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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Execution Version

Dated MARCH 23, 2016    

UP TO US$25,000,000

SECURED REVOLVING FACILITY AGREEMENT

between

KLONDEX MINES LTD.
as Borrower

and

KLONDEX CANADA LTD., 0985472 B.C. LTD, KLONDEX HOLDINGS (USA)
INC., KLONDEX MIDAS HOLDINGS LIMITED, KLONDEX MIDAS
OPERATIONS INC. and KLONDEX GOLD & SILVER MINING COMPANY
as Guarantors

with

INVESTEC BANK PLC
as Lender and Hedge Counterparty

and

INVESTEC BANK PLC
acting as Security Agent

[exhibit10-1x1x1.jpg]

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Contents

Clause Page INTERPRETATION 1 1 Definitions and Interpretation 1 THE FACILITY 21
2 The Facility 21 3 Purpose 22 4 Conditions of Utilization 23 UTILIZATION 24 5
Utilization 24 REPAYMENT, PREPAYMENT AND CANCELLATION 25 6 Repayment 25 7
Prepayment and Cancellation 25 COSTS OF UTILIZATION 28 8 Interest 28 9 Interest
Periods 29 10 Changes to the Calculation of Interest 29 11 Fees 30 ADDITIONAL
PAYMENT OBLIGATIONS 32 12 Tax Gross Up and Indemnities 32 13 Increased Costs 37
14 Other Indemnities 39 15 Mitigation by the Lender 40 16 Costs and Expenses 40
GUARANTEE 42 17 Guarantee and Indemnity 42

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT 45 18 Representations 45 19
Information Undertakings 52 20 Financial Covenants 57 21 General Undertakings 59
22 Events of Default 71 CHANGES TO PARTIES 77 23 Changes to the Lender 77 24
Restriction on Debt Purchase Transactions 81 25 Changes to the Obligors 81
ADMINISTRATION 82 26 Payment Mechanics 82 27 Set-Off 84 28 Notices 84 29
Calculations and Certificates 86 30 Partial Invalidity 86 31 Remedies and
Waivers 86 32 Amendments and Waivers 87 33 Confidentiality 88 34 Interest Act of
Canada 91 35 Usury 91 36 Future Financings 91 37 Counterparts 91 38 Contractual
Recognition of Bail-In 92 GOVERNING LAW AND ENFORCEMENT 92 39 Governing Law 92
40 Enforcement 92

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

41   Waiver of immunity 93 Schedule 1   Conditions Precedent 94 Schedule 2  
Requests 98 Part I   Utilization Request 98 Part II   Extension Request 99 Part
III   Amendment Request 100 Schedule 3   Form of Transfer Certificate 101
Schedule 4   Form of Assignment Agreement 103 Schedule 5   Form of Amendment
Confirmation 106 Schedule 6   Form of Compliance Certificate 108 Schedule 7  
Timetables 109 Schedule 8   Disclosure Schedule 110 Schedule 21.40   1 Schedule
33.2(C)   1 SIGNATURES 1

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

THIS AGREEMENT is dated as of March 23, 2016 and made between:

(1)

KLONDEX MINES LTD, a company incorporated under the laws of the Province of
British Columbia (the Borrower);

    (2)

KLONDEX CANADA LTD, a company incorporated under the laws of the Province of
British Columbia as guarantor (Klondex Canada);

    (3)

0985472 B.C. LTD, a company incorporated under the laws of the Province of
British Columbia as guarantor (0985472);

    (4)

KLONDEX HOLDINGS (USA) INC., a company incorporated under the laws of the State
of Nevada as guarantor (Klondex Holdings);

    (5)

KLONDEX MIDAS HOLDINGS LIMITED, a company incorporated under the laws of the
State of Nevada as guarantor (Klondex Midas);

    (6)

KLONDEX MIDAS OPERATIONS INC., a company incorporated under the laws of the
State of Nevada as guarantor (Klondex Operations);

    (7)

KLONDEX GOLD & SILVER MINING COMPANY, a company incorporated under the laws of
the State of Nevada as guarantor (Klondex Gold, together, the Guarantors);

    (8)

INVESTEC BANK PLC, under the laws of England and Wales whose registered office
is at 2 Gresham Street, London, EC2V 7QP and with registered number 00489604
(the Lender and Hedge Counterparty);

    (9)

INVESTEC BANK PLC, as security agent for the Secured Parties (the Security
Agent).

IT IS AGREED as follows:

INTERPRETATION

1

Definitions and Interpretation

1.1

Definitions

In this Agreement:

Accounting Principles means, for any Obligor, IFRS and, for the purposes of any
definition or calculation in clause 0 (Financial covenants), as applicable at
the date of this Agreement.

Accounting Reference Date means 31 December.

Affiliate means, in relation to any person:

  (a)

a Subsidiary of that person;

        (b)

a Holding Company of that person; or

        (c)

any other Subsidiary of that Holding Company,

1

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

(including head offices and branches of the above).

Amendment Confirmation means a confirmation substantially in the form set out in
0 Schedule (Form of Amendment Confirmation).

Amendment Request means a request substantially in the form set out in Part III
of 0(Requests).

Annual Budget means a cash flow budget prepared in accordance with Clause 19.4,
showing the proposed budgeted sources and uses of funds by the Borrower over the
following twelve (12) months. The Annual Budget shall take into account cash,
available debt and forecast cash flows calculated using reasonable metal price
and technical assumptions.

Applicable Law means any law, regulation, rule, executive order, decree, code of
practice, circular, guidance note or injunction of, or made by, any Competent
Authority that is binding and enforceable on or against an Obligor, the
Properties or the subject matter of, or any party to, any Finance Document, as
the case may be, including, for the avoidance of doubt, any Sanctions.

Assignment Agreement means an agreement substantially in the form set out in 0
(Form of Assignment Agreement).

Authorization means all Authorizations, permits, consent, approvals,
resolutions, licences, leases, exemptions, filings, notarisations or
registrations required in connection with:

  (a)

the conduct of the business of any member of the Group;

        (b)

the development, construction, operation and maintenance of the Properties,
including land use and access rights;

        (c)

the entry into and performance by an Obligor of any Finance Document to which it
is a party and the transactions contemplated thereby;

        (d)

the validity and enforceability against an Obligor of any Finance Document to
which it is a party; and

        (e)

the admissibility in any Relevant Jurisdiction of any Finance Document to which
an Obligor is party.

Availability Period means the period from and including Financial Close to and
including the date falling one (1) Month before the Original Final Maturity
Date.

Available Commitment means the Commitment minus:

  (a)

the amount of any outstanding Loans; and

        (b)

in relation to any proposed Utilization, the amount of any Loans that are due to
be made on or before the proposed Utilization Date,

excluding the amount of repayment or prepayment with respect to any Loans due on
or before the proposed Utilization Date.

Bail-In Action means the exercise of any Write-down and Conversion Powers.

2

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Bail-In Legislation means:

(a)      in relation to an EEA Member Country which has implemented, or which at
any time implements, Article 55 of Directive 2014/59/EU establishing a framework
for the recovery and resolution of credit institutions and investment firms ,
the relevant implementing law or regulation as described in the EU Bail-In
Legislation Schedule from time to time; and

(b)      in relation to any other state, any analogous law or regulation from
time to time which requires contractual recognition of any Write-down and
Conversion Powers contained in that law or regulation.

Bank Tax means any Tax directly or indirectly measured by reference to or
imposed as a result of the equity, assets, liabilities, leverage or other
exposures to risk of the Lender or of any Affiliate of the Lender, the nature of
the activities or transactions undertaken by the Lender or of any Affiliate of
the Lender or other similar factors and includes any similar Tax levied or
imposed in any other jurisdiction.

Base Case Model means the base case cash flow forecast model for the Borrower
prepared by the Borrower, such model to detail the Borrower’s cash flow forecast
for a minimum of three (3) years of operations and use reasonable assumptions in
light of the circumstances or market conditions at the time of delivery.

Break Costs means the amount (if any) by which:

  (a)

the interest (other than the Margin) which the Lender should have received for
the period from the date of receipt of all or any part of its participation in a
Loan or Unpaid Sum to the last day of the current Interest Period in respect of
that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been
paid on the last day of that Interest Period;

exceeds:

  (b)

the amount which that Lender would be able to obtain by placing an amount equal
to the principal amount or Unpaid Sum received by it on deposit with a leading
bank in the Relevant Interbank Market for a period starting on the Business Day
following receipt or recovery and ending on the last day of the current Interest
Period.

Business Day means a day (other than a Saturday or Sunday) on which banks are
open for general business in the provinces of Ontario and British Columbia and
in the United Kingdom.

Cash Available for Debt Service means, for a period for the Obligors and the
Properties, all revenues less cash operating costs, capital, exploration and
other agreed expenditures, and taxes payable for that period as represented in
the then current Base Case Model.

Charged Property means all of the assets which from time to time are, or are
expressed to be, the subject of the Transaction Security.

Code means the US Internal Revenue Code of 1986, as amended.

Commitment means US$25,000,000, or as amended in accordance with clause 0
(Amendment to Commitment) and to the extent not cancelled, reduced or
transferred under this Agreement.

Commitment Limit has the meaning given to it in clause 2.3 (Reduction in
Available Commitment).

3

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Competent Authority means a government, supranational, local government,
statutory or regulatory body or any subdivision thereof and any ministerial or
governmental, quasi governmental, mining industry or other regulatory
department, body, instrumentality, agency or official court or tribunal having
jurisdiction over an Obligor, the Properties or the subject matter of, or any
party to, any Finance Document.

Compliance Certificate means a certificate substantially in the form set out in
0 (Form of Compliance Certificate).

Condemnation means any legal or regulatory process that prevents use of the
site, facilities and assets (or any material part of any of the foregoing) of
any of the Properties on the grounds of health and safety for a continuous
period of ninety (90) days or more.

Confidential Information means all information relating to any Obligor, the
Group, the Finance Documents or the Facility of which a Finance Party becomes
aware in its capacity as, or for the purpose of becoming, a Finance Party or
which is received by a Finance Party in relation to the Finance Documents or the
Facility from either:

  (a)

any member of the Group or any of its advisers; or

        (b)

another Finance Party, if the information was obtained by that Finance Party
directly or indirectly from any member of the Group or any of its advisers,

in whatever form, and includes information given orally and any document,
electronic file or any other way of representing or recording information which
contains or is derived or copied from such information but excludes information
that:

  (i)

is or becomes public information other than as a direct or indirect result of
any breach that Finance Party of clause 0 (Confidentiality); or

        (ii)

is identified in writing at the time of delivery as non-confidential by any
member of the Group or any of its advisers; or

        (iii)

is known by that Finance Party before the date the information is disclosed to
it accordance with paragraphs (a) or (b) above or is lawfully obtained by that
Finance Party after that date, from a source which is, as far as that Finance
Party is aware, unconnected with the Group and which, in either case, as far as
that Finance Party aware, has not been obtained in breach of, and is not
otherwise subject to, any obligation of confidentiality.

Control means where one (1) person (either directly or indirectly and whether by
share capital, voting power, contract or otherwise) has the power to appoint
and/or remove the majority of the members of the governing body of another
person or otherwise controls or has the power to control the affairs and
policies of that other person and that other person is taken to be Controlled by
the first person.

Counterparty Hedging Agreements means the risk management facilities as provided
by the Hedge Counterparty, to be executed and utilised following Financial Close
(in each case at the Borrower’s election) to manage any member of the Group’s
short term sales and hedging of foreign currency exposure, gold and silver
production (and such other commodities to be agreed upon between the Borrower
and the Hedge Counterparty).

4

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Debt Purchase Transaction means, in relation to a person, a transaction where
such person:

  (a)

purchases by way of assignment or transfer;

        (b)

enters into any sub-participation in respect of; or

        (c)

enters into any other agreement or arrangement having an economic effect
substantially similar to a sub-participation in respect of,

any Commitment or amount outstanding under this Agreement.

Default means an Event of Default or any event or circumstance specified in
clause 0 (Events of Default) which would (with the expiry of a grace period, the
giving of notice, the making of any determination under the Finance Documents or
any combination of any of the foregoing) be an Event of Default.

Delegate means any delegate, agent, attorney or co-trustee appointed by the
Security Agent.

Designated Person means a person or entity:

  (a)

listed in the annex to, or otherwise targeted by the provisions of U.S.
Executive Order No. 13224 on Blocking Property and Prohibiting Transactions with
Persons who Commit, Threaten to Commit, or Support Terrorism;

        (b)

named as a "Specially Designated National and Blocked Person" on the most
current list published by the Office of Foreign Assets Control of the U.S.
Department of the treasury (or any successor thereto) as its official website or
any replacement website or other replacement official publication of such list;
or

        (c)

to the best of the Obligors' knowledge, with which any Finance Party is
prohibited from dealing or otherwise engaging in any transaction by any
Sanctions.

Disclosure Schedule means the disclosure information set out in Schedule 8
(Disclosure schedule).

Disposal means a sale, lease, licence, transfer, loan or other disposal by a
person of any asset, undertaking or business (whether by a voluntary or
involuntary single transaction or series of transactions).

Disruption Event means either or both of:

  (a)

a material disruption to those payment or communications systems or to those
financial markets which are, in each case, required to operate in order for
payments to be made in connection with the Facility (or otherwise in order for
the transactions contemplated by the Finance Documents to be carried out) which
disruption is not caused by, and is beyond the control of, any of the Parties;
or

        (b)

the occurrence of any other event which results in a disruption (of a technical
or systems- related nature) to the treasury or payments operations of a Party
preventing that, or any other Party:

  (i)

from performing its payment obligations under the Finance Documents; or

        (ii)

from communicating with other Parties in accordance with the terms of the
Finance Documents,

5

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

and which (in either such case) is not caused by, and is beyond the control of,
the Party whose operations are disrupted.

Distribution means, in respect of a person:

  (a)

declaring, making or paying any dividend, charge, fee or other distribution (or
interest on any unpaid dividend, charge, fee or other distribution) (whether in
cash or in kind) on or in respect of its share capital (or any class of its
share capital);

        (b)

repaying or distributing any dividend or share premium reserve;

        (c)

redeeming, reducing, cancelling, repaying, purchasing or transferring any
Financial Indebtedness owed to an Affiliate;

        (d)

paying or allowing any member of the Group to pay any management, advisory or
other fee to or to the order of (i) any of its shareholders, (ii) any other
member of the Group (unless such member is not an Obligor) or (iii) any of the
shareholders of another member of the Group; or

        (e)

redeeming, repurchasing, defeasing, retiring or repaying any of its share
capital or resolving to do so.

EEA Member Country means any member state of the European Union, Iceland,
Liechtenstein and Norway.

Environment means humans, animals, plants and all other living organisms
including the ecological systems of which they form part and the following
media:

  (a)

air (including, without limitation, air within natural or man-made structures,
whether above or below ground);

        (b)

water (including, without limitation, territorial, coastal and inland waters,
water under or within land and water in drains and sewers); and

        (c)

land (including, without limitation, land under water).

Environmental Assessment means the Environmental Assessment level under the
National Environmental Policy Act required to be completed for the Fire Creek
Project, as determined by the Bureau of Land Management.

Environmental Claim means any claim, proceeding, formal notice or investigation
by any person in respect of any Environmental Law.

Environmental Law means all federal, state or local laws, statutes, common law
duties, rules, regulations, ordinances and codes, together with all
administrative orders, directives, requests, licenses, authorizations and
permits of, and agreements with (including consent decrees), any governmental
agencies or authorities, in each case relating to or imposing liability or
standards of conduct concerning public health, safety and Environmental
protection matters, including those relating to hazardous, deleterious or toxic
materials or substances or wastes, air emissions, and discharges to waste or
public systems, in each case to the extent applicable to the Group.

6

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Environmental Permits means any permit and other Authorization and the filing of
any notification, report or assessment required under any Environmental Law for
the operation of the business of any member of the Group conducted on or from
the properties owned or used by any member of the Group.

Equivalent means, in relation to an amount specified in a particular currency
(the first amount), the net amount of any other currency which the Lender
determines can be purchased with the first amount in the Toronto foreign
exchange market at or about 11:00 a.m. on the day on which the calculation falls
to be made for spot delivery.

EU Bail-In Legislation Schedule means the document described as such and
published by the Loan Market Association (or any successor person) from time to
time.

Event of Default means any event or circumstance specified as such in clause 0
(Events of Default).

Event of Loss means any event that renders repair or restoration of the site or
facilities or assets (or any material part of any of the foregoing) of any of
the Properties impracticable or impossible unless adequately insured.

Excluded Assets means any Material Licences.

Exploration Business means any member of the Group (other than an Obligor) that
is engaged solely in the identification, reconnaissance, investigation and
exploration of potential or actual mineral resources by whatever means,
including the submission of applications for appropriate licences to do so.

Extension Fee means the fee referred to in clause 6.2 (Extension Option).

Extension Request means a request substantially in the form set out in Part II
of 0(Requests).

Facility means the revolving loan facility made available under this Agreement
as described in clause 0 (The Facility).

Facility Office means the office or offices through which the Lender will
perform its obligations under this Agreement.

FATCA means:

  (a)

the Foreign Account Tax Compliance Act, being

        (b)

sections 1471 to 1474 of the Code or any associated regulations or other
official guidance;

        (c)

any treaty, law or regulation of any other jurisdiction, or relating to an
intergovernmental agreement between the US and any other jurisdiction which (in
each case) facilitates the implementation of any law or regulation referred to
in paragraph (a) above; or

        (d)

any agreement pursuant to the implementation of any treaty, law or regulation
referred to in paragraphs (a) or (b) above with the US Internal Revenue Service,
the US government or any governmental or taxation authority in any other
jurisdiction.

FATCA Deduction means a deduction or withholding from a payment under a Finance
Document required by FATCA.

7

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

FATCA Exempt Party means a Party that is entitled to receive payments free from
any FATCA Deduction.

Fee Letter means:

  (d)

any letter or letters dated on or about the date of this Agreement between the
Lender and the Borrower or the Security Agent and the Borrower setting out any
of the fees referred to in clause 0 (Fees); and

        (e)

any agreement setting out fees payable to a Finance Party referred to in clause
0 (Amendment to Commitment) under any other Finance Document.

Finance Document means this Agreement, the Intercreditor Agreement, any
Counterparty Hedging Agreement, each Transaction Security Document, and any
other document designated as such by the Lender and the Borrower.

Finance Party means the Security Agent, the Hedge Counterparty or the Lender.

Financial Close means the date on which the Lender gives notice to the Borrower
under clause 0 (Initial conditions precedent).

Financial Indebtedness means any indebtedness for or in respect of:

  (a)

moneys borrowed;

        (b)

any amount raised by acceptance under any acceptance credit facility or
dematerialised equivalent;

        (c)

any amount raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or any similar instrument;

        (d)

the amount of any liability in respect of any lease or hire purchase contract
which would, in accordance with Accounting Principles, be treated as a finance
or capital lease;

        (e)

receivables sold or discounted (other than any receivables to the extent they
are sold on a non-recourse basis);

        (f)

any amount raised under any other transaction (including any forward sale or
purchase agreement) having the commercial effect of a borrowing;

        (g)

any derivative transaction entered into in connection with protection against or
benefit from fluctuation in any rate or price (and, when calculating the value
of any derivative transaction, only the marked to market value shall be taken
into account);

        (h)

any counter-indemnity obligation in respect of a guarantee, indemnity, bond,
standby or documentary letter of credit or any other instrument issued by a bank
or financial institution; and

        (i)

the amount of any liability in respect of any guarantee or indemnity for any of
the items referred to in paragraphs (a) to (h) above.

8

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Fire Creek Mine means the Fire Creek gold project in Nevada, United States.

Foreign Currency means any currency other than the lawful currency of Canada.

Good Industry Practice means international standards, practices, methods and
procedures complying with Applicable Law and all Authorizations and with that
degree of skill, diligence, judgment, prudence and foresight which would
reasonably and ordinarily be expected under the same or similar circumstances
from (as applicable) an internationally skilled and experienced owner,
contractor, manufacturer, marketer, sales company or, as the case may be,
operator engaged in designing, engineering, constructing, developing,
commissioning, repairing, refurbishing, operating, maintaining, insuring and/or
owning mining facilities in relation to the Properties.

Gold Purchase Agreement means the gold purchase agreement dated 11 February 2014
between the Borrower, as seller, and Franco-Nevada Corporation (Franco-Nevada),
as buyer, including any permitted amendments, in accordance with the
Intercreditor Agreement.

Government means the Government of Canada.

Group means each Obligor and each Subsidiary for the time being.

Group Structure Chart means the group structure chart provided to the Lender on
the Closing Date.

Hedging Policy Limits means those limits established in the Klondex Mines Ltd.
Accounting Policy Regarding Metal Sales, dated August 7, 2015, as prepared by
[****], specifying the amounts of metal that can be sold as follows:

  (a)

[****]% of metal in inventory after settlement with the refiner; and

        (b)

[****]% of metal delivered to the refiner but not settled, metal poured at mill
or in transit to the refiner, metal in precipitate or estimated recovered metal
in circuit. Metal is available to pledge after it is melted and poured at the
refiner. Final settlement with the refiner is 10 days from the melt date.

        (c)

Percentages of estimated metal production for a one year rolling program:

  (i)

[****]% of 0-90 days;

        (ii)

[****]% of 91-180 days;

        (iii)

[****]% of 181-273 days; and

        (iv)

[****]% of 274-365 days.

Hedging Agreements means any master agreement, confirmation, schedule or other
agreement entered into or to be entered into by any member of the Group and
another party for the purpose of risk management in accordance with this
Agreement (other than the Hedge Counterparty) or otherwise with the consent of
the Lender.

Holding Company means, in relation to a person, any other person in respect of
which it is a Subsidiary.

IFC Performance Standards means the IFC Performance Standards on Social and
Economic Sustainability dated 1 January 2012 and as updated from time to time.

9

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

IFRS means International Financial Reporting Standards, as promulgated by the
International Accounting Standards Committee, applied on a consistent basis both
as to classification of items and amounts.

Insurance means any policy of insurance in respect of the Properties in which an
Obligor may at any time have an interest, entered into in accordance with clause
0 (Insurance).

Insolvency Event in relation to an entity means that the entity:

  (a)

is dissolved (other than pursuant to a consolidation, amalgamation or merger);

        (b)

becomes insolvent or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts as they become due;

        (c)

makes a general assignment, arrangement or composition with or for the benefit
of its creditors;

        (d)

institutes or has instituted against it, by a regulator, supervisor or any
similar official with primary insolvency, rehabilitative or regulatory
jurisdiction over it in the jurisdiction of its incorporation or organisation or
the jurisdiction of its head or home office, a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a petition is presented
for its winding-up or liquidation by it or such regulator, supervisor or similar
official;

        (e)

has instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition is instituted or
presented by a person or entity not described in paragraph (d) above and:

  (i)

results in a judgment of insolvency or bankruptcy or the entry of an order for
relief or the making of an order for its winding-up or liquidation; or

        (ii)

is not dismissed, discharged, stayed or restrained in each case within 30 days
of the institution or presentation thereof;

  (f)

has a resolution passed for its winding-up, official management or liquidation
(other than pursuant to a consolidation, amalgamation or merger);

        (g)

seeks or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets (other than, for so long as it
is required by law or regulation not to be publicly disclosed, any such
appointment which is to be made, or is made, by a person or entity described in
paragraph (d) above);

        (h)

has a secured party take possession of all or substantially all its assets or
has a distress, execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is not dismissed,
discharged, stayed or restrained, in each case within 30 days thereafter;

10

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (i)

causes or is subject to any event with respect to it which, under the applicable
laws of any jurisdiction, has an analogous effect to any of the events specified
in paragraphs (a) to (i) above; or

        (j)

takes any action in furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the foregoing acts.

Intercreditor Agreement means the intercreditor agreement dated on or about
Financial Close and made between the Lender and Franco-Nevada.

Interest Period means, in relation to a Loan, each period determined in
accordance with clause 0 (Interest Periods) and, in relation to an Unpaid Sum,
each period determined in accordance with clause 0 (Default interest).

Interpolated Screen Rate means, in relation to LIBOR for any Loan, the rate
(rounded to the same number of decimal places as the two relevant Screen Rates)
which results from interpolating on a linear basis between:

  (a)

the applicable Screen Rate for the longest period (for which that Screen Rate is
available) which is less than the Interest Period of that Loan; and

        (b)

the applicable Screen Rate for the shortest period (for which that Screen Rate
is available) which exceeds the Interest Period of that Loan,

each as of the Specified Time on the Quotation Day for the currency of that
Loan.

Joint Venture means any joint venture entity, whether a company, unincorporated
firm, undertaking, association, joint venture or partnership or any other
entity.

Legal Opinion means any legal opinion by counsel to the Borrower required to be
delivered to the Lender and the Hedge Counterparty under paragraph 0 of
0(Conditions precedent).

Legal Reservations means:

  (a)

the principle that equitable remedies may be granted or refused at the
discretion of a court and the limitation of enforcement by laws relating to
insolvency, reorganisation and other laws generally affecting the rights of
creditors;

        (b)

the time barring of claims under the Limitation Act;

        (c)

similar principles, rights and defences under the laws of any Relevant
Jurisdiction; and

        (d)

any other matters that are set out as qualifications or reservations as to
matters of law of general application in the Legal Opinions.

Lender’s Spot Rate of Exchange means the Lender’s spot rate of exchange for the
purchase of the relevant currency with dollars in the Toronto foreign exchange
market at or about 11:00 a.m. on a particular day.

