exv10w1






Exhibit 10.1


 




EXECUTION COPY




$125,000,000




THIRD AMENDED AND RESTATED CREDIT AGREEMENT




among




ROYAL GOLD, INC.,

as a Borrower,




HIGH DESERT MINERAL RESOURCES, INC.,

as a Borrower




THE GUARANTORS

FROM TIME TO TIME PARTY HERETO,

as Guarantors,




THE LENDERS,




HSBC BANK USA, NATIONAL ASSOCIATION,

as Administrative Agent,




HSBC SECURITIES (USA) INC.,

as Sole Lead Arranger




and




THE BANK OF NOVA SCOTIA,

as Sole Syndication Agent




Dated as of October 30, 2008




 



 









 




TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I	 	DEFINITIONS
	 	 	2	 
	 	 	 
	 	 	 	 
	Section 1.1	 	Defined Terms
	 	 	2	 
	Section 1.2	 	Other Definitional Provisions; Time References
	 	 	21	 
	Section 1.3	 	Accounting Terms
	 	 	21	 
	 	 	 
	 	 	 	 
	ARTICLE II	 	THE LOANS; AMOUNT AND TERMS
	 	 	22	 
	 	 	 
	 	 	 	 
	Section 2.1	 	Revolving Loans
	 	 	22	 
	Section 2.2	 	Fees
	 	 	23	 
	Section 2.3	 	Commitment Reductions
	 	 	23	 
	Section 2.4	 	Prepayments
	 	 	24	 
	Section 2.5	 	Default Rate and Payment Dates
	 	 	24	 
	Section 2.6	 	Extension of an Interest Period
	 	 	24	 
	Section 2.7	 	Extension of Scheduled Maturity Date
	 	 	24	 
	Section 2.8	 	Computation of Interest and Fees
	 	 	25	 
	Section 2.9	 	Pro Rata Treatment and Payments
	 	 	26	 
	Section 2.10	 	Non-Receipt of Funds by the Administrative Agent
	 	 	27	 
	Section 2.11	 	Inability to Determine Interest Rate; Base Rate Loans
	 	 	28	 
	Section 2.12	 	Illegality
	 	 	29	 
	Section 2.13	 	Requirements of Law
	 	 	29	 
	Section 2.14	 	Indemnity
	 	 	30	 
	Section 2.15	 	Taxes
	 	 	31	 
	 	 	 
	 	 	 	 
	ARTICLE III	 	REPRESENTATIONS AND WARRANTIES
	 	 	32	 
	 	 	 
	 	 	 	 
	Section 3.1	 	Corporate Existence; Compliance with Law
	 	 	32	 
	Section 3.2	 	Corporate Power; Authorization; Enforceable Obligations
	 	 	33	 
	Section 3.3	 	Financial Condition; No Material Adverse Effect
	 	 	33	 
	Section 3.4	 	Compliance with Laws; No Conflict; No Default
	 	 	34	 
	Section 3.5	 	No Material Litigation
	 	 	35	 
	Section 3.6	 	Employee Benefit Plans
	 	 	35	 
	Section 3.7	 	Environmental Matters
	 	 	35	 
	Section 3.8	 	Purpose of Loans
	 	 	36	 
	Section 3.9	 	Subsidiaries
	 	 	36	 
	Section 3.10	 	Ownership; Insurance
	 	 	36	 
	Section 3.11	 	Title to Royalty Interests; Liens
	 	 	36	 
	Section 3.12	 	Royalty Agreements
	 	 	36	 
	Section 3.13	 	Indebtedness
	 	 	37	 
	Section 3.14	 	Taxes
	 	 	37	 
	Section 3.15	 	No Burdensome Restrictions
	 	 	37	 
	Section 3.16	 	Limitations on Incurrence of Indebtedness
	 	 	37	 
	Section 3.17	 	Accuracy and Completeness of Information
	 	 	37	 
	Section 3.18	 	Events of Default
	 	 	38	 





 i 


 








 




TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 3.19	 	Material Contracts
	 	 	38	 
	 	 	 
	 	 	 	 
	ARTICLE IV	 	COLLATERAL SECURITY
	 	 	38	 
	 	 	 
	 	 	 	 
	Section 4.1	 	Security Documents
	 	 	38	 
	Section 4.2	 	No Limitation on Application of Security Interest
	 	 	38	 
	Section 4.3	 	Maintenance of Security Over Minimum Collateral Royalties
	 	 	38	 
	Section 4.4	 	Perfection and Maintenance of Liens
	 	 	38	 
	Section 4.5	 	Security Documents
	 	 	39	 
	 	 	 
	 	 	 	 
	ARTICLE V	 	CONDITIONS PRECEDENT
	 	 	39	 
	 	 	 
	 	 	 	 
	Section 5.1	 	Conditions to Closing and Initial Loan
	 	 	39	 
	Section 5.2	 	Conditions to All Loans
	 	 	41	 
	 	 	 
	 	 	 	 
	ARTICLE VI	 	AFFIRMATIVE COVENANTS
	 	 	42	 
	 	 	 
	 	 	 	 
	Section 6.1	 	Financial Statements and Information
	 	 	42	 
	Section 6.2	 	Notices
	 	 	43	 
	Section 6.3	 	Payment of Taxes and Other Obligations
	 	 	45	 
	Section 6.4	 	Payment of Indebtedness
	 	 	45	 
	Section 6.5	 	Conduct of Business and Maintenance of Existence
	 	 	46	 
	Section 6.6	 	Maintenance of Royalty Interests and Defend Title
	 	 	46	 
	Section 6.7	 	Maintenance of Liens
	 	 	46	 
	Section 6.8	 	Maintenance and Perfection of Pledged Assets
	 	 	46	 
	Section 6.9	 	[Intentionally Omitted]
	 	 	46	 
	Section 6.10	 	Insurance
	 	 	46	 
	Section 6.11	 	Inspection of Property; Books and Records; Discussions
	 	 	47	 
	Section 6.12	 	Compliance with Law
	 	 	47	 
	Section 6.13	 	Environmental Laws
	 	 	47	 
	Section 6.14	 	Compliance with ERISA
	 	 	48	 
	Section 6.15	 	Further Assurances
	 	 	48	 
	Section 6.16	 	Financial Covenants
	 	 	48	 
	Section 6.17	 	Addition of Guarantors
	 	 	48	 
	 	 	 
	 	 	 	 
	ARTICLE VII	 	NEGATIVE COVENANTS
	 	 	49	 
	 	 	 
	 	 	 	 
	Section 7.1	 	Indebtedness
	 	 	49	 
	Section 7.2	 	Liens
	 	 	50	 
	Section 7.3	 	Guaranty Obligations
	 	 	50	 
	Section 7.4	 	Nature of Business
	 	 	50	 
	Section 7.5	 	Dissolution or Sale of Assets
	 	 	51	 
	Section 7.6	 	Mergers
	 	 	51	 
	Section 7.7	 	Advances and Loans
	 	 	52	 





ii


 








 




TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 7.8	 	Transactions with Affiliates
	 	 	52	 
	Section 7.9	 	[Intentionally Omitted]
	 	 	52	 
	Section 7.10	 	Organizational Documents
	 	 	52	 
	Section 7.11	 	Modification of Material Agreements
	 	 	52	 
	Section 7.12	 	Limitation on Restricted Actions
	 	 	53	 
	Section 7.13	 	Maintenance of Collateral Royalties
	 	 	53	 
	Section 7.14	 	No Further Negative Pledges
	 	 	53	 
	Section 7.15	 	No Prepayment of Permitted Subordinated Indebtedness
	 	 	54	 
	Section 7.16	 	Restrictive and Inconsistent Agreements
	 	 	54	 
	 	 	 
	 	 	 	 
	ARTICLE VIII	 	EVENTS OF DEFAULT
	 	 	54	 
	 	 	 
	 	 	 	 
	Section 8.1	 	Events of Default
	 	 	54	 
	Section 8.2	 	Acceleration; Remedies
	 	 	57	 
	 	 	 
	 	 	 	 
	ARTICLE IX	 	THE AGENT
	 	 	57	 
	 	 	 
	 	 	 	 
	Section 9.1	 	Appointment
	 	 	57	 
	Section 9.2	 	Delegation of Duties
	 	 	57	 
	Section 9.3	 	Exculpatory Provisions
	 	 	58	 
	Section 9.4	 	Reliance by Administrative Agent
	 	 	58	 
	Section 9.5	 	Notice of Default
	 	 	58	 
	Section 9.6	 	Non-Reliance on Administrative Agent and Other Lenders
	 	 	59	 
	Section 9.7	 	Indemnification
	 	 	59	 
	Section 9.8	 	Administrative Agent in Its Individual Capacity
	 	 	60	 
	Section 9.9	 	Successor Administrative Agent
	 	 	60	 
	Section 9.10	 	Nature of Duties
	 	 	60	 
	 	 	 
	 	 	 	 
	ARTICLE X	 	MISCELLANEOUS
	 	 	60	 
	 	 	 
	 	 	 	 
	Section 10.1	 	Amendments, Waivers and Release of Collateral
	 	 	60	 
	Section 10.2	 	Substitution of Lenders
	 	 	62	 
	Section 10.3	 	Notices
	 	 	62	 
	Section 10.4	 	No Waiver; Cumulative Remedies
	 	 	63	 
	Section 10.5	 	Survival of Representations and Warranties
	 	 	63	 
	Section 10.6	 	Payment of Expenses and Taxes; Indemnification
	 	 	64	 
	Section 10.7	 	Successors and Assigns; Participations; Purchasing Lenders
	 	 	65	 
	Section 10.8	 	Adjustments; Set-off
	 	 	67	 
	Section 10.9	 	Table of Contents and Section Headings
	 	 	68	 
	Section 10.10	 	Counterparts
	 	 	68	 
	Section 10.11	 	Effectiveness
	 	 	68	 
	Section 10.12	 	Severability
	 	 	68	 
	Section 10.13	 	Integration
	 	 	69	 





iii


 








 




TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 10.14	 	Consent to Jurisdiction
	 	 	69	 
	Section 10.15	 	Governing Law
	 	 	70	 
	Section 10.16	 	Confidentiality
	 	 	70	 
	Section 10.17	 	Acknowledgments
	 	 	70	 
	Section 10.18	 	USA Patriot Act
	 	 	71	 
	Section 10.19	 	Joint and Several Liability
	 	 	71	 
	 	 	 
	 	 	 	 
	ARTICLE XI	 	GUARANTY
	 	 	72	 
	 	 	 
	 	 	 	 
	Section 11.1	 	The Guaranty
	 	 	72	 
	Section 11.2	 	Bankruptcy
	 	 	72	 
	Section 11.3	 	Continuing Guaranty
	 	 	72	 
	Section 11.4	 	Nature of Liability
	 	 	73	 
	Section 11.5	 	Independent Obligation
	 	 	73	 
	Section 11.6	 	Authorization
	 	 	73	 
	Section 11.7	 	Reliance
	 	 	73	 
	Section 11.8	 	Waiver
	 	 	73	 
	Section 11.9	 	Confirmation of Payment
	 	 	75	 





iv


 








