exv10w1






Exhibit 10.1




EXECUTION VERSION




$130,000,000




AMENDED AND RESTATED TERM LOAN FACILITY AGREEMENT



among



ROYAL GOLD, INC.,

as a Borrower



ROYAL GOLD CHILE LIMITADA,

as a Guarantor



RGLD GOLD CANADA, INC.,

as a Guarantor



HIGH DESERT MINERAL RESOURCES, INC.,

as a Guarantor



THE OTHER GUARANTORS

FROM TIME TO TIME PARTY HERETO,

as Guarantors,



HSBC BANK USA, NATIONAL ASSOCIATION,

as a Lender



THE BANK OF NOVA SCOTIA,

as a Lender



AND SUCH OTHER LENDERS

AS MAY BECOME A PARTY HERETO FROM TIME TO TIME,

as Lenders,



HSBC BANK USA, NATIONAL ASSOCIATION,

as Administrative Agent,



HSBC SECURITIES (USA) INC.,

as Sole Lead Arranger



and



THE BANK OF NOVA SCOTIA,



as Sole Syndication Agent



Dated as of March 26, 2010



 









 





TABLE OF CONTENTS


	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 
	Section 1.1
	 	Defined Terms	 	 	2	 
	Section 1.2
	 	Other Definitional Provisions; Time References	 	 	24	 
	Section 1.3
	 	Accounting Terms	 	 	24	 
	Section 1.4
	 	Québec Matters	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE II THE LOAN; AMOUNT AND TERMS	 	 	25	 
	 
	 	 	 	 	 	 
	Section 2.1
	 	Term Loan	 	 	25	 
	Section 2.2
	 	Evidence of Indebtedness	 	 	26	 
	Section 2.3
	 	Repayment and Prepayment	 	 	27	 
	Section 2.4
	 	Fees	 	 	28	 
	Section 2.5
	 	Computation of Interest and Fees	 	 	28	 
	Section 2.6
	 	Pro Rata Treatment and Payments	 	 	29	 
	Section 2.7
	 	Non-Receipt of Funds by the Administrative Agent	 	 	31	 
	Section 2.8
	 	Inability to Determine Interest Rate; Base Rate Loan	 	 	31	 
	Section 2.9
	 	Illegality	 	 	31	 
	Section 2.10
	 	Requirements of Law	 	 	32	 
	Section 2.11
	 	Indemnity	 	 	33	 
	Section 2.12
	 	Taxes	 	 	34	 
	Section 2.13
	 	Judgment Currency Conversion.	 	 	35	 
	Section 2.14
	 	Amendment and Restatement	 	 	36	 
	 
	 	 	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES	 	 	36	 
	 
	 	 	 	 	 	 
	Section 3.1
	 	Corporate Existence; Compliance with Law	 	 	37	 
	Section 3.2
	 	Corporate Power; Authorization; Enforceable Obligations	 	 	37	 
	Section 3.3
	 	Financial Condition; No Material Adverse Effect	 	 	37	 
	Section 3.4
	 	Compliance with Laws; No Conflict; No Default	 	 	38	 
	Section 3.5
	 	No Material Litigation	 	 	39	 
	Section 3.6
	 	Employee Benefit Plans and Canadian Pension Plans	 	 	39	 
	Section 3.7
	 	Environmental Matters	 	 	40	 
	Section 3.8
	 	Purpose of Loan	 	 	40	 
	Section 3.9
	 	Subsidiaries	 	 	40	 
	Section 3.10
	 	Ownership; Insurance	 	 	40	 
	Section 3.11
	 	Title to Royalty Interests; Liens	 	 	41	 
	Section 3.12
	 	Royalty Agreements	 	 	41	 
	Section 3.13
	 	Indebtedness	 	 	41	 
	Section 3.14
	 	Taxes	 	 	41	 
	Section 3.15
	 	No Burdensome Restrictions	 	 	42	 
	Section 3.16
	 	Limitations on Incurrence of Indebtedness	 	 	42	 






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TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 3.17
	 	Accuracy and Completeness of Information	 	 	42	 
	Section 3.18
	 	Events of Default	 	 	42	 
	Section 3.19
	 	Material Contracts	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE IV COLLATERAL SECURITY	 	 	43	 
	 
	 	 	 	 	 	 
	Section 4.1
	 	Security Documents	 	 	43	 
	Section 4.2
	 	No Limitation on Application of Security Interest	 	 	43	 
	Section 4.3
	 	Maintenance of Security Over Material Royalties	 	 	43	 
	Section 4.4
	 	Perfection and Maintenance of Liens	 	 	43	 
	Section 4.5
	 	Release of RGLD Canada Security Documents	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE V CONDITIONS PRECEDENT	 	 	44	 
	 
	 	 	 	 	 	 
	Section 5.1
	 	Conditions to Funding the Supplemental Loan	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE VI AFFIRMATIVE COVENANTS	 	 	46	 
	 
	 	 	 	 	 	 
	Section 6.1
	 	Financial Statements and Information	 	 	46	 
	Section 6.2
	 	Notices	 	 	47	 
	Section 6.3
	 	Payment of Taxes and Other Obligations	 	 	49	 
	Section 6.4
	 	Payment of Indebtedness	 	 	49	 
	Section 6.5
	 	Conduct of Business and Maintenance of Existence	 	 	50	 
	Section 6.6
	 	Maintenance of Royalty Interests and Defend Title	 	 	50	 
	Section 6.7
	 	Maintenance of Liens	 	 	50	 
	Section 6.8
	 	Maintenance and Perfection of Pledged Assets	 	 	50	 
	Section 6.9
	 	Insurance	 	 	50	 
	Section 6.10
	 	Inspection of Property; Books and Records; Discussions	 	 	50	 
	Section 6.11
	 	Compliance with Law	 	 	51	 
	Section 6.12
	 	Environmental Laws	 	 	51	 
	Section 6.13
	 	Compliance with Employment Laws	 	 	52	 
	Section 6.14
	 	Further Assurances	 	 	52	 
	Section 6.15
	 	Financial Covenants	 	 	52	 
	Section 6.16
	 	Chilean Security Documents	 	 	52	 
	Section 6.17
	 	Repayment of Debentures and Release of Associated Liens	 	 	53	 
	 
	 	 	 	 	 	 
	ARTICLE VII NEGATIVE COVENANTS	 	 	53	 
	 
	 	 	 	 	 	 
	Section 7.1
	 	Indebtedness	 	 	53	 
	Section 7.2
	 	Liens	 	 	54	 
	Section 7.3
	 	Guaranty Obligations	 	 	55	 
	Section 7.4
	 	Nature of Business	 	 	55	 
	Section 7.5
	 	Dissolution or Sale of Assets	 	 	55	 
	Section 7.6
	 	Mergers	 	 	56	 






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TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 7.7
	 	Advances and Loan	 	 	56	 
	Section 7.8
	 	Transactions with Affiliates	 	 	57	 
	Section 7.9
	 	Organizational Documents	 	 	57	 
	Section 7.10
	 	Modification of Material Agreements	 	 	57	 
	Section 7.11
	 	Limitation on Restricted Actions	 	 	57	 
	Section 7.12
	 	Maintenance of Material Royalties	 	 	58	 
	Section 7.13
	 	Canadian Pension Plans	 	 	58	 
	Section 7.14
	 	No Further Negative Pledges	 	 	59	 
	Section 7.15
	 	No Prepayment of Permitted Subordinated Indebtedness	 	 	59	 
	Section 7.16
	 	Restrictive and Inconsistent Agreements	 	 	59	 
	 
	 	 	 	 	 	 
	ARTICLE VIII EVENTS OF DEFAULT	 	 	59	 
	 
	 	 	 	 	 	 
	Section 8.1
	 	Events of Default	 	 	59	 
	Section 8.2
	 	Acceleration; Remedies	 	 	62	 
	 
	 	 	 	 	 	 
	ARTICLE IX THE AGENT	 	 	62	 
	 
	 	 	 	 	 	 
	Section 9.1
	 	Appointment	 	 	62	 
	Section 9.2
	 	Delegation of Duties	 	 	63	 
	Section 9.3
	 	Exculpatory Provisions	 	 	63	 
	Section 9.4
	 	Reliance by Administrative Agent	 	 	63	 
	Section 9.5
	 	Notice of Default	 	 	64	 
	Section 9.6
	 	Non-Reliance on Administrative Agent and Other Lenders	 	 	64	 
	Section 9.7
	 	Indemnification	 	 	64	 
	Section 9.8
	 	Administrative Agent in Its Individual Capacity	 	 	65	 
	Section 9.9
	 	Successor Administrative Agent	 	 	65	 
	Section 9.10
	 	Nature of Duties	 	 	65	 
	Section 9.11
	 	Quebec Security	 	 	66	 
	 
	 	 	 	 	 	 
	ARTICLE X MISCELLANEOUS	 	 	66	 
	 
	 	 	 	 	 	 
	Section 10.1
	 	Amendments, Waivers and Release of Collateral	 	 	66	 
	Section 10.2
	 	Substitution of Lenders	 	 	68	 
	Section 10.3
	 	Notices	 	 	68	 
	Section 10.4
	 	No Waiver; Cumulative Remedies	 	 	69	 
	Section 10.5
	 	Survival of Representations and Warranties	 	 	70	 
	Section 10.6
	 	Payment of Expenses and Taxes; Indemnification	 	 	70	 
	Section 10.7
	 	Successors and Assigns; Participations; Purchasing Lenders	 	 	71	 
	Section 10.8
	 	Adjustments; Set-off	 	 	73	 
	Section 10.9
	 	Table of Contents and Section Headings	 	 	74	 
	Section 10.10
	 	Counterparts	 	 	74	 
	Section 10.11
	 	Effectiveness	 	 	74	 






iii









 




