Exhibit 10.1

Execution Version

 

 

$350,000,000

 

FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

among

 

ROYAL GOLD, INC.,

as a Borrower,

 

HIGH DESERT MINERAL RESOURCES, INC.,

as a Guarantor,

 

RG EXCHANGECO INC.,

as a Guarantor,

 

RG MEXICO, INC.,

as a Guarantor,

 

THE OTHER GUARANTORS

FROM TIME TO TIME PARTY HERETO,

as Guarantors,

 

HSBC BANK USA, NATIONAL ASSOCIATION,

as a Lender,

 

THE BANK OF NOVA SCOTIA,

as a Lender,

 

GOLDMAN SACHS BANK USA,

as a Lender,

 

AND SUCH OTHER LENDERS

AS MAY BECOME A PARTY HERETO FROM TIME TO TIME,

as Lenders,

 

HSBC BANK USA, NATIONAL ASSOCIATION,

as Administrative Agent,

 

HSBC SECURITIES (USA) INC.,

as Sole Lead Arranger and Joint Bookrunner

 

and

 

SCOTIABANK,

as Syndication Agent and Joint Bookrunner

 

Dated as of May 30, 2012

 

 

 

 

  TABLE OF CONTENTS     Page       ARTICLE I DEFINITIONS 2       Section 1.1
Defined Terms 2 Section 1.2 Other Definitional Provisions; Time References 24
Section 1.3 Québec Matters 25 Section 1.4 Accounting Terms 25 Section 1.5
Amendment and Restatement 26 Section 1.6 Permitted Liens 26       ARTICLE II THE
LOANS; AMOUNT AND TERMS 27       Section 2.1 Revolving Loans 27 Section 2.2 Fees
28 Section 2.3 Commitment Reductions 28 Section 2.4 Prepayments 29 Section 2.5
Default Rate and Payment Dates 29 Section 2.6 Extension of an Interest Period 29
Section 2.7 Computation of Interest and Fees 29 Section 2.8 Pro Rata Treatment
and Payments 31 Section 2.9 Non-Receipt of Funds by the Administrative Agent 33
Section 2.10 Inability to Determine Interest Rate; Base Rate Loans 33 Section
2.11 Illegality 34 Section 2.12 Requirements of Law 34 Section 2.13 Judgment
Currency Conversion 36 Section 2.14 Indemnity 36 Section 2.15 Incremental Loans
36 Section 2.16 Taxes 38       ARTICLE III REPRESENTATIONS AND WARRANTIES 40    
  Section 3.1 Corporate Existence; Compliance with Law 40 Section 3.2 Corporate
Power; Authorization; Enforceable Obligations 40 Section 3.3 Financial
Condition; No Material Adverse Effect 41 Section 3.4 Compliance with Laws; No
Conflict; No Default 41 Section 3.5 No Material Litigation 42 Section 3.6
Employee Benefit Plans and Canadian Pension Plans 42 Section 3.7 Environmental
Matters 43 Section 3.8 Purpose of Loans 44 Section 3.9 Subsidiaries 44 Section
3.10 Ownership; Insurance 44 Section 3.11 Title to Royalty Interests; Liens 44
Section 3.12 Royalty Agreements 44

 

i

 

 

TABLE OF CONTENTS (continued)     Page

 

Section 3.13 Indebtedness 45 Section 3.14 Taxes 45 Section 3.15 No Burdensome
Restrictions 45 Section 3.16 Limitations on Incurrence of Indebtedness 45
Section 3.17 Accuracy and Completeness of Information 45 Section 3.18 Events of
Default 46 Section 3.19 Material Contracts 46 Section 3.20 Margin Regulations 46
Section 3.21 Investment Company 46       ARTICLE IV COLLATERAL SECURITY 46      
Section 4.1 Security Documents 46 Section 4.2 No Limitation on Application of
Security Interest 46 Section 4.3 Maintenance of Security Over Collateral
Royalties 46 Section 4.4 Perfection and Maintenance of Liens 47       ARTICLE V
CONDITIONS PRECEDENT 47       Section 5.1 Conditions to Closing 47 Section 5.2
Conditions to All Loans 49       ARTICLE VI AFFIRMATIVE COVENANTS 50      
Section 6.1 Financial Statements and Information 50 Section 6.2 Notices 51
Section 6.3 Payment of Taxes and Other Obligations 53 Section 6.4 Payment of
Indebtedness 53 Section 6.5 Conduct of Business and Maintenance of Existence 53
Section 6.6 Maintenance of Collateral Royalty Interests and Defend Title 54
Section 6.7 Maintenance of Liens 54 Section 6.8 Maintenance and Perfection of
Pledged Assets 54 Section 6.9 Title Opinions 54 Section 6.10 Insurance 54
Section 6.11 Inspection of Property; Books and Records; Discussions 55 Section
6.12 Compliance with Law 55 Section 6.13 Environmental Laws 55 Section 6.14
Compliance with ERISA 56 Section 6.15 Further Assurances 56 Section 6.16
Financial Covenants 56

 

ii

 

 

TABLE OF CONTENTS (continued)

 

    Page       ARTICLE VII NEGATIVE COVENANTS 57       Section 7.1 Indebtedness
57 Section 7.2 Liens 58 Section 7.3 Guaranty Obligations 58 Section 7.4 Nature
of Business 59 Section 7.5 Dissolution or Sale of Assets 59 Section 7.6 Mergers
60 Section 7.7 Advances and Loans 60 Section 7.8 Transactions with Affiliates 60
Section 7.9 Organizational Documents 60 Section 7.10 Modification of Material
Agreements 61 Section 7.11 Limitation on Restricted Actions 61 Section 7.12
Maintenance of Collateral Royalties 61 Section 7.13 Canadian Pension Plans 61
Section 7.14 No Further Negative Pledges 62 Section 7.15 No Prepayment of
Permitted Indebtedness 63 Section 7.16 Restrictive and Inconsistent Agreements
63       ARTICLE VIII EVENTS OF DEFAULT 63       Section 8.1 Events of Default
63 Section 8.2 Acceleration; Remedies 66       ARTICLE IX THE AGENT 66      
Section 9.1 Appointment 66 Section 9.2 Delegation of Duties 67 Section 9.3
Exculpatory Provisions 67 Section 9.4 Reliance by Administrative Agent 67
Section 9.5 Notice of Default 68 Section 9.6 Non-Reliance on Administrative
Agent and Other Lenders 68 Section 9.7 Indemnification 68 Section 9.8
Administrative Agent in Its Individual Capacity 69 Section 9.9 Successor
Administrative Agent 69 Section 9.10 Quebec Security 69 Section 9.11 Nature of
Duties 70       ARTICLE X MISCELLANEOUS 71       Section 10.1 Amendments,
Waivers and Release of Collateral 71 Section 10.2 Substitution of Lenders 72
Section 10.3 Notices 73

 

iii

 

 

TABLE OF CONTENTS (continued)

 

    Page       Section 10.4 No Waiver; Cumulative Remedies 73 Section 10.5
Survival of Representations and Warranties 74 Section 10.6 Payment of Expenses
and Taxes; Indemnification 74 Section 10.7 Successors and Assigns;
Participations; Purchasing Lenders 75 Section 10.8 Adjustments; Set-off 78
Section 10.9 Table of Contents and Section Headings 78 Section 10.10
Counterparts 78 Section 10.11 Effectiveness 79 Section 10.12 Severability 79
Section 10.13 Integration 79 Section 10.14 Consent to Jurisdiction 79 Section
10.15 Governing Law 80 Section 10.16 Confidentiality 80 Section 10.17
Acknowledgments 81 Section 10.18 USA Patriot Act 81 Section 10.19 Proceeds of
Crime 81 Section 10.20 Joint and Several Liability 82       ARTICLE XI GUARANTY
82       Section 11.1 The Guaranty 82 Section 11.2 Bankruptcy 83 Section 11.3
Continuing Guaranty 83 Section 11.4 Nature of Liability 83 Section 11.5
Independent Obligation 84 Section 11.6 Authorization 84 Section 11.7 Reliance 84
Section 11.8 Stay of Acceleration 84 Section 11.9 Waiver 85 Section 11.10
Confirmation of Payment 86

 

iv

 

  

Schedules

 

Schedule 1.1(a) Collateral Royalties Schedule 1.1(b) Lenders’ Administrative
Details Schedule Schedule 1.1(c) Existing Collateral Security Documents Schedule
1.1(d) Royalty Interests (Non-Collateral Royalties) Schedule 1.1(e) Title
Opinions Schedule 3.4(b) Project Governmental Approvals Schedule 3.4(c)
Compliance Exceptions Schedule 3.5 Litigation Schedule 3.9 Subsidiaries Schedule
3.12 Royalty Agreement Exceptions Schedule 3.19 Material Contract Exceptions
Schedule 6.10 Insurance Schedule 7.1 Existing Indebtedness Schedule 7.2 Existing
Liens Schedule 7.5 Permitted Dispositions Schedule 7.7 Debt Investments

 

EXHIBITS

 

Exhibit A Form of Assignment Agreement Exhibit B Form of Joinder Agreement
Exhibit C Form of Promissory Note Exhibit D Form of Notice of Borrowing Exhibit
E Form of Notice of Extension Exhibit F Form of Pledge Agreement Exhibit G Form
of Secretary’s Certificate Exhibit H Form of Security Agreement Exhibit I Form
of Officer’s Certificate Exhibit J Form of Quarterly Compliance Certificate
Exhibit K Form of Ratification and Confirmation Exhibit L Form of Incremental
Increase Joinder

 

v

 

 

FIFTH AMENDED AND RESTATED REVOLVING credit agreement

 

This FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT dated as of May 30,
2012 (the “Closing Date”), is by and among ROYAL GOLD, INC., a corporation
organized and existing under the laws of the State of Delaware, as a borrower
(“Royal Gold” or “Borrower”), HIGH DESERT MINERAL RESOURCES, INC., a corporation
organized and existing under the laws of the State of Delaware and a
wholly-owned subsidiary of Royal Gold, as a guarantor (“High Desert”), RG
EXCHANGECO INC., an amalgamated corporation validly existing under the Canada
Business Corporations Act, as a guarantor (“RG Exchangeco”), RG MEXICO, INC., a
corporation organized and existing under the laws of the State of Delaware, as a
guarantor (“RG Mexico”), those additional guarantors identified as a “Guarantor”
on the signature pages hereto and such additional guarantors from time to time
party hereto, as guarantors (the “Additional Guarantors”) (with each of High
Desert, RG Exchangeco, RG Mexico and the Additional Guarantors individually
referred to herein as a “Guarantor” and collectively referred to herein as the
“Guarantors”), HSBC BANK USA, NATIONAL ASSOCIATION a national banking
association organized under the laws of the United States (“HSBC Bank”), as a
lender, THE BANK OF NOVA SCOTIA, a bank organized and existing under the laws of
Canada (“Scotia”), as a lender, GOLDMAN SACHS BANK USA, as a lender (“Goldman”),
and those banks and financial institutions identified as a “Lender” on the
signature pages hereto and such other banks or financial institutions as may
from time to time become parties to this Agreement, as lenders (the “Additional
Lenders”) (with each of HSBC Bank, Scotia, Goldman and the Additional Lenders
individually referred to herein as a “Lender” and collectively referred to
herein as the “Lenders”), HSBC Bank, as administrative agent for the Lenders
hereunder (in such capacity, the “Administrative Agent”), HSBC SECURITIES (USA)
INC. (“HSBC Securities”), as sole lead arranger (in such capacity, the “Sole
Lead Arranger”) and a joint bookrunner (in such capacity, a “Joint Bookrunner”),
and SCOTIABANK, as the syndication agent (in such capacity, the “Syndication
Agent”) and a joint bookrunner (in such capacity, a “Joint Bookrunner”).

 

Recitals

 

A.           The Borrower, the Guarantors, the Lenders and the Administrative
Agent entered into that certain Fourth Amended and Restated Credit Agreement
dated as of February 1, 2011 (as amended, modified, continued or restated prior
to the date hereof, the “Existing Agreement”), whereby the Lenders made
available to the Borrower a revolving credit facility in the amount of Two
Hundred Twenty-Five Million Dollars ($225,000,000) (the “Existing Committed
Amount”).

 

B.           The Borrower, the Guarantors, the Lenders and the Administrative
Agent now desire to (i) extend the maturity date of the Existing Agreement, (ii)
increase the Committed Amount under the Existing Agreement to a maximum
aggregate amount of Three Hundred Fifty Million Dollars ($350,000,000), (iii)
make available certain Incremental Loans in an aggregate principal amount not to
exceed Fifty Million Dollars ($50,000,000), and (iv) to otherwise amend,
restate, modify and continue the Existing Agreement as provided in this
Agreement and to continue any Loans under the Existing Agreement as Loans under
this Agreement.

 

1

 

 

C.           This Agreement, the Loans made pursuant hereto and the Obligations
described herein are secured by Liens on the Collateral in favor of the
Administrative Agent, which Liens, and the associated Security Documents, shall
be ratified, continued and affirmed. Each of the Guarantors shall
unconditionally and irrevocably guaranty the payment and performance of all
obligations hereunder and under the other Credit Documents.

 

D.           Effective as of the Closing Date, the Existing Agreement is
amended, continued and restated in its entirety as set forth in this Agreement.

 

Agreement

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

Section 1.1      Defined Terms.

 

As used in this Agreement, terms defined in the Preamble to this Agreement have
the meanings therein indicated, and the following terms have the following
meanings:

 

“Additional Guarantors” shall have the meaning set forth in the Preamble to this
Agreement.

 

“Additional Lenders” shall have the meaning set forth in the Preamble to this
Agreement, which shall include each Purchasing Lender that joins the Agreement
in accordance with Section 10.07 and each Additional Incremental Lender that
joins the Agreement in accordance with Section 2.15.

 

“Additional Incremental Lender” shall mean, at any time, any bank or other
financial institution that agrees to provide any portion of any Incremental Loan
or Commitment Increase in accordance with Section 2.15.

 

“Administrative Agent” shall have the meaning set forth in the first paragraph
of this Agreement and includes any successors in such capacity.

 

“Affected Lender” shall have the meaning set forth in Section 10.2.

 

“Affiliate” shall mean as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, a Person shall be deemed to be
“controlled by” a Person if such Person possesses, directly or indirectly, power
either (a) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (b) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding the foregoing, no Agent or Lender shall be deemed an
Affiliate of a Borrower solely by reason of the relationship created by the
Credit Documents.

 

2

 

 

“Agent” or “Agents” shall mean a reference to the Administrative Agent and the
Syndication Agent, collectively or individually, as such reference requires.

 

“Agreement” or “Credit Agreement” shall mean this Fifth Amended and Restated
Revolving Credit Agreement, as amended, restated, amended and restated,
modified, revised, increased, supplemented, extended, continued or replaced from
time to time in accordance with its terms together with all Schedules and
Exhibits hereto.

 

“AML Legislation” has the meaning set out in Section 10.19.

 

“Applicable Percentage” shall be determined from time to time by reference to
the Leverage Ratio, shall be effective as of the calculation date of such
Leverage Ratio and shall be equal to the following:

 

      Leverage Ratio     Applicable Percentage                   Level I     <
1.0 to 1.0       1.75 %                    Level II     < 2.0 to 1.0       1.875
%                    Level III     >  2.0 to 1.0       2.25 % 

 

“Applicable Reserve Percentage” shall mean for any day, the percentage which is
in effect for such day as prescribed by any banking authority or other
applicable Governmental Authority (or any successor) to which any Lender is
subject for determining the maximum reserve requirement (including without
limitation any basic, supplemental or emergency reserves) for purposes of making
Loans at the LIBOR Rate or any other category of deposits or liabilities by
reference to which the LIBOR Rate is determined. The Applicable Reserve
Percentage shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.

 

“Approved Bank” shall mean (a) any commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (b) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof, or
from Moody’s is at least P-1 or the equivalent thereof, or from Dominion Bond
Rating Service Limited is at least R-1 or the equivalent thereof.

 

“Approved Fund” shall mean any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.

 

“Assignment Agreement” shall mean an Assignment Agreement, substantially in the
form of Exhibit A

 

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

 

3

 

 

“Bankruptcy Laws” shall mean the Bankruptcy Code, the Ley de Concursos
Mercantiles of Mexico, the Canadian Insolvency Legislation and all other
Requirements of Law pertaining or applicable to bankruptcy, insolvency, debtor
relief, debtor protection, liquidation, reorganization, arrangement,
receivership, moratorium, assignment for the benefit of creditors or other
similar laws applicable in the United States, Mexico, Canada or other applicable
jurisdictions as in effect from time to time.

 

“Base Rate” shall mean, for any day, a rate per annum equal to the greater of
(a) the Prime Rate in effect on such day; (b) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%; or (c) the Lenders’ actual cost of funds
in effect on such day, as determined by each Lender in its sole discretion and
provided to the Administrative Agent. For purposes hereof: “Prime Rate” shall
mean, at any time, the rate of interest per annum publicly announced from time
to time by the Administrative Agent as its prime rate. Each change in the Prime
Rate shall be effective as of the opening of business on the day such change in
the Prime Rate occurs. The parties hereto acknowledge that the rate announced
publicly by the Administrative Agent as its Prime Rate is an index or base rate
and shall not necessarily be its lowest or best rate charged to its customers or
other banks; and “Federal Funds Effective Rate” shall mean, for any day, the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published on the next succeeding Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive in the absence of manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Base Rate shall
be determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Base Rate due to a change in the
Prime Rate, the Federal Funds Effective Rate or in the actual cost of funds
shall be effective on the opening of business on the date of such change.

 

“Base Rate Loan” shall mean a Loan bearing interest at a rate per annum equal to
the sum of (i) the Base Rate, plus (ii) the Applicable Percentage; the
applicable Base Rate shall be re-determined by the Administrative Agent on each
day that a change in the Base Rate occurs.

 

“Borrower” shall have the meaning set forth in the first paragraph of this
Agreement.

 

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

 

“Business Day” shall mean a day other than a Saturday, Sunday or other day on
which commercial banks in Denver, Colorado, New York, New York and Toronto,
Ontario are authorized or required by law to close.

 

“Canadian Credit Party” means any Credit Party incorporated or otherwise
organized under the laws of Canada or any province or territory thereof.

 

4

 

 

“Canadian Income Tax Act” means the Income Tax Act (Canada), as amended from
time to time.

 

“Canadian Insolvency Legislation” shall mean the Bankruptcy and Insolvency Act
(Canada), the Companies’ Creditors Arrangement Act (Canada), as amended from
time to time, and all other Requirements of Law pertaining or applicable to
bankruptcy, insolvency, debtor relief, debtor protection, winding up,
liquidation, reorganization, arrangement, receivership, moratorium, relief of
debts, assignment for the benefit of creditors or other similar laws applicable
in Canada or any other applicable jurisdictions as in effect from time to time.

 

“Canadian Pension Plan” shall mean a “registered pension plan”, as that term is
defined in subsection 248(1) of the Canadian Income Tax Act, which is or was
sponsored, administered or contributed to, or required to be contributed to by,
any Credit Party or under which any Credit Party has any actual or potential
liability.

 

“Canadian Ratification” shall mean that certain Ratification and Confirmation of
Security of even date herewith from RG Exchangeco in favor of the Administrative
Agent.

 

“Canadian Security Agreement” shall mean that certain General Security Agreement
from RG Exchangeco in favor of the Administrative Agent as further described on
Schedule 1.1(c) hereto, as ratified and confirmed pursuant to the Canadian
Ratification, together with all amendments, restatements, amendments and
restatements, modifications, revisions, increases, supplements, extensions,
continuations, replacements or refinancings from time to time in accordance with
the terms thereof.

 

“Capital Expenditure” shall mean, for any period, all capital expenditures of
the Credit Parties and their Subsidiaries on a Consolidated basis for such
period, as determined in accordance with GAAP and reflected on the Consolidated
balance sheet of the Borrower.

 

“Capital Lease” shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

 

“Capital Lease Obligations” shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.

 

“Capital Stock” shall mean (i) in the case of a corporation, capital stock,
(ii) in the case of a sociedad anonima de capital variable, the corporate
capital interests or capital social, (iii) in the case of an association or
business entity, any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iv) in the case of a
partnership, partnership interests (whether general or limited), (v) in the case
of a limited liability company, membership interests and (vi) any other right,
interest, participation or classification similar to the foregoing that confers
on a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.

 

5

 

 

“Cash Equivalents” shall mean (i) securities issued or directly and fully
guaranteed or insured by Canada or the United States of America or any agency or
instrumentality thereof having maturities of not more than twelve months from
the date of acquisition (“Government Obligations”), (ii) Canadian dollar
denominated or Dollar denominated time deposits, certificates of deposit,
Eurodollar time deposits and Eurodollar certificates of deposit of an Approved
Bank, in each case with maturities of not more than 364 days from the date of
acquisition, (iii) commercial paper and variable or fixed rate notes issued by
any Approved Bank (or by the parent company thereof), or any variable rate notes
issued by, or guaranteed by any domestic corporation rated by two out of three
of the following ratings agencies as A-1 (or the equivalent thereof) or better
by S&P, or P-1 (or the equivalent thereof) or better by Moody’s, or R-1 (or the
equivalent thereof) or better by Dominion Bond Rating Service Limited, and
maturing within six months of the date of acquisition, (iv) repurchase
agreements with a bank or trust company (including a Lender) or a recognized
securities dealer having capital and surplus in excess of $500,000,000 for
direct obligations issued by or fully guaranteed by Canada or the United States
of America, (v) obligations of any province of Canada or state of the United
States or any political subdivision thereof for which the payment of the
principal, interest and redemption price shall have been arranged by irrevocably
deposited government obligations maturing as to principal and interest at times
and in amounts sufficient to provide such payment, (vi) auction preferred stock
rated by two out of three of the following ratings agencies in the highest
short-term credit rating category by S&P, Moody’s or Dominion Bond Rating
Service Limited and (vii) shares of money market mutual or similar funds that
(A) invest exclusively in assets satisfying the requirements of clauses (i)
through (vi) of this definition or (B) comply with Rule 2a-7 of the Investment
Company Act of 1940.

 

“Change of Control” shall mean the occurrence of any of the following events:
(a) any “person” or “group” (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act becomes the “beneficial owner” (as defined in
Rule l3d-3 under the Securities Exchange Act) of more than 25% of then
outstanding Voting Stock of a Borrower, measured by voting power rather than the
number of shares, or (b) Continuing Directors shall cease for any reason to
constitute a majority of the members of the board of directors of a Borrower
then in office, or (c) the Borrower or the Guarantors shall cease to directly or
indirectly own and control the Capital Stock that each of them has pledged to
the Administrative Agent pursuant to a Pledge Agreement.

 

“Closing Date” shall mean the date of this Agreement.         

 

“Collateral” shall mean a collective reference to the collateral which is
identified in, and at any time will be, or is intended to be, subject to or
covered by, a Security Document and any other property or assets of a Credit
Party, whether tangible or intangible, whether real or personal and whether now
or hereafter acquired, that may from time to time secure the Obligations,
including the Collateral Royalties.

 

“Collateral Requirement” shall have the meaning set forth in Section 4.3.

 

“Collateral Royalties” shall mean each of (i) the following Royalties owned by
the Borrower: GSR #1, GSR #2, GSR #3 and NVR #1 with respect to the Pipeline
Project and the Robinson Royalty with respect to the Robinson Project; (ii) the
following Royalties owned by High Desert: SJ Royalty with respect to the
Betze-Post Mine and the Leeville Royalty with respect to the Leeville Project;
(iii) the following Royalties owned by RG Mexico: the Mulatos Royalty with
respect to the Mulatos Mine, the Penasquito Royalty with respect to the
Penasquito Project, the Dolores I and Dolores II Royalties with respect to the
Dolores Project; and (iv) the following Royalties owned by RG Exchangeco: Holt
McDermott, Malartic, Allan and Kutcho Creek; each of such Collateral Royalties
is further described on Schedule 1.1(a) hereto, together with, from time to time
hereafter, any other Royalty Interest subject to a Mortgage or other Security
Document satisfactory to the Required Lenders in their sole discretion.

 

6

 

 

“Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Loans in an aggregate principal amount at any time outstanding up
to an amount equal to such Lender’s Commitment Percentage of the Committed
Amount.

 

“Commitment Fee” shall have the meaning set forth in Section 2.2(a).

 

“Commitment Fee Percentage” shall be determined from time to time by reference
to the Leverage Ratio, effective as of the last date and shall be equal to the
following:

 

      Leverage Ratio       Commitment Fee Percentage                     Level I
    < 1.0 to 1.0       0.375 %                   Level II     < 2.0 to 1.0      
0.50 %                   Level III     >  2.0 to 1.0       0.50 %

 

“Commitment Increase” shall have the meaning set forth in Section 2.15(a).

 

“Commitment Percentage” shall mean, for each Lender, the percentage identified
as its Commitment Percentage on the Lenders’ Administrative Details Schedule, as
such Commitment Percentage may be adjusted (i) pursuant to any Assignment
Agreement pursuant to which a Lender became a Lender hereunder in connection
with any assignment made in accordance with the provisions of Section 10.7(c) or
(ii) in connection with each Commitment Increase and the respective Incremental
Loan and/or the addition of an Additional Incremental Lender pursuant to any
Incremental Increase Joinder, in each case in accordance with the provisions of
Section 2.15.

 

“Commitment Period” shall mean the period beginning on the date of satisfaction
of the conditions precedent set forth in Section 5.1 to, but not including, the
Maturity Date.

 

“Committed Amount” shall mean the maximum aggregate principal amount of Loans
that may be made by the Lenders hereunder, subject to the terms and conditions
herein, at any time, together with any Commitment Increase made in accordance
with Section 2.15, with the Committed Amount at the Closing Date being equal to
Three Hundred Fifty Million Dollars ($350,000,000).

 

“Consolidated” or “consolidated” shall mean, with reference to any term defined
herein, such term as applied to the accounts of Royal Gold and its Subsidiaries,
consolidated in accordance with GAAP.