 




SCHEDULES



	 	 	 
	Schedule 1.1(a)
	 	Collateral Royalties
	Schedule 1.1(b)
	 	Lenders’ Administrative Details Schedule
	Schedule 1.1(c)
	 	Existing Mortgages
	Schedule 1.1(d)
	 	Royalty Interests (Non-Collateral Royalties)
	Schedule 3.4(b)

	 	Project Governmental Approvals
	Schedule 3.4(c)

	 	Compliance Exceptions
	Schedule 3.5

	 	Litigation
	Schedule 3.9

	 	Subsidiaries
	Schedule 3.12

	 	Royalty Agreement Exceptions
	Schedule 3.19

	 	Material Contract Exceptions
	Schedule 6.10

	 	Insurance
	Schedule 7.1

	 	Existing Indebtedness
	Schedule 7.2

	 	Existing Liens
	Schedule 7.7

	 	Debt Investments
	Schedule 10.17

	 	Acknowledgment





EXHIBITS



	 	 	 
	Exhibit A

	 	Form of Assignment Agreement
	Exhibit B

	 	Form of Joinder Agreement
	Exhibit C

	 	Form of Promissory Note
	Exhibit D

	 	Form of Notice of Borrowing
	Exhibit E

	 	Form of Notice of Extension
	Exhibit F

	 	Form of Pledge Agreement
	Exhibit G

	 	[Omitted]
	Exhibit H

	 	Form of Secretary’s Certificate
	Exhibit I

	 	Form of Security Agreement
	Exhibit J

	 	Form of Officer’s Certificate
	Exhibit K

	 	Form of Quarterly Compliance Certificate
	Exhibit L

	 	Form of Mortgage Amendment
	Exhibit M

	 	Form of Ratification and Confirmation
	Exhibit N

	 	Form of Projected Revenue Certificate





 v 


 








 





THIRD AMENDED AND RESTATED CREDIT AGREEMENT




     This THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 30, 2008, is by and
among ROYAL GOLD, INC., a corporation organized and existing under the laws of the State of
Delaware, as a borrower (“Royal Gold”), HIGH DESERT MINERAL RESOURCES, INC., a corporation
incorporated under the laws of the State of Delaware and a wholly-owned subsidiary of Royal Gold,
as a borrower (“High Desert”, with each of Royal Gold and High Desert individually referred to
herein as a “Borrower” and collectively referred to
herein as the “Borrowers”), those Subsidiaries
of a Borrower identified as a “Guarantor” on the signature pages hereto and such other
Subsidiaries of a Borrower as may from time to time become a party hereto, as Guarantors, those
banks and financial institutions identified as a “Lender” on the signature pages hereto and such
other banks or financial institutions as may from time to time become parties to this Agreement as
Lenders (individually a “Lender” and collectively
the “Lenders”), HSBC BANK USA, NATIONAL
ASSOCIATION a national banking association organized under the laws of the United States, as
administrative agent for the Lenders hereunder (in such capacity, the
“Administrative Agent”),
HSBC SECURITIES (USA) INC., as the Sole Lead Arranger and THE BANK OF NOVA SCOTIA, as the Sole
Syndication Agent.



Recitals




     A. Royal Gold and HSBC Bank USA, National Association entered into that certain Second
Amended and Restated Loan Agreement dated as of January 5, 2007 (as amended, modified, continued or
restated prior to the date hereof, the “Existing Agreement”). Royal Gold and HSBC Bank USA,
National Association desire to (i) extend the maturity date of the Existing Agreement, (ii)
increase the Committed Amount under the Existing Agreement, and (iii) to otherwise amend, restate,
modify and continue the Existing Agreement as provided in this Agreement and to continue any Loans
under the Existing Agreement as Loans under this Agreement.



     B. This Agreement and the Loans made pursuant hereto are secured by Liens on the
Collateral in favor of the Administrative Agent, which Liens, and the associated Security
Documents, shall be ratified, continued and affirmed. Each of the Borrowers shall be jointly and
severally liable for the payment and performance of all obligations hereunder and under the other
Credit Documents.



     C. The Existing Agreement is hereby amended, continued and restated in its entirety as
set forth in this Agreement.



Agreement




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




 









 




ARTICLE I

DEFINITIONS


     Section 1.1 Defined Terms.


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


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


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


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


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


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


     “Applicable Percentage” shall be determined from time to time by reference to the
Leverage Ratio and shall be equal to the following:



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





     “Applicable Reserve Percentage” shall mean for any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect
for such day as prescribed by any banking authority or other applicable Governmental Authority
(or any successor) to which any Lender is subject for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) for purposes of
making Loans at the LIBOR Rate or any other category of deposits or liabilities by


 2 


 








 




reference to which the LIBOR Rate is determined. The Applicable Reserve Percentage shall be
adjusted automatically on and as of the effective date of any change in any reserve percentage.


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


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


     “Approved Metals Price” shall mean, with respect to any Metal, the lesser of (a)
ninety percent (90%) of the applicable Spot Price for such Metal, or (b) (i) for Gold, $550.00 per
Ounce of Gold; (ii) for Silver, $10.00 per Ounce of Silver; (iii) for Copper, $2.00 per pound of
Copper; (iv) for lead, $0.50 per pound of lead; (v) for zinc, $0.70 per pound of zinc; (vi) for
molybdenum, $10.00 per pound of molybdenum; and (vii) for nickel, $6.00 per pound of nickel.


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


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


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


     “Base Rate” shall mean, for any day, a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day; (b) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%; or (c) the Lenders’ actual cost of funds in effect on such day, as determined by each
Lender in its sole discretion and provided to the Administrative
Agent. For purposes hereof: “Prime
Rate” shall mean, at any time, the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its prime rate. Each change in the Prime Rate shall be effective as
of the opening of business on the day such change in the Prime Rate occurs. The parties hereto
acknowledge that the rate announced publicly by the Administrative Agent as its Prime Rate is an
index or base rate and shall not necessarily be its lowest or best rate charged to its customers or
other banks; and “Federal Funds Effective Rate” shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding
Business Day, the average of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing selected by it. If for
any reason the Administrative Agent shall have determined (which


 3 


 








 







determination shall be conclusive in the absence of manifest error) that it is unable to ascertain
the Federal Funds Effective Rate, for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the
Base Rate shall be determined without regard to clause (b) of the first sentence of this
definition, as appropriate, until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or
in the actual cost of funds shall be effective on the opening of business on the date of such
change.




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



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



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



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



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



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



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



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



     “Cash Equivalents” shall mean (i) securities issued or directly and fully guaranteed
or insured by Canada or the United States of America or any agency or instrumentality thereof
having maturities of not more than twelve months from the date of acquisition (“Government
Obligations”), (ii) Canadian dollar denominated or Dollar denominated time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of deposit of an
Approved Bank, in each case with maturities of not more than 364 days from the date of acquisition,
(iii) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the



 4 





 











 




parent company thereof), or any variable rate notes issued by, or guaranteed by any domestic
corporation rated by two out of three of the following ratings
agencies as A-1 (or the equivalent
thereof) or better by S&P, or P-1 (or the equivalent thereof) or better by Moody’s, or R-l (or the
equivalent thereof) or better by Dominion Bond Rating Service Limited, and maturing within six
months of the date of acquisition, (iv) repurchase agreements with a bank or trust company
(including a Lender) or a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by Canada or the United States of
America, (v) obligations of any province of Canada or state of the United States or any political
subdivision thereof for which the payment of the principal, interest and redemption price shall
have been arranged by irrevocably deposited government obligations maturing as to principal and
interest at times and in amounts sufficient to provide such payment, (vi) auction preferred stock
rated by two out of three of the following ratings agencies in the highest short-term credit rating
category by S&P, Moody’s or Dominion Bond Rating Service Limited and (vii) shares of money market
mutual or similar funds that (A) invest exclusively in assets satisfying the requirements of
clauses (i) through (vi) of this definition or (B) comply with Rule 2a-7 of the Investment Company
Act of 1940.


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


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


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


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


     “Collateral Royalties” means, initially, those Royalties set forth on Schedule
1.1(a) hereto, together with, from time to time hereafter, any other Royalty Interest subject
to a Mortgage or other Security Document satisfactory to the Required Lenders in their sole
discretion.


     “COMEX” means the division of the New York Mercantile Exchange on which commodities,
futures and options are traded, which was formerly known as the Commodity Exchange.


5








 




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


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


     “Commitment Fee Percentage” shall be determined from time to time by reference to
the Leverage Ratio and shall be equal to the following:



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

	 	> 2.0 to 1.0
	 	 	0.675	%






     “Commitment Percentage” shall mean, for each Lender, the percentage identified as
its Commitment Percentage on the Lenders’ Administrative Details Schedule or in the Assignment
Agreement pursuant to which such Lender became a Lender hereunder, as such percentage may be
modified in connection with any assignment made in accordance with the provisions of Section
10.7(c).



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



     “Committed Amount” shall mean the maximum aggregate principal amount of Loans that
may be made by the Lenders hereunder, subject to the terms and conditions herein, at any time,
with such Committed Amount at the Closing Date being equal to $125,000,000.



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



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


6








 




extraordinary or non-recurring gains or non-cash gains for such period, all determined on a
consolidated basis in accordance with GAAP.


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


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


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


     “Consolidated Total Indebtedness” means, without duplication, in relation to the
Borrowers and their Subsidiaries, (A) the sum of (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes or similar instruments, (c) all obligations under
conditional sale or other title retention agreements relating to property acquired and under all
purchase money obligations, (d) all obligations in respect of the deferred purchase price of
property or services, (e) all other obligations secured by any lien on property owned or acquired,
whether or not the obligations secured thereby have been assumed limited to the fair market value
of the property secured thereby, (f) all guarantees of the obligations of others, (g) all capital
lease obligations, (h) all obligations, contingent or otherwise, as an account party (including
reimbursement obligations to the issuer) in respect of letters of credit and letters of guarantee
which support or secure obligations of others, (i) the aggregate of all negative mark to market
amounts in respect of hedge obligations (netted against the aggregate of all positive mark to
market amounts in respect of hedge obligations), (k) all obligations in respect of prepaid
production arrangements, prepaid forward sale arrangements or derivative contracts in respect of
which the Borrowers or their Subsidiaries receive upfront payments in consideration of an
obligation to deliver product or commodities (or make cash payments based on the value of product
or commodities) at a future time, and (1) all obligations, contingent or otherwise, in respect of
bankers’ acceptances; minus (B) any amounts borrowed under the Term Loan Agreement,
provided that such facility continues to be secured by cash collateral held in a pledged account
with HSBC Bank USA, National Association; provided, that, for all purposes herein,
Consolidated Total Indebtedness, with respect to the Borrowers or the Credit Parties, shall mean
all Consolidated Total Indebtedness of the Borrowers and their Subsidiaries on a Consolidated
basis; provided, further, that Consolidated Total Indebtedness shall not include
Indebtedness among the Credit Parties to the extent such Indebtedness would be eliminated on a
Consolidated basis.