TABLE OF CONTENTS



	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	Section 10.12
	 	Severability	 	 	74	 
	Section 10.13
	 	Integration	 	 	74	 
	Section 10.14
	 	Consent to Jurisdiction	 	 	75	 
	Section 10.15
	 	Governing Law	 	 	75	 
	Section 10.16
	 	Confidentiality	 	 	76	 
	Section 10.17
	 	Acknowledgments	 	 	76	 
	Section 10.18
	 	USA Patriot Act	 	 	77	 
	Section 10.19
	 	Joint and Several Liability	 	 	77	 
	Section 10.20
	 	Proceeds of Crime	 	 	77	 
	 
	 	 	 	 	 	 
	ARTICLE XI GUARANTY	 	 	78	 
	 
	 	 	 	 	 	 
	Section 11.1
	 	The Guaranty	 	 	78	 
	Section 11.2
	 	Bankruptcy	 	 	78	 
	Section 11.3
	 	Continuing Guaranty	 	 	79	 
	Section 11.4
	 	Nature of Liability	 	 	79	 
	Section 11.5
	 	Independent Obligation	 	 	79	 
	Section 11.6
	 	Authorization	 	 	79	 
	Section 11.7
	 	Reliance	 	 	80	 
	Section 11.8
	 	Stay of Acceleration	 	 	80	 
	Section 11.9
	 	Waiver	 	 	80	 
	Section 11.10
	 	Confirmation of Payment	 	 	81	 







iv











 





SCHEDULES




	 	 	 
	Schedule 1.1(a)

	 	Material Royalties
	Schedule 1.1(b)

	 	Lenders’ Administrative Details Schedule
	Schedule 1.1(c)

	 	Royalty Interests (Non-Material Royalties)
	Schedule 1.1(d)

	 	Liens
	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 6.9

	 	Insurance
	Schedule 7.1

	 	Existing Indebtedness
	Schedule 7.5

	 	Permitted Dispositions
	Schedule 7.7

	 	Debt Investments






EXHIBITS




	 	 	 
	Exhibit A

	 	Form of Assignment Agreement
	Exhibit B

	 	Form of Joinder Agreement
	Exhibit C

	 	Form of Promissory Note
	Exhibit D

	 	Form of Notice of Borrowing
	Exhibit E

	 	Form of Pledge Agreement
	Exhibit F

	 	Form of Security Agreement
	Exhibit G

	 	Form of Secretary’s Certificate
	Exhibit H

	 	Form of Officer’s Certificate
	Exhibit I

	 	Form of Quarterly Compliance Certificate






V









 






AMENDED AND RESTATED TERM LOAN FACILITY AGREEMENT




     This AMENDED AND RESTATED TERM LOAN FACILITY AGREEMENT (together with all amendments,
restatements, amendments and restatements, modifications, revisions, increases, supplements,
extensions, continuations, replacements or refinancings from time to time in accordance with the
terms hereof, the “Agreement”) dated as of March 26, 2010 (the “Execution Date”),
is by and among ROYAL GOLD, INC., a corporation organized and existing under the laws of the State
of Delaware, as a borrower (“Royal Gold” or “Borrower”), ROYAL GOLD CHILE LIMITADA,
a limited liability partnership organized and existing under the laws of Chile, as a guarantor
(“RG Chile”), RGLD GOLD CANADA, INC., a corporation organized and existing under the laws
of the Province of British Columbia, as a guarantor (“RGLD Canada”), HIGH DESERT MINERAL
RESOURCES, INC., a corporation organized and existing under the laws of the State of Delaware, as a
guarantor (“High Desert”), those additional guarantors from time to time party hereto, as
guarantors (the “Additional Guarantors”) (with each of RG Chile, RGLD Canada, High Desert,
and the Additional Guarantors individually referred to herein as a “Guarantor” and
collectively referred to herein as the “Guarantors”), HSBC BANK USA, NATIONAL ASSOCIATION,
a national banking association organized under the laws of the United States (“HSBC Bank”),
as a lender, THE BANK OF NOVA SCOTIA, a bank organized and existing under the laws of Canada
(“Scotia”), as a lender, and those banks and financial institutions identified as a
“Lender” on the signature pages hereto and such other banks or financial institutions as may from
time to time become parties to this Agreement, as lenders (the “Additional Lenders”) (with
each of HSBC Bank, Scotia and the Additional Lenders individually referred to herein as a
“Lender” and collectively the “Lenders”), HSBC Bank, as administrative agent for
the Lenders hereunder (in such capacity, the “Administrative Agent”), HSBC SECURITIES (USA)
Inc., a corporation organized under the laws of the United States (“HSBC Securities”), as
the sole lead arranger (in such capacity, the “Sole Lead Arranger”).



Recitals




     A. The Borrower, the Guarantors, the Lenders, the Administrative Agent and the Sole Lead
Arranger entered into that certain Term Loan Facility Agreement dated as of January 20, 2010 (the
“Existing Credit Agreement”) whereby the Lenders made available to the Borrower a term loan
in the amount of One Hundred Million Dollars ($100,000,000) (the “Existing Committed
Amount”), the proceeds of which were used by the Borrower to fund the acquisition of all of the
issued and outstanding common shares of International Royalty Corporation, a corporation organized
and existing under the laws of Canada (“IRC”) pursuant to the terms and conditions set
forth in that certain Arrangement Agreement, including the Plan of Arrangement (the “Plan of
Arrangement”) dated December 17, 2009 by and between Royal Gold and IRC (the
“Arrangement”).



     B. On February 17, 2010 (the “Initial Funding Date”), the Borrower borrowed one
hundred percent (100%) of the Existing Committed Amount to fund the Arrangement (the “Initial
Loan”) and used such proceeds to consummate the Arrangement on February 22, 2010.



 









 





     C. The Borrower and the Lenders now desire to (i) extend the maturity date of the Existing
Credit Agreement, (ii) increase the Committed Amount to One Hundred Thirty Million Dollars
($130,000,000), and (iii) to otherwise amend, restate, modify and continue the Existing Credit
Agreement as provided in this Agreement.



     D. This Agreement and the Obligations are secured by certain real and personal property and
assets owned by the Credit Parties, including royalties and equity interests, all as further
described herein and in the Security Documents. Each of the Guarantors shall unconditionally and
irrevocably guaranty the payment and performance of all obligations hereunder and under the other
Credit Documents.



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



Agreement




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



ARTICLE I

DEFINITIONS




     Section 1.1 Defined Terms.



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



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



     “Additional Lenders” shall have the meaning set forth in the preamble to this
Agreement and includes any successors in such capacity.



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



     “Advance” means the advance by a Lender to the Borrower of a Loan in an amount equal
to the amount of its Commitment Percentage of the Committed Amount.



     “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



2









 





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 “the Administrative Agent” 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 Amended and Restated Credit
Agreement, as amended, restated, amended and restated, modified, revised, increased, supplemented,
extended, continued, replaced from time to time in accordance with its terms together with all
Schedules and Exhibits hereto.



     “AML Legislation” has the meaning set out in Section 10.20.



     “Andacollo Royalty” shall mean that certain Royalty identified as the Andacollo
Royalty on Schedule 1.1(a) and as described in detail therein.



     “Applicable Percentage” equals:



	 	 	 	 	 
	Period	 	Applicable Percentage
	Initial Funding Date — August 16, 2011

	 	 	2.25	%
	August 17, 2011 — February 16, 2012

	 	 	2.75	%
	February 17, 2012 — August 16, 2012

	 	 	3.25	%
	August 17, 2012 — February 17, 2013

	 	 	3.75	%






     “Applicable Rate” shall mean an interest rate per annum equal to the sum of the LIBOR
Rate plus the Applicable Percentage.



     “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
a Loan at the LIBOR Rate or any other category of deposits or liabilities by reference to which the
LIBOR Rate is determined. The Applicable Reserve Percentage shall be adjusted automatically on and
as of the effective date of any change in any reserve percentage.



     “Approved Bank” shall mean (a) any commercial bank of recognized standing having
capital and surplus in excess of Two Hundred Fifty Million Dollars ($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.



3









 





     “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.



     “Arrangement” shall have the meaning set forth in the Recitals to this Agreement.



     “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 Canadian Insolvency Legislation,
the Chilean Bankruptcy Legislation and all other Requirements of Law pertaining or applicable to
bankruptcy, insolvency, debtor relief, debtor protection, liquidation, reorganization, arrangement,
receivership, moratorium, assignment for the benefit of creditors or other similar laws applicable
in the United States, Chile, Canada or other applicable jurisdictions as in effect from time to
time.



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



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



4









 





     “Borrower” shall have the meaning set forth in the preamble to this Agreement.



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



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



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



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



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



     “Canadian Pledge Agreement” shall mean that certain Pledge, Security and Subordination
Agreement dated as of January 20, 2010 made by the Borrower in favor of the Administrative Agent,
together with all amendments, restatements, amendments and restatements, modifications, revisions,
increases, supplements, extensions, continuations, replacements or refinancings from time to time
in accordance with the terms thereof.



     “Canadian Pledge Amendment” shall mean that certain amendment to the Canadian Pledge
Agreement dated as of the Execution Date.



     “Canadian Security Agreement” shall mean that certain General Security Agreement made
as of January 20, 2010 by RGLD Canada in favor of the Administrative Agent, together with all
amendments, restatements, amendments and restatements, modifications, revisions, increases,
supplements, extensions, continuations, replacements or refinancings from time to time in
accordance with the terms thereof.