 

7

 

 

“Consolidated EBITDA” shall mean, for any period, Consolidated Net Income of the
Borrower and its Subsidiaries determined in accordance with GAAP for such period
plus (a) without duplication and to the extent deducted in determining such
Consolidated Net Income, the sum of (i) Consolidated Interest Expense for such
period, (ii) consolidated income tax expense for such period, (iii) all amounts
attributable to depreciation, amortization, depletion and non-cash reclamation
for such period, and (iv) any extraordinary or non-recurring charges or non-cash
charges, including non-cash charges resulting from requirements to
mark-to-market derivative obligations (including commodity-linked securities)
for such period (provided that any cash payment made with respect to any such
non-cash charge shall be subtracted in computing Consolidated EBITDA for the
period in which such cash payment is made), and minus (b) without duplication
and to the extent included in determining such Consolidated Net Income, any
extraordinary or non-recurring gains or non-cash gains for such period, all
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated Interest Expense” shall mean, for any period, the interest expense
(including imputed interest expense in respect of capital lease obligations) of
the Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net
income (or deficit) of the Borrower and its Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with GAAP.

 

“Consolidated Net Worth” shall mean, at any time, the value of all Consolidated
tangible assets of the Borrower and its Subsidiaries which would be shown on a
Consolidated balance sheet prepared as of such time in accordance with GAAP,
excluding all intangible assets, minus the sum of (x) all amounts which would be
shown on such balance sheets as minority interests in any such Subsidiary, plus
(y) all Consolidated liabilities of the Borrower and its Subsidiaries which
would be shown on such balance sheet prepared as of such time in accordance with
GAAP.

 

“Consolidated Total Indebtedness” means, without duplication, in relation to the
Borrower and its Subsidiaries, (A) the sum of (a) all obligations for borrowed
money, (b) all obligations evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations under conditional sale or other title retention
agreements relating to property acquired and under all purchase money
obligations, (d) all obligations in respect of the deferred purchase price of
property or services, (e) all other obligations secured by any lien on property
owned or acquired, whether or not the obligations secured thereby have been
assumed limited to the fair market value of the property secured thereby, (f)
all guarantees of the obligations of others, (g) all capital lease obligations,
(h) all obligations, contingent or otherwise, as an account party (including
reimbursement obligations to the issuer) in respect of letters of credit and
letters of guarantee which support or secure obligations of others, (i) the
aggregate of all negative mark to market amounts in respect of hedge obligations
(netted against the aggregate of all positive mark to market amounts in respect
of hedge obligations), (k) all obligations in respect of prepaid production
arrangements, prepaid forward sale arrangements or derivative contracts in
respect of which the Borrower or its Subsidiaries receive upfront payments in
consideration of an obligation to deliver product or commodities (or make cash
payments based on the value of product or commodities) at a future time, and (l)
all obligations, contingent or otherwise, in respect of bankers’ acceptances;
minus (B) any amounts borrowed under the Term Loan Agreement, provided that such
facility continues to be secured by cash collateral held in a pledged account
with HSBC Bank USA, National Association; provided, that, for all purposes
herein, Consolidated Total Indebtedness, with respect to the Borrower or the
Credit Parties, shall mean all Consolidated Total Indebtedness of the Borrower
and its Subsidiaries on a Consolidated basis; provided, further, that
Consolidated Total Indebtedness shall not include Indebtedness among the Credit
Parties to the extent such Indebtedness would be eliminated on a Consolidated
basis.

 

8

 

 

“Continuing Directors” shall mean during any period of twenty-four (24)
consecutive months commencing after the Closing Date, individuals who at the
beginning of such twenty-four (24) month period were directors of a Borrower
(together with any new director whose election by such Borrower’s board of
directors was approved by, or whose nomination for election by such Borrower’s
shareholders was recommended by, a vote of at least a majority of the directors
then still in office who either were directors at the beginning of such period
or whose election or nomination for election was previously approved or
recommended as described in this parenthetical).

 

“Credit Documents” shall mean this Agreement, each of the Notes, any Joinder
Agreement, any Assignment Agreement, any Incremental Increase Joinder, the
Security Documents, the Ratification, the Fee Letters, the Existing Credit
Documents and all other agreements, documents, certificates and Instruments
delivered to the Administrative Agent or any Lender by any Credit Party in
connection herewith or therewith, together with all amendments, modifications,
supplements, revisions, extensions and restatements of the foregoing, as well as
any other document or agreement which the Lenders and the Borrower agree is a
Credit Document.

 

“Credit Party” or “Credit Parties” shall mean any of the Borrower or the
Guarantors, individually or collectively, as appropriate.

 

“Current Ratio” shall mean, at any date, the ratio of (a) the current assets of
Royal Gold and its Subsidiaries determined on a Consolidated basis in accordance
with GAAP, to (b) the current liabilities of Royal Gold and its Subsidiaries
determined on a Consolidated basis in accordance with GAAP.

 

“Debt Investments” shall have the meaning set forth in Section 7.7.

 

“Debt Service Coverage Ratio” shall mean, at any date, the ratio of (a)
Consolidated EBITDA to (b) the sum of (i) scheduled principal payments with
respect to Consolidated Total Indebtedness, plus (ii) Consolidated Interest
Expense, in each case and for each amount, for the four (4) most recently
completed fiscal quarters most recently ended on or prior to such date.

 

“Default” shall mean any of the events specified in Section 8.1, whether or not
any requirement for the giving of notice or the lapse of time, or both, or any
other condition, has been satisfied.

 

“Default Rate” shall mean an interest rate equal to the sum of the LIBOR Rate,
plus the Applicable Percentage, plus two and one-half percent (2.5%) per annum.

 

9

 

 

“Defaulting Lender” shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the terms of this Agreement
in accordance with the terms hereof, (b) has failed to pay to the Administrative
Agent or any Lender an amount owed by such Lender pursuant to the terms of this
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or Insolvency Proceeding or has had appointed for it a receiver,
trustee or similar official.

 

“Dollars” and “$” shall mean dollars in lawful currency of the United States of
America.

 

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender, and
(c) any other Person (other than a natural person) approved by (i) the
Administrative Agent and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, Eligible Assignee shall
not include any Credit Party or any Affiliate or Subsidiary thereof.

 

“Employee Benefit Plan” shall mean any pension plan or other similar employee
benefit plan regulated by or within the meaning of ERISA or any other similar
legislation pursuant to which any Credit Party establishes a pension for or
otherwise makes contributions in respect of its employees, but does not include
a Canadian Pension Plan.

 

“Environmental Laws” shall mean any and all applicable Requirements of Law
regulating or relating to pollution or protection of human health or the
environment, as now or hereafter in effect, including Requirements of Law
regulating or relating to emissions, discharges, releases or threatened releases
of Materials of Environmental Concern, pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes, and the
applicable World Bank Guidelines and Criteria and International Finance
Corporation Guidelines, each as in effect from time to time.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, and the rules
and regulations thereunder, each as amended or modified from time to time.

 

“ERISA Affiliate” means any Person who together with a Borrower or any of its
Subsidiaries are treated as a single employer within the meaning of
Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

 

“Event of Default” shall mean any of the events specified in Section 8.1.

 

“Existing Agreement” shall have the meaning given thereto in Recital A.

 

“Existing Credit Documents” shall mean the Existing Agreement, the Original
Notes, the Existing Security Documents, the Intercreditor Agreement, the
Existing Fee Letter and all other agreements, documents, certificates and
Instruments delivered to the Administrative Agent or any Lender by any Credit
Party in connection with the Existing Agreement, together with all amendments,
restatements, amendments and restatements, modifications, revisions, increases,
supplements, extensions, continuations, replacements or refinancings from time
to time in accordance with the terms thereof, as well as any other document or
agreement which the Lenders and the Borrower agree is an Existing Credit
Document.

 

10

 

 

“Existing Fee Letter” shall mean the Fee Letter from HSBC, in its capacity as
Administrative Agent and Administrative Agent under the Term Loan Agreement, to
Borrower, dated February 1, 2011, regarding certain fees payable by Borrower.

 

“Existing Security Documents” shall mean the Security Documents entered into in
connection with the Existing Agreement as further described on Schedule 1.1(c)
hereto, and any other agreement, assignment, document, power-of-attorney, public
deed, or other Instrument executed and delivered in connection with (i) the
granting, attachment, formalization and perfection of the Administrative Agent’s
security interests and Liens arising thereunder, including UCC financing
statements, PPSA financing statements and other similar registrations, filings
or instruments, (ii) the pledge or subordination of Indebtedness to or in favor
of the Administrative Agent arising thereunder or (iii) any other mortgage,
deed, security, subordination, guaranty or support agreement or arrangement with
respect to the Obligations executed in connection with the Existing Agreement or
any Existing Credit Document, together with all amendments, restatements,
amendments and restatements, modifications, revisions, supplements, extensions,
continuations, and replacements thereof in accordance with its terms
(specifically including, but not limited to, any PPSA extensions necessary or
desirable to reflect the amendments made hereunder); provided, however, no such
Security Agreement, Pledge Agreement, Subordination Agreement, nor any other
agreement, assignment, document, power-of-attorney, public deed, or other
Instrument shall constitute an Existing Security Document if it has been
terminated in accordance with the requirements of this Agreement.

 

“Expropriation Event” shall mean the appropriation, confiscation, expropriation,
cancellation, seizure or nationalization (by Requirement of Law, intervention,
court order, condemnation, exercise of eminent domain or other action or form of
taking) of ownership or control of a Credit Party or any of its Subsidiaries or
of any Project or any substantial portion thereof, or any substantial portion of
the rights related thereto, or any substantial portion of the economic value
thereof, or which prevents or materially interferes with the ability of a Person
to own or operate the property subject to such action, including by the
imposition of any Tax, fee, charge or royalty.

 

“Fee Letters” shall mean the Fee Letters of even date herewith, and any other
agreements among the parties pertaining to the payment of fees to the Agents or
the Lenders, as each may be amended, modified or otherwise supplemented.

 

“Fund” shall mean any Person (other than a natural person) that is engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its activities.

 

“GAAP” shall mean generally accepted accounting principles in effect in the
United States applied on a consistent basis, subject, however, to the provisions
of Section 1.4 for the purpose of determination of compliance with the financial
covenants set out in Section 6.16.

 

11

 

 

“Gold” shall mean gold of minimum purity of at least 0.995 fineness conforming
in all respects with the requirements for good delivery on the London Bullion
Market.

 

“Goldman” shall have the meaning set forth in the Preamble to this Agreement and
includes any successors in such capacity.

 

“Governmental Approvals” shall mean any authorization, license, permit, consent,
approval, lease, ruling, certification, exemption, filing, variance, decree,
sanction, publication, declaration or registration, or other action whether
written or oral, of, by, from or on behalf of any Governmental Authority.

 

“Governmental Authority” shall mean the government of any nation, and any
provincial, territorial, divisional, state, county, regional, city or other
political subdivision thereof, and any tribal, aboriginal or native government,
and any entity, court, arbitrator or board of arbitrators, agency, department,
commission, board, bureau, regulatory authority or other instrumentality of any
of them exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government or Requirements of Law,
and any securities exchange or securities regulatory authority to which a Credit
Party is subject.

 

“Guarantor” has the meaning set forth in the Preamble to this Agreement. The
Guarantors as of the Closing Date are RG Exchangeco, High Desert, and RG Mexico.
Guarantors shall include any other Person that becomes a Guarantor by executing
a Joinder Agreement, together with the successors and permitted assigns of each
Guarantor.

 

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article XI.

 

“Guaranty Obligations” shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation in respect of Indebtedness, whether or not contingent, (i) to
purchase any such Indebtedness or any property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the lesser of (a) the outstanding principal amount (or maximum principal
amount, if larger) of the Indebtedness in respect of which such Guaranty
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guaranty
Obligation.

 

12

 

 

“Hedging Agreement” shall mean, with respect to any Person, any agreement or
transaction entered into to protect such Person against fluctuations in the
price of gold, silver or other metals, interest rates, currency, raw materials,
fuel or commodity values, including any forward sales, spot deferred sales,
options, swaps, price fixing commitment, interest rate swap, cap or collar
agreement or similar arrangement between such Person and one or more
counterparties, any foreign currency exchange agreement, currency protection
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements or other similar agreements
or arrangements.

 

“High Desert” shall have the meaning given to such term in the Preamble.

 

“HSBC Bank” shall have the meaning set forth in the Preamble to this Agreement
and includes any successors in such capacity.

 

“HSBC Securities” shall have the meaning set forth in the Preamble to this
Agreement and includes any successors in such capacity.

 

“Incremental Increase Joinder” shall have the meaning set forth in Section
2.15(c)(iii).

 

“Incremental Loan” shall have the meaning set forth in Section 2.15(a).

 

“Indebtedness” shall mean, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes, indentures or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
Capital Lease Obligations of such Person, (i) all net payment obligations of
such Person under Hedging Agreements, (j) the maximum amount of all letters of
credit issued or bankers’ acceptances facilities created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer; provided, however that Indebtedness shall not include (x)
Indebtedness among the Credit Parties to the extent such Indebtedness would be
eliminated on a Consolidated basis or (y) any amounts paid or to be paid to a
counterparty in any Metal Streaming Transaction.

 

13

 

 

“Information” shall have the meaning set forth in Section 10.16.

 

“Insolvency Proceeding” shall mean any proceeding seeking to adjudicate a Person
an insolvent, seeking a receiving order against under any Bankruptcy Law, or
seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief or composition of such
Person or its debts or a stay of proceedings of such Person’s creditors
generally (or any class of creditors) or any other relief, under any federal,
state provincial or foreign law now or hereafter in effect relating to
bankruptcy, winding-up, insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors (including the Bankruptcy and
Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada), the
Bankruptcy Code and any similar legislation in any jurisdiction) or at common
law or in equity.

 

“Instrument” means any contract, agreement, indenture, mortgage, document,
writing or other instrument (whether formal agreement, letter or otherwise)
under which any obligation is evidenced, assumed or undertaken, or any Lien (or
right or interest therein) is granted or perfected.

 

“Intercreditor Agreement” shall mean that certain Amended and Restated
Intercreditor Agreement of even date herewith among the Borrower, the Guarantors
and the Lenders, and the “Borrower”, the “Guarantors” and the “Lenders” each as
defined in the Term Loan Agreement.

 

“Interest Coverage Ratio” means, on any date, the ratio of (a) Consolidated
EBITDA to (b) Consolidated Interest Expense, in each case, for the four most
recently completed fiscal quarters most recently ended on or prior to such date.

 

“Interest Payment Date” shall mean (a) as to any Loan having an Interest Period
of three months or less, the last day of such Interest Period, (b) as to any
Loan having an Interest Period longer than three months, the day that is three
months after the first day of such Interest Period and the last day of such
Interest Period, and (c) as to any Base Rate Loan, the fifteenth (15th) day
following the last day of each calendar month.

 

“Interest Period” shall mean, with respect to any Loan,

 

(i)          initially, the period commencing on the Borrowing Date or extension
date, as the case may be, with respect to a Loan and ending one, two, three or
six months thereafter, as selected by the Borrower in the Notice of Borrowing or
Notice of Conversion given with respect thereto; and

 

(ii)         thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Loan and ending one,
two or three months thereafter, or of a longer period of days if available and
agreed to by the Lenders, as selected by the Borrower by irrevocable notice to
the Administrative Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto;

 

14

 

 

provided that the foregoing provisions are subject to the following:

 

(A)         if any Interest Period pertaining to a Loan would otherwise end on a
day that is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;

 

(B)         any Interest Period pertaining to a Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month;

 

(C)         if the Borrower shall fail to give notice as provided above, the
Borrower shall be deemed to have selected a Loan with an Interest Period of one
month;

 

(D)         no Interest Period in respect of any Loan shall extend beyond the
Maturity Date; and

 

(E)         no more than four (4) Loans may be in effect at any time. For
purposes hereof, Loans with different Interest Periods shall be considered as
separate Loans, even if they shall begin on the same date and have the same
duration, although borrowings, extensions and conversions may, in accordance
with the provisions hereof, be combined at the end of existing Interest Periods
to constitute a new Loan with a single Interest Period.

 

“Investment” shall mean all investments, in cash or by delivery of property
made, directly or indirectly in or to any Person, whether by acquisition of
shares of Capital Stock, property, assets, indebtedness or other obligations or
securities or by loan, credit advance, capital contribution or otherwise.

 

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of
Exhibit B, executed and delivered by a new or additional Guarantor.

 

“Joint Bookrunner” shall have the meaning set forth in the first paragraph of
this Agreement and includes any successors in such capacity.

 

“Lender” shall have the meaning set forth in the first paragraph of this
Agreement (including each Additional Lender) and each successor (in such
capacity).

 

“Lenders’ Administrative Details Schedule” shall mean, with respect to any
Lender, Schedule 1.1(b) (as revised or updated by the Administrative Agent or
any Lender from time to time) containing such Lender’s contact information for
purposes of notices provided under this Credit Agreement, such Lender’s account
details for purposes of payments made to such Lender under this Credit
Agreement, and such Lender’s Commitment Percentage.

 

15

 

 

“Leverage Ratio” means, on any date, the ratio of (a) Consolidated Total
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four
consecutive fiscal quarters most recently ended on or prior to such date.

 

“LIBOR” shall mean, for any Loan for any Interest Period therefor, a rate of
interest per annum equal to the rate per annum appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period.
If for any reason such rate is not available, the term “LIBOR” shall mean, for
any Loan for any Interest Period therefor, the rate per annum appearing on
Reuters Screen LIBOR Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates. If,
for any reason, neither of such rates is available, then “LIBOR” shall mean the
rate per annum at which, as determined by the Administrative Agent, Dollars in
an amount comparable to the Loans then requested are being offered to leading
banks at approximately 11:00 A.M. London time, two (2) Business Days prior to
the commencement of the applicable Interest Period for settlement in immediately
available funds by leading banks in the London interbank market for a period
equal to the Interest Period selected.

 

“LIBOR Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s LIBOR Lending Office shown on the Lenders’
Administrative Details Schedule; and thereafter, such other office of such
Lender as such Lender may from time to time specify to the Administrative Agent
and the Borrower as the office of such Lender at which the Loans of such Lender
are to be made.

 

“LIBOR Rate” shall mean a rate per annum determined by the Administrative Agent
pursuant to the following formula:

 

  LIBOR Rate = LIBOR       1.00 – Applicable Reserve Percentage

 

“Lien” shall mean any mortgage, deed of trust, pledge, charge, hypothecation,
assignment for security purposes, deposit arrangement for security purposes,
preferential right, option, encumbrance, lien (statutory or other), or other
security interest or collateral arrangement, or any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any conditional sale or other title retention agreement
and any Capital Lease having substantially the same economic effect as any of
the foregoing).

 

“Loan” shall have the meaning set forth in Section 2.1, and shall include each
Incremental Loan made pursuant to Section 2.15.

 

“Loan Increase Effective Date” shall have the meaning set forth in Section
2.15(a).

 

16

 

 

“Material Adverse Effect” shall mean an effect or change, resulting or occurring
from any event or occurrence of any nature whatsoever, whether individually or
in the aggregate, which is materially adverse to (a) the business, assets,
operations, property or condition (financial or otherwise) of the Credit Parties
and their Subsidiaries taken as a whole, (b)  the ability of the Credit Parties,
taken as a whole, to make any payment or otherwise perform their obligations
under this Agreement, any of the Notes or any other Credit Document when such
payments and obligations are required to be performed, (c) the Collateral
Royalties taken as a whole, or (d) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or thereunder
or the perfection or priority of any Lien in favor of the Administrative Agent.

 

“Material Contract” shall mean any contract or agreement to which any Credit
Party or any of its Subsidiaries is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto could
reasonably be expected to have a Material Adverse Effect, including each Royalty
Agreement relating to a Collateral Royalty.

 

“Materials of Environmental Concern” shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, pollutants, contaminants or
other materials or substances defined or regulated in or under any Environmental
Law, including asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.

 

“Maturity Date” shall mean the first to occur of (a) May __, 2017 or (b) any
date on which the due date of the Loans is accelerated by reason of an Event of
Default pursuant to Section 8.2.

 

“Metal Streaming Transaction” shall mean a transaction pursuant to which the
Borrower and/or a Subsidiary of the Borrower acquires the contractual right to
purchase Metals produced from one or more mines on the terms and conditions set
forth in the definitive purchase and sale documents related to such transaction.

 

“Metals” shall mean Gold, Silver, copper, lead, zinc, molybdenum, nickel, and
all other metals, minerals, ores and similar substances.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgages” shall mean, collectively, (i) the Fifth Amended and Restated
Mortgage, Deed of Trust, Security Agreement, Pledge and Financing Statement
(Pipeline Project) of even date herewith from the Borrower to Stewart Title of
Nevada Holdings, Inc. with the Administrative Agent as the beneficiary; (ii) the
Fourth Amended and Restated Mortgage, Deed of Trust, Security Agreement, Pledge
and Financing Statement (Pipeline Project) of even date herewith from the
Borrower to Stewart Title of Nevada Holdings, Inc. with the Administrative Agent
as the beneficiary; (iii) the Third Amended and Restated Mortgage, Deed of
Trust, Security Agreement, Pledge and Financing Statement (Robinson Project) of
even date herewith from the Borrower to Stewart Title of Nevada Holdings, Inc.
with the Administrative Agent as the beneficiary; and (iv) the Third Amended and
Restated Mortgage, Deed of Trust, Security Agreement, Pledge and Financing
Statement (Leeville Project) from High Desert to Stewart Title of Nevada
Holdings, Inc. with the Administrative Agent as the beneficiary; in each case,
together with all amendments, restatements, amendments and restatements,
modifications, revisions, increases, supplements, extensions, continuations,
replacements or refinancings from time to time in accordance with the terms
thereof; a description of each of the previous Mortgages securing the
Obligations, together with the relevant filing information with respect thereto,
is set forth on Schedule 1.1(c).

 

17

 

 

“Nevada Royalties” shall mean the following Royalties owned by the Borrower: GSR
#1, GSR #2, GSR #3 and NVR #1 with respect to the Pipeline Project and the
Robinson Royalty with respect to the Robinson Project; and the following
Royalties owned by High Desert: SJ Royalty with respect to the Betze-Post Mine
and the Leeville Royalty with respect to the Leeville Project; in each case, as
each of such Material Royalties is further described on Schedule 1.1(a) hereto.

 

“Non-Credit Party” shall mean a Subsidiary of a Credit Party that is not itself
a Credit Party.

 

“Non-Credit Party Royalty Interest” shall mean all Royalties now owned or
hereafter acquired by or for the benefit of a Non-Credit Party.

 

“Notes” shall mean each promissory note (including amended and restated
promissory notes) made by the Borrower in favor of each of the Lenders
evidencing the Loans provided pursuant hereunder, individually or collectively,
as appropriate, substantially in the form of Exhibit C, as such promissory notes
may be amended, modified, supplemented, extended, renewed or replaced from time
to time.

 

“Notice of Borrowing” shall mean a request for a Loan borrowing pursuant to
Section 2.1(b)(i) pursuant to a Form of Notice of Borrowing in the form attached
as Exhibit D.

 

“Notice of Extension” shall mean the written notice of the continuation and
extension of a Loan, in each case substantially in the form of Exhibit E, as
described in Section 2.6.

 

“Obligations” shall mean all of the obligations, indebtedness, liabilities,
duties, covenants and agreements of the Borrower and the other Credit Parties to
each Lender and each Agent, whenever arising and whether joint, several, or
joint and several, established by or arising under or in connection with this
Agreement, the Notes, any of the other Credit Documents, any Hedging Agreement
with a Lender (or an Affiliate of a Lender), or any account (including cash
management accounts) or other cash management services provided by a Lender (or
an Affiliate of a Lender), including, in each case, the payment of principal,
interest, fees, expenses, reimbursements and indemnification obligations and all
other amounts and the performance of all other obligations.

 

“Operating Lease” shall mean, as applied to any Person, any lease (including,
without limitation, leases which may be terminated by the lessee at any time) of
any property (whether real, personal or mixed) which is not a Capital Lease
other than any such lease in which that Person is the lessor.

 

“Original Notes” means (i) that certain Fourth Amended and Restated Promissory
Note dated February 1, 2011 made by the Borrower in favor of HSBC in the
principal amount of One Hundred Thirty Million Dollars ($130,000,000); and (ii)
that certain Promissory Note dated February 1, 2011 made by the Borrower in
favor of The Bank of Nova Scotia in the principal amount of Ninety-Five Million
Dollars ($95,000,000).

 

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“Ounce” means a fine ounce troy weight.

 

“Participant” shall have the meaning set forth in Section 10.7(b).

 

“Permitted Liens” shall mean:

 

(i)          Liens created by or otherwise existing, under or in connection with
this Agreement or the other Credit Documents;

 

(ii)         Purchase Money Liens securing purchase money indebtedness and Liens
to secure Capital Lease Obligations (and refinancings thereof) to the extent
permitted under Section 7.1(c);

 

(iii)        Liens for Taxes, assessments, charges or other governmental levies
not yet due or as to which the period of grace (not to exceed 30 days), if any,
related thereto has not expired or which are being diligently contested in good
faith by appropriate proceedings, provided that adequate reserves with respect
thereto are maintained on the books of the Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;

 

(iv)         carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s
inchoate, unperfected or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 20 days or which are
being diligently contested in good faith by appropriate proceedings; provided
that a reserve, bond or other appropriate provision shall have been made
therefore to the reasonable satisfaction of the Administrative Agent;

 

(v)          pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;

 

(vi)         any interest or title of a lessor under any lease entered into by
any Credit Party or any Subsidiary in the ordinary course of its business and
covering only the assets so leased;

 

(vii)        deposits and bonds to secure the performance of bids, trade
contracts (other than for Consolidated Total Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;

 

(viii)      Liens existing on the Closing Date and set forth on Schedule 7.2;
provided that (a) no such Lien shall at any time be extended to cover property
or assets other than the property or assets subject thereto on the Closing Date
and (b) the principal amount of the Indebtedness secured by such Liens shall not
be increased, extended, renewed, refunded or refinanced;

 

19

 

  

(ix)         Liens pursuant to the Term Loan Agreement made in favor of HSBC
Bank or any other “Lender” thereunder;

 

(x)          easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances which do not individually
or in the aggregate interfere in any material respect with the occupation, value
or use of the property to which such Lien is attached or with such Person’s
activities or operations on such property;

 

(xi)         Liens and minor title defects reflected in the Title Opinions, to
the extent not objected to by the Administrative Agent;

 

(xii)        any Lien with respect to judgments, orders or awards to the extent
such judgments, orders or awards secured thereby shall not, either individually
or in the aggregate, result in an Event of Default under Section 8.1(f);

 

(xiii)      rights of setoff or bankers’ Liens upon deposits of cash or broker’s
Liens upon securities accounts in favor of financial institutions, banks or
other depository institutions; and

 

(xiv)        any Lien with respect to interests in pre-feasibility, feasibility
or development stage properties not currently producing Metals, so long as such
Liens do not cover or attach to a Collateral Royalty; provided that such Liens
do not secure Indebtedness.