LIBOR means, in relation to any Loan:

  (a)

the applicable Screen Rate;

        (b)

(if no Screen Rate is available for dollars for the Interest Period of that
Loan) the Interpolated Screen Rate for that Loan; or

11

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (c)

if:

  (i)

no Screen Rate is available for dollars; or

        (ii)

no Screen Rate is available for dollars for the Interest Period of that Loan and
it is not possible to calculate an Interpolated Screen Rate for that Loan,

the Reference Bank Rate,

as of, in the case of paragraphs (a) and (c) above, the Specified Time on the
Quotation Day for dollars and for a period equal in length to the Interest
Period of that Loan and if that rate is less than zero, LIBOR shall be deemed to
be zero.

Limitation Act means the Limitations Act (Ontario), 2002 and any similar
legislation in any Relevant Jurisdiction.

Loan means a loan made or to be made under the Facility or the principal amount
outstanding for the time being of that loan.

Margin means [****] for the period up to the first full Test Date (as defined in
clause 0 (Financial definitions)) following Financial Close, inclusive of any
applicable Risk Premium. Thereafter, the Margin shall be determined based on the
Borrower Gearing Ratio (as defined in clause 0 (Financial definitions)) for the
Relevant Period (as defined in clause 0 (Financial definitions)) in accordance
with the table below:

Borrower Gearing Ratio Margin (% per annum) [****] [****] [****] [****] [****]
[****] [****] [****] [****] [****] [****] [****]

Material Adverse Effect means any effect which, in the reasonable opinion of the
Lender, is or is reasonably likely to be materially adverse to:

  (a)

the business, operations, property, condition (financial or otherwise) or
creditworthiness of any Obligor or the Group (taken as a whole);

        (b)

the ability of an Obligor to perform any of its obligations under the Finance
Documents; or

        (c)

the validity or enforceability of, or the effectiveness or ranking of any
Security granted or purporting to be granted pursuant to any of, the Finance
Documents or the rights or remedies of any Finance Party under any of the
Finance Documents.

Material Licences means any mining right issued by the relevant authority in
connection with the Properties, the termination, revocation or loss of which
could result in a Material Adverse Effect.

Midas Mine means the Midas gold mine in Nevada, United States.

12

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Midas Plant means the processing plant for the extraction of gold and silver
located at the Midas Mine.

Month means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month, except that:

  (a)

(subject to paragraph (c) below) if the numerically corresponding day is not a
Business Day, that period shall end on the next Business Day in that calendar
month in which that period is to end if there is one, or if there is not, on the
immediately preceding Business Day; and

        (b)

if there is no numerically corresponding day in the calendar month in which that
period is to end, that period shall end on the last Business Day in that
calendar month; and

        (c)

if an Interest Period begins on the last Business Day of a calendar month, that
Interest Period shall end on the last Business Day in the calendar month in
which that Interest Period is to end.

The above rules will only apply to the last Month of any period.

New Lender has the meaning given to that term in clause 0 (Changes to the
Lender).

Obligor means the Borrower, a Guarantor or any party (other than the Hedge
Counterparty) to a Counterparty Hedging Agreement.

On Demand Funds has the meaning given to that term in clause 11.1 (Commitment
fee).

On Notice Funds has the meaning given to that term in clause 11.1 (Commitment
fee).

Original Final Maturity Date means the date falling twenty-four (24) Months
after the date of this Agreement or, if extended pursuant to clause 0 (Extension
option), the date which is twelve months after the then Original Final Maturity
Date.

Original Financial Statements means the audited consolidated financial
statements of the Borrower and its Subsidiaries for each of the financial year
ended 31 December 2014 and the financial year ended 31 December 2013.

Original Jurisdiction means, in relation to an Obligor, the jurisdiction under
whose laws that Obligor is incorporated as at the date of this Agreement.

Party means a party to this Agreement.

Permitted Acquisitions has the meaning given to it in clause 21.15
(Acquisitions).

Permitted Acquisition Debt means any pre-existing debt facilities secured solely
against assets to be acquired under a Permitted Acquisition, including metal
pre-purchase agreements, streaming or royalty financing agreements entered into
to fund a Permitted Acquisition and which is secured solely against production
from the acquired assets.

Permitted Disposal means a sale, lease, licence, transfer, loan or other
disposal by a person of any asset, undertaking or business (whether by a
voluntary or involuntary single transaction or series of transactions), which is
on arm's length terms:

13

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

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (a)

of obsolete or redundant vehicles, inventory, plant and equipment for cash;

        (b)

of assets (other than shares, businesses, or real property) in aggregate of less
than or equal to $[****] in exchange for other assets comparable or superior as
to type, value and quality;

        (c)

of assets in the ordinary course of trading of the disposing entity; or

        (d)

of assets acquired as part of a Permitted Acquisition for fair market value,
where such assets are not required by the Borrower as part of its strategy for
that Permitted Acquisition or the existing Properties.

Permitted Equipment Financing means:

  (a)

lending arrangements for the acquisition of vehicles, plant, equipment or
computers, (or which are secured on any such vehicles, plant, equipment or
computers (and any insurance policies in respect of the foregoing)); or

        (b)

finance or capital leases of vehicles, plant, equipment or computers,

provided that:

  (i)

the cost of financing the asset does not exceed fifteen percent (15%) per annum;

        (ii)

the aggregate Financial Indebtedness arising thereunder does not exceed
US$[****] (or its Equivalent);

        (iii)

the relevant Obligor provides a copy of the agreement documenting such lending
arrangements to the Lender; and

        (iv)

in the case of (b) above only, any deposit or down payment that is required to
be made under the terms of the finance or capital lease does not exceed forty
percent (40%) of the capital cost of the asset.

Permitted Indebtedness has the meaning given to it in clause 0 (Financial
indebtedness).

Permitted Security has the meaning given to it in clause 0 (Negative pledge).

Properties means the operation, maintenance and ownership of Midas Mine, Midas
Plant, Fire Creek Mine, Rice Lake Mine and any Permitted Acquisitions.

Quotation Day means, in relation to any period for which an interest rate is to
be determined, two (2) Business Days before the first day of that period unless
market practice differs in the Relevant Interbank Market, in which case the
Quotation Day will be determined by the Lender in accordance with market
practice in the Relevant Interbank Market (and if quotations would normally be
given by leading banks in the Relevant Interbank Market on more than one day,
the Quotation Day will be the last of those days).

Receiver means a receiver or receiver and manager or administrative receiver of
the whole or any part of the Charged Property.

Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to
four (4) decimal places) as supplied to the Lender at its request by the
Reference Banks as the rate at which the relevant Reference Bank could borrow
funds in the London interbank market in dollars for the relevant period, were it
to do so by asking for and then accepting interbank offers for deposits in
reasonable market size in that currency and for that period.

14

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Reference Banks means the principal London offices of Barclays Bank PLC and such
other banks as may be selected by the Lender in consultation with the Borrower.

Related Fund in relation to a fund (the first fund), means a fund which is
managed or advised by the same investment manager or investment adviser as the
first fund or, if it is managed by a different investment manager or investment
adviser, a fund whose investment manager or investment adviser is an Affiliate
of the investment manager or investment adviser of the first fund.

Relevant Interbank Market means the London interbank market.

Relevant Jurisdiction means, in relation to an Obligor:

  (a)

its Original Jurisdiction;

        (b)

any jurisdiction where any asset subject to or intended to be subject to the
Transaction Security to be created by it is situated;

        (c)

any jurisdiction where it conducts its business; and

        (d)

the jurisdiction whose laws govern the perfection of any of the Transaction
Security Document entered into by it.

Repeating Representations means each of the representations set out in clause
18.

Representative means any delegate, agent, manager, administrator, nominee,
attorney, trustee or custodian.

Resolution Authority means any body which has authority to exercise any
Write-down and Conversion Powers.

Restricted Party means a person that is:

  (a)

listed on, or owned or controlled by a person listed on, or acting on behalf of
a person listed on, any Sanctions List;

        (b)

located in, incorporated under the laws of, or owned or (directly or indirectly)
controlled by, or acting on behalf of, a person located in or organized under
the laws of a country or territory that is the target of country-wide or
territory-wide Sanctions; or

        (c)

otherwise a target of Sanctions (“target of Sanctions” signifying a person with
whom a US person or other national of a Sanctions Authority would be prohibited
or restricted by law from engaging in trade, business or other activities).

Rice Lake Mine means the Rice Lake Mine and mill complex located near Bissett,
Manitoba.

Risk Premium means from the first Test Date (as defined in clause 20.1
(Financial definitions) for which the Margin is calculated under the grid
contained therein, an additional per annum premium shall be applied to the
Margin as follows:

  (a)

0.25% prior to the final approval of the Environmental Assessment for the Fire
Creek Mine; and

15

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

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

0.35% while the liabilities outstanding under the Gold Purchase Agreement exceed
US$10,000,000, as reported using Accounting Principles and/or the Intercreditor
Agreement remains in effect.

Rollover Loan means one or more Loans:

  (a)

made or to be made on the same day that a maturing Loan is due to be repaid;

        (b)

the aggregate amount of which is equal to or less than the amount of the
maturing Loan; and

        (c)

made or to be made to the same Borrower for the purpose of refinancing a
maturing Loan.

Sanctions means the economic sanctions laws, regulations, embargoes or
restrictive measures administered, enacted or enforced by:

  (a)

the United States government;

        (b)

the United Nations;

        (c)

the European Union;

        (d)

the United Kingdom; or

        (e)

the respective governmental institutions and agencies of any of the foregoing,
including, without limitation, the Office of Foreign Assets Control of the US
Department of Treasury (OFAC), the United States Department of State, and Her
Majesty’s Treasury (HMT),

(together, the Sanctions Authorities).

Sanctions List means the “Specially Designated Nationals and Blocked Persons”
list maintained by OFAC, the Consolidated List of Financial Sanctions Targets
and the Investment Ban List maintained by HMT, or any similar list maintained
by, or public announcement of Sanctions designation made by, any of the
Sanctions Authorities.

Screen Rate means the London interbank offered rate administered by ICE
Benchmark Administration Limited (or any other person which takes over the
administration of that rate) for dollars for the relevant period displayed on
pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page
which displays that rate), or on the appropriate page of such other information
service which publishes that rate from time to time in place of Reuters. If such
page or service ceases to be available, the Lender may specify another page or
service displaying the relevant rate after consultation with the Borrower.

Security means a mortgage, charge, pledge, lien or other security interest
securing any obligation of any person or any other agreement or arrangement
having a similar effect.

Separate Loan has the meaning given to it in clause 0 (Repayment of Loans).

Shoreline Asset Purchase Agreement means the Asset Purchase Agreement made as of
December 16, 2015 among Klondex Canada, Shoreline Gold Inc. and the Borrower.

16

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

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Shoreline Promissory Note means the secured Promissory Note dated January 21,
2016 made by Klondex Canada in favor of 7097914 Manitoba Inc. in the principal
amount of $12,000,000.

Specified Time means a time determined in accordance with 0(Timetables).

Subsidiary means, in relation to a company, any other company:

  (a)

which is Controlled, directly or indirectly, by the first named company; or

        (b)

more than half the issued share capital of which is beneficially owned, directly
or indirectly, by the first named company.

Tax means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection with any
failure to pay or any delay in paying any of the same).

Transaction Security means the Security created or expressed to be created in
favour of the Security Agent pursuant to the Transaction Security Documents.

Transaction Security Documents means any document required to be delivered under
paragraph 0 of 0(Conditions Precedent); and any other document entered into by
any Obligor creating or expressed to create any Security over all or any part of
its assets in respect of the obligations of any of the Obligors under any of the
Finance Documents.

Transfer Certificate means a certificate substantially in the form set out in 0
(Form of Transfer Certificate) or any other form agreed between the Lender and
the Borrower.

Transfer Date means, in relation to an assignment or a transfer, the proposed
date specified in the relevant Assignment Agreement or Transfer Certificate.

Unpaid Sum means any sum due and payable but unpaid by an Obligor under the
Finance Documents.

US means the United States of America.

US Tax Obligor means:

  (a)

the Borrower which is resident for tax purposes in the US; or

        (b)

an Obligor some or all of whose payments under the Finance Documents are from
sources within the US for US federal income tax purposes.

Utilization means a Utilization of the Facility.

Utilization Date means the date of a Utilization, being the date on which a Loan
is to be made.

Utilization Request means a notice substantially in the form set out in
0(Utilization Request).

VAT means general sales tax and provincial sales tax as applicable in British
Columbia, or any other tax of similar nature, whether imposed in Canada or
elsewhere.

World Bank Standards means:

17

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (a)

the environmental and social standards, requirements, policies and guidelines
contained in the Pollution, Prevention and Abatement Handbook 1998 published by
the World Bank and (to the extent applicable) all other environmental and social
standards, requirements, policies and guidelines relating to mining projects
published by the World Bank from time to time;

        (b)

the IFC Environmental Guidelines for Occupational Health and Safety in force
from time to time;

        (c)

the IFC Performance Standards; and

        (d)

(to the extent applicable) all other environmental and social standards,
requirements, policies and guidelines relating to mining projects published by
the International Finance Corporation from time to time.

Write-down and Conversion Powers means:

  (a)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation
Schedule from time to time, the powers described as such in relation to that
Bail-In Legislation in the EU Bail-In Legislation Schedule; and

        (b)

in relation to any other applicable Bail-In Legislation:

  (i)

any powers under that Bail-In Legislation to cancel, transfer or dilute shares
issued by a person that is a bank or investment firm or other financial
institution or affiliate of a bank, investment firm or other financial
institution, to cancel, reduce, modify or change the form of a liability of such
a person or any contract or instrument under which that liability arises, to
convert all or part of that liability into shares, securities or obligations of
that person or any other person, to provide that any such contract or instrument
is to have effect as if a right had been exercised under it or to suspend any
obligation in respect of that liability or any of the powers under that Bail-In
Legislation that are related to or ancillary to any of those powers; and

        (ii)

any similar or analogous powers under that Bail-In Legislation.

1.2

Construction

  (a)

Unless a contrary indication appears, any reference in this Agreement to:

  (i)

the Security Agent, any Finance Party, the Lender, any Obligor, or any Party
shall be construed so as to include its successors in title, permitted assigns
and permitted transferees to, or of, its rights and/or obligations under the
Finance Documents and, in the case of the Security Agent, any person for the
time being appointed as Security Agent or Security Agents in accordance with the
Finance Documents;

        (ii)

a document in agreed form is a document which is previously agreed in writing by
or on behalf of the Borrower and the Lender or their respective legal advisors
or, if not so agreed, is in the form specified by the Lender;

        (iii)

assets includes present and future properties, assets, intellectual property
rights, real property, personal property, revenues, uncalled capital and rights
of every description;

18

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

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (iv)

a Finance Document or any other agreement or instrument is a reference to that
Finance Document or other agreement or instrument as amended, novated,
supplemented, extended or restated, however fundamentally;

        (v)

guarantee means (other than in clause 0 (Guarantee and Indemnity)) any
guarantee, letter of credit, bond, indemnity or similar assurance against loss,
or any obligation, direct or indirect, actual or contingent, to purchase or
assume any indebtedness of any person or to make an investment in or loan to any
person or to purchase assets of any person where, in each case, such obligation
is assumed in order to maintain or assist the ability of such person to meet its
indebtedness;

        (vi)

indebtedness includes any obligation (whether incurred as principal or as
surety) for the payment or repayment of money, whether present or future, actual
or contingent;

        (vii)

the term including shall be construed to mean including without limitation;

        (viii)

an obligation means any duty, obligation or liability of any kind;

        (ix)

a person includes any individual, firm, company, corporation, government, state
or agency of a state or any association, trust, joint venture, consortium,
partnership or other entity (whether or not having separate legal personality);

        (x)

a regulation includes any regulation, rule, official directive, request or
guideline (whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or of any
regulatory, self-regulatory or other authority or organisation;

        (xi)

a right means any right, privilege, power, immunity or other interest or remedy
of any kind;

        (xii)

the winding up, dissolution, administration or bankruptcy of a person shall be
construed as to include any equivalent or analogous procedures under the laws of
any jurisdiction in which such person is incorporated or resident in any
jurisdiction in which such person carries on business or in which any of its
assets are located (including the seeking of a liquidation, winding up,
appointment of bankruptcy trustee, reorganisation, dissolution, administration,
arrangement, adjustment, protection or relief of debtors, insolvency and
suspension of payments);

        (xiii)

a provision of law is a reference to that provision as amended or re-enacted;

        (xiv)

a time of day is a reference to Pacific Time; and

        (xv)

clauses and schedules are to be construed as references to clauses of and
schedules to this Agreement.

  (b)

Section, clause and Schedule headings are for ease of reference only.

        (c)

Unless a contrary indication appears, a term used in any other Finance Document
or in any notice given under or in connection with any Finance Document has the
same meaning in that Finance Document or notice as in this Agreement.

        (d)

A Default (other than an Event of Default) is continuing if it has not been
remedied or waived and an Event of Default is continuing if it has not been
waived.

19

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

1.3

Currency symbols and definitions

$, US$, USD and dollars denote the lawful currency of the United States of
America.

1.4

Third Party Rights

  (a)

Unless expressly provided to the contrary in a Finance Document a person who is
not a Party has no right to enforce or to enjoy the benefit of any term of this
Agreement.

        (b)

Notwithstanding any term of any Finance Document the consent of any person who
is not a Party is not required to rescind or vary this Agreement at any time.

1.5

Calculations

In any calculation done for the purposes of a Finance Document, no amount shall
be double-counted.

20

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

THE FACILITY

2

The Facility

2.1

The Facility

Subject to the terms of this Agreement, the Lender shall make available to the
Borrower a dollar revolving loan facility in an aggregate amount equal to the
Commitment.

2.2

Amendment to Commitment

  (a)

The Borrower may, on the one (1) year anniversary of Financial Close, request
that the Commitment be amended by delivering an Amendment Request to the Lender
specifying the amount in dollars of the proposed amendment in the Commitment.

        (b)

The Borrower may not deliver an Amendment Request unless:

  (i)

no Default is continuing or would result from the proposed increase in the
Commitment; and

        (ii)

the Repeating Representations are true on the date of the Amendment Request.

  (c)

Any amendment to the Commitment made pursuant to paragraph (a) above will take
effect on the last day of the current Interest Period for the Loan or Loans
which are outstanding when the conditions set out in paragraph (d) below are
satisfied.

        (d)

An amendment to the Commitment will only be effective on:

  (i)

the Lender’s credit committee consenting in writing to the proposed amendment;
and

        (ii)

the execution by the Lender of an Amendment Confirmation.

  (e)

The Borrower shall promptly on demand pay the Lender and the Security Agent the
amount of all costs and expenses (including legal fees and disbursements)
reasonably incurred by either of them and, in the case of the Security Agent, by
any Receiver or Delegate in connection with any increase in Commitment under
this clause 2.2.

        (f)

The Borrower may pay to the Lender a fee in the amount and at the times agreed
between the Borrower and the Lender in a Fee Letter.

2.3

Reduction in Commitment

If the Borrower Gearing Ratio (as defined in clause 0 (Financial definitions))
is greater than 3.75:1 at any time when calculated prior to the Original Final
Maturity Date, the Available Commitment shall be recalculated by the Lender and
reduced to a level in compliance with the ratios described in clause 20.1
(Financial definitions) (the Commitment Limit). If the amount of the outstanding
under the Facility exceeds the Commitment Limit, the Borrower shall be required
to remit a mandatory prepayment in accordance with clause 7.3 (Mandatory
prepayment – reduction in Commitment).

2.4

Finance Parties' rights and obligations

  (a)

The obligations of each Finance Party under the Finance Documents are several.
Failure by a Finance Party to perform its obligations under the Finance
Documents does not affect the obligations of any other Party under the Finance
Documents. No Finance Party is responsible for the obligations of any other
Finance Party under the Finance Documents.

21

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

The rights of each Finance Party under or in connection with the Finance
Documents are separate and independent rights and any debt arising under the
Finance Documents to a Finance Party from an Obligor shall be a separate and
independent debt.

        (c)

A Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce its rights under the Finance Documents.

2.5

Obligors' Agent

  (a)

Each Obligor (other than the Borrower) by its execution of this Agreement
irrevocably appoints the Borrower (acting through one or more authorised
signatories) to act on its behalf as its agent in relation to the Finance
Documents and irrevocably authorises:

  (i)

the Borrower on its behalf to supply all information concerning itself
contemplated by this Agreement to the Finance Parties and to give all notices
and instructions, to make such agreements and to effect the relevant amendments,
supplements and variations capable of being given, made or effected by any
Obligor notwithstanding that they may affect the Obligor, without further
reference to or the consent of that Obligor; and

        (ii)

each Finance Party to give any notice, demand or other communication to that
Obligor pursuant to the Finance Documents to the Borrower,

and in each case the Obligor shall be bound as though the Obligor itself had
given the notices and instructions or executed or made the agreements or
effected the amendments, supplements or variations, or received the relevant
notice, demand or other communication.

  (b)

Every act, omission, agreement, undertaking, settlement, waiver, amendment,
supplement, variation, notice or other communication given or made by the
Obligors' Agent or given to the Obligors' Agent under any Finance Document on
behalf of another Obligor or in connection with any Finance Document (whether or
not known to any other Obligor and whether occurring before or after such other
Obligor became an Obligor under any Finance Document) shall be binding for all
purposes on that Obligor as if that Obligor had expressly made, given or
concurred with it. In the event of any conflict between any notices or other
communications of the Obligors' Agent and any other Obligor, those of the
Obligors' Agent shall prevail.

3

Purpose

3.1

Purpose

The Borrower shall apply all amounts borrowed by it under the Facility towards:

  (a)

any fees and expenses which are payable by the Obligors under this Agreement;

        (b)

general corporate requirements of the Borrower;

22

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (c)

working capital requirements of the Borrower or its Subsidiaries; and

        (d)

capital investments and expenditures of the Borrower or its Subsidiaries.

3.2

Monitoring

No Finance Party is bound to monitor or verify the application of any amount
borrowed pursuant to this Agreement.

4

Conditions of Utilization

4.1

Initial conditions precedent

The Borrower may not deliver a Utilization Request unless the Lender has
received all of the documents and other evidence listed in 0(Conditions
precedent) in form and substance satisfactory to the Lender. The Lender shall
notify the Borrower promptly upon being so satisfied.

4.2

Further conditions precedent

The Lender will only be obliged to comply with clause 0 (Lender’s obligation) if
on the date of the Utilization Request and on the proposed Utilization Date:

  (a)

in the case of a Rollover Loan, no Event of Default is continuing or would
result from the proposed Loan and, in the case of any other Loan, no Default is
continuing or would result from the proposed Loan; and

        (b)

the Repeating Representations to be made by each Obligor are true in all
material respects.

23

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

UTILIZATION

5

Utilization

5.1

Delivery of a Utilization Request

The Borrower may utilise the Facility by delivery to the Lender of a duly
completed Utilization Request not later than the Specified Time.

5.2

Completion of a Utilization Request

  (a)

Each Utilization Request is irrevocable and will not be regarded as having been
duly completed unless:

  (i)

the proposed Utilization Date is a Business Day within the Availability Period;

        (ii)

the currency and amount of the Utilization comply with clause 0 (Currency and
amount); and

        (iii)

the proposed Interest Period complies with clause 0 (Interest Periods).

  (b)

Only one (1) Loan may be requested in each Utilization Request.

5.3

Currency and amount

  (a)

The currency specified in a Utilization Request must be dollars.

        (b)

The amount of the proposed Loan must be an amount which is not more than the
Available Commitment and which is a minimum of US$1,000,000 and an integral
multiple of US$500,000 or, if less, the Commitment.

5.4

Lender’s obligations

If the conditions set out in this Agreement have been met, and subject to clause
0 (Repayment of Loans) the Lender shall make each Loan available by the
Utilization Date through its Facility Office.

5.5

Cancellation of Commitment

The portion of the Commitment which, at that time, is unutilised shall be
immediately cancelled at the end of the Availability Period.

24

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

REPAYMENT, PREPAYMENT AND CANCELLATION

6

Repayment

6.1

Repayment of Loans

  (a)

The Borrower shall repay each Loan on the last day of its Interest Period, and
any outstanding Loans shall be repaid on the Original Final Maturity Date.

6.2

Extension option

  (a)

On an annual basis after the date hereof, the Borrower may request an extension
of the then applicable Original Final Maturity Date by a further twelve months
by delivering an Extension Request to the Lender not less than sixty (60) days
before the then applicable Original Final Maturity Date, provided that the
Borrower may not deliver an Extension Request unless:

  (i)

no Default is continuing or would result from the Extension Request; and

        (ii)

the Repeating Representations are true on the date of the Extension Request.

  (b)

An Extension Request shall be irrevocable.

        (c)

Concurrent with the Extension Request, the Borrower shall deliver an extension
fee equal to US$[****] on the date of the delivery of the Extension Request (the
“Extension Fee”).

        (d)

If the Lender consents to the Extension Request, it shall notify the Borrower by
no later than thirty (30) days prior to the then Original Final Maturity Date
(the Consent Date). The decision as to whether to consent to the Extension
Request is at the sole discretion of the Lender who shall not be under any
obligation whatsoever to agree to the Extension Request. If the Borrower does
not receive notification from the Lender by the Consent Date or if the Lender
does not receive the Extension Fee, that Lender shall be deemed not to have
consented to the Extension Request.

        (e)

If the Lender consents to the Extension Request, provided that no Default is
continuing and the Extension Fee has been received by the Lender, the Original
Maturity Date shall be extended by a further twelve months on the later of the
Consent Date and the date on which the Borrower pays the Extension Fee to the
Lender.

        (f)

If the Lender does not consent to the Extension Request by the Consent Date, the
Original Final Maturity Date shall remain the same as was previously in effect
without any recognition of an extension, and the Lender shall return the
Extension Fee to the Borrower.