     “Canadian Security Amendment” shall mean that certain amendment to the Canadian
Security Agreement dated as of the Execution Date.



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



5









 





     “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 an association or business entity, any and all shares, interests, participations,
rights or other equivalents (however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv) in the case of a limited
liability company, membership interests or social interests and (v) 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 (12) 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 three hundred sixty four (364) days
from the date of acquisition, (iii) commercial paper and variable or fixed rate notes issued by any
Approved Bank (or by the parent company thereof), or any variable rate notes issued by, or
guaranteed by any domestic corporation rated by two out of three of the following ratings agencies
as A-1 (or the equivalent thereof) or better by S&P, or P-1 (or the equivalent thereof) or better
by Moody’s, or R-1 (or the equivalent thereof) or better by Dominion Bond Rating Service Limited,
and maturing within six (6) 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 Five Hundred Million Dollars ($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 (2) out of three (3) of the
following ratings agencies in the highest short-term credit rating category by S&P, Moody’s or
Dominion Bond Rating Service Limited and (vii) shares of money market mutual or similar funds that
(A) invest exclusively in assets satisfying the requirements of clauses (i) through (vi) of this
definition or (B) comply with Rule 2a-7 of the Investment Company Act of 1940.



     “Change of Control” shall mean the occurrence of any of the following events: (a) any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act becomes the “beneficial owner” (as defined in Rule l3d-3 under the Securities Exchange Act) of
more than twenty five percent (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



6









 





directly or indirectly own and control the Capital Stock that each of them has pledged to the
Administrative Agent pursuant to a Pledge Agreement.




     “Chilean Bankruptcy Legislation” shall mean Chapter IV of the Chilean Commercial Code
(Article 1 through Article 263) and Law N° 18.175 of Superintendency of Bankruptcy
(“Superintendencia de Quiebras”), as amended from time to time, and all other Requirements of Law
pertaining or applicable to bankruptcy, insolvency, debtor relief, debtor protection, winding up,
liquidation, reorganization, arrangement, receivership, moratorium, relief of debts, assignment for
the benefit of creditors or other similar laws applicable in Chile or any other applicable
jurisdictions as in effect from time to time.



     “Chilean Security Documents” shall mean each Pledge Agreement delivered to the
Administrative Agent in respect of the ownership interests in RG Chile, each Security Agreement
delivered to the Administrative Agent by RG Chile with respect to the Pascua-Lama, El Toqui, and
Andacollo Royalties and any other property subject thereto; the fianza y codeuda solidaria
agreement to be executed in Chile by public deed in order to declare the joint and several
liability of RG Chile in accordance with Section 10.19, and each other Security Document
associated with the foregoing.



     “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 Material Royalties.



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



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



     “Commitment” shall mean, with respect to each Lender, the commitment of such Lender to
make a portion of the Loan 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 Date” shall mean December 16, 2009.



     “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).



     “Committed Amount” shall mean the principal amount of the Loan to be made by the
Lenders hereunder, subject to the terms and conditions herein, at any time, with such Committed
Amount at the Execution Date being equal to One Hundred Thirty Million Dollars ($130,000,000).



7









 





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



     “Consolidated Interest Expense” shall mean, for any period, the interest expense
(including imputed interest expense in respect of Capital Lease Obligations) of Royal Gold and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.



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



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



     “Consolidated Total Indebtedness” shall mean, without duplication, in relation to
Royal Gold and its Subsidiaries, (A) the sum of (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes or similar instruments, (c) all obligations under
conditional sale or other title retention agreements relating to property acquired and under all
purchase money obligations, (d) all obligations in respect of the deferred purchase price of
property or services, (e) all other obligations secured by any lien on property owned or acquired,
whether or not the obligations secured thereby have been assumed limited to the fair market value
of the property secured thereby, (f) all guarantees of the obligations of others, (g) all Capital
Lease Obligations, (h) all obligations, contingent or otherwise, as an account party (including
reimbursement obligations to the issuer) in respect of letters of credit and letters of guarantee
which support or secure obligations of others, (i) the aggregate of all negative mark to
market amounts in respect of hedge obligations (netted against the aggregate of all positive
mark to market amounts in respect of hedge obligations), (k) all obligations in respect of prepaid
production arrangements, prepaid forward sale arrangements or derivative contracts in respect of



8









 





which Royal Gold and its Subsidiaries receive upfront payments in consideration of an obligation to
deliver product or commodities (or make cash payments based on the value of product or commodities)
at a future time, and (l) all obligations, contingent or otherwise, in respect of bankers’
acceptances; provided, that, for all purposes herein, Consolidated Total
Indebtedness, with respect to Royal Gold and its Subsidiaries, shall mean all Consolidated Total
Indebtedness of Royal Gold and its Subsidiaries on a Consolidated basis; provided,
further, that Consolidated Total Indebtedness shall not include Indebtedness among the
Credit Parties to the extent such Indebtedness would be eliminated on a Consolidated basis.




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



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



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



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



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



     “Debentures” means the “Debentures” as defined in the Indenture.



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



     “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 Applicable Rate
plus two and one-half percent (2.5%) per annum.



9









 





     “Defaulting Lender” shall mean, at any time, any Lender that, at such time (a) has
failed to make its Advance required pursuant to the terms of this Agreement or any Assignment
Agreement in accordance with the terms thereof, (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 Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing, Eligible Assignee
shall not include any Credit Party or any Affiliate or Subsidiary thereof.



     “Employee Benefit Plan” shall mean any pension plan or other similar employee benefit
plan regulated by or within the meaning of ERISA, Decree Law 3.500 of the Republic of Chile and any
other similar legislation pursuant to which any Credit Party establishes a pension for or otherwise
makes contributions in respect of its employees, but does not include a Canadian Pension Plan.



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



     “ERISA” shall mean 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” shall mean 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.



     “Execution Date” has the meaning set forth in the preamble to this Agreement.



     “Existing Credit Agreement” shall have the meaning set forth in the Recitals to this
Agreement.



     “Existing Credit Documents” shall mean the Existing Credit Agreement, the Original
Note, the Existing Security Documents, the Intercreditor Agreement, the Fee Letter and all other



10









 





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




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



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



     “Fee Letter” shall mean the letter from HSBC Securities dated December 16, 2009, and
any other agreements among the parties pertaining to the payment of fees to the Administrative
Agent 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.



     “Funding Date” shall mean the date the conditions to funding set forth in Section
5.1 have been satisfied and the Lenders advance the remaining proceeds of the Loan to the
Borrower.



11









 





     “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 6.15.



     “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 RG Chile, RGLD Canada until such time as RGLD Canada is
released from its obligations under the Credit Documents in accordance with the requirements of
this Agreement, High Desert, 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



12









 





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




     “High Desert” shall have the meaning given thereto in the Preamble.



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



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



     “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 (6) months of the incurrence thereof) which would
appear as liabilities on a balance sheet of such Person, (e) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements, (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations secured thereby have been
assumed, (g) all Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all Capital Lease Obligations of such Person, (i) all net
payment obligations of such Person under Hedging Agreements, (j) the maximum amount of all letters
of credit issued or bankers’ acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed), (k) all preferred
Capital Stock issued by such Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (l) the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing product and (m) the
Indebtedness of any partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer; provided however that Indebtedness shall not include Indebtedness
among the Credit Parties to the extent such Indebtedness would be eliminated on a Consolidated
basis.



     “Indenture” shall mean the Trust Indenture made as of February 22, 2005 among IRC,
Archean Resources Ltd., a corporation incorporated under the laws of Newfoundland and Labrador, and
CIBC Mellon Trust Company, a trust company existing under the laws of Canada.



13









 





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



     “Initial Funding Date” shall have the meaning set forth in the Recitals to this
Agreement.



     “Initial Loan” shall have the meaning set forth in the Recitals to this Agreement.



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



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



     “Intercreditor Agreement” shall mean that certain Intercreditor Agreement dated as of
January 20, 2010 among the Borrower, the Guarantors and the Lenders, and the “Borrowers” and the
“Lenders” each as defined in the Revolving Credit Agreement.



     “Interest Coverage Ratio” shall mean, on any date, the ratio of (a) Consolidated
EBITDA to (b) Consolidated Interest Expense, in each case, for the four (4) most recently completed
fiscal quarters most recently ended on or prior to such date.



     “Interest Payment Date” shall mean (a) with respect to an Interest Period of three (3)
months or less, the last day of such Interest Period, or (b) with respect to an Interest Period
longer than three (3) months, the day that is three (3) months after the first day of such Interest
Period and the last day of such Interest Period.



     “Interest Period” shall mean, with respect to the Loan on and after the Funding Date,




     (i) the period commencing on the Funding Date and ending one (1), two (2), three (3) or
six (6) months thereafter, as selected by the Borrower in the Notice of Borrowing;




     (ii) thereafter each period commencing on the last day of the immediately preceding
Interest Period and ending one (1), two (2) or three (3) months thereafter, or of a longer
period of days if available and agreed to by the Lenders, as selected by the Borrower by
irrevocable notice to the Administrative Agent not less than three (3) Business Days prior
to the last day of the then current Interest Period with respect thereto;



14









 






     provided that the foregoing provisions are subject to the following:




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




     (C) if the Borrower shall fail to give notice as provided above, the Borrower
shall be deemed to have selected an Interest Period of one (1) month; and




     (D) no Interest Period shall extend beyond the Maturity Date.



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



     “IRC” shall have the meaning set forth in the Recitals to this Agreement.



     “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 preamble to 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” shall mean, on any date, the ratio of (a) Consolidated Total
Indebtedness as of such date to (b) Consolidated EBITDA for the period of four (4) consecutive
fiscal quarters most recently ended on or prior to such date.