 

“Person” shall mean an individual, partnership, corporation, limited liability
company, sociedad anonima, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

 

“Pipeline Project” means the Project relating to the Pipeline Project
Properties, as described on the Schedule of Collateral Royalties in Schedule
1.1(a).

 

“Pledge Agreements” shall mean (i) each of the Pledge Agreements described on
Schedule 1.1(c) hereto, as each has been ratified and confirmed pursuant to the
Ratification, and (ii) any other pledge agreement, document, agreement,
arrangement or Instrument executed by a Credit Party to secure the Obligations,
in each case as any of the foregoing may be amended, modified, restated or
supplemented from time to time.

 

“Preamble” means the first full paragraph of this Agreement.

 

“Project” means each mine, mining project and properties, including Project
Properties, in which a Credit Party has or acquires a Royalty Interest. As of
the Closing Date, the Projects include those set forth on Schedule 1.1(d)
hereto.

 

“Project Managers” means the operator or manager of each Project, with the
Project Manager for each Project in existence on the date hereof set forth on
Schedule 1.1(d) hereto.

 

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“Project Properties” means all real property right, title or interests, now
owned or hereafter acquired, included in each of the Projects, which are
burdened with a Royalty Interest, including all fee property, concessions,
unpatented mining claims and other real property interests which are identified
in any Royalty Agreement, together with all relocations, modifications,
additions or amendments thereof, and all lands subject thereto.

 

“Property” shall mean all real estate, surface and subsurface rights and
interests, minerals, mineral leases, mineral rights, lands, concessions,
licenses, exploration or exploitation rights, claims, water rights and other
property right, title and interest, howsoever characterized or designated, that
are owned, leased, operated, held or controlled, directly or indirectly, by any
Borrower or any of their Subsidiaries, including all such rights and interests
associated with the Projects, together with all rights, titles and interests
hereafter acquired.

 

“Purchase Money Lien” shall mean a Lien taken or reserved in personal property
to secure payment of all or part of its purchase price, provided that such Lien
(i) secures an amount not exceeding the purchase price of such personal
property, (ii) extends only to such personal property and its proceeds, and
(iii) is granted prior to or within 30 days after the purchase of such personal
property.

 

“Purchasing Lenders” shall have the meaning set forth in Section 10.7(c).

 

“Quebec Security Documents” shall mean (i) that certain Deed of Hypothec and
Issue of Bonds, (ii) that certain Bond, (iii) that certain Delivery Order, (iv)
that certain Pledge of Bond Agreement, (v) that certain Register of Bondholders,
as each of the foregoing is further described on Schedule 1.1(c) hereto, and
(vi) such other Instruments as may be necessary to obtain and perfect a
collateral security interest in favor of the Administrative Agent with respect
to the Malartic Royalty, together with all amendments, restatements, amendments
and restatements, modifications, revisions, increases, supplements, extensions,
continuations, replacements or refinancings from time to time in accordance with
the terms thereof.

 

“Ratification” means the Ratification and Confirmation Agreement of even date
herewith in the form set forth in Exhibit K hereto.

 

“Required Lenders” shall mean (a) for so long as any one Lender and its
Affiliates control fifty percent (50%) or more of the Commitment Percentage,
those Lenders holding in the aggregate greater than 66.667% of (i) the
outstanding Loans and unfunded Commitments or (ii) if the Commitments have been
terminated, the outstanding Loans; and (b) at any time that no Lender and its
Affiliates controls fifty percent (50%) or more of the Commitment Percentage,
those Lenders holding in the aggregate greater than 50.1% of (i) the outstanding
Loans and unfunded Commitments or (ii) if the Commitments have been terminated,
the outstanding Loans; provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from the
determination of Required Lenders, Obligations owing to such Defaulting Lender
and such Defaulting Lender’s Commitments, or after termination of the
Commitments, the principal balance of the Obligations owing to such Defaulting
Lender.

 

21

 

 

“Requirement of Law” shall mean each law, statute, code, ordinance, treaty,
order, rule, regulation, judgment, ruling, decree, injunction, franchise,
permit, certificate, license, authorization, regulation, approval or other
direction of any Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject, and as to any Person, the Certificate of Incorporation and
By-laws or other organizational or governing documents of such Person.

 

“Responsible Officer” shall mean, as to (a) a Borrower, any of the President,
the Chief Executive Officer or the Chief Financial Officer or (b) any other
Credit Party, any duly authorized officer thereof.

 

“RG Exchangeco” shall have the meaning set forth in the Preamble.

 

“RG Mexico” shall have the meaning set forth in the Preamble.

 

“Royal Gold” shall have the meaning set forth in the Preamble.

 

“Royalties” shall mean any share of mineral production, including, gross smelter
return royalties, net smelter return royalties, overriding royalties,
non-participating royalties, production payments, net profit interests and all
other mineral royalties of every type and characterization, whether constituting
a real property or a personal property interest; provided, however, “Royalties”
shall not include any Metal Streaming Transaction or any Metals purchased
pursuant to a Metal Streaming Transaction.

 

“Royalty Agreements” means, collectively, each of the agreements with or for the
benefit of a Credit Party relating to a Royalty Interest, whether now or
hereafter in existence, together with all amendments, restatements,
modifications, revisions, supplements, extensions, continuations, replacements
and renewals thereof in accordance with its terms.

 

“Royalty Interests” means all Royalties now owned or hereafter acquired by or
for the benefit of a Credit Party, in or relating to a Project, with the
Collateral Royalties in existence as of the Closing Date described on Schedule
1.1(a) hereto and all other Royalties (other than the Collateral Royalties) in
existence and held by a Credit Party as of the Closing Date described on
Schedule 1.1(d) hereto, and all Metals received or receivable with respect
thereto, now held or hereafter acquired by a Credit Party, whether pursuant to a
Royalty Agreement or otherwise.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of The McGraw Hill
Companies, Inc.

 

“Scotia” shall have the meaning set forth in the Preamble to this Agreement and
includes any successors in such capacity.

 

“Securities Exchange Act” shall mean the Securities Exchange Act of 1934,
together with any amendment thereto or replacement thereof and any rules or
regulations promulgated thereunder.

 

22

 

 

“Security Agreements” shall mean (i) the U.S. Security Agreement, (ii) the
Canadian Security Agreement, (iii) each other security agreement (or other
equivalent Instrument, howsoever designated) given by a Credit Party for the
benefit of the Administrative Agent, substantially in the form of Exhibit H
hereto, covering and extending to all assets of such Credit Party, and (iv) each
other Instrument whereby a Credit Party subordinates its rights to receive
payment of any amounts from any other Credit Party to the complete payment in
full of the Obligations, and any other security agreement or other Instrument by
which the Administrative Agent obtains a Lien in or on any personal property or
assets of a Credit Party to secure the Obligations, together with all
amendments, restatements, modifications, supplements, extensions and
restatements thereof in accordance with its terms.

 

“Security Documents” shall mean the Security Agreements, the Mortgages, the
Pledge Agreements, the Quebec Security Documents, the Existing Security
Documents, the Ratification, the Canadian Ratification, and any other agreement,
assignment, document, power-of-attorney, public deed, or other Instrument
executed and delivered in connection with (i) the granting, attachment,
formalization and perfection of the Administrative Agent’s security interests
and Liens arising thereunder, including UCC financing statements, PPSA financing
statements and other similar registrations, filings or instruments, (ii) the
pledge or subordination of Indebtedness to or in favor of the Administrative
Agent, or (iii) any other mortgage, deed, security, subordination, guaranty or
support agreement or arrangement with respect to the Obligations or any Credit
Document, together with all amendments, restatements, amendments and
restatements, modifications, revisions, supplements, extensions, continuations,
and replacements thereof in accordance with its terms; provided, however, no
such Security Document, nor any other agreement, assignment, document, power of
attorney, public deed, or other Instrument shall constitute a Security Document
if it has been terminated in accordance with the requirements of this Agreement.

 

“Silver” shall mean silver of minimum purity of at least 0.999 fineness
conforming in all respects with the requirements for good delivery on the London
Bullion Market.

 

“Sole Lead Arranger” shall have the meaning set forth in the first paragraph of
this Agreement and includes any successors in such capacity.

 

“Subsidiary” shall mean, as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. For purposes of clarity, as of
the Closing Date, Crescent Valley Partners, L.P. shall be deemed a Subsidiary of
Royal Gold. Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
a Borrower.

 

“Syndication Agent” shall have the meaning set forth in the first paragraph of
this Agreement and includes any successors in such capacity.

 

“Taxes” shall mean all present and future taxes, levies, duties, imposts,
deductions, charges, withholdings and other similar levies and liabilities of
whatever nature, including stamp, sales, use, documentary, value added, excise,
registration, property and income taxes.

 

23

 

 

“Term Loan Agreement” shall mean the Second Amended and Restated Term Loan
Facility Agreement dated February 1, 2011 among Royal Gold, as the borrower, RG
Exchangeco, as a guarantor, High Desert, as a guarantor, RG Mexico, as a
guarantor, the other guarantors from time to time party thereto, HSBC Bank, as a
lender, Scotia, as a lender, HSBC Securities and Scotia Capital, as joint lead
arrangers, HSBC Securities, as sole global coordinator, and Scotia, as sole
syndication agent, as amended, modified, increased, replaced, supplemented or
refinanced from time to time.

 

“Title Opinions” means those legal opinions from counsel to the Credit Parties
pertaining to the Nevada Royalties and the right, title and interest of the
Credit Parties in and to such Nevada Royalties attached hereto as Schedule
1.1(e), together with any additional or future legal opinions pertaining to the
Nevada Royalties and the right, title and interest of the Credit Parties in and
to such Nevada Royalties, which are in form and substance acceptable to the
Administrative Agent.

 

“Transfer Effective Date” shall have the meaning set forth in each Assignment
Agreement.

 

“U.S. Security Agreement” shall mean that certain Amended and Restated Security
Agreement from Royal Gold, High Desert and RG Mexico in favor of the
Administrative Agent as further described on Schedule 1.1(c) hereto, as it has
been ratified and confirmed pursuant to the Ratification, together with all
amendments, restatements, amendments and restatements, modifications, revisions,
increases, supplements, extensions, continuations, replacements or refinancings
from time to time in accordance with the terms thereof.

 

“Voting Stock” shall mean, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.

 

Section 1.2           Other Definitional Provisions; Time References.

 

(a)          Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or other Credit
Documents or any certificate or other document made or delivered pursuant
hereto.

 

(b)          The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.

 

(c)          The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

(d)          The word “including” means “including without limitation” or
“including, but not limited to,” and does not create or denote a limitation.

  

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(e)          Unless otherwise expressly indicated, each time reference in any
Credit Document shall be to New York time. 

 

Section 1.3           Québec Matters   . For purposes of any assets, liabilities
or entities located in the Province of Québec and for all other purposes
pursuant to which the interpretation or construction of this Agreement may be
subject to the laws of the Province of Québec or a court or tribunal exercising
jurisdiction in the Province of Québec, (a) “personal property” shall include
“movable property”, (b) “real property” or “real estate” shall include
“immovable property”, (c) “tangible property” shall include “corporeal
property”, (d) “intangible property” shall include “incorporeal property”, (e)
“security interest”, “mortgage” and “lien” shall include a “hypothec”, “right of
retention”, “prior claim” and a resolutory clause, (f) all references to filing,
perfection, priority, remedies, registering or recording under the Uniform
Commercial Code or a Personal Property Security Act shall include publication
under the Civil Code of Québec, (g) all references to “perfection” of or
“perfected” liens or security interest shall include a reference to an
“opposable” or “set up” lien or security interest as against third parties, (h)
any “right of offset”, “right of setoff” or similar expression shall include a
“right of compensation”, (i) “goods” shall include “corporeal movable property”
other than chattel paper, documents of title, instruments, money and securities,
(j) an “agent” shall include a “mandatary”, (k) “construction liens” shall
include “legal hypothecs”; (l) ”joint and several” shall include “solidary”; (m)
“gross negligence or willful misconduct” shall be deemed to be “intentional or
gross fault”; (n) “beneficial ownership” shall include “ownership on behalf of
another as mandatary”; (o) “easement” shall include “servitude”; (p) “priority”
shall include “prior claim”; (q) “survey” shall include “certificate of location
and plan”; (r) “state” shall include “province”; (s) “fee simple title” shall
include “absolute ownership”; (t) “accounts” shall include “claims”. The parties
hereto confirm that it is their wish that this Agreement and any other document
executed in connection with the transactions contemplated herein be drawn up in
the English language only and that all other documents contemplated thereunder
or relating thereto, including notices, may also be drawn up in the English
language only. Les parties aux présentes confirment que c’est leur volonté que
cette convention et les autres documents de crédit soient rédigés en langue
anglaise seulement et que tous les documents, y compris tous avis, envisagés par
cette convention et les autres documents peuvent être rédigés en langue anglaise
seulement.

 

   Section 1.4        Accounting Terms.   Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations
hereunder shall be made, and all financial statements required to be delivered
hereunder shall be prepared in accordance with GAAP applied on a basis
consistent with the most recent audited consolidated financial statements of the
Borrower delivered to the Administrative Agent; provided that, if the Borrower
shall notify the Administrative Agent that it wishes to amend any covenant in
Section 6.16 (or the definitions used therein) to eliminate the effect of any
change in GAAP on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Section 6.16 or
any definition used therein for such purpose), then compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.

 

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The Borrower shall deliver to the Administrative Agent at the same time as the
delivery of any annual or quarterly financial statements given in accordance
with the provisions of Section 6.1, (a) a description in reasonable detail of
any material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding quarterly or annual financial statements as to which no objection
shall have been made in accordance with the provisions above and (b) a
reasonable estimate of the effect on the financial statements on account of such
changes in application.

 

Section 1.5        Amendment and Restatement.   This Agreement amends, restates
and continues the Existing Agreement, and this Agreement and each Note and all
Instruments, agreements, and documents executed in connection herewith,
constitute an amendment, renewal, continuance and restatement of all
Indebtedness and Obligations of the Borrower and the Guarantors evidenced by the
Existing Agreement and the Original Notes. All promissory notes, instruments,
documents, and agreements entered into in connection with the Existing Agreement
or the Original Note shall remain in full force and effect, except to the extent
expressly modified in accordance with their respective terms. It is expressly
understood and agreed by the parties hereto that this Agreement is in no way
intended to constitute, and does not constitute, a release, repayment,
satisfaction, discharge or novation of the obligations and liabilities existing
under the Existing Agreement or the Original Notes or a release, termination,
novation or impairment of any Lien or Existing Credit Document. All Liens
created pursuant to the Existing Credit Documents shall extend and apply to this
Agreement and each Note issued hereunder and the full payment and performance of
all Obligations, in each case for the benefit of the Lenders and all such Liens
are hereby expressly continued, ratified and confirmed by the Borrower and the
Guarantors (except to the extent such Liens have previously been expressly
released or modified or are being modified by the Credit Documents). The
amendment and restatement hereby of the Existing Agreement, or the concurrent
amendment and restatement of any other Existing Credit Document, shall not
constitute a waiver of any conditions or requirements set forth herein or
therein, whether or not performed, fulfilled or required to be performed or
fulfilled prior to the date hereof, nor does it constitute consent to any prior
or existing default, event of default or breach of any provision hereof or of
any other Existing Credit Document. All references to the Existing Agreement in
any Existing Credit Document shall be deemed to refer to this Agreement. If any
inconsistency exists between this Agreement and the Existing Credit Agreement,
the terms of this Agreement shall prevail. Nothing contained in this Agreement
or any other document or instrument executed contemporaneously herewith shall be
deemed to satisfy or discharge the Indebtedness or Obligations arising under
this Agreement or any Note (this being an amendment and restatement only).

 

Section 1.6        Permitted Liens.   Any reference in any of the Credit
Documents to a Permitted Lien is not intended to subordinate or postpone, and
shall not be interpreted as subordinating or postponing, or as any agreement to
subordinate or postpone, any Lien created by any of the Credit Documents to any
Permitted Lien.

 

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ARTICLE II
THE LOANS; AMOUNT AND TERMS

 

Section 2.1        Revolving Loans.

  

(a)          Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Lenders severally agree to make revolving
credit loans (the “Loans”) to the Borrower from time to time in an aggregate
principal amount of up to the Committed Amount; provided, however, that (i) with
regard to each Lender individually, the sum of such Lender’s Commitment
Percentage of outstanding Loans shall not exceed such Lender’s Commitment, and
(ii) with regard to the Lenders collectively, the aggregate sum of the
outstanding Loans shall not exceed the Committed Amount. Loans may be repaid and
reborrowed in accordance with the provisions hereof.

 

(b)          Loan Borrowing Procedure.

 

(i)          Notice of Borrowing. The Borrower shall request a Loan borrowing by
delivering a written Notice of Borrowing (or telephone notice promptly confirmed
in writing by delivery of a written Notice of Borrowing, which delivery may be
by facsimile) to the Administrative Agent not later than 11:00 a.m. on the third
Business Day prior to the date of the requested borrowing. Each such Notice of
Borrowing shall be irrevocable and shall specify (A) that a Loan is requested,
(B) the date of the requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed, and (D) the requested Interest
Period(s). If the Borrower shall fail to specify an applicable Interest Period
in the Notice of Borrowing, then such notice shall be deemed to be a request for
an Interest Period of one month. The Administrative Agent shall give notice to
each Lender promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Lender’s share thereof.

 

(ii)         Minimum Amounts. Each Loan shall be in a minimum aggregate amount
of $1,000,000 and in integral multiples of $500,000 in excess thereof.

 

(iii)        Advances. Each Lender will make its Commitment Percentage of each
Loan borrowing available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in the Lenders’
Administrative Details Schedule, or at such other office as the Administrative
Agent may designate in writing, by 1:00 p.m. on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately available to
the Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as received by the
Administrative Agent.

 

(c)          Repayment. The principal amount of all Loans shall be due and
payable in full on the Maturity Date. Each Borrower covenants and agrees to pay
the Loans in accordance with the terms of this Agreement and the Notes.

 

27

 

  

(d)          Interest. Except as set forth in Section 2.10 hereof, Loans shall
bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the
Applicable Percentage. Each Borrower covenants and agrees to promptly pay
interest on the Loans on each Interest Payment Date, with such interest payable
in arrears.

 

(e)          Amendment, Restatement and Continuance. This Agreement amends,
restates, continues and replaces the Existing Agreement, and nothing contained
in this Agreement shall be deemed or construed to be a repayment, satisfaction
or novation of the Loans outstanding under the Existing Agreement, or to
release, terminate, novate or in any way impair any Lien or Security Document
that guarantees or secures the payment and performance of the Loans, this
Agreement and the other Credit Documents. All Liens and Security Documents that
guarantee or secure such payment and performance shall extend to and apply to
all Loans made hereunder and under the Note, and such Liens and Security
Documents shall be continued, ratified and confirmed. Any Interest Periods
applicable to amounts outstanding as of the Closing Date under the Existing
Agreement shall continue until the expiration date applicable thereto, without
being effected by this Agreement.

 

Section 2.2      Fees.

  

(a)          Commitment Fee. In consideration of the Commitment, the Borrower
agrees to pay to the Administrative Agent, for the ratable benefit of the
Lenders, a commitment fee (the “Commitment Fee”) in an amount equal to the
Commitment Fee Percentage per annum on the average daily unused portion of the
Committed Amount beginning on the Closing Date. The Commitment Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.

 

(b)          Other Fees. On or prior to the Closing Date, the Borrower agrees to
pay to the Administrative Agent the fees described in the Fee Letters. During
the term of this Agreement, the Borrower agrees to pay to the Administrative
Agent for its account, an agent’s fee in the amount of $10,000 per annum payable
(i) on the Closing Date if more than one Lender is a party hereto, (ii) if only
one Lender is a party hereto as of the Closing Date, on the date that the first
Additional Lender receives an assignment of a portion of the Commitment, and
(iii) on each anniversary of the date on which such agent’s fee is first paid,
during the term hereof, so long as more than one Lender continues to hold a
portion of the Commitment on such anniversary date.

 

(c)          Finality of Fees. All fees hereunder are fully earned and payable
when due and are non-refundable.

 

Section 2.3        Commitment Reductions.

  

(a)          Voluntary Reduction. The Borrower shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
from the Borrower to the Administrative Agent, to permanently reduce the
Committed Amount by an aggregate principal amount not less than $1,000,000, plus
any whole multiples of $1,000,000 in excess thereof or any amount in excess
thereof which would reduce the Committed Amount to the aggregate sum of the
outstanding Loans.

 

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(b)          Commitment Reduction Repayment. Upon the giving of notice set forth
in Section 2.3(a), which shall be irrevocable, each permanent reduction in the
Committed Amount permitted pursuant to this Section 2.3 and any amounts due as a
result thereof shall be due and payable on the date set forth therein.

 

(c)          Maturity Date. The Commitment shall automatically terminate on the
Maturity Date.

 

Section 2.4        Prepayments.

  

(a)          Optional Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; provided, however, that each
partial prepayment of a Loan shall be in a minimum principal amount of
$1,000,000 and integral multiples of $500,000 in excess thereof or, if less, the
unpaid balance thereof. The Borrower shall give three (3) Business Days’
irrevocable notice of prepayment to the Administrative Agent (which shall notify
the Lenders thereof as soon as practicable). Each prepayment pursuant to this
Section 2.4(a) shall be applied to the outstanding Loans as the Borrower may
elect; provided, however, each prepayment shall be applied in direct order of
Interest Period maturities. All prepayments under this Section 2.4(a) shall be
subject to Section 2.14, but otherwise without premium or penalty. Interest on
the principal amount prepaid shall be payable on the next occurring Interest
Payment Date that would have occurred had such Loan not been prepaid or, at the
request of the Administrative Agent, interest on the principal amount prepaid
shall be payable on any date that a prepayment is made hereunder through the
date of prepayment.

 

(b)          Mandatory Prepayments. If at any time after the Closing Date, the
aggregate sum of all the outstanding Loans shall exceed the Committed Amount,
the Borrower shall immediately prepay the Loans in an amount sufficient to
eliminate such excess (such prepayment to be applied to the Loans in direct
order of Interest Period maturities).

 

Section 2.5        Default Rate and Payment Dates.   Upon the occurrence, and
during the continuance, of an Event of Default, the principal of and, to the
extent permitted by law, interest on the Loans and any other amounts owing
hereunder or under the other Credit Documents shall bear interest, payable on
demand, at the Default Rate.

 

Section 2.6        Extension of an Interest Period.   Any Loans may be continued
or extended upon the expiration of an Interest Period with respect thereto by
delivery by the Borrower of a Notice of Extension to the Administrative Agent
not later than 11:00 a.m. on the third Business Day prior to the last day of the
Interest Period applicable thereto. If the Borrower shall fail to deliver a
Notice of Extension as contemplated by this Section 2.6, the Borrower shall be
deemed to have delivered a Notice of Extension, including all certifications
therein, requesting an Interest Period of one-month.

 

Section 2.7        Computation of Interest and Fees.

  

(a)          Interest payable hereunder and all other fees and other amounts
payable hereunder shall be calculated on the basis of a 360 day year for the
actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a LIBOR Rate on the
Business Day of the determination thereof.

 

29

 

  

(b)          Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the computations used by the Administrative Agent
in determining any interest rate.

 

(c)          It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to time
in effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this paragraph which shall override and control all
such agreements, whether now existing or hereafter arising and whether written
or oral. In no way, nor in any event or contingency (including but not limited
to prepayment or acceleration of the maturity of any Obligation), shall the
interest taken, reserved, contracted for, charged, or received under this
Agreement, under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any of
the Credit Documents or any other document, interest would otherwise be payable
in excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum nonusurious amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Loans and not to the payment of interest, or refunded to the Borrower or the
other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand
payment of the Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and the Lenders do not intend to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of such
indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.

 

(d)          For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever any interest or any fee to be paid hereunder or in
connection herewith is to be calculated on the basis of a 360-day or 365-day
year, the yearly rate of interest to which the rate used in such calculation is
equivalent is the rate so used 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,
as applicable. The rates of interest under this Agreement are nominal rates, and
not effective rates or yields. The principle of deemed reinvestment of interest
does not apply to any interest calculation under this Agreement.

 

(e)          Any provision of this Agreement that would oblige a Canadian Credit
Party to pay any fine, penalty or rate of interest on any arrears of principal
or interest secured by a mortgage on real property or hypothec on immovables
that has the effect of increasing the charge on arrears beyond the rate of
interest payable on principal money not in arrears shall not apply to such
Canadian Credit Party, which shall be required to pay interest on money in
arrears at the same rate of interest payable on principal money not in arrears.

 

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(f)          If any provision of this Agreement would oblige a Canadian Credit
Party to make any payment of interest or other amount payable to any Secured
Party in an amount or calculated at a rate which would be prohibited by law or
would result in a receipt by that Secured Party of “interest” at a “criminal
rate” (as such terms are construed under the Criminal Code (Canada)), then,
notwithstanding such provision, such amount or rate shall be deemed to have been
adjusted with retroactive effect to the maximum amount or rate of interest, as
the case may be, as would not be so prohibited by applicable law or so result in
a receipt by that Secured Party of “interest” at a “criminal rate”, such
adjustment to be effected, to the extent necessary (but only to the extent
necessary), as follows:

 

(i)          first, by reducing the amount or rate of interest; and

 

(ii)         thereafter, by reducing any fees, commissions, costs, expenses,
premiums and other amounts required to be paid which would constitute interest
for purposes of section 347 of the Criminal Code (Canada).

 

Section 2.8        Pro Rata Treatment and Payments.