7

Prepayment and Cancellation

7.1

Illegality

If, in any applicable jurisdiction, it becomes unlawful for the Lender to
perform any of its obligations as contemplated by this Agreement or to fund or
maintain its participation in any Loan or it becomes unlawful for any Affiliate
of the Lender to do so:

  (a)

upon the Lender notifying the Borrower, the Available Commitment of that Lender
will be immediately cancelled; and

25

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

the Borrower shall repay the Lender on the last day of the Interest Period for
each Loan occurring after the Lender has notified the Borrower, and the Lender's
Commitment shall be cancelled in the amount of the Loans repaid.

7.2

Mandatory prepayment - change of control

  (a)

If a Change of Control occurs:

  (i)

the Borrower shall promptly (and in any event no later than three (3) Business
Days after the occurrence of the Change of Control) notify the Lender upon
becoming aware of that event; and

        (ii)

unless the Lender gave its written consent prior to the occurrence of the Change
of Control, the Commitment will be immediately cancelled and all outstanding
Loans, together with accrued interest and all other amounts accrued under the
Finance Documents, will become immediately due and payable.

  (b)

For the purposes of paragraph 0 above, Change of Control means any person or
group of persons acting jointly or otherwise acting in concert (including by way
of joint venture or other cooperation agreement with an Obligor) gaining direct
or indirect control of the Borrower or any Obligor and, for the purposes of this
definition:

  (i)

control of a person means:

  (A)

the power (whether by way of ownership of shares, proxy, contract, agency or
otherwise) to:

  (1)

cast, or control the casting of, more than fifty percent (50%) of the maximum
number of votes that might be cast at a general meeting of that person; or

        (2)

appoint or remove all, or the majority, of the directors or other equivalent
officers of that person; or

        (3)

give directions with respect to the operating and financial policies of that
person with which the directors or other equivalent officers of that person are
obliged to comply; or

  (B)

the holding of more than fifty percent (50%) of the issued and outstanding share
capital of that person (excluding any part of that issued share capital that
carries no right to participate beyond a specified amount in a distribution of
either profits or capital); and

  (ii)

acting in concert means a group of persons who, pursuant to an agreement or
understanding (whether formal or informal), actively co-operate, through the
acquisition by any of them, either directly or indirectly, of shares in a
person, to obtain or consolidate control of that person.

7.3

Mandatory prepayment – reduction in Commitment

If the amount of Loans outstanding under the Facility exceeds the Commitment
Limit pursuant to a reduction under Clause 2.3 (Reduction in Commitment):

26

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (a)

any available cash of the Borrower above US$10,000,000 shall become immediately
due and payable to the Lender to reduce the Loans to the Commitment Level; and

        (b)

following the payment described in paragraph (a) above, one hundred percent
(100%) of Cash Available for Debt Service shall be payable to the Lender until
the outstanding Loans do not exceed the Commitment Limit.

7.4

Automatic cancellation

The Available Commitment shall be automatically cancelled at the end of the
Availability Period.

7.5

Restrictions

  (a)

Any notice of cancellation or prepayment given by any Party under this clause 0
shall be irrevocable and, unless a contrary indication appears in this
Agreement, shall specify the date or dates upon which the relevant cancellation
or prepayment is to be made and the amount of that cancellation or prepayment.

        (b)

Any prepayment under this Agreement shall be made together with accrued interest
on the amount prepaid and, subject to any Break Costs, without premium or
penalty.

        (c)

Unless a contrary indication appears in this Agreement, any part of the Facility
which is prepaid or repaid may be reborrowed in accordance with the terms of
this Agreement.

        (d)

The Borrower shall not repay or prepay all or any part of the Loans or cancel
all or any part of the Commitment except at the times and in the manner
expressly provided for in this Agreement.

        (e)

Subject to clause 0 (Amendment to Commitment), no amount of the Commitment
cancelled under this Agreement may be subsequently reinstated.

        (f)

If all or part of a Loan is repaid or prepaid and is not available for redrawing
(other than by operation of clause 0 (Further conditions precedent)), the amount
which is repaid or prepaid will be deemed to be cancelled on the date of
repayment or prepayment.

27

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

COSTS OF UTILIZATION

8

Interest

8.1

Calculation of interest

The rate of interest on each Loan for each Interest Period is the percentage
rate per annum which is the aggregate of the applicable:

  (a)

Margin;

        (b)

LIBOR; and

        (c)

Risk Premium.

8.2

Payment of interest

The Borrower shall pay accrued interest on the Loan to which that Interest
Period relates on the last day of each Interest Period (and, if the Interest
Period is longer than six (6) Months, on the dates falling at six (6) monthly
intervals after the first day of the Interest Period).

8.3

Default interest

  (a)

If an Obligor fails to pay any amount payable by it under a Finance Document on
its due date, interest shall accrue on the overdue amount from the due date up
to the date of actual payment (both before and after judgment) at a rate which,
subject to paragraph 0 below, is two percent (2.0%) per annum higher than the
rate which would have been payable if the overdue amount had, during the period
of non-payment, constituted a Loan of the overdue amount for successive Interest
Periods, each of a duration selected by the Lender (acting reasonably). Any
interest accruing under this clause 0 shall be immediately payable by the
Obligor on demand by the Lender.

        (b)

If any overdue amount consists of all or part of a Loan which became due on a
day which was not the last day of an Interest Period relating to that Loan:

  (i)

the first Interest Period for that overdue amount shall have a duration equal to
the unexpired portion of the current Interest Period relating to that Loan; and

        (ii)

the rate of interest applying to the overdue amount during that first Interest
Period shall be two percent (2%) per annum higher than the rate which would have
applied if the overdue amount had not become due.

  (c)

Default interest (if unpaid) arising on an overdue amount will be compounded
with the overdue amount at the end of each Interest Period applicable to that
overdue amount but will remain immediately due and payable.

8.4

Notification of rates of interest

The Lender shall promptly notify the Borrower of the determination of a rate of
interest under this Agreement.

28

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

9

Interest Periods

9.1

Selection of Interest Periods

  (a)

The Borrower may select an Interest Period for a Loan in the Utilization Request
for that Loan.

        (b)

The Borrower may select an Interest Period of one (1), three (3), and six (6) or
twelve (12) Months or any other period agreed between the Borrower and the
Lender.

        (c)

An Interest Period for a Loan shall not extend beyond the Original Final
Maturity Date.

        (d)

Each Interest Period for a Loan shall start on its Utilization Date.

        (e)

A Loan has one (1) Interest Period only.

9.2

Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day,
that Interest Period will instead end on the next Business Day in that calendar
month (if there is one) or the preceding Business Day (if there is not).

10

Changes to the Calculation of Interest

10.1

Absence of quotations

Subject to clause 0 (Market disruption), if LIBOR is to be determined by
reference to the Reference Banks but a Reference Bank does not supply a
quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall
be determined on the basis of the quotations of the remaining Reference Banks.

10.2

Market disruption

  (a)

If a Market Disruption Event occurs in relation to a Loan for any Interest
Period, then the rate of interest on the Loan for the Interest Period shall be
the percentage rate per annum which is the sum of:

  (i)

the Margin; and

        (ii)

the percentage rate per annum of the cost to the Lender of funding its
participation in that Loan from whatever source it may reasonably select.

  (b)

If the percentage rate per annum notified by the Lender pursuant to clause 0
above is less than LIBOR, the cost to that Lender of funding its participation
in that Loan for that Interest Period shall be deemed, for the purposes of
clause 0 above, to be LIBOR.

        (c)

If a Market Disruption Event occurs the Lender shall, as soon as is practicable,
notify the Borrower.

        (d)

In this Agreement Market Disruption Event means:

  (i)

at or about noon on the Quotation Day for the relevant Interest Period when
LIBOR is to be determined by reference to the Reference Banks, and none or only
one of the Reference Banks supplies a rate to the Lender to determine LIBOR for
the relevant Interest Period; or

29

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (ii)

before close of business in Toronto on the Quotation Day for the relevant
Interest Period, the cost to the Lender of obtaining matching deposits in the
Relevant Interbank Market would be in excess of LIBOR.

10.3

Alternative basis of interest or funding

If a Market Disruption Event occurs and the Lender or the Borrower so requires,
the Lender and the Borrower shall enter into negotiations (for a period of not
more than thirty (30) days) with a view to agreeing a substitute basis for
determining the rate of interest.

10.4

Break Costs

  (a)

The Borrower shall, within three (3) Business Days of demand by a Finance Party,
pay to that Finance Party its Break Costs attributable to all or any part of a
Loan or Unpaid Sum being paid by the Borrower on a day other than the last day
of an Interest Period for that Loan or Unpaid Sum.

        (b)

The Lender shall, as soon as reasonably practicable to the Borrower, provide a
certificate of an authorized signatory of the Lender confirming the amount of
its Break Costs for any Interest Period in which they accrue.

11

Fees

11.1

Commitment fee

  (a)

The Borrower shall pay to the Lender a fee on undrawn amounts under the Facility
computed at the rate equal to:

  (i)

[****] per annum on amounts subject to sixty (60) days’ notice for Utilizations
(On Notice Funds); and

        (ii)

[****] per annum on all other amounts (On Demand Funds).

  (b)

Following Financial Close, the Borrower shall notify the Lender of the aggregate
amount of undrawn funds to be held as On Notice Funds and On Demand Funds.
Following receipt of such notice by the Lender, the Borrower may elect to
re-allocate any undrawn funds as either On Notice Funds or On Demand Funds at
any time during the Availability Period, provided that the Borrower provides
sixty (60) days’ notice to the Lender prior to any change of allocation.

        (c)

The accrued commitment fee is payable on the last day of each fiscal quarter
which ends during the Availability Period, on the last day of the Availability
Period and, if cancelled in full, on the cancelled amount of the Lender's
Commitment at the time the cancellation is effective.

11.2

Establishment fee

The Borrower shall pay to the Lender an establishment fee as more specifically
outlined in the Fee Letter in the form attached as Schedule 11.2 and executed
and delivered concurrently with this Agreement.

30

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

ADDITIONAL PAYMENT OBLIGATIONS

12

Tax Gross Up and Indemnities

12.1

Definitions

  (a)

In this Agreement:

Protected Party means a Finance Party which is or will be subject to any
liability, or required to make any payment, for or on account of Tax in relation
to a sum received or receivable (or any sum deemed for the purposes of Tax to be
received or receivable) under a Finance Document.

Tax Deduction means a deduction or withholding for or on account of Tax from a
payment under a Finance Document, other than a FATCA Deduction.

Tax Payment means either the increase in a payment made by an Obligor to a
Finance Party under clause 0 (Tax gross-up) or a payment under clause 0 (Tax
indemnity).

Tax Refund means a refund of any Tax.

Tax Withholding means (i) a FATCA Withholding or (ii) withholding Taxes imposed
on amounts payable to or for the account of a Finance Party under a Finance
Document pursuant to a law in effect on the date on which (A) such Finance Party
acquires such interest in the Finance Document or (B) such Finance Party changes
its Facility Office, except in each case to the extent that, pursuant to Section
12 of this Agreement, amounts with respect to such Taxes were payable either to
such Finance Party’s assignor immediately before such Finance Party became a
party hereto or to such Finance Party immediately before it changed its Facility
Office.

  (b)

Unless a contrary indication appears, in this clause 0 a reference to determines
or determined means a determination made in the absolute discretion of the
person making the determination.

12.2

Tax gross-up

  (a)

Each Obligor shall make all payments to be made by it without any Tax Deduction,
unless a Tax Deduction is required by law.

        (b)

The Borrower shall promptly upon becoming aware that an Obligor must make a Tax
Deduction (or that there is any change in the rate or the basis of a Tax
Deduction) notify the Lender accordingly. Similarly, the Lender shall notify the
Borrower on becoming so aware in respect of a payment payable to that Lender.

        (c)

If a Tax Deduction is required by law to be made by an Obligor, the amount of
the payment due from that Obligor shall be increased to an amount which (after
making any Tax Deduction) leaves an amount equal to the payment which would have
been due if no Tax Deduction had been required.

        (d)

If an Obligor is required to make a Tax Deduction, that Obligor shall make that
Tax Deduction and any payment required in connection with that Tax Deduction
within the time allowed and in the minimum amount required by law.

        (e)

Within thirty (30) days of making either a Tax Deduction or any payment required
in connection with that Tax Deduction, the Obligor making that Tax Deduction
shall deliver to the Finance Party entitled to the payment evidence reasonably
satisfactory to that Finance Party that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing authority.

31

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (f)

Notwithstanding anything else in this Agreement, provided no Event of Default
shall have occurred and be continuing, the provisions of this Section 0 shall
not apply in respect of any Tax Withholding that is required solely as a result
of an assignment by the Lender pursuant to Section 0 of this Agreement.

12.3

Tax indemnity

  (a)

The Borrower shall (within ten days of demand by the Lender) indemnify each
Protected Party for the full amount of Tax imposed on such Protected Party and
any other loss, liability or cost which that Protected Party reasonably
determines will be or has been (directly or indirectly) suffered for or on
account of Tax by that Protected Party in respect of a Finance Document,
including, without limitation, any Tax imposed or asserted on, or attributable
to, amounts payable under this clause 12.3(a), whether or not such Tax was
correctly or legally imposed or asserted. Any Protected Party making a claim
under this clause 0 shall provide the Borrower with documentary evidence that
the loss, liability or cost will be or has been suffered.

        (b)

Paragraph 0 above shall not apply:

  (i)

with respect to any Tax assessed on a Finance Party:

  (A)

under the law of the jurisdiction in which that Finance Party is incorporated
or, if different, the jurisdiction (or jurisdictions) in which that Finance
Party is treated as resident for tax purposes; or

        (B)

under the law of the jurisdiction in which that Finance Party's Facility Office
is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received
or receivable (but not any sum deemed to be received or receivable) by that
Finance Party; or

  (ii)

to the extent a loss, liability or cost:

  (A)

is compensated for by an increased payment under clause 0 (Tax gross-up); or

        (B)

relates to a FATCA Deduction required to be made by a Party; or

  (iii)

with respect to any Bank Tax assessed or imposed on a Finance Party to the
extent a loss, liability or cost is attributable to the unreasonable delay or
default of a Finance Party in accounting for an amount of Tax due where such
Finance Party was aware that such delay or default would result in such loss,
liability or cost, save to the extent that such delay or default is attributable
to the Borrower’s failure to pay that Finance Party pursuant to its obligation
under clause 0 (Tax indemnity).

12.4

Tax Refund

If an Obligor makes a Tax Payment and the relevant Finance Party determines, in
its discretion, that:

32

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (a)

a Tax Refund is attributable to an increased payment of which that Tax Payment
forms part, to that Tax Payment or to a Tax Deduction in consequence of which
that Tax Payment was required; and

        (b)

that a Finance Party (or any Affiliate of that Finance Party) has obtained that
Tax Refund,

the Finance Party shall pay an amount to the Obligor which that Finance Party
determines will leave it, together with its Affiliates (if relevant) (after
making that payment) in the same after-Tax position as it (or they, as the case
may be) would have been in had the Tax Payment not been required to be made by
the Obligor. Notwithstanding any other provision of this Agreement:

  (a)

the relevant Finance Party shall not be required to take any steps to claim or
utilise any Tax Refund which would result in that Finance Party incurring any
costs (including costs of management time);

        (b)

the relevant Finance Party shall not be required to take any steps which it
reasonably considers would adversely affect its interests; and

        (c)

the relevant Finance Party shall not be required to claim or utilise any Tax
Refund in priority to any other Tax relief, credit, deduction or right of
repayment or other Tax benefit which may be available to it.

12.5

Stamp taxes

The Borrower shall pay and, within ten days of demand, indemnify each Finance
Party against any cost, loss or liability that Finance Party incurs in relation
to all stamp duty, registration and other similar Taxes payable in respect of
any Finance Document except for any such Tax payable in connection with the
entry into of, or any transaction implemented by, a Transfer Certificate (other
than where that Transfer Certificate is entered into following an Event of
Default which is continuing or a request by an Obligor).

12.6

VAT

  (a)

All amounts expressed to be payable under a Finance Document by any Party to a
Finance Party which (in whole or in part) constitute the consideration for any
supply for VAT purposes are deemed to be exclusive of any VAT which is
chargeable on that supply, and accordingly, subject to paragraph (b) below, if
VAT is or becomes chargeable on any supply made by any Finance Party to any
Party under a Finance Document and such Finance Party is required to account to
the relevant tax authority for the VAT, that Party must pay to such Finance
Party (in addition to and at the same time as paying any other consideration for
such supply) an amount equal to the amount of the VAT (and such Finance Party
must promptly provide an appropriate VAT invoice to that Party). In the event
that any VAT is paid by any Party to a Finance Party in respect of such supply
and such VAT is found not to be chargeable in respect of such supply and, as a
result, such Finance Party receives a credit or repayment from the relevant tax
authority, the Finance Party shall promptly pay to the Party an amount equal to
such credit or repayment (if any) (up to an amount equal to the VAT paid by that
Party to the relevant Finance Party in relation to such supply) which it
reasonably determines relates to the VAT chargeable on that supply.

        (b)

If VAT is or becomes chargeable on any supply made by any Finance Party (the
Supplier) to any other Finance Party (the Recipient) under a Finance Document,
and any Party other than the Recipient (the Relevant Party) is required by the
terms of any Finance Document to pay an amount equal to the consideration for
that supply to the Supplier (rather than being required to reimburse or
indemnify the Recipient in respect of that consideration):

33

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (c)

(where the Supplier is the person required to account to the relevant tax
authority for the VAT) the Relevant Party must also pay to the Supplier (at the
same time as paying that amount) an additional amount equal to the amount of the
VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the
Relevant Party an amount equal to any credit or repayment the Recipient receives
from the relevant tax authority which the Recipient reasonably determines
relates to the VAT chargeable on that supply; and

        (d)

(where the Recipient is the person required to account to the relevant tax
authority for the VAT) the Relevant Party must promptly, following demand from
the Recipient, pay to the Recipient an amount equal to the VAT chargeable on
that supply but only to the extent that the Recipient reasonably determines that
it is not entitled to credit or repayment from the relevant tax authority in
respect of that VAT.

        (e)

Where a Finance Document requires any Party to reimburse or indemnify a Finance
Party for any cost or expense, that Party shall reimburse or indemnify (as the
case may be) such Finance Party for the full amount of such cost or expense,
including such part thereof as represents VAT, save to the extent that such
Finance Party reasonably determines that it is entitled to credit or repayment
in respect of such VAT from the relevant tax authority.

        (f)

Any reference in this clause 12.6 to any Party shall, at any time when such
Party is treated as a member of a group for VAT purposes, include (where
appropriate and unless the context otherwise requires) a reference to the person
who is treated as making the supply, or (as appropriate) receiving the supply,
under any applicable grouping rules.

        (g)

In relation to any supply made by a Finance Party to any Party under a Finance
Document, if reasonably requested by such Finance Party, that Party must
promptly provide such Finance Party with details of that Party's VAT
registration and such other information as is reasonably requested in connection
with such Finance Party's VAT reporting requirements in relation to such supply.

12.7

FATCA Information

  (a)

Subject to clause 0 below, each Party shall, within ten (10) Business Days of a
reasonable request by another Party in writing:

  (i)

confirm to that other Party whether it is:

  (A)

a FATCA Exempt Party; or

        (B)

not a FATCA Exempt Party;

  (ii)

supply to that other Party such forms, documentation and other information
relating to its status under FATCA as that other Party reasonably requests for
the purposes of that other Party's compliance with FATCA; and

        (iii)

supply to that other Party such forms, documentation and other information
relating to its status as that other Party reasonably requests for the purposes
of that other Party's compliance with any other law, regulation or exchange of
information regime.

34

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

If a Party confirms to another Party pursuant to paragraph (a)(i) above that it
is a FATCA Exempt Party and it subsequently becomes aware that it is not or has
ceased to be a FATCA Exempt Party, that Party shall notify that other Party
reasonably promptly.

        (c)

Paragraph (a) above shall not oblige any Finance Party to do anything, and
paragraph (a)(iii) above shall not oblige any other Party to do anything, which
would or might in its reasonable opinion constitute a breach of:

  (i)

any law or regulation;

        (ii)

any fiduciary duty; or

        (iii)

any duty of confidentiality.

  (d)

If a Party fails to confirm whether or not it is a FATCA Exempt Party or to
supply forms, documentation or other information requested in accordance with
paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where
paragraph (c) applies), then such Party shall be treated for the purposes of the
Finance Documents (and payments under them) as if it is not a FATCA Exempt Party
until such time as the Party in question provides the requested confirmation,
forms, documentation or other information

        (e)

If the Borrower is a US Tax Obligor, or where the Lender reasonably believes
that its obligations under FATCA or any other applicable law or regulation
require it, the Lender shall, within ten (10) Business Days of:

  (i)

where the Borrower is a US Tax Obligor and the relevant Lender is the Lender,
the date of this Agreement; or

        (ii)

where an Obligor is a US Tax Obligor and the relevant Lender is a New Lender, on
or prior to the relevant Transfer Date or the date on which an increase in
Commitment takes effect pursuant to clause 2.2 (Amendment to Commitment),

Lender shall supply:

  (A)

an executed withholding certificate on Form W-8 or Form W-9 or any other
relevant form; or

        (B)

any withholding statement and other documentation, Authorization or waiver to
certify or establish the status of such Lender under FATCA or that other law or
regulation.

  (f)

The Lender shall provide any withholding certificate, withholding statement,
document, Authorization or waiver received pursuant to paragraph (a) above to
the relevant Borrower.

        (g)

If any withholding certificate, withholding statement, document, Authorization
or waiver provided to the Lender pursuant to paragraph (e) above is or becomes
materially inaccurate or incomplete, that Borrower shall promptly update it and
provide such updated withholding certificate, withholding statement, document,
Authorization or waiver to the Lender, unless it is unlawful for the Lender to
do so.

35

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

12.8

FATCA Deduction

  (a)

Each Party may make any FATCA Deduction it is required to make by FATCA, and any
payment required in connection with that FATCA Deduction, and no Party shall be
required to increase any payment in respect of which it makes such a FATCA
Deduction or otherwise compensate the recipient of the payment for that FATCA
Deduction.

        (b)

Each Party shall promptly, upon becoming aware that it must make a FATCA
Deduction (or that there is any change in the rate or the basis of such FATCA
Deduction), and in any case at least three (3) Business Days prior to making a
FATCA Deduction, notify the Party to whom it is making the payment and, on or
prior to the day on which it notifies that Party, shall also notify the
Borrower, the Lender and the other Finance Parties.

13

Increased Costs

13.1

Increased costs

  (a)

Subject to clause 0 (Exceptions) the Borrower shall, within three (3) Business
Days of a demand by the Lender, pay for the account of a Finance Party the
amount of any Increased Costs incurred by that Finance Party or any of its
Affiliates as a result of:

  (i)

the introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation;

        (ii)

compliance with any law or regulation made after the date of this Agreement; or

        (iii)

is a Basel III Increased Cost.

  (b)

In this Agreement:

Increased Costs means:

  (i)

a reduction in the rate of return from the Facility or on a Finance Party's (or
its Affiliate's) overall capital;

        (ii)

an additional or increased cost; or

        (iii)

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the
extent that it is attributable to that Finance Party having entered into its
Commitment or funding or performing its obligations under any Finance Document.

Basel II means the “International Convergence of Capital Measurement and Capital
Standards, a Revised Framework” published by the Basel Committee on Banking
Supervision in June 2004 as updated prior to, and in the form existing on, the
date of this Agreement, excluding any amendment thereto arising out of Basel
III;

Basel III means:

  (iv)

the agreements on capital requirements, a leverage ratio and liquidity standards
contained in “Basel III: A global regulatory framework for more resilient banks
and banking systems”, “Basel III: International framework for liquidity risk
measurement, standards and monitoring” and “Guidance for national authorities
operating the countercyclical capital buffer” published by the Basel Committee
on Banking Supervision in December 2010, each as amended, supplemented or
restated;

36

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (v)

the rules for global systemically important banks contained in “Global
systemically important banks: assessment methodology and the additional loss
absorbency requirement - Rules text” published by the Basel Committee on Banking
Supervision in November 2011, as amended, supplemented or restated; and

        (vi)

any further guidance or standards published by the Basel Committee on Banking
Supervision relating to “Basel III”;

Basel III Increased Cost means an Increased Cost which is attributable to the
implementation or application of or compliance with any Basel III Regulation
(whether such implementation, application or compliance is by a government,
regulator, Finance Party or any of its Affiliates); and

Basel III Regulation means any law or regulation implementing Basel III
(including any regulations regarding such issued by the Office of the
Superintendent of Financial Institutions of Canada).

13.2

Increased cost claims

A Finance Party intending to make a claim pursuant to clause 0 (Increased costs)
shall notify the Borrower, and as soon as practicably after, provide a
certificate of an authorized signatory of the Lender confirming the amount of
its Increased Costs.

13.3

Exceptions

  (a)

Clause 0 (Increased costs) does not apply to the extent any Increased Cost is:

  (i)

attributable to a Tax Deduction required by law to be made by an Obligor;

        (ii)

attributable to a FATCA Deduction required to be made by a Party;

        (iii)

compensated for by clause 0 (Tax indemnity) (or would have been compensated for
under clause 0 (Tax indemnity) but was not so compensated solely because any of
the exclusions in paragraph 0 of clause 0 (Tax indemnity) applied); or

        (iv)

attributable to the implementation or application of or compliance with Basel II
or any other law or regulation which implements Basel II (but excluding any
proposed changes to Basel II for the purposes of implementing Basel III or any
other law or regulation which implements Basel III (whether such implementation,
application or compliance is by a government, regulator, Finance Party or any of
its Affiliates)) or any other regulation which implements Basel II (whether such
implementation, application or compliance is by a government, regulator, Finance
Party or any of its Affiliates);

        (v)

attributable to the wilful breach by the relevant Finance Party or its
Affiliates of any law or regulation.