     “Continuing Directors” shall mean during any period of 24 consecutive months
commencing after the Closing Date, individuals who at the beginning of such 24 month period were
directors of a Borrower (together with any new director whose election by such Borrower’s


7








 




board of directors was approved by, or whose nomination for election by such Borrower’s
shareholders was recommended by, a vote of at least a majority of the directors then still in
office who either were directors at the beginning of such period or whose election or nomination
for election was previously approved or recommended as described in this parenthetical).




     “Copper” means high grade copper upon which the COMEX spot price is based.



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



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



     “Current Ratio” shall mean, at any date, the ratio of (a) the current assets of the
Credit Parties and their Subsidiaries determined on a Consolidated basis in accordance with GAAP,
excluding therefrom any cash or Cash Equivalent of the Credit Parties pledged as collateral under
the Term Loan Agreement to the extent that such cash or Cash Equivalent would otherwise constitute
a current asset to (b) the current liabilities of the Credit Parties and their Subsidiaries
determined on a Consolidated basis in accordance with GAAP, excluding therefrom the aggregate
amount of loans outstanding to Royal Gold Chile Limitada under the Term Loan Agreement to the
extent such loans would otherwise constitute current liabilities.



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



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



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



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



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



8









 





     “Employee Benefit Plan” shall mean any pension plan or other similar employee benefit
plan regulated by or within the meaning of ERISA or any other similar legislation pursuant to which
any Credit Party establishes a pension for or otherwise makes contributions in respect of its
employees.



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


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


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


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


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


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


     “Facility Coverage Ratio” shall mean, at any date, the ratio of (a) Projected
Facility Term Revenue to (b) the Committed Amount.


     “Fee Letters” shall mean the Agent Fee Letter Agreement dated August 8, 2008, the
letter from The Bank of Nova Scotia dated September 17, 2008, and any other agreements among the
parties pertaining to the payment of fees to the Agents or the Lenders, as each may be amended,
modified or otherwise supplemented.


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


9








 




     “GAAP” shall mean generally accepted accounting principles in effect in the United
States applied on a consistent basis, subject, however, to the provisions of Section 1.3
for the purpose of determination of compliance with the financial covenants set out in Section
6.16.


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


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


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


     “Guarantor” shall mean the Subsidiaries of a Borrower identified as a “Guarantor” on
the signature pages hereto and any other Person that executes a Joinder Agreement, together with
their successors and permitted assigns.


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


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


     “Hedging Agreement” shall mean, with respect to any Person, any agreement or
transaction entered into to protect such Person against fluctuations in the price of gold, silver
or other metals, interest rates, currency, raw materials, fuel or commodity values, including any


10








 







forward sales, spot deferred sales, options, swaps, price fixing commitment, interest rate swap,
cap or collar agreement or similar arrangement between such Person and one or more counterparties,
any foreign currency exchange agreement, currency protection agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price hedging agreements or
other similar agreements or arrangements.




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



     “Indebtedness” shall mean, with respect to any Person, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes, indentures or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the deferred purchase
price of property or services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence thereof) which would appear
as liabilities on a balance sheet of such Person, (e) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations secured thereby have been
assumed, (g) all Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all Capital Lease Obligations of such Person, (i) all net
payment obligations of such Person under Hedging Agreements, (j) the maximum amount of all letters
of credit issued or bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred
Capital Stock issued by such Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (1) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing product and (m) the
Indebtedness of any partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer; provided however that Indebtedness shall not include Indebtedness
among the Credit Parties to the extent such Indebtedness would be eliminated on a Consolidated
basis.



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



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



     “Interest Payment Date” shall mean (a) as to any Loan having an Interest Period of
three months or less, the last day of such Interest Period, (b) as to any Loan having an Interest
Period




11









 







longer than three months, the day that is three months after the first day of such Interest Period
and the last day of such Interest Period, and (c) as to any Base Rate Loan, the fifteenth
(15th) day following the last day of each calendar month.




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




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




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




     provided that the foregoing provisions are subject to the following:




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




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




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




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




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



     “Investment” shall mean all investments, in cash or by delivery of property made,
directly or indirectly in or to any Person, whether by acquisition of shares of Capital Stock,




12









 




property, assets, indebtedness or other obligations or securities or by loan, credit advance,
capital contribution or otherwise.


     “Irrevocable Payment Instructions” shall mean irrevocable payment instructions to certain
counterparties in respect of cash payments owing to a Borrower, with such instructions to be in
the form attached hereto as Exhibit G.


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


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


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


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


     “LIBOR” shall mean, for any Loan for any Interest Period therefor, a rate of
interest per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the rate
per annum appearing on Telerate Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest Period. If for any
reason such rate is not available, the term “LIBOR” shall mean, for any Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars
at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the
arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If,
for any reason, neither of such rates is available, then “LIBOR” shall mean the rate per annum at
which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans
then requested are being offered to leading banks at approximately 11:00 A.M. London time, two (2)
Business Days prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for a period equal to
the Interest Period selected.


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


13








 




     “LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:



	 	 	 	 	 	 	 
	 

	 	LIBOR Rate
	 	=
	 	LIBOR
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	1.00 — Applicable Reserve Percentage





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


     “Loan” shall have the meaning set forth in Section 2.1.


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


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


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


     “Maturity Date” shall mean October 30, 2013, as such date may be extended pursuant to
Section 2.5.


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


     “Mortgages” shall mean those Mortgages, Deeds of Trust, Security Agreement, Pledge
and Financing Statements and other similar documents set forth on Schedule 1.1(c) hereto,
as each of such Mortgages has been or may be amended, modified, supplemented, continued, restated,
or amended and restated, from time to time in accordance with their respective terms.


14








 




     “Mortgage Amendments” shall mean, collectively, each of the Mortgage amendments, supplements
or amendments and restatements to be delivered by a Credit Party, substantially in the form of
Exhibit L hereto.


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


     “Non-Credit Party Royalty Interests” shall mean all Royalties now owned or hereafter acquired
by or for the benefit of a Subsidiary of a Credit Party that is not itself a Credit Party.


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


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


     “Notice of Extension” shall mean the written notice of extension of a Loan, in each case
substantially in the form of Exhibit E.


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


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


     “Ounce” means a fine ounce troy weight.


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


     “Permitted Liens” shall mean:


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


     (ii) purchase money Liens securing purchase money indebtedness (and
refinancings thereof) to the extent permitted under Section 7.1(c);


15








 




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


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


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


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


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


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


     (ix) Liens of HSBC Bank USA, National Association over one or more deposit accounts in
connection with the Term Loan Agreement;


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


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


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


16








 




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


     (xiv) any Lien with respect to interests in pre-feasibility, feasibility or
development stage properties not currently producing Metals, which properties are not
included in the calculation of Projected Facility Term Revenue; provided that such Liens do
not secure Indebtedness.


     “Permitted Subordinated Indebtedness” shall have the meaning set forth in Section
7.1(i).


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


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


     “Pledge
Agreements” shall mean (i) each of the Pledge Agreements dated as of the Closing Date
to be executed in favor of the Administrative Agent by a Borrower, substantially in the form of
Exhibit F hereto, and (ii) any other pledge agreement, document, agreement, arrangement or
Instrument executed by a Credit Party to secure the Obligations, in each case as any of the
foregoing may be amended, modified, restated or supplemented from time to time.


     “Products”
shall mean, without limitation, all ore, minerals, concentrate, doré bar
and refined Metals produced on behalf of, or payable to, a Credit Party pursuant to a Royalty
Interest from a Project Property.


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


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


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


     “Projected Facility Term Revenue” means the product of (A) 100% of the Royalty Metals, on a
consolidated basis, over a period of time equal to the greater of (i) the remaining number of days
until the Maturity Date or (ii) a period of thirty-six (36) months from the date of determination,
multiplied by (B) the applicable Approved Metals Price.


17








 




     “Projected Revenue Certificate” shall mean a certificate of the Borrowers signed by a
Responsible Officer setting forth a calculation of the Royalty Metals, the Projected Facility Term
Revenue and the Facility Coverage Ratio, substantially in the form of
Exhibit N attached hereto.


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


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


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


     “Request for Extension” shall have the meaning set forth in Section 2.7.


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


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


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


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


     “Royalties” shall mean any share of mineral production, including, gross smelter
return royalties, net smelter return royalties, overriding royalties, non-participating royalties,
production payments, net profit interests and all other mineral royalties of every type and
characterization, whether constituting a real property or a personal property interest.


18








 




     “Royalty Agreements” means, collectively, each of the agreements with or for the
benefit of a Credit Party relating to a Royalty Interest, whether now or hereafter in existence,
and all amendments, modifications, extensions and renewals thereof.


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


     “Royalty Metals” means, as of any date of determination, an amount approved by the
Required Lenders, which shall be equal to the aggregate ounces or pounds, as applicable, of Metals
projected to be payable to the Credit Parties (in cash or in kind) from the date of determination
through the later of (i) the remaining term of the Loans until the Maturity Date or (ii) thirty-six
(36) months with respect to the Royalty Interests held by the Credit Parties, which shall be based
on current, commercially reasonable projections of production from each applicable Project.
Calculations of Royalty Metals to be included as Royalties from Projects either not in production
at the Closing Date or acquired by a Credit Party after the Closing Date and accepted by the
Required Lenders as Royalties for purposes of this calculation shall be based on the reserve report
set forth in the applicable then-current mine plan for such Project or such other current,
commercially reasonable projections of production, unless the Required Lenders, in their reasonable
discretion, elect to audit the information used as the basis of such calculation, develop their own
conclusions based on their independent analysis of such information, and prepare their own
calculation of the Royalty Metals for such Project, in which event the Required Lenders’
determination shall be conclusive. Calculations of Royalty Metals shall include all reasonable
deductions for shipping, smelting, contractual and other standard deductions (which deductions
shall be described with reasonable specificity in the Borrowers’ calculations).


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


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


     “Security Agreement” shall mean the Security Agreement of even date herewith among
the Borrowers, the Guarantors and the Administrative Agent, as amended, modified, supplemented or
restated from time to time.


