
consolidated income statement of the Borrower for such period as the net income
of the Borrower excluding any extraordinary items.

“Non-Financial Letter” means a standby letter of credit or guarantee in a form
satisfactory to the Issuing Lender and issued by the Issuing Lender at the
request of the Borrower in favour of a third party that is a
“transaction-related contingency” within the meaning of the Guideline A-1 –
Capital Adequacy Requirement of the Office of the Superintendent of Financial
Institutions Canada, as determined by the Issuing Lender (“transaction-related
contingencies” include performance bonds and standby and documentary letters of
credit that support particular performance of non-financial or commercial
contracts or undertakings rather than supporting general financial obligations).

“NPI” means the unsecured net profits interest in the Hycroft Mine of 4% per
annum payable to Vista Gold Corp.

“Obligors” means, collectively, the Borrower and the Guarantors and “Obligor”
means any of the Obligors.

“Official Body” means any national, state, provincial or municipal government or
government of any political subdivision thereof, or any agency, authority,
board, central bank, monetary authority, commission, department or
instrumentality thereof, or any court, tribunal, grand jury, mediator,
arbitrator or referee, whether foreign or domestic having jurisdiction and the
ability to make decisions having the force of law.

“Order” means an order, judgment, injunction or other determination restricting
payment by the Issuing Lender under or in accordance with a Letter or extending
the Issuing Lender’s liability beyond the expiration date stated therein.

“Other Taxes” means all present and future stamp or documentary Taxes or any
other excise tax or property Taxes, charges or similar levies arising from the
execution, delivery, registration or enforcement of this Agreement or any other
Finance Document, in each case, including any additions to Tax, interest or
penalties applicable thereto.

“Out-of-the-Money Derivative Exposure” has the meaning given to it in the
definition of “Derivative Exposure”.

“Participant” shall have the meaning ascribed thereto pursuant to Section 15.5.

“PBGC” means Pension Benefit Guaranty Corporation or any governmental body
succeeding to its functions.

 

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“Permitted Acquisition” means any Acquisition with respect to which:

 

  (a) the business of the entity being acquired is, (in the case of a share
Acquisition) or the assets being acquired are used in or relate to, (in the case
of an asset Acquisition) a business of the nature referred to in
Section 11.2(d);

 

  (b) no Default or Event of Default exists at the time of such proposed
Acquisition and no Default or Event of Default would exist immediately after the
implementation of any such proposed Acquisition;

 

  (c) the financial covenants set out in 11.1(n) to 11.1(p), inclusive, would be
met, on a pro forma basis, immediately after giving effect to the implementation
of any such Acquisition;

 

  (d) in the case of any one or more Acquisitions, no more than an aggregate
$50,000,000 of cash is used for such Acquisitions.

 

  (e) in the case of any Acquisition of assets, the assets are located in a
Permitted Jurisdiction or in the case of any Acquisition of Shares, the subject
target and each of its Subsidiaries is incorporated or otherwise formed under
the laws of a Permitted Jurisdiction; and

 

  (f) in the case of any Acquisition of Shares, at least 90% of the consolidated
book value of the subject target’s assets are located in a Permitted
Jurisdiction.

“Permitted Acquisition Indebtedness” means any Indebtedness resulting from a
Permitted Acquisition which existed prior to, and not in contemplation of, the
Permitted Acquisition and any Indebtedness incurred upon and following the
Permitted Acquisition pursuant to any commitment (an “Existing Commitment”)
which existed prior to, and not in contemplation of, the Permitted Acquisition,
provided (x) no Default exists at the time of the Permitted Acquisition, (y) no
Default would exist immediately thereafter and (z) the financial covenants set
out in Sections 11.1(n) to 11.1(p), inclusive,) would be met, on a pro forma
basis, immediately after the Permitted Acquisition.

“Permitted Acquisition Risk Management Agreements” means any Risk Management
Agreements relating to a Permitted Acquisition which existed prior to, and not
in contemplation of, the Permitted Acquisition and all transactions entered into
prior to the date of the Permitted Acquisition with respect to such Risk
Management Agreement.

“Permitted Capital Reorganization” means (a) any change in the issued and
outstanding Shares of the Borrower (other than a change in connection with an
Acquisition that is not a Permitted Acquisition or a change that would result in
an Event of Default) and (b) any Capital Reorganization (i) that does not result
in any change in the combined direct and indirect percentage ownership interest
of

 

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the Borrower in any Guarantor; (ii) notice of which (and reasonable details
thereof) has been provided by the Borrower to the Administrative Agent in
writing ten Banking Days before its proposed completion date (where the Capital
Reorganization only involves the change in the capital structure of a Company,
the notice referred to in this clause (ii) shall be reduced to three Banking
Days), (iii) where at the time of the delivery of the aforesaid notice by the
Borrower to the Administrative Agent, the Borrower delivers to the
Administrative Agent a certificate (A) certifying that the completion of the
Capital Reorganization will not have a Material Adverse Effect and (B) in which
the Borrower shall covenant to deliver or cause to be delivered to the
Administrative Agent, contemporaneously with the completion of such Capital
Reorganization, any Guarantees and Security Documents and/or amendments thereto,
or Postponement and Subordination Undertaking, certificates, opinions and other
things as the Administrative Agent may request to ensure the completion of such
Capital Reorganization shall not adversely affect any rights of any Finance
Party under any Guarantee or Security Document and (iv) where no Default or
Event of Default has occurred and is outstanding at the time of the completion
of the Capital Reorganization or would arise immediately thereafter.

“Permitted Corporate Reorganization” means any Corporate Reorganization
(i) notice of which (and reasonable details thereof) has been provided by the
Borrower to the Administrative Agent in writing ten Banking Days before its
proposed completion date, (ii) where at the time of the delivery of the
aforesaid notice by the Borrower to the Administrative Agent, the Borrower
delivers to the Administrative Agent a certificate (A) certifying that the
completion of the Corporate Reorganization will not have a Material Adverse
Effect and (B) in which the Borrower shall covenant to deliver or cause to be
delivered to the Administrative Agent, contemporaneously with the completion of
such Corporate Reorganization, any Guarantees and Security Documents and/or
amendments thereto, Postponement and Subordination Undertaking, certificates,
opinions and other things as the Administrative Agent may request to ensure the
completion of such Capital Reorganization shall not adversely affect any rights
of any Finance Party under any Guarantee, Security Document or Postponement and
Subordination Undertaking and (iii) where no Default or Event of Default has
occurred and is outstanding at the time of the completion of the Corporate
Reorganization or would arise immediately thereafter.

“Permitted Indebtedness” means any one or more of the following:

 

  (a) the Secured Obligations;

 

  (b) Indebtedness of the Borrower on a consolidated basis arising under Capital
Leases and Purchase Money Indebtedness provided that the aggregate principal
amount of all such Indebtedness incurred and outstanding at any time shall not
exceed $150,000,000;

 

  (c) any Permitted Acquisition Indebtedness or any Indebtedness under Permitted
Acquisition Risk Management Agreements;

 

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  (d) Indebtedness in respect of bonds, letters of credit or bank guarantees in
favour of a public utility or any other Official Body when required by such
utility or other Official Body in connection with the operations of any Company
(including for the reclamation or remediation of mining properties), all in the
ordinary course of business;

 

  (e) Indebtedness owing by any Obligor to any Subsidiary of the Borrower that
is subordinated and postponed pursuant to the Postponement and Subordination
Undertaking.

 

  (f) any Indebtedness relating to employee benefit plans or compensation; and

 

  (g) any guarantee by any Obligor of any Indebtedness permitted under
paragraphs (b), (d) or (e); and

 

  (h) Indebtedness of the Borrower on a consolidated basis, not otherwise
permitted under paragraphs (a) – (g), in an aggregate amount at any particular
time of not more than $25,000,000.

“Permitted Jurisdiction” means the United States of America, Canada, Mexico,
Greenland, Bermuda, all countries of South America (excluding Venezuela,
Paraguay and Bolivia), the European Union, Norway, Switzerland, Turkey, Croatia,
Macedonia, Albania, Andorra, Bosnia & Herzegovina, Montenegro, Serbia, New
Zealand, Australia, Tasmania, Papua New Guinea, British Virgin Islands,
Barbados, the Cayman Islands, Curacao, Antilles, Channel Islands, Belize,
Honduras, Costa Rica, Panama, Tanzania, Namibia, South Africa, Botswana and
Ghana.

“Permitted Liens” means any one or more of the following with respect to the
property and assets of the Companies:

 

  (a) Liens for taxes, assessments or governmental charges or levies not at the
time due or delinquent or the validity or amount of which are being contested in
good faith by appropriate proceedings and as to which reserves are being
maintained in accordance with generally accepted accounting principles so long
as forfeiture of any part of such property or assets will not result from the
failure to pay such taxes, assessments or governmental charges or levies during
the period of such contest;

 

  (b) the Lien of any judgment rendered or the Lien of any claim filed which is
being contested in good faith by appropriate proceedings and as to which
reserves are being maintained in accordance with generally accepted accounting
principles so long as forfeiture of any part of such property or assets will not
result from the failure to satisfy such judgment or claim during the period of
such contest;

 

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  (c) Liens and charges incidental to construction or current operations which
have not at such time been filed pursuant to law or which relate to obligations
not due or delinquent or the validity or amount of which are being contested in
good faith by appropriate proceedings and as to which reserves are being
maintained in accordance with generally accepted accounting principles so long
as forfeiture of any part of such property or assets will not result from the
failure to pay such obligations during the period of such contest;

 

  (d) restrictions, easements, rights of way, servitudes or other similar rights
in land granted to or reserved by other Persons which in the aggregate do not
materially impair the usefulness, in the operation of the business of any
Company, of the property subject to such restrictions, easements, rights of way,
servitudes or other similar rights in land granted to or reserved by other
Persons;

 

  (e) the right reserved to or vested in any Official Body by the terms of any
lease, licence, franchise, grant or permit acquired by any Company or by any
statutory provision, to terminate any such lease, licence, franchise, grant or
permit, or to require annual or other payments as a condition to the continuance
thereof;

 

  (f) Liens resulting from the deposit of cash or securities (i) in connection
with contracts, tenders or expropriation proceedings, or (ii) to secure workers’
compensation, surety or appeal bonds, costs of litigation when required by law
and public and statutory obligations, or (iii) in connection with the discharge
of Liens or claims incidental to construction and mechanics’, warehouseman’s,
carriers’ and other similar liens;

 

  (g) security given to a public utility or any other Official Body when
required by such utility or other Official Body in connection with the
operations of any Company, all in the ordinary course of business (whether such
security is given directly or indirectly (ie. as security for a letter of credit
or bank guarantee that is given as security to the public utility or other
Official Body));

 

  (h) the reservations, limitations, provisos and conditions, if any, expressed
in any original grants from the United States of America or any other Official
Body;

 

  (i) title defects or irregularities which are of a minor nature and in the
aggregate will not materially impair the use of the property for the purpose for
which it is held;

 

  (j) applicable municipal and other Official Body restrictions affecting the
use of land or the nature of any structures which may be erected thereon,
provided such restrictions have been complied with and will not materially
impair the use of the property for the purpose for which it is held;

 

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  (k) Liens on concentrates or minerals or the proceeds of sale of such
concentrates or minerals arising or granted pursuant to a processing arrangement
entered into in the ordinary course and upon usual market terms, securing the
payment of a Company’s portion of the fees, costs and expenses attributable to
the processing of such concentrates or minerals under any such processing
arrangement, but only insofar as such Liens relate to obligations which are at
such time not past due or the validity of which are being contested in good
faith by appropriate proceedings and as to which reserves are being maintained
in accordance with generally accepted accounting principles;

 

  (1) the Security;

 

  (m) royalties on the production or profits from mining and other Liens arising
under Third Party Mining Arrangements provided such royalties (x) are in
existence as at the date hereof (including, for certainty, the NPI) or (y) do
not relate to a property in production at the time the royalty was granted;

 

  (n) customary Liens in respect of service charges and other obligations, other
than Indebtedness, in respect of bank, custodian, investment, customs and other
accounts opened in the ordinary course of business;

 

  (o) Liens securing Indebtedness to be incurred and outstanding pursuant to
paragraph (b) of the definition of “Permitted Indebtedness”; provided, however,
that any such Lien shall attach only to the asset in respect of which such
Indebtedness is incurred and any proceeds thereof;

 

  (p) Liens securing Indebtedness referenced in paragraphs (c) or (d) of the
definition of “Permitted Indebtedness”;

 

  (q) Liens securing up to $10,000,000 of the Indebtedness referenced in
paragraph (h) of the definition of “Permitted Indebtedness”; and

 

  (r) any exceptions or limitations set forth in the Mineral Title Opinion.

“Permitted Reorganizations” means Permitted Corporate Reorganizations and
Permitted Capital Reorganizations.

“Person” means any natural person, corporation, firm, partnership, joint
venture, joint stock company, incorporated or unincorporated association,
government, governmental agency or any other entity, whether acting in an
individual, fiduciary or other capacity.

“Plan” means each “employee benefit plan”, as defined in Section 3(3) of ERISA
(including any Multiemployer Plan), and each other employment, consulting, bonus
or other incentive compensation, salary continuation during any absence from
active employment for disability or other reasons, supplemental retirement,
cafeteria benefit (Section 125 of the IRC) or dependent care (Section 129 of the

 

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IRC), sick pay, tuition assistance, club membership, employee discount, employee
loan, vacation pay, severance, deferred compensation, incentive, fringe benefit,
perquisite, change in control, retention, stock option, stock purchase,
restricted stock or other compensatory plan, policy, agreement or arrangement
(including any collective bargaining agreement) (i) that is currently, or has
been at any time in the six prior calendar years, maintained, administered,
contributed to or required to be contributed to by the Borrower, or (ii) to
which the Borrower is a party or has any liability, or (iii) that covers any
current or former officer, director, employee or independent contractor, (or any
of their dependents) of the Borrower or any ERISA Affiliate.

“Postponement and Subordination Undertaking” means the postponement and
subordination undertaking to be entered into by the non-Obligor Subsidiaries of
the Borrower in favour of the Administrative Agent pursuant to Section 1 l.l(t),
in form and substance satisfactory to the Administrative Agent as the same may
be amended, modified, supplemented or replaced from time to time.

“Pro Rata Share” means at any particular time with respect to a particular
Lender, the ratio of the Individual Commitment of such Lender with respect to
the Credit Facility at such time to the aggregate of the Individual Commitments
of all of the Lenders with respect to the Credit Facility at such time.

“Proceeds of Realization” means all cash and non-cash proceeds derived from any
sale, disposition or other realization of the Secured Assets or received from
the Borrower pursuant to this agreement (i) on or after the Enforcement Date,
(ii) upon any dissolution, liquidation, winding-up, reorganization, bankruptcy,
insolvency or receivership of any Obligor (or any other arrangement or
marshalling of the Secured Assets that is similar thereto) or (iii) upon the
enforcement of, or any action taken with respect to enforcement of, any of the
Credit Documents.

“Prohibited Transaction” means a transaction that is prohibited under
Section 4975 of the Code or Section 406 of ERISA and is not eligible for an
exemption under those sections.

“Purchase Money Indebtedness” means Indebtedness assumed by an Obligor as part
of, or issued or incurred by an Obligor to pay or provide funds to pay, all or a
part of the purchase price of any equipment hereafter or previously acquired by
an Obligor.

“Qualified Affiliate” means an Affiliate of a Lender who has executed and
delivered to the Administrative Agent an instrument of adhesion in the form set
forth in Schedule J.

“Qualified Risk Management Agreements” means any Risk Management Agreement with
a term that expires on or prior to the Maturity Date entered into between an
Obligor on the one hand and a Lender or any of its Affiliates on the other hand
(but only for so long as such Lender remains a Qualified Risk Management
Lender).

 

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“Qualified Risk Management Lender” means (x) any Person that enters into a Risk
Management Agreement at a time when such Person is a Lender or (y) any Qualified
Affiliate that enters into a Risk Management Agreement at a time when the Lender
with which such Qualified Affiliate is affiliated is a Lender.

“Receiver” means a receiver, receiver and manager or other Person having similar
powers or authority appointed by the Administrative Agent or by a court at the
instance of the Administrative Agent in respect of the Secured Assets or any
part thereof.

“Release” means any spilling, leaking, emitting, discharging, depositing,
disposing, escaping, emptying, leaching, seeping, dumping, placing or other
releasing into, upon or under any land, water or air or otherwise entering into
the Environment, whether intentional or unintentional.

“Risk Management Agreements” means present or future agreement which evidences
any gold, silver or other commodity hedging transaction, spot or forward foreign
exchange transaction, interest rate swap transaction, currency swap transaction,
forward rate transaction, rate cap transaction, rate floor transaction, rate
collar transaction, and any other exchange or rate protection transaction, any
combination of such transactions or any option with respect to any such
transaction entered into by an Obligor.

“Rolling EBITDA” means, for any Fiscal Quarter, the aggregate of (without
duplication):

 

  (a) the sum of EBITDA (exclusive of any portion thereof attributable to any
Rolling Permitted Acquisition EBITDA) for such Fiscal Quarter and for the three
immediately preceding Fiscal Quarters; and

 

  (b) any Rolling Permitted Acquisition EBITDA for such Fiscal Quarter.

“Rolling Interest Expenses” means, for any Fiscal Quarter, the aggregate of
(without duplication):

 

  (a) the sum of Interest Expenses (exclusive of any portion thereof
attributable to any Rolling Permitted Acquisition Interest Expenses) plus the
Borrower’s consolidated capitalized interest expenses for such Fiscal Quarter
and for the three immediately preceding Fiscal Quarters; and

 

  (b) any Rolling Permitted Acquisition Interest Expenses for such Fiscal
Quarter.

“Rolling Permitted Acquisition EBITDA” means, for any Fiscal Quarter as concerns
any Permitted Acquisition with respect to which four Fiscal Quarter ends or less
have occurred since the date of the completion of such Permitted

 

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Acquisition, pro forma EBITDA attributable to such Permitted Acquisition during
such Fiscal Quarter and the three immediately preceding Fiscal Quarters as if
such Permitted Acquisition had occurred on the first day of such four Fiscal
Quarter period.

“Rolling Permitted Acquisition Interest Expenses” means, for any Fiscal Quarter
as concerns any Permitted Acquisition with respect to which four Fiscal Quarter
ends or less have occurred since the date of the completion of such Permitted
Acquisition, pro forma Interest Expenses attributable to such Permitted
Acquisition during such Fiscal Quarter and the three immediately preceding
Fiscal Quarters as if such Permitted Acquisition had occurred on the first day
of such four Fiscal Quarter period.

“Rollover Notice” shall have the meaning ascribed thereto in Section 5.2.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw
Hill Companies Inc. and its successors.

“Sale Leaseback” shall mean any transaction or series of related transactions
pursuant to which the Borrower or any of its Subsidiaries (a) sells, transfers
or otherwise disposes of any property, real or personal, whether now owned or
hereafter acquired, and (b) as part of such transaction, thereafter rents or
leases such property or other property that it intends to use for substantially
the same purpose or purposes as the property being sold, transferred or
disposed.

“Secured Assets” means all present and after-acquired personal property of the
Obligors.

“Secured Obligations” shall mean all indebtedness, obligations and liabilities,
present or future, absolute or contingent, matured or not, at any time owing by
any of the Obligors to any of the Finance Parties, or remaining unpaid to any of
the Finance Parties, under or in connection with any of the Finance Documents
and Secured Obligations of a particular Obligor shall mean all indebtedness,
obligations and liabilities, present or future, absolute or contingent, matured
or not, at any time owing by such Obligor to any of the Finance Parties, or
remaining unpaid to any of the Finance Parties, under or in connection with any
of the Finance Documents to which such Obligor is a party. For certainty,
“Secured Obligations” shall include interest accruing subsequent to the filing
of, or which would have accrued but for the filing of, a petition for
bankruptcy, in accordance with and at the rate (including any rate applicable
upon any Default or Event of Default to the extent lawful) specified herein,
whether or not such interest is an allowable claim in such bankruptcy
proceeding.

“Secured Obligations Termination Date” means the date on which all Secured
Obligations of the Obligors (other than those provisions which by their terms
survive the termination of the Finance Documents) have been paid in full and the
Finance Parties have no Individual Commitments.

 

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“Security” means the collateral security constituted by the Security Documents.

“Security Documents” means the security documents which, in the reasonable
opinion of the Administrative Agent, are required to be entered into from time
to time by each Obligor in favour of the Administrative Agent in order to grant
to the Administrative Agent a Lien on the Secured Assets as continuing
collateral security for the payment and performance of the Secured Obligations
of such Obligor, such security documents to be in form and substance
satisfactory to the Administrative Agent and to include the security documents
described in Schedule I hereto.

“Shares”, as applied to the shares of any corporation or other entity, means the
shares or other ownership interests of every class whether now or hereafter
authorized, regardless of whether such shares or other ownership interests shall
be limited to a fixed sum or percentage with respect to the rights of the
holders thereof to participate in dividends and in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding-up of such
corporation or other entity.

“Subsidiary” means, with respect to any Person, any corporation, company or
other similar business entity (including, for greater certainty, a chartered
bank) of which more than fifty per cent (50%) of the outstanding Shares or other
equity interests (in the case of Persons other than corporations) having
ordinary voting power to elect a majority of the board of directors or the
equivalent thereof of such corporation, company or similar business entity
(irrespective of whether at the time Shares of any other class or classes of the
Shares of such corporation, company or similar business entity shall or might
have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned by such Person, by such Person and one or more
other Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.

“Tangible Net Worth” means, at any particular time, the amount of Equity at such
time less the aggregate of the amounts, at such time, which would, in accordance
with generally accepted accounting principles, be classified upon the
consolidated balance sheet of the Borrower as goodwill (without taking into
account any future income tax assets that may be classified as goodwill),
intangible assets and accumulated other comprehensive income.

“Tax Act” means the Income Tax Act (Canada), as amended from time to time, and
regulations promulgated thereunder.

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Official Body,
including any interest, additions to tax, penalties or similar liabilities
applicable thereto.

“Termination Event” means (i) any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder; (ii) the Borrower’s, or any ERISA

 

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Affiliate’s, withdrawal from a Multiemployer Plan during a year in which it was
a “substantial employer”, as this term is defined in Section 4001(a)(2) of
ERISA, (iii) the incurrence of liability by the Borrower or any ERISA Affiliate
under Section 4064 of ERISA upon the termination of a Multiemployer Plan;
(iv) providing notice of intent to terminate a Plan under 4041(a)(2) of ERISA or
the treatment of a Multiemployer Plan amended as a termination under 4041 of
ERISA; (v) the PBGC instituting proceeding to terminate a Plan under
Section 4041 of ERISA; (vi) any other event or condition that might constitute
grounds under Section 4042 of ERISA to terminate or appoint a trustee to
administer a Multiemployer Plan; (vii) the occurrence of an event described in
Section 302(f), 4069, 4070, or 4212(c) of ERISA; (viii) any complete or partial
withdrawal from a Multiemployer Plan, any termination of a Multiemployer Plan,
or any Multiemployer Plan being insolvent or in reorganization status; or
(ix) any occurrence similar to any of those referenced in clauses (i) – (viii)
above under the applicable law of a foreign country.