  (b)

In this clause 0, a reference to a Tax Deduction has the same meaning given to
the term in clause 0 (Definitions).

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

14

Other Indemnities

14.1

Currency indemnity

  (a)

If any sum due from an Obligor under the Finance Documents (a Sum), or any
order, judgment or award given or made in relation to a Sum, has to be converted
from the currency (the First Currency) in which that Sum is payable into another
currency (the Second Currency) for the purpose of:

  (i)

making or filing a claim or proof against that Obligor; or

        (ii)

obtaining or enforcing an order, judgment or award in relation to any litigation
or arbitration proceedings,

that Obligor shall as an independent obligation, within three (3) Business Days
of demand, indemnify the Lender and the Secured Party to whom that Sum is due
against any cost, loss or liability arising out of or as a result of the
conversion including any discrepancy between (1) the rate of exchange used to
convert that Sum from the First Currency into the Second Currency and (2) the
rate or rates of exchange available to that person at the time of its receipt of
that Sum.

  (b)

Each Obligor waives any right it may have in any jurisdiction to pay any amount
under the Finance Documents in a currency or currency unit other than that in
which it is expressed to be payable.

14.2

Other indemnities

  (a)

The Borrower shall, within three (3) Business Days of demand, indemnify the
Lender and the Secured Party against any cost, loss or liability incurred by
that Finance Party as a result of:

  (i)

the occurrence of any Event of Default;

        (ii)

a failure by an Obligor to pay any amount due under a Finance Document on its
due date, including without limitation, any cost, loss or liability arising as a
result of clause 30 (Sharing among the Finance Parties);

        (iii)

funding, or making arrangements to fund a Loan requested by the Borrower in a
Utilization Request but not made by reason of the operation of any one or more
of the provisions of this Agreement (other than by reason of default or
negligence by that Finance Party alone);

        (iv)

a Loan (or part of a Loan) not being prepaid in accordance with a notice of
prepayment given by the Borrower; or

        (v)

any actual or alleged breach of any Environmental Law or any Environmental
Permit in connection with the Properties or the Facility by any person other
than a Finance Party (except where such actual or alleged breach by a Finance
Party is due to the acts or omissions of an Obligor or any other third party).

  (b)

The Borrower shall, within three (3) Business Days of demand, indemnify each
Finance Party, each Affiliate of a Finance Party and each officer or employee of
a Finance Party or its Affiliate, against any cost, loss or liability incurred
by that Finance Party or its Affiliate (or officer or employee of that Finance
Party or Affiliate) in connection with or arising out of the use of proceeds
under the Facility or Transaction Security being taken over the Charged Property
(including but not limited to those incurred in connection with any litigation,
arbitration or administrative proceedings or regulatory enquiry concerning the
use of proceeds under the Facility), unless such loss or liability is caused by
the gross negligence or wilful misconduct of that Finance Party or its Affiliate
(or employee or officer of that Finance Party or Affiliate). Any Affiliate or
any officer or employee of a Finance Party or its Affiliate may rely on this
Clause 0 subject to Clause 0 (Third party rights).

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

14.3

Indemnity to the Lender

The Borrower shall indemnify the Lender immediately on demand against:

  (a)

any cost, loss or liability incurred by the Lender as a result of:

  (i)

investigating any event which it reasonably believes is a Default;

        (ii)

acting or relying on any notice, request or instruction which it reasonably
believes to be genuine, correct and appropriately authorised; or

        (iii)

instructing lawyers, accountants, tax advisors, surveyors or other professional
advisers or experts as permitted under this Agreement and in accordance with the
terms of clause 0 (Costs and expenses); and

  (b)

any cost, loss or liability incurred by the Lender, except where by reason of
the Lender’s gross negligence or wilful misconduct, or in the case of any cost,
loss or liability pursuant to clause 0 (Disruption to Payment Systems etc.).

15

Mitigation by the Lender

15.1

Mitigation

  (a)

Each Finance Party shall, in consultation with the Borrower, take all reasonable
steps to mitigate any circumstances which arise and which would result in any
amount becoming payable under or pursuant to, or cancelled pursuant to, any of
clause 0 (Illegality), clause 0 (Tax gross-up and indemnities) or clause 0
(Increased costs) including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or Facility Office.

        (b)

Paragraph 0 above does not in any way limit the obligations of any Obligor under
the Finance Documents.

15.2

Limitation of liability

  (a)

The Borrower shall promptly indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of steps taken by
it under clause 0 (Mitigation).

        (b)

A Finance Party is not obliged to take any steps under clause 0 (Mitigation) if,
in the opinion of that Finance Party (acting reasonably), to do so might be
prejudicial to it.

16

Costs and Expenses

16.1

Transaction expenses

The Borrower shall promptly on demand pay each of the Finance Parties all
reasonable costs incurred in the development, completion and maintenance of the
Facility will be for the account of the Borrower including legal documentation,
stamp duty, independent technical experts (if required) and reasonable
out-of-pocket expenses incurred by the Lender. The Finance Documents will
contain the normal cost, increased cost (gross up provisions), charges, expenses
and indemnity provisions for Facility arrangements of this nature.

39

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

16.2

Amendment costs

If (a) an Obligor requests an amendment, waiver or consent, or (b) an amendment
is required pursuant to clause 0 (Change of currency), the Borrower shall,
within three (3) Business Days of demand, reimburse each of the Finance Parties
for the amount of all costs and expenses (including legal fees) reasonably
incurred by the Lender and the Security Agent (and, in the case of the Security
Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or
complying with that request or requirement.

16.3

Enforcement costs

The Borrower shall, within three (3) Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal fees)
incurred by that Finance Party in connection with the enforcement of, or the
preservation of any rights under, any Finance Document and the Transaction
Security and any proceedings instituted by or against the Security Agent as a
consequence of taking or holding the Transaction Security or enforcing these
rights.

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

GUARANTEE

17

Guarantee and Indemnity

17.1

Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

  (a)

guarantees to each Finance Party punctual performance by each other Obligor of
all that Obligor's obligations under the Finance Documents;

        (b)

undertakes with each Finance Party that whenever another Obligor does not pay
any amount when due under or in connection with any Finance Document, that
Guarantor shall immediately on demand pay that amount as if it was the principal
obligor; and

        (c)

agrees with each Finance Party that if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal, it will, as an independent and
primary obligation, indemnify that Finance Party immediately on demand against
any cost, loss or liability it incurs as a result of an Obligor not paying any
amount which would, but for such unenforceability, invalidity or illegality,
have been payable by it under any Finance Document on the date when it would
have been due. The amount payable by a Guarantor under this indemnity will not
exceed the amount it would have had to pay under this clause 0 if the amount
claimed had been recoverable on the basis of a guarantee.

17.2

Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance
of sums payable by any Obligor under the Finance Documents, regardless of any
intermediate payment or discharge in whole or in part.

17.3

Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations
of any Obligor or any security for those obligations or otherwise) is made by a
Finance Party in whole or in part on the basis of any payment, security or other
disposition which is avoided or must be restored in insolvency, liquidation,
administration or otherwise, without limitation, then the liability of each
Guarantor under this clause 0 will continue or be reinstated as if the
discharge, release or arrangement had not occurred.

17.4

Waiver of defences

The obligations of each Guarantor under this clause 0 will not be affected by an
act, omission, matter or thing which, but for this clause, would reduce, release
or prejudice any of its obligations under this clause 0 (without limitation and
whether or not known to it or any Finance Party) including:

  (a)

any time, waiver or consent granted to, or composition with, any Obligor or
other person;

        (b)

the release of any other Obligor or any other person under the terms of any
composition or arrangement with any creditor of any member of the Group;

        (c)

the taking, variation, compromise, exchange, renewal or release of, or refusal
or neglect to perfect, take up or enforce, any rights against, or security over
assets of, any Obligor or other person or any non-presentation or non-observance
of any formality or other requirement in respect of any instrument or any
failure to realise the full value of any security;

41

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (d)

any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor or any other
person;

        (e)

any amendment, novation, supplement, extension, restatement (however fundamental
and whether or not more onerous) or replacement of any Finance Document or any
other document or security including without limitation any change in the
purpose of, any extension of or any increase in any facility or the addition of
any new facility under any Finance Document or other document or security;

        (f)

any unenforceability, illegality or invalidity of any obligation of any person
under any Finance Document or any other document or security; or

        (g)

any insolvency or similar proceedings.

17.5

Guarantor intent

Without prejudice to the generality of clause 0 (Waiver of defences), each
Guarantor expressly confirms that it intends that this guarantee shall extend
from time to time to any (however fundamental) variation, increase, extension or
addition of or to any of the Finance Documents and/or any facility or amount
made available under any of the Finance Documents for the purposes of or in
connection with any of the following: business acquisitions of any nature;
increasing working capital; enabling investor distributions to be made; carrying
out restructurings; refinancing existing facilities; refinancing any other
indebtedness; making facilities available to a new borrower; any other variation
or extension of the purposes for which any such facility or amount might be made
available from time to time; and any fees, costs and/or expenses associated with
any of the foregoing.

17.6

Immediate recourse

  (a)

Each Guarantor waives any right it may have of first requiring any Finance Party
(or any trustee or agent on its behalf) to proceed against or enforce any other
rights or security or claim payment from any person before claiming from that
Guarantor under this clause 0. This waiver applies irrespective of any law or
any provision of a Finance Document to the contrary.

        (b)

Each Guarantor acknowledges the right of the Lender pursuant to clause 0
(Acceleration) to accelerate the payment of any sum that may become due under
any guarantee or indemnity contained in this clause 0.

17.7

Appropriations

Until all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full, each
Finance Party (or any trustee or agent on its behalf) may:

  (a)

refrain from applying or enforcing any other moneys, security or rights held or
received by that Finance Party (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in such manner and order
as it sees fit (whether against those amounts or otherwise) and no Guarantor
shall be entitled to the benefit of the same; and

42

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

hold in an interest-bearing suspense account any moneys received from any
Guarantor or on account of any Guarantor's liability under this clause 0.

17.8

Deferral of Guarantors' rights

Until all amounts which may be or become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in full and
unless the Lender otherwise directs, no Guarantor will exercise any rights which
it may have by reason of performance by it of its obligations under the Finance
Documents or by reason of any amount being payable, or liability arising, under
this clause 0:

  (a)

to be indemnified by an Obligor;

        (b)

to claim any contribution from any other guarantor of any Obligor's obligations
under the Finance Documents;

        (c)

to take the benefit (in whole or in part and whether by way of subrogation or
otherwise) of any rights of the Finance Parties under the Finance Documents or
of any other guarantee or security taken pursuant to, or in connection with, the
Finance Documents by any Finance Party;

        (d)

to bring legal or other proceedings for an order requiring any Obligor to make
any payment, or perform any obligation, in respect of which any Guarantor has
given a guarantee, undertaking or indemnity under clause 0 (Guarantee and
Indemnity);

        (e)

to exercise any right of set-off against any Obligor; and/or

        (f)

to claim or prove as a creditor of any Obligor in competition with any Finance
Party.

If a Guarantor receives any benefit, payment or distribution in relation to such
rights it shall hold that benefit, payment or distribution to the extent
necessary to enable all amounts which may be or become payable to the Finance
Parties by the Obligors under or in connection with the Finance Documents to be
repaid in full on trust for the Finance Parties and shall promptly pay or
transfer the same to the Lender or as the Lender may direct for application in
accordance with clause 0 (Payment mechanics).

17.9

Additional security

This guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by any Finance Party.

17.10

Further assurance

Each Guarantor agrees that, upon demand of the Lender (acting reasonably), it
shall promptly execute and deliver at its own expense any document (executed as
a deed or under hand as the Lender may direct in writing) and do any act or
thing in order to confirm or establish the validity and enforceability of the
guarantee and indemnity intended to be created by it under this clause 0.

43

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

18

Representations

Each Obligor makes the representations and warranties set out in this clause 0
to each Finance Party on the date of this Agreement.

18.1

Status

  (a)

It is a corporation, duly incorporated and validly existing under the law of its
Original Jurisdiction.

        (b)

Each of its Subsidiaries is a corporation, duly incorporated and validly
existing under the law of its jurisdiction of incorporation.

        (c)

It and each of its Subsidiaries has the power to:

  (i)

own or hold under lease and operate the assets it purports to own or hold under
lease; and

        (ii)

own its assets and carry on its business as it is being conducted and as
currently proposed to be conducted.

18.2

Binding obligations

Subject to the Legal Reservations:

  (a)

the obligations expressed to be assumed by it in each Finance Document to which
it is a party are legal, valid, binding and enforceable obligations; and

        (b)

(without limiting the generality of paragraph (a) above), each Transaction
Security Document to which it is a party creates (or will create, on the
effective date of such relevant Transaction Security Document) the security
interests which that Transaction Security Document purports to create and those
security interests are valid and effective.

18.3

Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by,
the Finance Documents and the granting of the Transaction Security do not and
will not conflict with:

  (a)

any Applicable Law;

        (b)

its or any of its Subsidiaries' charter documents; or

        (c)

any agreement or instrument binding upon it or any of its Subsidiaries or any of
its or any of its Subsidiaries' assets or constitute a default or termination
event (however described) under any such agreement or instrument to an extent or
in a manner that has or could reasonably be expected to have a Material Adverse
Effect.

18.4

Power and authority

  (a)

It has the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery of, the Finance
Documents to which it is a party and the transactions contemplated by those
Finance Documents.

44

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

No limit on its powers will be exceeded as a result of the borrowing, grant of
security or giving of guarantees or indemnities contemplated by the Finance
Documents to which it is a party.

18.5

Validity and admissibility in evidence

  (a)

All Authorizations required or desirable:

  (i)

to enable it lawfully to enter into, exercise its rights and comply with its
obligations in the Finance Documents to which it is a party; and

        (ii)

to make the Finance Documents to which it is a party admissible in evidence in
its Relevant Jurisdictions,

have been obtained, effected, done, fulfilled or performed and are in full force
and effect.

  (b)

All Authorizations necessary for the conduct of the business, trade and ordinary
activities of members of the Group have been obtained or effected and are in
full force and effect if failure to obtain or effect those Authorizations has or
is reasonably likely to have a Material Adverse Effect.

        (c)

No action has been taken against it or any member of the Group by any Competent
Authority in connection with the Authorizations.

        (d)

All the Material Licences have been obtained or effected and are in full force
and effect.

18.6

Governing law and enforcement

  (a)

The choice of the law stated to be the governing law of each Finance Document
will be recognised and enforced in its Relevant Jurisdictions.

        (b)

Any judgment obtained in relation to a Finance Document in the jurisdiction of
the stated governing law of that Finance Document will be recognised and
enforced in its Relevant Jurisdictions.

        (c)

Any arbitral award obtained in relation to a Finance Document in the seat of the
arbitral tribunal as specified in that Finance Document will be recognised and
enforced in its Relevant Jurisdictions.

18.7

Insolvency

No:

  (a)

corporate action, legal proceeding or other procedure or step described in
clause 0 (Insolvency proceedings); or

        (b)

creditors' process described in clause 0 (Creditors' process),

has been taken or, to the knowledge of the Borrower, threatened in relation to a
member of the Group and none of the circumstances described in clause 0
(Insolvency) applies to a member of the Group.

45

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

18.8

Deduction of Tax

It is not required to make any deduction for or on account of Tax from any
payment it may make under any Finance Document.

18.9

No filing or stamp taxes

Under the law of its Relevant Jurisdictions it is not necessary that the Finance
Documents be filed, recorded or enrolled with any court or other authority in
that jurisdiction or that any stamp, registration, notarial or similar Taxes or
fees be paid on or in relation to the Finance Documents or the transactions
contemplated by the Finance Documents except the filings to be made and
registration fees and stamp duty to be paid in relation to the execution of the
relevant Finance Documents as set out below (which shall be made and paid
promptly after the date of the relevant Finance Document):

  (a)

any registration or duties payable as described in the Legal Opinions;

        (b)

registration of the relevant Transaction Security Document in accordance with
the Personal Property Security Act (British Columbia) and the Uniform Commercial
Code in Nevada.

18.10

No default

  (a)

No Default is continuing or might reasonably be expected to result from the
making of any Loan or the entry into, the performance of, or any transaction
contemplated by, any Finance Document.

        (b)

No other event or circumstance is outstanding which constitutes (or, with the
expiry of a grace period, the giving of notice, the making of any determination
or any combination of any of the foregoing, would constitute) a default or
termination event (however described) under any other agreement or instrument
which is binding on it or any of its Subsidiaries or to which its (or any of its
Subsidiaries') assets are subject which might have a Material Adverse Effect.

18.11

No misleading information

  (a)

Any factual information provided by or on behalf of any member of the Group to
any Finance Party in connection with the Properties or the Finance Documents (or
in budgets or forecasts provided under this Agreement):

  (i)

was true and accurate in all material respects as at the date it was provided or
as at the date (if any) at which it is stated and was not misleading in any
respect; and

        (ii)

does not omit any information that results in the information provided being
untrue or misleading in any material respect.

  (b)

Any opinions, forecasts and projections contained in any factual information
referred to in clause 0, the Base Case Model and the assumptions on which they
were based, have been prepared in good faith and, as at their date, on the basis
of recent historical information and on assumptions believed by the Borrower to
be fair and reasonable.

        (c)

Nothing has occurred since the date any information referred to in clause 0 was
provided, and no information has been given or withheld, that renders that
information untrue or misleading in any material respect (taking into account
any updates to such information which fall within clause 0).

46

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

18.12

Financial statements

  (a)

The Original Financial Statements were prepared in accordance with Accounting
Principles.

        (b)

The Original Financial Statements fairly represent its financial condition and
operations (consolidated in the case of the Borrower) during the relevant
financial year.

        (c)

The most recent financial statements of the Obligors delivered pursuant to
clause 0 (Financial statements):

  (i)

have been prepared in accordance with Accounting Principles; and

        (ii)

fairly represent its financial condition and operations (consolidated in the
case of the Borrower) during the relevant financial year.

  (d)

There has been no material adverse change in the business or financial condition
of any Obligor since the date of its most recent financial statements delivered
pursuant to clause 0 (Financial statements).

18.13

Pari passu ranking

Its payment obligations under the Finance Documents rank at least pari passu
with the claims of all its other unsecured and unsubordinated creditors, except
for obligations mandatorily preferred by law applying to companies generally.

18.14

No proceedings pending or threatened

No litigation, arbitration or administrative proceedings or investigations of or
before any court, arbitral body or agency (including in respect of any labour
dispute) or any other claims or disputes which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect have been started or
(to the best of its knowledge and belief, having made due and careful enquiry)
threatened in writing against it or any of its Subsidiaries.

18.15

No breach of laws

  (a)

It has not (and none of its Subsidiaries has) breached any law or regulation
which breach has or is reasonably likely to have a Material Adverse Effect.

        (b)

It is in compliance with all Authorizations in all material respects.

18.16

Environmental compliance

  (a)

Each member of the Group is in compliance with clause 0 (Environmental
compliance) and to the best of its knowledge and belief (having made due and
careful internal enquiry) no circumstances have occurred which would prevent
such compliance in a manner or to an extent which has or is reasonably likely to
have a Material Adverse Effect.

        (b)

No Environmental Claim has been commenced or (to the best of its knowledge and
belief (having made due and careful internal enquiry)) is threatened against any
member of the Group where that claim has or is reasonably likely, if determined
against that member ofthe Group, to have a Material Adverse Effect.

47

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

18.17

Taxation

  (a)

It is not (and none of its Subsidiaries is) materially overdue in the filing of
any Tax returns.

        (b)

It is not (and none of its Subsidiaries is) overdue in the payment of any amount
in respect of Tax (unless and only to the extent that (i) payment can be
lawfully withheld, is being contested in good faith and adequate reserves are
being maintained for the payment of such Taxes or (ii) the amount of such unpaid
Taxes is not material, the non-payment results from an administrative oversight
or error by a member of the Group and such payment is made promptly (and in any
event within three (3) Business Days) after a member of the Group becoming aware
of such non-payment).

        (c)

No claims or investigations are being, or are reasonably likely to be, made or
conducted against it (or any of its Subsidiaries) with respect to Taxes such
that a liability of, or claim against, any member of the Group of US$[****] (or
its Equivalent) or more is reasonably likely to arise.

18.18

Anti-corruption law

The Borrower, each Obligor and each of their Subsidiaries has conducted its
businesses in compliance with applicable anti-corruption laws and has instituted
and maintained policies and procedures designed to promote and achieve
compliance with such laws.

18.19

Sanctions

  (a)

Neither the Borrower nor any Obligor, nor any of their Subsidiaries or joint
ventures, nor any of their respective directors, officers or employees, nor to
the knowledge of any Obligor, any persons acting on any of their behalf:

  (i)

is a Restricted Party; or

        (ii)

has received notice of or is aware of any claim, action, suit, proceeding or
investigation against it with respect to Sanctions by any Sanctions Authority.

18.20

Security and Financial Indebtedness

  (a)

No Security or Quasi-Security exists over all or any of the present or future
assets of any member of the Group other than Permitted Security.

        (b)

No member of the Group has any Financial Indebtedness outstanding other than

18.21

Transaction Security

  (a)

Subject to the Legal Reservations, the Transaction Security ranks (or, on the
effective date of such Transaction Security, will rank) at least pari passu with
all other Security (excluding Permitted Security), including such secured
obligations owed under the Gold Purchase Agreement.

        (b)

Any shares that are expressed to be subject to the Transaction Security are
fully paid and are not subject to any option to purchase or similar rights. The
charter documents of the companies whose shares are subject to the Transaction
Security do not and could not restrict or inhibit any transfer of those shares
on creation or on enforcement of the Transaction Security.

48

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

18.22

Legal and beneficial ownership

  (a)

Each member of the Group has good, valid and marketable title to, or valid
leases or licences of, and all appropriate Authorizations to use, the assets
necessary to carry on its business as presently conducted.

        (b)

Each member of the Group is the sole legal and beneficial owner of the
respective assets over which it purports to grant Security free from any claims,
third party rights or competing interests other than Permitted Security.

        (c)

No breach of any law or regulation is subsisting that would reasonably be likely
to adversely affect the value of the assets that are expressed to be the subject
of the Transaction Security.

        (d)

There is no covenant, easement, agreement, reservation, restriction, condition
or other matter that materially and adversely affects the assets that are
expressed to be the subject of the Transaction Security.

18.23

Intellectual Property

It has available to it now, or will at the time necessary for the business of
the Properties have, all material Intellectual Property necessary for the
Properties (if any) including in relation to all patents, trade marks, service
marks, designs, utility models, copyrights, design rights, inventions,
confidential information, know-how and rights of like nature.

18.24

Group Structure Chart

The Group Structure Chart is true, complete and accurate in all material
respects and shows the following information:

  (a)

Each member of the Group, including current name and company registration
number, its Original Jurisdiction, its jurisdiction of incorporation and/or its
jurisdiction of establishment, a list of shareholders and indicating whether a
company is not a company with limited liability; and

        (b)

all minority interests in any member of the Group and any person in which any
member of the Group holds shares in its issued share capital or equivalent
ownership interest of such person.

18.25

Accounting Reference Date

The Accounting Reference Date of the Borrower and each member of the Group is 31
December.

18.26

No amendment

Its articles and by-laws documents have not been amended since the date of
certification of those provided pursuant to paragraph 0 of 0(Conditions
precedent), except for any amendments permitted pursuant to the Finance
Documents.

49

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

18.27

Ownership of Obligors

  (a)

As at the date of this Agreement, the date of and after Financial Close:

  (i)

one hundred percent (100%) of the share capital of 0985472 is directly, legally
and beneficially owned and controlled by the Borrower;

        (ii)

one hundred percent (100%) of the share capital of Klondex Canada Ltd. is
directly, legally and beneficially owned by the Borrower;

        (iii)

one hundred percent (100%) of the share capital of Klondex Holdings is directly,
legally and beneficially owned and controlled by 0985472;

        (iv)

one hundred percent (100%) of the share capital of Klondex Gold and Klondex
Midas is directly, legally and beneficially owned and controlled by Klondex
Holdings; and

        (v)

one hundred percent (100%) of the share capital of Klondex Operations is
directly, legally and beneficially owned and controlled by Klondex Midas;

except to the extent that the ownership interest of the applicable shareholder
in the share capital of an Obligor may change pursuant to any other transaction
undertaken with the prior written consent of the Lender.

18.28

Insurances

  (a)

All Insurances that by the terms of this Agreement are required to be in place
are in place and are in full force and effect.

        (b)

Nothing has been done, suffered or omitted to be done by an Obligor that would
render any of such Insurances unenforceable, suspended, void or voidable, in
whole or in a material part or which would entitle any insurer or reinsurer to
reduce its liability thereunder.

        (c)

No member of the Group has received any notification from its insurers that
their liability under the Insurances has been reduced or avoided.

18.29

Material Adverse Effect

No event or circumstance is continuing which has or is reasonably likely to have
a Material Adverse Effect.

18.30

No adverse consequences

  (a)

It is not necessary under the laws of its Relevant Jurisdictions:

  (i)

in order to enable any Finance Party to enforce its rights under any Finance
Document; or

        (ii)

by reason of the execution of any Finance Document or the performance by it of
its obligations under any Finance Document,business in its Relevant
Jurisdictions.

that any Finance Party should be licensed, qualified or otherwise entitled to
carry on

50

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

No Finance Party is or will be deemed to be resident, domiciled or carrying on
business in its Relevant Jurisdictions by reason only of the execution,
performance and/or enforcement of any Finance Document.

18.31

No immunity

In any proceedings taken in its jurisdiction of incorporation in relation to the
Finance Documents to which it is a party, it will not be entitled to claim for
itself or any of its assets immunity from suit, execution, attachment or other
legal process.

18.32

[Intentionally Deleted]

18.33

Repetition

  (a)

The Repeating Representations are deemed to be made by each Obligor on the date
of each Utilization Request, the date of Financial Close, the first day of each
Interest Period, the date of any Extension Request and the date of any Amendment
Request.