 

(a)          Pro Rata Treatment. Each borrowing of Loans and any reduction of
the Commitments shall be made pro rata according to the respective Commitment
Percentages of the Lenders. Each payment (other than prepayments) of principal
or interest under this Agreement or any Note shall be applied pro rata, first,
to any fees and expenses then due and owing by the Borrower hereunder, second,
to interest then due and owing hereunder and under the Notes and, third, to
principal then due and owing hereunder and under the Notes. Each payment on
account of any fees and expenses hereunder shall be made pro rata in accordance
with the respective amounts due and owing. Each optional prepayment of the Loans
shall be applied in accordance with Section 2.4(a) and each mandatory prepayment
of the Loans shall be applied in accordance with Section 2.4(b). Prepayments
made pursuant to Section 2.11 shall be applied in accordance with such section.
All payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim and shall be made to the Administrative Agent for the account of
the Lenders at the Administrative Agent’s office specified on the Lenders’
Administrative Details Schedule in Dollars and in immediately available funds
not later than 12:00 Noon on the date when due. The Administrative Agent shall
distribute such payments to the Lenders entitled thereto promptly upon receipt
in like funds as received. If any payment hereunder (other than payments on the
Loans) becomes due and payable on a day other than a Business Day, such payment
shall be extended to the next succeeding Business Day, and, with respect to
payments of principal, interest thereon shall be payable at the then applicable
rate during such extension. If any payment on a Loan becomes due and payable on
a day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.

 

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(b)          Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Agreement to the contrary, after the exercise of
remedies by the Administrative Agent or the Lenders pursuant to Section 8.2 (or
after the Commitments shall automatically terminate and the Loans (with accrued
interest thereon) and all other amounts under the Credit Documents shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by the Administrative Agent or any
Lender on account of the Obligations or any other amounts outstanding under any
of the Credit Documents or in respect of the Collateral shall be paid over or
delivered as follows:

       

FIRST, to the payment of all out-of-pocket costs and expenses (including without
limitation reasonable attorneys’ fees) of the Administrative Agent in connection
with enforcing the rights of the Lenders under the Credit Documents and any
protective advances made by the Administrative Agent with respect to the
Collateral under or pursuant to the terms of the Security Documents;

                 

SECOND, to payment of any fees owed to the Agents;

                 

THIRD, to the payment of all out-of-pocket costs and expenses (including without
limitation, reasonable attorneys’ and consultants’ fees) of each of the Lenders
in connection with enforcing its rights under the Credit Documents or otherwise
with respect to the Obligations owing to such Lender;

                 

FOURTH, to the payment of all of the Obligations consisting of interest and any
accrued fees not paid under the foregoing;

                   

FIFTH, to the payment of the outstanding principal amount of the Obligations and
any breakage, termination or other payments due on the Obligations, and any
interest accrued thereon together with all Obligations arising under any Hedging
Agreement with a Lender (or an Affiliate of a Lender) or any account (including
cash management accounts) or other cash management services provided by a Lender
(or an Affiliate of a Lender);

                

SIXTH, to all other Obligations and all other obligations which shall have
become due and payable under the Credit Documents or otherwise and not repaid
pursuant to clauses “FIRST” through “FIFTH” above; and

               

SEVENTH, to the payment of the surplus, if any, to whomever may be lawfully
entitled to receive such surplus.

 

In carrying out the foregoing, amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category.

 

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Section 2.9           Non-Receipt of Funds by the Administrative Agent.

 

(a)          Unless the Administrative Agent shall have been notified in writing
by a Lender prior to the date a Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make the
proceeds of such Loan available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, in accordance with the terms hereof, the Administrative Agent
will promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent shall
also be entitled to recover from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing.

 

(b)          Unless the Administrative Agent shall have been notified in writing
by the Borrower, prior to the date on which any payment is due from it hereunder
(which notice shall be effective upon receipt) that the Borrower does not intend
to make such payment, the Administrative Agent may assume that the Borrower has
made such payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if the Borrower has not in fact
made such payment to the Administrative Agent, such Lender shall, on demand,
repay to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to the
Administrative Agent on demand interest on such amount in respect of each day
from the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent at a per
annum rate equal to the LIBOR Rate.

 

(c)          A certificate of the Administrative Agent submitted to the Borrower
or any Lender with respect to any amount owing under this Section 2.9 shall be
conclusive in the absence of manifest error.

 

Section 2.10           Inability to Determine Interest Rate; Base Rate Loans.
  Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, including that LIBOR quotations are
unavailable or insufficient in number or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding Loans that the Borrower has requested during
such Interest Period, the Administrative Agent shall forthwith give telephone
notice of such determination, confirmed in writing, to the Borrower and the
Lenders at least two Business Days prior to the first day of such Interest
Period. Until any such notice has been withdrawn by the Administrative Agent, no
further Loans shall be made as, continued as, or converted into, LIBOR Rate
Loans for the Interest Periods so affected, and all Loans outstanding shall be
converted into a Base Rate Loan (i) on the last day of the then-current Interest
Period if the Lenders may lawfully continue to maintain the Loans as LIBOR Rate
Loans to such day, or (ii) immediately if the Administrative Agent or any Lender
shall determine that any Lender may not lawfully continue to maintain the Loans
as LIBOR Rate Loans to such day. Furthermore, until any such notice has been
withdrawn by the Administrative Agent, all Loans requested by the Borrower or
advanced by any Lender hereunder shall be made and advanced as a Base Rate Loan,
to which all other terms and conditions of this Agreement shall apply.

 

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Section 2.11      Illegality.  Notwithstanding any other provision of this
Agreement, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof by the relevant Governmental Authority to
any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to
make or maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain
in the interbank eurodollar market through its LIBOR Lending Office the funds
with which to make such Loans, (a) such Lender shall promptly notify the
Administrative Agent and the Borrower thereof, and (b) the commitment of such
Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such
shall forthwith be suspended until the Administrative Agent shall give notice
that the condition or situation which gave rise to the suspension shall no
longer exist. The Borrower hereby agrees to promptly pay any Lender, upon its
demand, any additional amounts necessary to compensate such Lender for actual
and direct costs (but not including anticipated profits) reasonably incurred by
such Lender in making any repayment in accordance with this Section including,
but not limited to, any interest or fees payable by such Lender to lenders of
funds obtained by it in order to make or maintain its LIBOR Rate Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be
payable pursuant to this Section; provided, however, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.

 

Section 2.12         Requirements of Law.

 

(a)          If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:

 

(i)          shall subject such Lender to any tax of any kind whatsoever with
respect to any LIBOR Rate Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for tax on the overall net
income of such Lender or franchise taxes imposed on it in lieu of net income
taxes and changes in the rate of such taxes);

 

(ii)         shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by, any office of
such Lender which is not otherwise included in the determination of the LIBOR
Rate hereunder; or

 

34

 

 

(iii)        shall impose on such Lender any other condition not otherwise
expressly excluded above;

 

and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining LIBOR Rate Loans or to reduce any amount receivable
hereunder or under any Note or Loan, then, in any such case, the Borrower shall
promptly pay such Lender, within fifteen (15) days after its demand, any
additional amounts necessary to compensate such Lender for such additional cost
or reduced amount receivable which such Lender reasonably deems to be material
as determined by such Lender with respect to its LIBOR Rate Loans. A certificate
as to any additional amounts payable pursuant to this Section submitted by such
Lender, through the Administrative Agent, to the Borrower shall be conclusive in
the absence of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its LIBOR Lending Office, as the case
may be) to avoid or to minimize any amounts which might otherwise be payable
pursuant to this paragraph of this Section; provided, however, that such efforts
shall not cause the imposition on such Lender of any additional costs or other
disadvantages deemed by such Lender to be material.

 

(b)          If any Lender shall have reasonably determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender’s or such corporation’s
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, within fifteen
(15) days after demand by such Lender, the Borrower shall pay to such Lender
such additional amount as shall be certified by such Lender as being required to
compensate it for such reduction. Such a certificate as to any additional
amounts payable under this Section submitted by a Lender (which certificate
shall include a description of the basis for the computation), through the
Administrative Agent, to the Borrower shall be conclusive absent manifest error.

 

(c)          The agreements in this Section 2.12 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.

 

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Section 2.13      Judgment Currency Conversion. If, for the purposes of
obtaining judgment in any court in any jurisdiction with respect to this
Agreement or any other Credit Document, it becomes necessary to convert into a
particular currency (the “Judgment Currency”) any amount due under this
Agreement or under any other Credit Document in any currency other than the
Judgment Currency (the “Currency Due”), then conversion shall be made at the
rate of exchange prevailing on the Business Day before the day on which judgment
is given. For this purpose “rate of exchange” means the rate at which the
Administrative Agent is able, on the relevant date, to purchase the Currency Due
with the Judgment Currency in accordance with its normal practice at its head
office. In the event that there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment is given and the
date of receipt by the Administrative Agent of the amount due, the Borrower
will, on the date of receipt by the Administrative Agent, pay such additional
amounts, if any, or be entitled to receive reimbursement of such amount, if any,
as may be necessary to ensure that the amount received by the Administrative
Agent on such date is the amount in the Judgment Currency which when converted
at the rate of exchange prevailing on the date of receipt by the Administrative
Agent is the amount then due under this Agreement or such other Credit Document
in the Currency Due. If the amount of the Currency Due which the Administrative
Agent is so able to purchase is less than the amount of the Currency Due
originally due to it, the Borrower shall indemnify and save the Administrative
Agent and the Lenders harmless from and against all loss or damage arising as a
result of such deficiency. This indemnity shall constitute an obligation
separate and independent from the other obligations contained in this Agreement
and the other Credit Documents, shall give rise to a separate and independent
cause of action, shall apply irrespective of any indulgence granted by the
Administrative Agent from time to time and shall continue in full force and
effect notwithstanding any judgment or order for a liquidated sum in respect of
an amount due under this Agreement or any other Credit Document or under any
judgment or order.

 

Section 2.14         Indemnity. The Borrower hereby agrees to indemnify each
Lender and to hold such Lender harmless from any liabilities, claims, costs,
charges, funding loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrower in payment of the principal amount of
or interest on any Loan by such Lender in accordance with the terms hereof,
(b) default by the Borrower in accepting a borrowing after the Borrower have
given a notice in accordance with the terms hereof, (c) default by the Borrower
in making any prepayment after the Borrower have given a notice in accordance
with the terms hereof, and/or (d) any payment or prepayment of a Loan, or the
extension thereof, on a day which is not the last day of the Interest Period
with respect thereto, in each case including, but not limited to, any such loss,
expense, cost or liability arising from interest, fees, costs or charges payable
by such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. The agreements in
this Section shall survive termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.

 

Section 2.15         Incremental Loans.

 

(a)          Borrower Request for Incremental Loans. The Borrower may at any
time and from time to time after the Closing Date by written notice to the
Administrative Agent (whereupon the Administrative Agent shall make such notice
available to each of the Lenders) request one or more additional new revolving
loan tranches (an “Incremental Loan”) increasing the aggregate amount of the
Committed Amount (each such increase, a “Commitment Increase”) in an aggregate
amount not to exceed $50,000,000 from any existing Lender or an Additional
Incremental Lender (which Additional Incremental Lender shall become an
“Additional Lender” and “Lender” hereunder subject to the prior consent of the
Administrative Agent and Borrower, such consent not to be unreasonably withheld,
conditioned or delayed). Each such written notice shall specify: (i) the date on
which the Borrower proposes that the Commitment Increase shall be effective (the
“Loan Increase Effective Date”), which shall be a date not less than ten (10)
Business Days after the date on which such notice is delivered to the
Administrative Agent, (ii) the amount of such proposed Commitment Increase
(which shall not exceed an aggregate of $50,000,000 for all Commitment
Increases), and (iii) the identity of each Lender (including each Additional
Incremental Lender) to whom the Borrower proposes each portion of such
Commitment Increase and related Incremental Loan be allocated and the amount of
each such allocation. No existing Lender will have any obligation to accept or
make any portion of any Incremental Loan or to make any Loan associated with any
Commitment Increase. Each Lender, in its sole discretion, may either grant or
deny any increase in its respective Commitment.

 

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(b)          Conditions to Incremental Loans. A Commitment Increase shall become
effective as of the Loan Increase Effective Date; provided that each of the
following conditions precedent is satisfied:

 

(i)          no Default or Event of Default shall have occurred or be continuing
or would result from any borrowing to be made as of the Loan Increase Effective
Date or otherwise with respect to the Commitment Increase;

 

(ii)         the representations and warranties made by the Credit Parties
herein shall be true and correct on and as of the Loan Increase Effective Date
as if made on and as of such date, except for representations and warranties
expressly stated to relate to a specific earlier date;

 

(iii)        the Credit Parties shall have delivered to the Administrative Agent
a certificate of a Responsible Officer certifying clauses (i) and (ii);

 

(iv)         the Term Loan Agreement shall have been repaid in full and shall
have been (or shall be upon the effective date of the Commitment Increase)
cancelled and terminated; and

 

(v)          the Commitment Increase has been accepted by one or more Lenders or
Additional Incremental Lenders.

 

(c)          Terms of Incremental Loans and Commitment Increase. The terms and
conditions of any Incremental Loan made pursuant to a Commitment Increase shall
be as follows:

 

(i)          on and after each Loan Increase Effective Date, each Lender
(including Additional Incremental Lender(s)) shall be obligated, to the extent
of its Commitment, in accordance with the requirements set forth in this
Agreement to provide Loans to Borrower under each Incremental Loan subject to
Borrower’s compliance with the terms and conditions of this Agreement applicable
to all Loans, including Section 2.1(b) regarding borrowing procedures and
Article 5 regarding conditions precedent to all Loans;

 

(ii)         each Commitment Increase shall be in a minimum amount of
$5,000,0000 and in integral multiples of $1,000,000 in excess thereof; and

 

(iii)        each Additional Incremental Lender shall be joined to this
Agreement as a Lender pursuant to a joinder agreement in the form attached
hereto as Exhibit L (the “Incremental Increase Joinder”), executed by the
Borrower, the Administrative Agent and each such Additional Incremental Lender
making such Incremental Loan. The Incremental Increase Joinder may, without the
consent of any other Lender, effect such amendments to this Agreement and the
other Credit Documents as may be necessary or appropriate, in the opinion of the
Administrative Agent, to effect the provisions of this Section 2.15. In
addition, unless otherwise specifically provided herein, all references in this
Agreement and any other Credit Document to Loans shall be deemed to include a
reference to Incremental Loans that are Loans made pursuant to this Agreement.

 

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(d)           Additional Incremental Lenders’ Administrative Details Schedule.
Prior to each respective Loan Increase Effective Date, the Administrative Agent
shall receive from each Additional Incremental Lender, a Lenders’ Administrative
Details Schedule or in the case of an existing Lender, an update to its Lenders’
Administrative Details Schedule and the Administrative Agent shall adjust each
Lender’s Commitment Percentage to account for each such Lender and/or Additional
Incremental Lender and each Commitment Increase and related Incremental Loan.
Such new or updated Lenders’ Administrative Details Schedule shall be deemed to
replace and/or update, as the case may be, the existing Lenders’ Administrative
Details Schedule and shall become part of this Agreement without the need for an
amendment or any other action on the part of the parties hereto.

 

(e)          Equal and Ratable Benefit. The Incremental Loans and Commitment
Increases established pursuant to this Section 2.15 shall constitute Loans and
Commitments for all purposes under, and shall be entitled to all the rights,
benefits and remedies afforded by this Agreement and the other Credit Documents,
and shall, without limiting the foregoing, benefit equally and ratably, on a
pari passu basis, from all security interests created by each Security Document
and the guarantees of the Guarantors. The Credit Parties shall take any actions
and execute and deliver any Instruments required by the Administrative Agent to
evidence and ensure that the Liens and security interests granted by the
Security Documents extend to and benefit the Incremental Loans and continue to
be effective and perfected following the establishment of any such Incremental
Loan or Commitment Increase.

 

Section 2.16         Taxes.

 

(a)          All payments made by the Borrower hereunder or under any Note shall
be made free and clear of, and without deduction or withholding for, any present
or future Taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any Governmental Authority or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding any Tax imposed on or measured by the net income or
profits of a Lender or franchise taxes imposed on it in lieu of net income
taxes, in each case pursuant to the laws of the jurisdiction in which it is
organized or the jurisdiction in which the principal office or applicable
lending office of such Lender is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect thereto. If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. The Borrower will furnish to the
Administrative Agent as soon as practicable after the date the payment of any
Taxes is due pursuant to applicable law certified copies (to the extent
reasonably available and required by law) of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Lender.

 

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(b)          Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its LIBOR Lending Office, as the case may be) to avoid or to
minimize any amounts which might otherwise be payable pursuant to this Section;
provided, however, that such efforts shall not cause the imposition on such
Lender of any additional costs or other disadvantages deemed by such Lender in
its sole discretion to be material.

 

(c)          If the Borrower pays any additional amount pursuant to this
Section 2.16 with respect to a Lender, such Lender shall use reasonable efforts
to obtain a refund of tax or credit against its tax liabilities on account of
such payment; provided that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit position
or (ii) it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the event that
such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the Borrower.
In the event that no refund or credit is obtained with respect to the Borrower’s
payments to such Lender pursuant to this Section 2.16, then such Lender shall
upon request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.16(c) shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its determination
referred to in the proviso to the first sentence of this Section 2.16(c) to the
Borrower or any other party.

 

(d)          Each Lender that is not a “United States person” (as such term is
defined in Section 7701(a)(30) of the Code) (a “Foreign Lender”) shall submit to
Borrower and Administrative Agent on or before the date such financial
institution becomes a party hereto, two duly signed completed copies of either
IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Foreign Lender by Borrower pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by Borrower pursuant to this Agreement) or
such other evidence satisfactory to Borrower and Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, United States
withholding tax. Thereafter and from time to time, each such Foreign Lender
shall: (i) promptly submit to Administrative Agent such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then-current United States laws and
regulations to avoid, or such evidence as is satisfactory to Borrower and
Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign
Lender by Borrower pursuant to this Agreement; (ii) promptly notify
Administrative Agent of any change in circumstances that would modify or render
invalid any claimed exemption or reduction; and (iii) take such steps as shall
not be materially disadvantageous to it, in the reasonable judgment of such
Foreign Lender, and as may be reasonably necessary (including the re-designation
of its lending office) to avoid any requirement of applicable laws that Borrower
make any deduction or withholding for taxes from amounts payable to such Foreign
Lender. If any Foreign Lender fails to deliver the forms or other documentation
referred to in this subsection, then the Borrower shall not be required to pay
any additional amount to such Foreign Lender under Section 2.16(a) with respect
to any withholding tax imposed by Sections 1441 and 1442 of the Code; provided
that if such Foreign Lender shall have satisfied the requirement of this Section
2.16(d) on the date such Foreign Lender became a Lender, nothing in this Section
2.16(d) shall relieve the Borrower of their obligations to pay any amounts
pursuant to Section 2.16(a) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Foreign
Lender is no longer properly entitled to deliver forms, certificates or other
evidence at a subsequent date establishing the fact that such Foreign Lender or
is not subject to withholding.

 

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(e)          The agreements in this Section 2.16 shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES

 

To induce the Lenders to enter into this Agreement and to make the Loans herein
provided for, the Credit Parties hereby represent and warrant to the
Administrative Agent and to each Lender that:

  

Section 3.1            Corporate Existence; Compliance with Law.   Each of the
Credit Parties (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the requisite
corporate power, authority and right to acquire, lease, own and operate, as
applicable, all its property and to conduct the business in which it is
currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to so qualify or be in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

Section 3.2           Corporate Power; Authorization; Enforceable Obligations.
  Each of the Credit Parties has full corporate power, authority and right to
execute, deliver and perform the Credit Documents to which it is party and has
taken all necessary limited liability company or corporate action to authorize
the execution, delivery and performance by it of the Credit Documents to which
it is party. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery or
performance of any Credit Document by the Credit Parties (other than those which
have been obtained) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party has been duly executed and delivered
on behalf of each of the Credit Parties. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of each of the Credit
Parties, enforceable against such Credit Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

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Section 3.3           Financial Condition; No Material Adverse Effect.

 

(a)          The audited Consolidated financial statements of the Borrower for
the twelve-month period ending June 30, 2011, and the related Consolidated
statements of income and of cash flows for the fiscal year ended on such date,
all of which have been furnished to the Administrative Agent, have been prepared
in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein and fairly present the
financial condition of the Borrower and its Subsidiaries as of the date or dates
thereof and results of operations for the periods covered thereby. Such
financial statements and the notes thereto disclose all material liabilities,
direct or contingent, of the Borrower and its Subsidiaries that are required to
be disclosed under GAAP.

 

(b)          Subsequent to the respective dates as of which information is given
in such financial statements, there has been no change or event that,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect.

 

Section 3.4           Compliance with Laws; No Conflict; No Default.

 

(a)          The execution, delivery and performance by each Credit Party of the
Credit Documents to which such Credit Party is a party, in accordance with their
respective terms, the borrowings hereunder and the transactions contemplated
hereby do not and will not, by the passage of time, the giving of notice or
otherwise, (i) violate any Requirement of Law applicable to such Credit Party,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws, articles of organization, operating agreement
or other organizational documents of such Credit Party or any material
indenture, agreement or other instrument to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval of such
Person, except to the extent that such conflict, breach or default with respect
to any such indenture, agreement or instrument could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, or
(iii) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by such Person other
than Liens arising under the Credit Documents.

 

(b)          Each Credit Party (i) has all Governmental Approvals required by
law for it to conduct its business in all material respects, and (ii) is in
compliance with each Governmental Approval applicable to it and in compliance
with all other Requirements of Law relating to it or any of its respective
properties, in each case except to the extent the failure to obtain such
Governmental Approval or failure to comply with such Governmental Approval or
Requirement of Law could not reasonably be expected to have a Material Adverse
Effect. Except as set forth in Schedule 3.4(b) and except for matters that do
not have or would not reasonably be expected to have a Material Adverse Effect,
to the knowledge of the Credit Parties, the Project Managers of each of the
Projects have obtained all material Governmental Approvals required to operate
such Projects as currently being operated in accordance with the then-effective
mine plan therefore and are operating such Projects in material compliance
therewith.

 

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(c)          Except as set forth in Schedule 3.4(c) hereto, (i) each Credit
Party has complied in all material respects with all Requirements of Law,
(ii) to the knowledge of each Credit Party, each Project is in compliance with
all Requirements of Law relating to the operation of such Project, in each case
except to the extent that the failure to obtain a Governmental Approval or the
failure to comply with such Governmental Approval or Requirement of Law has not
had, and would not reasonably be expected to have, a Material Adverse Effect,
and (iii) to the knowledge of each Credit Party, no investigation is currently
being conducted by any local, state or federal agency with respect to
enforcement of Requirements of Law that would reasonably be expected to have a
Material Adverse Effect. Except as disclosed in Schedule 3.4(c), no Credit Party
has knowledge of any existing violation of Requirements of Law or notices
thereof issued by any Governmental Authority, with respect to a Credit Party or
a Project, which has had or would reasonably be expected to have a Material
Adverse Effect.

 

(d)          None of the Credit Parties is in default under or with respect to
any of its Material Contracts, or any judgment, order or decree to which it is a
party, in any respect that has had or could reasonably be expected to have a
Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.

 

Section 3.5          No Material Litigation.   Except as set forth in
Schedule 3.5 hereto, no Credit Party is a party to any action, suit or
proceeding at law or in equity, by or before any Governmental Authority (or, to
the knowledge of any Credit Party, threatened in writing) against or affecting
any Credit Party, any Royalty Interest, or any Project that has had, or would
reasonably be expected to have a Material Adverse Effect, or which may affect
the legality, validity or enforceability of this Agreement or any other Credit
Document. Except as set forth in Schedule 3.5, to the knowledge of each Credit
Party, there is no action, suit or proceeding at law or in equity, by or before
any Governmental Authority now pending or threatened against or, with direct and
specific application, affecting, any Credit Party, the Royalty Interests or any
Project, which has had, or would reasonably be expected to have, a Material
Adverse Effect, or which may affect the legality, validity or enforceability of
this Agreement or any other Credit Document, and no judgments are
outstanding which could reasonably be expected to have a Material Adverse
Effect.

 

Section 3.6           Employee Benefit Plans and Canadian Pension Plans.

 

(a)          Employee Benefit Plans. Each Employee Benefit Plan established or
maintained by the Borrower or any other Credit Party complies, and has been
maintained and administered, in all material respects in accordance with
applicable Requirements of Law. Each Employee Benefit Plan is fully funded on a
going concern basis in accordance with its terms and applicable Requirements of
Law, and the present value of all accrued benefits under any such plans do not
exceed the value of the assets of such plans allocable to such accrued benefits
by an amount that could reasonably be expected to have a Material Adverse
Effect. No material liability exists with respect to any Employee Benefit Plan
that has been terminated.

 

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(b)          Canadian Pension Plans. Each of the Canadian Pension Plans (if any)
is duly registered under the Canadian Income Tax Act and any other applicable
Laws which require registration, has been administered in accordance with the
Canadian Income Tax Act and such other applicable Laws and no event has occurred
which could reasonably be expected to cause the loss of such registered status,
except to the extent that any failure to do so could not reasonably be expected
to have a Material Adverse Effect. All material obligations of each of the
Credit Parties (including fiduciary, funding, investment and administration
obligations) required to be performed in connection with the Canadian Pension
Plans and the funding agreements therefor have been performed on a timely basis,
except to the extent that any failure to do so could not reasonably be expected
to have a Material Adverse Effect. There are no outstanding disputes concerning
the assets of the Canadian Pension Plans. No promises of benefit improvements
under the Canadian Pension Plans have been made except where such improvement
could not reasonably be expected to have a Material Adverse Effect. All
contributions or premiums required to be made or paid by each of the Credit
Parties to the Canadian Pension Plans have been made on a timely basis in
accordance with the terms of such plans and all applicable Laws. There have been
no improper withdrawals or applications of the assets of the Canadian Pension
Plans. None of the Canadian Pension Plans contain or have ever contained a
"defined benefit provision", as that term is defined in subsection 147.1(1) of
the Canadian Income Tax Act. Each of the Canadian Pension Plans is fully funded
on a solvency basis and going concern basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with the
applicable Governmental Authorities and which are consistent with GAAP).