“Third Party Mining Arrangements” means any arrangement with another Person or
Persons of a nature that is, or shall have become customary in, the mining
business for the purposes of sharing the risks or costs of exploring, acquiring,
developing or producing minerals from property owned by a Company, including,
operating, processing, farm-in, farm-out, development, area of mutual interest,
unitization, pooling, joint bidding, joint venture, service, partnership,
subscription and stock purchase agreement and other similar agreements.

“Total Commitment Amount” means, at any particular time, the aggregate of the
Individual Commitments of all of the Lenders at such time.

“Total Debt” means, at any particular time, the aggregate Indebtedness of the
Borrower on a consolidated basis.

“UCC” means the Uniform Commercial Code of any applicable state of the United
States of America as in effect from time to time.

“U.S.” and “United States” means the United States of America.

“U.S. Dollar Equivalent” means the relevant Exchange Equivalent in United States
dollars of any amount of Canadian dollars.

“Voting Shares” means Shares of a Person which carries voting rights or the
right to Control such Person under any circumstances.

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

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1.2 Other Usages

References to “this agreement”, “the agreement”, “hereof’, “herein”, “hereto”
and like references refer to this agreement and not to any particular Article,
Section or other subdivision of this agreement. Any references herein to any
agreements or documents shall mean such agreements or documents as amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof and thereof.

1.3 Plural and Singular

Where the context so requires, words importing the singular number shall include
the plural and vice versa.

1.4 Headings

The division of this agreement into Articles and Sections and the insertion of
headings in this agreement are for convenience of reference only and shall not
affect the construction or interpretation of this agreement.

1.5 Currency

Unless otherwise specified herein, all statements of or references to dollar
amounts in this agreement shall mean lawful money of the United States.

1.6 Applicable Law

This agreement shall be governed by and construed in accordance with the laws of
the Province of Ontario and the federal laws of Canada applicable therein. Any
legal action or proceeding with respect to this agreement may be brought in the
courts of the Province of Ontario and, by execution and delivery of this
agreement, the parties hereby accept for themselves and in respect of their
property, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts. Nothing herein shall limit the right of any party to serve
process in any manner permitted by law or to commence legal proceedings or
otherwise proceed against any other party in any other jurisdiction.

1.7 Time of the Essence

Time shall in all respects be of the essence of this agreement.

1.8 Non-Banking Days

Subject to Section 7.4(c), whenever any payment to be made hereunder shall be
stated to be due or any action to be taken hereunder shall be stated to be
required to be taken on a day other than a Banking Day, such payment shall be
made or such action shall be taken on the next succeeding Banking Day and, in
the case of the payment of any amount, the extension of time shall be included
for the purposes of computation of interest, if any, thereon.

 

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1.9 Consents and Approvals

Whenever the consent or approval of a party hereto is required in a particular
circumstance, unless otherwise expressly provided for therein, such consent or
approval shall not be unreasonably withheld or delayed by such party.

1.10 Amount of Credit

Any reference herein to the amount of credit outstanding shall mean, at any
particular time:

 

  (a) in the case of a LIBOR Loan or Base Rate Loan, the principal amount
thereof; and

 

  (b) in the case of a Letter denominated in U.S. dollars, the contingent
liability of the Issuing Lender thereunder.

1.11 Schedules

Each and every one of the schedules which is referred to in this agreement and
attached to this agreement shall form a part of this agreement.

1.12 Extension of Credit

For the purposes hereof, each drawdown, rollover and conversion shall be deemed
to be an extension of credit to the Borrower hereunder.

1.13 Accounting Terms – GAAP

All accounting terms not specifically defined in this agreement shall be
interpreted in accordance with GAAP.

1.14 Rule of Construction

The Finance Documents have been negotiated by each party with the benefit of
legal representation, and any rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not apply to the
construction or interpretation of the Finance Documents.

1.15 Successors and Permitted Assigns of Parties

Any reference in this agreement to a party to this agreement shall include the
successors and permitted assigns of such party.

1.16 Meaning of Include

The words “include”, “includes” and “including”, when used in this agreement,
shall be deemed to be followed by the phrase “without limitation”.

 

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ARTICLE 2

CREDIT FACILITY

2.1 Establishment of Credit Facility

Subject to the terms and conditions hereof, the Lenders hereby establish in
favour of the Borrower a revolving term credit facility (the “Credit Facility”)
in an amount equal to the Credit Limit (as such amount may be reduced from time
to time).

2.2 Lenders’ Commitments

Subject to the terms and conditions hereof, the Lenders agree to extend credit
to the Borrower under the Credit Facility from time to time provided that the
aggregate amount of credit extended by each Lender under the Credit Facility
shall not at any time exceed the Individual Commitment of such Lender under the
Credit Facility and further provided that the aggregate amount of credit
outstanding under the Credit Facility shall not at any time exceed the amount of
the Credit Facility. All credit requested under the Credit Facility shall be
made available to the Borrower contemporaneously by all of the Lenders. Each
Lender shall provide to the Borrower its Pro Rata Share of each credit, whether
such credit is extended by way of drawdown, rollover or conversion. No Lender
shall be responsible for any default by any other Lender in its obligation to
provide its Pro Rata Share of any credit under the Credit Facility nor shall the
Individual Commitment of any Lender be increased as a result of any such default
of another Lender in extending credit under the Credit Facility. The failure of
any Lender to make available to the Borrower its Pro Rata Share of any credit
under the Credit Facility shall not relieve any other Lender of its obligation
hereunder to make available to the Borrower its Pro Rata Share of such credit
under the Credit Facility.

2.3 Reduction of Credit Facility

The Borrower may, from time to time and at any time, by notice in writing to the
Administrative Agent, permanently reduce the amount of the Credit Facility in
whole or in part to the extent it is not being utilized at the time such notice
is given, provided that such reduction shall not become effective until five
Banking Days after such notice has been given. The amount of the Credit Facility
will be permanently reduced with respect to the amount of the repayment made in
accordance with Section 9.1. Any repayment or prepayment of credit outstanding
under the Credit Facility (other than as set forth above) shall not cause a
reduction in the amount of the Credit Facility. Any repayment of outstanding
credit which forms part of any conversion from one type of credit to another
type of credit under Article 3 or Article 6 or of any rollover under Article 5
shall not cause any reduction in the amount of the Credit Facility. Upon any
reduction of the amount of the Credit Facility, the Individual Commitment of
each Lender with respect to the Credit Facility shall thereupon be reduced by an
amount equal to such Lender’s Pro Rata Share of such reduction of the amount of
the Credit Facility.

2.4 Termination of Credit Facility

 

  (a) The Credit Facility shall terminate upon the earliest to occur of:

 

  (i) the termination of such Credit Facility in accordance with Section 13.1;

 

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  (ii) the date on which the amount of such Credit Facility has been permanently
reduced to zero pursuant to Section 2.3; and

 

  (iii) the Maturity Date.

 

  (b) Upon the termination of the Credit Facility, the right of the Borrower to
obtain any credit thereunder and all of the obligations of the Lenders to extend
credit thereunder shall automatically terminate.

ARTICLE 3

GENERAL PROVISIONS RELATING TO CREDITS

3.1 Types of Credit Availments

Subject to the terms and conditions hereof the Borrower may obtain credit from
the Lenders through the Branch of Account by way of one or more Base Rate Loans,
LIBOR Loans and Letters.

Any extension of credit hereunder by way of drawdowns of Base Rate Loans or
LIBOR Loans shall be in a minimum amount of $1,000,000 and in multiples thereof.

3.2 Funding of Loans

Each Lender shall make available to the Administrative Agent its Pro Rata Share
of the principal amount of each Loan under the Credit Facility prior to 11:00
a.m. (Reno, Nevada time) on the date of the extension of credit. The
Administrative Agent shall, upon fulfilment by the Borrower of the terms and
conditions set forth in Article 12 and unless otherwise irrevocably authorized
and directed in the Drawdown Notice make such funds available to the Borrower on
the date of the extension of credit by crediting the Designated Account (or
causing such account to be credited). Unless the Administrative Agent has been
notified by a Lender at least one Banking Day prior to the date of the extension
of credit that such Lender will not make available to the Administrative Agent
its Pro Rata Share of such Loan, the Administrative Agent may assume that such
Lender has made such portion of the Loan available to the Administrative Agent
on the date of the extension of credit in accordance with the provisions hereof
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If the
Administrative Agent has made such assumption, to the extent such Lender shall
not have so made its Pro Rata Share of the Loan available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent, forthwith on
demand, such Lender’s Pro Rata Share of the Loan and all reasonable costs and
expenses incurred by the Administrative Agent in connection therewith together
with interest thereon at the then prevailing interbank rate for each day from
the date such amount is made available to the Borrower until the date such
amount is paid or repaid to the Administrative Agent; provided, however, that
notwithstanding such obligation, if such Lender fails so to pay, the Borrower
shall, without prejudice to any rights that the Borrower might have against such
Lender, repay such amount to the Administrative Agent forthwith after demand
therefor by the Administrative Agent. The amount payable by each Lender to the
Administrative Agent pursuant hereto shall be set forth in a certificate
delivered by the Administrative Agent to such Lender and the Borrower (which
certificate shall contain reasonable details of how the amount payable is
calculated) and

 

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shall constitute prima facie evidence of such amount payable. If such Lender
makes the payment to the Administrative Agent required herein, the amount so
paid shall constitute such Lender’s Pro Rata Share of the Loan for purposes of
this agreement and shall entitle the Lender to all rights and remedies against
the Borrower in respect of such Loan.

3.3 Failure of Lender to Fund Loan

If any Lender (a “Defaulting Lender”) fails to make available to the
Administrative Agent its Pro Rata Share of any Loan under the Credit Facility as
required and the Administrative Agent has not funded pursuant to Section 3.2,
the Administrative Agent shall forthwith give notice of such failure by such
Defaulting Lender to the Borrower and the other Lenders and such notice shall
state that any Lender may make available to the Administrative Agent all or any
portion of the Defaulting Lender’s Pro Rata Share of such Loan (but in no way
shall any other Lender or the Administrative Agent be obliged to do so) in the
place and stead of the Defaulting Lender. If more than one Lender gives notice
that it is prepared to make funds available in the place and stead of a
Defaulting Lender in such circumstances and the aggregate of the funds which
such Lenders (herein collectively called the “Contributing Lenders” and
individually called the “Contributing Lender”) are prepared to make available
exceeds the amount of the advance which the Defaulting Lender failed to make,
then each Contributing Lender shall be deemed to have given notice that it is
prepared to make available its pro rata share of such advance based on the
Contributing Lenders’ relative commitments to advance in such circumstances. If
any Contributing Lender makes funds available in the place and stead of a
Defaulting Lender in such circumstances, then the Defaulting Lender shall pay to
any Contributing Lender making the funds available in its place and stead,
forthwith on demand, any amount advanced on its behalf together with interest
thereon at the then prevailing interbank rate for each day from the date of
advance to the date of payment, against payment by the Contributing Lender
making the funds available of all interest received in respect of the Loan from
the Borrower. In addition to interest as aforesaid, the Borrower shall pay all
amounts owing by the Borrower to the Defaulting Lender hereunder (with respect
to the amounts advanced by the Contributing Lenders on behalf of the Defaulting
Lender) to the Contributing Lenders until such time as the Defaulting Lender
pays to the Administrative Agent for the Contributing Lenders all amounts
advanced by the Contributing Lenders on behalf of the Defaulting Lender.

3.4 Timing of Credit Availments

No LIBOR Loan under the Credit Facility may have a maturity date later than the
Maturity Date.

3.5 Inability to Fund LIBOR Loan in the United States

If a Lender determines in good faith, which determination shall be final,
conclusive and binding on the Borrower, and the Administrative Agent notifies
the Borrower that (i) adequate and fair means do not exist for ascertaining the
interest rate on the basis provided in the definition of LIBOR, (ii) the making
or continuation of LIBOR Loans in the United States has been made impracticable
by the occurrence of a contingency (other than a mere increase in rates payable
by such Lender to fund the advance) which materially and adversely affects the
funding of the advances at any interest rate computed on the basis of LIBOR, or
by reason of a

 

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change since the date hereof in any applicable law or government regulation,
guideline or order (whether or not having the force of law but, if not having
the force of law, one with which a responsible U.S. commercial bank would
comply) or in the interpretation thereof by any Official Body affecting such
Lender or any relevant financial market, which results in LIBOR no longer
representing the effective cost to such Lender of deposits in such market for a
relevant Interest Period, or (iii) any change to present law or any future law,
regulation, order, treaty or official directive (whether or not having the force
of law but, if not having the force of law, one with which a responsible U.S. or
Canadian commercial bank would comply) or any change therein or any
interpretation or application thereof by any Official Body has made it unlawful
for such Lender to make or maintain or give effect to its obligations in respect
of LIBOR Loans in the United States as contemplated herein, then

 

  (a) the right of the Borrower to obtain any credit in United States dollars by
way of LIBOR Loans, shall be suspended until such Lender determines, acting
reasonably, that the circumstances causing such suspension no longer exist and
such Lender so notifies the Borrower;

 

  (b) if any credit in United States dollars by way of LIBOR Loans is not yet
outstanding, any applicable Drawdown Notice shall be cancelled and the advance
requested therein shall not be made; and

 

  (c) if any LIBOR Loan is already outstanding at any time when the right of the
Borrower to obtain credit by way of a LIBOR Loan is suspended, it shall, subject
to the Borrower having the right to obtain credit by way of a Base Rate Loan at
such time, be converted to a Base Rate Loan on the last day of the Interest
Period applicable thereto (or on such earlier date as may be required to comply
with any applicable law).

3.6 Time and Place of Payments

Unless otherwise expressly provided herein, the Borrower shall make all payments
pursuant to this agreement or pursuant to any document, instrument or agreement
delivered pursuant hereto by deposit to the Designated Account before 10 a.m.
(Reno, Nevada time) on the day specified for payment and the Administrative
Agent shall be entitled to withdraw the amount of any payment due to the
Administrative Agent or the Lenders hereunder from such account on the day
specified for payment.

3.7 Remittance of Payments

Forthwith after the withdrawal from the Designated Account by the Administrative
Agent of any payment of principal, interest, fees or other amounts for the
benefit of the Lenders pursuant to Section 3.6, the Administrative Agent shall,
subject to Sections 3.3 and 8.3 remit to each Lender, in immediately available
funds, such Lender’s Pro Rata Share of such payment (except to the extent such
payment results from a Loan with respect to which a Lender had failed, pursuant
to Section 3.2, to make available to the Administrative Agent its Pro Rata Share
and, where any other Lender has made funds available in the place and stead of a
Defaulting Lender); provided that if the Administrative Agent, on the assumption
that it will receive, on any particular date, a payment of principal (including,
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prepayment), interest, fees or other amount under the Credit Facility, remits to
each Lender its Pro Rata Share of such payment and the Borrower fails to make
such payment, each Lender agrees to repay to the Administrative Agent, forthwith
on demand, to the extent that such amount is not recovered from the Borrower on
demand and after reasonable efforts by the Administrative Agent to collect such
amount (without in any way obligating the Administrative Agent to take any legal
action with respect to such collection), such Lender’s Pro Rata Share of the
payment made to it pursuant hereto together with interest thereon at the then
prevailing interbank rate for each day from the date such amount is remitted to
the Lenders until the date such amount is paid or repaid to the Administrative
Agent, the exact amount of the repayment required to be made by the Lenders
pursuant hereto to be as set forth in a certificate delivered by the
Administrative Agent to each Lender, which certificate shall constitute prima
facie evidence of such amount of repayment.

3.8 Evidence of Indebtedness

The Administrative Agent shall maintain accounts wherein the Administrative
Agent shall record the amount of credit outstanding, each payment of principal
and interest on account of each Loan, each Letter issued and drawn upon and all
other amounts becoming due to and being paid to the Lenders or the
Administrative Agent hereunder, including Letter fees and standby fees. The
Administrative Agent’s accounts constitute, in the absence of manifest error,
prima facie evidence of the indebtedness of the Borrower pursuant to this
agreement.

3.9 General Provisions Relating to All Letters

 

  (a) Each request by the Borrower for the issuance or amendment of a Letter
shall be deemed to be a representation by the Borrower that the extension of
credit so requested complies with the conditions set forth in Section 12.1. The
Borrower hereby acknowledges and confirms to the Issuing Lender that the Issuing
Lender shall not be obliged to make any inquiry or investigation as to the right
of any beneficiary to make any claim or Draft under a Letter and payment by the
Issuing Lender pursuant to a Letter shall not be withheld by the Issuing Lender
by reason of any matters in dispute between the beneficiary thereof and the
Borrower. The sole obligation of the Issuing Lender with respect to Letters
issued by it is to cause to be paid a Draft drawn or purporting to be drawn in
accordance with the terms of the applicable Letter and for such purpose the
Issuing Lender is only obliged to determine that the Draft purports to comply
with the terms and conditions of the relevant Letter.

 

  (b)

The Issuing Lender shall not have any responsibility or liability for or any
duty to inquire into the form, sufficiency (other than to the extent provided in
the preceding paragraph), authorization, execution, signature, endorsement,
correctness (other than to the extent provided in the preceding paragraph),
genuineness or legal effect of any Draft, certificate or other document
presented to it pursuant to a Letter issued by the Issuing Lender and the
Borrower unconditionally assumes all risks with respect to the same. The
Borrower agrees that it assumes all risks of the acts or omissions of the
beneficiary of any Letter with respect to the use by such beneficiary of the
relevant Letter. The Borrower shall promptly examine a copy of each Letter and
each amendment thereto that is

 

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  delivered to it and, in the event of any claim of non-compliance with the
Borrower’s instructions or other irregularity, the Borrower will immediately
notify the Issuing Lender. The Borrower shall be conclusively deemed to have
waived any such claim against the Issuing Lender and its correspondents unless
such notice is given as aforesaid.

 

  (c) The obligations of the Borrower hereunder with respect to Letters shall be
absolute, unconditional and irrevocable and shall not be reduced by any event or
occurrence including, without limitation:

 

  (i) any lack of validity or enforceability of this agreement or any such
Letter;

 

  (ii) any amendment or waiver of or any consent to departure from this
agreement;

 

  (iii) the existence of any claim, set-off, defense or other rights which the
Borrower may have at any time against any beneficiary or any transferee of any
such Letter (or any person or entities for whom any such beneficiary or any such
transferee may be acting), any Lender, the Issuing Lender or any other person or
entity;

 

  (iv) any Draft, statement or other document presented under any such Letter
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;

 

  (v) any non-application or misapplication by the beneficiary of such Letter of
the proceeds of any drawing under such Letter;

 

  (vi) the surrender or impairment of any Security;

 

  (vii) any reduction or withdrawal of the Issuing Lender’s credit rating by any
rating agency; or

 

  (viii) any other circumstance or happening whatsoever, similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower.

The obligations of the Borrower hereunder with respect to Letters shall remain
in full force and effect and shall apply to any amendment to or extension of the
expiration date of any such Letter, approved in writing by the Borrower. The
Issuing Lender shall not be under any obligation to amend any Letter if (A) the
Issuing Lender would have no obligation at such time to issue such Letter in its
amended form under the terms hereof, or (B) the beneficiary of such Letter does
not accept the proposed amendment to such Letter.

 

  (d)

Any action, inaction or omission taken or suffered by the Issuing Lender or any
of its correspondents under or in connection with a Letter or any Draft made
thereunder, if in good faith and in conformity with foreign or domestic laws,

 

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  regulations or customs applicable thereto, shall be binding upon the Borrower
and shall not place the Issuing Lender or any of its correspondents under any
resulting liability to the Borrower. Without limiting the generality of the
foregoing, the Issuing Lender and its correspondents may receive, accept or pay
as complying with the terms of a Letter, any Draft thereunder, otherwise in
order which may be signed by, or issued to, the administrator or any executor
of, or the trustee in bankruptcy of, or the receiver for any property of, or
other person or entity acting as the representative or in the place of, such
beneficiary or its successors and assigns. The Borrower covenants that it will
not take any steps, issue any instructions to the Issuing Lender or any of its
correspondents or institute any proceedings intended to derogate from the right
or ability of the Issuing Lender or its correspondents to honour and pay any
Draft or Drafts.

 

  (e) The Borrower agrees that the Lenders, the Issuing Lender and the
Administrative Agent shall have no liability to it for any reason in respect of
or in connection with any Letter, the issuance thereof, any payment thereunder,
or any other action taken by the Lenders, the Issuing Lender or the
Administrative Agent or any other Person in connection therewith, other than on
account of the Issuing Lender’s gross negligence or wilful misconduct.

 

  (f) Save to the extent expressly provided otherwise in this Section 3.9, the
rights and obligations between the Issuing Lender and the Borrower with respect
to each Letter shall be determined in accordance with the applicable provisions
of the (i) Uniform Customs and Practice for Documentary Credits, ICC
Publications 600 or (ii) the International Standby Practices - ISP98, ICC
Publication No. 590, as applicable.

 

  (g) The Issuing Lender shall act on behalf of the Lenders with respect to any
Letters issued by it and the documents associated therewith, and the Issuing
Lender shall have all of the benefits and immunities (A) provided to the
Administrative Agent in Article 14 with respect to any acts taken or omissions
suffered by the Issuing Lender in connection with Letters issued by it or
proposed to be issued by it and any documentation pertaining to such Letters as
fully as if the term “Administrative Agent” as used in Article 14 included the
Issuing Lender with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the Issuing Lender.

 

  (h) Immediately upon the issuance of each Letter, each Lender under the Credit
Facility shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the Issuing Lender a risk participation in such Letter in an
amount equal to the product of such Lender’s Pro Rate Share times the amount of
such Letter.

 

  (i)

None of the Issuing Lender, the Administrative Agent nor any correspondent,
participant or assignee of the Issuing Lender shall be liable to any Lender for
(i) any action of any of the Issuing Lender, the Administrative Agent or any
correspondent, participant or assignee of the Issuing Lender taken or omitted in
connection herewith at the request or with the approval of the Lenders or the

 

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  Majority Lenders, as applicable, (ii) any action of any of the Issuing Lender,
the Administrative Agent or any correspondent, participant or assignee of the
Issuing Lender taken or omitted in the absence of such party’s gross negligence
or wilful misconduct; or (iii) any deficiency in the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter.

3.10 Notice Periods

Each Drawdown Notice, Rollover Notice, Conversion Notice and Prepayment Notice
shall be given to the Administrative Agent:

 

  (a) prior to 11:00 a.m. (Reno, Nevada time) on the third Banking Day prior to
the date of any voluntary prepayment or the date of a drawdown of, rollover of,
conversion into or conversion of a LIBOR Loan or the issuance of a Letter; and

 

  (b) prior to 11:00 a.m. (Reno, Nevada time) on the second Banking Day prior to
the date of any other drawdown, rollover or conversion.