        (b)

Each representation or warranty deemed to be made after the date of this
Agreement shall be deemed to be made by reference to the facts and circumstances
existing at the date the representation or warranty is deemed to be made.

19

Information Undertakings

The undertakings in this clause 0 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance Documents
or any Commitment is in force.

19.1

Financial statements

The Borrower shall supply to the Lender:

  (a)

as soon as available and in any event within ninety (90) days after the end of
each fiscal year, the Borrower shall deliver to the Lender: (i) the audited
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year and the related audited
consolidated and consolidating statements of income, shareholders’ equity and
cash flow for such fiscal year; (ii) a report with respect to such audited
financial statements from the Borrower’s auditors, which report shall state that
(A) such audited financial statements present fairly the consolidated financial
position of the Borrower as at the dates indicated and the results of its
operations and cash flow for the periods indicated in conformity with Accounting
Principles applied on a basis consistent with prior years, and (B) that the
examination by such accountants in connection with such audited financial
statements has been made in accordance with generally accepted auditing
standards;

        (b)

as soon as available and in any event within forty-five (45) days after the end
of each fiscal quarter of each fiscal year, the Borrower shall deliver the
unaudited condensed consolidated balance sheet of the Borrower, as adjusted in
conformity with Accounting Principles, as at the end of such fiscal quarter and
the related consolidated statements of income, shareholders’ equity and cash
flow for such fiscal quarter and for the period from the beginning of such
fiscal year to the end of such fiscal quarter; and

        (c)

as soon as available but in no event more than thirty (30) days after the end of
each calendar month, the Borrower shall deliver a summary of such month’s
operations and a summary of the fiscal year-to-date operations, in a form
reasonably satisfactory to the Lender, including information in reasonable
detail concerning (i) production during such period; (ii) the inventory at the
end of such period; (iii) revenues generated during such period; (iv) operating
costs during such period; (v) costs constituting capital expenditures; (vi) when
prepared and available, the Borrower’s most recent quarterly cash planning
forecast (including, without limitation, current cash balances) covering at
least the next following fiscal quarter; and (vii) any material developments
during such period in project operation or development, including material
technical problems, discovery of any material defect in any physical facilities
of the Borrower, material interruption to operation, updates on permitting and
project timelines or material labor difficulties.

51

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

19.2

Compliance Certificate

  (a)

The Borrower shall supply to the Lender, with each set of financial statements
or quarterly management accounts delivered pursuant to clause 0 (Financial
statements), a Compliance Certificate setting out (in reasonable detail)
computations as to compliance with clause 0 (Financial covenants) as at the date
as at which those financial statements were drawn up.

        (b)

Each Compliance Certificate shall be signed by the Chief Financial Officer or
any director of the Borrower, for the purpose of certifying compliance with the
other financial covenants in clause 0 (Financial covenants).

19.3

Requirements as to financial statements

  (a)

Each set of financial statements delivered by the Borrower pursuant to clause 0
(Financial statements) shall be certified by the Chief Financial Officer or any
director of the relevant company as fairly representing its financial condition
as at the date as at which those financial statements were drawn up.

        (b)

The Borrower shall procure that each set of financial statements delivered
pursuant to clause 0 (Financial statements) is prepared in accordance with the
Accounting Principles.

19.4

Annual Budget and Base Case Model

  (a)

The Borrower shall provide to the Lender the Annual Budget describing the
budgeted sources and uses of funds by the Borrower over the following twelve
(12) month operating period, which will be consistent with the Base Case Model.
The Annual Budget shall be updated annually during the term of the Facility, and
in the event of any material changes to the Annual Budget during the relevant
year.

        (b)

The Borrower shall provide to the Lender the Base Case Model for the Properties
outlining, at a minimum, the following three (3) years of operations. The
Borrower shall provide an updated Base Case Model annually, and in the event of
a material changes to the Base Case Model during the relevant year (including
for the avoidance of doubt, in respect of any proposed acquisitions). Where any
such material change will likely result in:

  (i)

a material reduction in forecast production up to the Original Final Maturity
Date, on a consolidated basis;

        (ii)

a material increase in the average cost of production or capital expenditures
required to maintain production from the Properties, on a consolidated basis in
dollars;

52

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (iii)

a material change in current or conventional mining methods employed at the
Midas Mine or Fire Creek Mine;

        (iv)

a material change in the processing circuit used at the Midas Plant for current
mine production (for greater certainty, the use of alternative methods and
processing for the development and extraction of new resources or deposits shall
not constitute a material change in this clause 19.4(b));

        (v)

a forecast funding shortfall, after considering cash, forecast cash flows and
available Commitments, over the forecast period greater than ten percent (10%)
of the current market capitalization of the Borrower; or

        (vi)

any change which could have a Material Adverse Effect on the Transaction
Security,

the Borrower shall be required to obtain the Lender’s consent within thirty (30)
days of proposing any changes to the Base Case Model, such consent not to be
unreasonably withheld or delayed.

19.5

Report undertakings

The Borrower undertakes in relation to each report, budget or certificate
delivered by it pursuant to this clause 0 (Information undertakings) that, as at
the date of delivery thereof:

  (a)

all the factual information set out therein will (or, to the extent that
information has been provided by others, will to the best of its knowledge,
after due enquiry) be true, complete and accurate in all material respects and
will be compiled in good faith; and

        (b)

all projections, forecasts, estimates and opinions made by it therein are made
in good faith, arrived at after due and careful consideration and enquiry and
genuinely represent its views as at the date they are given or made.

19.6

Environmental matters

  (a)

Each Obligor shall, promptly upon becoming aware of the same, inform the Lender
in writing of:

  (i)

any Environmental Claim against any member of the Group which is current,
pending, or threatened in writing; and

        (ii)

any facts or circumstances which are reasonably likely to result in any
Environmental Claim being commenced or threatened against any member of the
Group.

  (b)

The Borrower shall promptly upon request provide such information as may be
requested by the Lender, and give such access to the Properties and the assets
of the Borrower, as is reasonably required by the Lender to assess the
Properties in relation to the Environmental.

53

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

19.7

Reserves and resources

  (a)

The Borrower shall ensure that it maintains

  (i)

sufficient reported measured and indicated resources (in accordance with Ontario
Securities Commission instrument NI 43-101) in a minimum amount (such amount,
the Minimum Resources Undertaking) equal to [****]; and

        (ii)

[****].

  (b)

The Borrower shall provide a certificate calculating the measured, indicated and
inferred resources to the Lender within forty-five (45) days after the end of
each fiscal quarter of each fiscal year based on internal calculations and
technical report in accordance with NI 43-101 report on an annual basis in order
to demonstrate compliance with subparagraph (i) above, and in respect of
subparagraph (ii) above, shall satisfy the same with the delivery of the mine
plan upon which each Annual Budget is based.

19.8

Information: miscellaneous

The Borrower shall supply to the Lender:

  (a)

all documents dispatched by the Borrower or any Obligor to its shareholders (or
any class of them) or its creditors generally;

        (b)

a copy of (i) all reports, notices, orders, edicts or other information
submitted to, or received from the Government and any material notices in
respect of the Environmental Impact Assessment Licence; and (ii) any material
notices given or received by the Borrower or any other Obligor pursuant to any
other Finance Document promptly upon submission or receipt thereof;

        (c)

promptly upon any Obligor becoming aware of them, the details of any litigation,
arbitration or administrative proceedings (including in respect of any labour
dispute) which are current, threatened or pending against any member of the
Group which:

  (i)

relate to a claimed amount in excess of US$[****] (in relation to any individual
proceedings, claims or disputes, or in aggregate with any other proceedings,
claims or disputes in relation to the same matter of contract) or, when
aggregated with the other claims, disputes and/or proceedings, in excess of
US$[****]; or

        (ii)

would, if adversely determined, have or be reasonably likely to have, a Material
Adverse Effect,

unless and only to the extent to which such proceedings, disputes or claims have
been disclosed in the Disclosure Schedule, provided that the Borrower shall
promptly upon any Obligor becoming aware of the same, supply the Lender with
details of any final determination, settlement or discharge of such disclosed
proceedings, disputes or claims or any adverse change in relation to such
disclosed proceedings, disputes or claims;

  (d)

promptly upon becoming aware of such, the details of any claims in relation to
the Insurances in excess of US$[****];

        (e)

promptly upon becoming aware of such, the details of any circumstances which are
reasonably likely to lead to the revocation, cancellation or cessation of the
mining rights of any Obligor;

        (f)

promptly, any event that reasonably could be expected to result in the
revocation,withdrawal, cancellation, termination, suspension, forfeiture or
variation of any Authorization, except where any such Authorization is no longer
required for the Properties;

54

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (g)

promptly, details of any replacement, resignation or other expiry of appointment
(or proposals for the same) of any senior management employees of the Obligors
(including the chief executive officer and the chief operating officer;

        (h)

promptly, such information as the Security Agent may reasonably require about
the Charged Property and compliance of the Obligors with the terms of any
Transaction Security Documents; and

        (i)

promptly, such further information regarding the financial condition, business
and operations of any member of the Group as any Finance Party may reasonably
request.

19.9

Amendment of charter documents

Each Obligor shall inform and notify the Lender of any proposed amendment,
variation or waiver of any of the terms or conditions or scope of its charter
documents at least five (5) Business Days’ prior to the proposed amendment,
variation or waiver taking effect.

19.10

Notification of default

  (a)

Each Obligor shall notify the Lender of any Default (and the steps, if any,
being taken to remedy it) promptly upon becoming aware of its occurrence (unless
that Obligor is aware that a notification has already been provided by another
Obligor).

        (b)

Promptly upon a request by the Lender, the Borrower shall supply to the Lender a
certificate signed by the Chief Financial Officer, or other director or senior
officer, on its behalf certifying that no Default is continuing (or if a Default
is continuing, specifying the Default and the steps, if any, being taken to
remedy it).

19.11

[Intentionally deleted]

19.12

Know your customer checks

If:

  (a)

the introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this Agreement;

        (b)

any change in the status of an Obligor (or the incorporation or addition of a
new Obligor) after the date of this Agreement; or

        (c)

a proposed assignment or transfer by the Lender of any of its rights and
obligations under this Agreement to a party that is not the Lender prior to such
assignment or transfer,

obliges the Lender to comply with know your customer or similar identification
procedures in circumstances where the necessary information is not already
available to it, each Obligor shall, promptly upon the request of the Lender,
supply, or procure the supply of, such documentation and other evidence as is
reasonably requested by the Lender to carry out and be satisfied that the
Obligor has complied with all necessary know your customer or other similar
checks under all applicable laws and regulations pursuant to the transactions
contemplated in the Finance Documents.

55

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

20

Financial Covenants

20.1

Financial definitions

In this Agreement:

Borrower Adjusted EBITDA means, in respect of any Relevant Period, the aggregate
EBITDA less an amount equal to the Sustaining Capital Expenditures, without, for
greater certainty, double counting any such expenditure that is included within
operating expenses for the Relevant Period.

Borrower Cash Balance means the aggregate amounts standing to the credit of the
Borrower’s accounts, subject to the Transaction Security excluding cash securing
(i) the performance of bids, tenders, leases, contracts (other than for the
payment of money) or statutory obligations or (ii) obligations on surety or
appeal or performance bonds, including those to support or secure reclamation in
accordance with applicable law, as required by any governmental agency to
support or secure reclamation in accordance with applicable laws or (iii) any
margined trading exposures permitted under clause 0.

Borrower Current Assets means, with respect to the Borrower, on a consolidated
basis, all current assets of the Borrower as of any date of determination
calculated in accordance with Accounting Principles.

Borrower Current Liabilities means the aggregate (on a consolidated basis) of
all liabilities (including trade creditors, accruals and provisions) of the
Borrower expected to be settled within twelve months of the Test Date calculated
in accordance with Accounting Principles.

Borrower Current Ratio means, in respect of any Relevant Period, the ratio of:

  (a)

Borrower Current Assets on the Test Date; to

        (b)

Borrower Current Liabilities on the Test Date.

Borrower Gearing Ratio means, in respect of any Relevant Period, the ratio of:

  (c)

Borrower Total Debt on the Test Date; to

        (d)

Borrower Adjusted EBITDA for that Relevant Period.

Borrower Tangible Net Worth means the aggregate value of all assets after
deducting or eliminating from the calculation intangible assets and future
income tax benefits less the aggregate of all liabilities.

Borrower Total Debt means the aggregate of the current liabilities and long term
liabilities in respect of financing transactions as detailed in the Borrower’s
consolidated financial statements, including the Gold Purchase Agreement, less
the minimum Borrower Cash Balance of US$10,000,000.

Capital Expenditures means, with respect to any Person for any period, any
expenditure in respect of any fixed or capital asset (excluding normal
replacements and maintenance which are properly charged to current operations).

56

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

EBITDA shall be calculated on the basis of the Net Income for the period,
adjusted to add back income tax, depreciation, amortization and finance charges
(as detailed in the Statement of Income) and otherwise adjusted for other
non-cash items (as detailed in the Borrower’s consolidated financial
statements).

Quarter Date means each of 31 March, 30 June, 30 September and 31 December.

Relevant Period means each period of twelve (12) months ending on a Test Date.

Sustaining Capital Expenditures means [****].

Test Date means every Quarter Date in each year.

20.2

Interpretation

  (a)

Except as provided to the contrary in this clause 0 (Financial covenants), an
accounting term used in this clause 0 (Financial covenants) is to be construed
in accordance with the Accounting Principles.

        (b)

Any amount in a currency other than dollars is to be taken into account at its
dollar equivalent calculated on the basis of:

  (i)

the Lender’s Spot Rate of Exchange; or

        (ii)

if the amount is to be calculated on the last day of a financial period of the
Borrower or a member of the Group, the relevant rates of exchange used by the
Borrower or a member of the Group in, or in connection with, the financial
statements covering it for that period.

  (c)

No item must be credited or deducted more than once in any calculation under
this clause 0 (Financial covenants).

20.3

Financial condition

The Borrower shall ensure that:

  (a)

Borrower Tangible Net Worth: The Borrower Tangible Net Worth in respect of any
Test Date is not less than US$100,000,000.

        (b)

Borrower Gearing Ratio: The Borrower Gearing Ratio in respect of any Relevant
Period is not greater than 4.00:1.

        (c)

Borrower Cash Balance: The Borrower Cash Balance in respect of any Relevant
Period is not less than US$10,000,000.

        (d)

Borrower Current Ratio: The Borrower Current Ratio in respect of any Relevant
Period is not less than 1.10:1.

20.4

Financial testing

The financial covenants set out in clause 0 (Financial condition) shall be
calculated in accordance with the Accounting Principles and tested by reference
to each of the quarterly financial statements delivered pursuant to 0 (Financial
statements).

57

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

20.5

Annual Budget undertaking

The Annual Budget shall be required to show that forecast operations and capital
expenditures for the period is fully funded from available liquidity (including
cash, forecast cash flows and available debt under the Facility).

21

General Undertakings

The undertakings in this clause 21 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance Documents
or any Commitment is in force.

21.1

Authorizations

The Borrower shall promptly:

  (a)

obtain, comply with and do all that is necessary to maintain all Authorizations
in full force and effect; and

        (b)

upon request, supply certified copies to the Lender of,

  (i)

any Authorization required under any law or regulation of a Relevant
Jurisdiction to:

  (A)

enable it to perform its obligations under the Finance Documents;

        (B)

ensure, subject to Legal Reservations, the legality, validity, enforceability or
admissibility in evidence of any Finance Document; and

        (C)

carry on its business where failure to do so has or is reasonably likely to have
a Material Adverse Effect; and

  (ii)

any Material Licence.

21.2

Default

The Borrower shall immediately notify the Finance Parties of any Default
occurring under the Finance Documents.

21.3

Compliance with laws

  (a)

The Borrower shall (and shall ensure that each of its Subsidiaries will) comply
in all material respects with all Applicable Laws.

        (b)

The Borrower shall (and shall ensure that each of its Subsidiaries will) comply
in all respects with all Applicable Laws and all agreements which are binding
and enforceable against it, in each case to the extent they relate to the
provision and funding of pension schemes.

        (c)

The Borrower shall ensure that no:

  (i)

funds or assets of the Borrower or its Subsidiaries that are used to repay the
Facility shall constitute property of, or shall be beneficially owned by, any
Designated Person or be derived from any transaction that would violate any
Sanctions;

58

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (ii)

proceeds of the Facility shall be used to fund any transaction that would
violate any Sanctions; and

        (iii)

Designated Person shall have any direct or indirect interest in the Borrower or
its Subsidiaries that would violate any Sanctions.

21.4

Defence of claims

The Borrower shall defend any action, claim or other proceeding made against or
affecting the Borrower unless there is no effective defence to such action,
claim or proceeding, or it is not commercially worthwhile for the Borrower to
defend it, in which case the Borrower shall use all reasonable endeavours to
minimise or mitigate the effect of such claim, action or proceeding upon it and
its business (including settling or compromising such claim if commercially
appropriate to do so).

21.5

Negative pledge

In this clause 0, Quasi-Security means an arrangement or transaction described
in paragraph 0 below.

  (a)

Other than Permitted Security, the Borrower shall not create or permit to
subsist any Security over any of its assets.

        (b)

The Borrower shall not:

  (i)

sell, transfer or otherwise dispose of any of its assets on terms whereby they
are or may be leased to or re-acquired by the Borrower or any other member of
the Group;

        (ii)

sell, transfer or otherwise dispose of any of its receivables on recourse terms;

        (iii)

other than pursuant to Permitted Indebtedness, enter into any arrangement under
which money for the benefit of a bank or other account may be applied, set-off
or made subject to a combination of accounts; or

        (iv)

enter into any other preferential arrangement having a similar effect,

       

in circumstances where the arrangement or transaction is entered into primarily
as a method of raising Financial Indebtedness or of financing the acquisition of
an asset.

  (c)

Paragraphs 0 and 0 above do not apply to any Security or (as the case may be)
Quasi- Security, listed below:

  (i)

any lien arising by operation of law and in the ordinary course of trading on
arm’s length terms (including retention of title arrangements) and securing
amounts not more than sixty (60) days overdue and not as a result of a default
or omission by any member of the Group, and a reserve or other appropriate
provision, if any, as shall be required by IFRS shall have been made for such
lien;

        (ii)

any Security or Quasi-Security over or affecting any asset acquired by the
Borrower after the date of this Agreement if such asset is acquired as a result
of a Permitted Acquisition under Permitted Acquisition Debt;

59

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (iii)

any Security or Quasi-Security arising under the Finance Documents;

        (iv)

(prior to Financial Close) any Security or Quasi-Security which secures
Permitted Indebtedness arising under the Gold Purchase Agreement, on its terms
as at the date of this Agreement;

        (v)

(prior to Financial Close) any Security or Quasi-Security which secures
Permitted Indebtedness arising under the Shoreline Asset Purchase Agreement and
Shoreline Promissory Note, on its terms as at the date of this Agreement;

        (vi)

any Security or Quasi-Security assumed by the Borrower or Klondex Canada in
connection with the Shoreline Asset Purchase Agreement;

        (vii)

the Borrower deposits and pledges of cash or securities (only to the extent such
deposits or pledges are incurred or otherwise arise in the ordinary course of
business and secure obligations not past due) securing (i) the performance of
bids, tenders, leases, contracts (other than for the payment of money) or
statutory obligations or (ii) obligations on surety or appeal or performance
bonds, including those to support or secure reclamation in accordance with
Applicable Law, as required by any governmental agency to support or secure
reclamation in accordance with Applicable Laws, and, in each case, only to the
extent such deposits or pledges are incurred or otherwise arise in the ordinary
course of business and secure obligations not past due;

        (viii)

pledges, deposits and liens in connection with workers’ compensation, employment
insurance and other similar legislation and deposits securing liability to
insurance carriers under insurance or self-insurance arrangements to the extent
required by Applicable Law;

        (ix)

rights of set-off or bankers’ liens upon deposits of cash or broker’s liens upon
securities in favour of financial institutions, banks or other depositary
institutions to a maximum of $[****];

        (x)

short term pledge certificates, cash collateral or cash margining posted under
the Hedging Agreements contemplated by Section 0, not to exceed the limit set
forth in Section Error! Reference source not found.; and

        (xi)

any Security or Quasi-Security granted in respect of any equipment which secures
Permitted Indebtedness arising under any Permitted Equipment Financing; and

        (xii)

any Security or Quasi-Security created or permitted to subsist with the prior
written consent of the Lender,

provided that only clauses 0, 0, 0 and 2.15(c)(xii) shall apply to any Security
or Quasi-Security over any Excluded Assets, (together, Permitted Security).

21.6

Disposals

  (a)

The Borrower shall not effect a Disposal of any of its assets, undertaking or
business.

        (b)

Paragraph 0 above does not apply to any Permitted Disposal or Disposal:

  (i)

of assets to another Obligor, provided that if the disposing company has given
Transaction Security over those assets, the acquiring company must give
equivalent Transaction Security over those assets; or

60

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (ii)

made with the prior written consent of the Lender.

21.7

Arm's length basis

  (a)

The Borrower shall not enter into any transaction with any person except on
arm's length terms and for full market value (except with the prior written
consent of the Lender).

        (b)

Paragraph (a) above does not apply to:

  (i)

any disposals permitted under clause 0 (Disposals) or guarantees permitted under
clause 0 (Financial indebtedness), in each case arising under or made in
accordance with an agreement which is in force on (and on its terms as at) the
date of this Agreement; or

        (ii)

any loans, disposal or guarantees entered into or made between the Borrower and
another Obligor from time to time.

21.8

Acquisition of Real Property

  (a)

As soon as reasonably practicable upon the acquisition of additional real
property, including real property in relation to the Properties, (provided
however with respect to acquisition of additional real property with a value of
less than $[****] only, no later than the end of the fiscal quarter following
any such acquisition), the Borrower shall:

  (i)

notify the Lender; and

        (ii)

execute a supplement (or similar document) amending the appropriate deed of
trust or debenture such that it thereafter includes the additional real
property.

21.9

No guarantees or indemnities

  (a)

The Borrower shall not incur or allow to remain outstanding any guarantee in
respect of any obligation of any person.

        (b)

Paragraph 0 does not apply to a guarantee which is:

  (i)

permitted under clause 0 (Financial indebtedness); or

        (ii)

granted with the prior written consent of the Lender.

21.10

Dividends and share redemption

  (a)

The Borrower shall not make any Distribution.

        (b)

Paragraph (a) above does not apply to:

  (i)

the making of a Distribution to another Obligor with respect to (x) Permitted
Indebtedness, (y) management fees or consulting fees to reflect attributable
management (or consulting) costs or salaries, or (z) intercompany cash and
inventory management, each in the ordinary course of business and Accounting
Principles; or

61

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (ii)

the making of a Distribution, provided that:

  (A)

payment is made when no Default is continuing or would occur immediately after
the making of the payments;

        (B)

the covenants described in clause 20.3 (Financial condition) have been satisfied
as of the most recent Test Date and on a pro-forma basis for the following
twelve (12) Months.

        (C)

the most recent Annual Budget shows that the Borrower is fully funded from cash,
forecast cash flows and available liquidity after making such distribution for
the following twelve (12) Months.

21.11

Financial Indebtedness

  (a)

Neither the Borrower, nor any of the Obligors, shall:

  (i)

Incur, be a creditor in respect of or allow to remain outstanding any Financial
Indebtedness; or

        (ii)

pay or discharge (including by way of set-off or combination of accounts), or
grant any guarantee, indemnity, bond, letter of credit or similar assurance of
performance or against financial loss in support of, any obligations (including
indebtedness) owed to it or any other person.

  (b)

Paragraph 0 above does not apply to any Financial Indebtedness:

  (i)

arising under a Finance Document;

        (ii)

(prior to the first Utilization Date) arising under the Gold Purchase Agreement,
on its terms as at the date of this Agreement;

        (iii)

(prior to the first Utilization Date) arising under the Shoreline Promissory
Note, on its terms as at the date of this Agreement;

        (iv)

arising under any Permitted Equipment Financing;

        (v)

arising under intercompany loans to any Obligor;

        (vi)

arising under any unsecured debt,

  (A)

excluding any marked-to-market trading exposures, not exceeding US$[****] in
aggregate;

        (B)

consisting of marked-to-market trading exposures not exceeding the amounts
specified in Section 21.38;

  (vii)

arising under any trade payables in the ordinary course of business or less than
ninety (90) days outstanding;

        (viii)

deposits and pledges of cash or securities (only to the extent such deposits or
pledges are incurred or otherwise arise in the ordinary course of business and
secure obligations not past due) securing (i) the performance of bids, tenders,
leases, contracts (other than for the payment of money) or statutory obligations
or (ii) obligations on surety or appeal or performance bonds, including those to
support or secure reclamation in accordance with applicable law, as required by
any governmental agency to support or secure reclamation in accordance with
applicable laws, and, in each case, only to the extent such deposits or pledges
are incurred or otherwise arise in the ordinary course of business and secure
obligations not past due;

62

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (ix)

unsecured indebtedness owed to any person providing property, casualty,
liability, or other insurance to the Borrower or any Obligor, so long as the
amount of such indebtedness is not in excess of $[****], and shall be incurred
only to defer the cost of such insurance for the year in which such indebtedness
is incurred and such indebtedness is outstanding only during such year;

        (x)

owed by the Borrower to another Obligor; or

        (xi)

incurred or allowed to remain outstanding with the prior written consent of the
Lender

(together, Permitted Indebtedness).