     “LIBOR” shall mean, for a 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 (2) 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 a 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



15









 





approximately 11:00 A.M. (London time) two (2) 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 a Loan then
requested are being offered to leading banks at approximately 11:00 A.M. London time, two (2)
Business Days prior to the commencement of the applicable Interest Period for settlement in
immediately available funds by leading banks in the London interbank market for a period equal to
the Interest Period selected.




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



     “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).



     “Lien Release Date” shall mean the day that is thirty (30) days from the Funding Date.



     “LIBOR Rate Loan” shall mean a Loan bearing interest at a rate per annum equal to the
Applicable Rate.



     “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 Note or any other Credit Document when such payments and obligations are
required to be performed, (c) any Material Royalty, or (d) the validity or enforceability of this
Agreement, the Note or any of the other Credit Documents or the rights or



16









 





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 Material Royalty.



     “Material Royalties” shall mean each of (i) the following Royalties owned, or to be
owned, by RG Chile: Pascua-Lama, El Toqui, and Andacollo; and (ii) the following Royalties owned by
RGLD Canada: Holt McDermott and Malartic, until such time as the Holt McDermott and Malartic
Royalties no longer constitute Collateral, as described in Section 4.5; each of such
Material Royalties is further described on Schedule 1.1(a) hereto.



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



     “Maturity Date” shall mean the first to occur of (a) February 17, 2013 or (b) any date
on which the due date of the Loan is accelerated by reason of an Event of Default pursuant to
Section 8.2.



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



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



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



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



     “Note” shall mean each amended and restated promissory note made by the Borrower
evidencing the Loan provided pursuant hereto, substantially in the form of Exhibit C, as
any such promissory note may be amended, restated, amended and restated, modified, revised,
increased, supplemented, extended, continued or replaced from time to time.



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



     “Obligations” shall mean all of the obligations, indebtedness, liabilities, duties,
covenants and agreements of the Borrower and the other Credit Parties to each Lender and the
Administrative Agent, whenever arising and whether joint, several, or joint and several,
established by or arising under or in connection with this Agreement, each Note, any of the other
Credit Documents, any Hedging Agreement with a Lender (or an Affiliate of a Lender), or any



17









 





account (including cash management accounts) or other cash management services provided by a
Lender (or an Affiliate of a Lender), including, in each case, the payment of principal, interest,
fees, expenses, reimbursements and indemnification obligations and all other amounts and the
performance of all other obligations.




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



     “Original Note” means that certain Promissory Note dated January 20, 2010 made by the
Borrower in favor of the Administrative Agent in the principal amount of the Existing Committed
Amount.



     “Ounce” shall mean a fine ounce troy weight.



     “Outside Redemption Date” means the date that is ten (10) days after the Funding Date.



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



     “Patriot Act” shall have the meaning set forth in Section 10.18.



     “Permitted Bylaw Amendments” shall mean the amendments to the bylaws of RG Chile as
requested by the Administrative Agent in connection with the Chilean Security Documents.



     “Permitted Liens” shall mean:




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




     (ii) prior to the Lien Release Date, Liens existing as of the Execution Date to secure
the Indenture, as such Liens are described on Schedule 1.1(d); provided that
no such Lien shall at any time be extended to cover property or assets other than the
property or assets subject thereto on the Execution Date;




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




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




     (v) 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 twenty (20) days or which are being diligently



18









 






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;




     (vi) 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;




     (vii) 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;




     (viii) 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;




     (ix) Liens existing on the Execution Date and set forth on Schedule 1.1(d);
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 Execution Date and (b) the
principal amount of the Indebtedness secured by such Liens shall not be increased, extended,
renewed, refunded or refinanced;




     (x) Liens pursuant to the Revolving Credit Agreement made in favor of HSBC Bank or any
other “Lender” thereto;




     (xi) 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;




     (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(g);




     (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; provided that such Liens do not secure
Indebtedness.



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



19









 





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



     “Plan of Arrangement” shall have the meaning set forth in the Recitals to this
Agreement.



     “Pledge Agreements” shall mean (i) the Canadian Pledge Agreement, (ii) the Canadian
Pledge Amendment, (iii) each other pledge agreement given by a Credit Party for the benefit of the
Administrative Agent, substantially in the form of Exhibit E hereto, and (iv) any other
pledge agreement, document, agreement, arrangement or Instrument executed by a Credit Party to
secure the Obligations, in each case, together with all amendments, restatements, amendments and
restatements, modifications, revisions, supplements, extensions, continuations, and replacements
thereof in accordance with its terms.



     “Principal Repayment Date” shall have the meaning set forth in Section 2.3(a).



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



     “Project Managers” shall mean 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(c) hereto.



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



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



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



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



20









 





     “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 the outstanding Loan; 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 the outstanding Loan; 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 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 (including
securities laws and regulations and the rules of any securities exchange), 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.



     “Revolving Credit Agreement” shall mean the Third Amended and Restated Credit
Agreement dated as of October 30, 2008, by and among Royal Gold, as a borrower, 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, those subsidiaries of a borrower identified
as a “Guarantor” on the signature pages thereto and such other subsidiaries of a borrower
as may from time to time become a party thereto, as guarantors, those banks and financial
institutions identified as a “Lender” on the signature pages thereto and such other banks or
financial institutions as may from time to time become parties thereto, as lenders, HSBC Bank, as
administrative agent for the lenders thereunder, HSBC Securities, as the sole lead arranger and The
Bank of Nova Scotia, as the sole syndication agent, together with all amendments, restatements,
amendments and restatements, modifications, revisions, increases, supplements, extensions,
continuations, replacements or refinancings from time to time in accordance with its terms.



     “Revolving Amendment” shall mean the Consent and First Amendment to the Third Amended
and Restated Credit Agreement amending the Revolving Credit Agreement and granting certain waivers
as further described therein.



     “RG Barbados Subordinated Loan” shall mean the loan from RG Finance (Barbados) to RG
Chile, in the principal amount of $275,000,000, which has been subordinated to the Obligations
pursuant to the Subordination Agreement.



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



     “RGLD Canada” shall mean RGLD Gold Canada, Inc., a corporation organized and existing
under the laws of British Columbia, Canada.



21









 





     “RGLD Canada Intercompany Loan” shall mean the loan from Royal Gold to RGLD Canada, in
the principal amount of $57,000,000.



     “RGLD Canada Security Documents” shall mean the Canadian Security Agreement and the
Canadian Pledge Agreement, and each other Security Document associated with the foregoing, in each
case until any of the foregoing has been terminated as contemplated in Section 4.5.



     “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.



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



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



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



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



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



     “Security Agreements” shall mean (i) the Canadian Security Agreement, (ii) the
Canadian Security Amendment; (iii) each other security agreement (or other equivalent Instrument,
howsoever designated) given by a Credit Party for the benefit of the Administrative Agent,
substantially in the form of Exhibit F hereto, covering and extending to all assets of such
Credit Party, and (iv) each other Instrument whereby a Credit Party subordinates its rights to
receive payment of any amounts from any other Credit Party to the complete payment in full of the
Obligations, and any other security agreement or other Instrument by which the Administrative Agent
obtains a Lien in or on any personal property or assets of a Credit Party to



22









 





secure the Obligations, together with all amendments, restatements, modifications,
supplements, extensions and restatements thereof in accordance with its terms.




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



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



     “Subordination Agreement” the Subordination Agreement dated January 20, 2010 among RG
Chile, RG Finance (Barbados), and the Administrative Agent regarding the subordination of the
indebtedness arising or existing under the RG Barbados Subordinated Loan to the Obligations, on
terms and conditions satisfactory to the Administrative Agent.



     “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 Execution 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.



     “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.



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



     “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



23









 





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 Note 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 Borrower delivered
to the Administrative Agent; provided that, if the Borrower shall notify the Administrative Agent
that they wish to amend any covenant in Section 6.15 (or the definitions used therein) to
eliminate the effect of any change in GAAP on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to amend Section
6.15 or any definition used therein for such purpose), then compliance with such covenant shall
be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to the Borrower and the Required Lenders.



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



     Section 1.4 Québec Matters.For purposes of any assets, liabilities or entities located in the Province of Québec and for
all other purposes pursuant to which the interpretation or construction of this Agreement may be
subject to the laws of the Province of Québec or a court or tribunal exercising jurisdiction in the
Province of Québec, (a) “personal property” shall



24









 





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




ARTICLE II

THE LOAN; AMOUNT AND TERMS




     Section 2.1 Term Loan.



     (a) Loan. Each Lender severally agrees, on the terms and conditions set forth in this
Agreement, to loan to the Borrower funds in an aggregate amount equal to One Hundred Thirty Million
Dollars ($130,000,000) or such lesser amount as shall have been actually advanced on and as of the
Funding Date (the “Loan”) and, individually, in an amount equal to such Lender’s
Commitment Percentage of the Committed Amount.



     (b) Notice of Borrowing. The Borrower shall request the Loan 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 (3rd) Business Day prior to the Funding Date. The Notice of
Borrowing shall be irrevocable and shall specify (A) that the additional proceeds of the Loan are
requested, (B) the Funding Date, and (C) the Interest Period. If the Borrower shall fail to
specify an Interest Period in the Notice of Borrowing, then such notice shall be deemed to be
a request for an Interest Period of one (1) 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.



25









 





     (c) Advance. Each Lender agrees to make an Advance to the Borrower in the amount
equal to such Lender’s Commitment Percentage of the Committed Amount to be advanced on the Funding
Date as specified in the Notice of Borrowing. Principal payments made after the Funding Date may
not be reborrowed.