     “Security Documents” shall mean the Mortgages, the Mortgage Amendments, the Security
Agreement, the Pledge Agreements and any other agreement, assignment, document or Instrument
executed and delivered in connection with (i) the granting, attachment, formalization and
perfection of the Administrative Agent’s security interests and Liens arising thereunder, including
UCC financing statements, PPSA financing statements and other similar registrations, filings or
instruments, (ii) the pledge or subordination of Indebtedness to or in favor of the Administrative
Agent or (iii) any other mortgage, deed, security, subordination, guaranty or


19








 




support agreement or arrangement with respect to the Obligations or any Credit Document, as any of
the foregoing may be amended, modified, supplemented, continued, restated, or amended and restated
from time to time.


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


     “Spot Price” shall mean, with respect to Gold and Silver, the price fixing for such
Metal by the London Bullion Market Association as reported in The Wall Street Journal or any other
agreed upon successor publication for the applicable date, time or time period; and, with respect
to any other Metal, the spot COMEX price as reported in The Wall Street Journal or any other
agreed upon successor publication for the applicable date, time or time period; and, with respect
to any Metal for which a spot price is not quoted by COMEX, the spot price for such Metal
established by the London Metal Exchange or such other pricing source used by the Administrative
Agent in its reasonable discretion.


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


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


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


     “Term Loan Agreement” shall mean the Amended and Restated Term Loan Agreement dated August
27, 2008 between HSBC Bank USA, National Association and Royal Gold Chile Limitada, as amended,
modified, increased, replaced or refinanced from time to time.


     “Title Opinions” means those legal opinions from counsel to the Borrowers pertaining
to the Collateral Royalties and the respective Borrower’s right, title and interest in and to such
Collateral Royalties previously delivered to HSBC Bank USA, National Association, together with any
additional or future legal opinions pertaining to the Collateral Royalties and the respective
Borrower’s right, title and interest in and to such Collateral Royalties, in form and substance
acceptable to the Administrative Agent.


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


20








 





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



     Section 1.2 Other Definitional Provisions; Time References.



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



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



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



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



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



     Section 1.3 Accounting Terms. Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a basis consistent with the most recent audited consolidated financial statements of
the Borrowers delivered to the Administrative Agent; provided that, if the Borrowers shall notify
the Administrative Agent that they wish to amend any covenant in Section 6.16 (or the definitions
used therein) to eliminate the effect of any change in GAAP on the operation of such covenant (or
if the Administrative Agent notifies the Borrowers that the Required Lenders wish to amend Section
6.16 or any definition used therein for such purpose), then compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrowers and the Required Lenders.



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




21









 




ARTICLE II

THE LOANS; AMOUNT AND TERMS


     Section 2.1 Revolving Loans.


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


     (b) Loan Borrowing Procedure.


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


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


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


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


22








 





     (d) Interest. Except as set forth in Section 2.11 hereof, Loans shall bear interest at
a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.
Each
Borrower covenants and agrees to promptly pay interest on the Loans on each Interest Payment
Date, with such interest payable in arrears.



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



     Section 2.2 Fees.



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



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



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



     Section 2.3 Commitment Reductions.



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



23









 




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


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


     Section 2.4 Prepayments.


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


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


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


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


     Section 2.7 Extension of Scheduled Maturity Date.


     (a) Request for Extension. So long as no Default or Event of Default has occurred, the
Borrowers may, on any Business Day during a period of time beginning on the day that is sixty (60)
days prior to each anniversary of the Closing Date and ending on the day that is thirty (30) days
prior to each anniversary of the Closing Date, irrevocably request in writing that the


24








 







Lenders extend the Maturity Date for an additional year, from the date of October 30, 2013 to
October 30, 2014 (the “Request for Extension”). Upon receipt of the Request for Extension, the
Administrative Agent shall promptly provide it to all Lenders. The Administrative Agent shall
notify the Borrowers whether or not the Lenders have consented to the Request for Extension by no
later than thirty (30) days after the Administrative Agent receives the Request for Extension.
Each Lender may approve or reject in its sole discretion the Borrowers’ Request for Extension.




     (b) Terms and Conditions Binding. If the Request for Extension is approved by the
Lenders, this Agreement shall continue with full force and effect upon the same terms and
conditions as those set forth herein (except as amended, supplemented or modified in
accordance
with the terms hereof) until the Maturity Date as extended in accordance herewith.



     (c) Miscellaneous Terms. Each Request for Extension shall be irrevocable and
binding on the Borrowers. The failure of the Borrowers to make any Request for Extension
within the time period specified therefor shall thereby terminate the Borrowers’ option to
make
such a Request for Extension. The failure of any Lender to respond to a Request for Extension
within the thirty (30) day consideration period shall be deemed a rejection of the Request for
Extension by such Lender.



     Section 2.8 Computation of Interest and Fees.



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



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



     (c) It is the intent of the Lenders and the Credit Parties to conform to and contract in
strict compliance with applicable usury law from time to time in effect. All agreements
between
the Lenders and the Credit Parties are hereby limited by the provisions of this paragraph
which
shall override and control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency (including but not limited
to
prepayment or acceleration of the maturity of any Obligation), shall the interest taken,
reserved,
contracted for, charged, or received under this Agreement, under the Notes or otherwise,
exceed
the maximum nonusurious amount permissible under applicable law. If, from any possible
construction of any of the Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such construction shall be subject to
the provisions of this paragraph and such interest shall be automatically reduced to the
maximum
nonusurious amount permitted under applicable law, without the necessity of execution of any
amendment or new document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would, apart from this
provision, be in excess of the maximum nonusurious amount, an amount equal to the amount



25









 




which would have been excessive interest shall, without penalty, be applied to the reduction of
the principal amount owing on the Loans and not to the payment of interest, or refunded to the
Borrowers or the other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand payment of the
Loans or any other Indebtedness evidenced by any of the Credit Documents does not include the
right to receive any interest which has not otherwise accrued on the date of such demand, and the
Lenders do not intend to charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full
stated term (including any renewal or extension) of the Loans so that the amount of interest on
account of such indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.


     Section 2.9 Pro Rata Treatment and Payments.


     (a) Pro
Rata Treatment. Each borrowing of Loans and any reduction of the
Commitments shall be made pro rata according to the respective Commitment Percentages
of the Lenders. Each payment (other than prepayments) of principal or interest under this Agreement
or any Note shall be applied pro rata, first, to any fees and expenses then due and owing by
the Borrowers hereunder, second, to interest then due and owing hereunder and under the Notes and,
third, to principal then due and owing hereunder and under the Notes. Each payment on account
of any fees and expenses hereunder shall be made pro rata in accordance with the
respective
amounts due and owing. Each optional prepayment of the Loans shall be applied in accordance
with Section 2.4(a) and each mandatory prepayment of the Loans shall be applied in accordance
with Section 2.4(b). Prepayments made pursuant to Section 2.12 shall be applied in accordance
with such section. All payments (including prepayments) to be made by the Borrowers on
account of principal, interest and fees shall be made without defense, set-off or counterclaim
and
shall be made to the Administrative Agent for the account of the Lenders at the Administrative
Agent’s office specified on the Lenders’ Administrative Details Schedule in Dollars and in
immediately available funds not later than 12:00 Noon on the date when due. The
Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly
upon receipt in like funds as received. If any payment hereunder (other than payments on the
Loans) becomes due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such extension. If any
payment on a Loan becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.


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


26








 




account of the Obligations or any other amounts outstanding under any of the Credit Documents or
in respect of the Collateral shall be paid over or delivered as follows:





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




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




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




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




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




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




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


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




     Section 2.10 Non-Receipt of Funds by the Administrative Agent.



     (a) Unless the Administrative Agent shall have been notified in writing by a Lender prior to
the date a Loan is to be made by such Lender (which notice shall be effective upon receipt) that
such Lender does not intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the Borrowers a corresponding amount.
If such corresponding amount is not in fact made available to the Administrative Agent, the
Administrative Agent shall be able to recover such corresponding amount from such Lender. If such
Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand
therefor, in accordance with the terms hereof, the




27









 







Administrative Agent will promptly notify the Borrowers, and the Borrowers shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover from such Lender or the Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrowers to the date such corresponding amount is
recovered by the Administrative Agent at a per annum rate equal to the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing.




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



     (c) A certificate of the Administrative Agent submitted to the Borrowers or any
Lender with respect to any amount owing under this Section 2.10 shall be conclusive in the
absence of manifest error.



     Section 2.11 Inability to Determine Interest Rate; Base Rate Loans.
Notwithstanding any other provision of this Agreement, if (i) the Administrative Agent shall
reasonably determine (which determination shall be conclusive and binding absent manifest error)
that, by reason of circumstances affecting the relevant market, reasonable and adequate means do
not exist for ascertaining LIBOR for such Interest Period, including that LIBOR quotations are
unavailable or insufficient in number or (ii) the Required Lenders shall reasonably determine
(which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate
does not adequately and fairly reflect the cost to such Lenders of funding Loans that the Borrowers
have requested during such Interest Period, the Administrative Agent shall forthwith give telephone
notice of such determination, confirmed in writing, to the Borrowers and the Lenders at least two
Business Days prior to the first day of such Interest Period. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as, continued as, or
converted into, LIBOR Rate Loans for the Interest Periods so affected, and all Loans outstanding
shall be converted into a Base Rate Loan (i) on the last day of the then-current Interest Period if
the Lenders may lawfully continue to maintain the Loans as LIBOR Rate Loans to such day, or (ii)
immediately if the Administrative Agent or any Lender shall determine that any Lender may not
lawfully continue to maintain the Loans as LIBOR Rate Loans to such day. Furthermore, until any
such notice has been withdrawn by the Administrative Agent, all Loans requested by the Borrowers or
advanced by any Lender




28









 







hereunder shall be made and advanced as a Base Rate Loan, to which all other terms and conditions
of this Agreement shall apply.




     Section 2.12 Illegality. Notwithstanding any other provision of this Agreement, if the
adoption of or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it unlawful for such
Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated by this
Agreement or to obtain in the interbank eurodollar market through its LIBOR Lending Office the
funds with which to make such Loans, (a) such Lender shall promptly notify the Administrative
Agent and the Borrowers thereof, and (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until the
Administrative Agent shall give notice that the condition or situation which gave rise to the
suspension shall no longer exist. The Borrowers hereby agree to promptly pay any Lender, upon its
demand, any additional amounts necessary to compensate such Lender for actual and direct costs
(but not including anticipated profits) reasonably incurred by such Lender in making any repayment
in accordance with this Section including, but not limited to, any interest or fees payable by
such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans
hereunder. A certificate as to any additional amounts payable pursuant to this Section submitted
by such Lender, through the Administrative Agent, to the Borrowers shall be conclusive in the
absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts which may
otherwise be payable pursuant to this Section; provided, however, that such efforts shall
not cause the imposition on such Lender of any additional costs or legal or regulatory burdens
deemed by such Lender in its sole discretion to be material.



     Section 2.13 Requirements of Law.



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




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




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




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




29












 




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




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



     (c) The agreements in this Section 2.13 shall survive the termination of this
Agreement and payment of the Notes and all other amounts payable hereunder.