21.12

Merger

The Borrower shall not enter into any merger or consolidation, except where:

  (a)

The Borrower’s management survives and the Borrower’s board of directors retain
control of the board following the merger or consolidation;

        (b)

The merger or consolidation counterparty is within the precious metals mining
sector in approved jurisdictions (US, Canada, Mexico and other to be agreed in
writing with the Lender) and complies with the Lender’s regulatory compliance
requirements; and

        (c)

No breach of the Facility’s terms would result from the merger or consolidation,
and the Lender’s position under the documentation or security is not adversely
affected.

21.13

Change of business

The Borrower shall procure that no substantial change is made to the general
nature of the business of the Borrower or the Group from that carried on at the
date of this Agreement.

21.14

Joint Ventures

  (a)

The Borrower shall not (except with the prior written consent of the Lender):

  (i)

enter into, invest in or acquire (or agree to acquire) any shares, stocks,
securities or other interest in any Joint Venture; or

        (ii)

transfer any assets or lend to or guarantee or give an indemnity for or give
Security for the obligations of a Joint Venture or maintain the solvency of or
provide working capital to any Joint Venture (or agree to do any of the
foregoing).

  (b)

Paragraph (a) above does not apply to any Joint Venture specifically permitted
by clause 21.15(b) below.

63

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

21.15

Acquisitions

  (a)

The Borrower shall not (except with the prior written consent of the Lender):

  (i)

invest in or acquire any share in, or any security issued by, any person (other
than an Obligor), or any interest therein or in the capital of any person (other
than an Obligor), or make any capital contribution to any person (other than an
Obligor) (or make any preliminary or other payments towards or with a view to
make such investment;

        (ii)

invest in or acquire any business or going concern, or the whole or
substantially the whole of the assets or business of any person, or any assets
that constitute a division or operating unit of the business of any person (or
make any preliminary or other payments towards or with a view to make such
investment); or

        (iii)

enter into any joint venture, consortium, partnership or similar arrangement
with any person other than as permitted under clause 0 (Joint ventures).

  (b)

Paragraph (a) above does not apply to any acquisition of:

  (i)

assets or formations of Joint Ventures that are within the precious metals
mining sector within approved jurisdictions (US, Canada, Mexico and other to be
agreed upon in writing with the Lender, acting reasonably), provided that:

  (A)

the cash acquisition costs or the Borrower’s funding commitments can be funded
from currently available funds (including treasury, available debt under this
Facility and proceeds of related equity issue) or Permitted Acquisition Debt;

        (B)

any security over the acquired assets or Joint Ventures is on a limited recourse
financing with no direct recourse post-acquisition to any Obligor for repayment;

        (C)

the Borrower is able to demonstrate pro-forma compliance with financial ratios
described in clause 20.3 (Financial condition) following the acquisition as such
covenant is recomputed as at the last day of the most recently ended Test Date
under such Section as if such acquisition had occurred on the first day of such
Test Date;

        (D)

if the acquisition materially increases the actual or contingent environmental,
social and/or Tax liabilities of the Borrower, the Borrower shall show that such
liabilities can be adequately funded or mitigated post-acquisition, to the
extent that such liabilities are not otherwise reflected in the compliance with
the financial ratios described in clause 20.3 (Financial condition);

        (E)

if the acquisition requires any member of the Group to comply with either IFC
Performance Standards or World Bank Standards, compliance with such standards;
and

        (F)

such acquisition shall result in the Security Agent, for the benefit of the
Finance Parties, being granted a security interest (second ranking to the extent
secured under Permitted Acquisition Debt) in any equity interests or any assets
so acquired,

64

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

(together, Permitted Acquisitions).

21.16

Finance Documents

  (a)

The Borrower shall not amend, vary, novate, supplement, supersede, waive or
terminate any term of a Finance Document or any other document delivered to the
Lender pursuant to clause 0 (Initial conditions precedent) except in writing:

  (i)

in accordance with clause 0 (Amendments and Waivers) or as otherwise permitted
pursuant to this Agreement;

        (ii)

to the extent that that amendment, variation, novation, supplement, superseding,
waiver or termination is permitted by the Intercreditor Agreement; or

        (iii)

prior to or on Financial Close, with the prior written consent of the Lender.

  (b)

The Borrower shall promptly supply to the Lender a copy of any document relating
to any of the matters referred to in paragraph (a) above.

21.17

Environmental compliance

  (a)

The Borrower shall:

  (i)

comply in all respects with all Environmental Law;

        (ii)

obtain, maintain and ensure compliance with all requisite Environmental Permits;

        (iii)

take all reasonable steps in anticipation of known or expected future changes or
obligations under Environmental Law; and

        (iv)

implement procedures and management systems to adequately monitor compliance
with and to mitigate liability under any Environmental Law.

21.18

Preservation of assets

The Borrower shall maintain and preserve all of its assets that are necessary or
desirable for the conduct of its business, as conducted at the date of this
Agreement, in good working order and condition, ordinary wear and tear excepted.

21.19

Access to the site

The Borrower shall permit the Lender and its authorised representatives
reasonable access, upon request and reasonable notice, to inspect the
construction, commissioning and operation of the Properties and related
technical data books and records and shall cooperate with such persons to enable
them to prepare their reports, provided that such rights of access shall be
exercised in a way to minimise expense to the Borrower and, as far as is
reasonably practicable, any disruption to the Properties.

21.20

Principal place of business

The Borrower shall have its registered office in British Columbia and principal
place of business and executive office in Nevada, and shall maintain in such
places, originals or copies of the principal books and records relating to its
business.

65

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

21.21

Accounting systems

The Borrower shall ensure that adequate and appropriate accounting, management
information and cost control and accounting systems for the Properties are
installed and maintained and that books of accounts and other records give a
true and fair view of the financial condition of the Borrower and the results of
its operations in accordance with the Accounting Principles.

21.22

Accounting Reference Date

The Borrower shall not, change its Accounting Reference Date without the prior
written consent of the Lender.

21.23

Auditors

The Borrower shall ensure at all times that its and the Group’s and the
Borrower’s auditors are Pricewaterhouse Coopers LLP or such other firm approved
in advance by the Lender (such approval not to be unreasonably withheld or
delayed).

21.24

Construction, operation and maintenance

The Borrower shall carry out the Properties and conduct its business pursuant to
this Agreement and Good Industry Practice, and in all material aspects in
accordance with the Annual Budget and Base Case Model.

21.25

Amendment of charter documents

The Borrower shall not agree to any amendment to, variation or waiver of any of
the terms or conditions or scope of its charter documents, unless the Lender has
been given at least five (5) Business Days’ prior written notice of the proposed
amendment, variation or waiver as required under clause 0 (Amendment of charter
documents) and provided that where any such amendment, variation or waiver could
have a Material Adverse Effect, no such amendment, variation or waiver may be
effected without the prior written consent of the Lender, such consent not to be
unreasonably withheld.

21.26

Anti-corruption law

  (a)

The Borrower shall (and shall ensure that no Subsidiary will) directly or
indirectly use the proceeds of the Facility for any purpose which would breach
the Canada Corruption of Foreign Public Officials Act, the United States Foreign
Corrupt Practices Act of 1977 or other similar legislation in other
jurisdictions.

        (b)

The Borrower shall (and shall ensure that its Subsidiaries will):

  (i)

conduct its businesses in compliance with applicable anti-corruption laws; and

        (ii)

maintain policies and procedures designed to promote and achieve compliance with
such laws.

21.27

Sanctions

The Borrower shall not, and shall not permit or authorise any other person to,
directly or indirectly, use, lend, make payments of, contribute or otherwise
make available, all or any part of the proceeds of any Loan or other
transaction(s) contemplated by this Agreement to fund any trade, business or
other activities:

66

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (a)

involving or for the benefit of any Restricted Party; or

        (b)

in any other manner that would reasonably be expected to result in the Borrower
or the Lender being in breach of any Sanctions (if and to the extent applicable
to either of them) or becoming a Restricted Party.

21.28

Taxation

  (a)

The Borrower shall (and shall ensure that each member of the Group will) pay and
discharge all Taxes imposed upon it or its assets within the time period allowed
without incurring penalties unless and only to the extent that:

  (i)

such payment is being contested in good faith; and

  (A)

adequate reserves are being maintained for those Taxes and the costs required to
contest them which have been disclosed in its latest financial statements
delivered to the Lender under clause 0 (Financial statements); and

        (B)

such payment can be lawfully withheld and failure to pay those Taxes does not
have or is not reasonably likely to have a Material Adverse Effect; or

  (ii)

the amount of such unpaid Taxes is not material, the non-payment results from an
administrative oversight or error by a member of the Group and such payment is
made promptly (and in any event within three (3) Business Days) after a member
of the Group becoming aware of such non-payment.

  (b)

No member of the Group may change its residence for Tax purposes.

21.29

Critical assets

Notwithstanding any other provision of this Agreement the Borrower shall not
sell, lease, transfer or otherwise dispose of any Material Licence or of any
other asset critical to the operation of the Properties without the prior
written consent of the Lender. For greater certainty the obligations under this
clause 21.29 shall include obtaining, maintaining or renewing, as applicable,
any Material Licenses, approvals or consents necessary at the time for the
carrying out of the Borrower’s business and operations.

21.30

Intellectual Property

The Borrower shall, to the extent that it has the right to the same, preserve
and maintain the subsistence and validity of all material Intellectual Property
necessary for the Properties including in relation to all patents, trade marks,
service marks, designs, utility models, copyrights, design rights, inventions,
confidential information, know-how and rights of like nature.

21.31

Insurance

  (a)

The Borrower shall effect and maintain or cause to be effected and maintained in
full force and effect the following Insurances with reputable independent
insurance companies or underwriters:

67

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (i)

property damage insurance covering all risks of physical loss, destruction, or
damage to all insurable assets of the Properties;

        (ii)

insurance of all risks of direct physical loss or damage on a “warehouse to
warehouse” basis arising from the transport or temporary storage of Product or
equipment;

        (iii)

liability insurance on an occurrence basis against claims filed anywhere in the
world and occurring anywhere in the world for an Obligor’s liability arising out
of claims for personal injury (including bodily injury and death) and property
damage;

        (iv)

employers’ liability insurance in accordance with statutory requirements;

        (v)

directors’ and officers’ liability insurance; and

        (vi)

all insurances required to be in effect by the laws of the countries of
incorporation of each Obligor.

21.32

Pari passu ranking

The Borrower shall ensure that at all times any unsecured and unsubordinated
claims of a Finance Party against it under the Finance Documents rank at least
pari passu with the claims of all its other unsecured and unsubordinated
creditors except those creditors whose claims are mandatorily preferred by laws
of general application to companies.

21.33

Access

The Borrower shall ensure that each member of the Group will, (not more than
once in every calendar year unless the Lender reasonably suspects a Default is
continuing or may occur) permit the Lender and/or the Security Agent and/or
accountants or other professional advisers and contractors of the Lender or the
Security Agent free access at all reasonable times and on reasonable notice at
the risk and cost of the Borrower to (a) the premises, assets, books, accounts
and records of each member of the Group and (b) meet and discuss matters with
management of the Group.

21.34

Further assurance

  (a)

The Borrower shall (and shall procure that each other member of the Group will)
promptly do all such acts or execute all such documents (including assignments,
transfers, mortgages, charges, notices and instructions) as the Security Agent
may reasonably specify (and in such form as the Security Agent may reasonably
require in favour of the Security Agent or its nominee(s)):

  (i)

to perfect the Security created or intended to be created under or evidenced by
the Transaction Security Documents or for the exercise of any rights, powers and
remedies of the Security Agent or the Finance Parties provided by or pursuant to
the Finance Documents or by law; and/or

        (ii)

to facilitate the realisation of the assets which are, or are intended to be,
the subject of the Transaction Security.

  (b)

The Borrower shall (and shall procure that each other member of the Group will)
take all such action as is available to it (including making all filings and
registrations) as may be necessary for the purpose of the creation, perfection,
protection or maintenance of any Security conferred or intended to be conferred
on the Security Agent or the Finance Parties by or pursuant to the Finance
Documents.

68

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

21.35

Preservation of Transaction Security

Other than as expressly permitted under the Finance Documents, the Borrower
shall not do, or consent to the doing of, anything that reasonably could be
expected to prejudice the validity of any of the security granted pursuant to
the Transaction Security Documents.

21.36

Abandonment or suspension

  (a)

The Borrower shall not:

  (i)

abandon the conduct of the Properties or any material part thereof; or

        (ii)

suspend the operation of any of the Properties for a continuous period of more
than thirty five (35) days.

  (b)

If an event of force majeure occurs that the Borrower anticipates (acting
reasonably) may result in the abandonment of the conduct of any of the
Properties or a suspension of construction or operation of any of the Properties
for a continuous period in excess of the relevant periods specified in clause 0,
the Borrower immediately shall notify and consult with the Lender.

21.37

Immunity

The Borrower shall not in any proceedings in Canada or in any other jurisdiction
in relation to any Finance Document, claim or seek in any way to claim, for
itself or any of its assets, immunity from execution, attachment or other
similar legal process.

21.38

Hedging programme

  (a)

The Borrower shall undertake in good faith to offer risk management business to
the Lender, subject to the Lender’s ability to execute such business effectively
and promptly, and offer competitive commercial terms.

        (b)

The Borrower shall not carry out any hedging transactions other than:

  (i)

pursuant to a Counterparty Hedging Agreement, provided that at no time shall the
aggregate of all outstanding Loans and marked-to-market trading exposures of the
Obligors owed to the Finance Parties under this Agreement and the Counterparty
Hedging Agreement exceed $[****];

        (ii)

[****]; or

        (iii)

with the prior written consent of the Lender.

21.39

Press announcements

The Borrower shall not, and shall procure that no member of the Group will, make
any press announcement or other media communication (including by making any
information available on any website) in relation to the Facility without the
prior written consent of the Lender, save where an announcement is required by
any applicable Canadian or US securities laws or the requirements of the TSX or
NYSE (provided that, to the extent permitted to do so by such law, rules or
regulation, the Borrower shall inform the Lender of the contents of such
announcement or communication as soon as possible before such announcement or
communication is made).

69

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

21.40

Klondex Canada

Klondex Canada shall deliver within 30 days of the Financial Close the
Transaction Security Documents set out in Schedule 21.40, in form and substance
satisfactory to the Finance Parties, acting reasonably.

22

Events of Default

Each of the events or circumstances set out in clause 0 is an Event of Default
(save for clause 22.28 (Acceleration)).

22.1

Non-payment

An Obligor does not pay on the due date any amount payable pursuant to a Finance
Document at the place and in the currency in which it is expressed to be
payable.

22.2

Other obligations

  (a)

An Obligor does not comply with any provision of the Finance Documents (other
than those referred to in clause 22.1 (Non-payment)).

        (b)

No Event of Default under paragraph 0 above will occur if the failure to comply
is capable of remedy and is remedied within ten (10) Business Days (or such
other time as may be expressly provided in this Agreement) of the earlier of (A)
the Lender giving notice to the Borrower and (B) the Borrower becoming aware of
the failure to comply.

        (c)

For the purposes of paragraph (b) above, any failure to comply with clauses
19.1, 19.2, 19.3, 19.4, 19.8(e), and 19.10, clause 0 (Financial covenants), or
any provision of any Transaction Security Document shall not be capable of
remedy.

22.3

Misrepresentation

Any representation or statement made or deemed to be made by an Obligor in the
Finance Documents or any other document delivered by or on behalf of any Obligor
under or in connection with any Finance Document is or proves to have been
incorrect or misleading in any material respect when made or deemed to be made
unless the underlying circumstances (if capable of remedy) are remedied within
ten (10) Business Days of the statement being made or deemed repeated.

22.4

Cross default

  (a)

Any event of default as described in the Gold Purchase Agreement.

        (b)

Any Financial Indebtedness of any member of the Group is not paid when due nor
within any originally applicable grace period.

        (c)

Any Financial Indebtedness of any member of the Group is declared to be or
otherwise becomes due and payable prior to its specified maturity as a result of
an event of default (however described).

        (d)

Any commitment for any Financial Indebtedness of any member of the Group is
cancelled or suspended by a creditor of any member of the Group as a result of
an event of default (however described).

70

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (e)

Any creditor of any member of the Group becomes entitled to declare any
Financial Indebtedness of any member of the Group due and payable prior to its
specified maturity as a result of an event of default (however described).

        (f)

No Event of Default will occur under this clause 22.4 if the aggregate amount of
Financial Indebtedness or commitment for Financial Indebtedness falling within
paragraphs 0 to 0 above is less than US$[****] (or its Equivalent).

22.5

Insolvency

  (a)

A member of the Group is unable or admits inability to pay its debts as they
fall due, suspends making payments on any of its debts or, by reason of actual
or anticipated financial difficulties, commences negotiations with one or more
of its creditors (excluding any Finance Party in its capacity as such) with a
view to rescheduling any of its indebtedness.

        (b)

The value of the assets of any member of the Group is less than its liabilities
(taking into account contingent and prospective liabilities).

        (c)

A moratorium is declared in respect of any indebtedness of any member of the
Group. If a moratorium ends, the ending of the moratorium will not remedy any
Event of Default caused by that moratorium.

22.6

Insolvency proceedings

  (a)

Any corporate action, legal proceedings or other procedure or step is taken in
relation to:

  (i)

the suspension of payments, a moratorium of any indebtedness, winding-up,
dissolution, administration or reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) of any member of the Group or the Borrower
other than a solvent liquidation or reorganisation of any member of the Group
which is not an Obligor;

        (ii)

a composition, compromise, assignment or arrangement with any creditor of any
member of the Group;

        (iii)

the appointment of a liquidator (other than in respect of a solvent liquidation
of a member of the Group which is not an Obligor), receiver, administrative
receiver, administrator, compulsory manager or other similar officer in respect
of any member of the Group or the Borrower or any of its assets; or

        (iv)

enforcement of any Security over any assets of any member of the Group,

or any analogous procedure or step is taken in any jurisdiction.

  (b)

This clause 22.6 shall not apply to:

  (i)

any winding-up petition which is frivolous or vexatious and is discharged,
stayed or dismissed within thirty (30) days of commencement; or

        (ii)

the solvent liquidation of any member of the Group that is not an Obligor so
long as any payments or assets distributed as a result of such liquidation are
distributed to other members of the Group.

71

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

22.7

Creditors' process

Any expropriation, attachment, sequestration, execution or other enforcement
action or any analogous process in any jurisdiction affects any asset or assets
of a member of the Group having an aggregate value of US$[****] and is not
discharged within thirty (30) days.

22.8

Failure to comply with court judgment or arbitral award

  (a)

Any member of the Group fails to comply with or pay by the required time any sum
due from it under any final judgment or any final order made or given by a court
or arbitral tribunal or other arbitral body, in each case of competent
jurisdiction.

        (b)

No Event of Default under paragraph 0 above will occur if the aggregate
liability under that judgment or order is less than US$[****] (or its
Equivalent) and is discharged within thirty (30) days.

22.9

Unlawfulness and invalidity

  (a)

It is or becomes unlawful for an Obligor to perform any of its obligations under
the Finance Documents or any Transaction Security created or expressed to be
created by the Transaction Security Documents ceases to be effective or any
subordination created under the Intercreditor Agreement ceases to be effective.

        (b)

Any obligation or obligations of any Obligor under any Finance Documents are not
(subject to the Legal Reservations) or cease to be legal, valid, binding or
enforceable and the cessation individually or cumulatively materially and
adversely affects the interests of the Lender under the Finance Documents.

        (c)

Any Finance Document ceases to be in full force and effect or any Transaction
Security or any subordination created under the Intercreditor Agreement ceases
to be legal, valid, binding, enforceable or effective or is alleged by a party
to it (other than a Finance Party) to be ineffective.

22.10

Repudiation and rescission of agreements

An Obligor (or other relevant party) rescinds or purports to rescind or
repudiates or purports to repudiate a Finance Document or any of the Transaction
Security or evidences an intention to rescind or repudiate a Finance Document or
any Transaction Security.

22.11

Intercreditor Agreement

Any party to the Intercreditor Agreement (other than a Finance Party or an
Obligor) fails to comply with the provisions of, or does not perform its
obligations under, the Intercreditor Agreement, provided if the non-compliance
or circumstances are capable of remedy, it is not remedied within thirty (30)
days of the Lender giving notice to that party.

22.12

Major damage

The whole or any part (the book value of which is twenty percent (20%) or more
of the book value of the aggregate of the assets of the Borrower on a
consolidated basis) of any asset of the Borrower is destroyed or otherwise
damaged.

72

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

22.13

Cessation of business

Any member of the Group suspends or ceases to carry on (or threatens to suspend
or cease to carry on) all or a material part of its business.

22.14

Abandonment

Abandonment, loss, damage or forfeiture of all or substantially all of the
Properties or the mining rights, including the Material Licences.

22.15

Authorizations

  (a)

Any Authorization is suspended, cancelled, revoked, forfeited, surrendered or
terminated (whether in whole or in part thereof) or otherwise is not, or ceases
to be, in full force and effect, or any person is, or becomes entitled to
revoke, cancel, suspend, surrender or terminate any Authorization (whether in
whole or in part thereof), and which is likely to have a Material Adverse
Effect.

        (b)

No Event of Default under clause 24.15(a) will occur if:

  (i)

the mining operations are continuing uninterrupted; and

        (ii)

the circumstances discussed in clause 24.15(a) are capable of remedy and are
remedied within sixty (60) days of their occurrence.

22.16

Audit qualification

The auditors of any Obligor include:

  (a)

a going concern qualification in their audit opinion; or

        (b)

any other material qualification or any emphasis of matter statement,

in relation to any financial statements required to be delivered pursuant to
clause 0 (Financial statements), which qualification or emphasis, or the matters
in relation to which such qualification or emphasis is made, would have a
Material Adverse Effect.

22.17

Litigation

  (a)

Other than as disclosed in the Disclosure Schedule, any litigation, arbitration,
administrative, governmental, regulatory or other investigation, proceeding or
dispute is commenced or threatened:

  (i)

in relation to the Finance Documents or the transactions contemplated in the
Finance Documents; or

        (ii)

otherwise against any member of the Group or its assets (or against the
directors of any member of the Group),

which (in each case) in the opinion of the Lender is reasonably likely to be
adversely determined and, if adversely determined, will have or is reasonably
likely to have a Material Adverse Effect.

73

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

Any litigation, arbitration or administrative proceeding of or before any court,
arbitral body or agency, or any other claim or dispute, has been finally settled
(by non-appealable judgment, decision or other determination) against, or
settled by, any member of the Group that has a determination or settlement value
which:

  (i)

is more than US$[****]; or

        (ii)

in the opinion of the Lender has or could reasonably be expected to increase the
Borrower’s environmental, social and/or tax liabilities, and which in each case
could have a Material Adverse Effect.

22.18

Expropriation

The authority or ability of any member of the Group to conduct its business is
limited or wholly or substantially curtailed by any seizure, expropriation,
nationalisation, compulsory acquisition, intervention, restriction or other
action by or on behalf of any governmental, regulatory or other authority or
other person in relation to any member of the Group or any of its assets or the
shares in that member of the Group (including without limitation the
displacement of all or part of the management of any member of the Group).

22.19

Convertibility/Transferability

Any foreign exchange law is amended, enacted or introduced or is reasonably
likely to be amended, enacted or introduced in any Relevant Jurisdiction that
(in the opinion of the Lender):

  (a)

has or is reasonably likely to have the effect of prohibiting, or restricting or
delaying in any material respect any payment that any Obligor is required to
make pursuant to the terms of any of the Finance Documents; or

        (b)

is materially prejudicial to the interests of the Finance Parties under or in
connection with any of the Finance Documents.

22.20

Material Licences

Any:

  (a)

Material Licence is terminated, cancelled, suspended or revoked (whether wholly
or in part);

        (b)

restrictions or conditions are imposed on any Material Licence;

        (c)

Material Licence is modified or varied in a way that is adverse in any material
respect to the interests of the relevant member or members of the Group; or

        (d)

Material Licence expires and is not renewed on substantially the same terms,

unless the mining operations are continuing uninterrupted and the circumstances
leading to the relevant occurrences referred to in paragraphs (a) to (d) above
are capable of remedy and are remedied within sixty (60) days of their
occurrence.

74

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

22.21

[Intentionally Deleted]

22.22

[Intentionally Deleted]

22.23

Insurance

  (a)

Any Insurance:

  (i)

is not, or ceases to be, in full force and effect;

        (ii)

is unavailable at the time it is required to be effected; or

        (iii)

is avoided or reduced,

in a manner which would have a Material Adverse Effect.

  (b)

Any insurer is entitled to avoid or otherwise reduce its liability under the
policy relating to any Insurance or other insurance required to be effected
under any Finance Document, unless the Insurance is, prior to its cession,
replaced by insurance on substantially similar or more favourable terms and in
form and substance satisfactory to the Lender.

22.24

Material adverse change

Any event or circumstance occurs which the Lender reasonably believe has or is
reasonably likely to have a Material Adverse Effect.

22.25

Acceleration

On and at any time after the occurrence of an Event of Default which is
continuing the Lender may, by notice to the Borrower:

  (a)

cancel the Commitment whereupon they shall immediately be cancelled;

        (b)

declare that all or part of the Loans, together with accrued interest, and all
other amounts accrued or outstanding under the Finance Documents be immediately
due and payable, whereupon they shall become immediately due and payable;

        (c)

declare that all or part of the Loans be payable on demand, whereupon they shall
immediately become payable on demand by the Lender; and/or

        (d)

exercise or direct the Security Agent to exercise any or all of its rights,
remedies, powers or discretions under the Finance Documents.

75

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

CHANGES TO PARTIES

23

Changes to the Lender

23.1

Assignments and transfers by the Lender

Subject to this clause 0 and to clause 0 (Restriction on Debt Purchase
Transactions), the Lender (the Existing Lender) may, upon the written consent of
the Borrower (such consent not to be unreasonably withheld or delayed):

  (a)

assign any of its rights; or

        (b)

transfer by novation any of its rights and obligations,

to another bank or financial institution or to a trust, fund or other entity
which is regularly engaged in or established for the purpose of making,
purchasing or investing in loans, debt securities or other similar debt
instruments or facilities (the New Lender); provided however that the consent of
the Borrower shall not be required where the assignment is to an Affiliate of
the Lender or after the occurrence and during the continuation of an Event of
Default.