     (d) Funding. Each Lender will make an amount equal to such Lender’s Commitment
Percentage of the Committed Amount available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in the Lenders’ Administrative Details
Schedule, or at such other office as the Administrative Agent may designate in writing, by 1:00
p.m. on the Funding Date in Dollars and in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such office with the Committed Amount and in
like funds as received by the Administrative Agent.



     (e) Interest.




     (i) Applicable Rate. Except as set forth in Section 2.1(e)(ii) hereof,
the Loan shall continue to bear interest on the outstanding principal amount thereof from
the Funding Date until such Loan is paid in full, at the Applicable Rate. Each Borrower
covenants and agrees to promptly pay interest on the Loan on each Interest Payment Date,
with such interest payable in arrears.




     (ii) Default Rate. 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 Loan
and any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at the Default Rate.



     Section 2.2 Evidence of Indebtedness.



     (a) Accounts and Records. The Loan shall be evidenced by one (1) or more accounts or
records maintained by the Administrative Agent in the ordinary course of business. The accounts or
records maintained by the Lender shall be conclusive absent manifest error of the amount of the
Loan made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations.



     (b) Note. The Borrower agrees that, in addition to such accounts or records set forth
in Section 2.2(a), to evidence their obligation to repay the Loan made hereunder, with
interest accrued thereon, it shall issue and deliver to the Administrative Agent on the Funding
Date the Note in the aggregate principal amount of the principal amount of the Loan. The
Administrative Agent may attach schedules to the Note and endorse thereon the date, amount and
maturity of the Loan and payments with respect thereto. In the event that any amount hereunder or
under the Note is not paid by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise), the Administrative Agent may take all such actions as it sees fit to recover such
amount, including, without limitation, the commencement and maintenance of proceedings.



     (c) Effect of Account Entries. Entries made in good faith by the Administrative Agent
in its account or accounts pursuant to Section 2.2(a), shall be prima facie evidence of the



26









 





amount of principal and interest due and payable or to become due and payable from the Borrower to
the Lenders, under this Agreement and the other Credit Documents, absent manifest error; provided
that the failure of the Lender to make an entry, or any finding that an entry is incorrect, in such
account or accounts shall not limit or otherwise affect the obligations of the Borrower under this
Agreement and the other Credit Documents.




     Section 2.3 Repayment and Prepayment.



     (a) Repayment. On each date set forth below (each, a “Principal Repayment
Date”), the Borrower shall repay to the Lender the respective amounts set forth opposite such
Principal Repayment Date as follows:



	 	 	 	 	 
	Principal	 	 
	Repayment Date	 	Amount
	May 17, 2010

	 	$	6,500,000	 
	August 17, 2010

	 	$	6,500,000	 
	November 17, 2010

	 	$	6,500,000	 
	February 17, 2011

	 	$	6,500,000	 
	May 17, 2011

	 	$	6,500,000	 
	August 17, 2011

	 	$	6,500,000	 
	November 17, 2011

	 	$	6,500,000	 
	February 17, 2012

	 	$	6,500,000	 
	May 17, 2012

	 	$	6,500,000	 
	August 17, 2012

	 	$	6,500,000	 
	November 17, 2012

	 	$	6,500,000	 
	February 17, 2013

	 	$	58,500,000	 






provided, however, that the final principal repayment installment of the Loan shall be repaid on or
before the Maturity Date and in any event shall be in an amount equal to the aggregate principal
amount of the Loan outstanding on such date. Each Borrower covenants and agrees to pay the Loan in
accordance with the terms of this Agreement and the Note.




     (b) Optional Prepayments. The Borrower shall have the right to prepay the Loan in
whole or in part from time to time; provided, however, that each partial prepayment of the Loan
shall be in a minimum principal amount of One Million Dollars ($1,000,000) and integral multiples
of Five Hundred Thousand Dollars ($500,000) in excess thereof or, if less, the unpaid balance
thereof. The Borrower shall give three (3) Business Days’ irrevocable notice of prepayment to the
Administrative Agent (which shall notify the Lenders thereof as soon as practicable). Each
prepayment pursuant to this Section 2.3(b) shall be applied to the outstanding Loan as the
Borrower may elect. All prepayments under this Section 2.3(b) shall be subject to
Section 2.11, 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.




27











 





     Section 2.4 Fees.



     (a) Commitment Fee. In consideration of the Commitment, the Borrower shall pay to the
Lenders such fees as are required by the Lenders and agreed to by the Borrower.



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



     Section 2.5 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 three hundred sixty (360) day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and the Lenders of each
determination of a LIBOR Rate on the Business Day of the determination thereof.



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



     (c) It is the intent of the Lenders and the Credit Parties to conform to and contract in
strict compliance with applicable usury law from time to time in effect. All agreements between
the Lenders and the Credit Parties are hereby limited by the provisions of this paragraph which
shall override and control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency (including but not limited to
prepayment or acceleration of the maturity of any Obligation), shall the interest taken, reserved,
contracted for, charged, or received under this Agreement, under the Note or otherwise, exceed the
maximum nonusurious amount permissible under any Requirement of 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 any Requirement of 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 Loan under any Requirement of Law and which would, apart from this
provision, be in excess of the maximum nonusurious amount, an amount equal to the amount which
would have been excessive interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loan and not to the payment of interest, or refunded to the Borrower
or the other payor thereof if and to the extent such amount which would have been excessive exceeds
such unpaid principal amount of the Loan. The right to demand payment of the Loan 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 Loan shall, to the extent permitted by any Requirement of Law, be amortized,
prorated, allocated, and spread throughout the full stated term (including any renewal or



28









 




extension) of the Loan so that the amount of interest on account of such indebtedness does not
exceed the maximum nonusurious amount permitted by any Requirement of Law.




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



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



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




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




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



     Section 2.6 Pro Rata Treatment and Payments.



     (a) Pro Rata Treatment. Each payment (other than prepayments made pursuant to
Section 2.3(b)) of principal or interest under this Agreement or the Note shall be applied
pro rata, first, to any fees and expenses then due and owing by the Borrower hereunder, second, to
interest then due and owing hereunder and under the Note and, third, to principal then due and
owing hereunder and under the Note. 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 Loan shall be applied in accordance with Section
2.3(b). Prepayments made pursuant to Section 2.9 shall be applied in accordance with
such section. All payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or counterclaim and shall be
made to the Administrative



29









 




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 Loan) 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 the 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 Loan (with accrued interest
thereon) and all other amounts under the Credit Documents shall automatically become due and
payable in accordance with the terms of such Section), all amounts collected or received by the
Administrative Agent or any Lender on account of the Obligations or any other amounts outstanding
under any of the Credit Documents or in respect of the Collateral shall be paid over or delivered
as follows:




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




     SECOND, to payment of any fees owed to the Administrative Agent;




     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



30









 






     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 2.7 Non-Receipt of Funds by the Administrative Agent.



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



     (b) A certificate of the Administrative Agent submitted to the Borrower or any Lender with
respect to any amount owing under this Section 2.7 shall be conclusive in the absence of
manifest error.



     Section 2.8 Inability to Determine Interest Rate; Base Rate Loan.
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 the Loan during such
Interest Period, the Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower and the Lenders at least two (2) Business Days
prior to the first day of such Interest Period. Until any such notice has been withdrawn by the
Administrative Agent, the outstanding Loan 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 Loan as a LIBOR Rate Loan to such day, or (ii) immediately if the
Administrative Agent or any Lender shall determine that any Lender may not lawfully continue to
maintain its Committed Percentage of the Loan as a LIBOR Rate Loan to such day.



     Section 2.9 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



31









 




Lender or its LIBOR Lending Office to make
or maintain its Committed Percentage of the Loan as a LIBOR Rate Loan 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 Loan, (a) such Lender shall promptly notify the Administrative Agent
and the Borrower thereof, and (b) the commitment of such Lender hereunder to make a LIBOR Rate Loan
or continue its Committed Percentage of the Loan as a LIBOR Rate Loan as such shall forthwith be
suspended until the Administrative Agent shall give notice that the condition or situation which
gave rise to the suspension shall no longer exist. The Borrower hereby agrees to promptly pay any
Lender, upon its demand, any additional amounts necessary to compensate such Lender for actual and
direct costs (but not including anticipated profits) reasonably incurred by such Lender in making
any repayment in accordance with this Section 2.9 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 Commitment Percentage of the Loan as a LIBOR Rate Loan hereunder. A certificate as to
any additional amounts payable pursuant to this Section 2.9 submitted by such Lender,
through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest
error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its
LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be payable pursuant
to this Section 2.9; 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 2.10 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 Loans 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;


and the result of any of the foregoing is to increase the cost to such Lender of making or
maintaining its Committed Percentage of the Loan as a LIBOR Rate Loan or to reduce any amount
receivable hereunder or under the Note or the Loan, then, in any such case, the Borrower shall
promptly pay such Lender, within fifteen (15) days after its demand, any additional




32









 







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
maintaining its Committed Percentage of the Loan as a LIBOR Rate Loan. A certificate as to any
additional amounts payable pursuant to this Section 2.10 submitted by such Lender, through
the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest error.
Each Lender agrees to use reasonable efforts (including reasonable efforts to change its LIBOR
Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this paragraph of this Section 2.10; provided, however,
that such efforts shall not cause the imposition on such Lender of any additional costs or other
disadvantages deemed by such Lender to be material.