3.11 Administrative Agent’s Discretion to Allocate

Notwithstanding the provisions of Section 3.2 and 9.4(b) with respect to the
funding of Loans and reimbursing with respect to Letters in accordance with each
Lender’s Pro Rata Share, the Administrative Agent shall be entitled to
reallocate the funding or reimbursement obligations among the Lenders in order
to ensure, to the greatest extent practicable, that after such funding the
aggregate amount of credit extended hereunder by each Lender coincides with such
Lender’s Pro Rata Share of the aggregate amount of credit extended under a
particular Credit Facility by all of the Lenders, provided that no such
allocation shall result in the aggregate amount of credit extended hereunder by
any Lender exceeding such Lender’s Individual Commitment under such Credit
Facility.

3.12 Cost of Funds

If the Majority Lenders notify the Administrative Agent at least one Banking Day
before the date of any proposed drawdown, conversion or rollover of a LIBOR Loan
that LIBOR, for any interest period for such LIBOR Loans will not adequately
reflect the cost to such Majority Lenders of making, funding or maintaining
their respective LIBOR Loans for such Interest Period, the Administrative Agent
shall forthwith so notify the Borrower and the Lenders, whereupon (i) each LIBOR
Loan will automatically, on the last day of the then existing interest period
therefor, convert into a Base Rate Canada Loan and (ii) the obligation of the
Lenders to make or to convert into, LIBOR Loans shall be suspended until the
Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.

 

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ARTICLE 4

DRAWDOWNS

4.1 Drawdown Notice

Subject to Sections 3.1 and 3.5 and provided that all of the applicable
conditions precedent set forth in Article 12 have been fulfilled by the Borrower
or waived by the Lenders as provided in Section 14.14, the Borrower may, from
time to time, obtain credit hereunder by giving to the Administrative Agent an
irrevocable notice in substantially the form of Schedule D hereto (“Drawdown
Notice”) in accordance with Section 3.10 and specifying, as applicable:

 

  (a) the date the credit is to be obtained;

 

  (b) whether the credit is to be obtained by way of Base Rate Loan, LIBOR Loan
or Letter;

 

  (c) in the case of any credit to be obtained by way of a Loan, the principal
amount of the Loan;

 

  (d) if the credit is to be obtained by way of LIBOR Loan, the applicable
Interest Period;

 

  (e) if the credit is to be obtained by way of Letter, the named beneficiary of
the Letter and address of such beneficiary, the documents to be presented by
such beneficiary in case of any drawing thereunder, the maturity date and amount
of the Letter and all other terms of the Letter (including, without limitation,
the proposed form of the Letter and such other matters as the Issuing Lender may
require);

 

  (f) the details of any irrevocable authorization and direction pursuant to
Section 3.2; and

 

  (g)

if credit is to be obtained by way of Letter and if such Letter is to be issued
on behalf of a Subsidiary of the Borrower as well as on behalf of the Borrower,
the Borrower shall ensure that accompanying such Drawdown Notice is an
instrument, substantially in the form of Schedule M hereto, and pursuant to
which such Subsidiary shall agree, without qualification, to reimburse the
Issuing Lender on demand for the full amount of each and any Draft presented to
and paid by the relevant Issuing Lender in accordance with such Letter.
Additionally, the Borrower shall furnish to the relevant Issuing Lender and the
Agent such other documents and information pertaining to such requested Letter
issuance or any amendment, including any documentation related thereto, as the
relevant Issuing Lender or the Administrative Agent may require (including,
without limitation, an application and reimbursement agreement). Unless the
Issuing Lender has received written notice from any Lender, the Administrative
Agent or any Obligor, at least one Banking Day prior to the requested date of
issuance or amendment of the applicable Letter, that one or more applicable
conditions contained in Article 12 shall not then be satisfied, then, subject to
the terms and

 

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  conditions hereof, the Issuing Lender shall, on the requested date, issue a
Letter for the account of the Borrower or enter into the applicable amendment,
as the case may be, in each case in accordance with the Issuing Lender’s usual
and customary business practices.

ARTICLE 5

ROLLOVERS

5.1 LIBOR Loans

Subject to Section 3.5 and provided that the Borrower has, by giving notice to
the Administrative Agent in accordance with Section 5.2, requested the Lenders
to continue to extend credit by way of a LIBOR Loan to replace all or a portion
of an outstanding LIBOR Loan as it matures, each Lender shall, on the maturity
of such LIBOR Loan, continue to extend credit to the Borrower by way of a LIBOR
Loan (without a further advance of funds to the Borrower) in the principal
amount equal to such Lender’s Pro Rata Share of the principal amount of the
matured LIBOR Loan or the portion thereof to be replaced.

5.2 Rollover Notice

The notice to be given to the Administrative Agent pursuant to Section 5.1
(“Rollover Notice”) shall be irrevocable, shall be given in accordance with
Section 3.10, shall be in substantially the form of Schedule E hereto and shall
specify:

 

  (a) the maturity date of the maturing LIBOR Loan;

 

  (b) the principal amount of the maturing LIBOR Loan and the portion thereof to
be replaced; and

 

  (c) the Interest Period or Interest Periods of the replacement LIBOR Loans.

5.3 Rollover by Lenders. Upon written notice to such effect to the Borrower at
such time as a Default has occurred and is continuing, the Administrative Agent
may, as applicable, on the maturity date of a LIBOR Loan, rollover such LIBOR
Loan into a LIBOR Loan having an Interest Period of one month or such other
period as the Lenders may determine, as though a notice to such effect had been
given in accordance with Section 5.2.

ARTICLE 6

CONVERSIONS

6.1 Converting Loan to Other Type of Loan

Subject to Sections 3.1 and 3.5 and provided that the Borrower has, by giving
notice to the Administrative Agent in accordance with Section 6.2, requested the
Lenders to convert all or a portion of an outstanding Loan into another type of
Loan, each Lender shall, on the date of conversion (which, in the case of the
conversion of all or a portion of an outstanding LIBOR Loan, shall be the date
on which such Loan matures), continue to extend credit to the Borrower by way of
the type of Loan into which the outstanding Loan or a portion thereof is
converted (with a repayment and a subsequent advance of funds to the Borrower)
in the aggregate principal amount equal to such Lender’s Pro Rata Share of the
principal amount of the outstanding Loan or the portion thereof which is being
converted.

 

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6.2 Conversion Notice

The notice to be given to the Administrative Agent pursuant to Section 6.1
(“Conversion Notice”) shall be irrevocable, shall be given in accordance with
Section 3.10, shall be in substantially the form of Schedule F hereto and shall
specify:

 

  (a) the type of Loan to be converted;

 

  (b) the date on which the conversion is to take place;

 

  (c) the principal amount of the Loan or the portion thereof which is to be
converted;

 

  (d) the type and amount of the Loan into which the outstanding Loan is to be
converted; and

 

  (e) if an outstanding Loan is to be converted into a LIBOR Loan, the
applicable Interest Period.

6.3 Absence of Notice

Subject to Section 3.5 in the absence of a Rollover Notice or Conversion Notice
within the appropriate time periods referred to herein, a maturing LIBOR Loan in
favour of the Borrower shall be automatically converted to a Base Rate Loan as
though a notice to such effect had been given in accordance with Section 6.2.

6.4 Conversion by Lenders

Upon written notice to such effect to the Borrower at such time as a Default has
occurred and is continuing, the Administrative Agent may, on the maturity date
of a LIBOR Loan, convert such LIBOR Loan into a Base Rate Loan, as though a
notice to such effect had been given in accordance with Section 6.2.

ARTICLE 7

INTEREST AND FEES

7.1 Interest Rates

The Borrower shall pay to the Lenders, in accordance with Section 3.6, interest
on the outstanding principal amount from time to time of each Loan and on
overdue interest thereon, at the rate per annum equal to:

 

  (i) in the case of each Base Rate Loan, the Alternate Base Rate Canada plus
the Applicable Rate; and

 

  (ii) in the case of each LIBOR Loan, LIBOR plus the Applicable Rate.

 

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7.2 Calculation and Payment of Interest

 

  (a) Interest on the outstanding principal amount from time to time of each
LIBOR Loan shall accrue from day to day from and including the date on which
credit is obtained by way of such Loan to but excluding the date on which such
Loan is repaid in full (both before and after maturity and as well after as
before judgment) and shall be calculated on the basis of the actual number of
days elapsed divided by 360.

 

  (b) Accrued interest shall be paid,

 

  (i) in the case of Base Rate Loans, in arrears monthly on the 22nd day of each
calendar month; and

 

  (ii) in the case of interest on LIBOR Loans, on the last day of the applicable
Interest Period; provided that, in the case of Interest Periods of a duration
longer than three months, accrued interest shall be paid no less frequently than
every three months from the first day of such Interest Period during the term of
such Interest Period and on the date on which such LIBOR Loans are otherwise
required to be repaid.

7.3 General Interest Rules

 

  (a) For the purposes hereof, whenever interest is calculated on the basis of a
year of 360 or 365 days, each rate of interest determined pursuant to such
calculation expressed as an annual rate for the purposes of the Interest Act
(Canada) is equivalent to such rate as so determined multiplied by the actual
number of days in the calendar year in which the same is to be ascertained and
divided by 360 or 365 days, respectively.

 

  (b) Interest on each Loan and on overdue interest thereon shall be payable in
the currency in which such Loan is denominated during the relevant period.

 

  (c) If the Borrower fails to pay any fee or other amount of any nature payable
by it to the Administrative Agent or the Lenders hereunder or under any
document, instrument or agreement delivered pursuant hereto on the due date
therefor, the Borrower shall pay to the Administrative Agent or the Lenders, as
the case may be, interest on such overdue amount in the same currency as such
overdue amount is payable from and including such due date to but excluding the
date of actual payment (as well after as before judgment) at the rate per annum,
calculated and compounded monthly, which is equal to the Alternate Base Rate
Canada plus the Applicable Rate at such time plus 3.00% in the case of overdue
amounts denominated in U.S. dollars.

Such interest on overdue amounts shall become due and be paid on demand made by
the Administrative Agent.

 

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7.4 Selection of Interest Periods

With respect to each LIBOR Loan, the Borrower shall specify in the Drawdown
Notice, Rollover Notice or Conversion Notice, the duration of the Interest
Period provided that:

 

  (a) Interest Periods shall have a duration from one, two, three or six months
(subject to availability and to the aggregate number of Interest Periods with
different dates outstanding under the Credit Facility at any time being less
than five);

 

  (b) the first Interest Period for a LIBOR Loan shall commence on and include
the day on which credit is obtained by way of such Loan and each subsequent
Interest Period applicable thereto shall commence on and include the date of the
expiry of the immediately preceding Interest Period applicable thereto; and

 

  (c) if any Interest Period would end on a day which is not a Banking Day, such
Interest Period shall be extended to the next succeeding Banking Day unless such
next succeeding Banking Day falls in the next calendar month, in which case such
Interest Period shall be shortened to end on the immediately preceding Banking
Day.

7.5 Standby Fees

Upon the first Banking Day following the completion of each Fiscal Quarter and
on the termination of the Credit Facility, the Borrower shall pay, in accordance
with Section 3.6, to the Lenders, in arrears, a standby fee calculated at the
rate per annum, on the basis of a year of 365 days, equal to the Applicable Rate
on the Available Credit, such fee to accrue daily from the date of the execution
and delivery of this agreement to and including the termination of the Credit
Facility pursuant to Section 2.4.

7.6 Letter Fees

The Borrower shall pay to the Lenders in respect of each Letter, in accordance
with Section 3.6, an issuance fee quarterly in arrears on the first Banking Day
of each Fiscal Quarter, calculated at a rate per annum equal to the Applicable
Rate on the basis of a year of 365 days and on the amount of each such Letter
for a period of time equal to the number of days in the preceding Fiscal Quarter
on which such Letter was outstanding. In addition, with respect to all Letters,
the Borrower shall from time to time pay to the Issuing Lender its usual and
customary fees (at the then prevailing rates) for the amendment, delivery and
administration of letters of credit such as the Letters. Each such payment is
non-refundable and fully earned when due.

7.7 Applicable Rate Adjustment

The changes in the Applicable Rate shall be effective as of the first day of the
applicable Fiscal Quarter, in each case based upon the compliance certificate
contemplated under Section 11.1(a) that has previously been delivered to the
Administrative Agent with respect to the second immediately preceding Fiscal
Quarter. If a new Applicable Rate becomes effective during the term of an
outstanding Letter or LIBOR Loan, the Administrative Agent shall

 

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forthwith determine the amount of any overpayment or underpayment of issuance
fees with respect to such Letters and interest with respect to such LIBOR Loan
and notify the Borrower and the relevant Lenders of such amounts. Such
determination by the Administrative Agent shall constitute, in the absence of
manifest error, prima facie evidence of the amount of such overpayment or
underpayment, as the case may be. In the event of an underpayment, the Borrower
shall, upon receipt of such notice, pay to the Lenders in accordance with
Section 3.6, the amount of such underpayment. In the event of any overpayment,
the amount of such overpayment shall be credited to succeeding payments of
interest or issuance fees, as the case may be, as they become due until such
amount has been fully applied, or, if any overpayment or part thereof is still
outstanding on the first Banking Day of the next Fiscal Quarter, the amount of
such overpayment or part thereof shall be paid by the Lenders to the Borrower on
such first Banking Day. For the purpose of making adjustments, if any, to the
Applicable Rate as of the first day of the second Fiscal Quarter of each Fiscal
Year, the compliance certificate contemplated under Section 11.1(a) with respect
to the Borrower’s consolidated audited financial statements for the preceding
Fiscal Year shall be determinative.

ARTICLE 8

RESERVE, CAPITAL, INDEMNITY AND TAX PROVISIONS

8.1 Conditions of Credit

The obtaining or maintaining of credit hereunder shall be subject to the terms
and conditions contained in this Article 8.

8.2 Change of Circumstances

 

  (a) Increased Costs Generally. If from time to time any Change in Law shall:

 

  (i) impose, modify or deem applicable any reserve, special deposit, compulsory
loan, insurance charge or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any Lender;

 

  (ii) subject any Lender to any Tax of any kind whatsoever with respect to this
Agreement, any Letter, any participation in a Letter, or any Loan made by it or
Bankers’ Acceptance accepted by it, or change the basis of taxation of payments
to such Lender in respect thereof, except for Indemnified Taxes or Other Taxes
covered by Section 8.6 and the imposition, or any change in the rate, of any
Excluded Tax payable by such Lender; or

 

  (iii) impose on any Lender or any applicable interbank market any other
condition, cost or expense affecting this Agreement or Loans made by such Lender
or any Letter or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Loan (or of maintaining its obligation to
make any such Loan), or to increase the cost to such Lender or the Issuing
Lender of participating in, issuing or maintaining any Letter (or of maintaining
its obligation

 

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to participate in or to issue any Letter), or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Lender hereunder (whether
of principal, interest or any other amount), then upon request of such Lender
from time to time the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered, such amount or amounts to be determined in the sole and
absolute discretion of the relevant Lender.

 

  (b) Capital and Liquidity Requirements. If any Lender determines in its sole
and absolute discretion that any Change in Law affecting such Lender or any
lending office of such Lender or such Lender’s holding company, if any,
regarding capital or liquidity requirements has or would have the effect of
reducing the rate of return on such Lender’s capital or on the capital of such
Lender’s holding company, if any, as a consequence of this Agreement, the
Individual Commitment of such Lender or the Loans made by, or the Letters issued
or participated in by such Lender, to a level below that which such Lender or
its holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s policies and the policies of its holding company
with respect to, as applicable, capital adequacy or liquidity requirements),
then from time to time the Borrower will pay to such Lender such additional
amount or amounts as will compensate such Lender or its holding company for any
such reduction suffered.

 

  (c) Certificates for Reimbursement. A certificate of a Lender setting forth
the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section, including reasonable detail of the basis of calculation of the amount
or amounts, and delivered to the Borrower from time to time shall be prima facie
evidence of such amounts absent manifest error. The Borrower shall pay such
Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.

 

  (d) Delay in Requests. Failure or delay on the part of any Lender to demand
compensation pursuant to this Section 8.2 shall not constitute a waiver of such
Lender’s right to demand such compensation, except that the Borrower shall not
be required to compensate a Lender pursuant to this Section 8.2 for any
increased costs incurred or reductions suffered more than four months prior to
the date that such Lender notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender’s intention to claim
compensation therefore, unless the Change in Law giving rise to such increased
costs or reductions is retroactive, in which case the four-month period referred
to above shall be extended to include the period of retroactive effect thereof.

 

  (e)

Alternate Booking Points. Each Lender agrees that, as promptly as practicable
after it becomes aware of the occurrence of an event or the existence of a
condition that would cause it to seek additional amounts from the Borrower
pursuant to Section 8.2, it will use reasonable efforts to make, fund or
maintain the affected credit of such Lender through another lending office or
take such other actions as it deems appropriate if as a result thereof the
additional moneys which would otherwise be required to be paid in respect of
such credit pursuant to

 

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  Section 8.2, would be reduced and if, as determined by such Lender in its sole
discretion, the making, funding or maintaining of such affected credit through
such other lending office or the taking of such other actions would not
otherwise adversely affect such credit or such Lender and would not, in such
Lender’s sole discretion, be commercially unreasonable.

8.3 Failure to Fund as a Result of Change of Circumstances

If any Lender but not all of the Lenders who have Individual Commitments seeks
additional compensation pursuant to Section 8.2 (the “Affected Lender”), then
the Borrower may indicate to the Administrative Agent in writing that it desires
to replace the Affected Lender with one or more of the other Lenders, and the
Administrative Agent shall then forthwith give notice to the other Lenders that
any such Lender or Lenders may, in the aggregate, advance all (but not part) of
the Affected Lender’s Pro Rata Share of the affected credit and, in the
aggregate, assume all (but not part) of the Affected Lender’s Individual
Commitments and obligations under a Credit Facility and acquire all (but not
part) of the rights of the Affected Lender and assume all (but not part) of the
obligations of the Affected Lender under each of the other Credit Documents to
the extent they relate to the Credit Facility (but in no event shall any other
Lender or the Administrative Agent be obliged to do so). If one or more Lenders
shall so agree in writing (herein collectively called the “Assenting Lenders”
and individually called an “Assenting Lender”) with respect to such advance,
acquisition and assumption, the Pro Rata Share of such credit of each Assenting
Lender and the Individual Commitments and the obligations of such Assenting
Lender under a particular Credit Facility and the rights and obligations of such
Assenting Lender under each of the other Credit Documents to the extent they
relate to the Credit Facility shall be increased by its respective pro rata
share (based on the relative Individual Commitments of the Assenting Lenders) of
the Affected Lender’s Pro Rata Share of such credit and Individual Commitments
and obligations under the Credit Facility and rights and obligations under each
of the other Credit Documents to the extent they relate to the Credit Facility
on a date mutually acceptable to the Assenting Lenders and the Borrower. On such
date, the Assenting Lenders shall extend to the Borrower the Affected Lender’s
Pro Rata Share of such credit and shall prepay to the Affected Lender the
advances of the Affected Lender then outstanding, together with all interest
accrued thereon and all other amounts owing to the Affected Lender hereunder,
and, upon such advance and prepayment by the Assenting Lenders, the Affected
Lender shall cease to be a “Lender” for purposes of this agreement and shall no
longer have any obligations hereunder. Upon the assumption of the Affected
Lender’s Individual Commitments as aforesaid by an Assenting Lender, Schedule A
hereto shall be deemed to be amended to increase the Individual Commitment of
such Assenting Lender by the respective amounts of such assumption.

 

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8.4 Indemnity Relating to Credits

Upon notice from the Administrative Agent to the Borrower (which notice shall be
accompanied by a detailed calculation of the amount to be paid by the Borrower),
the Borrower shall pay to the Administrative Agent such amount or amounts as
will compensate the Administrative Agent or the Lenders (including, for
certainty, the Issuing Lender) for any loss, cost or expense incurred by them:

 

  (a) in the liquidation or redeposit of any funds acquired by the Lenders to
fund or maintain any portion of a LIBOR Loan as a result of:

 

  (i) the failure of the Borrower to borrow or make repayments on the dates
specified under this agreement or in any notice from the Borrower to the
Administrative Agent (provided that if any notice specifies the repayment of a
LIBOR Loan at any time other than its maturity date, then the Borrower shall be
responsible for any loss, costs or expenses referred to above); or

 

  (ii) the repayment or prepayment of any amounts on a day other than the
payment dates prescribed herein or in any notice from the Borrower to the
Administrative Agent (provided that if any notice specifies the repayment of a
LIBOR Loan at any time other than its maturity date, then the Borrower shall be
responsible for any loss, costs or expenses referred to above); or

 

  (b) with respect to any Letter, arising from claims or legal proceedings, and
including reasonable and documented legal fees and disbursements, respecting the
collection of amounts owed by the Borrower hereunder in respect of such Letter
or the enforcement of the Administrative Agent or the Lenders’ rights hereunder
in respect of such Letter including, without limitation, legal proceedings
attempting to restrain the Administrative Agent or the Lenders from paying any
amount under such Letter.

Notwithstanding the foregoing, the Borrower shall not be required to indemnify a
Lender for any such cost or expense if such cost or expense is incurred while
such Lender is a Defaulting Lender.

8.5 Indemnity for Transactional and Environmental Liability

 

  (a)

The Borrower hereby agrees to indemnify and hold the Administrative Agent, each
Lender, the Issuing Lender and each of their respective Affiliates,
shareholders, officers, directors, employees, and agents (collectively, the
“Indemnified Parties”) free and harmless from and against any and all claims,
demands, actions, causes of action, suits, losses, costs, charges, liabilities
and damages, and expenses in connection therewith (irrespective of whether such
Indemnified Party is a party to the action for which indemnification hereunder
is sought), and including, without limitation, reasonable legal fees and out of
pocket disbursements and amounts paid in settlement which are approved by the
Borrower (collectively in this Section 8.5(a), the “Indemnified Liabilities”),
incurred or suffered by, or asserted against, the Indemnified Parties or any of
them as a result of, or arising out of, or relating to (i) the extension of
credit contemplated herein, (ii) any transaction financed or to be financed in
whole or in part, directly or indirectly, with the proceeds of any credit
extended hereunder, (iii) any actual or threatened investigation, litigation or
other proceeding relating to any credit extended or proposed to be extended as
contemplated herein or (iv) the execution, delivery, performance or enforcement
of the Credit Documents

 

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  and any instrument, document or agreement executed pursuant hereto, except for
any such Indemnified Liabilities that a court of competent jurisdiction
determined arose on account of the relevant Indemnified Party’s gross negligence
or willful misconduct.