 

Section 3.7           Environmental Matters.

 

(a)          To the knowledge of the Credit Parties, the Projects are owned,
leased, developed, operated or otherwise utilized in compliance with all
applicable Environmental Laws and Governmental Approvals, in each case except to
the extent that the failure to comply with such Environmental Laws or
Governmental Approvals has not had, and would not reasonably be expected to
have, a Material Adverse Effect.

 

(b)          No Credit Party has received any written or actual notice of
violation, alleged violation, non-compliance, notice of investigation, liability
or potential liability regarding Materials of Environmental Concern, compliance
with Environmental Laws or other environmental matters with regard to any of the
Projects, in each case, except as those that have not had, and would not
reasonably be expected to have, a Material Adverse Effect, nor does any Credit
Party have knowledge that any such notice will be received or is being
threatened.

 

(c)          No judicial proceeding or governmental or administrative action
under any Environmental Law is pending or, to the knowledge of any Credit Party
threatened, against any Credit Party, or to the knowledge of any Credit Party is
pending against any Project that has had, or would reasonably be expected to
have, a Material Adverse Effect. To the knowledge of the Credit Parties, there
are no consent decrees or other clean-up orders, mitigation orders, compliance
orders, remediation orders, decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to any Project that have had, or would
reasonably be expected to have, a Material Adverse Effect.

 

43

 

 

 

 

Section 3.8           Purpose of Loans. The proceeds of the Loans shall be used
by the Borrower to pay any fees and expenses in connection with this Agreement
and to provide for the working capital and general corporate requirements of the
Borrower and its Subsidiaries.

 

Section 3.9           Subsidiaries. Set forth on Schedule 3.9 is a complete and
accurate list of all Subsidiaries of the Credit Parties as of the Closing Date.
Information on the attached Schedule includes jurisdiction of incorporation or
organization; the number of authorized shares of each class of Capital Stock or
other equity interests; the number of outstanding shares of each class of
Capital Stock or other equity interests, the owner thereof and the percentage of
such ownership; and the number and effect, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding Capital
Stock and other equity interests of all such Subsidiaries is validly issued,
fully paid and non-assessable and is owned free and clear of all Liens (other
than Permitted Liens).

 

Section 3.10         Ownership; Insurance.

 

(a)          Each of the Credit Parties has good, legal and valid title to (or
in the case of any leased premises, easement properties or licensed property,
valid leasehold, easement or license interests, which are in full force and
effect, in) its real property and good title to, or a valid leasehold interest
in, its personal property.

 

(b)          Each of the Credit Parties has and maintains in full force and
effect adequate insurance in accordance with Section 6.10 hereof and which
insurance is described in full as of the Closing Date on Schedule 6.10.

 

Section 3.11         Title to Royalty Interests; Liens. Schedule 1.1(a) sets
forth, as of the Closing Date, a complete and accurate listing and description
of each Collateral Royalty, including the Project and the Royalty Interest
associated therewith. Schedule 1.1(d) sets forth, as of the Closing Date, a
complete and accurate listing of each of the Royalty Interests, other than the
Collateral Royalties. Each Credit Party has good and marketable title to the
Collateral Royalties owned by it, free and clear of any claims or rights of
title and free and clear of all Liens except for Permitted Liens; and each
Credit Party has good title to the Royalty Interests (other than the Collateral
Royalties) owned by it, free and clear of any claims or rights of title and free
and clear of all Liens except for Permitted Liens.

 

Section 3.12         Royalty Agreements. Schedule 1.1(a) sets forth a complete
and accurate list of all Royalty Agreements of each Credit Party relating to a
Collateral Royalty and in effect as of the Closing Date. Each Royalty Agreement
relating to a Collateral Royalty is (i) a legal, valid and binding obligation of
the Credit Party that is a party thereto, and to each Credit Party’s knowledge,
each other party thereto, and (ii) other than as set forth in Schedule 3.12,
each such Royalty Agreement is, and after giving effect to the transactions
contemplated by the Credit Documents will be, in full force and effect in
accordance with the terms thereof. To the extent requested by the Administrative
Agent, the Borrower has delivered or made available to the Administrative Agent
a true and complete copy of each Royalty Agreement listed on Schedule 1.1(a). No
Credit Party is in breach of or in default under any Royalty Agreement for a
Collateral Royalty. As of the Closing Date and since the date thereof, other
than as set forth on Schedule 3.12, no Credit Party has made any unresolved
allegation that any counterparty to a Material Contract has breached or
defaulted under any such agreement in a material respect, except for allegations
of breach or default that a Credit Party has diligently pursued and resolved
within thirty (30) days of obtaining knowledge thereof and which has not had,
and would not reasonably be likely to have, a Material Adverse Effect during
such period of time. To the knowledge of each Credit Party, other than as set
forth on Schedule 3.12, no counterparty to any Material Contract is in material
breach of or in material default of any such Material Contract, except for
allegations of breach or default that a Credit Party is diligently pursuing and
will resolve within thirty (30) days of obtaining knowledge thereof and which
breach or default has not had, and would not reasonably be likely to have, a
Material Adverse Effect.

 

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Section 3.13         Indebtedness. Except as otherwise permitted under
Section 7.1, the Credit Parties and their Subsidiaries have no Indebtedness.

 

Section 3.14         Taxes. Each of the Credit Parties and their Subsidiaries
has filed, or caused to be filed, all Tax returns (federal, provincial, state,
local, foreign or otherwise) required to be filed and has paid (a) all amounts
of Taxes shown thereon to be due (including interest and penalties) and (b) all
other Taxes, fees, assessments and other governmental charges (including
mortgage recording taxes, documentary stamp taxes and intangibles taxes) owing
by it, except, in each case, for such Taxes (i) which are not yet delinquent,
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP, or
(iii) that arise and become due in jurisdictions outside of the United States,
Canada or Mexico and which are not material either individually or in the
aggregate. Each Credit Party has established reserves which are reasonably
believed by the officers and representatives of such Credit Party to be adequate
for the payment of such taxes. None of the Credit Parties is aware of any
proposed Taxes or Tax assessments against it or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.

 

Section 3.15         No Burdensome Restrictions. None of the Credit Parties or
any of its Subsidiaries is a party to any agreement or Instrument or subject to
any other obligation or any charter or corporate restriction or any provision of
any applicable Requirement of Law which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

Section 3.16         Limitations on Incurrence of Indebtedness. No Credit Party
is subject to any Requirement of Law limiting its ability to borrow money or to
incur or perform the Obligations or to grant Liens with respect to the
Collateral as set forth in the Security Documents.

 

Section 3.17         Accuracy and Completeness of Information. No factual
information heretofore, contemporaneously or hereafter furnished by or on behalf
of any Credit Party or any of its Subsidiaries to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any other
Credit Document contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained therein, in
light of the circumstances when made, not materially misleading; provided,
however, that projections contained therein are not to be viewed as factual and
that actual results during the periods covered thereby may differ from the
results set forth in such projections by a material amount. There is no fact now
known to any Credit Party or any of its Subsidiaries which has, or could
reasonably be expected to have, a Material Adverse Effect.

 

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Section 3.18         Events of Default. No event has occurred and is continuing,
or would result from the incurring of the Obligations by the Borrower under this
Agreement, that, individually or in the aggregate, constitute, or could be
reasonably expected to constitute, a Default or Event of Default.

 

Section 3.19         Material Contracts. Except as set forth in Schedule 3.19
hereto, no Credit Party is a party to any material agreement or Instrument or
subject to any charter or other corporate restriction that has had or could
reasonably be expected to have a Material Adverse Effect. Each Material Contract
of the Credit Parties is, and after giving effect to the transactions
contemplated by the Credit Documents will be, in full force and effect in
accordance with the terms thereof and no Borrower or Subsidiary thereof has
violated in any respect any such Material Contract, the effect of which has had
or could reasonably be expected to have a Material Adverse Effect.

 

Section 3.20         Margin Regulations. No Credit Party is engaged in the
business of extending credit for the purpose of, and no proceeds of any Loan or
other extensions of credit hereunder will be used for the purpose of, buying or
carrying margin stock (within the meaning of Regulation U of the Federal Reserve
Board) or extending credit to others for the purpose of purchasing or carrying
any such margin stock, in each case in contravention of Regulation T, U or X of
the Federal Reserve Board.

 

Section 3.21         Investment Company. No Credit Party is an “investment
company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company”, as such terms are defined in the Investment
Company Act of 1940.

 

ARTICLE IV
COLLATERAL SECURITY

 

Section 4.1           Security Documents. As security for the prompt, complete
and irrevocable payment and performance of the Obligations, each of the Credit
Parties shall, contemporaneously with the execution of this Agreement, confirm,
ratify and continue, or grant, execute and deliver, the Security Documents. The
Security Documents create valid security interests in, and Liens on, the
Collateral purported to be covered thereby, which security interests and Liens
are, or upon the filing of the appropriate perfection or other administrative
action or notices to third parties necessary to perfect such security interests
and Liens will be, perfected security interests and Liens, prior to all other
Liens, other than Permitted Liens.

 

Section 4.2           No Limitation on Application of Security Interest. The
Credit Parties agree that notwithstanding any provision of any other Credit
Document to the contrary, the Liens created pursuant to the Security Documents
shall secure all Obligations. The payment and performance of all Obligations are
unconditionally and irrevocably guaranteed by the Guarantors.

 

Section 4.3           Maintenance of Security Over Collateral Royalties. The
Credit Parties shall at all times grant and maintain Mortgages or other Security
Documents satisfactory to the Required Lenders in their sole discretion over and
with respect to the Collateral Royalties (the “Collateral Requirement”).

 

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Section 4.4           Perfection and Maintenance of Liens. Each Credit Party
hereby authorizes the Administrative Agent and the other Lenders to file such
UCC financing statements, PPSA financing statements and other agreements,
documents, registrations, filings or Instruments with such Governmental
Authorities in such jurisdictions as it determines to be desirable and to take
such other actions as the Administrative Agent or any Lender determine to be
necessary or desirable to legalize, authenticate, protect, perfect and maintain
the perfection of first priority Liens in the Collateral identified in the
Security Documents (subject to the terms of the Intercreditor Agreement). The
Credit Parties agree to cooperate with the Administrative Agent and the other
Lenders in delivering all share certificates and other certificates of Capital
Stock pledged pursuant to Pledge Agreement and in undertaking and completing all
recordings, filings, registrations and other actions required in connection with
the Security Documents, and each Credit Party further agrees to promptly take
all such other actions as the Administrative Agent may reasonably determine to
be necessary or appropriate to confirm, perfect, maintain and protect the
perfection of the Liens granted by the Security Documents.

 

ARTICLE V
CONDITIONS PRECEDENT

 

Section 5.1           Conditions to Closing. This Agreement shall become
effective upon the satisfaction of the following conditions precedent:

 

(a)          Execution of Credit Documents. The Administrative Agent shall have
received (i) counterparts of this Agreement, (ii) a Note for the account of each
Lender, (iii) counterparts to each Security Document, and (iv) counterparts to
each other Credit Document, in each case conforming to the requirements of this
Agreement and executed by a duly authorized officer of each party thereto, and
in each case in form and substance reasonably satisfactory to the Lenders.

 

(b)          Authority Documents. The Administrative Agent shall have received a
certificate from the secretary of each Credit Party substantially in the form of
Exhibit G attached hereto, together with certified copies of each of the
following attachments (with respect to the attachments described in clauses (i)
and/or (ii) below, to the extent such attachment has changed since previously
delivered to Administrative Agent (and if no change has occurred, such secretary
shall so certify)):

 

(i)          Articles of Incorporation/Charter Documents. Copies of the articles
of incorporation or other charter documents, as applicable, of such Credit Party
certified to be true and complete as of a recent date by the appropriate
Governmental Authority of the jurisdiction of its incorporation;

 

(ii)         Bylaws/Operating Agreement. A copy of the bylaws or comparable
operating agreement of such Credit Party;

 

(iii)        Resolutions. Copies of resolutions of the board of directors of
such Credit Party approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery thereof;

 

47

 

 

(iv)        Good Standing. Copies of certificates of good standing, existence or
its equivalent with respect to such Credit Party certified as of a recent date
by the appropriate Governmental Authorities of the state of incorporation or
organization and each other state in which the failure to so qualify and be in
good standing could reasonably be expected to have a Material Adverse Effect on
the business or operations of such Credit Party; and

 

(v)         Incumbency. Incumbency signatures of appropriate officers of such
Credit Party, including each officer executing a Credit Document.

 

(c)          Legal Opinions of Counsel. The Administrative Agent shall have
received opinions of legal counsel (including local counsel to the extent
required by the Administrative Agent) for the Credit Parties, dated the Closing
Date and addressed to the Administrative Agent and the Lenders in form and
substance reasonably acceptable to the Required Lenders.

 

(d)          Collateral. The Administrative Agent shall have received, in form
and substance satisfactory to the Administrative Agent:

 

(i)          searches of all Lien filings, registrations and records deemed
necessary by the Administrative Agent, and copies of any documents, filings and
Instruments on file in such jurisdictions;

 

(ii)         all financing statements, registrations, filings or other
Instruments for each appropriate jurisdiction as is necessary, in the
Administrative Agent’s sole discretion, to perfect, or maintain the perfection
of, the Administrative Agent’s security interest in the Collateral;

 

(iii)        all stock or membership certificates evidencing the Capital Stock
pledged to the Administrative Agent pursuant to the Pledge Agreements, together
with duly executed in blank, undated stock or transfer powers attached thereto
to the extent not previously delivered to Administrative Agent; and

 

(iv)        such other duly executed agreements, consents, notices or
Instruments as are necessary, in the Administrative Agent’s sole discretion, to
formalize, legalize, protect and perfect the Administrative Agent’s security
interest in the Collateral.

 

(e)          Liability, Casualty and Business Interruption Insurance. The
Administrative Agent shall have received copies of insurance policies or
certificates of insurance evidencing liability, casualty and business
interruption insurance meeting the requirements set forth herein or in the
Security Documents.

 

(f)          Fees. The Agents and the Lenders shall have received all fees, if
any, owing pursuant to the Fee Letters and Section 2.2.

 

(g)         Consents. The Administrative Agent shall have received evidence that
all material governmental, shareholder, board of director and third party
consents and approvals necessary in connection with the financings and other
transactions contemplated hereby have been obtained.

 

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(h)          Material Adverse Effect. No material adverse change shall have
occurred since June 30, 2011 in the business, properties, operations or
financial condition of the Credit Parties and their Subsidiaries taken as a
whole.

 

(i)          Officer’s Certificates. The Administrative Agent shall have
received a certificate executed by a Responsible Officer of each of the Credit
Parties as of the Closing Date, substantially in the form of Exhibit I hereto
stating that (i) except as set forth on Schedule 3.5, there is no pending or, to
the knowledge of any Credit Party threatened, litigation, investigation,
bankruptcy or insolvency, injunction, order or claim affecting or relating to
any Credit Party or any of its Subsidiaries, or any Royalty Interest or Project,
which has had, or would reasonably be expected to have, a Material Adverse
Effect, or which would reasonably be expected to affect the legality, validity
or enforceability of this Agreement or the other Credit Documents, that has not
been settled, dismissed, vacated, discharged or terminated prior to the Closing
Date and (ii) immediately after giving effect to this Agreement (including the
initial Loans hereunder), the other Credit Documents and all the transactions
contemplated therein to occur on such date, (A) no Default or Event of Default
exists, (B) all representations and warranties contained herein and in the other
Credit Documents are true and correct in all material respects, and (C) the
Credit Parties are in compliance with each of the financial covenants set forth
in Section 6.16.

 

(j)          Additional Matters. Such other approvals, opinions, documents or
Instruments as the Administrative Agent may reasonably request, and all
documents and legal matters in connection with the transactions contemplated by
this Agreement shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.

 

Section 5.2           Conditions to All Loans. The obligation of each Lender to
make any Loan hereunder, including the initial Loan and each Incremental Loan,
is subject to the satisfaction of the following conditions precedent on the date
of making such Loan:

 

(a)          Representations and Warranties. The representations and warranties
made by the Credit Parties herein, in the Security Documents or which are
contained in any certificate furnished at any time under or in connection
herewith shall be true and correct on and as of the date of such Loan as if made
on and as of such date, except for representations and warranties expressly
stated to relate to a specific earlier date.

 

(b)          No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to
such Loan.

 

(c)          Compliance with Commitments. Immediately after giving effect to the
making of any such Loan (and the application of the proceeds thereof), the
aggregate sum of all outstanding Loans shall not exceed the Committed Amount.

 

(d)          Litigation. Except for litigation disclosed on Schedule 3.5, there
shall not exist any litigation, investigation, bankruptcy or insolvency,
injunction, order or claim affecting or relating to any Credit Party or any of
its Subsidiaries, or any Royalty Interest or Project, which has had, or would
reasonably be expected to have, a Material Adverse Effect, or which would
reasonably be expected to affect the legality, validity or enforceability of
this Agreement and the other Credit Documents, that has not been settled,
dismissed, vacated, discharged or terminated.

 

49

 

 

(e)          Additional Conditions to Loans. All conditions set forth in
Section 2.1, including delivery of an executed Notice of Borrowing, shall have
been satisfied, and all of the conditions set forth in Section 5.1 shall have
been, and shall remain, satisfied, and the Borrower shall have certified the
satisfaction of all such conditions precedent by its delivery of a Notice of
Borrowing.

 

(f)          Compliance Certificate. The Borrower shall have delivered to the
Administrative Agent a certificate of a Responsible Officer of the Borrower
demonstrating compliance with the financial covenants contained in Section 6.16
by calculation thereof as of the end of the most recently completed fiscal
quarter.

 

(g)          Evidence of Mortgage Filings. The Administrative Agent shall have
received copies of each Mortgage as filed with the appropriate county recording
office, together with a supplemental legal opinion from legal counsel to the
Credit Parties, in form and content reasonably acceptable to the Required
Lenders, confirming the perfection in favor of the Administrative Agent of
enforceable first priority Liens on the Collateral Royalties and on the other
property rights and interests of each Credit Party that are subject to the
Security Documents, substantially in the form of the security legal opinions
delivered to the Administrative Agent in connection with the Existing Agreement.

 

Each request for a Loan shall be deemed to constitute representations and
warranties by the Borrower as of the date of such Loan that the applicable
conditions in paragraphs (a) through (g) of this Section have been, and remain,
satisfied.

 

ARTICLE VI
AFFIRMATIVE COVENANTS

 

The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and all the Obligations
owing to the Administrative Agent or any Lender hereunder, are irrevocably paid
in full, the Credit Parties shall, and shall cause each of their Subsidiaries
to:

 

Section 6.1           Financial Statements and Information. Furnish to the
Administrative Agent:

 

(a)          Annual Financial Statements. As soon as available, but in any event
within ninety (90) days after the end of each fiscal year, a copy of the
consolidated balance sheet of Royal Gold and its consolidated Subsidiaries as at
the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows of Royal Gold and its consolidated
Subsidiaries for such year which shall be audited by a firm of independent
certified public accountants of recognized standing reasonably acceptable to the
Administrative Agent, setting forth in each case in comparative form the figures
for the previous year, reported on without a “going concern” or like
qualification or exception, or qualification indicating that the scope of the
audit was inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification;

 

50

 

 

(b)          Quarterly Financial Statements. As soon as available and in any
event within sixty (60) days after the end of each of the first three fiscal
quarters of each fiscal year, a copy of the consolidated balance sheet of Royal
Gold and its consolidated Subsidiaries as at the end of such period and related
consolidated statements of income and retained earnings and of cash flows for
Royal Gold and its consolidated Subsidiaries for such quarterly period and for
the portion of the fiscal year ending with such period, in each case setting
forth in comparative form consolidated figures for the corresponding period or
periods of the preceding fiscal year (subject to normal recurring year-end audit
adjustments);

 

(c)          Financial Statement Standards. All financial statements shall be
complete and correct in all material respects (subject, in the case of interim
statements, to normal recurring year-end audit adjustments and the lack of
footnotes) and prepared in reasonable detail and, in the case of the annual and
quarterly financial statements provided in accordance with subsections (a) and
(b) above, in accordance with GAAP applied consistently throughout the periods
reflected therein and further accompanied by a description of, and an estimation
of the effect on the financial statements on account of, a change, if any, in
the application of accounting principles as provided in Section 1.4;

 

(d)          Officer’s Certificate. At the time of delivery of the financial
statements provided for in Sections 6.1(a) and 6.1(b) above, a certificate of a
Responsible Officer of the Borrower substantially in the form of Exhibit J,
(i) demonstrating compliance with the financial covenants contained in
Section 6.16 by calculation thereof as of the end of each such fiscal period,
and (ii) stating that no Default or Event of Default exists, or if any Default
or Event of Default does exist, specifying the nature and extent thereof and
what action the Credit Parties propose to take with respect thereto; and

 

(e)          Other Information. Each Credit Party shall deliver to the
Administrative Agent such other information (in form reasonably acceptable to
the Administrative Agent) regarding the conditions or operations, financial or
otherwise, of each Credit Party, the Royalty Interests, the Projects, the
Project Properties or any other properties or activities of a Credit Party as
the Administrative Agent may reasonably request from time to time to the extent
such information is in the possession or control of a Credit Party and not
subject to confidentiality restrictions that prevent the Borrower’s disclosure
thereof.

 

Section 6.2           Notices. Promptly provide written notice to the
Administrative Agent (which shall promptly transmit such notice to each Lender)
of:

 

(a)          the occurrence of any Default or Event of Default, which notice
shall be provided in any event within two (2) Business Days after any Credit
Party knows or has reason to know thereof;

 

(b)          the occurrence of any default or event of default known to a Credit
Party under any Material Contract of any Credit Party or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse Effect or involve
a monetary claim in excess of $15,000,000;

 

51

 

 

(c)          any litigation, lawsuit, action, claim or dispute, or any
investigation or proceeding known to any Credit Party, (i) affecting any Credit
Party or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect or involve a monetary
claim in excess of $15,000,000, (ii) affecting or with respect to this Agreement
or any other Credit Document or (iii) involving an environmental claim or
potential liability of any Credit Party or any of its Subsidiaries under
Environmental Laws in excess of $15,000,000;

 

(d)          any loss or damage to the Collateral in excess of $10,000,000,
exclusive of diminution in value caused solely by changes in the price of any
Metal from time to time;

 

(e)           the consummation by any Credit Party of any purchase or
acquisition transaction involving a Royalty Interest with a value in excess of
$50,000,000, whether a new Royalty Interest or an addition to or increase in an
existing Royalty Interest;

 

(f)          any acquisition of an additional interest in a Project that is
subject to a Collateral Royalty;

 

(g)          every notice, and the contents thereof, received by a Borrower in
relation to any renewal of any rights with respect to, or having a material
adverse effect upon any Collateral Royalty or associated Project, including
notices pertaining to the loss of or a failure to obtain or a failure to be able
to renew such interest in a material part of such Project, together with a copy
of such notice if in writing;

 

(h)          every default or other adverse claim or demand made by any Person
which would, if successful, constitute a Material Adverse Effect;

 

(i)          every press release issued by a Credit Party together with a copy
of such press release, and any other occurrence, matter, event or thing (other
than changes in the price of Gold or other Metals) constituting a Material
Adverse Effect, together with a reasonably detailed explanation of such other
occurrence, matter, event or thing;

 

(j)          each material memorandum, letter or report received by a Credit
Party from any Project Manager concerning any Collateral Royalty or associated
Project, including (to the extent received by a Borrower and not subject to
confidentiality restrictions that prevent such Credit Party from disclosure
thereof) the annual strategic business plan and all reserve, mine plan and/or
operating reports received by a Credit Party with respect to a Project that is
subject to a Collateral Royalty, together with a copy of such plans and reports;

 

(k)          any notice of any material violation of or material noncompliance
by any Credit Party or any Subsidiary thereof with any Requirement of Law
received by any Credit Party from any Governmental Authority;

 

(l)          any amendment or waiver of, or any notice of default or event of
default with respect to, the Term Loan Agreement;

 

(m)        promptly after a Responsible Officer of a Credit Party obtains
knowledge thereof, any attachment, judgment, Lien, levy or order exceeding
$5,000,000 that is, or is reasonably likely to be, assessed against any Credit
Party other than Permitted Liens; and

 

52

 

 

(n)          promptly after a Responsible Officer of a Credit Party obtains
knowledge thereof, any other development, occurrence or event (other than
changes in the price of Gold or other Metals) which could reasonably be expected
to have a Material Adverse Effect.

 

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Credit Parties propose to take with respect thereto,
if any. In the case of any notice of a Default or Event of Default, the Borrower
shall specify that such notice is a Default or Event of Default notice on the
face thereof. For so long as the Administrative Agent and the “Administrative
Agent” (as defined in the Term Loan Agreement) shall be the same financial
institution or servicer, a notice under this Section 6.2 shall constitute notice
under Section 6.2 of the Term Loan Agreement and a notice under Section 6.2 of
the Term Loan Agreement shall constitute notice under this Section 6.2.

 

Section 6.3           Payment of Taxes and Other Obligations. Each Credit Party
and its Subsidiaries shall pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its Taxes in
the United States, Canada and Mexico, all its material Taxes in all
jurisdictions other than the United States, Canada and Mexico, and all other
material obligations and liabilities of whatever nature which, in each of the
foregoing cases, if unpaid, could become a Lien upon the Collateral, and any
additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such Taxes, obligations and liabilities. Each
Credit Party shall have the right, however, to contest in good faith the
validity or amount of any such Taxes by proper proceedings timely instituted,
and may permit the Taxes so contested to remain unpaid during the period of such
contest if: (a) it diligently prosecutes such contest, (b) it sets aside on its
books adequate reserves in conformity with GAAP with respect to the contested
items, (c) during the period of such contest, the enforcement of any contested
item is effectively stayed, (d) such contest does not involve any material risk
of the sale, forfeiture or loss of any part of the Collateral and provided such
non-payment is permitted by the appropriate taxing legislation. Each Credit
Party shall promptly pay or cause to be paid any valid final judgment enforcing
any such taxes and cause the same to be satisfied of record.