     (b) If any Lender shall have reasonably determined that the adoption of or any change in any
Requirement of Law regarding capital adequacy or in the interpretation or application thereof or
compliance by such Lender or any corporation controlling such Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from any central bank or
Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing
the rate of return on such Lender’s or such corporation’s capital as a consequence of its
obligations hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then from time to time, within fifteen (15) days after demand by such
Lender, the Borrower shall pay to such Lender such additional amount as shall be certified by such
Lender as being required to compensate it for such reduction. Such a certificate as to any
additional amounts payable under this Section 2.10 submitted by a Lender (which certificate
shall include a description of the basis for the computation), through the Administrative Agent, to
the Borrower shall be conclusive absent manifest error.



     (c) The agreements in this Section 2.10 shall survive the termination of this
Agreement and payment of the Note and all other amounts payable hereunder.



     Section 2.11 Indemnity.
The Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from
any liabilities, claims, costs, charges, funding loss or expense which such Lender may sustain or
incur as a consequence of (a) default by the Borrower in payment of the principal amount of or
interest on the Loan by such Lender in accordance with the terms hereof, (b) default by the
Borrower in accepting a borrowing after the Borrower have given a notice in accordance with the
terms hereof, (c) default by the Borrower in making any prepayment after the Borrower has given a
notice in accordance with the terms hereof, and/or (d) any payment or prepayment of
the 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 Committed Percentage of the Loan hereunder. A certificate
as to any additional amounts payable pursuant to this Section 2.11 submitted by any Lender,
through the Administrative Agent, to the Borrower shall be conclusive in the absence of manifest
error. The agreements in this Section 2.11 shall survive termination of this Agreement and
payment of the Note and all other amounts payable hereunder.



33









 





     Section 2.12 Taxes.



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



     (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 2.12; provided, however, that such
efforts shall not cause the imposition on such Lender of any additional costs or other
disadvantages deemed by such Lender in its sole discretion to be material.



     (c) If the Borrower pays any additional amount pursuant to this Section 2.12 with
respect to a Lender, such Lender shall use reasonable efforts to obtain a refund of tax or credit
against its tax liabilities on account of such payment; provided that such Lender shall
have no obligation to use such reasonable efforts if either (i) it is in an excess foreign tax
credit position or (ii) it believes in good faith, in its sole discretion, that claiming a refund
or credit would cause adverse tax consequences to it. In the event that such Lender receives such
a refund or credit, such Lender shall pay to the Borrower an amount that such Lender reasonably
determines is equal to the net tax benefit obtained by such Lender as a result of such payment by
the Borrower. In the event that no refund or credit is obtained with respect to the Borrower’s
payments to such Lender pursuant to this Section 2.12, 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 2.12(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 2.12(c) to the Borrower or
any other party.



     (d) Each Lender that is not a “United States person” (as such term is defined in Section
7701(a)(30) of the Code) (a “Foreign Lender”) shall submit to Borrower and Administrative
Agent on or before the date such financial institution becomes a party hereto, two (2) 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



34









 




all payments to
be made to such Foreign Lender by Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such Foreign Lender by Borrower pursuant
to this Agreement) or such other evidence satisfactory to Borrower and Administrative Agent that
such Foreign Lender is entitled to an exemption from, or reduction of, United States withholding
tax. Thereafter and from time to time, each such Foreign Lender shall: (i) promptly submit to
Administrative Agent such additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and regulations to
avoid, or such evidence as is satisfactory to Borrower and Administrative Agent of any available
exemption from or reduction of, United States withholding taxes in respect of all payments to be
made to such Foreign Lender by Borrower pursuant to this Agreement; (ii) promptly notify
Administrative Agent of any change in circumstances that would modify or render invalid any claimed
exemption or reduction; and (iii) take such steps as shall not be materially disadvantageous to it,
in the reasonable judgment of such Foreign Lender, and as may be reasonably necessary (including
the re-designation of its lending office) to avoid any requirement of applicable laws that Borrower
make any deduction or withholding for taxes from amounts payable to such Foreign Lender. If any
Foreign Lender fails to deliver the forms or other documentation referred to in this subsection,
then the Borrower shall not be required to pay any additional amount to such Foreign Lender under
Section 2.12(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 2.12(d) on the date such Foreign Lender became a Lender, nothing in this
Section 2.12(d) shall relieve the Borrower of its obligations to pay any amounts pursuant
to Section 2.12(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 2.12 shall survive the termination of this
Agreement and the payment of the Note and all other amounts payable hereunder.



     Section 2.13 Judgment Currency Conversion.
If, for the purposes of obtaining judgment in any court in any jurisdiction with respect to
this Agreement or any other Credit Document, it becomes necessary to convert into a particular
currency (the “Judgment Currency”) any amount due under this Agreement or under any other Credit
Document in any currency other than the Judgment Currency (the “Currency Due”), then conversion
shall be made at the rate of exchange prevailing on the Business Day before the day
on which judgment is given. For this purpose “rate of exchange” means the rate at which the
Administrative Agent is able, on the relevant date, to purchase the Currency Due with the Judgment
Currency in accordance with its normal practice at its head office. In the event that there is a
change in the rate of exchange prevailing between the Business Day before the day on which the
judgment is given and the date of receipt by the Administrative Agent of the amount due, the
Borrower will, on the date of receipt by the Administrative Agent, pay such additional amounts, if
any, or be entitled to receive reimbursement of such amount, if any, as may be necessary to ensure
that the amount received by the Administrative Agent on such date is the amount in the Judgment
Currency which when converted at the rate of exchange prevailing on the date of receipt by the
Administrative Agent is the amount then due under this Agreement or such other Credit



35









 




Document in
the Currency Due. If the amount of the Currency Due which the Administrative Agent is so able to
purchase is less than the amount of the Currency Due originally due to it, the Borrower shall
indemnify and save the Administrative Agent and the Lenders harmless from and against all loss or
damage arising as a result of such deficiency. This indemnity shall constitute an obligation
separate and independent from the other obligations contained in this Agreement and the other
Credit Documents, shall give rise to a separate and independent cause of action, shall apply
irrespective of any indulgence granted by the Administrative Agent from time to time and shall
continue in full force and effect notwithstanding any judgment or order for a liquidated sum in
respect of an amount due under this Agreement or any other Credit Document or under any judgment or
order.




     Section 2.14 Amendment and Restatement.
This Agreement amends, restates and continues the Existing Credit Agreement, and this
Agreement and each Note and all Instruments, agreements, and documents executed in connection
herewith, constitute an amendment, renewal, continuance and restatement of all Indebtedness and
Obligations of the Borrower and the Guarantors evidenced by the Existing Credit Agreement and the
Original Note. All promissory notes, instruments, documents, and agreements entered into in
connection with the Existing Credit Agreement or the Original Note shall remain in full force and
effect, except to the extent expressly modified in accordance with their respective terms. It is
expressly understood and agreed by the parties hereto that this Agreement is in no way intended to
constitute, and does not constitute, a release, repayment, satisfaction, discharge or novation of
the obligations and liabilities existing under the Existing Credit Agreement or the Original Note
or a release, termination, novation or impairment of any Lien or Existing Credit Document. All
Liens created pursuant to the Existing Credit Documents shall extend and apply to this Agreement
and each Note issued hereunder and the full payment and performance of all Obligations, in each
case for the benefit of the Lenders. All such Liens created pursuant to the Existing Credit
Documents are hereby expressly continued, ratified and confirmed by the Borrower and the
Guarantors. The amendment and restatement hereby of the Existing Credit Agreement, or the
concurrent amendment and restatement of any other Existing Credit Document, shall not constitute a
waiver of any conditions or requirements set forth herein or therein, whether or not performed,
fulfilled or required to be performed or fulfilled prior to the date hereof, nor does it constitute
consent to any prior or existing default, event of default or breach of any provision hereof or of
any other Existing Credit Document. All references to the Existing Credit Agreement in any
Existing Credit Document shall be deemed to refer to this Agreement. If any inconsistency exists
between this Agreement and the Existing Credit Agreement, the terms of this Agreement shall
prevail. Nothing contained in this Agreement or
any other document or instrument executed contemporaneously herewith shall be deemed to
satisfy or discharge the Indebtedness or Obligations arising under this Agreement or any Note (this
being an amendment and restatement only).



ARTICLE III

REPRESENTATIONS AND WARRANTIES




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



36









 





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



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



     Section 3.3 Financial Condition; No Material Adverse Effect.



     (a) The audited Consolidated financial statements of Royal Gold for the twelve-month period
ending June 30, 2009, 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 Royal Gold and its Consolidated 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 Royal Gold and its Consolidated
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.



37









 





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



     (a) The (i) 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, and (ii) execution, delivery and performance of
the Plan of Arrangement by each Credit Party or Subsidiary thereof that is a party thereto and the
consummation of the Arrangement and the other transactions contemplated thereby, in each case, do
not and will not, by the passage of time, the giving of notice or otherwise, (A) violate any
Requirement of Law applicable to such Credit Party, (B) 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 (C)
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



38









 




could reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.




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



     Section 3.6 Employee Benefit Plans and Canadian Pension Plans.



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



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



39









 




basis and going concern basis (using actuarial methods and assumptions which
are consistent with the valuations last filed with the applicable Governmental Authorities and
which are consistent with GAAP).




     Section 3.7 Environmental Matters.



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



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



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



     Section 3.8 Purpose of Loan.
The proceeds of the Loan shall be used by the Borrower to fund the Arrangement, fund the
redemption of the Debentures and pay any fees and expenses in connection therewith and herewith.



     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 Execution 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



40









 




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 6.9 hereof and which insurance is described in full as of the
Execution Date on Schedule 6.9.