 

  (b) Without limiting the generality of the indemnity set out in the preceding
clause (a), the Borrower hereby further agrees to indemnify and hold the
Indemnified Parties free and harmless from and against any and all claims,
demand, actions, causes of action, suits, losses, costs, charges, liabilities
and damages, and expenses in connection therewith, including, without
limitation, reasonable and documented legal fees and out of pocket disbursements
and amounts paid in settlement which are approved by the Borrower, of any and
every kind whatsoever paid (collectively in this Section 8.5(b), the
“Indemnified Liabilities”), incurred or suffered by, or asserted against, the
Indemnified Parties or any of them for, with respect to, or as a direct or
indirect result of, (i) the presence on or under, or the Release from on or
under, any real property legally or beneficially owned (or any estate or
interest which is owned), leased, used or operated by any Obligor of any
Hazardous Materials, and (ii) any other violation of or liability pursuant to an
Environmental Law with respect to any Obligor, and regardless of whether caused
by, or within the control of, such Obligor, except for any such Indemnified
Liabilities that a court of competent jurisdiction determined arose on account
of the relevant Indemnified Party’s gross negligence or willful misconduct.

 

  (c) All obligations provided for in this Section 8.5 shall survive
indefinitely the permanent repayment of the outstanding credit hereunder and the
termination of the Credit Agreement. The obligations provided for in this
Section 8.5 shall not be reduced or impaired by any investigation made by or on
behalf of the Administrative Agent or any of the Lenders.

 

  (d) The Borrower hereby agrees that, for the purposes of effectively
allocating the risk of loss placed on the Borrower by this Section 8.5, the
Administrative Agent and each Lender shall be deemed to be acting as the agent
or trustee on behalf of and for the benefit of their respective shareholders,
officers, directors, employees and agents.

 

  (e) If, for any reason, the obligations of the Borrower pursuant to this
Section 8.5 shall be unenforceable, the Borrower agrees to make the maximum
contribution to the payment and satisfaction of each obligation that is
permissible under applicable law.

 

  (f) The indemnity under this Section 8.5 shall not apply to any matters
specifically dealt with in Sections 8.2, 8.4, 8.6 or 11.1(f).

 

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8.6 Gross-Up for Taxes

 

  (a) Any and all payments made by or on behalf of the Borrower under this
agreement or under any other Credit Document (any such payment being hereinafter
referred to as a “Payment”) to or for the benefit of a Lender shall be made
without set-off or counterclaim, and free and clear of, and without deduction or
withholding for, or on account of, any and all present or future Taxes except to
the extent that such deduction or withholding is required by law or the
administrative practice of any Official Body. If any such Taxes are so required
to be deducted or withheld from or in respect of any Payment made to or for the
benefit of a Lender, the Borrower shall:

 

  (i) promptly notify the Administrative Agent of such requirement;

 

  (ii) if the Taxes are Indemnified Taxes, pay to such Lender in addition to the
Payment to which such Lender is otherwise entitled, such additional amount as is
necessary to ensure that the net amount actually received by such Lender (free
and clear of, and net of, any such Taxes, including the full amount of any Taxes
required to be deducted or withheld from any additional amount paid by the
Borrower under this Section 8.6(a), whether assessable against the Borrower, the
Administrative Agent or such Lender) equals the full amount the Lender, would
have received had no such deduction or withholding been required;

 

  (iii) make such deduction or withholding;

 

  (iv) pay to the relevant Official Body in accordance with applicable law the
full amount of Taxes required to be deducted or withheld (including the full
amount of Taxes required to be deducted or withheld from any additional amount
paid by the Borrower to the Lender under this Section 8.6(a), within the time
period required by applicable law; and

 

  (v) as promptly as possible thereafter, forward to the relevant Lender an
original official receipt (or a certified copy), or other documentation
reasonably acceptable to the Administrative Agent and such Lender, evidencing
such payment to such Official Body.

 

  (b) If the Administrative Agent or any Lender is subject to Indemnified Taxes
in respect of any Payment made by the Borrower but such Taxes are not levied by
way of deduction or withholding (all such Taxes being “Non-Withheld Taxes”), the
Borrower shall pay to the Administrative Agent or such Lender, as the case may
be, at the time the Borrower makes such Payment and in addition to such Payment,
such additional amount as is necessary to ensure that the total amount received
by the Administrative Agent or such Lender, as the case may be, is equal to the
Payment plus the amount of Non-Withheld Taxes exigible in respect of the
aggregate of the Payment and the additional amount payable under this
Section 8.6(b).

 

  (c) In addition, the Borrower agrees to pay any and all Other Taxes.

 

  (d)

The Borrower hereby indemnifies and holds harmless each Lender, on an
after-Taxes basis, for the full amount of Indemnified Taxes including Other
Taxes and

 

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  Non-Withheld Taxes, interest, penalties and other liabilities, levied, imposed
or assessed in connection therewith against (and whether or not paid directly
by) the Administrative Agent or such Lender, as applicable, and for all
expenses, resulting from or relating to the Borrower’s failure to:

 

  (i) remit to the Administrative Agent or such Finance Party the documentation
referred to in Section 8.6(a)(v);

 

  (ii) pay any Taxes or Other Taxes when due to the relevant Official Body
(including, without limitation, any Taxes imposed by any Official Body on
amounts payable under this Section 8.6; or

 

  (iii) pay to the Administrative Agent or applicable Lender any Non-Withheld
Taxes in accordance with Section 8.6,

 

  (e) whether or not such Taxes were correctly or legally assessed, the
Administrative Agent or any Lender who pays any Taxes or Other Taxes (other than
Non-Withheld Taxes), and the Administrative Agent or any Lender who pays any
Non-Withheld Taxes in excess of the amount (if any) paid by the Borrower on
account thereof under Section 8.6(b), shall promptly notify the Borrower of such
payment, provided, however, that failure to provide such notice shall not
detract from, or compromise, the obligations of the Borrower under this
Section 8.6. Payment pursuant to this indemnification shall be made within 30
days from the date the Administrative Agent or the relevant Lender, as the case
may be, makes written demand therefor accompanied by a certificate as to the
amount of such Taxes or Other Taxes and the calculation thereof, which
calculation shall be prima facie evidence of such amount.

 

  (f) If the Borrower determines in good faith that a reasonable basis exists
for contesting any Taxes for which a payment has been made under this
Section 8.6, the relevant Lender or the Administrative Agent, as applicable,
shall, if so requested by the Borrower, cooperate with the Borrower in
challenging such Taxes at the Borrower’s expense.

 

  (g)

If any Lender or the Administrative Agent, as applicable, receives a refund of,
or credit for, Taxes for which a payment has been made by the Borrower under
this Section 8.6, which refund or credit in the good faith judgment of such
Lender or the Administrative Agent, as the case may be, is attributable to the
Taxes giving rise to such payment made by the Borrower, then the Lender or the
Administrative Agent, as the case may be, shall reimburse the Borrower for such
amount (if any, but not exceeding the amount of any payment made under this
Section 8.6 that gives rise to such refund or credit), net of out-of-pocket
expenses of such Lender or the Administrative Agent, as the case may be, which
the Administrative Agent or such Lender, as the case may be, determines in its
absolute discretion will leave it, after such reimbursement, in no better or
worse position than it would have been in if such Taxes had not been exigible.
The Borrower, upon the request of the Administrative Agent or any Lender, agrees
to repay the Administrative Agent or such Lender, as the case may be, any
portion of

 

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  any such refund or credit paid over to the Borrower that the Administrative
Agent or such Lender, as the case may be, is required to pay to the relevant
Official Body and agrees to pay any interest, penalties or other charges paid by
such Lender or the Administrative Agent, as the case may be, as a result of or
related to such payment to such Official Body. Neither the Administrative Agent
nor any Lender shall be under any obligation to arrange its tax affairs in any
particular manner so as to claim any refund or credit. None of the Lenders nor
the Administrative Agent shall be obliged to disclose any information regarding
its tax affairs or computations to the Borrower or any other Person in
connection with this Section 8.6(f) or any other provision of this Section 8.6.

 

  (h) The Borrower also hereby indemnifies and holds harmless the Administrative
Agent and each Lender, on an after-Taxes basis, for any additional Taxes on net
income that the Administrative Agent or such Lender may be obliged to pay as a
result of the receipt of amounts under this Section 8.6.

 

  (i) Each Lender shall, on or prior to the date that it becomes a Lender,
provide each of the Administrative Agent and the Borrower with two original
copies of such forms, certificates and other documents (collectively, “Exemption
Forms”) as may be required by the Internal Revenue Service in order for the
Borrower to be able to make Payments without having to deduct or withhold any
Indemnified Taxes or having any Non-Withheld Taxes exigible against the
Administrative Agent or the Lender. In addition, each Lender agrees to update
such Exemption Forms upon the reasonable written request of the Borrower or the
Administrative Agent where required to maintain the exempt status of the
Payments pursuant to Applicable Law. Notwithstanding the foregoing, the updating
of such Exemption Forms shall not be required if the Lender is unable to do so
due to a Change in Law occurring after the date on which the Lender became a
Lender, however, it shall, in such case if it is able to do so, provide each of
the Administrative Agent and the Borrower with two original copies of such other
forms, certificates and other documents (collectively, the “Rate Reduction
Forms”) as may be required by the Internal Revenue Service in order for the
Borrower to be able to make Payments or withholdings at a reduced rate of
Indemnified Taxes or having Non-Withheld Taxes exigible against the
Administrative Agent or the Lender at a reduced rate. In addition, each Lender
agrees to update such Rate Reduction Forms upon the reasonable written request
of the Borrower or the Administrative Agent where required to maintain or obtain
the most advantageous tax status for the Payments pursuant to Applicable Law.
Notwithstanding the foregoing, if the updating of any Exemption Forms or the
provision or updating of any Rate Reduction Forms would, in the Lender’s
judgment subject such Lender to any material unreimbursed cost or expense or
would prejudice the legal or commercial position of the Lender, it will not be
required to update such Exemption Forms or to provide or update such Rate
Reduction Forms.

 

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  (j) Additional amounts payable under Section 8.6(a) and Non-Withheld Taxes
payable under Section 8.6(b) have the same character as the Payments to which
they relate. For greater certainty, for example, additional amounts payable
under Section 8.6(a) or Non-Withheld Taxes payable under Section 8.6(b), in
respect of interest payable under a Credit Document, shall be payments of
interest under such Credit Document. All payments made under this Section 8.6
shall be subject to the provisions of this Section 8.6.

 

  (k) The Borrower’s obligations under this Section 8.6 shall survive without
limitation the termination of the Credit Facility and this agreement and all
other Credit Documents and the permanent repayment of the outstanding credit and
all other amounts payable hereunder.

ARTICLE 9

REPAYMENTS AND PREPAYMENTS

9.1 Repayment of Credit Facility

The Borrower shall repay to the Administrative Agent, for the account of the
Lenders, in full the outstanding credit under the Credit Facility on the
Maturity Date together with all accrued and unpaid interest thereon and all
accrued and unpaid fees with respect thereto. As concerns any Letter which, on
the Maturity Date, has an expiry date later than the Maturity Date, the Borrower
shall pay to the Issuing Lender, on the Maturity Date, the then contingent
liability of the Issuing Lender thereunder (to be held solely for the purpose of
satisfying any draw under such Letter and to be held subject to Section 13.2).
Following such payment by the Borrower to the Issuing Lender, the Borrower shall
have no further liability to the Lenders with respect to any such Letter.

9.2 Voluntary Prepayments under Credit Facility

Subject to Section 9.3, the Borrower shall be entitled to prepay all or any
portion of the outstanding Loans under the Credit Facility at any time, without
penalty, provided that Section 8.4(a) shall be complied with in connection with
any such prepayment. Other than any payments required pursuant to
Section 8.4(a), there are no premiums, penalties or other additional payments
associated with any voluntary prepayments under this Section 9.2. Amounts which
are prepaid as aforesaid in respect of the Credit Facility may be reborrowed.

9.3 Prepayment Notice

The Borrower shall give written notice to the Administrative Agent of each
voluntary prepayment pursuant to Section 9.2. Such notice (a “Prepayment
Notice”) shall be irrevocable, shall be given in accordance with Section 3.10
and shall specify:

 

  (a) the date on which the prepayment is to take place; and

 

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  (b) the type and principal amount of the Loan or the portion thereof which is
to be prepaid.

9.4 Reimbursement or Conversion on Presentation of Letters

 

  (a) On presentation of a Letter and payment thereunder by the Issuing Lender,
the Borrower shall forthwith pay and in any event no later than 10:00 a.m.
(Reno, Nevada time) on the date of any payment by the Issuing Lender under a
Letter to the Administrative Agent for the account of the Issuing Lender, and
thereby reimburse Issuing Lender for, all amounts paid by Issuing Lender
pursuant to such Letter. Failing such payment, the Borrower shall be deemed to
have effected, notwithstanding any other provision hereof, a conversion of such
Letter into a Base Rate Loan to the extent of the payment of the Issuing Lender
thereunder.

 

  (b) If the Issuing Lender makes payment under any Letter and the Borrower does
not fully reimburse the Issuing Lender on or before the date of payment, then
Section 9.4(a) shall apply to deem a Loan to be outstanding to the Borrower
under the Credit Facility in the manner therein set out regardless of whether
the conditions set forth in Section 12.1 are satisfied. Each Lender under the
Credit Facility shall, on request by the Issuing Lender, immediately pay to the
Issuing Lender an amount equal to such Lender’s Pro Rata Share of the amount
paid by the Issuing Lender such that each Lender under the Credit Facility is
participating in the deemed Loan in accordance with its Pro Rata Share. The
obligation of each Lender under the Credit Facility to pay the Issuing Lender
its Pro Rata Share of each such deemed Loan shall be absolute and unconditional
and shall not be affected by any circumstance, including (A) any setoff,
counterclaim, recoupment, defence or other right which such Lender may have
against the Issuing Lender, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing.

 

  (c) Each Lender shall immediately on demand indemnify the Issuing Lender to
the extent of such Lender’s Pro Rata Share of any amount paid or liability
incurred by the Issuing Lender under each Letter issued by it to the extent that
the Borrower does not fully reimburse the Issuing Lender therefor.

 

  (d) Until each Lender funds its Loan pursuant to this Section 9.3 to reimburse
the Issuing Lender for any amount drawn under any Letter, interest in respect of
such Lender’s Pro Rate Share of such amount shall be solely for the account of
the Issuing Lender.

 

  (e)

If any Lender fails to immediately make available to the Administrative Agent
for the account of the Issuing Lender any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 9.3, the Issuing
Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately

 

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  available to the Issuing Lender at a rate per annum equal to Alternate Base
Rate Canada plus the Applicable Rate from time to time in effect, plus any
administrative, processing or similar fees customarily charged by the Issuing
Lender in connection with the foregoing. If such Lender pays such amount (with
interest and fees as aforesaid), the amount so paid shall constitute such
Lender’s Pro Rate Share of the relevant Loan. A certificate of the Issuing
Lender submitted to any Lender (through the Administrative Agent) with respect
to any amounts owing under this Section 9.4(e) shall be conclusive absent
manifest error.

9.5 Letters Subject to an Order

 

  (a) Subject to Section 13.2, the Borrower shall pay to the Issuing Lender an
amount equal to the maximum amount available to be drawn under any unexpired
Letter which becomes the subject of any Order. Payment in respect of each such
Letter shall be due forthwith upon demand.

 

  (b) Notwithstanding anything in this agreement to the contrary, the Issuing
Lender shall not be under any obligation to issue any Letter if:

 

  (i) the issuance of such Letter would violate one or more policies of the
Issuing Lender applicable to Letters generally;

 

  (ii) except as otherwise agreed by the Administrative Agent and the Issuing
Lender, such Letter is to be denominated in a currency other than U.S. dollars;

 

  (iii) any order, judgment or decree of any Official Body or arbitrator shall
by its terms purport to enjoin or restrain the Issuing Lender from issuing such
Letter, or any law applicable to the Issuing Lender or any request or directive
(whether or not having the force of law) from any Official Body with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or such Letter
in particular or shall impose upon the Issuing Lender with respect to such
Letter any restriction, reserve or capital requirement (for which the Issuing
Lender is not otherwise compensated hereunder) not in effect on the date hereof,
or shall impose upon the Issuing Lender any unreimbursed loss, cost or expense
which was not applicable on the date hereof and which the Issuing Lender in good
faith deems material to it; or

 

  (iv) such Letter contains any provisions for automatic reinstatement of the
stated amount after any drawing thereunder;

9.6 Currency of Repayment

All payments and repayments of outstanding credit hereunder shall be made in the
currency of such outstanding credit.

 

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ARTICLE 10

REPRESENTATIONS AND WARRANTIES

10.1 Representations and Warranties

To induce the Lenders and the Administrative Agent to enter into this agreement
and to induce the Lenders to extend credit hereunder, the Borrower hereby
represents and warrants to the Lenders and the Administrative Agent, as of the
date of this agreement, as of the date of each extension of credit hereunder and
as of the last day of each Fiscal Quarter, as follows and acknowledges and
confirms that the Lenders and the Administrative Agent are relying upon such
representations and warranties in entering into this agreement and in extending
credit hereunder:

 

  (a) Status and Power of Obligors. Each Obligor is a corporation or limited
liability company duly created and organized and validly subsisting in good
standing under the laws of the jurisdiction governing its existence. Each
Obligor is duly qualified, registered or licensed in all jurisdictions where the
nature of its business makes such qualification, registration or licensing
necessary except where the lack of such qualification, registration or licensing
could reasonably be expected to have a Material Adverse Effect. Each Obligor has
all requisite corporate capacity, power and authority to own, hold under licence
or lease its properties, to carry on its business as now conducted except where
the failure to have such capacity, power and authority could not reasonably be
expected to have a Material Adverse Effect. Each Obligor has all necessary
corporate capacity to enter into, and carry out the transactions contemplated
by, the Finance Documents to which is a party.

 

  (b) Authorization and Enforcement. All necessary action, corporate or
otherwise, has been taken to authorize the execution, delivery and performance
by each Obligor of the Finance Documents to which it is a party. Each Obligor
has duly executed and delivered the Finance Documents to which it is a party.
The Finance Documents to which each Obligor is a party are legal, valid and
binding obligations of such Obligor, enforceable against such Obligor in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by (i) applicable bankruptcy, insolvency, moratorium,
reorganization and other laws of general application limiting the enforcement of
creditors’ rights generally, (ii) the fact that the courts may deny the granting
or enforcement of equitable remedies and (iii) the fact that, pursuant to the
Currency Act (Canada), no court in Canada may make an order expressed in any
currency other than lawful money of Canada.

 

  (c)

Compliance with Other Instruments. The execution, delivery and performance by
each Obligor of the Finance Documents to which it is a party, and the
consummation of the transactions contemplated herein and therein, do not and
will not conflict with, result in any breach or violation of, or constitute a
default under, the terms, conditions or provisions of, the charter or constating
documents or by-laws of, or any shareholder agreement or declaration relating
to, such Obligor. The execution, delivery and performance by each Obligor of the
Finance

 

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  Documents to which it is a party, and the consummation of the transactions
contemplated herein and therein, do not and will not conflict with, result in
any material breach or violation of, or constitute a material default under, the
terms, conditions or provisions of, any law, regulation, judgment, decree or
order binding on or applicable to such Obligor or to which its property is
subject or of any Material Agreement or any material, lease, licence, permit or
other instrument to which such Obligor is a party or is otherwise bound or by
which such Obligor benefits or to which its property is subject and do not
require the consent or approval of any Official Body or any other party.

 

  (d) Financial Statements. The financial statements of the Borrower for the
most recently completed Fiscal Quarter or Fiscal Year, as the case may be, were
prepared in accordance with generally accepted accounting principles and no
Material Adverse Change has occurred in the condition, financial or otherwise,
of the Borrower since the date of such financial statements. The balance sheet
of the aforesaid financial statement presents a fair statement of the financial
condition and assets and liability of the Borrower as at the date thereof and
the statements of operations, retained earnings and cashflows contained in the
aforesaid financial statements fairly presents the results of the operations of
the Borrower throughout the period covered thereby. Except to the extent
reflected or reserved against in the aforesaid balance sheet (including the
notes thereto) and except as incurred in the ordinary and usual course of the
business of the Borrower, the Borrower does not have any outstanding
indebtedness or any liability or obligations (whether accrued, absolute,
contingent or otherwise) of a material nature customarily reflected or reserved
against in a balance sheet (including the notes thereto) prepared in accordance
with generally accepted accounting principles.

 

  (e) Litigation. There are no actions, suits, inquiries, claims or proceedings
(whether or not purportedly on behalf of any Company) pending or threatened in
writing against or affecting any Company before any Official Body which in any
case or in the aggregate could reasonably be expected to have a Material Adverse
Effect.

 

  (f) Title to Assets. Each Obligor has good and marketable title to its
property, assets and undertaking, free from any Lien other than Permitted Liens.

 

  (g) Conduct of Business. No Company is in violation of any agreement,
mortgage, franchise, licence, judgment, decree, order, statute, statutory trust,
rule or regulation relating in any way to itself or to the operation of its
business or to its property or assets (other than Environmental Laws) and which
could reasonably be expected to have a Material Adverse Effect. No Company is in
violation of any Environmental Law which violation could reasonably be expected
to have a Material Adverse Effect. Each Company holds all licenses, certificates
of approval, approvals, registrations, permits and consents which are required
to operate its businesses where they are currently being operated except where
the failure to have such licenses, certificates of approval, approvals,
registrations, permits and consents could not reasonably be expected to have a
Material Adverse Effect.

 

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  (h) Outstanding Defaults. No Default or Event of Default exists or would
result from the incurring of any Secured Obligations by any Obligor. No event
has occurred which constitutes or which, with the giving of notice, lapse of
time or both, would constitute a default under or in respect of any material
agreement, undertaking or instrument to which any Company is a party or to which
its respective property or assets may be subject, and which could reasonably be
expected to have a Material Adverse Effect.

 

  (i) Solvency Proceedings. No Obligor has:

 

  (i) admitted its inability to pay its debts generally as they become due or
failed to pay its debts generally as they become due;

 

  (ii) in respect of itself, filed an assignment or petition in bankruptcy or a
petition to take advantage of any insolvency statute;

 

  (iii) made an assignment for the benefit of its creditors;

 

  (iv) consented to the appointment of a receiver of the whole or any
substantial part of its assets;

 

  (v) filed a petition or answer seeking a reorganization, arrangement,
adjustment or composition in respect of itself under applicable bankruptcy laws
or any other applicable law or statute of Canada, the United States or other
applicable jurisdiction or any subdivision thereof; or

 

  (vi) been adjudged by a court having jurisdiction a bankrupt or insolvent, nor
has a decree or order of a court having jurisdiction been entered for the
appointment of a receiver, liquidator, trustee or assignee in bankruptcy of any
Company with such decree or order having remained in force and undischarged or
unstayed for a period of 30 days.

 

  (j) Tax Returns and Taxes. Each Obligor has filed all material Tax returns and
Tax reports required by law to have been filed by it and has paid all Taxes
thereby shown to be owing, except any such Taxes which are being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with generally accepted accounting principles shall have
been set aside on its books.