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



30








 




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




     Section 2.15 Taxes.



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



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



     (c) If the Borrowers pay any additional amount pursuant to this Section 2.15 with respect to a
Lender, such Lender shall use reasonable efforts to obtain a refund of tax or credit against its
tax liabilities on account of such payment; provided that such Lender shall have no
obligation to use such reasonable efforts if either (i) it is in an excess foreign tax credit
position or (ii) it believes in good faith, in its sole discretion, that claiming a refund or
credit would cause adverse tax consequences to it. In the event that such Lender receives such a
refund or credit, such Lender shall pay to the Borrowers an amount that such Lender reasonably
determines is equal to the net tax benefit obtained by such Lender as a result of such payment by
the Borrowers. In the event that no refund or credit is obtained with respect to the Borrowers’
payments to such Lender pursuant to this Section 2.15, then such Lender shall upon request provide
a certification that such Lender has not received a refund or credit for such payments. Nothing
contained in this Section 2.15(c) shall require a Lender to disclose or detail the basis of its
calculation of the amount of any tax benefit or any other amount or the basis of its determination
referred to in the proviso to the first sentence of this Section 2.15(c) to the Borrowers or any
other party.


31








 





     (d) Each Lender that is not a “United States person” (as such term is defined in
Section 7701(a)(30) of the Code) (a “Foreign Lender”) shall submit to Borrowers and Administrative Agent
on or before the date such financial institution becomes a party hereto, two duly signed completed
copies of either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender and
entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to
such Foreign Lender by Borrowers pursuant to this Agreement) or IRS 
Form W-8ECI or any successor
thereto (relating to all payments to be made to such Foreign Lender by Borrowers pursuant to this
Agreement) or such other evidence satisfactory to Borrowers and Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, United States withholding tax.
Thereafter and from time to time, each such Foreign Lender shall: (i) promptly submit to
Administrative Agent such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and regulations to
avoid, or such evidence as is satisfactory to Borrowers and Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by Borrowers pursuant to this Agreement; (ii) promptly notify
Administrative Agent of any change in circumstances that would modify or render invalid any claimed
exemption or reduction; and (iii) take such steps as shall not be materially disadvantageous to it,
in the reasonable judgment of such Foreign Lender, and as may be reasonably necessary (including
the re-designation of its lending office) to avoid any requirement of applicable laws that
Borrowers make any deduction or withholding for taxes from amounts payable to such Foreign Lender.
If any Foreign Lender fails to deliver the forms or other documentation referred to in this
subsection, then the Borrowers shall not be required to pay any additional amount to such Foreign
Lender under Section 2.15(a) with respect to any withholding tax imposed by Sections 1441
and 1442 of the Code; provided that if such Foreign Lender shall have satisfied the
requirement of this Section 2.15(d) on the date such Foreign Lender became a Lender,
nothing in this Section 2.15(d) shall relieve the Borrowers of their obligations to pay any
amounts pursuant to Section 2.15(a) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Foreign Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date establishing the
fact that such Foreign Lender or is not subject to withholding.



     (e) The agreements in this Section 2.15 shall survive the termination of this Agreement
and the payment of the Notes and all other amounts payable hereunder.



ARTICLE III

REPRESENTATIONS AND WARRANTIES




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



     Section 3.1 Corporate Existence; Compliance with Law. Each of the Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the jurisdiction of



32








 




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


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


     Section 3.3 Financial Condition; No Material Adverse Effect.


     (a) The
audited Consolidated financial statements of the Borrowers for the twelve-month period
ending June 30, 2008, and the related Consolidated statements of income and of cash flows for the
fiscal year ended on such date, all of which have been furnished to the Administrative Agent, have
been prepared in accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein and fairly present the financial condition of the
Borrowers and their Subsidiaries as of the date or dates thereof and results of operations for the
periods covered thereby. Such financial statements and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrowers and their Subsidiaries that are required to be
disclosed under GAAP.


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


33








 





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



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



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



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



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



34









 





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



     Section 3.6 Employee Benefit Plans. Each Employee Benefit Plan established or maintained by
the Borrowers or any other Credit Party complies, and has been maintained and administered, in all
material respects in accordance with applicable Requirements of Law. Each Employee Benefit Plan is
fully funded on a going concern basis in accordance with its terms and applicable Requirements of
Law, and the present value of all accrued benefits under any such plans do not exceed the value of
the assets of such plans allocable to such accrued benefits by an amount that could reasonably be
expected to have a Material Adverse Effect. No material liability exists with respect to any
Employee Benefit Plan that has been terminated.



     Section 3.7 Environmental Matters.



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



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



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



35









 





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



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



     Section 3.10 Ownership; Insurance.



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



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



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



     Section 3.12 Royalty Agreements.
Schedule 1.1(a) sets forth a complete and accurate
list of all Royalty Agreements of each Credit Party relating to a Collateral Royalty and in effect
as of the Closing Date. Each Royalty Agreement relating to a Collateral Royalty is (i) a legal,
valid and binding obligation of the Credit Party that is a party thereto, and to each Credit
Party’s knowledge, each other party thereto, and (ii) other than as set forth in Schedule
3.12, each such Royalty Agreement is, and after giving effect to the transactions contemplated
by the Credit Documents will be, in full force and effect in accordance with the terms thereof. To
the extent requested by the Administrative Agent, the Borrowers have delivered or made available
to the Administrative Agent a true and complete copy of each Royalty Agreement listed on
Schedule 1.1(a). No Credit Party is in breach of or in default under any Royalty
Agreement for a Collateral Royalty. As of the Closing Date and since the date thereof, other than
as set forth on Schedule 3.12, no Credit Party has made any unresolved allegation that any
counterparty to a


36








 




Material Contract has breached or defaulted under any such agreement in a material respect, except
for allegations of breach or default that a Credit Party has diligently pursued and resolved
within thirty (30) days of obtaining knowledge thereof and which has not had, and would not
reasonably be likely to have, a Material Adverse Effect during such period of time. To the
knowledge of each Credit Party, other than as set forth on Schedule 3.12, no counterparty to any
Material Contract is in material breach of or in material default of any such Material Contract,
except for allegations of breach or default that a Credit Party is diligently pursuing and will
resolve within thirty (30) days of obtaining knowledge thereof and which breach or default has not
had, and would not reasonably be likely to have, a Material Adverse Effect.




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



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



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



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



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


37








 




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


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


ARTICLE IV
COLLATERAL SECURITY


     Section 4.1 Security Documents. As security for the prompt, complete and irrevocable payment
and performance of the Obligations, each of the Credit Parties shall, contemporaneously with the
execution of this Agreement, confirm, ratify and continue, or grant, execute and deliver, the
Security Documents.


     Section 4.2 No Limitation on Application of Security Interest. The Credit Parties agree that
notwithstanding any provision of any other Credit Document to the contrary, the Liens created
pursuant to the Security Documents shall secure all Obligations. All Obligations are a joint and
several liability of the Borrowers.


     Section 4.3
Maintenance of Security Over Minimum Collateral Royalties. The
Credit Parties shall at all times grant and maintain Mortgages or other Security Documents
satisfactory to the Required Lenders in their sole discretion over and with respect to Royalty
Interests that generate Projected Facility Term Revenue equal to or greater than the greater of
(a) fifty percent (50%) of the total Projected Facility Term Revenue, or (b) an amount equal to
the Committed Amount (the “Collateral Requirement”).


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


38








 




appropriate to confirm, perfect, maintain and protect the perfection of the Liens granted by the
Security Documents.


     Section 4.5 Security Documents. The Security Documents create valid security interests in,
and Liens on, the Collateral purported to be covered thereby, which security interests and Liens
are currently perfected security interests and Liens, prior to all other Liens, other than
Permitted Liens.


ARTICLE V
CONDITIONS PRECEDENT


     Section 5.1
Conditions to Closing and Initial Loan. This Agreement shall become effective
upon, and the obligation of each Lender to make the initial Loan hereunder is subject to, the
satisfaction of the following conditions precedent:


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


     (b) Authority
Documents. The Administrative Agent shall have received a certificate
from the secretary of each Credit Party substantially in the form of Exhibit H attached
hereto, together with certified copies of each of the following attachments:


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


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


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


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


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


39








 




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


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


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


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


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


     (iii) all stock or membership certificates evidencing the Capital Stock pledged to the
Administrative Agent pursuant to the Pledge Agreements, together with duly executed in
blank, undated stock or transfer powers attached thereto; and


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


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


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


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


40








 





     (i) Material Adverse Effect. No material adverse change shall have occurred since
June 30, 2008 in the business, properties, operations or financial condition of the Credit Parties
and their Subsidiaries taken as a whole.



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



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



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



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


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


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


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


41








 





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



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



     (g) Projected Revenue Certificate. The Borrowers shall have provided to
the Administrative Agent a Projected Revenue Certificate signed by a Responsible Officer
of the Borrowers together with all information and data useful or necessary to calculate,
determine and verify the Projected Term Facility Revenue, and the Administrative Agent
shall have concurred with such calculation.



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



ARTICLE VI

AFFIRMATIVE COVENANTS




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



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



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



     (b) Quarterly Financial Statements. As soon as available and in any event
within sixty (60) days after the end of each of the first three fiscal quarters of each fiscal
year, a copy of the consolidated balance sheet of Royal Gold and its consolidated Subsidiaries
as at the end of



42









 




such period and related consolidated statements of income and retained earnings and of cash flows
for Royal Gold and its consolidated Subsidiaries for such quarterly period and for the portion of
the fiscal year ending with such period, in each case setting forth in comparative form
consolidated figures for the corresponding period or periods of the preceding fiscal year (subject
to normal recurring year-end audit adjustments);


     (c) Financial Statement Standards. All financial statements shall be complete and
correct in all material respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments and the lack of footnotes) and prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance with subsections (a)
and (b) above, in accordance with GAAP applied consistently throughout the periods reflected
therein and further accompanied by a description of, and an estimation of the effect on the
financial statements on account of, a change, if any, in the application of accounting principles
as provided in Section 1.3;



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



     (e) Projected Revenue Certificate. The Borrowers shall deliver to the Administrative
Agent a Projected Revenue Certificate signed by a Responsible Officer, together with all
information, data and documentation supporting the calculations therein, (i) by not later than
April 15 and October 15 of each year, and (ii) at any other time reasonably requested by the
Administrative Agent, with such Projected Revenue Certificate to be delivered to the
Administrative Agent within five (5) Business Days of a request. The Administrative Agent may
request a Projected Revenue Certificate and a calculation of the Projected Facility Term Revenue at
any time and from time to time, together with any data, information or documentation, as it deems
necessary to analyze and confirm the Projected Facility Term Revenue, while any Loans are
outstanding or prior to making any Loan; and



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

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

43








 






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


     (b) the occurrence of any default or event of default known to a Credit Party under any
Material Contract of any Credit Party or any of its Subsidiaries which could reasonably be expected
to have a Material Adverse Effect or involve a monetary claim in excess of $2,000,000;


     (c) any litigation, lawsuit, action, claim or dispute, or any investigation or proceeding
known to any Credit Party, (i) affecting any Credit Party or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material Adverse Effect or involve a
monetary claim in excess of $2,000,000, (ii) affecting or with respect to this Agreement or any
other Credit Document or (iii) involving an environmental claim or potential liability of any
Credit Party or any of its Subsidiaries under Environmental Laws in excess of $2,000,000;


     (d) any loss or damage to the Collateral in excess of $1,000,000, exclusive of diminution in
value caused solely by changes in the price of any Metal from time to time;


     (e) the consummation by any Credit Party of any purchase or acquisition transaction involving
a Royalty Interest with a value in excess of $10,000,000, whether a new Royalty Interest or an
addition to or increase in an existing Royalty Interest;


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


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


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


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


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


44








 





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



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



     (m) promptly after a Responsible Officer of a Credit Party obtains knowledge thereof, any
attachment, judgment, Lien, levy or order exceeding $2,000,000 that is, or is reasonably likely to
be, assessed against any Credit Party other than Permitted Liens; and



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


Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to therein and stating what action the Credit
Parties propose to take with respect thereto, if any. In the case of any notice of a Default or
Event of Default, the Borrowers shall specify that such notice is a Default or Event of Default
notice on the face thereof.