     Section 3.11 Title to Royalty Interests; Liens.
Schedule 1.1(a) sets forth, as of the Execution Date, a complete and accurate
listing and description of each Material Royalty, including the Project and the Royalty Interest
associated therewith. Schedule 1.1(c) sets forth, as of the Execution Date, a complete and
accurate listing of each of the Royalty Interests, other than the Material Royalties. Each Credit
Party has good and marketable title to the Material 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 Material 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 Material Royalty and in effect as of the Execution Date. Each
Royalty Agreement relating to a Material Royalty is (i) a legal, valid and binding obligation of
the Credit Party that is a party thereto, and to each Credit Party’s knowledge, each other party
thereto, and (ii) other than as set forth in Schedule 3.12, each such Royalty Agreement is,
and after giving effect to the transactions contemplated by the Credit Documents will be, in full
force
and effect in accordance with the terms thereof. To the extent requested by the
Administrative Agent, the Borrower has delivered or made available to the Administrative Agent a
true and complete copy of each Royalty Agreement listed on Schedule 1.1(a). No Credit
Party is in breach of or in default under any Royalty Agreement relating to a Material Royalty. As
of the Execution Date and since the date thereof, other than as set forth on Schedule 3.12,
no Credit Party has made any unresolved allegation that any counterparty to a Material Contract has
breached or defaulted under any such agreement in a material respect, except for allegations of
breach or default that a Credit Party has diligently pursued and resolved within thirty (30) days
of obtaining knowledge thereof and which has not had, and would not reasonably be likely to have, a
Material Adverse Effect during such period of time. To the knowledge of each Credit Party, other
than as set forth on Schedule 3.12, no counterparty to any Material Contract is in material
breach of or in material default of any such Material Contract, except for allegations of breach or
default that a Credit Party is diligently pursuing and will resolve within thirty (30) days of
obtaining knowledge thereof and which breach or default has not had, and would not reasonably be
likely to have, a Material Adverse Effect.



     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



41









 




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.



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



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



42









 





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 or prior to the execution of
this Agreement, grant, execute and deliver, the Security Documents, other than the Chilean Security
Documents. The Credit Parties agree to finalize, execute and deliver the Chilean Security
Documents in accordance with Section 6.16. The Security Documents create, or in the case
of the Chilean Security Documents upon their delivery they will create, valid security interests
in, and Liens on, the Collateral purported to be covered thereby, which security interests and
Liens are, or upon the filing of the appropriate perfection or other administrative action or
notices to third parties necessary to perfect such security interests and Liens will be, perfected
security interests and Liens, prior to all other Liens, other than Permitted Liens.



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



     Section 4.3 Maintenance of Security Over Material Royalties.
The Credit Parties shall grant, and at all times after the delivery of each applicable
Security Document shall maintain, Security Documents satisfactory to the Administrative Agent in
its sole discretion over and with respect to the Material Royalties (the “Collateral
Requirement”), subject to any release of the RGLD Canada Security Documents pursuant to
Section 4.5.



     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 the Pledge Agreements and in undertaking and completing all recordings, filings,
registrations and other actions required in connection with the Security Documents, and each Credit
Party further agrees to promptly take all such other actions as the Administrative Agent may
reasonably determine to be necessary or appropriate to confirm, perfect, maintain and protect the
perfection of the Liens granted by the Security Documents.



     Section 4.5 Release of RGLD Canada Security Documents.
Upon the completion of all documents, Instruments, deliveries, and actions set forth in
Section 6.16 to the satisfaction of the Administrative Agent in its sole discretion, the
Administrative Agent and the Lenders agree that the RGLD Canada Security Documents shall be
terminated and RGLD Canada shall be released from its obligations under the Credit Documents as
promptly as practicable



43









 




thereafter, and in connection therewith, the Administrative Agent and the
Lenders, at the expense of the Credit Parties, shall execute and deliver such terminations,
releases and discharges necessary to evidence such release.




ARTICLE V

CONDITIONS PRECEDENT




     Section 5.1 Conditions to Funding the Loan. The obligation of each Lender to Advance its
Committed Percentage of the Loan hereunder is subject to the satisfaction of the following
conditions precedent on or prior to the date of making such Loan:



     (a) Execution of Credit Documents. The Administrative Agent shall have received (i)
counterparts of this Agreement, (ii) the Note, (iii) counterparts to each Security Document
requested by the Administrative Agent (other than the Chilean Security Documents, which shall be
delivered to the Administrative Agent as set forth in Section 6.16), and (iv) counterparts
to each other Credit Document, in each case conforming to the requirements of this Agreement and
executed by a duly authorized officer of each party thereto, and in each case in form and substance
reasonably satisfactory to the Lenders.



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




     (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.



     (c) Officer’s Certificates. The Administrative Agent shall have received a
certificate dated as of the Execution Date executed by a Responsible Officer of each of the Credit
Parties,



44









 




substantially in the form of Exhibit H 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 date thereof and (ii) immediately after giving effect to this Agreement, the other
Credit Documents and all the transactions contemplated therein, (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 6.15.




     (d) Compliance Certificate. The Borrower shall have delivered to the Administrative
Agent a certificate of a Responsible Officer of the Borrower demonstrating compliance with the
financial covenants contained in Section 6.15 by calculation thereof as of the end of the
most recently completed fiscal quarter.



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



     (f) 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 or desirable, in the Administrative Agent’s sole
discretion, to perfect, or maintain the perfection of, the Administrative Agent’s security
interest in the Collateral (other than with respect to the Chilean Security Documents, which
shall be delivered to the Administrative Agent in accordance with Section 6.16);




     (iii) [Intentionally Omitted]; 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,
perfect and maintain the Administrative Agent’s security interest in the Collateral (other
than with respect to the Chilean Security Documents, which shall be delivered to the
Administrative Agent in accordance with Section 6.16).



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



45









 





     (h) Fees. The Lenders shall have received all fees owing pursuant to Section
2.4.



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



     (j) Material Adverse Effect. No material adverse change shall have occurred since
June 30, 2009 in the business, properties, operations or financial condition of the Credit Parties
and their Subsidiaries taken as a whole.



     (k) 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 the Loan.



     (l) Revolving Amendment. The Administrative Agent shall have received counterparts
of the Revolving Amendment executed by a duly authorized officer of each party thereto, and in each
case in form and substance reasonably satisfactory to the Administrative Agent and all other
agreements, documents, certificates and Instruments to be delivered by any party thereto in
connection with therewith.



     (m) Notice of Borrowing; Satisfaction of all Conditions. The Borrower shall have
delivered an executed Notice of Borrowing, and the Borrower shall have certified the satisfaction
of all conditions precedent set forth in this Section 5.1 by the delivery of such Notice of
Borrowing.



     (n) 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.



ARTICLE VI

AFFIRMATIVE COVENANTS




     The Credit Parties hereby covenant and agree that on the Execution Date, and thereafter for so
long as this Agreement is in effect and until 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 Royal Gold balance sheet as
at the end of such fiscal year and the related Consolidated Royal Gold statements of income and
retained earnings and of cash flows 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



46









 




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 (3) fiscal quarters of each fiscal year, a
copy of the Consolidated Royal Gold balance sheet as at the end of such period and related
Consolidated Royal Gold statements of income and retained earnings and of cash flows 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 I, (i) demonstrating
compliance with the financial covenants contained in Section 6.15 by calculation thereof as
of the end of each such fiscal period, and (ii) stating that no Default or Event of Default exists,
or if any Default or Event of Default does exist, specifying the nature and extent thereof and what
action the Credit Parties propose to take with respect thereto; and



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



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



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



     (b) the occurrence of any default or event of default known to a Credit Party under any
Material Contract of any Credit Party or any of its Subsidiaries which could reasonably be



47









 




expected
to have a Material Adverse Effect or involve a monetary claim in excess of Two Million Dollars
($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 Two Million Dollars ($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 Two Million Dollars ($2,000,000);



     (d) any loss or damage to the Collateral in excess of One Million Dollars ($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 Ten Million Dollars ($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 Material
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 Material 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 Material 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 Material Royalty,
together with a copy of such plans and reports;



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



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



     (m) promptly after a Responsible Officer of a Credit Party obtains knowledge thereof, any
attachment, judgment, Lien, levy or order exceeding Two Million Dollars ($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 6.2 shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein and stating what
action the Credit Parties propose to take with respect thereto, if any. In the case of any notice
of a Default or Event of Default, the Borrower shall specify that such notice is a Default or Event
of Default notice on the face thereof. For so long as the Administrative Agent and the
“Administrative Agent” (as defined in the Revolving Credit Agreement) shall be the same financial
institution or servicer, a notice under this Section 6.2 shall constitute notice under
Section 6.2 of the Revolving Credit Agreement and a notice under Section 6.2 of the
Revolving Credit Agreement shall constitute notice under this Section 6.2.




     Section 6.3 Payment of Taxes and Other Obligations.
Each Credit Party and its Subsidiaries shall pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its Taxes in the United
States and Canada, all its material Taxes in all jurisdictions other than the United States and
Canada, 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.



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     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 Execution 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 Material Royalties and the other Collateral against the claims and demands of all
Persons whomsoever, except as permitted in writing 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 Material Royalties and (b) any other or additional Royalty
Interests included or added as a Material 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 company pledged as security for the Obligations 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 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 Execution Date is outlined as to
carrier, policy number, expiration date, type and amount on Schedule 6.9. 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 6.9.



     Section 6.10 Inspection of Property; Books and Records; Discussions.