23.2

Conditions of assignment or transfer

  (a)

An assignment or transfer of part of the Lender's participation in Commitment or
Loans must be in a minimum amount of US$[****].

        (b)

An assignment will only be effective on:

  (i)

receipt by the Existing Lender (whether in the Assignment Agreement or
otherwise) of written confirmation from the New Lender (in form and substance
satisfactory to the Lender) that the New Lender will assume the same obligations
to the other Finance Parties and the other Secured Parties as it would have been
under if it was the Lender;

        (ii)

the New Lender entering into the documentation required for it to accede as a
party to the Intercreditor Agreement; and

        (iii)

performance by the Existing Lender of all necessary know your customer or other
similar checks under all applicable laws and regulations in relation to such
assignment to a New Lender.

  (c)

A transfer will only be effective if the New Lender enters into the
documentation required for it to accede as a party to the Intercreditor
Agreement and if the procedure set out in clause 0 (Procedure for transfer) is
complied with.

        (d)

If:

  (i)

the Lender assigns or transfers any of its rights or obligations under the
Finance Documents or changes its Facility Office; and

        (ii)

as a result of circumstances existing at the date the assignment, transfer or
change occurs, an Obligor would be obliged to make a payment to the New Lender
or Lender acting through its new Facility Office under clause 0 (Tax gross-up
and indemnities) or clause 0 (Increased Costs),

76

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

then the New Lender or Lender acting through its new Facility Office is only
entitled to receive payment under those clauses to the same extent as the
Existing Lender or Lender acting through its previous Facility Office would have
been if the assignment, transfer or change had not occurred.

23.3

Limitation of responsibility of the Existing Lender

  (a)

Unless expressly agreed to the contrary, the Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender for:

  (i)

the legality, validity, effectiveness, adequacy or enforceability of the Finance
Documents, the Transaction Security or any other documents;

        (ii)

the financial condition of any Obligor;

        (iii)

the performance and observance by any Obligor of its obligations under the
Finance Documents or any other documents; or

        (iv)

the accuracy of any statements (whether written or oral) made in or in
connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

  (b)

Each New Lender confirms to the Existing Lender, the other Finance Parties and
the Secured Parties that it:

  (i)

has made (and shall continue to make) its own independent investigation and
assessment of the financial condition and affairs of each Obligor and its
related entities in connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by the Existing Lender
or any other Finance Party in connection with any Finance Document or the
Transaction Security; and

        (ii)

will continue to make its own independent appraisal of the creditworthiness of
each Obligor and its related entities whilst any amount is or may be outstanding
under the Finance Documents or any Commitment is in force.

  (c)

Nothing in any Finance Document obliges an Existing Lender to:

  (i)

accept a re-transfer or re-assignment from a New Lender of any of the rights and
obligations assigned or transferred under this clause 23; or

        (ii)

support any losses directly or indirectly incurred by the New Lender by reason
of the non-performance by any Obligor of its obligations under the Finance
Documents or otherwise.

23.4

Procedure for transfer

  (a)

Subject to the conditions set out in clause 23.2 (Conditions of assignment or
transfer) a transfer is effected in accordance with paragraph 0 below when the
Existing Lender executes an otherwise duly completed Transfer Certificate by the
New Lender. The Existing Lender shall, subject to paragraph 0 below, as soon as
reasonably practicable after receipt by it of a duly completed Transfer
Certificate appearing on its face to comply with the terms of this Agreement and
delivered in accordance with the terms of this Agreement, execute that Transfer
Certificate.

77

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (b)

The Borrower and the other Finance Parties irrevocably authorise the Lender to
execute any Transfer Certificate on their behalf, without any consultation with
them.

        (c)

The Lender shall only be obliged to execute a Transfer Certificate delivered to
it once it is satisfied that it has complied with all necessary know your
customer or other similar checks under all applicable laws and regulations in
relation to the transfer to such New Lender.

        (d)

Subject to clause 0 (Pro rata interest settlement), on the Transfer Date:

  (i)

to the extent that in the Transfer Certificate the Existing Lender seeks to
transfer by novation its rights and obligations under the Finance Documents and
in respect of the Transaction Security each of the Obligors and the Existing
Lender shall be released from further obligations towards one another under the
Finance Documents and in respect of the Transaction Security and their
respective rights against one another under the Finance Documents and in respect
of the Transaction Security shall be cancelled (being the Discharged Rights and
Obligations);

        (ii)

each of the Obligors and the New Lender shall assume obligations towards one
another and/or acquire rights against one another which differ from the
Discharged Rights and Obligations only insofar as that Obligor and the New
Lender have assumed and/or acquired the same in place of that Obligor and the
Existing Lender;

        (iii)

the New Lender shall acquire the same rights and assume the same obligations in
respect of the Transaction Security as they would have acquired and assumed had
the New Lender been the Lender with the rights and/or obligations acquired or
assumed by it as a result of the transfer and to that extent the Security Agent
and the Existing Lender shall each be released from further obligations to each
other under the Finance Documents; and

        (iv)

the New Lender shall become a Party as the Lender.

23.5

Procedure for assignment

  (a)

Subject to the conditions set out in clause 23.2 (Conditions of assignment or
transfer) an assignment may be effected in accordance with paragraph 0 below
when the Lender executes an otherwise duly completed Assignment Agreement
delivered to it by the New Lender. The Lender shall, subject to paragraph 0
below, as soon as reasonably practicable after receipt by it of a duly completed
Assignment Agreement appearing on its face to comply with the terms of this
Agreement and delivered in accordance with the terms of this Agreement, execute
that Assignment Agreement.

        (b)

The Borrower and the other Finance Parties irrevocably authorise the Lender to
execute any Assignment Agreement on their behalf, without any consultation with
them

        (c)

The Lender shall only be obliged to execute an Assignment Agreement delivered to
it by the New Lender once it is satisfied it has complied with all necessary
know your customer or other similar checks under all applicable laws and
regulations in relation to the assignment to such New Lender.

78

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (d)

Subject to clause 23.8 (Pro rata interest settlement), on the Transfer Date:

  (i)

the Existing Lender will assign absolutely to the New Lender its rights under
the Finance Documents and in respect of the Transaction Security expressed to be
the subject of the assignment in the Assignment Agreement;

        (ii)

the Existing Lender will be released from the obligations (the Relevant
Obligations) expressed to be the subject of the release in the Assignment
Agreement (and any corresponding obligations by which it is bound in respect of
the Transaction Security); and

        (iii)

the New Lender shall become a Party as the Lender and will be bound by
obligations equivalent to the Relevant Obligations.

  (e)

The Lender may utilise procedures other than those set out in this clause 23.5
to assign their rights under the Finance Documents (but not, without the consent
of the relevant Obligor or unless in accordance with clause 23.4 (Procedure for
transfer), to obtain a release by that Obligor from the obligations owed to that
Obligor by the Lender nor the assumption of equivalent obligations by a New
Lender) provided that they comply with the conditions set out in clause 0
(Conditions of assignment or transfer).

23.6

Copy of Transfer Certificate, Assignment Agreement or Amendment Confirmation to
Borrower

The Lender shall, as soon as reasonably practicable after it has executed a
Transfer Certificate, an Assignment Agreement or an Amendment Confirmation, send
to the Borrower a copy of that Transfer Certificate, Assignment Agreement or
Amendment Confirmation.

23.7

Security over the Lender’s rights

In addition to the other rights provided the Lender under this clause 23, the
Lender may without consulting with or obtaining consent from any Obligor, at any
time charge, assign or otherwise create Security in or over (whether by way of
collateral or otherwise) all or any of its rights under any Finance Document to
secure obligations of that Lender including, without limitation:

  (a)

any charge, assignment or other Security to secure obligations to a federal
reserve or central bank; and

        (b)

in the case of the Lender which is a fund, any charge, assignment or other
Security granted to any holders (or trustee or representatives of holders) of
obligations owed, or securities issued, by that Lender as security for those
obligations or securities,

except that no such charge, assignment or Security shall:

  (i)

release the Lender from any of its obligations under the Finance Documents or
substitute the beneficiary of the relevant charge, assignment or Security for
the Lender as a party to any of the Finance Documents; or

        (ii)

require any payments to be made by an Obligor other than or in excess of, or
grant to any person any more extensive rights than, those required to be made or
granted to the relevant Lender under the Finance Documents.

79

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

23.8

Pro rata interest settlement

  (a)

Any interest or fees in respect of the relevant participation which are
expressed to accrue by reference to the lapse of time shall continue to accrue
in favour of the Existing Lender up to but excluding the Transfer Date (Accrued
Amounts) and shall become due and payable to the Existing Lender (without
further interest accruing on them) on the last day of the current Interest
Period (or, if the Interest Period is longer than six (6) Months, on the next of
the dates which falls at six (6) Monthly intervals after the first day of that
Interest Period).

        (b)

The rights assigned or transferred by the Existing Lender will not include the
right to the Accrued Amounts, so that, for the avoidance of doubt:

  (i)

when the Accrued Amounts become payable, those Accrued Amounts will be payable
to the Existing Lender; and

        (ii)

the amount payable to the New Lender on that date will be the amount which
would, but for the application of this clause 23.8, have been payable to it on
that date, but after deduction of the Accrued Amounts.

  (c)

In this clause references to 23.8Interest Period shall be construed to include a
reference to any other period for accrual of fees.

24

Restriction on Debt Purchase Transactions

The Borrower shall not, and shall procure that and each other member of the
Group shall not, enter into any Debt Purchase Transaction or beneficially own
all or any part of the share capital of a company that is the Lender or a party
to a Debt Purchase Transaction.

25

Changes to the Obligors

25.1

Assignments and transfer by Obligors

No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.

80

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

ADMINISTRATION

26

Payment Mechanics

26.1

Distributions to an Obligor

The Lender may (with the consent of the Obligor or in accordance with clause 27
(Set-off)) apply any amount received by it for that Obligor in or towards
payment (on the date and in the currency and funds of receipt) of any amount due
from that Obligor under the Finance Documents or in or towards purchase of any
amount of any currency to be so applied.

26.2

Clawback

  (a)

Where a sum is to be paid to the Lender under the Finance Documents for another
Party, the Lender is not obliged to pay that sum to that other Party (or to
enter into or perform any related exchange contract) until it has been able to
establish to its satisfaction that it has actually received that sum.

        (b)

If the Lender pays an amount to another Party and it proves to be the case that
such Party had not actually received that amount, then the Party to whom that
amount (or the proceeds of any related exchange contract) was paid by the Lender
shall on demand refund the same to the Lender together with interest on that
amount from the date of payment to the date of receipt by the Lender, calculated
by the Lender to reflect its cost of funds.

26.3

Partial payments

  (a)

If the Lender receives a payment that is insufficient to discharge all the
amounts then due and payable by an Obligor under the Finance Documents, the
Lender shall apply that payment towards the obligations of that Obligor under
the Finance Documents in the following order:

  (i)

first, in or towards payment pro rata of any unpaid fees, costs and expenses of
the Lender or the Security Agent under the Finance Documents;

        (ii)

secondly, in or towards payment pro rata of any accrued interest, fee or
commission due but unpaid under this Agreement;

        (iii)

thirdly, in or towards payment pro rata of any principal due but unpaid under
this Agreement; and

        (iv)

fourthly, in or towards payment pro rata of any other sum due but unpaid under
the Finance Documents.

  (b)

The Lender may vary the order set out in paragraphs 00 to 0 above.

  (c)

Paragraphs 0 and 0 above will override any appropriation made by an Obligor.

26.4

No set-off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for) set-off
or counterclaim.

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

26.5

Business Days

  (a)

Any payment under the Finance Documents which is due to be made on a day that is
not a Business Day shall be made on the next Business Day in the same calendar
month (if there is one) or the preceding Business Day (if there is not).

        (b)

During any extension of the due date for payment of any principal or Unpaid Sum
under this Agreement interest is payable on the principal or Unpaid Sum at the
rate payable on the original due date.

26.6

Currency of account

  (a)

Subject to paragraphs 0 and 0 below, dollars is the currency of account and
payment for any sum due from an Obligor under any Finance Document.

        (b)

Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.

        (c)

Any amount expressed to be payable in a currency other than dollars shall be
paid in that other currency.

26.7

Change of currency

  (a)

Unless otherwise prohibited by law, if more than one currency or currency unit
are at the same time recognised by the central bank of any country as the lawful
currency of that country, then:

  (i)

any reference in the Finance Documents to, and any obligations arising under the
Finance Documents in, the currency of that country shall be translated into, or
paid in, the currency or currency unit of that country designated by the Lender
(after consultation with the Borrower); and

        (ii)

any translation from one currency or currency unit to another shall be at the
official rate of exchange recognised by the central bank for the conversion of
that currency or currency unit into the other, rounded up or down by the Lender
(acting reasonably).

  (b)

If a change in any currency of a country occurs, this Agreement will, to the
extent the Lender (acting reasonably and after consultation with the Borrower)
specifies to be necessary, be amended to comply with any generally accepted
conventions and market practice in the Relevant Interbank Market and otherwise
to reflect the change in currency.

26.8

Disruption to Payment Systems etc.

If either the Lender determines (in its discretion) that a Disruption Event has
occurred or the Lender is notified by the Borrower that a Disruption Event has
occurred:

  (a)

the Lender may, and shall if requested to do so by the Borrower, consult with
the Borrower with a view to agreeing with the Borrower such changes to the
operation or administration of the Facility as the Lender may deem necessary in
the circumstances;

        (b)

the Lender shall not be obliged to consult with the Borrower in relation to any
changes mentioned in paragraph 0 if, in its opinion, it is not practicable to do
so in the circumstances and, in any event, shall have no obligation to agree to
such changes;

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (c)

the Lender may consult with the Finance Parties in relation to any changes
mentioned in paragraph 0 but shall not be obliged to do so if, in its opinion,
it is not practicable to do so in the circumstances;

        (d)

any such changes agreed upon by the Lender and the Borrower shall (whether or
not it is finally determined that a Disruption Event has occurred) be binding
upon the Parties as an amendment to (or, as the case may be, waiver of) the
terms of the Finance Documents notwithstanding the provisions of clause 32
(Amendments and Waivers);

        (e)

the Lender shall not be liable for any damages, costs or losses whatsoever
(including, without limitation for negligence, gross negligence or any other
category of liability whatsoever but not including any claim based on the fraud
of the Lender) arising as a result of its taking, or failing to take, any
actions pursuant to or in connection with this clause 26.8; and

        (f)

the Lender shall notify the Finance Parties of all changes agreed pursuant to
paragraph 0 above.

27

Set-Off

A Finance Party may set off any matured obligation due from an Obligor under the
Finance Documents (to the extent beneficially owned by that Finance Party)
against any matured obligation owed by that Finance Party to that Obligor,
regardless of the place of payment, booking branch or currency of either
obligation. If the obligations are in different currencies, the Finance Party
may convert either obligation at a market rate of exchange in its usual course
of business for the purpose of the set-off.

28

Notices

28.1

Communications in writing

Any communication to be made under or in connection with the Finance Documents
shall be made in writing and, unless otherwise stated, may be made by fax or
letter.

28.2

Addresses

The address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any communication
or document to be made or delivered under or in connection with the Finance
Documents is:

  (a)

in the case of any Obligor, that identified with its name below;

        (b)

in the case of the Lender or the Security Agent, that identified with its name
below,

or any substitute address or fax number or department or officer as the Party
may notify to the Lender by not less than five (5) Business Days' notice.

28.3

Delivery

  (a)

Any communication or document made or delivered by one person to another under
or in connection with the Finance Documents will only be effective:

83

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (i)

if by way of fax, when received in legible form; or

        (ii)

if by way of letter, when it has been left at the relevant address or five
Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address;

       

and, if a particular department or officer is specified as part of its address
details provided under clause 28.2 (Addresses), if addressed to that department
or officer.

  (b)

Any communication or document to be made or delivered to the Lender or the
Security Agent will be effective only when actually received by Lender or the
Security Agent and then only if it is expressly marked for the attention of the
department or officer identified with the Lender’s or the Security Agent’s
signature below (or any substitute department or officer as the Lender or the
Security Agent shall specify for this purpose).

        (c)

All notices from or to an Obligor shall be sent through the Lender.

        (d)

Any communication or document made or delivered to the Borrower in accordance
with this clause will be deemed to have been made or delivered to each of the
Obligors.

        (e)

Any communication or document which becomes effective, in accordance with
paragraphs 0 to 0 above, after 5:00 p.m. in the place of receipt shall be deemed
only to become effective on the following day (unless mutually agreed otherwise
by all parties to the communication or document).

28.4

Notification of address and fax number

Promptly upon receipt of notification of an address or fax number or change of
address or fax number pursuant to clause 28.2 (Addresses) or changing its own
address or fax number, the Lender shall notify the other Parties.

28.5

Electronic communication

  (a)

Any communication to be made between any two Parties under or in connection with
the Finance Documents may be made by electronic mail or other electronic means,
to the extent that those two Parties agree that, unless and until notified to
the contrary, this is to be an accepted form of communication and if those two
Parties:

  (i)

notify each other in writing of their electronic mail address and/or any other
information required to enable the sending and receipt of information by that
means; and

        (ii)

notify each other of any change to their address or any other such information
supplied by them by not less than five (5) Business Days' notice.

  (b)

Any electronic communication made between those two Parties will be effective
only when actually received in readable form and in the case of any electronic
communication made by a Party to the Lender or the Security Agent only if it is
addressed in such a manner as the Lender or Security Agent shall specify for
this purpose.

        (c)

Any electronic communication which becomes effective, in accordance with
paragraph 0 above, after 5.00 p.m. in the place of receipt shall be deemed only
to become effective on the following day.

84

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

28.6

English language

  (a)

Any notice given under or in connection with any Finance Document must be in
English.

        (b)

All other documents provided under or in connection with any Finance Document
must be:

  (i)

in English; or

        (ii)

if not in English, and if so required by the Lender, accompanied by a certified
English translation and, in this case, the English translation will prevail
unless the document is a constitutional, statutory or other official document.

29

Calculations and Certificates

29.1

Accounts

In any litigation or arbitration proceedings arising out of or in connection
with a Finance Document, the entries made in the accounts maintained by a
Finance Party are prima facie evidence of the matters to which they relate.

29.2

Certificates and Determinations

Any certification or determination by a Finance Party of a rate or amount under
any Finance Document is, in the absence of manifest error, conclusive evidence
of the matters to which it relates.

29.3

Day count convention

Any interest, commission or fee accruing under a Finance Document will accrue
from day to day and is calculated on the basis of the actual number of days
elapsed and a year of three hundred sixty (360) days or, in any case where the
practice in the Relevant Interbank Market differs, in accordance with that
market practice.

30

Partial Invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions nor
the legality, validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.

31

Remedies and Waivers

No failure to exercise, nor any delay in exercising, on the part of any Finance
Party or Secured Party, any right or remedy under a Finance Document shall
operate as a waiver of any such right or remedy or constitute an election to
affirm any Finance Document. No election to affirm any Finance Document on the
part of any Finance Party or Secured Party shall be effective unless it is in
writing. No single or partial exercise of any right or remedy shall prevent any
further or other exercise or the exercise of any other right or remedy. The
rights and remedies provided in each Finance Document are cumulative and not
exclusive of any rights or remedies provided by law.

85

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

32

Amendments and Waivers

32.1

Intercreditor Agreement

This clause 32 is subject to the terms of the Intercreditor Agreement.

32.2

Required consents

  (a)

Subject to clause 32.3 (Lender matters) and clause 32.4 (Other exceptions), any
term of the Finance Documents may be amended or waived only with the consent of
Lender and the Obligors and any such amendment or waiver will be binding on all
Parties.

        (b)

The Lender may effect, on behalf of any Finance Party, any amendment or waiver
permitted by this clause 32.

        (c)

Notwithstanding clause (a) and (b) above, the Lender shall not amend, supplement
or restate the terms of any Finance Document in such a way that such amendment,
supplement or restatement would, materially affect the rights of the Hedge
Counterparty without the prior written consent of the Hedge Counterparty.

32.3

Lender matters

  (a)

An amendment, waiver or (in the case of a Transaction Security Document) a
consent of, or in relation to, any term of any Finance Document that has the
effect of changing or which relates to:

  (i)

an extension to the date of payment of any amount under the Finance Documents;

        (ii)

a reduction in the Margin or a reduction in the amount of any payment of
principal, interest, fees or commission payable;

        (iii)

an increase in the Commitment (except pursuant to clause 0 (Amendment to
Commitment), an extension of the Availability Period or any requirement that a
cancellation reduces the Commitment of the Lender under the Facility;

        (iv)

a change to the Borrower or the Guarantors;

        (v)

any provision which expressly requires the consent of all the Lender;

        (vi)

clause 0 (Finance Parties' rights and obligations), clause 0 (Extension option),
clause 0 (Changes to the Lender), this clause 32, the governing law of any
Finance Document or clause 0 (Jurisdiction of British Columbia courts);

        (vii)

the nature or scope of:

  (A)

the guarantee and indemnity granted under clause 0 (Guarantee and Indemnity);

        (B)

the Charged Property; or

        (C)

the manner in which the proceeds of enforcement of the Transaction Security are
distributed,

(except, in the case of paragraphs (B) and (C) above, insofar as it relates to a
sale or disposal of an asset which is the subject of the Transaction Security
where such sale or disposal is expressly permitted under this Agreement or any
other Finance Document);

86

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (viii)

the release of any guarantee and indemnity granted under clause 0 (Guarantee and
indemnity) or of any Transaction Security (unless permitted under this Agreement
or any other Finance Document or relating to a sale or disposal of an asset
which is the subject of the Transaction Security where such sale or disposal is
expressly permitted under this Agreement or any other Finance Document); or

        (ix)

any amendment to the order of priority or subordination under the Intercreditor
Agreement,

shall not be made or given without the prior consent of all the Lender.

32.4

Other exceptions

An amendment or waiver which relates to the rights or obligations of the Lender
or the Security Agent (each in their capacity as such) may not be effected
without the consent of the Lender or the Security Agent.

33

Confidentiality

33.1

Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and
not to disclose it to anyone, save to the extent permitted by clause 0
(Disclosure of Confidential Information), and to ensure that all Confidential
Information is protected with security measures and a degree of care that would
apply to its own confidential information.

33.2

Disclosure of Confidential Information

Any Finance Party may disclose:

  (a)

to any of its Affiliates (including branches) and Related Funds and any
representatives in any jurisdiction and any of its or their officers, directors,
employees, professional advisers, insurers, insurance brokers, service
providers, rating agencies, direct or indirect providers of credit protection,
auditors, partners and Representatives such Confidential Information as that
Finance Party shall consider appropriate if any person to whom the Confidential
Information is to be given pursuant to this paragraph 0 is informed in writing
of its confidential nature and that some or all of such Confidential Information
may be price- sensitive information except that there shall be no such
requirement to so inform if the recipient is subject to professional obligations
to maintain the confidentiality of the information or is otherwise bound by
requirements of confidentiality in relation to the Confidential Information;

        (b)

to any person:

  (i)

to (or through) whom it assigns or transfers (or may potentially assign or
transfer) all or any of its rights and/or obligations under one or more Finance
Documents or which succeeds (or which may potentially succeed) it as Lender or
Security Agent and, in each case, to any of that person's Affiliates, Related
Funds, Representatives and professional advisers;

87

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (ii)

with (or through) whom it enters into (or may potentially enter into), whether
directly or indirectly, any sub-participation, insurance or brokerage
arrangement in relation to, or any other transaction under which payments are to
be made or may be made by reference to, one or more Finance Documents and/or one
or more Obligors and to any of that person's Affiliates, Related Funds,
Representatives and professional advisers;

        (iii)

appointed by any Finance Party or by a person to whom paragraph 00 or 0 above
applies to receive communications, notices, information or documents delivered
pursuant to the Finance Documents on its behalf;

        (iv)

who invests in or otherwise finances (or may potentially invest in or otherwise
finance), directly or indirectly, any transaction referred to in paragraph 00 or
00 above;

        (v)

to whom information is required or requested to be disclosed by any court of
competent jurisdiction or any governmental, quasi-governmental, administrative,
supervisory, banking, taxation or other regulatory authority or similar body,
court or tribunal, the rules of any relevant stock exchange or pursuant to any
applicable law or regulation;

        (vi)

to whom information is required to be disclosed in connection with, and for the
purposes of, any litigation, arbitration, administrative or other
investigations, proceedings or disputes;

        (vii)

to whom or for whose benefit that Finance Party charges, assigns or otherwise
creates Security (or may do so) pursuant to clause 0 (Security over Lender’s
rights);

        (viii)

who is a Party; or

        (ix)

with the consent of the Borrower;

in each case, such Confidential Information as that Finance Party shall consider
appropriate if:

  (A)

in relation to paragraphs 00, 00 and 00 above, the person to whom the
Confidential Information is to be given has entered into a confidentiality
undertaking except that there shall be no requirement for a confidentiality
undertaking if the recipient is a professional adviser and is subject to
professional obligations to maintain the confidentiality of the Confidential
Information;

        (B)

in relation to paragraph 00 above, the person to whom the Confidential
Information is to be given has entered into a confidentiality undertaking or is
otherwise bound by requirements of confidentiality in relation to the
Confidential Information they receive and is informed that some or all of such
Confidential Information may be price-sensitive information;

        (C)

in relation to paragraphs 00, 00 and 00 above, the person to whom the
Confidential Information is to be given is informed of its confidential nature
and that some or all of such Confidential Information may be price-sensitive
information; and

88

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (c)

to any person appointed by that Finance Party or by a person to whom paragraph
(b)(i) or (b)(ii) above applies to provide administration or settlement services
in respect of one or more of the Finance Documents including without limitation,
in relation to the trading of participations in respect of the Finance
Documents, such Confidential Information as may be required to be disclosed to
enable such service provider to provide any of the services referred to in this
paragraph 0 if the service provider to whom the Confidential Information is to
be given has entered into a confidentiality agreement substantially in a form
attached hereto as Schedule 33.2(c);

        (d)

to any rating agency (including its professional advisers) such Confidential
Information as may be required to be disclosed to enable such rating agency to
carry out its normal rating activities in relation to the Finance Documents
and/or the Obligors if the rating agency to whom the Confidential Information is
to be given is informed of its confidential nature and that some or all of such
Confidential Information may be price-sensitive information; and

        (e)

where such Finance Party is the Lender, at its own expense, its involvement in
the Facility by way of internal and external pitch documents and the placement
of “tombstone” or other advertisements in financial and other newspapers and
journals (and such other methods of publication as the Lender may choose from
time to time).