 

  (k) Expropriation or Condemnation. There is no present or threatened (in
writing) expropriation or condemnation of the property or assets of any Company,
which expropriation could reasonably be expected to have a Material Adverse
Effect.

 

  (l) Environmental Compliance.

 

  (i) All facilities and property (including underlying groundwater) owned,
leased, used or operated by any Company have been, and continue to be, owned or
leased in compliance with all Environmental Laws, except where such
non-compliance could not reasonably be expected have a Material Adverse Effect;

 

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  (ii) There are no pending or threatened (in writing)

 

  (A) claims, complaints, notices or requests for information received by any
Company with respect to any alleged violation of any Environmental Law which
alleged violation could reasonably be expected to have a Material Adverse
Effect;

 

  (B) complaints, notices or inquiries to any Company regarding potential
material liability under any Environmental Law which could reasonably be
expected to have a Material Adverse Effect;

 

  (iii) There have been no Releases of any Hazardous Materials, at, on, under or
from any property now or previously owned, operated, used or leased by any
Company that, singly or in the aggregate have, or could reasonably be expected
to have, a Material Adverse Effect;

 

  (iv) Each Company has been issued and is in compliance with all permits,
certificates, approvals, licenses and other authorizations under any
Environmental Laws to carry on its business except where any such non-issuance
or non-compliance could not reasonably be expected to have a Material Adverse
Effect; and

 

  (v) No conditions exist at, on or under any property now or previously owned,
operated, used or leased by any Company which, with the passage of time, or the
giving of notice or both, would give rise to liability under any Environmental
Law; which liability could reasonably be expected to have a Material Adverse
Effect.

 

  (m) Investment Company. No Obligor is subject to regulation under the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to enter into any Finance Document to
which it is a party or otherwise render any such Finance Document unenforceable.

 

  (n) Subsidiaries and Partnerships. No Company is, directly or indirectly, a
member of, or a partner or participant in, any partnership, joint venture or
syndicate that could reasonably be expected to have a Material Adverse Effect.

 

  (o) Corporate Structure. As at the date hereof, and hereafter, except as such
information may change as a result of a transaction permitted hereby and
reported to the Administrative Agent in accordance with Section 11.1(b)(iii),
the chart attached hereto as Schedule G accurately sets out the corporate
structure of the Borrower and all of its Subsidiaries and evidences
(i) intercorporate share ownership and (ii) ownership of mines.

 

  (p) Solvency after Drawdown. On an unconsolidated basis,

 

  (i) the assets of the Borrower shall exceed its liabilities, including
contingent liabilities at a fair valuation;

 

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  (ii) the capital of the Borrower shall not be reasonably small to conduct its
business; and

 

  (iii) the Borrower shall not have intended to incur debts, nor shall have
believed that it would incur debts, beyond its ability to pay such debts as they
mature.

 

  (q) Employee Benefit Plans. Each of the ERISA Companies is in compliance with
ERISA and all Applicable Law, except where such non-compliance is not reasonably
expected to have a Material Adverse Effect. There have been no Prohibited
Transactions or breaches of fiduciary duty with respect to any Plan that could
be reasonably expect to have Material Adverse Effect. No Termination Event has
occurred or is expected to occur with respect to any Plan or Multiemployer Plan
that could be reasonably expected to have a Material Adverse Effect

 

  (r) Regulation U or X. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any credit obtained hereunder shall be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation U or X. Terms
for which meanings are provided in F.R.S. Board Regulation U or X or any
regulations substituted therefor, as from time to time in effect, are used in
this Section with such meanings.

 

  (s) Assets Insured. The property and assets of the Obligors are insured with
insurers, in amounts, for risks and otherwise which are reasonable in relation
to such property and assets (subject to the amount of such deductibles as are
reasonable and normal in the circumstances) against loss or damage, and there
has been no default or failure by the party or parties insured under the
provisions of such policies of insurance maintained which would prevent the
recovery by the relevant Obligor insured thereunder of the full amount of any
material insured loss.

 

  (t)

Foreign Assets Control Regulations. Neither the execution and delivery of this
agreement nor the Borrower’s use of the proceeds of the Credit Facility will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any other enabling legislation or executive order
relating thereto. Without limiting the foregoing, no Obligor nor any of its
Subsidiaries (a) is or will become a Person whose property or interests in
property are blocked pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001) or (b) engages or will engage in any dealings or transactions, or be
otherwise associated, with any such Person. Each Obligor and its Subsidiaries
are in compliance, in all

 

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  material respects, with the Title III of Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA
Patriot Act of 2001). No part of the proceeds from either Credit Facility will
be used, directly or indirectly, for any payment to any governmental official or
employee, political party, official of a political party, candidate for
political office or anyone else acting in an official party capacity, in order
to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.

 

  (u) Intellectual Property. Each Company owns or is licensed or otherwise has
the right to use all Intellectual Property that is used in the operation of its
businesses without conflict with the rights of any other Person (other than any
Intellectual Property the absence of which or any such conflict with respect to
which would not have a Material Adverse Effect). No Company has not received any
notice of any claim of infringement or similar claim or proceeding relating to
any of the Intellectual Property which if determined against such Company could
reasonably be expected to have a Material Adverse Effect. No present or former
employee of any Company and no other Person owns or claims to own or has or
claims to have any interest, direct or indirect, in whole or in part, in any of
the Intellectual Property of the Borrower that could reasonably be expected to
have a Material Adverse Effect.

 

  (v) Employment and Labour Agreements. Each Company is in compliance with the
terms and conditions of all collective bargaining agreements and other labour
agreements except where the failure to so comply could not reasonably be
expected to have a Material Adverse Effect.

 

  (w) Liens. The Liens granted to the Administrative Agent pursuant to the
Security Documents are fully perfected first priority Liens in and to the
Secured Assets, subject only to Permitted Liens and will, upon the acquisition
of additional Secured Assets by each Obligor, constitute first charges or
security interests upon all such Secured Assets of such Obligor free and clear
of all Liens except for the Permitted Liens.

 

  (x) Consents, Approvals, etc. No consents, approvals, acknowledgements,
undertakings, non-disturbance agreements, directions or other documents or
instruments which have not already been provided to the Administrative Agent are
required to be entered into by any Person (i) to make effective the Security
created or intended to be created by the Obligors in favour of the
Administrative Agent pursuant to the Security Documents in the issued and
outstanding Shares of the Obligors or the Investment Accounts, (ii) to ensure
the perfection and the intended priority of such Security other than the
consents and approvals referred to in the last sentence of Section 10.1(c) and
(iii) to implement the transactions contemplated hereby.

 

  (y)

Share Capital of Guarantors. As of the date hereof and hereafter, except as such
information may change as a result of transactions permitted hereby (which shall
be reported to the Administrative Agent pursuant to Section 11.1(i)

 

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  Schedule K sets out (X) the issued capital of each Guarantor, all of which
issued Shares have been issued and are outstanding; (Y) the owner of record of
all such issued Shares; and (Z) the outstanding warrants, options or other
agreements which require or may require the issuance of any Shares of any
Guarantor or the issuance of any debt or securities convertible into Shares of
any Guarantor.

 

  (z) Information Required for Perfection of Security Interests in Secured
Assets. Except as reported or to be reported to the Administrative Agent in
accordance with Section 11.1(i), the location of the chief executive office and
places of business and the jurisdiction of organization, of each Obligor (for
the purposes of perfecting security interests in personal property of the
Obligors under the UCC or the Personal Property Security Act (Ontario) and the
branch and location of each bank account and each securities account owned by
each Obligor are as set forth in Schedule L.

 

  (aa) Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada). The Borrower’s most recent audited balance sheet states that the
Borrower has net assets of at least CDN$75,000,000. The Borrower’s shares are
traded on a Canadian stock exchange or a stock exchange designated under
subsection 262(1) of the Tax Act. The Borrower operates in a country that is a
member of the Financial Action Task Force.

 

  (bb) No Omissions. None of the representations and statements of fact set
forth in this Section 10.1 omits to state any material fact necessary to make
any such representation or statement of fact not misleading in any material
respect.

10.2 Survival of Representations and Warranties

All of the representations and warranties of the Borrower contained in
Section 10.1 shall survive the execution and delivery of this agreement until
the Secured Obligations Termination Date, notwithstanding any investigation made
at any time by or on behalf of the Administrative Agent or any of the Lenders.

ARTICLE 11

COVENANTS

11.1 Affirmative Covenants

The Borrower hereby covenants and agrees with the Administrative Agent and the
Lenders that, until the Secured Obligations Termination Date, and unless waived
in writing in accordance with Section 14.14:

 

  (a) Prompt Payment. The Borrower shall, and shall cause each other Obligor to,
duly and punctually pay, or cause to be duly and punctually paid to the Finance
Parties, all amounts payable by each Obligor under the Credit Documents at the
times and places and in the currency and manner mentioned therein.

 

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  (b) Financial Reporting. The Borrower shall furnish the Administrative Agent
with the following statements and reports (with sufficient copies for all of the
Lenders (the filing of any of the following documents on SEDAR or EDGAR shall
satisfy the delivery obligation in relation to the documents so filed when the
Borrower has provided written notice of such filing to the Administrative
Agent)):

 

  (i) within 90 days after the end of each Fiscal Year, copies of the audited
financial statements of the Borrower for such Fiscal Year together with the
auditors’ report on such audited financial statements in form and substance
satisfactory to the Administrative Agent, as well as a chart setting out the
corporate structure of the Borrower and all of its Subsidiaries, whether direct
or indirect, and evidencing (i) intercorporate share ownership and (ii) mine
ownership;

 

  (ii) within 45 days after the end of each of the first 3 Fiscal Quarters in
each Fiscal Year:

 

  (A) the unaudited consolidated financial statements of the Borrower, in form
and substance satisfactory to the Administrative Agent, together with a summary
report detailing the Borrower’s consolidated risk management activities for the
most recently completed Fiscal Quarter; and

 

  (B) an operating report prepared by the Borrower in relation to the Hycroft
Mine detailing operating costs, capital expenditures and production levels for
the most recently completed Fiscal Quarter;

 

  (iii) concurrent with the deliveries of financial statements pursuant to any
of clauses (i) and (ii) above, a duly executed and completed compliance
certificate, in the form attached as Schedule B hereto and signed by a senior
financial officer of the Borrower;

 

  (iv) within 45 days after the end of each Fiscal Year, an updated life of mine
plan and financial model for the Hycroft Mine to the extent changed from the
previous such plan and model delivered to the Administrative Agent; and

 

  (v) such other statements, reports and information as the Administrative Agent
on the instructions of the Majority Lenders may reasonably request from time to
time.

 

  (c) Business Activities. The Borrower shall not, nor shall it suffer or permit
any other Company to, engage in any business activity other than activities
relating to the business of mining in a Permitted Jurisdiction and any activity
incidental thereto (including acting as a holding company of any Company).

 

  (d) Insurance. The Borrower shall, and shall cause each other Obligors to,
insure and keep insured, with insurers, for risks, in amounts in a manner
consistent with industry practice and otherwise upon terms satisfactory to the
Administrative Agent acting reasonably, all of the Obligors assets, property and
undertaking.

 

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  (e) Access to Senior Financial Officers. Upon the request of the
Administrative Agent at reasonable intervals, the Borrower shall, and shall
cause each other Obligor to, make available its senior financial officers to
answer questions concerning such Obligor’s business and affairs,

 

  (f) Reimbursement of Expenses. The Borrower shall (i) reimburse the
Administrative Agent, on demand, for all reasonable out-of-pocket costs, charges
and expenses incurred by or on behalf of the Administrative Agent (including,
without limitation, the reasonable and documented fees, disbursements and other
charges of one primary counsel and any local or special counsel to the
Administrative Agent as well the costs of any engineering reports and
environmental audits and studies as required by the Administrative Agent and
approved by the Borrower, acting reasonably) in connection with the negotiation,
preparation, execution, delivery, syndication, participation, administration and
interpretation of the Credit Documents and the closing documentation ancillary
to the completion of the transactions contemplated hereby and thereby and any
amendments and waivers hereto and thereto (whether or not consummated or entered
into), the charges of Intralinks and any lien search fees and lien registration
fees, (ii) reimburse each Finance Party’s agents or officers, on demand, for all
reasonable out-of-pocket expenses of such agents or officers in connection with
any visit of the nature referred to in Section 11.1(r), and (iii) reimburse the
Administrative Agent and the Lenders, on demand, for all reasonable
out-of-pocket costs, charges and expense incurred by or on behalf of any of them
(including the fees, disbursements and other charges of counsel) in connection
with the enforcement of the Credit Documents.

 

  (g) Notice of Expropriation or Condemnation, Litigation and Default/Event of
Default. The Borrower shall promptly notify the Administrative Agent in writing
of:

 

  (i) the commencement or the written threat of any expropriation or
condemnation of any material assets, property or undertaking of any Obligor or
of the institution of any proceedings related thereto;

 

  (ii) any actions, suits, inquiries, disputes, claims or proceedings (whether
or not purportedly on behalf of a Company) commenced or threatened in writing
against or affecting a Company before any Official Body which in any case or in
the aggregate could reasonably be expected to have a Material Adverse Effect;
and

 

  (iii) upon the occurrence of either a Default or an Event of Default of which
the Borrower is aware, the nature and date of occurrence of such Default or
Event of Default, the Borrower’s assessment of the duration and effect thereof
and the action which such Borrower (or the relevant Obligor, as applicable)
proposes to take with respect thereto.

 

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  (h) Inspection of Assets and Operations. The Borrower shall, and shall cause
each other Obligor to, permit representatives of the Administrative Agent from
time to time and representatives of the Lenders to inspect the assets, property
or undertaking of each Obligor and for that purpose to enter on any property
which is owned and controlled by an Obligor and where any of the assets,
property or undertaking of any Obligor may be situated during reasonable
business hours and, unless a Default has occurred and is continuing, upon
reasonable notice.

 

  (i) Change of Name, Office or Other Information. The Borrower shall notify the
Administrative Agent in writing (i) promptly of any change in (A) the corporate
name of any Obligor; (B) the location of any Obligor for purposes of the UCC or
the Personal Property Security Act (Ontario), (C) the jurisdiction of
incorporation of any Obligor and (D) the locations of each bank account and each
securities account owned by each Obligor; and (ii) not less than 10 Banking Days
prior to the closing thereof, of any transaction permitted hereby which will
result in any change in the information set out in Schedule L.

 

  (j) Corporate Existence. Except as may otherwise be contemplated by a
Permitted Reorganization, the Borrower shall, and shall cause each of the other
Obligors to, maintain its corporate existence in good standing and qualify and
remain duly qualified to carry on business and own property in each jurisdiction
where the nature of its business makes such qualification necessary.

 

  (k) Conduct of Business. The Borrower shall, and shall cause each other
Company to, conduct its business in such a manner so as to comply with all laws
and regulations (including, without limitation, Environmental Laws), so as to
observe and perform all its obligations under leases, licences and agreements
necessary for the proper conduct of its business and so as to preserve and
protect its property and assets and the earnings, income and profits therefrom
where such non-compliance, non-observance or non-performance could reasonably be
expected to have a Material Adverse Effect. The Borrower shall, and shall cause
each other Company to, obtain and maintain all licenses, permits, government
approvals, franchises, authorizations and other rights necessary for the
operation of its business where failure to do so could reasonably be expected to
have a Material Adverse Effect.

 

  (l) Taxes. The Borrower shall pay, and shall cause each of the other Obligors
to pay, all material Taxes levied, assessed or imposed upon it and upon its
property or assets or any part thereof, as and when the same become due and
payable, save and except when and so long as the validity or amount of any such
Taxes is being contested in good faith by appropriate proceedings and reserves
are being maintained in accordance with generally accepted accounting
principles.

 

  (m)

Environmental Matters. The Borrower shall, and shall cause each other Company
to, promptly notify the Administrative Agent and provide copies upon receipt of
all written claims, complaints, notices or inquiries relating to the condition
of its facilities and properties or material compliance with Environmental Laws
and shall proceed diligently to resolve any such claims,

 

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  complaints, notices or inquiries relating to material compliance with
Environmental Laws which claims, complaints, notices or inquiries relate to
matters which could reasonably be expected to have a Material Adverse Effect and
provide such information and certifications which the Administrative Agent may
reasonably request from time to time to evidence compliance with this
Section 11.1(m).

 

  (n) Tangible Net Worth. The Borrower shall at all times maintain its Tangible
Net Worth to be greater than or equal to the sum of (x) $392,000,000 and (y) 25%
of the positive Net Income, if any, for each Fiscal Quarter after the Fiscal
Quarter ended March 31, 2011 and shall calculate such ratio as at each
Calculation Date.

 

  (o) Interest Coverage Ratio. The Borrower shall at all times cause the
Interest Coverage Ratio to be greater than or equal to 4.00:1, and shall
calculate such ratio as at each Calculation Date.

 

  (p) Leverage Ratio. The Borrower shall, at all times, cause the Leverage Ratio
to be less than or equal to 3.00:1, and shall calculate such ratio as at each
Calculation Date.

 

  (q) ERISA. The Borrower shall, and shall cause each ERISA Affiliate to,
furnish to the Administrative Agent:

 

  (i) promptly after receipt thereof (but in no event later than 30 days after
such receipt), a copy of any notice any ERISA Company receives after the date of
this agreement from the PBGC relating to the intention of the PBGC to terminate
any Plan or Plans or to appoint a trustee to administer any Plan or Plans, if
such termination or appointment would result in a Material Adverse Effect;

 

  (ii) within 10 days after the due date for filing with the PBGC pursuant to
Section 412(n) of the Code of a notice of failure to make a required instalment
or other payment with respect to a Plan, a statement of a financial officer
setting forth details as to such failure and the action proposed to be taken
with respect thereto, together with a copy of such notice given to the PBGC, but
only if such failure to make a required instalment would result in a Material
Adverse Effect; and

 

  (iii) promptly and in any event within 30 days after receipt thereof by any
ERISA Company from the sponsor of a Multiemployer Plan, a copy of each notice
received by any ERISA Company concerning (A) the imposition of any Withdrawal
Liability or (B) a determination that a Multiemployer Plan is, or is expected to
be, terminated or in reorganization, in each case within the meaning of Title IV
of ERISA, but only if the imposition of such withdrawal liability, in the case
of clause (A), or such termination or reorganization, in the case of clause (B),
would result in a Material Adverse Effect.

 

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  (r) Books and Records. The Borrower shall, and shall cause each other Company
to, keep proper books of account and records covering all its business and
affairs on a current basis, make full, true and correct entries of its
transactions in such books, set aside on its books from their earnings all such
proper reserves as required by generally accepted accounting principles and
permit representatives of the Administrative Agent to inspect such books of
account, records and documents and to make copies therefrom during reasonable
business hours and upon reasonable notice and to discuss the affairs, finances
and accounts of such Company with its auditors during reasonable business hours
and upon reasonable notice.

 

  (s) Copies of Public Filings. The Borrower shall, upon request, furnish the
Administrative Agent with copies of all documents which are publicly filed by
the Borrower with the Ontario Securities Commission, the United States
Securities and Exchange Commission or with any similar Official Body in any
other jurisdiction in compliance with applicable securities legislation which
are not available on SEDAR or EDGAR.

 

  (t) Intercompany Indebtedness. The Borrower shall cause all Indebtedness owing
by any Obligor to any Subsidiary of the Borrower which is not an Obligor to be
subordinated and postponed, pursuant to the Postponement and Subordination
Undertaking, to the Secured Obligations of such Obligor for so long as a Default
has occurred and is continuing. The Borrower shall cause any Subsidiary of the
Borrower which is not an Obligor, prior to the incurrence of any such
Indebtedness, to execute and deliver to the Administrative Agent the
Postponement and Subordination Undertaking or an instrument of adhesion thereto.

 

  (u) Maintenance of Secured Assets. The Borrower shall, and shall cause each
other Obligor to, maintain, preserve, protect and keep:

 

  (i) all of its ownership, lease, use, licence and other interests in the
Secured Assets as are necessary or advisable to be able to operate the Hycroft
Mine substantially in accordance with sound mining and business practice; and

 

  (ii) all of the Secured Assets owned by each in good repair, working order,
and condition, and make necessary and proper repairs, renewals, and replacements
so that the business carried on in connection therewith may be properly
conducted at all times.

 

  (v) Ownership and Maintenance of Hycroft Mine. The Borrower shall cause
Hycroft Resources to (i) maintain ownership of 100% of the Hycroft Mine and all
Mining Claims as are necessary or advisable to be able to operate the Hycroft
Mine substantially in accordance with sound mining and business practice; and
(ii) to maintain and operate the Hycroft Mine in accordance with sound mining
and business practice.

 

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  (w) Minimum Aggregate Deposit Accounts Balance. The Borrower shall at all
times maintain a minimum aggregate balance of $30,000,000 in the Deposit
Accounts.

 

  (x) Additional Guarantors and Security. Upon the direct or indirect formation
or acquisition by the Borrower of a Material Subsidiary or upon a Subsidiary of
the Borrower becoming a Material Subsidiary:

 

  (i) the Borrower shall forthwith cause each such Material Subsidiary to duly
execute and deliver to the Administrative Agent the Guarantee and the Security
Document to which it is a party for the purpose of charging all of such Material
Subsidiary’s present and after-acquired personal property;

 

  (ii) the Borrower shall forthwith deliver, or cause to be delivered to, the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent:

 

  (A) a duly certified copy of the articles of incorporation and by-laws or
comparable constitutional documents of such Material Subsidiary;

 

  (B) a certificate of status or good standing for such Material Subsidiary
issued by the appropriate governmental body or agency of the jurisdiction in
which such Material Subsidiary is incorporated or otherwise formed (other than
with respect to any Material Subsidiary whose jurisdiction of incorporation or
formation does not customarily offer such certificates);

 

  (C) a duly certified copy of the resolution of the board of directors of such
Material Subsidiary or other comparable authorization authorizing it to execute,
deliver and perform its obligations under each Finance Document to which such
Material Subsidiary is a signatory;

 

  (D) a certificate of an officer of such Material Subsidiary, in such capacity,
setting forth specimen signatures of the individuals authorized to sign the
Finance Documents to which such Material Subsidiary is a signatory;

 

  (E) an opinion of such Material Subsidiary’s counsel addressed to the Lenders,
the Administrative Agent and its counsel, relating to the status and capacity of
such Material Subsidiary, the due authorization, execution and delivery and the
validity and enforceability of the Finance Documents to which such Material
Subsidiary is a party in and such other matters as the Administrative Agent may
reasonably request; and

 

  (F)

an opinion of the Lenders’ counsel with respect to such matters as may be
reasonably required by the Administrative Agent in

 

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  connection with such Material Subsidiary (including, without limitation, the
legality, validity and binding nature of the obligations of such Material
Subsidiary under, and the enforceability against such Material Subsidiary of,
the Finance Documents which are governed by the laws of the Province of
Ontario);

 

  (iii) the Administrative Agent and its counsel shall be satisfied, acting
reasonably, that all necessary approvals, acknowledgements, directions and
consents have been given and that all relevant laws have been complied with in
respect of all agreements and transactions referred to herein; and

 

  (iv) all documents and instruments shall have been properly registered,
recorded and filed in all places which, searches shall have been conducted in
all jurisdictions which, and deliveries of all consents, approvals,
acknowledgements, undertakings, directions, negotiable documents of title and
other documents and instruments to the Administrative Agent shall have been made
which, in the opinion of the Administrative Agent’s counsel, acting reasonably,
are desirable or required to make effective the Security created or intended to
be created pursuant to Section 11.1(v) and to ensure the perfection and the
intended first-ranking priority of such Security;

whereupon the Material Subsidiary shall become an Additional Guarantor.