 

Section 6.4           Payment of Indebtedness. Except as would not constitute a
Default or an Event of Default pursuant to Section 8.1(d), each Credit Party
shall pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all of its Indebtedness and other
material obligations of whatever nature, except for any Indebtedness or other
material obligations which are being contested in good faith and by appropriate
proceedings if (a) reserves in conformity with GAAP with respect thereto are
maintained on its books, and (b) such contest does not involve any material risk
of the sale, forfeiture or loss of any part of the Collateral.

 

Section 6.5           Conduct of Business and Maintenance of Existence. Each
Credit Party shall continue to engage in business of the same general type as
conducted by it on the Closing Date; preserve, renew and keep in full force and
effect its existence and good standing in its jurisdiction of organization and
each other jurisdiction where the failure to so qualify could not reasonably be
expected to have a Material Adverse Effect; take all reasonable action to
maintain all rights, privileges and franchises necessary or desirable in the
normal conduct of its business; comply with all Material Contracts except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

53

 

 

Section 6.6           Maintenance of Collateral Royalty Interests and Defend
Title. Each Credit Party shall, at its own cost and expense, maintain, warrant
and defend the title to the Collateral Royalties and the other Collateral
against the claims and demands of all Persons whomsoever, except as permitted in
writing by the Administrative Agent and except for matters disclosed in the
Title Opinion and not objected to by the Administrative Agent.

 

Section 6.7           Maintenance of Liens. Each Credit Party shall take all
action required or desirable to maintain and preserve the Liens of the
Administrative Agent on the Collateral and, to the extent required under each
Security Document, the first priority thereof. Each Credit Party, at no cost to
the Administrative Agent or any Lender, shall from time to time execute,
deliver, file and record, and each Credit Party authorizes the Administrative
Agent to file and record, any and all further Instruments (including financing
statements, continuation statements and similar statements with respect to any
of the Security Documents) reasonably requested by the Administrative Agent for
such purposes, including such as may be necessary to include within the
Collateral (a) any additional real property interests or other increase in the
Collateral Royalties and (b) any other or additional Royalty Interests included
or added as a Collateral Royalty.

 

Section 6.8           Maintenance and Perfection of Pledged Assets. Each Credit
Party shall, and shall cause each of its Subsidiaries to, cause 100% of the
Capital Stock of each of High Desert and RG Mexico, Inc. to be subject at all
times, subject to the requirements of the Intercreditor Agreement, to a first
priority, perfected Lien in favor of the Administrative Agent pursuant to the
terms and conditions of the Security Documents or such other security documents
as the Administrative Agent shall reasonably request, including the delivery of
all share certificates therefor.

 

Section 6.9           Title Opinions. Not later than forty-five (45) days after
the Closing Date, the Credit Parties shall have obtained and provided to the
Administrative Agent updated Title Opinions with respect to the Nevada
Royalties, which shall be in form and substance acceptable to the Administrative
Agent.

 

Section 6.10         Insurance. Maintain with financially sound and reputable
insurance companies (i) insurance on all its property (including without
limitation its tangible Collateral) insuring against at least such risks as are
usually insured against in the same or a similar business and as required by
Requirements of Law and (ii) liability insurance covering at least such risks as
are usually insured against in the same or a similar business and as required by
Requirements of Law; and furnish to the Administrative Agent, upon request, full
information as to the insurance carried. The present insurance coverage of the
Credit Parties as of the Closing Date is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 6.10. Upon the request of the
Administrative Agent from time to time, each Credit Party shall deliver to the
Administrative Agent evidence of the insurance then in effect, including a
detailed list of such insurance containing the information set forth on Schedule
6.10.

 

54

 

 

Section 6.11         Inspection of Property; Books and Records; Discussions.

 

(a)          Keep proper books of records and accounts in which full, true,
correct and complete entries shall be made of all dealings and transactions in
relation to its businesses and activities, such entries to be in conformity with
GAAP and all Requirements of Law.

 

(b)          Permit, during normal business hours and upon reasonable notice,
the Administrative Agent, any Lender or any agent or representative of the
foregoing to examine the books of record and accounts, to visit, examine and
inspect the properties of the Credit Parties, to examine and make abstracts from
any of the books and records of the Credit Parties and their Subsidiaries and to
discuss the affairs, finances and accounts of each Credit Party with such Credit
Party’s principal officers, engineers, technical staff and independent
accountants, at such intervals as the Administrative Agent may desire; provided,
however, that (1) the Administrative Agent, the Lenders and their agents and
representatives shall provide such Credit Party with at least five Business
Days’ notice of any visit and shall use commercially reasonable efforts not to
disrupt such Credit Party’s business during any such visits, and (2) so long as
no Event of Default shall have occurred and be continuing, the Credit Parties
shall not be responsible for the cost and expense of any visit or inspection to
a Project or more than one visit or inspection per calendar year in the
aggregate by the Administrative Agent and the Lenders. Upon any request by the
Administrative Agent to visit and inspect any Project associated with a
Collateral Royalty, each Credit Party will use commercially reasonable efforts
to make arrangements with the Project Manager for such a visit to and inspection
of such Project Property by the Administrative Agent or its agents or
representatives (it being understood that any such inspection or visit shall be
(1) at the risk of the Administrative Agent and the Lenders, as applicable, and
(2) subject to all limitations applicable to inspections of or visits to such
Projects by the Credit Parties).

 

Section 6.12         Compliance with Law. Each Credit Party shall, and shall
cause each of its Subsidiaries to, comply in all respects with all Requirements
of Law, including Environmental Laws and Governmental Approvals, applicable to
it and its property, except where any noncompliance or violation has not had,
and could not reasonably be expected to have, a Material Adverse Effect.

 

Section 6.13         Environmental Laws. Defend, indemnify and hold harmless the
Agents and the Lenders, and their respective Affiliates, employees, agents,
consultants, representatives, officers, managers and directors, from and against
any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of, or in any way relating to or associated
with the violation of, noncompliance with or investigation, liability, claim,
lawsuit, failure or action under, any Environmental Law applicable to the
operations of the Credit Parties or any of their Subsidiaries or to the
Properties or the Projects, or any orders, requirements, remediation,
reclamation, settlements, response or demands of Governmental Authorities
related thereto, or with respect to the release, presence, handling or disposal
of Materials of Environmental Concern at any Property or Project, including
reasonable attorney’s and consultant’s fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of (i) the gross negligence or willful misconduct
of the party seeking indemnification therefor as determined by a court of
competent jurisdiction in a final and non-appealable judgment or (ii) any other
loan facility or other interest in the Properties or the Projects not
attributable to this Agreement or the other Credit Documents. The agreements in
this paragraph shall survive repayment of the Obligations.

 

55

 

 

Section 6.14         Compliance with ERISA. Each Credit Party shall (a) comply
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Plans, (b) not take any action or
fail to take any action the result of which could be a liability to the PBGC or
to a Multiemployer Plan, (c) not participate in any prohibited transaction that
would result in any civil penalty under ERISA or tax under the Code, (d) operate
each Plan in such a manner that will not incur any tax liability under
Section 4980B of the Code or any liability to any qualified beneficiary as
defined in Section 4980B of the Code and (e) furnish to the Administrative Agent
upon the Administrative Agent’s request such additional information about any
Plan as may be reasonably requested by the Administrative Agent.

 

Section 6.15         Further Assurances. Each Credit Party shall execute,
acknowledge and deliver to the Administrative Agent such other and further
documents and Instruments and do or cause to be done such other acts as the
Administrative Agent reasonably determines to be necessary or desirable to
effect the intent of the parties to this Agreement or otherwise to protect and
preserve the interests of the Administrative Agent and the Lenders hereunder,
promptly upon request of the Administrative Agent, including the execution and
delivery of any and all documents which are necessary or advisable to create,
protect or maintain in favor of the Administrative Agent, for the benefit of the
Lenders, Liens on all Collateral of the Credit Parties as may be required by
this Agreement or any Security Document that are duly perfected in accordance
with all applicable Requirements of Law.

 

Section 6.16         Financial Covenants. The Credit Parties shall at all times
maintain and comply with the following financial covenants:

 

(a)          Leverage Ratio. The Leverage Ratio shall be less than or equal to
3.0 to 1.0.

 

(b)          Consolidated Net Worth. A Consolidated Net Worth of not less than
an amount equal to (i) 80% multiplied by (ii) the sum of (A) $480,782,000, plus
(B) 50% of the cumulative positive quarterly net income for the period beginning
July 1, 2008 and ending with the most recently completed fiscal quarter for
which financial statements have been provided pursuant to Section 6.1(b).

 

(c)          Interest Coverage Ratio. The Interest Coverage Ratio shall be
greater than 3.0 to 1.0.

 

(d)          Current Ratio. The Current Ratio shall be greater than or equal to
1.5 to 1.0.

 

(e)          Debt Service Coverage Ratio. The Debt Service Coverage Ratio shall
not be less than 1.25 to 1.0.

 

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ARTICLE VII
NEGATIVE COVENANTS

 

The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Obligations
owing to the Administrative Agent or any Lender hereunder, are irrevocably paid
in full, that:

 

Section 7.1           Indebtedness. Each of the Credit Parties will not, nor
will it permit any Subsidiary to, contract, create, incur, assume or permit to
exist any Indebtedness, except, to the extent that none of the following,
individually or in the aggregate, would create or result in a breach of the
Leverage Ratio:

 

(a)          Indebtedness arising or existing under this Agreement and the other
Credit Documents;

 

(b)          Indebtedness existing as of the Closing Date as referenced in the
financial statements referenced in Section 3.3 (and set out more specifically in
Schedule 7.1 hereto) together with any refinancings or replacements thereof that
do not increase the principal amount thereof;

 

(c)          Indebtedness incurred after the Closing Date consisting of Capital
Leases or Indebtedness incurred to provide all or a portion of the purchase
price of furniture, fixtures and equipment; provided that (i) such Indebtedness
when incurred shall not exceed the purchase price or cost of construction of
such furniture, fixtures and equipment; (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; and (iii) the total amount of all such
Indebtedness shall not exceed $2,500,000 at any time outstanding and renewals,
refinancings or extensions thereof in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension;

 

(d)          Unsecured intercompany Indebtedness between any Credit Parties,
between Subsidiaries of the Credit Parties or between any Credit Party and a
Subsidiary thereof; provided that any such Indebtedness owing by a Credit Party
to a Subsidiary shall be fully subordinated to the Obligations hereunder on
terms and conditions satisfactory to the Required Lenders;

 

(e)          Indebtedness and obligations owing under Hedging Agreements entered
into in order to manage existing or anticipated business risks and not for
speculative purposes; provided, that at all times no such Hedging Agreement
requires a Credit Party or a Subsidiary to post collateral or margin to secure
its obligations under such Hedging Agreement;

 

(f)          Indebtedness in respect of Guaranty Obligations to the extent
permitted under Section 7.3;

 

(g)         Unsecured Indebtedness of any Credit Party or any Subsidiary in an
aggregate amount not to exceed $5,000,000 at any time outstanding;

 

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(h)          Indebtedness that (i) is unsecured, (ii) does not have a scheduled
maturity date prior to the Maturity Date, (iii) such Indebtedness does not
contain any mandatory prepayments in cash, (iv) such Indebtedness is created and
incurred pursuant to a public bond offering on terms and conditions that are
customary for similar Indebtedness in light of then-prevailing market conditions
as reasonably determined by the Credit Parties, (v) at the time of any such
incurrence of Indebtedness and after giving effect thereto on a pro forma basis,
the Leverage Ratio is less than or equal to 3.0 to 1.0, (vi) the aggregate
principal amount of Indebtedness outstanding at any time in reliance on this
clause (h) when taken together with Indebtedness incurred in reliance on clause
(g) above, shall not exceed $350,000,000 in the aggregate, and (vii) to the
extent that the Term Loan Agreement remains in effect at the time of the
incurrence of Indebtedness in reliance on this clause (h), the Credit Parties
shall use and apply the proceeds of the Indebtedness incurred in reliance on
this clause (h) to the repayment in full of the Term Loan Agreement, at which
time the Term Loan Agreement will be cancelled and terminated; provided,
however, the Credit Parties shall have delivered a certificate of a Responsible
Officer to the Administrative Agent at least ten (10) Business Days prior to the
incurrence of such Indebtedness providing a calculation of the Leverage Ratio on
a pro forma basis assuming the incurrence of such Indebtedness and stating that
the Credit Parties have determined in good faith after due investigation that
the terms and conditions of the proposed Indebtedness pursuant to this clause
(h) satisfy the conditions precedent set forth in this clause (h);

 

(i)          Indebtedness arising or existing under the Term Loan Agreement; and

 

(j)          Indebtedness of any Credit Party that is subordinated to the
Obligations; provided, however, that (i) the subordination of such Indebtedness
is pursuant to a written subordination agreement satisfactory to the Required
Lenders in their sole discretion, (ii) the terms, conditions and amount of any
such subordinated Indebtedness shall be satisfactory to the Required Lenders in
their sole discretion, (iii) the stated maturity date or mandatory redemption
date of such subordinated Indebtedness shall not be prior to the Maturity Date,
and (iv) immediately prior to and immediately after giving pro forma effect to
the full amount of such subordinated Indebtedness, no Default or Event of
Default shall occur hereunder.

 

Section 7.2           Liens. Each of the Credit Parties will not, nor will it
permit any Subsidiary to, directly or indirectly, contract, create, incur,
assume, permit or suffer to exist, or agree to grant or create, any Lien with
respect to any of its property or assets of any kind (whether real or personal,
tangible or intangible), including the Royalty Interests, the Non-Credit Party
Royalty Interests or any Collateral, whether now owned or hereafter acquired,
except for Permitted Liens. Notwithstanding the foregoing, if a Credit Party
shall grant a Lien on any of its assets in violation of this Section 7.2, then
it shall be deemed to have simultaneously granted an equal and ratable Lien on
any such assets in favor of the Administrative Agent for the benefit of the
Lenders, to the extent such a Lien has not already been granted to the
Administrative Agent.

 

Section 7.3           Guaranty Obligations. The Credit Parties will not,
directly or indirectly, enter into or otherwise become or be liable in respect
of any Guaranty Obligations other than (a) those in favor of the Administrative
Agent or the Lenders in connection herewith, and (b) Guaranty Obligations by the
Credit Parties and their Subsidiaries with respect to Indebtedness permitted
under Section 7.1 (except, as regards Indebtedness under subsection (b) thereof,
only if and to the extent such Indebtedness was guaranteed on the Closing Date).

 

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Section 7.4           Nature of Business. Each of the Credit Parties will not,
nor will it permit any Subsidiary to, engage in any business activities or
operations substantially different from the business of ownership of
non-executory interests in mining properties or capital stock of companies in
the mining sector and activities and operations reasonably related thereto;
provided, however, that the Credit Parties shall be permitted to enter into
exploration agreements with respect to mining properties owned by it and into
joint venture agreements or other similar business arrangements pursuant to
which its executory or ownership interests are convertible into Royalties.

 

Section 7.5           Dissolution or Sale of Assets. Each of the Credit Parties
will not, nor will it permit any Subsidiary to (whether in one transaction or in
a series of transactions and whether directly or indirectly): (a) dissolve,
liquidate or wind up its affairs, except for the dissolution, liquidation or
winding up of the affairs of any Non-Credit Party at such time as such
Non-Credit Party has no material assets; provided that the Credit Parties have
provided advance written notice thereof to the Administrative Agent; or
(b) sell, assign, transfer, lease to a third party or otherwise dispose of its
business or assets as a whole or in an amount which constitutes a substantial
portion thereof, except with respect to any Non-Credit Party that has no
material assets, which shall be permitted so long as no Default or Event of
Default has occurred and is continuing, or would otherwise occur as a result of
such action; provided that the Credit Parties have provided advance written
notice thereof to the Administrative Agent; or (c) sell, assign, transfer, lease
to a third party or otherwise dispose of any material property or asset,
including any Royalty Interest or Non-Credit Party Royalty Interest, equity
interests of any Non-Credit Party or any portion of the foregoing; or (d) agree
to do any of the foregoing at a future time; except, in the case of clause (c),
a Credit Party or Non-Credit Party shall be permitted to undertake the following
actions so long as no Default or Event of Default has occurred and is
continuing, or would occur as a result of such action:

 

(i)          the sale, assignment, lease, transfer or other disposition in the
ordinary course of business of (A) Metals received with respect to any Royalty
Interest and Metals purchased pursuant to a Metal Streaming Transaction, (B)
property that has become obsolete or worn out or no longer used in the conduct
of business, (C) Non-Credit Party Royalty Interests and Royalty Interests (other
than Collateral Royalties) other than Royalties on or with respect to precious
Metals, (D) Non-Credit Party Royalty Interests and Royalty Interests (other than
Collateral Royalties) in respect of precious Metals in a total aggregate amount
for all Credit Parties and Non-Credit Parties not to exceed $15,000,000 in any
calendar year, or (E) the assets set forth on Schedule 7.5, or (F) other assets
not constituting Royalty Interests, Non-Credit Party Royalty Interests or
Metals, in an aggregate amount not to exceed $5,000,000 in any calendar year;

 

(ii)         the swap or exchange of any Non-Credit Party Royalty Interest or
Royalty Interest not constituting a Collateral Royalty for another Non-Credit
Party Royalty Interest or Royalty Interest of at least reasonably equivalent
value, as determined by the Board of Directors of Royal Gold and approved in
writing by the Administrative Agent (or, to the extent that the Royalty Interest
or Non-Credit Party Royalty Interest to be acquired is less than reasonably
equivalent value, such swap or exchange shall be permitted if the net
disposition amount would be permitted pursuant to the immediately preceding
clause (i)); or

 

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(iii)        the sale, assignment, lease or transfer of property or assets,
other than a Collateral Royalty, to the Credit Parties or any Subsidiary
thereof.

 

Section 7.6           Mergers. Each of the Credit Parties will not, nor will it
permit any Subsidiary to, (whether in one transaction or in a series of
transactions and whether directly or indirectly): (a) enter into any transaction
of amalgamation, merger, consolidation, partnership, joint venture or other
combination where such combination involves a contribution by a Credit Party or
a Subsidiary thereof of all or a substantial portion of its assets, except, in
each case, for the amalgamation, merger or consolidation of a Credit Party or a
Subsidiary thereof with and into another Credit Party or the amalgamation,
merger or consolidation of any Subsidiary that is not a Credit Party with and
into another Subsidiary that is not a Credit Party; provided that if a Borrower
is a party thereto, such Borrower will be the surviving corporation, or (b)
agree to do any of the foregoing at a future time.

 

Section 7.7           Advances and Loans. Each of the Credit Parties will not,
nor will it permit any Subsidiary to, lend money or extend credit or make
advances (collectively, “Debt Investments”) to any Person except for: (a)
receivables owing to any Credit Party or any of its Subsidiaries, and advances
to suppliers and other extensions of trade credit, in each case if created,
acquired or made in the ordinary course of business and payable or dischargeable
in accordance with customary trade terms; (b) intercompany Debt Investments
permitted pursuant to Section 7.1; (c) non-cash consideration received in
connection with sales of property or assets permitted under Section 7.5; (d)
Debt Investments existing as of the Closing Date as set forth on Schedule 7.7;
(e) purchases and investments made in connection with the creation, development,
acquisition or other investment in any Royalty Interest or Non-Credit Party
Royalty Interest; (f) Debt Investments to employees of the Credit Parties or any
Subsidiary to finance travel, entertainment and relocation expenses and other
ordinary business purposes; (g) customary deposits in connection with operating
leases and good faith deposits made in connection with an acquisition otherwise
permitted hereunder; (h) Cash Equivalents; and (i) Guaranty Obligations
otherwise permitted hereunder. For clarity, the requirements of this Section 7.7
shall not limit the ability of the Credit Parties or any Subsidiary thereof to
make equity investments or to invest in Royalty Interests, Non-Credit Party
Royalty Interests or Metal Streaming Transactions.

 

Section 7.8           Transactions with Affiliates. Each of the Credit Parties
will not, nor will it permit any Subsidiary to, enter into any transaction or
series of transactions, whether or not in the ordinary course of business, with
any officer, director, shareholder or Affiliate that is not a Credit Party or
Subsidiary thereof other than on terms and conditions substantially as favorable
as would be obtainable in a comparable arm’s-length transaction with a Person
other than an officer, director, shareholder or Affiliate, except for (a)
dividends and distributions to shareholders otherwise permitted hereunder and
(b) expense reimbursement and reasonable salaries and other reasonable director
or employee compensation to officers and directors of the Credit Parties and
their Subsidiaries.

 

Section 7.9           Organizational Documents. Each of the Credit Parties will
not, nor will they permit any of its Subsidiaries to, amend, modify or change
their articles of incorporation (or corporate charter or other similar
organizational document), operating agreement or bylaws (or other similar
document) in any material respect.

 

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Section 7.10         Modification of Material Agreements. Each of the Credit
Parties will not, nor will it permit any of its Subsidiaries to, without the
approval of the Administrative Agent, modify or amend any Collateral Royalty,
any Material Contract or any confidentiality agreements or provisions to which a
Credit Party is a party or otherwise subject in connection with a Collateral
Royalty or a Material Contract if such modification or amendment would be
adverse to the Lenders in any material respect. With respect to any
confidentiality agreement that any Credit Party may execute with respect to (i)
any existing Collateral Royalty or a Project related thereto, or (ii) any
Royalty Interest or the Project associated with such Royalty Interest acquired
after the date hereof with the proceeds of a Loan, such Credit Party shall use
commercially reasonable efforts to include appropriate provisions in such
confidentiality agreement authorizing the Credit Parties to provide to the
Administrative Agent and the Lenders information obtained by such Credit Party
pursuant to such confidentiality agreement.

 

Section 7.11         Limitation on Restricted Actions. Each of the Credit
Parties will not, nor will it permit any Subsidiary to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Person to (a) pay dividends or make
any other distributions to any Credit Party on its Capital Stock or with respect
to any other interest or participation in, or measured by, its profits, (b) pay
any Indebtedness or other obligation owed to any Credit Party, (c) make loans or
advances to any Credit Party, (d) sell, lease or transfer any of its properties
or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets
pursuant to the Credit Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(e) above) for such encumbrances or restrictions
existing under or by reason of (i) this Agreement and the other Credit
Documents, (ii) applicable Requirements of Law, (iii) pursuant to any document
or Instrument governing Indebtedness permitted by Section 7.1(c), provided that
any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, (iv) any Permitted Lien or any
document or Instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien, (v) customary restrictions on the assignment of or granting
of a Lien on a particular lease, sublease, license or contract set forth in such
lease, sublease, license or contract entered into in the ordinary course of
business, (vi) restrictions on the pledge of interests in or assets of joint
ventures contained in the applicable joint venture agreement, (vii) customary
restrictions and conditions relating to a disposition of property or assets
permitted hereunder pending the consummation of such disposition, and (viii)
restrictions contained in the Term Loan Agreement.

 

Section 7.12         Maintenance of Collateral Royalties. Each of the Credit
Parties will not, nor will it permit any Subsidiary to, enter into any agreement
or undertaking, or otherwise act to sell, assign, transfer or create or suffer
the creation of rights of any Person other than a Credit Party or the
Administrative Agent or the Lenders in or with respect to a Collateral Royalty
or any Metals accruing to the account of a Credit Party pursuant thereto.

 

Section 7.13         Canadian Pension Plans. Each Credit Party shall not:

 

(a)          terminate, or permit any other Credit Party to terminate, any
Canadian Pension Plan in a manner, or take any other action with respect to any
Canadian Pension Plan which could reasonably be expected to result in any
material liability of a Credit Party;

 

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(b)          fail to make, or permit any other Credit Party to fail to make,
full payment when due of all amounts which, under the provisions of any Canadian
Pension Plan, any agreement relating thereto or applicable Law, the Borrower or
any other Credit Party is required to pay as contributions thereto, except where
the failure to make such payments could not reasonably be expected to have a
Material Adverse Effect,

 

(c)          permit to exist, or allow any other Credit Party to permit to
exist, any accumulated funding deficiency, whether or not waived, with respect
to any Canadian Pension Plan in an amount which could reasonably be expected to
have a Material Adverse Effect;

 

(d)          contribute to or assume an obligation to contribute to, or permit
any other Credit Party to contribute to or assume an obligation to contribute
to, any “multi-employer pension plan” as such term is defined in the Pension
Benefits Act (Ontario), unless such contribution is required to be made by a
Requirement of Law;

 

(e)          acquire, or permit any other Credit Party to acquire, an interest
in any Person if such Person sponsors, maintains or contributes to, or at any
time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to any “multi-employer pension plan” as such term is
defined in the Pension Benefits Act (Ontario); provided that, any Credit Party
may acquire an interest in any such Person if such Person is acquired as a
Permitted Acquisition and no Credit Party has any legal liability to perform
such Person’s obligations or assume such Person’s liabilities; or

 

(f)          permit, or allow any other Credit Party to permit, the actuarial
present value of the benefit liabilities (computed on an accumulated benefit
obligation basis in accordance with GAAP) under all Canadian Pension Plans in
the aggregate to exceed the current value of the assets of all Canadian Pension
Plans in the aggregate that are allocable to such benefit liabilities, in each
case only to the extent such liabilities and assets relate to benefits to be
paid to employees of the Credit Parties, by an amount that could reasonably be
expected to cause a Material Adverse Effect.

 

Section 7.14         No Further Negative Pledges. Each of the Credit Parties
will not, nor will it permit any Subsidiary to, enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security to secure obligations
under such agreement if security is given for some other obligation, except
(a) pursuant to this Agreement and the other Credit Documents, (b) pursuant to
any document or Instrument governing Indebtedness incurred pursuant to
Section 7.1(c), provided that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith,
(c) in connection with any Permitted Lien or any document or Instrument
governing any Permitted Lien, provided that any such restriction contained
therein relates only to the asset or assets subject to such Permitted Lien, (d)
customary restrictions on the assignment of or granting of a lien on a
particular lease, sublease, license or contract set forth in such lease,
sublease, license or contract entered into in the ordinary course of business,
(e) restrictions on the pledge of interests in or assets of joint ventures
contained in the applicable joint venture agreement, (f) customary restrictions
and conditions relating to a disposition of property or assets permitted
hereunder pending the consummation of such disposition, and (g) restrictions
contained in the Term Loan Agreement.