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



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



45









 





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



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



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



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



     Section 6.9 [Intentionally Omitted].



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


46








 





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



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



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



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



     Section 6.13 Environmental Laws. Defend, indemnify and hold harmless the Agents and the
Lenders, and their respective Affiliates, employees, agents, consultants, representatives,
officers, managers and directors, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of, or in any way relating to or associated with the violation
of, noncompliance with or investigation, liability, claim, lawsuit, failure or action under, any
Environmental Law applicable to the operations of the Credit Parties or any of their Subsidiaries
or to the Properties or the Projects, or any orders, requirements, remediation, reclamation,
settlements, response or demands of Governmental Authorities related thereto, or with respect to
the release, presence, handling or disposal of Materials of Environmental Concern at any Property
or Project, including reasonable attorney’s and consultant’s fees, investigation and laboratory
fees, response costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of (i) the gross negligence or willful misconduct of the party seeking
indemnification therefor as determined by a court of competent jurisdiction in a final and
non-appealable judgment or (ii) any other loan facility or other interest in the Properties


47








 




or the Projects not attributable to this Agreement or the other Credit Documents. The
agreements in this paragraph shall survive repayment of the Obligations.




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



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



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



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


     (b) Consolidated Net Worth. A Consolidated Net Worth of not less than an amount equal
to (i) 80% multiplied by (ii) the sum of (A) $480,782,000, plus (B) 50% of the
cumulative positive quarterly net income for the period beginning July 1, 2008 and ending with the
most recently completed fiscal quarter for which financial statements have been provided pursuant
to Section 6. l(b).



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


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



     (e) Facility Coverage Ratio. The Facility Coverage Ratio shall be greater than or
equal to 1.25 to 1.0.


     Section 6.17 Addition of Guarantors. The Borrowers may at any time cause a Subsidiary to join
this Agreement as a Guarantor by causing such Subsidiary to sign and deliver to the Administrative
Agent a Joinder Agreement. If, at any time, the Facility Coverage Ratio, as calculated based solely
on Royalty Metals owned by or payable to the Credit Parties and excluding any Royalty Metals owned
by or payable to non-Credit Party Subsidiaries, shall be


48








 




less than 1.25 to 1.0, then the Credit Parties shall promptly cause sufficient Subsidiaries to
join this Agreement as a Guarantor so that the Facility Coverage Ratio calculated based solely on
Royalty Metals owned by or payable to the Credit Parties shall be equal to or greater than 1.25 to
1.0 at all times. Such additional Subsidiaries shall sign and deliver to the Administrative Agent
a Joinder Agreement. For the purpose of clarification, the covenant set forth in Section 6.16(e)
shall always be applicable.




ARTICLE VII

NEGATIVE COVENANTS




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



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


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


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


     (c) Indebtedness incurred after the Closing Date consisting of Capital Leases or Indebtedness
incurred to provide all or a portion of the purchase price of furniture, fixtures and equipment
provided that (i) such Indebtedness when incurred shall not exceed the purchase price or cost of
construction of such furniture, fixtures and equipment; (ii) no such Indebtedness shall be
refinanced for a principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing; and (iii) the total amount of all such Indebtedness shall not exceed
$1,000,000 at any time outstanding and renewals, refinancings or extensions thereof in a principal
amount not in excess of that outstanding as of the date of such renewal, refinancing or extension;


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


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


49








 




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


     (g) Unsecured Indebtedness issued and owed by a Credit Party or any Subsidiary in an aggregate
amount not to exceed $5,000,000 at any time;



     (h) Indebtedness owed to HSBC Bank USA, National Association arising or existing under the
Term Loan Agreement, including any restatements thereof or increases in the principal amount
thereof, provided that such Indebtedness is incurred solely by Royal Gold Chile Limitada, is
guaranteed by Royal Gold, is secured by cash collateral in an amount not less than the aggregate
outstanding principal amount under the Term Loan Agreement, and is used solely for the acquisition
of interests in mining properties or mining royalties in Chile; and



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



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



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



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


50








 







business arrangements pursuant to which its executory or ownership interests are convertible into
Royalties.




     Section 7.5 Dissolution or Sale of Assets. Each of the Credit Parties will not, nor will it
permit any Subsidiary to (whether in one transaction or in a series of transactions and whether
directly or indirectly): (a) dissolve, liquidate or wind up its affairs, except for the
dissolution, liquidation or winding up of the affairs of any Subsidiary that is not a Credit Party
at such time as such Subsidiary has no material assets; provided that the Credit Parties
have provided advance written notice thereof to the Administrative Agent; or (b) sell, assign,
transfer, lease to a third party or otherwise dispose of its business or assets as a whole or in
an amount which constitutes a substantial portion thereof; or (c) sell, assign, transfer, lease to
a third party or otherwise dispose of any material property or asset, including any Royalty
Interest or Non-Credit Party Royalty Interest or any portion of the foregoing; or (d) agree to do
any of the foregoing at a future time; except, in the case of clause (b) with respect to any
Subsidiary that is not a Credit Party that undertakes any of the following actions or in the case
of clause (c) with respect to any Credit Party or any Subsidiary that undertakes any of the
following actions, each of which shall be permitted so long as the Facility Coverage Ratio
requirement set forth in Section 6.16(e) shall continue to be satisfied after the completion of
any of the following:




     (i) the sale, assignment, lease, transfer or other disposition in the ordinary course
of business of (A) inventory or property that has become obsolete or worn out or no longer
used in the conduct of business, (B) Non-Credit Party Royalty Interests and Royalty
Interests (other than Collateral Royalties) in respect of Metals other than precious
Metals, (C) Non-Credit Party Royalty Interests and Royalty Interests (other than Collateral
Royalties) in respect of precious Metals in an aggregate amount not to exceed $5,000,000 in
the aggregate in any calendar year, or (D) other assets not constituting Royalty Interests
or Non-Credit Party Royalty Interests in an aggregate amount not to exceed $1,000,000 in
any calendar year;




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




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



     Section 7.6 Mergers. Each of the Credit Parties will not, nor will it permit any Subsidiary
to, (whether in one transaction or in a series of transactions and whether directly or
indirectly): (a) enter into any transaction of amalgamation, merger, consolidation, partnership,
joint venture or other combination where such combination involves a contribution by a Credit
Party or a Subsidiary thereof of all or a substantial portion of its assets, except, in each case,
for the amalgamation, merger or consolidation of a Credit Party or a Subsidiary thereof with and
into



51









 




another Credit Party or the amalgamation, merger or consolidation of any Subsidiary that is not a
Credit Party with and into another Subsidiary that is not a Credit Party; provided that if
a Borrower is a party thereto, such Borrower will be the surviving corporation, or (b) agree to do
any of the foregoing at a future time.




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



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



     Section 7.9 [Intentionally Omitted]



     Section 7.10 Organizational Documents. Each of the Credit Parties will not, nor will they
permit any of its Subsidiaries to, amend, modify or change their articles of incorporation (or
corporate charter or other similar organizational document), operating agreement or bylaws (or
other similar document) in any material respect.



     Section 7.11 Modification of Material Agreements. Each of the Credit Parties will not, nor
will it permit any of its Subsidiaries to, without the approval of the Administrative Agent,
modify or amend any Collateral Royalty, any Material Contract or any confidentiality agreements or
provisions to which a Credit Party is a party or otherwise subject in connection with a Collateral
Royalty or a Material Contract if such modification or amendment would be adverse to the Lenders
in any material respect. With respect to any confidentiality agreement that any Credit Party may
execute with respect to (i) any existing Collateral Royalty or a Project



52









 




related thereto, or (ii) any Royalty Interest or the Project associated with such Royalty Interest
acquired after the date hereof with the proceeds of a Loan, such Credit Party shall use
commercially reasonable efforts to include appropriate provisions in such confidentiality
agreement authorizing the Credit Parties to provide to the Administrative Agent and the Lenders
information obtained by such Credit Party pursuant to such confidentiality agreement.




     Section 7.12 Limitation on Restricted Actions. Each of the Credit Parties will not, nor will
it permit any Subsidiary to, directly or indirectly, create or otherwise cause or suffer to exist
or become effective any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital Stock or with respect
to any other interest or participation in, or measured by, its profits, (b) pay any Indebtedness or
other obligation owed to any Credit Party, (c) make loans or advances to any Credit Party, (d)
sell, lease or transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any renewals, refinancings,
exchanges, refundings or extension thereof, except (in respect of any of the matters referred to in
clauses (a)-(e) above) for such encumbrances or restrictions existing under or by reason of (i)
this Agreement and the other Credit Documents, (ii) applicable Requirements of Law, (iii) pursuant
to any document or Instrument governing Indebtedness permitted by Section 7.1(c), provided
that any such restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith, (iv) any Permitted Lien or any document or Instrument governing
any Permitted Lien, provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (v) customary restrictions on the assignment of or
granting of a Lien on a particular lease, sublease, license or contract set forth in such lease,
sublease, license or contract entered into in the ordinary course of business, (vi) restrictions on
the pledge of interests in or assets of joint ventures contained in the applicable joint venture
agreement, (vii) customary restrictions and conditions relating to a disposition of property or
assets permitted hereunder pending the consummation of such disposition, and (viii) restrictions
contained in the Term Loan Agreement.