11.2 Restrictive Covenants

The Borrower hereby covenants and agrees with the Administrative Agent and the
Lenders that, until the Secured Obligations Termination Date, and unless waived
in writing in accordance with Section 14.14:

 

  (a) Liens. The Borrower shall not, and shall not permit or suffer any other
Obligor to, enter into or grant, create, assume or suffer to exist any Lien
affecting any of their respective properties, assets or undertaking, whether now
owned or hereafter acquired, save and except only for the Permitted Liens.

 

  (b) Corporate Existence. Except for Permitted Reorganizations, the Borrower
shall not, and shall not permit or suffer any other Company to, take part in any
amalgamation, merger, dissolution, winding up, corporate reorganization, capital
reorganization or similar proceeding or arrangement or discontinue any
businesses.

 

  (c)

Disposition of Assets. The Borrower shall not, and shall not suffer or permit
any other Obligor to, sell, transfer or otherwise dispose (by way of Sale
Leaseback or otherwise) of any of their respective assets other than sales,
transfers or other dispositions of (i) inventory or product disposed of in the
ordinary course of business, (ii) worn out, unserviceable or obsolete equipment,
(iii) sales or

 

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  dispositions pursuant to Third Party Mining Arrangements that are Permitted
Liens; (iv) other assets of the Companies the aggregate fair market value of
which shall not exceed $10,000,000 in any Fiscal Year. For certainty, the
Borrower shall not, nor shall it suffer or permit, the sale, transfer or
disposition of the Shares of any Guarantor unless pursuant to a Permitted
Reorganization.

 

  (d) Change in Business. The Borrower shall not, and shall not suffer or permit
any other Obligor to, engage in any business other than the business of mining
and activities related or incidental thereto.

 

  (e) Regulation U or X. The Borrower shall not, and shall not suffer or permit
any other Obligor to, engage in the business of extending credit for the purpose
of purchasing or carrying margin stock. The Borrower shall not use any of the
proceeds of any credit extended hereunder to “purchase” or “carry” any “margin
stock” as defined in Regulation U and X of the F.R.S. Board.

 

  (f) Risk Management Agreements. The Borrower shall not, and shall not suffer
or permit any other Obligor to, enter into any Risk Management Agreement for
speculative purposes or on a margined basis. For certainty, the Borrower shall
not, nor shall it suffer or permit any other Obligor to, grant security to any
counterparty other than a Qualified Risk Management Lender as collateral
security for its obligations under any Risk Management Agreement.

 

  (g) Amendments to Constating Documents. The Borrower shall not, and shall not
suffer or permit any other Obligor to, amend their constating documents, other
than pursuant to a Permitted Reorganization.

 

  (h) Distributions. The Borrower shall not make any Distributions other than
Distributions of up to a maximum aggregate annual amount of $50,000,000 in any
Fiscal Year made at any time during which no Default or Event of Default has
occurred and is continuing or would result therefrom.

 

  (i) Indebtedness. The Borrower shall not, and shall not suffer or permit any
other Obligor to, create, incur, assume or suffer to exist any Indebtedness
other than Permitted Indebtedness.

 

  (j) Investments. The Borrower shall not, and shall not permit any other
Obligor to, make any Investments other than (i) Investments in the Obligors,
(ii) Investments in Cash Equivalents, (iii) Investments in the Hycroft Mine and
(iv) other Investments (exclusive of the foregoing) in the maximum aggregate
amount of $100,000,000 in any calendar year.

 

  (k) Acquisitions. The Borrower shall not, and shall not suffer or permit any
other Company to, make any Acquisitions other than Permitted Acquisitions.

 

  (l)

Transactions with Affiliates. The Borrower shall not, and shall not permit any
other Company to, sell, lease or otherwise transfer any property or assets to,
or purchase, lease or otherwise acquire any property or assets from, or
otherwise

 

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  engage in any other transactions with, any of its Affiliates other than at
prices and on terms and conditions not less favourable to such Company than
could be obtained on an arm’s length basis from unrelated third parties unless
undertaken pursuant to a Permitted Reorganization. The Borrower shall not, and
shall not suffer or permit any other Company to, enter into any transaction or
series of transactions with Affiliates of any Company, which involve an outflow
of money or other property from such Company to an Affiliate of any of the
Companies, including payment of management fees, affiliation fees,
administration fees, compensation, salaries, asset purchase payments or any
other type of fees or payments similar in nature, other than on terms and
conditions substantially as favourable to such Company as would be obtainable by
such Company in a reasonably comparable arm’s length transaction with a Person
other than an Affiliate of such Company.

 

  (m) Sale Leasebacks. The Borrower shall not, and shall not suffer or permit
any other Obligor to, enter into any Sale Leasebacks with any Person that is not
an Obligor.

11.3 Performance of Covenants by Administrative Agent

The Administrative Agent may, on the instructions of the Majority Lenders and
upon notice by the Administrative Agent to the Borrower, perform any covenant of
the Borrower under this agreement which the Borrower fails to perform or cause
to be performed and which the Administrative Agent is capable of performing,
including any covenants the performance of which requires the payment of money,
provided that the Administrative Agent shall not be obligated to perform any
such covenant on behalf of the Borrower and no such performance by the
Administrative Agent shall require the Administrative Agent to further perform
the Borrower’s covenants or shall operate as a derogation of the rights and
remedies of the Administrative Agent and the Lenders under this agreement or as
a waiver of such covenant by the Administrative Agent. Any amounts paid by the
Administrative Agent as aforesaid shall be reimbursed by the Lenders in their
Pro Rata Shares and shall be repaid by the Borrower to the Administrative Agent
on behalf of the Lenders on demand.

ARTICLE 12

CONDITIONS PRECEDENT TO OBTAINING CREDIT

12.1 Conditions Precedent to All Credit

The obligation of the Lenders to extend credit hereunder is subject to
fulfilment of the following conditions precedent on the date such credit is
extended:

 

  (a) the Borrower shall have complied with the requirements of Article 4,
Article 5 or Article 6, as the case may be, in respect of the relevant credit;

 

  (b) no Default has occurred and is continuing or would arise immediately after
giving effect to or as a result of such extension of credit;

 

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  (c) the representations and warranties of the Borrower contained in
Section 10.1 shall be true and correct in all respects on the date such credit
is extended as if such representations and warranties were made on such date;
and

 

  (d) the Credit Facility has not terminated pursuant to Section 2.4.

12.2 Conditions Precedent to Initial Extension of Credit

The obligations of the Lenders to extend credit by way of the initial drawdown
under the Credit Facility is subject to the fulfilment of the following
conditions precedent at the time, or immediately following, such extension of
credit:

 

  (a) the conditions precedent set forth in Section 12.1 have been fulfilled;

 

  (b) the Obligors shall have duly executed and delivered to the Administrative
Agent the Credit Documents to which each is a party and each Company which is
not an Obligor and to whom any Obligor owes any Indebtedness shall have executed
and delivered to the Administrative Agent a Postponement and Subordination
Undertaking, in each case form and substance satisfactory to the Administrative
Agent;

 

  (c) the Administrative Agent has received, in form and substance satisfactory
to the Administrative Agent:

 

  (i) a duly certified copy of the articles of incorporation, articles of
amalgamation or similar documents and by-laws of each Obligor;

 

  (ii) a certificate of status or good standing (or other like document) for
each Obligor (where available) issued by the appropriate governmental body or
agency of the jurisdiction which governs the legal existence of such Obligor;

 

  (iii) a duly certified copy of the resolution of the board of directors of
each Company authorizing it to execute, deliver and perform its obligations
under each Credit Document to which such Company is a signatory;

 

  (iv) a certificate of an officer of each Obligor, in such capacity, setting
forth specimen signatures of the individuals authorized to sign the Credit
Documents to which such Obligor is a signatory;

 

  (v) a certificate of a senior officer of the Borrower, in such capacity,
certifying that, to the best of his knowledge after due inquiry, no Default has
occurred and is continuing or would arise immediately upon the initial extension
of credit under the Credit Facility;

 

  (vi) certificates representing all of the issued and outstanding Shares of
each Guarantor, duly endorsed in blank or accompanied by an executed stock
transfer power of attorney;

 

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  (vii) a perfection certificate of each Obligor in form and substance
satisfactory to the Administrative Agent;

 

  (viii) an opinion of counsel to each Obligor addressed to the Finance Parties
and their counsel, relating to the status and capacity of such Obligor, the due
authorization, execution and delivery and the validity and enforceability of the
Credit Documents to which such Obligor is a party in the Province of Ontario, in
the jurisdiction where the Secured Assets are located and/or the jurisdiction
governing the existence of the relevant Obligor and such other matters as the
Administrative Agent may reasonably request;

 

  (ix) an opinion of the Administrative Agent’s counsel with respect to such
matters as may be reasonably required by the Administrative Agent in connection
with the transactions hereunder (including, without limitation, the legality,
validity and binding nature obligations of the Borrower under, and the
enforceability against the Obligors of, the Credit Documents which are governed
by the laws of the Province of Ontario); and

 

  (x) requisite information to identify the Obligors under the applicable “know
your client” legislation, delivered sufficiently in advance for each Lender to
complete such identification;

 

  (d) there has not occurred a Material Adverse Change since December 31, 2010;

 

  (e) there shall exist no pending or threatened (in writing) litigation,
proceedings or investigations which (x) contest the consummation of the Credit
Facility or any part thereof or (y) could reasonably be expected to have a
Material Adverse Effect;

 

  (f) all current account documentation required by the Administrative Agent has
been executed by the Obligors;

 

  (g) the Administrative Agent and its counsel shall be satisfied, acting
reasonably, that all necessary approvals, acknowledgements, directions and
consents have been given and that all relevant laws have been complied with in
respect of all agreements and transactions referred to herein;

 

  (h) all documents and instruments shall have been properly registered,
recorded and filed in all places which, searches shall have been conducted in
all jurisdictions which, and deliveries of all consents, approvals, directions,
acknowledgements, undertakings and non-disturbance agreements contemplated
herein, negotiable documents of title, ownership certificates and other
documents and instruments to the Administrative Agent shall have been made
which, in the opinion of the Administrative Agent’s counsel, are desirable or
required to make effective the Security created or intended to be created by the
Obligors in favour of the Administrative Agent pursuant to the Security
Documents and to ensure the perfection and the intended priority of the
Security; and

 

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  (i) the Borrower shall have paid to the Administrative Agent, the Lead
Arranger and the Lenders all fees and expenses required to be paid on or before
the initial extension of credit under the Credit Facility.

12.3 Waiver

The terms and conditions of Sections 12.1 and 12.2 are inserted for the sole
benefit of the Administrative Agent and the Lenders, and the Lenders may waive
them in accordance with Section 14.14, in whole or in part, with or without
terms or conditions, in respect of any extension of credit, without prejudicing
their right to assert the terms and conditions of Section 12.1 and 12.2 in whole
or in part in respect of any other extension of credit.

ARTICLE 13

DEFAULT AND REMEDIES

13.1 Events of Default

Upon the occurrence of any one or more of the following events, unless expressly
waived in writing in accordance with Section 14.14:

 

  (a) the breach by the Borrower of the provisions of Section 9.1;

 

  (b) the failure of any Obligor to pay any amount due under the Credit
Documents (other than amounts due pursuant to Section 9.1) within two Banking
Days after the payment is due;

 

  (c) the commencement by any Obligor or by any other Person of proceedings for
the dissolution, liquidation or winding up of any Obligor or for the suspension
of operations of any Obligor (other than (i) such proceedings commenced by
another Person which are diligently defended and are discharged, vacated or
stayed within thirty days after commencement or (ii) proceedings that are part
of a Permitted Corporate Reorganization);

 

  (d) if an Obligor ceases or threatens to cease to carry on its business or is
adjudged or declared bankrupt or insolvent or admits its inability to pay its
debts generally as they become due or fails to pay its debts generally as they
become due or makes an assignment for the benefit of creditors, petitions or
applies to any tribunal for the appointment of a receiver or trustee for it or
for any part of its property (or such a receiver or trustee is appointed for it
or any part of its property), or commences (or any other Person commences) any
proceedings relating to it under any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction whether now or hereafter in effect (other than such proceedings
commenced by another Person which are diligently defended and are discharged,
vacated or stayed within thirty days after commencement or that are part of a
Permitted Corporate Reorganization), or by any act indicates its consent to,
approval of, or acquiescence in, any such proceeding for it or for any part of
its property, or suffers the appointment of any receiver or trustee,
sequestrator or other custodian;

 

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  (e) if any representation or warranty made by any Obligor in this agreement or
in any other document, agreement or instrument delivered pursuant hereto or
referred to herein or any material information furnished in writing to the
Administrative Agent by any Obligor proves to have been incorrect in any respect
when made or furnished which, if capable of being cured, has not been remedied
within 30 Banking Days after written notice to do so has been given by the
Administrative Agent to the Borrower;

 

  (f) if a writ, execution, attachment or similar process is issued or levied
against all or any portion of the property of any Obligor in connection with any
judgment against it in an amount of at least $5,000,000, and such writ,
execution, attachment or similar process is not released, bonded, satisfied,
discharged, vacated or stayed within thirty days after its entry, commencement
or levy;

 

  (g) any breach of any of Section 11.1(n), (o), (p) or (w) or Section 11.2;

 

  (h) the breach or failure of due observance or performance by any Obligor of
any covenant or provision of any Finance Document (other than those previously
referred to in this Section 13.1) and such breach or failure continues for 15
Banking Days after the earlier of (x) the Borrower becoming aware of such breach
or failure or (y) the Administrative Agent giving the Borrower notice of such
breach or failure;

 

  (i) if one or more encumbrancers, liens or landlords take possession of any
part of the property of any Obligor or attempt to enforce their security or
other remedies against such property and their claims remain unsatisfied for
such period as would permit such property to be sold thereunder and such
property which has been repossessed or is capable of being sold has an aggregate
fair market value of at least $5,000,000;

 

  (j) if any Indebtedness of any Obligor (other than Indebtedness owing to
another Company) in an amount of at least $5,000,000, is not paid when due and
payable (whether on demand, maturity, acceleration or otherwise);

 

  (k) the occurrence of a Change of Control;

 

  (l)

(i) any Termination Event occurs (not otherwise described in this
Section 13.1(1) that, when taken together with all other Termination Events that
have occurred, could be expected, in the reasonable opinion of Lender, to result
in a liability of the Borrower, when added to any liability of any other ERISA
Company, in excess of $5,000,000; (ii) failure to make full payment (including
all required instalments) when due of all amounts that, under the provisions of
any Plan or Applicable Law, the Borrower or any ERISA Affiliate is required to
pay as contributions thereto, which, together with all such other failures,
would result in a liability to the Borrower, when added to any liability of a
Guarantor, in excess of $5,000,000; (iii) failure of the Borrower or any ERISA
Company to timely pay an amount or amounts aggregating in excess of $5,000,000
for which it is liable under Section 4062, 4063 or 4064 of ERISA and for which
the Borrower or any

 

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  ERISA Company does not reasonably dispute the amount or validity thereof; (iv)
notice of intent to terminate a Plan shall be filed under Title IV of ERISA by
any ERISA Company, any plan administrator, or both if such termination would be
reasonably expected to result in a Material Adverse Effect; (v) the PBGC
institutes proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Plan, if such action by the PBGC
would result in a Material Adverse Effect; or (vi) there shall occur a complete
or partial withdrawal from, or a default, within the meaning of
Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans
which could cause one or more ERISA Companies to incur a current annual payment
obligation in excess of $5,000,000;

 

  (m) the occurrence of an event of default under any Material Agreement or the
termination or amendment of any Material Agreement if such termination or
amendment could reasonably be expected to have a Material Adverse Effect;

 

  (n) the expropriation, condemnation or abandonment of the Hycroft Mine or any
part thereof other than any such expropriation or condemnation the proceeds from
which do not exceed $25,000,000 or the Borrower ceases to own, directly or
indirectly, 100% of the Hycroft Mine or the Borrower fails to maintain the
Mining Claims necessary or advisable to be able to operate the Hycroft Mine
substantially in accordance with sound mining and business practice;

 

  (o) any Credit Document shall terminate (other than in accordance with its
terms) or cease in whole or in any material part to be a legal, valid and
binding obligation of any Obligor which is a party thereto, enforceable by the
Administrative Agent, the Lenders or any of them against such Obligor and such
Credit Document has not been replaced by a legal, valid, binding and enforceable
document which is equivalent in effect to such Credit Document, assuming such
Credit Document had originally been legal, valid, binding and enforceable, in
form and substance acceptable to the Administrative Agent, within 20 days of
such determination, provided, however, that such grace period shall only be
provided if such Obligor actively co-operates with the Administrative Agent to
so replace such Credit Document;

 

  (p) the validity, enforceability or priority of any of the Credit Documents is
contested in any manner by any Obligor;

 

  (q) the Postponement and Subordination Undertaking shall terminate (other than
in accordance with its terms) or ceases in whole or in any material part to be
the legal, valid, binding and enforceable obligations of any party thereto and
the Postponement and Subordination Undertaking has not been replaced by a legal,
valid, binding and enforceable document which is equivalent in effect to the

 

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  Postponement and Subordination Undertaking, assuming the Postponement and
Subordination Undertaking had originally been legal, valid, binding and
enforceable, in form and substance acceptable to the Administrative Agent,
within 21 days of the Administrative Agent giving written notice to the
Borrower, or a senior officer of the Borrower obtaining actual knowledge, of
such termination or cessation, provided, however, that such grace period shall
only be provided if the Companies actively co operate with the Administrative
Agent to so replace the Postponement and Subordination Undertaking;

 

  (r) any Security Document does not constitute first ranking, priority Lien on
any Investment Account or on 100% of the issued and outstanding Shares of the
Guarantors, subject only to Permitted Liens arising by operation of law and
customary Liens in respect of service charges and other obligations, other than
Indebtedness, in respect of an Investment Account; or

 

  (s) a Material Adverse Change occurs;

the Administrative Agent (with the approval and instructions of the Majority
Lenders) may, by notice to the Borrower, terminate the Credit Facility
(provided, however, that the Credit Facility shall automatically terminate,
without notice of any kind, upon the occurrence of an event described in clause
(c) or (d) above) and the Administrative Agent (with the approval and
instructions of the Majority Lenders) may, by the same or further notice to the
Borrower, declare all Indebtedness of the Borrower to the Lenders pursuant to
this agreement (including the then contingent liability of the Issuing Lender
under all Letters) to be immediately due and payable whereupon all such
indebtedness shall immediately become and be due and payable without further
demand or other notice of any kind, all of which are expressly waived by the
Borrower (provided, however, that all such Indebtedness of the Borrower to the
Lenders shall automatically become due and payable, without notice of any kind,
upon the occurrence of an event described in clause (c) or (d) above). Upon the
payment by the Borrower to the Issuing Lender of the then aggregate contingent
liability under all outstanding Letters issued by the Issuing Lender, the
Borrower shall have no further liability to the Issuing Lender with respect to
such Letters.

13.2 Refund of Overpayments

With respect to each Letter for which the Issuing Lender has been paid all of
its contingent liability pursuant to Section 9.1, 9.4 or 13.1 and provided that
all amounts due by the Borrower to the Issuing Lender under Sections 9.1, 9.4
and 13.1 have been paid, the Issuing Lender agrees to pay to the Borrower, upon
the later of:

 

  (a) if the Letter is subject to an Order, the date on which any final and
non-appealable order, judgment or other determination has been rendered or
issued either permanently enjoining the Issuing Lender from paying under such
Letter or terminating any outstanding Order; and

 

  (b) the earlier of:

 

  (i) the date on which either the original counterpart of such Letter is
returned to the Issuing Lender for cancellation or the Issuing Lender is
released by the beneficiary thereof from any further obligations in respect of
such Letter;

 

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  (ii) the expiry of such Letter; and

 

  (iii) (where the contingent liability under such Letter is less than the face
amount thereof), all amounts possibly payable under such Letter have been paid;

an amount equal to any excess of the amount received by the Issuing Lender
hereunder in respect of its contingent liability under such Letter over the
total of amounts applied to reimburse the Issuing Lender for amounts paid by it
under or in connection with such Letter (the Issuing Lender having the right to
so appropriate such funds).

13.3 Remedies Cumulative

The Borrower expressly agrees that the rights and remedies of the Administrative
Agent and the Lenders under this agreement are cumulative and in addition to and
not in substitution for any rights or remedies provided by law. Any single or
partial exercise by the Administrative Agent or any Lender of any right or
remedy for a default or breach of any term, covenant or condition in this
agreement does not waive, alter, affect or prejudice any other right or remedy
to which the Administrative Agent or such Lender may be lawfully entitled for
the same default or breach. Any waiver by the Administrative Agent with the
approval of the Majority Lenders or all of the Lenders in accordance with
Section 14.14 of the strict observance, performance or compliance with any term,
covenant or condition of this agreement is not a waiver of any subsequent
default and any indulgence by the Lenders with respect to any failure to
strictly observe, perform or comply with any term, covenant or condition of this
agreement is not a waiver of the entire term, covenant or condition or any
subsequent default. No failure or delay by the Administrative Agent or any
Lender in exercising any right shall operate as a waiver of such right nor shall
any single or partial exercise of any power or right preclude its further
exercise or the exercise of any other power or right.

13.4 Set-Off

In addition to any rights now or hereafter granted under applicable law, and not
by way of limitation of any such rights, the Administrative Agent and each
Lender is authorized, at any time that an Event of Default has occurred and is
continuing without notice to the Borrower or to any other Person, any such
notice being expressly waived by the Borrower, to set-off, appropriate and apply
any and all deposits, matured or unmatured, general or special, and any other
indebtedness at any time held by or owing by the Administrative Agent or such
Lender, as the case may be, to or for the credit of or the account of the
Borrower against and on account of the obligations and liabilities of the
Borrower which are due and payable to the Administrative Agent or such Lender,
as the case may be, under the Finance Documents.

 

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ARTICLE 14

THE ADMINISTRATIVE AGENT

14.1 Appointment and Authorization of Administrative Agent

Each Finance Party hereby appoints and authorizes, and hereby agrees that it
will require any assignee of any of its interests in the Credit Documents (other
than the holder of a participation in its interests herein or therein) to
appoint and authorize the Administrative Agent to take such actions as agent on
its behalf and to exercise such powers under the Credit Documents as are
delegated to the Administrative Agent by such Finance Party by the terms hereof,
together with such powers as are reasonably incidental thereto. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable to any of the Finance Parties for any action taken or omitted to
be taken by it or them hereunder or thereunder or in connection herewith or
therewith, except for its own gross negligence or wilful misconduct and each
Finance Party hereby acknowledges that the Administrative Agent is entering into
the provisions of this Section 14.1 on its own behalf and as agent and trustee
for its directors, officers, employees and agents.