 

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Section 7.15         No Prepayment of Permitted Indebtedness. To the extent that
any Credit Party has incurred permitted Indebtedness in accordance with Sections
7.1(g), 7.1(h) or 7.1(j) hereof, such Credit Party shall repay such Indebtedness
only in accordance with the terms thereof and shall not (i) voluntarily prepay
any principal of or interest on any such permitted Indebtedness, (ii) use
proceeds from any Loan to make any payment or prepayment of principal of or
interest on, or to create a sinking fund payment in respect of, any such
permitted Indebtedness, or (iii) pay, prepay, redeem or purchase or deposit
funds or property for the payment, prepayment, redemption or purchase of
permitted Indebtedness, except, in each case, for regularly scheduled interest
payments on such permitted Indebtedness made in compliance with the terms and
conditions thereof and, with respect to Indebtedness incurred in accordance with
Section 7.1(j), in compliance with the terms and conditions of the subordination
agreement with respect thereto. No Credit Party will make any payment on any
such permitted Indebtedness if such payment would result in a Default or Event
of Default hereunder, or with respect to Indebtedness incurred in accordance
with Section 7.1(j), if such payment would result in a breach or default of the
subordination agreement with respect thereto.

 

Section 7.16         Restrictive and Inconsistent Agreements. Each of the Credit
Parties will not, nor will it permit any Subsidiary to, enter into any
agreement, Instrument or undertaking or incur or suffer any obligation
prohibiting or inconsistent with the performance by such Credit Party of the
Obligations or its obligations under any Royalty Agreement.

 

ARTICLE VIII
EVENTS OF DEFAULT

 

Section 8.1           Events of Default. An Event of Default shall exist upon
the occurrence of any of the following specified events (each an “Event of
Default”):

 

(a)          Any Borrower shall fail to pay (i) any principal on any Loan when
due (whether at maturity, by reason of acceleration or otherwise) in accordance
with the terms hereof, or (ii) within five (5) Business Days of the date when
due, any interest, costs, fees or any other Obligation or other amount payable
hereunder or under any Credit Document when due (whether at maturity, by reason
of acceleration or otherwise) in accordance with the terms hereof; or any
Guarantor shall fail to pay on the Guaranty in respect of any of the foregoing
or in respect of any other Guaranty Obligations hereunder; or

 

(b)          Any representation or warranty of a Credit Party made or deemed
made herein, in the Security Documents or in any of the other Credit Documents
or which is contained in any certificate, document or financial statement
furnished at any time under or in connection with this Agreement provided by a
Responsible Officer shall prove to have been incorrect, false or misleading in
any material respect on or as of the date made or deemed made; or

 

(c)          Any Credit Party shall fail to observe, perform or comply with any
covenant contained in this Agreement (other than the covenants referred to in
paragraph (a) above) and such Credit Party shall have not remedied such default
within ten (10) days after written notice of such default has been given by the
Administrative Agent to the Borrower; or

 

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(d)          A default shall occur under any Credit Document, any Royalty
Agreement pertaining to a Collateral Royalty or any agreement pertaining to
Indebtedness permitted hereunder; or any Credit Party or any Subsidiary thereof
shall fail to pay any Indebtedness with a value, individually or in the
aggregate, in excess of $15,000,000 (excluding Indebtedness evidenced by the
Notes) or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the Instrument relating to such Indebtedness; or any other default under any
Instrument relating to any such Indebtedness, or any other event, shall occur
and shall continue after the applicable grace period, if any, specified in such
Instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or, other than as described in this Agreement, any Credit
Party shall default or fail to perform under any Credit Document and such Credit
Party shall have not remedied such default within ten (10) days after written
notice of such default has been given by the Administrative Agent to the
Borrower; or

 

(e)          (i) Any Credit Party or any of its Subsidiaries shall initiate or
commence any case, proceeding or other action (A) under any existing or future
Bankruptcy Law or at common law or in equity, or otherwise seeking to have it
judged bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, compromise, protection,
moratorium, relief, stay of proceedings of creditors generally (or any class of
creditors), composition or other relief with respect to it or its debts, or
(B) seeking appointment of a receiver, trustee, custodian, conservator or other
similar official for it or for all or any substantial part of its assets, or any
Credit Party or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) any Canadian Credit Party shall commit an act
of bankruptcy under the Bankruptcy and Insolvency Act (Canada), or makes an
assignment of its property for the general benefit of its creditors under such
Act, or makes a proposal (or files a notice of its intention to do so) under
such Act; or (iii) there shall be commenced against any Credit Party or any of
its Subsidiaries any case, proceeding or other action of a nature referred to in
clause (i) above (including without limitation any petition or application being
filed or made or other proceeding instituted against such Credit Party seeking a
receiving order under the Bankruptcy and Insolvency Act (Canada) which
(A) results in the entry of an order for relief or any such adjudication or
appointment; (B) remains undismissed, undischarged or unbonded for a period of
sixty (60) days; or C) in respect of which such Credit Party files an answer
admitting the material allegations of a petition filed against it in any such
proceeding; or (iv) there shall be commenced against any Credit Party or any of
its Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of their assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within sixty (60) days from the entry thereof; or iv) any
Credit Party or any of its Subsidiaries shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), (iii), or (iv) above; or (vi) any Credit Party or
any of its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or

 

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(f)          One or more judgments, orders, decrees or arbitration awards shall
be entered against any Credit Party or any Subsidiary thereof involving in the
aggregate a liability (to the extent not covered by third-party insurance with
respect to which coverage has not been disputed by the insurer) of $15,000,000
or more, and all such judgments, orders, decrees or arbitration awards shall not
have been paid and satisfied, vacated, discharged, stayed or bonded pending
appeal within thirty (30) days from the entry thereof, or any injunction,
temporary restraining order or similar decree shall be issued against any Credit
Party, any of its Subsidiaries or any of their respective Properties or Projects
that could reasonably be expected to result in a Material Adverse Effect; or

 

(g)          Any involuntary Lien or Liens for amounts then due in the aggregate
sum of $1,000,000 or more, of any kind or character (other than Permitted Liens)
shall attach to any assets or property of any Credit Party if such Lien or Liens
are not discharged or bonded pending proceedings to release such Lien or Liens
within sixty (60) days after the date of attachment or unless such Lien or Liens
are being contested in good faith; or

 

(h)          An Expropriation Event occurs with respect to any Collateral
Royalty or a Collateral Royalty is sold under threat of such taking, or
possession of any material portion of a Project Property pertaining to a
Collateral Royalty is taken through exercise of such power; or

 

(i)          Any Governmental Authority shall commence an investigation or take
any action with respect to any Credit Party or any Project or the Collateral,
which would result in a Material Adverse Effect on any Credit Party, unless such
action is set aside, dismissed or withdrawn within ninety (90) days of its
institution or such action is being contested in good faith and its effect is
stayed during such contest; or

 

(j)          There shall exist a defect or deficiency in title to any Royalty
Interest or the Project Properties (other than as identified in the Title
Opinion) which results in a Material Adverse Effect, and the Credit Parties have
not remedied such defect or deficiency within ten (10) days after written notice
of default has been given to the Borrower by the Administrative Agent or any
Lender; or

 

(k)          Any Lien established or purported to be established by the Security
Documents shall fail to constitute a valid and effective Lien in the Collateral
described therein, perfected and with first priority to the extent required by
the Security Document related thereto, or any Credit Party shall so state in
writing, and the Credit Parties have not remedied such default within ten (10)
days after written notice of default has been given to the Borrower by the
Administrative Agent or any Lender; or

 

(l)          There shall occur a Change of Control; or

 

(m)        Any event or change occurs with respect to the Pipeline Project,
including the abandonment or termination or the taking by power of expropriation
or eminent domain of all or any material portion thereof, which has a Material
Adverse Effect; or

 

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(n)          An “Event of Default” (as defined in the Term Loan Agreement) shall
occur and be continuing under the Term Loan Agreement; or

 

(o)          The Guaranty or any provision thereof for any reason shall cease to
be in full force and effect or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm any Guarantor’s obligations
under the Guaranty; or

 

(p)          Any other Credit Document shall fail to be in full force and effect
or to give the Administrative Agent and/or the Lenders the rights, powers and
privileges purported to be created thereby in any material respect (except as
such documents may be terminated or no longer in force and effect in accordance
with the terms thereof, other than those indemnities and provisions which by
their terms shall survive).

 

Section 8.2           Acceleration; Remedies. Upon the occurrence and during the
continuation of an Event of Default, then, (a) if such event is an Event of
Default specified in Section 8.1(e) above, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon), and all
other Obligations under the Credit Documents shall immediately become due and
payable, without notice from the Administrative Agent or any Lender, and (b) if
such event is any other Event of Default, any of the following actions may be
taken: with the written consent of the Required Lenders, the Administrative
Agent may, or upon the written request of the Required Lenders, the
Administrative Agent shall, (i) by notice to the Borrower declare all or any
portion of the Commitments to be terminated forthwith, whereupon such
Commitments shall immediately terminate, (ii) by notice of default to the
Borrower, declare the Loans (with accrued interest thereon) and all other
Obligations under the Credit Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable, (iii) hire, at the
expense of the Credit Parties, one or more Independent Engineers or other
consultants, and the Credit Parties agree to cooperate with such engineers and
consultants, (iv) exercise any rights or remedies of the Administrative Agent or
the Lenders under this Agreement or any other Credit Document, including,
without limitation, any rights or remedies with respect to the Collateral, and
(v) exercise any and all rights or remedies available to the Administrative
Agent or Lenders under applicable Requirements of Law, whether under law, in
equity or otherwise.

 

ARTICLE IX
THE AGENT

 

Section 9.1           Appointment. Each Lender hereby irrevocably designates and
appoints HSBC Bank USA, National Association as the Administrative Agent of such
Lender under this Agreement, and each such Lender irrevocably authorizes HSBC
Bank USA, National Association, as the Administrative Agent for such Lender, to
take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

 

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Section 9.2           Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care. Without limiting the foregoing, the Administrative Agent may
appoint one of its affiliates as its agent to perform the functions of the
Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.

 

Section 9.3           Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person’s own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of any of the Credit
Documents or for any failure of the Borrower to perform their obligations
hereunder or thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance by the Borrower of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower.

 

Section 9.4           Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless (a) a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent and (b) the Administrative Agent shall have received the
written agreement of such assignee to be bound hereby as fully and to the same
extent as if such assignee were an original Lender party hereto, in each case in
form satisfactory to the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under any of the Credit Documents in accordance with a request of the
Required Lenders or all of the Lenders, as may be required under this Agreement,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Notes.

 

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Section 9.5           Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default”. In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give prompt notice thereof to the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided, however, that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not taken, only with the consent or upon the authorization of the Required
Lenders, or all of the Lenders, as the case may be.

 

Section 9.6           Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of, and
investigation into, the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.

 

Section 9.7           Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity hereunder (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought under this Section, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of any Credit
Document or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the Administrative Agent’s gross negligence or willful misconduct, as determined
by a court of competent jurisdiction. The agreements in this Section 9.7 shall
survive the termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.

 

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Section 9.8           Administrative Agent in Its Individual Capacity. The
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to its Loans made or renewed by it and any Note issued to it, the Administrative
Agent shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not the Administrative Agent, and
the terms “Lender” and “Lenders” shall include the Administrative Agent in its
individual capacity.

 

Section 9.9           Successor Administrative Agent. The Administrative Agent
may resign as Administrative Agent upon 30 days’ prior notice to the Borrower
and the Lenders. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the Notes, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the Borrower with such approval not to be
unreasonably withheld (provided, however if an Event of Default shall exist at
such time, no approval of the Borrower shall be required hereunder), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Section 9.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

 

Section 9.10         Quebec Security.

 

(a)          For greater certainty each of the Lenders hereby irrevocably
constitutes HSBC Bank USA, National Association as the holder of an irrevocable
power of attorney (fondé de pouvoir within the meaning of Article 2692 of the
Civil Code of Québec) in order to hold hypothecs and security granted by any
Credit Party on property pursuant to the laws of the Province of Québec in order
to secure obligations of any Credit Party under any bond, debenture or similar
title of indebtedness, issued by any Credit Party, and hereby agrees that the
Administrative Agent, may act as the bondholder and mandatary (i.e. agent) with
respect to any shares, capital stock or other securities or any bond, debenture
or similar title of indebtedness that may be issued by any Credit Party and
pledged in favor of the Administrative Agent, for the benefit of the Lenders.
The execution by HSBC Bank USA, National Association, acting as fondé de pouvoir
and mandatary, prior to the Credit Agreement of any deeds of hypothec or other
security documents is hereby ratified and confirmed.

 

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(b)          Notwithstanding the provisions of Section 32 of An Act respecting
the special powers of legal persons (Québec), the Administrative Agent may
acquire and be the holder of any bond or debenture issued by any Credit Party
(i.e. the fondé de pouvoir may acquire and hold the first bond issued under any
deed of hypothec by any Credit Party).

 

(c)          The constitution of HSBC Bank USA, National Association as fondé de
pouvoir, and of the Administrative Agent as bondholder and mandatary with
respect to any bond, debenture, shares, capital stock or other securities that
may be issued and pledged from time to time to the Administrative Agent for the
benefit of the Lenders, shall be deemed to have been ratified and confirmed by
each Person accepting an assignment of, a participation in or an arrangement in
respect of, all or any portion of any Lenders’ rights and obligations under the
Credit Agreement by the execution of an assignment, including a joinder
agreement, or other agreement pursuant to which it becomes such assignee or
participant, and by each successor Administrative Agent by the execution of an
assignment and assumption agreement or other agreement, or by the compliance
with other formalities, as the case may be, pursuant to which it becomes a
successor Administrative Agent under the Credit Agreement.

 

(d)          HSBC Bank USA, National Association acting as fondé de pouvoir
shall have the same rights, powers, immunities, indemnities and exclusions from
liability as are prescribed in favor of the Administrative Agent in the Credit
Agreement, which shall apply mutatis mutandis to HSBC Bank USA, National
Association acting as fondé de pouvoir.

 

Section 9.11         Nature of Duties. Except as otherwise expressly stated
herein, any agent (other than the Administrative Agent) listed from time to time
on the cover page of this Agreement shall have no obligations, responsibilities
or duties under this Agreement or under any other Credit Document other than
obligations, responsibilities and duties applicable to all Lenders in their
capacity as Lenders; provided, however, that such agents shall be entitled to
the same rights, protections, exculpations and indemnifications granted to the
Administrative Agent under this Article IX in their capacity as an agent.

 

The relationship between the Lenders, Administrative Agent, Sole Lead Arranger,
Syndication Agent and Joint Bookrunners (collectively, “Lender Parties”), on the
one hand, and the Credit Parties, on the other hand, is solely that of lender
(or lender representative) and creditor. No Lender Party has any fiduciary
relationship or duty or any other implied duty to any Credit Party arising out
of or in connection with, and there is no agency, tenancy or joint venture
relationship between the Lender Parties and the Credit Parties by virtue of, any
Credit Document or any transaction contemplated therein.

 

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ARTICLE X

MISCELLANEOUS

 

Section 10.1         Amendments, Waivers and Release of Collateral. Neither this
Agreement, nor any of the Notes, nor any of the other Credit Documents, nor any
terms hereof or thereof may be amended, supplemented, waived or modified except
in accordance with the provisions of this Section nor may be released except as
specifically provided herein or in the Security Documents or in accordance with
the provisions of this Section 10.1. The Required Lenders may, or, with the
written consent of the Required Lenders, the Administrative Agent may, from time
to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of adding
any provisions to this Agreement or the other Credit Documents or changing in
any manner the rights of the Lenders or of the Borrower hereunder or thereunder
or (b) waive, on such terms and conditions as the Required Lenders may specify
in such instrument, any of the requirements of this Agreement or the other
Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement,
modification or release shall:

 

(i)          (A) reduce or increase the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon or waive any payment
default (other than a payment default that has been cured), or (B)  reduce the
stated rate of any interest or fee payable hereunder (other than interest at the
increased post-default rate) or extend the scheduled date of any payment
thereof, in each case without the written consent of all Lenders,

 

(ii)         increase the Committed Amount without the written consent of all
Lenders or the amount of any Lender’s Commitment without the written consent of
all Lenders directly affected thereby, or

 

(iii)        amend, modify or waive any provision of this Section 10.1 or change
the percentages specified in the definition of Required Lenders, without the
written consent of all the Lenders, or

 

(iv)        amend, modify or waive any provision of Article IX without the
written consent of the then Administrative Agent, or

 

(v)         release a Borrower or any other Credit Party from its obligations
under the Credit Documents or any Guarantor from its obligations under the
Guaranty, without the written consent of all of the Lenders, or

 

(vi)        release all of the Collateral or any material portion of the
Collateral that would result in the value of the Collateral being less than the
Collateral Requirement or amend the definition of Collateral Requirement, in
each case, without the written consent of all of the Lenders; or

 

(vii)       amend, modify or waive any provision of the Credit Documents
requiring consent, approval or request of the Required Lenders or all Lenders,
without the written consent of all of the Required Lenders or all Lenders, as
appropriate, and, provided, further, that no amendment, waiver or consent
affecting the rights or duties of the Administrative Agent under any Credit
Document shall in any event be effective, unless in writing and signed by the
Administrative Agent, as applicable, in addition to the Lenders required
hereinabove to take such action.

 

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Any such waiver, any such amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the other Credit Parties, the Lenders, the Administrative Agent and
all future holders of the Notes. In the case of any waiver, the Borrower, the
other Credit Parties, the Lenders, and the Administrative Agent shall be
restored to their former position and rights hereunder and under the outstanding
Loans and Notes and other Credit Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.

 

Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article IX (other than the provisions of Section 9.9);
provided, however, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver.

 

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan or similar action under
applicable Bankruptcy Law that affects the Loans, and each Lender acknowledges
that applicable Bankruptcy Law may supersede the unanimous consent provisions
set forth herein and (y) the Required Lenders may consent to allow a Credit
Party to use cash collateral in the context of a bankruptcy or Insolvency
Proceeding.

 

Section 10.2         Substitution of Lenders. In the event (a) the Borrower
receives a claim from any Lender for compensation under Section 2.12 hereof,
(b) the Borrower receives notice from any Lender of any illegality pursuant to
Section 2.11 hereof, (c) any Lender is in default in any material respect with
respect to its obligations under the Credit Documents, or (d) a Lender or
Participant fails to consent to an amendment or waiver requested under
Section 10.1 or Section 10.7(b) hereof, as applicable, at a time when the
Required Lenders or other Participants, as applicable, have approved such
amendment or waiver (any such Lender or Participant referred to in clause (a),
(b), (c), or (d) above being hereinafter referred to as an “Affected Lender”),
the Borrower may, in addition to any other rights the Borrower may have
hereunder or under applicable law, require, at its expense, any such Affected
Lender to assign, at par, without recourse, all of its interest, rights, and
obligations hereunder (including all of its Commitments and the Loans and other
amounts at any time owing to it hereunder and the other Credit Documents) to an
Eligible Assignee specified by the Borrower, provided that (i) such assignment
shall not conflict with or violate any law, rule or regulation or order of any
court or other governmental authority, (ii) the Borrower shall have paid to the
Affected Lender all monies (together with amounts due such Affected Lender
hereunder as if the Loans owing to it were prepaid rather than assigned) other
than such principal owing to it hereunder, and (iii) the assignment is entered
into in accordance with, and subject to the consents required by (other than the
consent of the Affected Lender), Section 10.7 hereof (provided any assignment
fees and reimbursable expenses due thereunder shall be paid by the Borrower).

 

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Section 10.3         Notices. Except as otherwise provided in Article II, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile or e-mail), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made (a) when delivered by hand, (b) when transmitted via telecopy (or other
facsimile device) to the number set out herein, (c) the Business Day immediately
following the day on which the same has been delivered prepaid (or pursuant to
an invoice arrangement) to a reputable national overnight air courier service,
(d) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, or (e) when delivered by e-mail,
upon the sender’s receipt of an acknowledgment from the intended recipient (such
as by the “return receipt requested” function, as available, return e-mail or
other written acknowledgment), provided that if such notice, request or demand
is not sent during the normal business hours of the recipient, such notice,
request or demand shall be deemed to have been sent at the opening of business
on the next Business Day for the recipient, in each case, addressed as follows
in the case of the Borrower, the other Credit Parties and the Administrative
Agent, and, with respect to each Lender, as set forth in the Lenders’
Administrative Details Schedule, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:

 

The Borrower and the other Credit Parties:

 

c/o Royal Gold, Inc.

1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202-1132

Attention: Chief Financial Officer

Facsimile: (303) 595-9385

E-mail:swenger@royalgold.com

Telephone: (303) 573-1660

 

with a copy to:

 

c/o Royal Gold, Inc.

1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202-1132

Attention: General Counsel

Facsimile: (303) 595-9385

E-mail:bkirchhoff@royalgold.com

Telephone: (303) 573-1660

 

The Administrative Agent:

 

HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

Attention: Mr. Bill Edge

Facsimile: (212) 525-6581

E-mail: bill.edge@us.hsbc.com

Telephone: (212) 525-6481

 

Section 10.4         No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

 

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Section 10.5         Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes and the making of the
Loans.

 

Section 10.6         Payment of Expenses and Taxes; Indemnification.

 

(a)          The Borrower agrees to pay within thirty (30) days after receipt of
an invoice therefor, all costs and expenses in connection with the preparation,
negotiation, execution, delivery, registration and administration of this
Agreement, the Note and the other Credit Documents and any amendment, supplement
or modification to or extension or restatement of, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and out-of-pocket
expenses of counsel and of technical advisors and consultants for the
Administrative Agent with respect thereto and with respect to advising the
Administrative Agent as to its rights and responsibilities under this Agreement;
provided, however, that so long as no Event of Default shall have occurred and
be continuing, the Borrower’s prior written consent (not to be unreasonably
withheld) shall be obtained before the Administrative Agent retains a technical
advisor or other technical consultant. The Borrower further agrees to pay on
demand all losses, costs and expenses, if any (including reasonable counsel fees
and expenses), in connection with the preservation of any rights of the Lender
under, or the enforcement of, or legal advice in respect of the rights or
responsibilities of the Lender under, this Agreement, the Note and the other
Credit Documents, including losses, costs and expenses sustained by the Lender
as a result of any failure by any Borrower to perform or observe its obligations
contained herein or in the Note held by the Lender or in connection with any
refinancing or restructuring of the Loan in the nature of a “workout.” The
Borrower further agrees to pay on demand, and to indemnify, and hold each Lender
and each Agent harmless from, any and all recording and filing fees and any and
all liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
the Credit Documents and any such other documents

 

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(b)          Each Credit Party agrees to pay, indemnify, and hold each Lender,
each Agent, their respective Affiliates and their respective directors,
partners, managers, principals, officers, employees, agents, consultants and
representatives (collectively, the “Indemnified Parties”) harmless from and
against, any and all other liabilities, obligations, losses, damages, penalties,
actions, claims, judgments, awards, fines, settlements, suits, costs, charges,
expenses or disbursements of any kind or nature whatsoever (irrespective of
whether the Indemnified Party is named as a party to any litigation or
proceeding and whether it is joint, several or joint and several) with respect
to the execution, delivery, enforcement, performance and administration of any
Credit Document, any such other documents, agreements and Instruments or the
transactions contemplated thereby, the use, or proposed use, of proceeds of the
Loans, or otherwise with respect to any Project or Property or any activity,
occurrence or event thereon or associated therewith (all of the foregoing,
collectively, a “Third Party Claim”), and will reimburse the Indemnified Parties
for all costs and expenses (including reasonable attorneys’ fees and expenses)
on demand as they are incurred in connection with the investigation of,
preparation for or defense or prosecution of any pending or threatened Third
Party Claim or any action or proceeding arising therefrom; provided, however,
that the Borrower shall not have any obligation hereunder to the Administrative
Agent or any Lender with respect to Third Party Claims arising from the gross
negligence or willful misconduct of the Administrative Agent or any such Lender,
as determined by a court of competent jurisdiction in a final and non-appealable
judgment; provided, further, that (i) each Indemnified Party shall promptly
notify the Borrower in writing upon becoming aware of the initiation of any
Third Party Claim against it, (ii) the Borrower shall be entitled to participate
in the defense of any such Third Party Claim and, if the Borrower so chooses, to
assume the defense, at the Borrower’s expense, of any such Third Party Claim
with counsel selected by the Borrower (it being understood that any Indemnified
Party shall have the right to participate in such defense and employ counsel
separate from the counsel employed by the Borrower, and that such counsel shall
be at the expense of such Indemnified Party unless such Indemnified Party shall
have been advised by counsel that there may be legal defenses available to it
that are inconsistent with or in addition to those available to the Borrower, in
which case such counsel shall be at the Borrower’s expense) and (iii) no
Indemnified Party shall settle any Third Party Claim without the Borrower’s
prior written consent (such consent not to be unreasonably withheld). The
agreements in this Section 10.6 shall survive repayment of the Loans, Notes and
all other amounts payable hereunder.

 

(c)          In no event shall any party hereto be liable to any other party
hereto on any theory of liability for any special, indirect, consequential or
punitive damages (including any loss of profits, business or anticipated
savings) arising out of this Agreement or the other Credit Documents.  Each
party hereto hereby waives, releases and agrees (and shall cause each other
Credit Party to waive, release and agree) not to sue upon any such claim for any
special, indirect, consequential or punitive damages, whether or not accrued and
whether or not known or suspected to exist in its favor. Nothing contained in
this Section 10.6(c) shall limit or affect the indemnification and reimbursement
obligations of the Credit Parties set forth in Section 10.6(b).

 

Section 10.7         Successors and Assigns; Participations; Purchasing Lenders.

 

(a)          This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Agents, all future holders of the Notes and their
respective successors and assigns, except that the Borrower and the Guarantors
may not assign or transfer any of their rights or obligations under this
Agreement or the other Credit Documents without the prior written consent of all
the Lenders.