     Section 7.13 Maintenance of Collateral Royalties. Each of the Credit Parties will not, nor
will it permit any Subsidiary to, enter into any agreement or undertaking, or otherwise act to
sell, assign, transfer or create or suffer the creation of rights of any Person other than a
Credit Party or the Administrative Agent or the Lenders in or with respect to a Collateral Royalty
or any Metals accruing to the account of a Credit Party pursuant thereto.



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



53









 




sublease, license or contract entered into in the ordinary course of business, (e) restrictions on
the pledge of interests in or assets of joint ventures contained in the applicable joint venture
agreement, (f) customary restrictions and conditions relating to a disposition of property or
assets permitted hereunder pending the consummation of such disposition, and (g) restrictions
contained in the Term Loan Agreement.




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



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



ARTICLE VIII

EVENTS OF DEFAULT




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


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



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


     (c) Any Credit Party shall fail to observe, perform or comply with any covenant contained in
this Agreement (other than the covenants referred to in paragraph (a) above) and


54








 




such Credit Party shall have not remedied such default within ten (10) days after written notice
of such default has been given by the Administrative Agent to the Borrowers; or




     (d) A default shall occur under any Credit Document, any Royalty Agreement pertaining to a
Collateral Royalty or any agreement pertaining to Indebtedness permitted hereunder; or any Credit
Party or any Subsidiary thereof shall fail to pay any Indebtedness with a value, individually or
in the aggregate, in excess of $2,500,000 (excluding Indebtedness evidenced by the Notes) or any
interest or premium thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the Instrument relating to such Indebtedness; or any other default
under any Instrument relating to any such Indebtedness, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such Instrument, if the effect of
such default or event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity
thereof; or, other than as described in this Agreement, any Credit Party shall default or fail to
perform under any Credit Document and such Credit Party shall have not remedied such default
within ten (10) days after written notice of such default has been given by the Administrative
Agent to the Borrowers; or



     (e) (i) Any Credit Party or any of its Subsidiaries shall initiate or commence any case,
proceeding or other action (A) under any existing or future Bankruptcy Law, or otherwise seeking
to have it judged bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar
official for it or for all or any substantial part of its assets, or any Credit Party or any of
its Subsidiaries shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against any Credit Party or any of its Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged
or unbonded for a period of 60 days; or (iii) there shall be commenced against any Credit Party or
any of its Subsidiaries any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any substantial part of their
assets which results in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) any Credit Party or any of its Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) any Credit Party or any of its Subsidiaries shall generally not,
or shall be unable to, or shall admit in writing its inability to, pay its debts as they become
due; or



     (f) One or more judgments, orders, decrees or arbitration awards shall be entered against any
Credit Party or any Subsidiary thereof involving in the aggregate a liability (to the extent not
covered by third-party insurance with respect to which coverage has not been disputed by the
insurer) of $2,500,000 or more, and all such judgments, orders, decrees or arbitration awards shall
not have been paid and satisfied, vacated, discharged, stayed or bonded pending appeal within
thirty (30) days from the entry thereof, or any injunction, temporary restraining order or similar
decree shall be issued against any Credit Party, any of its Subsidiaries or any of



55









 




their respective Properties or Projects that could reasonably be expected to result in a Material
Adverse Effect; or




     (g) Any involuntary Lien or Liens for amounts then due in the aggregate sum of $250,000 or
more, of any kind or character (other than Permitted Liens) shall attach to any assets or property
of any Credit Party if such Lien or Liens are not discharged or bonded pending proceedings to
release such Lien or Liens within sixty (60) days after the date of attachment or unless such Lien
or Liens are being contested in good faith; or



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



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



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



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



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



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



     (n) The aggregate principal amount of all Loans shall exceed the Committed Amount at any
time; or


     (o) [Intentionally Omitted]; or


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


56








 





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



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



ARTICLE IX

THE AGENT




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



     Section 9.2 Delegation of Duties. The Administrative Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable
care. Without limiting the foregoing, the Administrative Agent



57









 




may appoint one of its affiliates as its agent to perform the functions of the Administrative
Agent hereunder relating to the advancing of funds to the Borrowers and distribution of funds to
the Lenders and to perform such other related functions of the Administrative Agent hereunder as
are reasonably incidental to such functions.




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



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



     Section 9.5 Notice of Default. The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative
Agent has received notice from a Lender or the Borrowers referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a “notice of default”. In the
event that the Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such



58









 




action with respect to such Default or Event of Default as shall be reasonably directed by the
Required Lenders; provided, however, that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or Event of Default
as it shall deem advisable in the best interests of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not taken, only with the consent or
upon the authorization of the Required Lenders, or all of the Lenders, as the case may be.


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



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


59








 





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



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



     Section 9.10 Nature of Duties. Except as otherwise expressly stated herein, any agent (other
than the Administrative Agent) listed from time to time on the cover page of this Agreement shall
have no obligations, responsibilities or duties under this Agreement or under any other Credit
Document other than obligations, responsibilities and duties applicable to all Lenders in their
capacity as Lenders; provided, however, that such agents shall be entitled to the same rights,
protections, exculpations and indemnifications granted to the Administrative Agent under this
Article IX in their capacity as an agent.



ARTICLE X

MISCELLANEOUS




     Section 10.1 Amendments, Waivers and Release of Collateral. Neither this Agreement, nor any of
the Notes, nor any of the other Credit Documents, nor any terms hereof or thereof may be amended,
supplemented, waived or modified except in accordance with the provisions of this Section nor may
be released except as specifically provided herein or in the Security Documents or in accordance
with the provisions of this Section 10.1. The Required Lenders may, or, with the written consent of
the Required Lenders, the Administrative Agent may, from time to time, (a) enter into with the
Borrowers written amendments, supplements or modifications hereto and to the other Credit Documents
for the purpose of adding any provisions to this Agreement or the other Credit Documents or
changing in any manner the rights of the Lenders or of the Borrowers hereunder or thereunder or (b)
waive, on such terms and conditions



60









 




as the Required Lenders may specify in such instrument, any of the requirements of this Agreement
or the other Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, supplement,
modification or release shall:





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




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




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




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




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




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




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



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



61









 





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



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



     Section 10.2 Substitution of Lenders. In the event (a) the Borrowers receive a claim from any
Lender for compensation under Section 2.13 hereof, (b) the Borrowers receive notice from any
Lender of any illegality pursuant to Section 2.12 hereof, (c) any Lender is in default in any
material respect with respect to its obligations under the Credit Documents, (d) any Lender fails
to consent to a Request for Extension submitted in accordance with Section 2.7 hereof, or (e) a
Lender or Participant fails to consent to an amendment or waiver requested under Section 10.1 or
Section 10.7(b) hereof, as applicable, at a time when the Required Lenders or other Participants,
as applicable, have approved such amendment or waiver (any such Lender or Participant referred to
in clause (a), (b), (c), (d) or (e) above being hereinafter referred to as an “Affected
Lender”), the Borrowers may, in addition to any other rights the Borrowers may have hereunder
or under applicable law, require, at its expense, any such Affected Lender to assign, at par,
without recourse, all of its interest, rights, and obligations hereunder (including all of its
Commitments and the Loans and other amounts at any time owing to it hereunder and the other Credit
Documents) to an Eligible Assignee specified by the Borrowers, provided that (i) such assignment
shall not conflict with or violate any law, rule or regulation or order of any court or other
governmental authority, (ii) the Borrowers shall have paid to the Affected Lender all monies
(together with amounts due such Affected Lender hereunder as if the Loans owing to it were prepaid
rather than assigned) other than such principal owing to it hereunder, and (iii) the assignment is
entered into in accordance with, and subject to the consents required by (other than the consent
of the Affected Lender), Section 10.7 hereof (provided any assignment fees and reimbursable
expenses due thereunder shall be paid by the Borrowers).



     Section 10.3 Notices. Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in writing (including by
facsimile or e-mail), and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made (a) when delivered by hand, (b) when transmitted via telecopy (or other
facsimile device) to the number set out herein, (c) the Business Day immediately following the day
on which the same has been delivered prepaid (or pursuant to an invoice arrangement) to a reputable
national overnight air courier service, (d) the third Business Day following the day on which the
same is sent by certified or registered mail, postage prepaid, or (e) when delivered by e-mail,
upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other written acknowledgment), provided
that if such notice, request or demand is not sent during the normal business hours of the
recipient, such notice, request or demand shall be deemed to have been sent



62









 




at the opening of business on the next Business Day for the recipient, in each case, addressed as
follows in the case of the Borrowers, the other Credit Parties and the Administrative Agent, and,
with respect to each Lender, as set forth in the Lenders’ Administrative Details Schedule, or to
such other address as may be hereafter notified by the respective parties hereto and any future
holders of the Notes:


     The Borrowers
and the other Credit Parties:


c/o Royal Gold, Inc.

1660 Wynkoop Street, Suite 1000
Denver, Colorado 80202-1132
Attention: Chief Financial Officer

Facsimile: (303) 595-9385
E-mail: swenger@royalgold.com
Telephone: (303) 573-1660


with a copy to:


c/o Royal Gold, Inc.

1660 Wynkoop Street, Suite 1000
Denver, Colorado 80202-1132
Attention: General Counsel

Facsimile: (303) 595-9385
E-mail:bkirchhoff@royalgold.com
Telephone: (303) 573-1660


     The Administrative Agent:


HSBC Bank USA, National Association

452 Fifth Avenue
New York, New York 10018
Attention: Mr. Bill Edge
Facsimile: (212) 525-6581

E-mail: bill.edge@us.hsbc.com
Telephone: (212) 525-6481


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


     Section 10.5 Survival of Representations and Warranties. All representations and warranties
made hereunder and in any document, certificate or statement delivered pursuant


63








 







hereto or in connection herewith shall survive the execution and delivery of this Agreement and
the Notes and the making of the Loans.




     Section 10.6 Payment of Expenses and Taxes; Indemnification.