14.2 Interest Holders

The Administrative Agent may treat each Lender set forth in Schedule A hereto or
the person designated in the last notice delivered to it under Section 15.5 as
the holder of all of the interests of such Lender under the Credit Documents.

14.3 Consultation with Counsel

The Administrative Agent may consult with legal counsel selected by it as
counsel for the Administrative Agent and the Lenders and shall not be liable for
any action taken or not taken or suffered by it in good faith and in accordance
with the advice and opinion of such counsel.

14.4 Documents

The Administrative Agent shall not be under any duty to the Finance Parties to
examine, enquire into or pass upon the validity, effectiveness or genuineness of
the Credit Documents or any instrument, document or communication furnished
pursuant to or in connection with the Credit Documents and the Administrative
Agent shall, as regards the Finance Parties, be entitled to assume that the same
are valid, effective and genuine, have been signed or sent by the proper parties
and are what they purport to be.

14.5 Administrative Agent as Finance Party

With respect to those portions of a particular Credit Facility made available by
it, the Administrative Agent shall have the same rights and powers under the
Credit Documents as any other Finance Party and may exercise the same as though
it were not the Administrative Agent. The Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower and its Affiliates and persons doing business
with the Borrower and/or any of its Affiliates as if it were not the
Administrative Agent and without any obligation to account to the Finance
Parties therefor.

 

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14.6 Responsibility of Administrative Agent

The duties and obligations of the Administrative Agent to the Finance Parties
under the Credit Documents are only those expressly set forth herein. The
Administrative Agent shall not have any duty to the Finance Parties to
investigate whether a Default or an Event of Default has occurred. The
Administrative Agent shall, as regards the Lenders, be entitled to assume that
no Default or Event of Default has occurred and is continuing unless the
Administrative Agent has actual knowledge or has been notified by the Borrower
of such fact or has been notified by a Finance Party that such Finance Party
considers that a Default or Event of Default has occurred and is continuing,
such notification to specify in detail the nature thereof.

14.7 Action by Administrative Agent

The Administrative Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights which may be vested in it on
behalf of the Finance Parties by and under this agreement; provided, however,
that the Administrative Agent shall not exercise any rights under Section 13.1
or under the Guarantee or the Security Documents or expressed to be on behalf of
or with the approval of the Majority Lenders without the request, consent or
instructions of the Majority Lenders. Furthermore, any rights of the
Administrative Agent expressed to be on behalf of or with the approval of the
Majority Lenders shall be exercised by the Administrative Agent upon the request
or instructions of the Majority Lenders. The Administrative Agent shall incur no
liability to the Finance Parties under or in respect of any of the Credit
Documents with respect to anything which it may do or refrain from doing in the
reasonable exercise of its judgment or which may seem to it to be necessary or
desirable in the circumstances, except for its gross negligence or wilful
misconduct. The Administrative Agent shall in all cases be fully protected in
acting or refraining from acting under any of the Credit Documents in accordance
with the instructions of the Majority Lenders and any action taken or failure to
act pursuant to such instructions shall be binding on all Finance Parties. In
respect of any notice by or action taken by the Administrative Agent hereunder,
the Borrower shall at no time be obliged to enquire as to the right or authority
of the Administrative Agent to so notify or act.

14.8 Notice of Events of Default

In the event that the Administrative Agent shall acquire actual knowledge or
shall have been notified of any Default or Event of Default, the Administrative
Agent shall promptly notify the Lenders and shall take such action and assert
such rights under Section 13.1 of this agreement and under the other Credit
Documents as the Majority Lenders shall request in writing and the
Administrative Agent shall not be subject to any liability by reason of its
acting pursuant to any such request. If the Majority Lenders shall fail for five
Banking Days after receipt of the notice of any Default or Event of Default to
request the Administrative Agent to take such action or to assert such rights
under any of the Credit Documents in respect of such Default or Event of
Default, the Administrative Agent may, but shall not be required to, and subject
to subsequent specific instructions from the Majority Lenders, take such action
or assert such rights (other than rights under Section 13.1 of this agreement or
under the other Credit Documents and other than

 

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giving an express waiver of any Default or any Event of Default) as it deems in
its discretion to be advisable for the protection of the Lenders except that, if
the Majority Lenders have instructed the Administrative Agent not to take such
action or assert such rights, in no event shall the Administrative Agent act
contrary to such instructions unless required by law to do so.

14.9 Responsibility Disclaimed

The Administrative Agent shall be under no liability or responsibility
whatsoever as agent hereunder:

 

  (a) to the Borrower or any other Person as a consequence of any failure or
delay in the performance by, or any breach by, any Finance Party or Finance
Parties of any of its or their obligations under any of the Credit Documents;

 

  (b) to any Finance Party or Finance Parties as a consequence of any failure or
delay in performance by, or any breach by, any Obligor of any of its obligations
under any of the Credit Documents; or

 

  (c) to any Finance Party or Finance Parties for any statements,
representations or warranties in any of the Credit Documents or in any other
documents contemplated hereby or thereby or in any other information provided
pursuant to any of the Credit Documents or any other documents contemplated
thereby or for the validity, effectiveness, enforceability or sufficiency of any
of the Credit Documents or any other document contemplated hereby or thereby.

14.10 Indemnification

The Finance Parties agree to indemnify the Administrative Agent (to the extent
not reimbursed by the Borrower) in their respective Pro Rata Shares from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any nature
whatsoever which may be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of any of the Credit
Documents or any other document contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent under any of the Credit Documents
or any document contemplated hereby or thereby, except that no Finance Party
shall be liable to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of the Administrative Agent.

14.11 Credit Decision

Each Lender represents and warrants to the Administrative Agent that:

 

  (a) in making its decision to enter into this agreement and to make its Pro
Rata Share of a Credit Facility available to the Borrower, it is independently
taking whatever steps it considers necessary to evaluate the financial condition
and affairs of the Obligors and that it has made an independent credit judgment
without reliance upon any information furnished by the Administrative Agent; and

 

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  (b) so long as any portion of a Credit Facility is being utilized by the
Borrower, it will continue to make its own independent evaluation of the
financial condition and affairs of the Obligors.

14.12 Successor Administrative Agent

Subject to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may, with the prior written consent of
the Borrower (which consent shall not be required for so long as a Default has
occurred and is continuing), resign at any time by giving 30 days written notice
thereof to the Borrower and the Lenders. Upon any such resignation, the Majority
Lenders, with the prior written consent of the Borrower (which consent shall not
be required (x) if the successor Administrative Agent is an Affiliate or
Subsidiary of the Administrative Agent on the date hereof or (y) for so long as
a Default has occurred and is continuing), shall have the right to appoint a
successor Administrative Agent who shall be one of the Lenders unless none of
the Lenders wishes to accept such appointment. If no successor Administrative
Agent shall have been so appointed and shall have accepted such appointment by
the time of such resignation, then the retiring Administrative Agent may, on
behalf of the Finance Parties and with the prior written consent of the Borrower
(which consent shall not be required for so long as an Event of Default has
occurred and is continuing), appoint a successor Administrative Agent which
shall be a bank which has combined capital and reserves in excess of
CDN$250,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the retiring Administrative Agent (in its
capacity as Administrative Agent but not in its capacity as a Finance Party) and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder (in its capacity as Administrative Agent but not in its
capacity as a Finance Party). After any retiring Administrative Agent’s
resignation hereunder as the Administrative Agent, provisions of this Article 14
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.

14.13 Delegation by Administrative Agent

With the prior approval of the Majority Lenders, the Administrative Agent shall
have the right to delegate any of its duties or obligations hereunder as
Administrative Agent to any Affiliate of the Administrative Agent so long as the
Administrative Agent shall not thereby be relieved of such duties or
obligations.

14.14 Waivers and Amendments

 

  (a) Subject to Section 14.14(b), any term, covenant or condition of any of the
Credit Documents may only be amended with the prior consent of the Borrower and
the Majority Lenders or compliance therewith may be waived (either generally or
in a particular instance and either retroactively or prospectively) by the
Majority Lenders and in any such event the failure to observe, perform or
discharge any such covenant, condition or obligation, so amended or waived
(whether such amendment is executed or such consent or waiver is given before or
after such failure), shall not be construed as a breach of such covenant,
condition or obligation or as a Default or Event of Default.

 

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  (b) Notwithstanding Section 14.14(a), without the prior written consent of
each Lender, no such amendment or waiver shall directly:

 

  (i) increase the amount of the Credit Facility or the amount of the Individual
Commitment of any Lender with respect to the Credit Facility;

 

  (ii) extend the Maturity Date;

 

  (iii) extend the time for the payment of interest on Loans, forgive any
portion of principal thereof, reduce the stated rate of interest thereon or
amend the requirement of pro rata application of all amounts received by the
Administrative Agent in respect of the Credit Facility;

 

  (iv) reduce the stated amount or postpone the date for payment of any fees or
other amount to be paid pursuant to Article 7 or Article 8 of this agreement;

 

  (v) permit any subordination of any of the Secured Obligations;

 

  (vi) except as otherwise permitted pursuant to Section 14.20, release or
discharge any Guarantee or any Security Documents, in whole or in part.

 

  (vii) change the percentage of the Lenders’ requirement to constitute the
Majority Lenders or otherwise amend the definition of Majority Lenders;

 

  (viii) except as otherwise permitted pursuant to Section 14.20, release or
discharge any Guarantee or the Security Documents, in whole or in part;

 

  (ix) alter the terms of this Section 14.14; or

 

  (x) amend the definitions of “Qualified Risk Management Agreements”,
“Enforcement Date”, “Exposure”, “Finance Document”, “Finance Party”, “Qualified
Affiliate”, “Qualified Risk Management Lender”, “Risk Management Agreement” or
“Secured Obligations”.

 

  (c) No amendment to or waiver of any provision hereof to the extent it affects
the rights or obligations of the Administrative Agent shall be effective without
the prior written consent of the Administrative Agent.

 

  (d) Without the prior written consent of the Issuing Lender, no amendment to
or waiver of Article 14 or any other provision hereof to the extent it affects
the rights or obligations of the Issuing Lender shall be effective.

 

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14.15 Determination by Administrative Agent Conclusive and Binding

Any determination to be made by the Administrative Agent on behalf of or with
the approval of the Lenders or the Majority Lenders under this agreement shall
be made by the Administrative Agent in good faith and, if so made, shall be
binding on all parties, absent manifest error. The Obligors are entitled to
assume that any action taken by the Administrative Agent under or in connection
with any Credit Document has been appropriately authorized by the Lenders or the
Majority Lenders, as the case may be, pursuant to the terms hereof.

14.16 Adjustments among Lenders after Acceleration

 

  (a) The Lenders agree that, at any time after all Indebtedness of the Borrower
to the Lenders pursuant hereto has become immediately due and payable pursuant
to Section 13.1 or alter the cancellation or termination of the Credit Facility,
they will at any time or from time to time upon the request of any Lender
through the Administrative Agent purchase portions of the availments made
available by the other Lenders which remain outstanding, and make any other
adjustments which may be necessary or appropriate, in order that the amounts of
the availments made available by the respective Lenders which remain
outstanding, as adjusted pursuant to this Section 14.16, will be in the same
proportions as their respective Pro Rata Shares thereof with respect to the
Credit Facility immediately prior to such acceleration, cancellation or
termination.

 

  (b) The Lenders agree that, at any time after all Indebtedness of the Borrower
to the Lenders pursuant hereto has become immediately due and payable pursuant
to Section 13.1 or after the cancellation or termination of the Credit Facility,
the amount of any repayment made by the Borrower under this agreement, and the
amount of any proceeds of the exercise of any rights or remedies of the Lenders
under the Credit Documents, which are to be applied against amounts owing
hereunder as principal, will be so applied in a manner such that to the extent
possible, the availments made available by the Lenders which remain outstanding,
after giving effect to such application, will be in the same proportions as
their respective Pro Rata Shares thereof with respect to the Credit Facility
immediately prior to the cancellation of termination thereof immediately prior
to such acceleration, cancellation or termination.

 

  (c) For greater certainty, the Lenders acknowledge and agree that without
limiting the generality of the provisions of Section 14.16(a) and (b), such
provisions will have application if and whenever any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, compensation, or otherwise), other than on account of any monies owing
or payable by the Borrower to it under the Finance Documents in excess of its
pro rata share of payments on account of monies owing by the Borrower to all the
Finance Parties thereunder.

 

  (d) The Borrower agrees to be bound by and to do all things necessary or
appropriate to give effect to any and all purchases and other adjustments made
by and between the Lenders pursuant to this Section 14.16.

 

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14.17 Redistribution of Payment

If a Lender shall receive payment of a portion of the aggregate amount of
principal and interest due to it hereunder which is greater than the proportion
received by any other Lender in respect of the aggregate amount of principal and
interest due in respect of the Credit Facility (having regard to the respective
Individual Commitments of the Lenders), the Lender receiving such
proportionately greater payment shall purchase a participation (which shall be
deemed to have been done simultaneously with receipt of such payment) in that
portion of the aggregate outstanding credit of the other Lender or Lenders so
that the respective receipts shall be pro rata to their respective participation
in the credits; provided, however, that if all or part of such proportionately
greater payment received by such purchasing Lender shall be recovered from the
Borrower, such purchase shall be rescinded and the purchase price paid for such
participation shall be returned by such selling Lender or Lenders to the extent
of such recovery, but without interest.

14.18 Distribution of Notices

Except as otherwise expressly provided herein, promptly after receipt by the
Administrative Agent of any notice or other document which is delivered to the
Administrative Agent hereunder on behalf of the Lenders, the Administrative
Agent shall provide a copy of such notice or other document to each of the
Lenders; provided, however, that a copy of any such notice delivered at any time
during the continuance of an Event of Default shall be delivered by the
Administrative Agent to each of the Finance Parties.

14.19 Other Security Not Permitted. None of the Finance Parties shall be
entitled to enjoy any Lien with respect to any of the Secured Assets other than
the Security.

14.20 Discharge of Security. To the extent a sale or other disposition of the
Secured Assets is permitted pursuant to the provisions hereof, the Lenders
hereby authorize the Administrative Agent, at the cost and expense of the
Borrower, to execute such discharges and other instruments which are necessary
for the purposes of releasing and discharging the Security therein or for the
purposes of recording the provisions or effect thereof in any office where the
Security Documents may be registered or recorded or for the purpose of more
fully and effectively carrying out the provisions of this Section 14.20.

14.21 Determination of Exposures. Concurrent with any request for any approval
or instructions of the Majority Lenders and prior to any distribution of Cash
Proceeds of Realization to the Finance Parties, the Administrative Agent shall
request each Finance Party to provide to the Administrative Agent a written
calculation of such Finance Party’s Exposure, each such calculation to be
certified true and correct by the Finance Party providing same. Each Finance
Party shall so provide such calculation within two Banking Days following the
request of the Administrative Agent. Any such calculation provided by a
particular Finance Party shall, absent manifest error, constitute prima facie
evidence of such Finance Party’s Exposure at such time. With respect to each
determination of the Exposure of the Finance Parties, the Administrative Agent
shall promptly notify the Finance Parties. For the purposes of determining a
particular Finance Party’s Exposure:

 

  (a) the Exposure of a Finance Party under any Credit Documents shall be the
aggregate amount (expressed in United States dollars) owing to such Finance
Party thereunder on such date;

 

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  (b) the Exposure of a Qualified Risk Management Lender in respect of Qualified
Risk Management Agreements shall be measured as the net exposure of such
Qualified Risk Management Lender under all Qualified Risk Management Agreements
less the aggregate exposure of the Borrower thereunder; the exposure of party to
a Qualified Risk Management Agreement shall be, in the case of a Qualified Risk
Management Agreement which has not been terminated as of such date, the total
amount which would be owing to such party by the other party under such
Qualified Risk Management Agreement in the event of the early termination as of
such date of such Qualified Risk Management Agreement as a result of the
occurrence of a default, event of default or termination event (however
specified or designated) with respect to such party thereunder or, in the case
of a Qualified Risk Management Agreement which has been terminated as of such
date, the total amount which is owing to such party by the other party under
such Qualified Risk Management Agreement, in each case expressed in United
States dollars; and

 

  (c) any amount of Secured Obligations of any Obligor denominated in Canadian
dollars shall be expressed as the U.S. Dollar Equivalent thereof.

14.22 Decision to Enforce Security. Upon the Security becoming enforceable in
accordance with its terms, the Administrative Agent shall promptly so notify
each of the Finance Parties. The Administrative Agent or any Qualified Risk
Management Lender may thereafter provide the Administrative Agent with a written
request to enforce the Security. Forthwith after the receipt of such a request,
the Administrative Agent shall seek the instructions of the Majority Lenders as
to whether the Security should be enforced and the manner in which the Security
should be enforced. In seeking such instructions, the Administrative Agent shall
submit a specific proposal to the Finance Parties. From time to time, the
Administrative Agent or any Qualified Risk Management Lender may submit a
proposal to the Administrative Agent as to the manner in which the Security
should be enforced and the Administrative Agent shall submit any such proposal
to the Finance Parties for approval of the Majority Lenders. The Administrative
Agent shall promptly notify the Finance Parties of all instructions and
approvals of the Majority Lenders. If the Majority Lenders instruct the
Administrative Agent to enforce the Security, each of the Finance Parties agree
to accelerate the Secured Obligations owed to it to the extent permitted under
the relevant Credit Document and in accordance with the relevant Credit
Document.

14.23 Enforcement. The Administrative Agent reserves the sole right to enforce,
or otherwise deal with, the Security and to deal with the Obligors in connection
therewith; provided, however, that the Administrative Agent shall so enforce, or
otherwise deal with, the Security as the Majority Lenders shall instruct.

14.24 Application of Cash Proceeds of Realization.

 

  (a) All Proceeds of Realization not in the form of cash shall be forthwith
delivered to the Administrative Agent and disposed of, or realized upon, by the
Administrative Agent in such manner as the Majority Lenders may approve so as to
produce Cash Proceeds of Realization.

 

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  (b) Subject to the claims, if any, of secured creditors of the Obligors whose
security ranks in priority to the Security, all Cash Proceeds of Realization
shall be applied and distributed, and the claims of the Finance Parties shall be
deemed to have the relative priorities which would result in the Cash Proceeds
of Realization being applied and distributed, as follows:

 

  (i) firstly, to the payment of all reasonable costs and expenses incurred by
the Administrative Agent (including, without limitation, all legal fees and
disbursements) in the exercise of all or any of the powers granted to it
hereunder or under the Security Documents and Guarantees and in payment of all
of the remuneration of any Receiver and all costs and expenses properly incurred
by such Receiver (including, without limitation, all legal fees and
disbursements) in the exercise of all or any powers granted to it under the
Security Documents;

 

  (ii) secondly, in payment of all amounts of money borrowed or advanced by the
Administrative Agent or such Receiver pursuant to the Security Documents and any
interest thereon;

 

  (iii) thirdly, to the payment of the Secured Obligations of the Obligors
(including holding as cash collateral to be applied against Secured Obligations
of the Borrower which have not then matured) to the Finance Parties pro rata in
accordance with their relative Exposures; and

 

  (iv) the balance, if any, in accordance with Applicable Law.

14.25 Survival. The provisions of Articles 10, 11, 13 and 14 (and all other
provisions of this agreement which are necessary to give effect to each of the
provisions of such Articles) shall survive repayment in full of all credit
outstanding under the Credit Facility and the termination of the Individual
Commitments of the Lenders hereunder for the benefit of the Finance Parties
until the Secured Obligations Termination Date.

ARTICLE 15

MISCELLANEOUS

15.1 Notices

All notices and other communications provided for herein shall be in writing and
shall be personally delivered to an officer or other responsible employee of the
addressee or sent by telefacsimile, charges prepaid, at or to the applicable
addresses or telefacsimile numbers, as the case may be, set out opposite the
parties’ name on the signature page hereof or at or to such other address or
addresses, telefacsimile number or numbers as any party hereto may from time to
time designate to the other parties in such manner. Any communication which is
personally delivered as aforesaid shall be deemed to have been validly and
effectively given on the date of such delivery if such date is a Banking Day and
such delivery received before 12:00 p.m. (Reno,

 

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Nevada time); otherwise, it shall be deemed to have been validly and effectively
given on the Banking Day next following such date of delivery. Any communication
which is transmitted by telefacsimile as aforesaid shall be deemed to have been
validly and effectively given on the date of transmission if such date is a
Banking Day and such transmission was received before 12:00 p.m. (Reno, Nevada
time); otherwise, it shall be deemed to have been validly and effectively given
on the Banking Day next following such date of transmission.

15.2 Severability

Any provision hereof which is prohibited or unenforceable shall be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.

15.3 Counterparts

This agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original and all of which taken together shall be deemed to
constitute one and the same instrument.

15.4 Successors and Assigns

This agreement shall enure to the benefit of and shall be binding upon the
parties hereto and their respective successors and permitted assigns.

15.5 Assignment

 

  (a) Neither the Credit Documents nor the benefit thereof may be assigned by
any Obligor.

 

  (b)

A Lender may at any time sell to one or more other persons (“Participants”)
participating interests in any credit outstanding hereunder, any commitment of
such Lender hereunder or any other interest of the Lender hereunder. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender’s obligations under this agreement to the Borrower shall remain
unchanged, such Lender shall remain solely responsible for the performance
thereof and the Borrower shall continue to be obligated to such Lender in
connection with such Lender’s rights under this agreement. The Borrower agrees
that if amounts outstanding under this agreement are due and unpaid, or shall
have been declared to be or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this agreement to the same extent as if the amount of its participating interest
were owing directly to it as the relevant Lender under this agreement. The
Borrower also agrees that each Participant shall be entitled to the benefits of
Article 8 with respect to its participation hereunder and for the purposes of
Article 8 such Participant shall be deemed to be a Lender to the extent of such
participation, provided, that such Participant shall have complied with
obligations of a Lender provided in Article 8 and that no Participant shall be
entitled to receive any greater amount pursuant to

 

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  such Article than the relevant Lender would have been entitled to receive in
respect of the amount of the participation transferred by the relevant Lender to
such Participant had no such transfer occurred.