 

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(b)          Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other entities (“Participants”) participating interests in any Loan
owing to such Lender, any Note held by such Lender, any Commitment of such
Lender, or any other interest of such Lender hereunder. In the event of any such
sale by a Lender of participating interests to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note for
all purposes under this Agreement, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. No Lender shall
transfer or grant any participation under which the Participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the scheduled maturity of any Loan or Note or any installment thereon in which
such Participant is participating, or reduce the stated rate or extend the time
of payment of interest or fees thereon (except in connection with a waiver of
interest at the increased post-default rate) or reduce the principal amount
thereof, or increase the amount of the Participant’s participation over the
amount thereof then in effect (it being understood that a waiver of any Default
or Event of Default shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without consent of any participant if the Participant’s participation is not
increased as a result thereof), (ii) release all or substantially all of the
Guarantors from their obligations under the Guaranty, (iii) release all or
substantially all of the Collateral, or (iv) consent to the assignment or
transfer by the Borrower or the Guarantors of any of their rights and
obligations under this Agreement. In the case of any such participation, the
Participant shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant’s rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the Participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation; provided, that no Participant shall be entitled to receive any
greater amount pursuant to such Sections than the transferor Lender would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.

 

(c)          Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time, sell or assign to
any Lender or any Affiliate thereof and, with the consent of the Administrative
Agent and, so long as no Event of Default has occurred and is continuing, the
Borrower (in each case, which consent shall not be unreasonably withheld), to
one or more additional banks or financial institutions or entities (“Purchasing
Lenders”), all or any part of its rights and obligations under this Agreement
and the Notes in minimum amounts of $5,000,000 (or, if less, the entire amount
of such Lender’s interests and obligations), pursuant to an Assignment
Agreement, executed by such Purchasing Lender and such transferor Lender (and,
in the case of a Purchasing Lender that is not then a Lender or an affiliate or
Approved Fund thereof, the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower), and delivered to the
Administrative Agent for its acceptance and recording. Upon such execution,
delivery, acceptance and recording, from and after the Transfer Effective Date
specified in such Assignment Agreement, (x) the Purchasing Lender thereunder
shall be a party hereto and, to the extent provided in such Assignment
Agreement, have the rights and obligations of a Lender hereunder with a
Commitment as set forth therein, and (y) the transferor Lender thereunder shall,
to the extent provided in such Assignment Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment Agreement
covering all or the remaining portion of a transferor Lender’s rights and
obligations under this Agreement, such transferor Lender shall cease to be a
party hereto). Such Assignment Agreement shall be deemed to amend this Agreement
to the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Percentages arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement and the Notes. On
or prior to the Transfer Effective Date specified in such Assignment Agreement,
the Borrower, at its own expense and upon reasonable request, shall execute and
deliver to the Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Assignment Agreement new Notes to the
order of such Purchasing Lender in an amount equal to the Commitment assumed by
it pursuant to such Assignment Agreement and, unless the transferor Lender has
not retained a Commitment hereunder, new Notes to the order of the transferor
Lender in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the form of the
Notes replaced thereby. The Notes surrendered by the transferor Lender shall be
promptly returned by the Administrative Agent to the Borrower marked
“cancelled”.

 

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(d)          The Administrative Agent shall maintain at its address referred to
in Section 10.3 a copy of each Assignment Agreement delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender from time
to time. The entries in such register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in such register as the owner of the
Loan recorded therein for all purposes of this Agreement.

 

(e)          Upon its receipt of a duly executed Assignment Agreement, together
with payment to the Administrative Agent by the transferor Lender or the
Purchasing Lender, as agreed between them, of a registration and processing fee
in the amount of $3,500 for each Purchasing Lender (other than an affiliate of
such Lender or an Approved Fund) listed in such Assignment Agreement and the
Notes subject to such Assignment Agreement, the Administrative Agent shall
(i) accept such Assignment Agreement and (ii) give prompt notice of such
acceptance and recordation to the Lenders and the Borrower.

 

(f)          The Borrower authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a “Transferee”) and any prospective Transferee any
and all financial information in such Lender’s possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by or on
behalf of the Borrower pursuant to this Agreement or which has been delivered to
such Lender by or on behalf of the Borrower in connection with such Lender’s
credit evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement, in each case subject to Section 10.16.

 

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Section 10.8         Adjustments; Set-off.

 

(a)          Each Lender agrees that if any Lender (a “benefited Lender”) shall
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8.1(e), or otherwise) in a greater proportion than any
such payment to or Collateral received by any other Lender, if any, in respect
of such other Lender’s Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Loan, or shall provide such other Lenders
with the benefits of any such Collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such Collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender’s Loans may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.

 

(b)          In addition to any rights and remedies of the Lenders provided by
law (including, without limitation, other rights of set-off), each Lender shall
have the right, without prior notice to the Borrower or the applicable Credit
Party, any such notice being expressly waived by the Credit Parties to the
extent permitted by applicable law, upon the occurrence and during the
continuance of any Event of Default, to setoff and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held by or owing to such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower or any other Credit
Party, or any part thereof in such amounts as such Lender may elect, against and
on account of the Loans and other Obligations of the Borrower and the other
Credit Parties to the Administrative Agent and the Lenders and claims of every
nature and description of the Administrative Agent and the Lenders against the
Borrower and the other Credit Parties, in any currency, whether arising
hereunder or under any other Credit Document, as such Lender may elect, whether
or not the Administrative Agent or the Lenders have made any demand for payment
and although such obligations, liabilities and claims may be contingent or
unmatured. The aforesaid right of set-off may be exercised by such Lender
against the Borrower, any other Credit Party or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of the Borrower or any
other Credit Party, or against anyone else claiming through or against the
Borrower, any other Credit Party or any such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the occurrence of
any Event of Default. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application.

 

Section 10.9         Table of Contents and Section Headings. The table of
contents and the Section and subsection headings herein are intended for
convenience only and shall be ignored in construing this Agreement.

 

Section 10.10         Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.

 

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Section 10.11         Effectiveness. This Agreement shall become effective on
the date on which all of the parties have signed a copy hereof (whether the same
or different copies) and shall have delivered the same to the Administrative
Agent pursuant to Section 10.3 or, in the case of the Lenders, shall have given
to the Administrative Agent written notice (actually received) at such office
that the same has been signed and mailed to it.

 

Section 10.12         Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

Section 10.13         Integration. This Agreement and the Notes represent the
agreement of the Credit Parties, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Credit Parties or
any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the Notes. This Agreement amends, restates, replaces
and supersedes all prior agreements and understandings, both written and oral,
among the parties, with respect to the subject matter hereof.

 

Section 10.14         Consent to Jurisdiction.

 

(a)          EACH CREDIT PARTY HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY STATE OR FEDERAL COURT SITTING IN NEW YORK, NEW YORK OVER ANY SUIT, ACTION
OR PROCEEDING (A “PROCEEDING”) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTE OR THE SECURITY DOCUMENTS AND EACH CREDIT PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH
CREDIT PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO, THE DEFENSE OF AN INCONVENIENT FORUM OR IMPROPER VENUE TO THE MAINTENANCE
OF ANY SUCH PROCEEDING. EACH CREDIT PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF
ANY AND ALL PROCESS IN ANY SUCH PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS TO SUCH CREDIT PARTY AT ITS ADDRESS REFERRED TO IN SECTION 10.3 HEREOF.
EACH CREDIT PARTY AGREES THAT A FINAL JUDGMENT IN ANY SUCH PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE EXECUTED UPON AND ENFORCED IN OTHER JURISDICTIONS BY SUIT
ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

(b)          NOTHING IN THIS SECTION 10.14 SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER
TO BRING ANY SUIT, ACTION OR PROCEEDING AGAINST A CREDIT PARTY OR ITS PROPERTY
IN THE COURTS OF OTHER JURISDICTIONS. THE TAKING OF ANY PROCEEDINGS IN ANY ONE
OR MORE JURISDICTIONS SHALL NOT PRECLUDE THE TAKING OF ANY PROCEEDINGS IN ANY
OTHER JURISDICTION.

 

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(c)          EACH BORROWER AND THE LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NOTE, THE SECURITY DOCUMENTS AND ANY OTHER CREDIT DOCUMENTS
REFERRED TO HEREIN OR THE OBLIGATIONS UNDER ANY THEREOF.

 

Section 10.15         Governing Law. THIS AGREEMENT, AND ANY INSTRUMENT OR
AGREEMENT REQUIRED HEREUNDER, UNLESS OTHERWISE SPECIFICALLY PROVIDED HEREIN OR
THEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, PROVIDED, HOWEVER, THAT THE MORTGAGES SHALL BE GOVERNED BY
AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THEY ARE FILED.

 

Section 10.16         Confidentiality. The Administrative Agent and each Lender
agree that they will not disclose without the prior consent of the Borrower any
non-public, confidential or proprietary information of or with respect to any
Credit Party or any Subsidiary thereof which is furnished pursuant to this
Agreement, any other Credit Document or any documents contemplated by or
referred to herein or therein (the “Information”), except that any Agent and any
Lender may disclose any such Information (a) to its employees, affiliates,
agents, representatives, auditors, consultants, engineers (including the
Independent Engineer) or counsel or to another Agent or Lender each of whom
shall have been made aware of this confidentiality requirement and shall have
agreed to abide by its provisions, (b) as has become generally available to the
public other than by a breach of this Section 10.16, (c) as may be required or
appropriate in any report, statement or testimony submitted to any Governmental
Authority having or claiming to have jurisdiction over such Lender or Agent or
to the Federal Reserve Board or the Federal Deposit Insurance Corporation or the
Office of the Comptroller of the Currency or the National Association of
Insurance Commissioners or similar organizations (whether in the United States,
Canada or any other jurisdiction) or their successors, (d) as may be required or
appropriate in response to any summons or subpoena or any Requirement of Law
applicable to such Lender or Agent, (e) to (i) any prospective Participant or
assignee in connection with any contemplated transfer pursuant to Section 10.7
or (ii) any actual or prospective counterparty (or its advisors) to any Hedging
Agreement relating to the Borrower, provided that such prospective counterparty
or transferee shall have been made aware of this Section 10.16 and shall have
agreed to be bound by its provisions as if it were a party to this Credit
Agreement, (f) to Gold Sheets and other similar bank trade publications; such
information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such
publications, (g) in connection with any claim, suit, action or proceeding for
the purpose of defending itself, reducing its liability, or protecting or
exercising any of its claims, rights, remedies or interests under or in
connection with the Credit Documents, or (h) any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender; provided,
however, that in the case of any disclosure pursuant to clause (d), the
applicable Agent or Lender shall give the Borrower at least ten days prior
written notice (unless less time is permitted by the applicable proceeding)
before disclosing any of the Confidential Information in any such proceeding
and, in making such disclosure, the Agent or any Lender, as applicable, shall
disclose only that portion thereof required to be disclosed and shall take all
reasonable efforts to preserve the confidentiality thereof.

 

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Section 10.17         Acknowledgments. Each of the parties hereto hereby
acknowledges that:

 

(a)          it has been advised by counsel in the negotiation, execution and
delivery of each Credit Document;

 

(b)          neither any Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower or any other Credit Party arising out of or in
connection with this Agreement and the relationship between the Agents and
Lenders, on one hand, and the Borrower and the other Credit Parties, on the
other hand, in connection herewith is solely that of debtor and creditor; and

 

(c)          no joint venture or partnership exists among the Lenders or the
Agents, or among the Borrower or the other Credit Parties and the Lenders or the
Agents.

 

Section 10.18         USA Patriot Act. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (as amended from time to time, the “Patriot Act”) hereby
notifies the Credit Parties that pursuant to the requirements of the Patriot
Act, it is required to obtain, verify and record information that identifies
each Credit Party, which information includes the name and address of such
Credit Party and other information that will allow each such Lender to identify
the Credit Party in accordance with the Patriot Act, and each Credit Party
agrees to provide such information from time to time to such Lender.

 

Section 10.19         Proceeds of Crime.

 

(a)          The Borrower acknowledges that, pursuant to the Proceeds of Crime
(Money Laundering) and Terrorist Financing Act (Canada) and other applicable
anti-money laundering, anti-terrorist financing, government sanction and “know
your client” Laws, whether within Canada or elsewhere (collectively, including
any guidelines or orders thereunder, “AML Legislation”), the Lenders and the
Administrative Agent may be required to obtain, verify and record information
regarding the Borrower, its directors, authorized signing officers, direct or
indirect shareholders or other Persons in control of the Borrower, and the
transactions contemplated hereby. The Borrower shall promptly provide all such
information, including supporting documentation and other evidence, as may be
reasonably requested by any Lender or the Administrative Agent, or any
prospective assign or participant of a Lender or the Administrative Agent, in
order to comply with any applicable AML Legislation, whether now or hereafter in
existence.

 

(b)          If the Administrative Agent has ascertained the identity of the
Borrower or any authorized signatories of the Borrower for the purposes of
applicable AML Legislation, then the Administrative Agent:

 

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(i)          shall be deemed to have done so as an agent for each Lender, and
this Agreement shall constitute a “written agreement” in such regard between
each Lender and the Administrative Agent within the meaning of applicable AML
Legislation; and

 

(ii)         shall provide to each Lender copies of all information obtained in
such regard without any representation or warranty as to its accuracy or
completeness.

 

Notwithstanding the preceding sentence and except as may otherwise be agreed in
writing, each of the Lenders agrees that the Administrative Agent has no
obligation to ascertain the identity of the Borrower or any authorized
signatories of the Borrower on behalf of any Lender, or to confirm the
completeness or accuracy of any information it obtains from the Borrower or any
such authorized signatory in doing so.

 

Section 10.20         Joint and Several Liability. The Credit Parties are
engaged in related businesses and integrated to such an extent that the
financial strength and flexibility of each Credit Party has a direct, tangible
and immediate impact on the success of the other Credit Parties. If at any time
another Person shall be joined as a “Borrower” it is acknowledged and agreed
that (i) such Person is a co-borrower hereunder and shall be jointly and
severally, with the other Borrower, directly and primarily liable for the
payment and performance of the Notes and the Obligations, regardless of which
Borrower actually receives any proceeds of the Loan or the amount of such
proceeds received, (ii) each of the Borrowers shall have the obligation of a
co-maker and shall be a primary obligor with respect to the Loan, the Notes and
the other Obligations, it being agreed that the Loan to each Borrower inure to
the benefit of both Borrowers, and (iii) the Administrative Agent and each
Lender are relying on such joint and several liability of the Borrowers (if at
any time there shall be more than one (1) Borrower) in entering into this
Agreement and extending the Loan. Each Borrower and each Guarantor hereby
unconditionally and irrevocably agrees that upon default in the payment when due
of any principal, interest, fee or other amount hereunder, it will forthwith pay
the same, without notice of demand. The Administrative Agent and the Lenders
shall be entitled to rely upon any notice, request or communication received by
it from the Borrower on behalf of all Credit Parties, and shall be entitled to
treat its giving of any notice hereunder pursuant to Section 10.3 hereof as
notice to each and all Credit Parties.

 

ARTICLE XI

GUARANTY

 

Section 11.1         The Guaranty. In order to induce the Lenders to enter into
this Credit Agreement and the Notes and to extend credit hereunder and
thereunder and in recognition of the direct benefits to be received by the
Guarantors from the Loans hereunder, each of the Guarantors hereby agrees with
the Administrative Agent and the Lenders as follows: each Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all Obligations. If any
or all of the indebtedness becomes due and payable hereunder or under any other
Credit Document, each Guarantor unconditionally promises to pay such
indebtedness to the Administrative Agent and the Lenders, or their respective
order, on demand, together with any and all reasonable costs, fees and expenses
which may be incurred by the Administrative Agent or the Lenders in collecting
any of the Obligations.

 

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Notwithstanding any provision to the contrary contained herein or in any other
of the Credit Documents, to the extent the obligations of a Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including, because of
any applicable Requirement of Law relating to fraudulent conveyances or
transfers or similar principles) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable Requirements of Law, including Bankruptcy Laws.

 

Section 11.2         Bankruptcy. Additionally, each of the Guarantors
unconditionally and irrevocably guarantees jointly and severally the payment of
any and all Obligations of the Borrower to the Administrative Agent and the
Lenders whether or not due or payable by the Borrower upon the occurrence of any
of the events specified in Section 8.1(e), and unconditionally promises to pay
such Obligations to the Administrative Agent for the account of the Lenders, or
order, on demand, in lawful money of the United States. Each of the Guarantors
further agrees that to the extent that the Borrower or a Guarantor shall make a
payment or a transfer of an interest in any property to the Administrative Agent
or any Lender, which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise is avoided,
and/or required to be repaid to the Borrower or a Guarantor, the estate of the
Borrower or a Guarantor, a trustee, receiver or any other party under any
Bankruptcy Law, common law or equitable cause or other Requirement of Law, then
to the extent of such avoidance or repayment, the obligation or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if said payment had not been made.

 

Section 11.3         Continuing Guaranty. This guaranty is a continuing guaranty
and shall: (i) remain in full force and effect until the later of (x) the
irrevocable payment in full of the Obligations and all other amounts payable by
the Guarantor, and (y) all the Commitments have been terminated; (ii) be binding
on each Guarantor, its successors and assigns; and (iii) inure to the benefit of
and be enforceable by the Administrative Agent, the Lenders and their
successors, pledges, transferees and assigns. Without limiting the generality of
the foregoing, any Lender may pledge, assign or otherwise transfer all or any
portion of its rights and obligations under any Credit Document to any other
Person, and such Person shall thereupon become vested with all the benefits in
respect thereof granted to such Person herein or otherwise.

 

Section 11.4         Nature of Liability. The liability of each Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the Obligations of the Borrower whether executed by any such Guarantor, any
other guarantor or by any other party, and no Guarantor’s liability hereunder
shall be affected or impaired by (a) any direction as to application of payment
by the Borrower or by any other party, or (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the Obligations of the Borrower, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any payment
made to the Administrative Agent or the Lenders on the Obligations which the
Administrative Agent or such Lenders repay to the Borrower pursuant to court
order in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each of the Guarantors waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.

 

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Section 11.5         Independent Obligation. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor or the
Borrower, and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not action is brought against any other Guarantor or
the Borrower and whether or not any other Guarantor or the Borrower is joined in
any such action or actions.

 

Section 11.6         Authorization. Each of the Guarantors authorizes the
Administrative Agent and each Lender without notice or demand (except as shall
be required by applicable statute and cannot be waived), and without affecting
or impairing its liability hereunder, from time to time to (a) amend, modify,
renew, restate, compromise, extend, continue, increase, accelerate or otherwise
change the time for payment of, or otherwise change the terms of the Obligations
or any part thereof in accordance with this Credit Agreement and any other
Credit Document, as applicable, including any increase or decrease of the rate
of interest thereon, (b) take and hold security from any Guarantor or any other
party for the payment of this Guaranty or the Obligations and exchange, enforce,
waive and release any such security, (c) apply such security and direct the
order or manner of sale thereof as the Administrative Agent and the Lenders in
their discretion may determine and (d) release or substitute any one or more
endorsers, Guarantors, the Borrower or other obligors.

 

Section 11.7         Reliance. It is not necessary for the Administrative Agent
or the Lenders to inquire into the capacity or powers of any Borrower or the
officers, directors, members, partners or agents acting or purporting to act on
its behalf, and any Obligations made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.

 

Section 11.8         Stay of Acceleration. If acceleration of the time for
payment, or the liability of a Borrower to make payment, of any amount specified
to be payable by such Borrower in respect of its Obligations is stayed,
prohibited or otherwise affected upon any Insolvency Proceeding or other event
affecting such Borrower or payment of any of its Obligations by such Borrower,
all such amounts otherwise subject to acceleration or payment shall nonetheless
be deemed for all purposes of this Agreement to be and to have become due and
payable by such Borrower and shall be payable by each Guarantor under this
Agreement immediately forthwith on demand by the Administrative Agent unless
otherwise prohibited or restricted by order, judgment or applicable law.

 

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Section 11.9         Waiver.

 

(a)          Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the Borrower, any
other guarantor or any other party, (ii) proceed against or exhaust any security
held from the Borrower, any other guarantor or any other party, or (iii) pursue
any other remedy in the Administrative Agent’s or any Lender’s power whatsoever.
Each of the Guarantors waives any defense based on or arising out of any defense
of any Borrower, any other guarantor or any other party other than payment in
full of the Obligations (other than contingent indemnity obligations), including
without limitation any defense based on or arising out of the disability of a
Borrower, any other guarantor or any other party, or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of a Borrower other than payment in full of the Obligations.
The Administrative Agent may, at its election, foreclose on any security held by
the Administrative Agent by one or more judicial or nonjudicial sales (to the
extent such sale is permitted by applicable law), or exercise any other right or
remedy the Administrative Agent or any Lender may have against a Borrower or any
other party, or any security, without affecting or impairing in any way the
liability of any Guarantor hereunder except to the extent the Obligations have
been paid in full and the Commitments have been terminated. Each of the
Guarantors waives any defense arising out of any such election by the
Administrative Agent or any of the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of the Guarantors against any Borrower or any other party or any
security.

 

(b)          Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of acceptance of
this Guaranty, and notices of the existence, creation or incurring of new,
additional, restated or continued Obligations. Each Guarantor assumes all
responsibility for being and keeping itself informed of each Borrower’s
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Obligations and the nature, scope and extent of the
risks which such Guarantor assumes and incurs hereunder, and agrees that neither
the Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or risks.

 

(c)          Each Guarantor waives all other acts or omissions to act or delay
of any kind by the Administrative Agent, any Lender or any other Person or any
other circumstance whatsoever that might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the obligations of any
Guaranty, and each Guarantor waives all other defenses available to a guarantor
or surety, whether at law or in equity.

 

(d)          The Borrower and the Guarantors are engaged in related businesses
and integrated to such an extent that the financial strength and flexibility of
each Borrower has a direct, tangible and immediate impact on the success of each
Guarantor. Each Guarantor will derive substantial direct and indirect benefit
from the extensions of credit to the Borrower hereunder. Each Guarantor hereby
waives any right to revoke this Guaranty, and acknowledges that this Guaranty is
continuing in nature and applies to all Obligations, whether existing now or in
the future. Each Guarantor knowingly waives certain rights and defenses as set
forth in this Agreement in contemplation of the benefits that it will receive.

 

(e)          Each Guarantor irrevocably renounces to any rights it may have to
be released from this Guarantee under Article 2362 of the Civil Code of Québec
and agrees to renew its guarantee hereunder at the request of the Administrative
Agent by executing such documents as the Administrative Agent may request from
time to time.

 

85

 

 

(f)          Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under applicable Bankruptcy Law, or
otherwise) to the claims of the Administrative Agent or the Lenders against any
Borrower or any other guarantor of the Obligations of a Borrower owing to the
Administrative Agent or the Lenders (collectively, the “Other Parties”) and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from any Other Party which it may at any time otherwise have as a
result of this Guaranty until such time as the Obligations shall have been paid
in full and the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy which the
Administrative Agent or the Lenders now have or may hereafter have against any
Other Party, any endorser or any other guarantor of all or any part of the
Obligations of a Borrower and any benefit of, and any right to participate in,
any security or collateral given to or for the benefit of the Administrative
Agent and the Lenders to secure payment of the Obligations of a Borrower until
such time as the Obligations (other than contingent indemnity obligations) shall
have been paid in full and the Commitments have been terminated.

 

Section 11.10         Confirmation of Payment. The Administrative Agent and the
Lenders will, upon request after payment of the Obligations which are the
subject of this Guaranty and termination of the Commitments relating thereto,
confirm to the Borrower, the Guarantors or any other Person that such
indebtedness and obligations have been paid and the Commitments relating thereto
terminated, subject to the provisions of Section 11.2.

 

At such time as the Obligations which are the subject of this Guaranty have been
irrevocably paid in full and the Commitments have been terminated, this Guaranty
and all obligations of the Guarantors hereunder shall terminate and be of no
further force and effect, all without delivery of any Instrument or performance
of any act by any Person (subject, in each case, to the effects of Section 11.2
hereof and any indemnification obligations that survive such termination).

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its proper and duly authorized officers as of the day
and year first above written.

 

BORROWER:

  ROYAL GOLD, INC.,   a Delaware corporation         By: /s/Bruce C. Kirchhoff  
Name: Bruce C. Kirchhoff   Title: Vice President and General Counsel

 

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Fifth Amended and Restated Credit Agreement signature page

 

 

 

 

GUARANTORS:

  HIGH DESERT MINERAL RESOURCES, INC.,   a Delaware corporation         By:
/s/Bruce C. Kirchhoff   Name: Bruce C. Kirchhoff   Title: Vice President        
RG MEXICO, INC.,   a Delaware corporation         By: /s/Bruce C. Kirchhoff  
Name: Bruce C. Kirchhoff   Title: Vice President         RG EXCHANGECO INC.   an
amalgamated corporation validly existing under the
Canada Business Corporations Act         By: /s/Bruce C. Kirchhoff   Name: Bruce
C. Kirchhoff   Title: Vice President and General Counsel

 

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Fifth Amended and Restated Revolving Credit Agreement Signature Page

 

 

 

 

ADMINISTRATIVE AGENT

AND LENDER:

  HSBC BANK USA, NATIONAL ASSOCIATION   as Administrative Agent and as a Lender
        By: /s/William S. Edge III   Name: William S. Edge III   Title: Managing
Director       SOLE LEAD ARRANGER AND   JOINT BOOKRUNNER:     HSBC SECURITIES
(USA) INC.   as Sole Lead Arranger and Joint Bookrunner         By: /s/William
S. Edge III   Name: William S. Edge III   Title: Managing Director

 

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Fifth Amended and Restated Revolving Credit Agreement Signature Page

 

 

 

 

LENDER:

  THE BANK OF NOVA SCOTIA   as a Lender         By: /s/Ray Clarke   Name: Ray
Clarke   Title: Managing Director         By: /s/Bhiravi Ravichandran   Name:
Bhiravi Ravichandran   Title: Associate Director      

SYNDICATION AGENT AND JOINT

BOOKRUNNER:

      SCOTIABANK   as Syndication Agent and Joint Bookrunner         By: /s/Ray
Clarke   Name: Ray Clarke   Title: Managing Director         By: /s/Bhiravi
Ravichandran   Name: Bhiravi Ravichandran   Title: Associate Director

 

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Fifth Amended and Restated Revolving Credit Agreement Signature Page

 

 

 

 

LENDER:       GOLDMAN SACHS BANK USA   as a Lender         By: /s/ Mark Walton  
Name: Mark Walton    Title: Authorized Signatory

 

Fifth Amended and Restated Revolving Credit Agreement Signature Page