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



     (b) Each Credit Party agrees to pay, indemnify, and hold each Lender, each Agent, their
respective Affiliates and their respective directors, partners, managers, principals, officers,
employees, agents, consultants and representatives (collectively, the “Indemnified
Parties”) harmless from and against, any and all other liabilities, obligations, losses,
damages, penalties, actions, claims, judgments, awards, fines, settlements, suits, costs, charges,
expenses or disbursements of any kind or nature whatsoever (irrespective of whether the Indemnified
Party is named as a party to any litigation or proceeding and whether it is joint, several or joint
and several) with respect to the execution, delivery, enforcement, performance and administration
of any Credit Document, any such other documents, agreements and Instruments or the transactions
contemplated thereby, the use, or proposed use, of proceeds of the Loans, or otherwise with respect
to any Project or Property or any activity, occurrence or event thereon or associated therewith
(all of the foregoing, collectively, a “Third Party Claim”), and will reimburse the
Indemnified Parties for all costs and expenses (including reasonable attorneys’ fees and expenses)
on demand as they are incurred in connection with the investigation of, preparation for or defense
or prosecution of any pending or threatened Third Party Claim or any action or



64









 







proceeding arising therefrom; provided, however, that the Borrowers shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect to Third Party
Claims arising from (i) the gross negligence or willful misconduct of the Administrative Agent or
any such Lender, as determined by a court of competent jurisdiction in a final and non-appealable
judgment or (ii) any other loan facility involving the Administrative Agent or a Lender and a
Property or Project that does not involve or is not attributable to a Credit Party, a Credit
Party’s interest therein or actions with respect thereto, this Agreement or any other Credit
Document; provided, further, that (i) each Indemnified Party shall promptly notify
the Borrowers in writing upon becoming aware of the initiation of any Third Party Claim against
it, (ii) the Borrowers shall be entitled to participate in the defense of any such Third Party
Claim and, if the Borrowers so choose, to assume the defense, at the Borrowers’ expense, of any
such Third Party Claim with counsel selected by the Borrowers (it being understood that any
Indemnified Party shall have the right to participate in such defense and employ counsel separate
from the counsel employed by the Borrowers, and that such counsel shall be at the expense of such
Indemnified Party unless such Indemnified Party shall have been advised by counsel that there may
be legal defenses available to it that are inconsistent with or in addition to those available to
the Borrowers, in which case such counsel shall be at the Borrowers’ expense) and (iii) no
Indemnified Party shall settle any Third Party Claim without the Borrowers’ prior written consent
(such consent not to be unreasonably withheld). The agreements in this Section 10.6 shall survive
repayment of the Loans, Notes and all other amounts payable hereunder.



     Section 10.7 Successors and Assigns; Participations; Purchasing Lenders.



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



     (b) Any Lender may, in the ordinary course of its commercial banking business and in
accordance with applicable law, at any time sell to one or more banks or other entities
(“Participants”) participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender, or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of participating interests to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall remain unchanged,
such Lender shall remain solely responsible for the performance thereof, such Lender shall remain
the holder of any such Note for all purposes under this Agreement, and the Borrowers and the
Administrative Agent shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve any amendment to or waiver
of this Agreement or any other Credit Document except to the extent such amendment or waiver would
(i) extend the scheduled maturity of any Loan or Note or any installment thereon in which such
Participant is participating, or reduce the stated rate or extend the time of payment of interest
or fees thereon (except in connection with a waiver of interest at the increased post-default rate)
or reduce the principal amount thereof, or increase the amount of the Participant’s participation
over the amount thereof then in effect (it being understood that a waiver of any Default or Event
of Default shall not constitute a change in the terms of such



65









 







participation, and that an increase in any Commitment or Loan shall be permitted without consent
of any participant if the Participant’s participation is not increased as a result thereof), (ii)
release all or substantially all of the Guarantors from their obligations under the Guaranty,
(iii) release all or substantially all of the Collateral, or (iv) consent to the assignment or
transfer by the Borrowers or the Guarantors of any of their rights and obligations under this
Agreement. In the case of any such participation, the Participant shall not have any rights under
this Agreement or any of the other Credit Documents (the Participant’s rights against such Lender
in respect of such participation to be those set forth in the agreement executed by such Lender in
favor of the Participant relating thereto) and all amounts payable by the Borrowers hereunder
shall be determined as if such Lender had not sold such participation; provided, that no
Participant shall be entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no such transfer
occurred.



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



66









 




otherwise be in the form of the Notes replaced thereby. The Notes surrendered by the transferor
Lender shall be returned by the Administrative Agent to the Borrowers marked “canceled”.


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


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


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


     Section 10.8 Adjustments; Set-off.


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


67








 





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



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



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



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



     Section 10.12 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any



68









 







such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.



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



     Section 10.14 Consent to Jurisdiction.



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



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



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



69









 





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



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



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



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



70









 





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



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



     (d) the Administrative Agent and the Lenders acknowledge receipt of the information described
on Schedule 10.17 and agree that, notwithstanding anything to the contrary in this Agreement or the
other Credit Documents, the occurrence of the events as described therein shall not constitute a
Default or Event of Default hereunder; provided, that this acknowledgement and agreement by the
Administrative Agent and the Lenders is effective only to the extent specifically set forth herein
and it shall not: (i) be deemed or construed as a waiver or consent to any breach or default other
than as specifically described herein, nor as a waiver of any breach or default of which the
Administrative Agent and the Lenders have not been informed; (ii) be deemed as a consent to any
other or further action, undertaking, departure or variance other than as specifically consented to
hereby; (iii) affect the right of the Administrative Agent and the Lenders to demand compliance
with all terms and conditions of this Agreement in all other instances; or (iv) be deemed or
construed as a waiver of, amendment of, consent to or modification of any other term or provision
of this Agreement or of any transaction, departure or future action on the part of a Credit Party
that requires the consent, approval or waiver of the Administrative Agent or any Lender.



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



     Section 10.19 Joint and Several Liability. The Borrowers are engaged in related businesses and
integrated to such an extent that the financial strength and flexibility of each Borrower has a
direct, tangible and immediate impact on the success of the other Borrower. Each of the Borrowers
acknowledges and agrees that (i) it is a co-borrower hereunder and shall be jointly and severally,
with the other Borrower, directly and primarily liable for the payment and performance of the Note
and the Obligations, regardless of which Borrower actually receives Loans or the amount of such
Loans received, (ii) each of the Borrowers shall have the obligation of a co-maker and shall be a
primary obligor with respect to the Loans, the Note and the other Obligations, it being agreed that
the Loans to each Borrower inure to the benefit of both Borrowers, and (iii) the Administrative
Agent and each Lender are relying on such joint and several liability of the Borrowers in entering
into this Agreement and extending the Loans. Each Borrower hereby unconditionally and irrevocably
agrees that upon default in the payment when due of any principal, interest, fee or other amount
hereunder, it will forthwith pay the same, without notice of demand. The Administrative Agent and
the Lenders shall be entitled to rely upon any notice, request or communication received by it from
any one Borrower on behalf of



71









 







both Borrowers, and shall be entitled to treat its giving of any notice hereunder pursuant to Section
10.3 hereof as notice to each and all Borrowers.



ARTICLE II

GUARANTY




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



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



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



     Section 11.3 Continuing Guaranty. This guaranty is a continuing guaranty and shall: (i) remain
in full force and effect until the later of (x) the irrevocable payment in full of the Obligations
and all other amounts payable by the Guarantor, and (y) all the Commitments have
been terminated; (ii) be binding on each Guarantor, its successors and assigns; and (iii)
inure to the benefit of and be enforceable by the Administrative Agent, the Lenders and their
successors,



72









 







pledges, transferees and assigns. Without limiting the generality of the foregoing,
any Lender may pledge, assign or otherwise transfer all or any portion of its rights and
obligations under any Credit Document to any other Person, and such Person shall thereupon become
vested with all the benefits in respect thereof granted to such Person herein or otherwise.



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



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



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



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



     Section 11.8 Waiver.



     (a) Each of the Guarantors waives any right (except as shall be required by applicable statute
and cannot be waived) to require the Administrative Agent or any Lender to (i) proceed



73









 







against the Borrowers, any other guarantor or any other party, (ii) proceed against or exhaust any security
held from the Borrowers, any other guarantor or any other party, or (iii) pursue any other remedy
in the Administrative Agent’s or any Lender’s power whatsoever. Each of the Guarantors waives any
defense based on or arising out of any defense of any Borrower, any other guarantor or any other
party other than payment in full of the Obligations (other than contingent indemnity obligations),
including without limitation any defense based on or arising out of the disability of a Borrower,
any other guarantor or any other party, or the unenforceability of the Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of a Borrower other than
payment in full of the Obligations. The Administrative Agent may, at its election, foreclose on
any security held by the Administrative Agent by one or more judicial or nonjudicial sales (to the
extent such sale is permitted by applicable law), or exercise any other right or remedy the
Administrative Agent or any Lender may have against a Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations have been paid in full and the Commitments have been terminated. Each of
the Guarantors waives any defense arising out of any such election by the Administrative Agent or
any of the Lenders, even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors against any Borrower or any
other party or any security.



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



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



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



     (e) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation which
it may at any time otherwise have as a result of this Guaranty (whether contractual, under
applicable Bankruptcy Law, or otherwise) to the claims of the Administrative Agent or the



74









 







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



     Section 11.9 Confirmation of Payment. The Administrative Agent and the Lenders will, upon
request after payment of the Obligations which are the subject of this Guaranty and termination of
the Commitments relating thereto, confirm to the Borrowers, the Guarantors or any other Person that
such indebtedness and obligations have been paid and the Commitments relating thereto terminated,
subject to the provisions of Section 11.2.



     At such time as the Obligations which are the subject of this Guaranty have been irrevocably
paid in full and the Commitments have been terminated, this Guaranty and all obligations of the
Guarantors hereunder shall terminate and be of no further force and effect, all without delivery of
any Instrument or performance of any act by any Person.



(remainder of this page intentionally blank)




75









 





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



BORROWERS:




	 	 	 	 	 
	 	ROYAL GOLD, INC.

 	 
	 	By:  	/s/ Tony Jensen
 	 
	 	 	Name:  	Tony Jensen 	 
	 	 	Title:  	President and Chief Executive Officer 	 
	 



	 	 	 	 	 
	 	HIGH DESERT MINERAL RESOURCES, INC.

 	 
	 	By:  	/s/ Tony Jensen
 	 
	 	 	Name:  	Tony Jensen 	 
	 	 	Title:  	President 	 
	 



GUARANTOR:




	 	 	 	 	 
	 	RG MEXICO, INC.

 	 
	 	By:  	/s/ Bruce Kirchhoff
 	 
	 	 	Name:  	Bruce Kirchhoff 	 
	 	 	Title:  	Vice President and General Counsel 	 
	 



[signature pages continue]















 





ADMINISTRATIVE AGENT

AND LENDER:




	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION

as Administrative Agent and as a Lender

 	 
	 	By:  	/s/ William S. Edge, III
 	 
	 	 	Name:  	William S. Edge, III 	 
	 	 	Title:  	Managing Director 	 
	 



SOLE LEAD ARRANGER:




	 	 	 	 	 
	 	HSBC SECURITIES (USA) INC.

as Sole Lead Arranger

 	 
	 	By:  	/s/ William S. Edge, III
 	 
	 	 	Name:  	William S. Edge, III 	 
	 	 	Title:  	Managing Director 	 
	 



[signature pages continue]















 





LENDER:




	 	 	 	 	 
	 	SCOTIABANC INC.

as a Lender

 	 
	 	By:  	/s/ J.F. Todd
 	 
	 	 	Name:  	J.F. Todd 	 
	 	 	Title:  	Managing Director 	 
	 



[signature pages continue]