 

  (c) With the prior written consent of, (x) the Issuing Lender, (y) the
Administrative Agent and (z) at any time that no Default has occurred and is
continuing, the Borrower, a Lender may at any time sell all or any part of its
rights and obligations under the Credit Documents to one or more Persons
(“Purchasing Lenders”). For certainty, no consent shall be required for (x) any
sale by a Lender to another Lender or by a Lender to any of its affiliates or
(y) any pledge by a Lender to the Federal Reserve Bank of such Lender’s interest
hereunder. Upon such sale, the relevant Lender shall, to the extent of such
sale, be released from its obligations under the Credit Documents and each of
the Purchasing Lenders shall become a party to the Credit Documents to the
extent of the interest so purchased. Any such assignment by a Lender shall not
be effective unless and until such Lender has paid to the Administrative Agent
an assignment fee in the amount of $3,500 for each Purchasing Lender, unless and
until the Purchasing Lender has executed an instrument substantially in the form
of Schedule C hereto whereby the Purchasing Lender has agreed to be bound by the
terms of the Credit Documents as a Lender and has agreed to specific Individual
Commitments with respect to the Credit Facility and a specific address and
telefacsimile number for the purpose of notices as provided in Section 15.1 and
unless and until the requisite consents to such assignment have been obtained,
unless and until a copy of a fully executed copy of such instrument has been
delivered to each of the Administrative Agent and the Borrower. Upon any such
assignment becoming effective, Schedule A hereto shall be deemed to be amended
to include the Purchasing Lender as a Lender with the specific Individual
Commitment, address and telefacsimile number as aforesaid and the Individual
Commitment of the Lender making such assignment shall be deemed to be reduced by
the amount of the Individual Commitment of the Purchasing Lender with respect to
the Credit Facility.

 

  (d) The Borrower authorizes the Administrative Agent and the Lenders to
disclose to any Participant or Purchasing Lender (each, a “Transferee”) and any
prospective Transferee or any professional advisor of any Transferee or
prospective Transferee and authorizes each of the Lenders to disclose to any
other Lender any and all financial information in their possession concerning
the Borrower which has been delivered to them by or on behalf of the Borrower
pursuant to this agreement or which has been delivered to them by or on behalf
of the Borrower in connection with their credit evaluation of the Obligors prior
to becoming a party to this agreement, so long as any such Transferee agrees not
to disclose any confidential, non-public information to any person other than
its non-brokerage affiliates, employees, accountants or legal counsel, unless
required by law and authorizes each of the Lenders to disclose to any other
Lender and to any Person where disclosure is required by law, regulation, legal
process or regulatory authority (for certainty under any circumstance and not
solely in connection with assignment of rights). Each Lender shall advise the
Borrower, upon request, of the identity of the Participants to whom it has sold
participating interests and the nature and extent of the interests sold unless
prohibited by Applicable Law.

 

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15.6 Entire Agreement

This agreement and the agreements referred to herein and delivered pursuant
hereto (including, without limitation, the Fee Letter) constitute the entire
agreement between the parties hereto and supersede any prior agreements,
undertakings, declarations, representations and understandings, both written and
verbal, in respect of the subject matter hereof.

15.7 Further Assurances

The Borrower shall, and shall cause each other Obligor to, from time to time and
at all times hereafter, upon every reasonable request of the Administrative
Agent, make, do, execute, and deliver or cause to be made, done, executed and
delivered all such further acts, deeds, assurances and things as may be
necessary in the opinion of the Administrative Agent for more effectually
implementing and carrying out the true intent and meaning of the Credit
Documents or any agreement delivered pursuant hereto or thereto and such
additional security, legal opinions, consents, approvals, acknowledgements,
undertakings, non-disturbance agreements, directions and negotiable documents of
title in connection with the property and assets of the Obligors, in form and
substance satisfactory to the Administrative Agent, as the Administrative Agent
may from time to time reasonably request, to ensure (i) that all Secured Assets
are subject to a Lien in favour of the Administrative Agent and (ii) the
intended first ranking priority of such Liens.

15.8 Judgment Currency

 

  (a) If, for the purpose of obtaining or enforcing judgment against the
Borrower in any court in any jurisdiction, it becomes necessary to convert into
a particular currency (such currency being hereinafter in this Section 15.8
referred to as the “Judgment Currency”) an amount due in another currency (such
other currency being hereinafter in this Section 15.8 referred to as the
“Indebtedness Currency”) under this agreement, the conversion shall be made at
the rate of exchange prevailing on the Banking Day immediately preceding:

 

  (i) the date of actual payment of the amount due, in the case of any
proceeding in the courts of the Province of Ontario or in the courts of any
other jurisdiction that will give effect to such conversion being made on such
date; or

 

  (ii) the date on which the judgment is given, in the case of any proceeding in
the courts of any other jurisdiction (the date as of which such conversion is
made pursuant to this Section 15.8(a)(ii) being hereinafter in this Section 15.8
referred to as the “Judgment Conversion Date”).

 

  (b)

If, in the case of any proceeding in the court of any jurisdiction referred to
in Section 15.8(a)(ii), there is a change in the rate of exchange prevailing
between the Judgment Conversion Date and the date of actual payment of the
amount due,

 

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  the Borrower shall pay to the appropriate judgment creditor or creditors such
additional amount (if any, but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Indebtedness Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
order at the rate of exchange prevailing on the Judgment Conversion Date.

 

  (c) Any amount due from the Borrower under the provisions of Section 15.8(b)
shall be due to the appropriate judgment creditor or creditors as a separate
debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of this agreement.

 

  (d) The term “rate of exchange” in this Section 15.8 means the noon spot rate
of exchange for Canadian interbank transactions applied in converting the
Indebtedness Currency into the Judgment Currency published by the Bank of Canada
for the day in question.

15.9 Waivers of Jury Trial

THE BORROWER, THE LENDERS AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT TO WHICH IT IS A PARTY AND FOR
ANY COUNTERCLAIM THEREIN.

15.10 USA Patriot Act

Each Lender subject to the Act (as hereinafter defined) hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Obligors which
information includes the name and address of each Obligor and other information
that will allow such Lender to identify such Obligor in accordance with the Act.

[The remainder of this page is intentionally left blank.]

 

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IN WITNESS WHEREOF the parties hereto have executed and delivered this agreement
on the date first written above.

 

Allied Nevada Gold Corp.

9790 Gateway Drive, Suite 200

Reno, Nevada

89521

  ALLIED NEVADA GOLD CORP.     By:  

 

Attention:   Chief Financial Officer     Telefax:   (775) 358-4458         By:  

 

 

Credit Agreement

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The Bank of Nova Scotia

Corporate Banking – Loan Syndications

40 King Street West

  THE BANK OF NOVA SCOTIA, as Administrative Agent Scotia Plaza, 62nd Floor  
By:  

 

Toronto, Ontario M5W 2X6     Name:       Title: Attention:   Managing Director  
  Telefax:   (416) 866-3329         By:  

 

      Name:       Title: The Bank of Nova Scotia   THE BANK OF NOVA SCOTIA, as
Lender Corporate Banking – Global Mining    

40 King Street West

Scotia Plaza, 62nd Floor

  By:  

 

Toronto, Ontario M5W 2X6     Name:       Title: Attention:   Managing Director  
  Telefax:   (416) 866-2009         By:  

 

      Name:       Title:

 

Credit Agreement

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SCHEDULE A

LENDERS AND INDIVIDUAL COMMITMENTS

 

Lenders

   Individual Commitments  

The Bank of Nova Scotia

   $ 30,000,000   

 

Credit Agreement

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SCHEDULE B

COMPLIANCE CERTIFICATE

 

TO: THE BANK OF NOVA SCOTIA

I,                     , the [senior financial officer] of Allied Nevada Gold
Corp. (the “Borrower”), hereby certify that:

 

1. I am the duly appointed [senior financial officer] the Borrower named in the
credit agreement made as of May 17, 2011, as amended (the “Credit Agreement”)
between, inter alia, Allied Nevada Gold Corp., the Lenders named therein and The
Bank of Nova Scotia, as administrative agent of the Lenders and as such I am
providing this Certificate for and on behalf of Allied Nevada Gold Corp.
pursuant to the Credit Agreement.

 

2. I am familiar with and have examined the provisions of the Credit Agreement
including, without limitation, those of Article 10, Article 11 and Article 13
therein.

 

3. To the best of my knowledge, information and belief and after due inquiry, no
Default has occurred and is continuing.

As at or for the relevant period ending
                                        , the amounts and financial ratios as
contained in Sections 11.1(n), (o) and (p) of the Credit Agreement are as
follows and detailed calculations thereof are attached hereto:

 

     Actual
Amount or
Percentage      Required Amount or
Percentage  

(a)    Tangible Net Worth

   $                    $                   

 

 

    

(b)    Interest Coverage Ratio

        ³ 4.00:1      

 

 

    

(c)    Leverage Ratio

        £ 3.00:1      

 

 

    

The attached calculation worksheet as at the relevant period ending
                     accurately sets out the information therein contained.

 

4.

Attached hereto is a revised and updated Schedule G (Corporate Chart) and
Schedule L (Location of Obligors/Assets) of the Credit Agreement.

 

5. Unless the context otherwise requires, capitalized terms in the Credit
Agreement which appear herein without definitions shall have the meanings
ascribed thereto in the Credit Agreement.

 

Credit Agreement

--------------------------------------------------------------------------------

DATED this      day of             , 20    .

 

 

(Signature)

 

(Name - please print)

 

(Title of Senior Financial Officer)

 

Credit Agreement

--------------------------------------------------------------------------------

CALCULATION WORKSHEET

Tangible Net Worth

Actual:

 

Equity as of financial statements dated [    ]

   $                

Less:

  

Goodwill, Other Intangible Assets and Accumulated Other Comprehensive Income

   $ (             ) 

Tangible Net Worth

   $                

Minimum Required:

 

   [$ 392,000,000 ] 

Plus:

  

25% of positive Net Income for each Fiscal Quarter after the Fiscal Quarter
ended March 31, 2011

   $                

Minimum Level

   $                

Compliance    [Yes]/[No]

Interest Coverage Ratio

 

Description

   Amount  

Rolling Interest Expenses

   $   (B)    

 

 

 

Rolling EBITDA

   $   (C)    

 

 

 

Interest Coverage Ratio (Actual)

   $   (D = B:C)    

 

 

 

Minimum Requirement: 4.00:1

  

Leverage Ratio

 

Total Debt

   $              (A)    

 

 

 

Rolling EBITDA

   $              (B)    

 

 

 

Leverage Ratio (Actual)

                  (A:B)    

 

 

  Minimum Requirement 3:1   

Compliance    [Yes]/[No]

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE C

FORM ASSIGNMENT

Dated             , 20    

Reference is made to the Credit Agreement made as of May 17, 2011, as amended
(the “Credit Agreement”) between, inter alia, Allied Nevada Gold Corp., as
borrower, the Lenders named therein and The Bank of Nova Scotia, as
administrative agent of the Lenders (in that capacity, the “Administrative
Agent”). Terms defined in the Credit Agreement are used herein as therein
defined.

                     (the “Assignor”) and                      (the “Assignee”)
agree as follows:

(a) The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a     % interest in and to all
of the Assignor’s rights and obligations under the Credit Agreement as of the
Effective Date (as defined below) (including, without limitation, such
percentage interest in the Assignor’s Individual Commitment with respect to each
the Credit Facility as in effect on the Effective Date, the credit extended by
the Assignor under each the Credit Facility and outstanding on the Effective
Date and the corresponding rights and obligations of the Assignor under all of
the Credit Documents as it relates to each the Credit Facility).

(b) The Assignor (i) represents and warrants that as of the date hereof its
Individual Commitment with respect to the Credit Facility is $            
(without giving effect to assignments thereof which have not yet become
effective, including, but not limited to, the assignment contemplated hereby),
and the aggregate outstanding amount of credit extended by it under the Credit
Facility is $             (without giving effect to assignments thereof which
have not yet become effective, including, but not limited to, the assignment
contemplated hereby); (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any other instrument or document furnished
pursuant thereto; (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Obligor or the
performance or observance by the Obligors of any of their obligations under the
Credit Documents or any other instrument or document furnished pursuant thereto;
and (v) gives notice to the Administrative Agent and the Borrower of the
assignment to the Assignee hereunder.

(c) The effective date of this Assignment (the “Effective Date”) shall be the
later of              and the date on which a copy of a fully executed copy of
this Assignment has been delivered to the Borrower and the Administrative Agent
in accordance with Section 15.5(c) of the Credit Agreement.

 

Credit Agreement

--------------------------------------------------------------------------------

(d) The Assignee hereby agrees to the specific Individual Commitments of $
             and to the address and telefacsimile number set out after its name
on the signature page hereof for the purpose of notices as provided in
Section 15.1 of the Credit Agreement.

(e) As of the Effective Date (i) the Assignee shall, in addition to any rights
and obligations under the Credit Documents held by it immediately prior to the
Effective Date, have the rights and obligations under the Credit Documents that
have been assigned to it pursuant to this Assignment and (ii) the Assignor
shall, to the extent provided in this Assignment, relinquish its rights and be
released from its obligations under the Credit Documents.

(g) The Assignor and Assignee shall make all appropriate adjustments in payments
under the Credit Documents for periods prior to the Effective Date directly
between themselves.

This Assignment shall be governed by, and construed in accordance with, the laws
of the Province of Ontario and the laws of Canada applicable therein.

 

[ASSIGNOR] By:  

 

  Title: [ASSIGNEE] By:  

 

  Title: Address

 

 

 

Attention:  

 

Telefax:  

 

 

Credit Agreement

--------------------------------------------------------------------------------

Acknowledged and agreed to as of this      day of                     ,
20         .

 

THE BANK OF NOVA SCOTIA, as Administrative Agent By:  

 

  Name:   Title:

Acknowledged and agreed to as of this      day of                     ,
20        .

 

THE BANK OF NOVA SCOTIA, as Issuing Lender By:  

 

  Name:   Title: ALLIED NEVADA GOLD CORP. By:  

 

  Name:   Title:

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULED D

FORM OF DRAWDOWN NOTICE

 

TO:    The Bank of Nova Scotia, as Administrative Agent   

WBO – Loan Administration and Agency Services

3rd Floor, 720 King Street

Toronto, Ontario M5V 2T3

Att: Senior Manager

Facsimile: (416) 866-5991

WITH A COPY TO:   

Corporate Banking – Loan Syndications

40 King Street West, 62nd Floor

Toronto, Ontario M5W 2X6

Att: Managing Director

Facsimile: (416) 866-3329

RE:    Credit Agreement made as of May 17, 2011 (the “Credit Agreement”)
between, inter alia, Allied Nevada Gold Corp. as borrower, the Lenders named
therein and The Bank of Nova Scotia, as administrative agent of the Lenders

Pursuant to the terms of the Credit Agreement, the undersigned hereby
irrevocably notifies you that it wishes to draw down under the Credit Facility
on [date of drawdown] as follows:

 

Availment Option:  

 

 

Currency & Amount:  

 

 

If LIBOR Loan, Interest Period:  

 

 

If Letter, (a copy being attached hereto):    

Type of Letter (financial or performance):  

 

 

Date of Issuance:  

 

 

Named Beneficiary:  

 

 

Maturity Date:  

 

 

Currency & Amount:  

 

 

Other Terms:  

 

 

[You are hereby irrevocably authorized and directed to pay the proceeds of the
drawdown to                      and this shall be your good and sufficient
authority for so doing.]

 

Credit Agreement

--------------------------------------------------------------------------------

No Default has occurred and is continuing or would arise immediately after
giving effect to or as a result of the extension of credit requested hereby.

All capitalized terms defined in the Credit Agreement and used herein shall have
the meanings ascribed thereto in the Credit Agreement.

DATED the      day of                     , 20        .

 

ALLIED NEVADA GOLD CORP. By:  

 

  Name:   Title:

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE E

FORM OF ROLLOVER NOTICE

 

TO:    The Bank of Nova Scotia, as Agent   

WBO – Loan Administration and Agency Services

3rd Floor, 720 King Street

Toronto, Ontario M5V 2T3

Att: Senior Manager

Facsimile: (416) 866-5991

WITH A
COPY TO:   

Corporate Banking – Loan Syndications

40 King Street West, 62nd Floor

Toronto, Ontario M5W 2X6

Att: Managing Director

Facsimile: (416) 866-3329

RE:   

Credit Agreement made as of May 17, 2011 (the “Credit Agreement”) between, inter
alia, Allied Nevada Gold Corp. as borrower, the Lenders named therein and The
Bank of Nova Scotia, as administrative agent of the Lenders

Pursuant to the terms of the Credit Agreement, the undersigned hereby
irrevocably requests a rollover of outstanding credit under the Credit Facility
on [date of rollover] as follows:

LIBOR Loans

 

Maturity Date of Maturing LIBOR Loan

                    

Principal Amount of Maturing LIBOR Loan

  $                

Portion Thereof to be Replaced

  $                

Interest Period of New LIBOR Loan

       months

No Default has occurred and is continuing or would arise immediately after
giving effect to or as a result of the extension of credit requested hereby.

 

Credit Agreement

--------------------------------------------------------------------------------

All capitalized terms defined in the Credit Agreement and used herein shall have
the meaning ascribed thereto in the Credit Agreement.

DATED the      day of                     , 20        .

 

ALLIED NEVADA GOLD CORP. By:  

 

  Name:   Title:

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE F

FORM OF CONVERSION NOTICE

 

TO:    The Bank of Nova Scotia, as Agent   

WBO – Loan Administration and Agency Services

3rd Floor, 720 King Street

Toronto, Ontario M5V 2T3

Att: Senior Manager

Facsimile: (416) 866-5991

WITH A
COPY TO:   

Corporate Banking – Loan Syndications

40 King Street West, 62nd Floor

Toronto, Ontario M5W 2X6

Att: Managing Director

Facsimile: (416) 866-3329

RE:   

Credit Agreement made as of May 17, 2011 (the “Credit Agreement”) between, inter
alia, Allied Nevada Gold Corp. as borrower, the Lenders named therein and The
Bank of Nova Scotia, as administrative agent of the Lenders

Pursuant to the terms of the Credit Agreement, the undersigned hereby
irrevocably requests a conversion of outstanding credit under the Credit
Facility on [date of conversion] as follows:

 

Converting From          Converting Into        LIBOR Loans      LIBOR Loans   
Maturity Date of Maturing LIBOR Loan      Principal Amount of New LIBOR Loan   
  $                    Principal Amount of Maturing LIBOR Loan    
$                          Portion Thereof to be converted     $                
      Interest Period of New LIBOR Loan           months    Base Rate Loans     
Base Rate Loan    Principal Amount of Base Rate Loan to be converted    
$                       Principal Amount of New Base Rate Loan     
$                    Portion Thereof to be converted     $                      
  

No Default has occurred and is continuing or would arise immediately after
giving effect to or as a result of the extension of credit requested hereby.

 

Credit Agreement

--------------------------------------------------------------------------------

All capitalized terms defined in the Credit Agreement and used herein shall have
the meaning ascribed thereto in the Credit Agreement.

DATED the     day of                     , 20        .

 

ALLIED NEVADA GOLD CORP. By:  

 

  Name:   Title:

 

Credit Agreement

--------------------------------------------------------------------------------

 

LOGO [g266036exdpg108.jpg]

--------------------------------------------------------------------------------

SCHEDULE H

APPLICABLE RATES

 

Level

   Leverage
Ratio    Base Rate Loan
interest rate margin    LIBOR Loan
interest rate margin
and Financial Letter
issuance fee rate    Non-Financial Letter
issuance fee rate    Standby Fee
rate

I

   <1.50 to 1    2.25% per annum    3.25% per annum    1.950% per annum   
0.975% per annum

II

   ³1.50 to 1
and

<2.25 to 1

   2.75% per annum    3.75% per annum    2.250% per annum    1.125% per annum

III

   ³2.25    3.25% per annum    4.25% per annum    2.550% per annum    1.275% per
annum

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE I

SECURITY DOCUMENTS

 

1. Security agreement dated as of May 17, 2011 and made by each Obligor in
favour of the Administrative Agent (the “Security Agreement”).

 

2. Share pledge agreement dated May 17, 2011 and made by the Borrower in favour
of the Administrative Agent.

 

3. Share pledge agreement dated May 17, 2011 and made by Allied VGH in favour of
the Administrative Agent.

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE J

QUALIFIED AFFILIATE INSTRUMENT OF ADHESION

 

TO:    THE BANK OF NOVA SCOTIA, as Administrative Agent AND TO:    THE OTHER
PARTIES TO THE CREDIT AGREEMENT REFERRED TO BELOW

Reference is made to the credit agreement dated as of May 17, 2011 by and among,
inter alia, Allied Nevada Gold Corp., as Borrower, the Lenders who may from time
to time be parties thereto, and The Bank of Nova Scotia, as Administrative Agent
(such credit agreement, as amended, modified, supplemented, replaced or restated
from time to time, being the “Credit Agreement”. The terms defined therein and
not otherwise defined herein being used herein as therein defined).

WHEREAS the Credit Agreement provides that an Affiliate of a Lender may become a
Qualified Affiliate under the Credit Agreement if it executes this instrument
and delivers it to the Administrative Agent;

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged by the undersigned, the undersigned hereby
represents, warrants and covenants as follows:

 

1. By executing this instrument, the undersigned hereby covenants and agrees to
be bound by the terms and conditions of the Credit Agreement as a Qualified
Affiliate, including all amendments, supplements and additions thereto,
deletions therefrom and restatements thereof, solely as relates to the terms and
conditions set forth in Article 14 of the Credit Agreement.

 

2. The undersigned hereby acknowledges that it has been provided with a copy of
the Credit Agreement.

DATED this      day of                     ,         .

 

[INSERT NAME OF QUALIFIED AFFILIATE] By:  

 

 

Name:

Title:

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE K

SHARE CAPITAL OF GUARANTORS

 

Pledged Guarantor

   Issued Capital      Owner of Record    Percentage of Issued
and Outstanding  

Allied VGH

     13,325 common shares       Borrower      100 % 

Hycroft Resources

     18,953 common shares       Allied VGH      100 % 

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE L

PRINCIPAL PLACES OF BUSINESS; LOCATIONS OF ASSETS

 

Obligor

  

Jurisdiction

Borrower

  

Allied VGH

  

Hycroft Resources

  

ADDRESS OF LOCATIONS OF PROPERTY

 

Obligor

  

Address

  

Type of Property

Borrower

     

Allied VGH

     

Hycroft Resources

     

 

Credit Agreement

--------------------------------------------------------------------------------

SCHEDULE M

REIMBURSEMENT INSTRUMENT

 

TO:    The Bank of Nova Scotia (the “Issuing Lender”) RE:    Credit Agreement
made as of May 17, 2011 (as amended to the date hereof, the “Credit Agreement”)
between Allied Nevada Gold Corp., as borrower, the Lenders named therein and The
Bank of Nova Scotia, as administrative agent of the Lenders

For good and valuable consideration, undersigned hereby agrees to immediately
reimburse the Issuing Lender the amount of each and any demand or other request
for payment presented to and paid by the Issuing Lender in accordance with each
Letter (as defined in the Credit Agreement) issued by the Issuing Lender on
behalf of the undersigned (even if, under laws applicable to the rights of the
beneficiary of such Letter, a demand or other request for payment is validly
presented after expiry of such Letter).

DATED as of the      day of                     ,         .

 

[NAME OF SUBSIDIARY] By:  

 

By:  

 

 

Credit Agreement