33.3

Entire agreement

This clause 33 (Confidentiality) constitutes the entire agreement between the
Parties in relation to the obligations of the Finance Parties under the Finance
Documents regarding Confidential Information and supersedes any previous
agreement, whether express or implied, regarding Confidential Information.

33.4

Inside information

Each of the Finance Parties acknowledges that some or all of the Confidential
Information is or may be price-sensitive information and that the use of such
information may be regulated or prohibited by applicable legislation including
securities law relating to insider dealing and market abuse and each of the
Finance Parties undertakes not to use any Confidential Information for any
unlawful purpose.

33.5

Notification of disclosure

Each of the Finance Parties agrees (to the extent permitted by law and
regulation) to inform the Borrower:

  (a)

of the circumstances of any disclosure of Confidential Information made pursuant
to paragraph 00 of clause 0 (Disclosure of Confidential Information) except
where such disclosure is made to any of the persons referred to in that
paragraph during the ordinary course of its supervisory or regulatory function;
and

        (b)

upon becoming aware that Confidential Information has been disclosed in breach
of this clause 0 (Confidentiality).

33.6

Continuing obligations

The obligations in this clause 0 (Confidentiality) are continuing and, in
particular, shall survive and remain binding on each Finance Party for a period
of twelve (12) months from the earlier of:

89

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (a)

the date on which all amounts payable by the Obligors under or in connection
with this Agreement have been paid in full and all Commitment have been
cancelled or otherwise cease to be available; and

        (b)

the date on which such Finance Party otherwise ceases to be a Finance Party.

34

Interest Act of Canada

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 to 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.

35

Usury

If any provision of this Agreement would oblige the Borrower to make any payment
of interest or other amount payable to any Finance Party in an amount or
calculated at a rate which would be prohibited by law or would result in a
receipt by that Lender 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 law or so result in a receipt by the Lender
of “interest” at a “criminal rate”, such adjustment to be effected, to the
extent necessary (but only to the extent necessary), as follows:

  (a)

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

        (b)

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

in each case, if necessary, to be effected by repayment by such Finance Party to
the Borrower of any amount already received by such Finance Party that would be
reduced by this Section (it being agreed that such Finance Party may elect
whether to effect such repayment and reduction by return of shares or by payment
of the applicable amount in cash to the Borrower).

36

Future Financings

The Borrower agrees in good faith to provide the Lender with the right to offer
future debt finance ([****]) and trading business on an equal basis with any
other parties; further in the event that a club of syndicated transaction is
proposed with another arranger that requires more than one lender, the Borrower
will use reasonable commercial efforts to offer the Lender the opportunity to
participate on an equal basis in the transaction. The Borrower will also
undertake to consider using the Lender’s corporate advisory services should the
opportunity arise. For greater certainty, this provision shall not restrict the
Borrower from fulfilling prior agreements entered into with other financial
institutions in relation to non-lending services.

37

Counterparts

Each Finance Document may be executed in any number of counterparts, and this
has the same effect as if the signatures on the counterparts were on a single
copy of the Finance Document.

90

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

38

Contractual Recognition of Bail-In

Notwithstanding any other term of any Finance Document or any other agreement,
arrangement or understanding between the Parties, each Party acknowledges and
accepts that any liability of any Party to any other Party under or in
connection with the Finance Documents may be subject to Bail-In Action by the
relevant Resolution Authority and acknowledges and accepts to be bound by the
effect of:

  (a)

any Bail-In Action in relation to any such liability, including (without
limitation):

  (i)

a reduction, in full or in part, in the principal amount, or outstanding amount
due (including any accrued but unpaid interest) in respect of any such
liability;

        (ii)

a conversion of all, or part of, any such liability into shares or other
instruments of ownership that may be issued to, or conferred on, it; and

        (iii)

a cancellation of any such liability; and

(b)

a variation of any term of any Finance Document to the extent necessary to give
effect to any Bail-In Action in relation to any such liability.

GOVERNING LAW AND ENFORCEMENT

39

Governing Law

This Agreement and any non-contractual obligations arising out of or in
connection with it are governed by laws of the Province of British Columbia, and
the federal laws of Canada as applicable herein.

40

Enforcement

40.1

Jurisdiction of British Columbia courts

  (a)

The courts of British Columbia have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including a dispute
relating to the existence, validity or termination of this Agreement or any
non-contractual obligation arising out of or in connection with this Agreement)
(a Dispute).

        (b)

The Parties agree that the courts of British Columbia are the most appropriate
and convenient courts to settle Disputes and accordingly no Party will argue to
the contrary.

        (c)

This clause 0 is for the benefit of the Finance Parties and the Secured Parties
only. As a result, no Finance Party or Secured Party shall be prevented from
taking proceedings relating to a Dispute in any other courts with jurisdiction.
To the extent allowed by law, the Finance Parties and the Secured Parties may
take concurrent proceedings in any number of jurisdictions.

40.2

Service of process

  (a)

Without prejudice to any other mode of service allowed under any relevant law,
each Obligor, other than the Borrower, 0985472 and Klondex Canada (the
Non-British Columbia Obligors):

91

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (i)

irrevocably appoints the Borrower as its agent for service of process in
relation to any proceedings before the British Columbia courts in connection
with any Finance Document; and

        (ii)

agrees that failure by an agent for service of process to notify the relevant
Non- British Obligor of the process will not invalidate the proceedings
concerned.

  (b)

If any person appointed as an agent for service of process is unable for any
reason to act as agent for service of process, the Borrower (on behalf of all
Non-British Obligors) must immediately (and in any event within five (5)
Business Days of such event taking place) appoint another agent on terms
acceptable to the Lender.

41

Waiver of immunity

41.1

Waiver of Immunity

Each Obligor irrevocably and unconditionally:

  (a)

agrees not to claim in any jurisdiction, for itself or in respect of its assets,
immunity from suit, execution, attachment (whether in aid of execution, before
judgment or otherwise) or other legal process and waives such present or future
immunity, whether claimed or not; and

        (b)

consents generally to the giving of any relief or the issue of any process in
connection with any proceedings, including the making, enforcement or execution
against any property of any nature (irrespective of its use or intended use) of
any order or judgement which may be made or given in any proceedings.

This Agreement has been entered into on the date stated at the beginning of this
Agreement.

92

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 1
Conditions Precedent

1

Original Obligors

  (a)

A copy of the charter documents of each Obligor.

        (b)

A copy of a resolution of the board of directors of each Obligor:

  (i)

approving the terms of, and the transactions contemplated by, the Finance
Documents to which it is a party and resolving that it execute the Finance
Documents to which it is a party;

        (ii)

authorising a specified person or persons to execute the Finance Documents to
which it is a party on its behalf; and

        (iii)

authorising a specified person or persons, on its behalf, to sign and/or
despatch all documents and notices (including, if relevant, any Utilization
Request) to be signed and/or despatched by it under or in connection with the
Finance Documents to which it is a party.

  (c)

A specimen of the signature of each person authorised by the resolution referred
to in paragraph 0 above.

        (d)

A copy of a resolution signed by all the holders of the issued shares in the
Borrower approving the terms of, and the transactions contemplated by, the
Finance Documents to which that Obligor is a party.

        (e)

A certificate of each Obligor (signed by a director or by the Chief Financial
Officer or Treasurer) confirming that borrowing or guaranteeing or securing, as
appropriate, the Commitment would not cause any borrowing, guarantee, security
or similar limit binding on it to be exceeded.

        (f)

A certificate of an authorised signatory of each Obligor certifying that each
copy document relating to it specified in this Part I of 0is correct, complete
and in full force and effect and has not been amended or superseded as at a date
no earlier than the date of this Agreement.

        (g)

A certified copy of the register of members/shareholders of each Obligor (other
than the Borrower).

        (h)

A certified copy of each Material Licence.

        (i)

Any applicable Fee Letters duly executed by all parties.

2

Finance Documents

  (a)

This Agreement duly executed by all original parties to it.

        (b)

The Intercreditor Agreement executed by the parties thereto (other than the
Finance Parties) on or prior to the Utilisation Date.

        (c)

At least two (2) originals of each Transaction Security Document executed by the
relevant Obligor, including the following

93

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (i)

The guarantees from each Guarantor in favour of the Lender;

        (ii)

The general security agreements and first lien security agreements granted to
the Lender by the Borrower and each Guarantor;

        (iii)

The securities pledge agreements granted to the Lender by each of the Borrower,
0985472 B.C. Ltd., Klondex Holdings (USA) Inc. and Klondex Midas Holdings
Limited; and

        (iv)

The perfection certificate provided by the Borrower to the Lender;

        (v)

The fee and leasehold deed of trust, assignment of leases and rents and security
agreement dated February 10, 2014 from Klondex Gold & Silver Mining Company in
relation to the Fire Creek Mine, as amended;

        (vi)

The deed of trust, assignment of leases and rents and security agreement dated
February 10, 2014 from Klondex Gold & Silver Mining Company in relation to the
Hot Springs Property, as amended;

        (vii)

The deed of trust, assignment of leases and rents and security agreement dated
February 11, 2014, from Klondex Gold & Silver Mining Company in relation to the
Maggie Creek Property, as amended;

        (viii)

The deed of trust, assignment of leases and rents and security agreement dated
February 10, 2014, from Klondex Gold & Silver Mining Company in relation to the
Reef Property, as amended;

        (ix)

The Fee and Leasehold Deed of Trust, Assignment of Leases and Rents and Security
Agreement dated February 11, 2014, from Klondex Midas Operations Inc., in
relation to the Midas Property, as amended;

        (x)

The environmental indemnity agreement issued by Klondex Gold & Silver Mining
Company and Klondex Midas Operations Inc. in favour of the Lender;

        (xi)

The Ontario and Manitoba debentures made by Klondex Canada Ltd. in favour of the
Lender; and

        (xii)

All instruments, financing statements, stock powers, documents, guarantees and
agreements executed in relation to the above listed Transaction Security
Documents by or on behalf of any Obligor for the Lender, Hedge Counterparty or
Security Agent.

  (d)

A copy of all notices required to be sent under the Transaction Security
Documents executed by the relevant Obligors and duly acknowledged by the
addressee.

        (e)

A copy of all share certificates, transfers and stock transfer forms or
equivalent duly executed by the relevant Obligor in blank in relation to the
assets subject to or expressed to be subject to the Transaction Security and
other documents of title to be provided under the Transaction Security
Documents.

        (f)

The relevant Obligors have signed all other documents and taken all other
actions requested by the Lender or the Security Agent to enable the Transaction
Security to be perfected including all filings, stampings, registrations,
notifications and other actions (or documents to effect such actions) in all
relevant jurisdictions necessary or, in the opinion of legal advisors to the
Lender, acting reasonably, advisable, in order to create in favour of the
Security Agent valid perfected Security over all of the assets purported to be
covered by the Transaction Security.

94

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

  (g)

Evidence that any applicable stamp, registration or other fees payable in
connection with the registration and perfection of the creation of the
Transaction Security, have been paid.

        (h)

Evidence showing that there is no other Security (other than the Transaction
Security or Permitted Security) registered against the assets of the Obligors.

3

Finance Documents

A certified copy of each of the Finance Documents (other than the Finance
Documents) executed by the parties to those documents.

4

Insurance

  (a)

A letter from the Borrower’s insurance brokers addressed to the Lender and the
Security Agent listing the insurance policies of the Group and confirming that
they are on risk and that the insurance for the Group at the date of this
Agreement is at a level acceptable to the Lender and covering appropriate risks
for the business carried out by the Group.

        (b)

Evidence of insurance cover in full force and effect that accords with the terms
of this Agreement.

5

Legal opinions

The following legal opinions, each addressed to the Finance Parties.

  (a)

A legal opinion of Bennett Jones LLP, Dorsey & Whitney LLP and Erwin & Thompson
LLP, legal advisers to the Borrower.

6

Other documents and evidence

  (a)

Certified true copies of the Shoreline Asset Purchase Agreement and Shoreline
Promissory Note.

        (b)

The Base Case Model.

        (c)

A certified copy of the Original Financial Statements.

        (d)

Evidence of the Lender’s internal credit approval to provide the Facility.

        (e)

An updated list of the fixed assets of each Obligor.

        (f)

Evidence that the fees, costs and expenses then due from the Borrower pursuant
to clause 0 (Fees) and clause 0 (Costs and expenses) have been paid or will be
paid by the first Utilization Date.

        (g)

Satisfactory completion of all "know your customer" requirements of the Finance
Parties.

95

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

        (h)

A copy of any other Authorization or other document, opinion or assurance which
the Lender considers to be necessary or desirable (if it has notified the
Borrower accordingly) in connection with the entry into and performance of the
transactions contemplated by any Finance Document or for the validity and
enforceability of any Finance Document.

96

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 2
Requests

Part I
Utilization Request

From: Klondex Mines Ltd

To:     [Lender]

Dated:

Dear Sirs

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[          ] 2016 (the Agreement)

1

We refer to the Agreement. This is a Utilization Request. Terms defined in the
Agreement have the same meaning in this Utilization Request unless given a
different meaning in this Utilization Request.

    2

We wish to borrow a Loan on the following terms:

  Proposed Utilization Date: [     ] (or, if that is not a Business Day, the
next Business Day)         Currency of Loan: [     ]         Amount: [     ] or,
if less, the Available Commitment         Interest Period: [          ]

3

We confirm that each condition specified in clause 0 (Further conditions
precedent) is satisfied on the date of this Utilization Request.

    4

[This Loan is to be made in [whole]/[part] for the purpose of refinancing
[identify maturing Loan.] [The proceeds of this Loan should be credited to
[account].]

    5

This Utilization Request is irrevocable.

Yours faithfully

....................................................

authorised signatory for

Klondex Mines Ltd

97

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Part II
Extension Request

From: Klondex Mines Ltd

To:     [Lender]

Dated:

Dear Sirs

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[          ] 2016 (the Agreement)

1

We refer to the Agreement. This is an Extension Request. Terms defined in the
Agreement have the same meaning in this Extension Request unless given a
different meaning in this Extension Request.

    2

We hereby request pursuant to clause 0 (Extension option) to extend the Original
Final by a further 12 month period to ______________.

    3

We confirm that no Default is continuing or would result from this Extension
Request.

    4

This Extension Request is irrevocable.

Yours faithfully

....................................................

authorised signatory for

Klondex Mines Ltd

98

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Part III
Amendment Request

From: Klondex Mines Ltd

To:     [Lender]

Dated:

Dear Sirs

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[          ] 2016 (the Agreement)

1

We refer to the Agreement. This is an Amendment Request. Terms defined in the
Agreement have the same meaning in this Amendment Request unless given a
different meaning in this Amendment Request.

    2

We hereby request pursuant to clause 0 (Amendment to Commitment) that the
Commitment be amended to US$[     ].

    3

We confirm that no Default is continuing or would result from this Amendment
Request.

    4

This Amendment Request is irrevocable.

Yours faithfully

....................................................

authorised signatory for

Klondex Mines Ltd

99

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 3
Form of Transfer Certificate

To:     Investec Bank PLC

From: [The New Lender] (the New Lender)

Dated:

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[          ] 2016 (the Agreement)

1

We refer to the Facility Agreement and to the Intercreditor Agreement (as
defined in the Facility Agreement). This agreement (the Agreement) shall take
effect as a Transfer Certificate for the purpose of the Facility Agreement.
Terms defined in the Facility Agreement have the same meaning in this Agreement
unless given a different meaning in this Agreement.

    2

We refer to clause 0 (Procedure for transfer):

  (a)

The Existing Lender and the New Lender agree to the Existing Lender transferring
to the New Lender by novation, and in accordance with clause 0 (Procedure for
transfer), all of the Existing Lender's rights and obligations under the
Agreement and the other Finance Documents which relate to that portion of the
Existing Lender's Commitment and participations in Loans under the Agreement as
specified in the Schedule.

        (b)

The proposed Transfer Date is [          ].

        (c)

The Facility Office and address, fax number and attention details for notices of
the New Lender for the purposes of clause 0 (Addresses) are set out in the
Schedule.

3

The New Lender expressly acknowledges the limitations on the Existing Lender's
obligations set out in paragraph 0 of clause 0 (Limitation of responsibility of
Existing Lender).

    4

This Transfer Certificate may be executed in any number of counterparts and this
has the same effect as if the signatures on the counterparts were on a single
copy of this Transfer Certificate.

    5

This Transfer Certificate and any non-contractual obligations arising out of or
in connection with it are governed by laws of the Province of British Columbia,
and the federal laws of Canada as applicable therein.

    6

This Transfer Certificate has been entered into on the date stated at the
beginning of this Transfer Certificate.

100

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

THE SCHEDULE

Commitment/rights and obligations to be transferred

[insert relevant details]
[Facility Office address, fax number and attention details for notices and
account details for payments,]

[Existing Lender] [New Lender]     By: By:

This Agreement is accepted as a Transfer Certificate for the purposes of the
Facility Agreement by the Lender, the Security Agent, and the Transfer Date is
confirmed as [          ].

By:

101

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 4
Form of Assignment Agreement

From: [the New Lender] (the New Lender)

To:     [the Existing Lender] (the Existing Lender)

Dated:

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[           ] 2016 (the Agreement)

1

We refer to the Facility Agreement and to the Intercreditor Agreement (as
defined in the Facility Agreement). This is an Assignment Agreement. This
agreement (the Agreement) shall take effect as an Assignment Agreement for the
purpose of the Facility Agreement and as a Creditor/Creditor Representative
Accession Undertaking for the purposes of the Intercreditor Agreement (and as
defined in the Intercreditor Agreement). Terms defined in the Facility Agreement
have the same meaning in this Agreement unless given a different meaning in this
Agreement.

    2

We refer to clause 0 (Procedure for assignment):

  (a)

The Existing Lender assigns absolutely to the New Lender all the rights of the
Existing Lender under the Agreement and the other Finance Documents and in
respect of the Transaction Security which relate to that portion of the Existing
Lender's Commitment and participations in Loans under the Agreement as specified
in the Schedule.

        (b)

The Existing Lender is released from all the obligations of the Existing Lender
which correspond to that portion of the Existing Lender's Commitment and
participations in Loans under the Agreement specified in the Schedule.

        (c)

The New Lender becomes a Party as the Lender and is bound by obligations
equivalent to those from which the Existing Lender is released under paragraph
(b) above.

3

The proposed Transfer Date is [     ].

    4

On the Transfer Date the New Lender becomes Party to the Finance Documents as
the Lender.

    5

The Facility Office and address, fax number and attention details for notices of
the New Lender for the purposes of clause 0 (Addresses) are set out in the
Schedule.

    6

The New Lender expressly acknowledges the limitations on the Existing Lender's
obligations set out in paragraph 0 of clause 0 (Limitation of responsibility of
Existing Lender).

    7

This Assignment Agreement acts as notice to the Lender (on behalf of each
Finance Party) and, upon delivery in accordance with clause 0 (Copy of Transfer
Certificate, Assignment Agreement or Amendment Confirmation to Borrower), to the
Company (on behalf of each Obligor) of the assignment referred to in this
Assignment Agreement.

    8

This Assignment Agreement may be executed in any number of counterparts and this
has the same effect as if the signatures on the counterparts were on a single
copy of this Assignment Agreement.

    9

This Assignment Agreement and any non-contractual obligations arising out of or
in connection with it are governed by laws of the Province of British Columbia,
and the federal laws of Canada as applicable therein.

102

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

10

This Assignment Agreement has been entered into on the date stated at the
beginning of this Assignment Agreement.

103

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

THE SCHEDULE

Rights to be assigned and obligations to be released and undertaken

[insert relevant details]

[Facility office address, fax number and attention details for notices and
account details for payments]

[Existing Lender] [New Lender]     By: By:

This Agreement is accepted as an Assignment Agreement for the purposes of the
Facility Agreement by the Lender, the Security Agent, and the Transfer Date is
confirmed as [ ].

Signature of this Assignment Agreement by the Lender constitutes confirmation by
the Lender of receipt of notice of the assignment referred to herein, which
notice the Lender receives on behalf of each Finance Party.

104

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 5
Form of Amendment Confirmation

To:     [Lender] and [Security Agent]

From: [          ] as Borrower, for and on behalf of each Obligor

Dated:

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[          ] 2016 (the Agreement)

1

We refer to the Facility Agreement. This agreement (the Agreement) shall take
effect as an Amendment Confirmation for the purpose of the Facility Agreement.
Terms defined in the Facility Agreement have the same meaning in this Agreement
unless given a different meaning in this Agreement.

    2

We refer to [clause 0 (Amendment to Commitment)] of the Facility Agreement.

    3

The proposed date on which the amendment is to take effect (the Amendment Date)
is [     ].

    4

On the Amendment Date, the Commitment shall be amended to be US$[          ].

    1

This Agreement may be executed in any number of counterparts and this has the
same effect as if the signatures on the counterparts were on a single copy of
this Agreement.

    2

This Agreement and any non-contractual obligations arising out of or in
connection with it are governed by the laws of the Province of British Columbia,
and the federal laws of Canada as applicable therein.

    3

This Agreement has been entered into on the date stated at the beginning of this
Agreement.

105

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

THE SCHEDULE

Relevant Commitment/rights and obligations to be assumed by the Increase Lender

[insert relevant details]

[Facility office address, fax number and attention details for notices and
account details for payments] [Increase Lender] By:

This Agreement is accepted as an Amendment Confirmation for the purposes of the
Facility Agreement by the Lender, the Security Agent and the Amendment Date is
confirmed as [     ].

Lender

By:

 

Security Agent

By:

106

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 6
Form of Compliance Certificate

To:     [     ] as Lender

From: [Company]

Dated:

Dear Sirs

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving Facility dated
[          ] 2016 (the Agreement)

1

We refer to the Agreement. This is a Compliance Certificate. Terms defined in
the Agreement have the same meaning when used in this Compliance Certificate
unless given a different meaning in this Compliance Certificate.

    2

We confirm that: [Insert details of covenants to be certified]

    3

[We confirm that no Default is continuing.]1 *

Signed: ………… …………

Director or Chief Financial Officer

of

[Borrower]

__________________________________________

1 * If this statement cannot be made, the certificate should identify any
Default that is continuing and the steps, if any, being taken to remedy it.

107

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 7
Timetables

Delivery of a duly 10.00am three completed Utilization Business Days Request
(clause 0 before the (Delivery of a Utilization proposed Request)) Utilization
Date     LIBOR is fixed Quotation Day as   of 11:00 a.m. EST

108

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 8 - Disclosure Schedule

109

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 21.40

Guarantee

Debenture

Such other security documents required to effect the grant by Klondex Canada of
a security interest that is pari passu with the security granted to
Franco-Nevada.

1

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

Schedule 33.2(C)

1

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

SIGNATURES

LENDER

INVESTEC BANK PLC

By: /s/ “Anthony Rowe”   Name: Anthony Rowe   Title: Authorized Signatory      
  By: /s/ “Oliver Tagg” Name: Oliver Tagg   Title: Authorized Signatory

HEDGE COUNTERPARTY

INVESTEC BANK PLC

By: /s/ “Andrew Lillywhite”   Name: Andrew Lillywhite   Title: Authorized
Signatory         By: /s/ “Paul Geddes” Name: Paul Geddes   Title: Authorized
Signatory

BORROWER

KLONDEX MINES LTD

By: /s/ “Barry Dahl”   Barry Dahl

Address:     Suite 2200, 1055 West Hastings Street, Vancouver, BC, V6E 2E9,
Canada

GUARANTORS

0985472 B.C. LTD

1

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

By: /s/ “Barry Dahl”   Barry Dahl

Address:     Suite 2200, 1055 West Hastings Street, Vancouver, BC, V6E 2E9,
Canada

KLONDEX HOLDINGS (USA) INC.

By: /s/ “Barry Dahl”   Barry Dahl

Address:     360 Western Road, Suite 1, Reno, Nevada, USA 89506

KLONDEX MIDAS HOLDINGS LIMITED

By: /s/ “Barry Dahl”   Barry Dahl

Address:     360 Western Road, Suite 1, Reno, Nevada, USA 89506

KLONDEX MIDAS OPERATIONS INC.

By: /s/ “Barry Dahl”   Barry Dahl

Address:     360 Western Road, Suite 1, Reno, Nevada, USA 89506

KLONDEX GOLD & SILVER MINING COMPANY

By: /s/ “Barry Dahl”   Barry Dahl

Address:     360 Western Road, Suite 1, Reno, Nevada, USA 89506

2

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NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE SUBJECT TO A
CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE, UNREDACTED COPIES
OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT REQUEST.

KLONDEX CANADA LTD.

By: /s/ “Barry Dahl”   Barry Dahl

Address:     Suite 2200, 1055 West Hastings Street, Vancouver, BC, V6E 2E9,
Canada

3

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