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     (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 (5) 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 Material 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 6.11 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 6.12 Environmental Laws. Defend, indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective Affiliates, employees, agents, consultants, representatives, officers, managers and
directors, from and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, known or unknown, contingent
or otherwise, arising out of, or in any way relating to or associated with the violation of,
noncompliance with or investigation, liability, claim, lawsuit, failure or action under, any
Environmental Law applicable to the operations of the Credit Parties or any of their Subsidiaries
or to the Properties or the Projects, or any orders, requirements, remediation, reclamation,
settlements, response or demands of Governmental Authorities related thereto, or with respect to
the release, presence, handling or disposal of Materials of Environmental Concern at any Property
or Project, including reasonable attorney’s and consultant’s fees, investigation and laboratory
fees, response costs, court costs and litigation expenses, except to the extent that any
of the foregoing arise out of (i) the gross negligence or willful misconduct of the party
seeking indemnification therefor as determined by a court of competent jurisdiction in a final and
non-appealable judgment or (ii) any other loan facility or other interest in the Properties or the
Projects not attributable to this Agreement or the other Credit Documents. The agreements in this
paragraph shall survive repayment of the Obligations.



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     Section 6.13 Compliance with Employment Laws. Each Credit Party shall (a) comply with all applicable provisions of ERISA and the regulations
and published interpretations thereunder with respect to all Plans, and with Chilean Decree Law
3.500 when applicable, (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 6.14 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 6.15 Financial Covenants. The Credit Parties shall at all times maintain and comply with the following financial
covenants:



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



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



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



     (d) Current Ratio. The Current Ratio shall be (i) for the periods ending March 31,
2010 and June 30, 2010, greater than or equal to 1.0 to 1.0; and (ii) all times thereafter, greater
than or equal to 1.5 to 1.0.



     Section 6.16 Chilean Security Documents. The Credit Parties shall use their commercially reasonable efforts to finalize, execute and
deliver to the Administrative Agent the Chilean Security Documents, in form and content
satisfactory to the Administrative Agent, as promptly as practicable after the Execution Date,
including: (i) counterparts of each Pledge Agreement and Security Agreement executed by the
appropriate Credit Party as a notarial deed, to be delivered as promptly as practicable and in any
event by not later than April 30, 2010; (ii) signed and notarized Security Documents as filed,
registered, or recorded with each appropriate



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Governmental Authority as may be required or
desirable for the attachment, validity, formalization, perfection or enforceability of such
Security Document, together with the delivery of any notices in connection therewith, with delivery
of the foregoing to be completed as promptly as practicable and in any event by not later than May
31, 2010; (iii) a signed security legal opinion from legal counsel to the Credit Parties, in form
and content acceptable to the Administrative Agent, confirming the completion and perfection in
favor of the Administrative Agent of fully registered, enforceable first priority Liens on the
Material Royalties owned by RG Chile and on the other property rights and interests of each Credit
Party that are subject to the Chilean Security Documents, with delivery of the foregoing to be
completed as promptly as practicable and in any event by not later than May 31, 2010; and (iv) such
other duly executed and notarized agreements, consents, notices, documents, opinions or Instruments
as are necessary, in the Administrative Agent’s sole discretion, to formalize, legalize, protect
and perfect the Administrative Agent’s fully enforceable, first priority security interest in the
Collateral identified in the Chilean Security Documents, and all documents and legal matters in
connection with the Chilean Security Documents shall be satisfactory in form and substance to the
Administrative Agent and its counsel, with delivery of the foregoing to be completed as promptly as
practicable and in any event by not later than May 31, 2010.




     Section 6.17 Repayment of Debentures and Release of Associated Liens



     As promptly as practicable and in any event by not later than the Outside Redemption Date, the
Borrower shall redeem the Debentures and terminate and cancel the Indenture. As promptly as
practicable and in any event by not later than the Lien Release Date, all Liens existing to secure
the Indenture shall have been cancelled, terminated and released.



ARTICLE VII

NEGATIVE COVENANTS




     The Credit Parties hereby covenant and agree that on the Execution Date, and thereafter for so
long as this Agreement is in effect and until all 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 Execution 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 Execution Date consisting of Capital Leases or
Indebtedness incurred to provide all or a portion of the purchase price of furniture, fixtures and



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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 One
Million Dollars ($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, including the RG Barbados
Subordinated Loan, so long as the Subordination Agreement remains in effect, and the RGLD Canada
Intercompany Loan; provided that any such Indebtedness owing by a Credit Party to a
Subsidiary shall be fully subordinated to the Obligations hereunder on terms and conditions
satisfactory to the Required Lenders;



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



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



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



     (h) Indebtedness arising or existing under the Revolving Credit Agreement;



     (i) Indebtedness of any Credit Party that is subordinated to the Obligations; provided,
however, that (i) the subordination of such Indebtedness is pursuant to a written subordination
agreement satisfactory to the Required Lenders in their sole discretion, (ii) the terms, conditions
and amount of any such subordinated Indebtedness shall be satisfactory to the Required Lenders in
their sole discretion, (iii) the stated maturity date or mandatory redemption date of such
subordinated Indebtedness shall not be prior to the Maturity Date, 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”);
and



     (j) prior to the Outside Redemption Date, Indebtedness arising or existing under the
Indenture; provided that the principal amount outstanding thereunder shall not be increased from
the amount outstanding as of the Execution Date and no Credit Party or any Subsidiary of any Credit
Party shall become liable or obligated with respect to such Indebtedness (other than those Persons
currently obligated thereunder that became a Subsidiary upon the closing of the Arrangement).



     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



54









 




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



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




     (i) the sale, assignment, lease, transfer or other disposition in the ordinary course
of business of (A) 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 Material Royalties) in respect of Metals other than precious Metals,
(C) Non-Credit Party Royalty Interests and Royalty Interests (other than Material



55









 







Royalties)
in respect of precious Metals in an aggregate amount not to exceed Five Million Dollars
($5,000,000) in the aggregate in any calendar year, (D) the proceeds of the Loan in
accordance with Section 3.8, (E) the assets set forth on Schedule 7.5, or
(f) other assets not constituting Royalty Interests or Non-Credit Party Royalty Interests in
an aggregate amount not to exceed One Million Dollars ($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 Material 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
Non-Credit Party Royalty Interest or 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
Material Royalty, to a Credit Party.



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



     Section 7.7 Advances and Loan. 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(d); (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 Execution 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 Non-Credit Party Royalty Interests or 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; (i) Guaranty Obligations otherwise permitted hereunder; and (j) advances of the
proceeds of the Initial Loan and other cash necessary to consummate the Arrangement. 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.



56









 





     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, (b)
expense reimbursement and reasonable salaries and other reasonable director or employee
compensation to officers and directors of the Credit Parties and their Subsidiaries, and (c)
advances or extensions of credit of the proceeds of the Initial Loan and other cash necessary to
consummate the Arrangement.



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



     Section 7.10 Modification of Material Agreements. Each of the Credit Parties
will not, nor will it permit any of its Subsidiaries to, without
the approval of the Administrative Agent, modify or amend any agreement pertaining to a
Material 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 Material 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 agreement pertaining to a Material Royalty or a Project related
thereto, or (ii) any Royalty Interest or the Project associated with such Royalty Interest acquired
after the date hereof with the proceeds of the Loan, such Credit Party shall use commercially
reasonable efforts to include appropriate provisions in such confidentiality agreement authorizing
the Credit Parties to provide to the Administrative Agent and the Lenders information obtained by
such Credit Party pursuant to such confidentiality agreement.



     Section 7.11 Limitation on Restricted Actions. Each of the Credit Parties will not,
nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Person to (a) pay dividends or make any other distributions
to any Credit Party on its Capital Stock or with respect to any other interest or participation in,
or measured by, its profits, (b) pay any Indebtedness or other obligation owed to any Credit Party,
(c) make loans or advances to any Credit Party, (d) sell, lease or transfer any of its properties
or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets pursuant to the
Credit Documents, 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), (h) or (j), 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



57









 




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) the Revolving
Credit Agreement.




     Section 7.12 Maintenance of Material 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 Material Royalty or any Metals accruing to the account of a Credit
Party pursuant thereto.



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



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



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



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



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



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



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



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     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), (h) or (j), provided that any such restriction contained therein relates only
to the asset or assets constructed or acquired in connection therewith, (c) in connection with any
Permitted Lien or any document or Instrument governing any Permitted Lien, provided that
any such restriction contained therein relates only to the asset or assets subject to such
Permitted
Lien, (d) customary restrictions on the assignment of or granting of a lien on a particular
lease, sublease, license or contract set forth in such lease, sublease, license or contract entered
into in the ordinary course of business, (e) restrictions on the pledge of interests in or assets
of joint ventures contained in the applicable joint venture agreement, (f) customary restrictions
and conditions relating to a disposition of property or assets permitted hereunder pending the
consummation of such disposition, and (g) the Revolving Credit 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(i) 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
the 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 the 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



59









 




Obligation or other amount payable hereunder or under any Credit Document when due (whether at
maturity, by reason of acceleration or otherwise) in accordance with the terms hereof; or any
Guarantor shall fail to pay on the Guaranty in respect of any of the foregoing or in respect of any
other Guaranty Obligations hereunder; or




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



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



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



     (e) An “Event of Default” (as defined in the Revolving Credit Agreement) shall occur and be
continuing under the Revolving Credit Agreement;



     (f) (i) Any Credit Party or any of its Subsidiaries shall initiate or commence any case,
proceeding or other action (A) under any existing or future Bankruptcy Law or at common law or in
equity, or otherwise seeking to have it judged bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, compromise, protection, moratorium,
relief, stay of proceedings of creditors generally (or any class of creditors), composition or
other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any substantial part of its
assets, or any Credit Party or any of its Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) any Canadian Credit Party shall commit an act of bankruptcy under
the Bankruptcy and Insolvency Act (Canada), or makes an assignment of its property for the general
benefit of its creditors under such Act, or makes a proposal (or files a



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notice of its intention to
do so) under such Act; or (iii) there shall be commenced against any Credit Party or any of its
Subsidiaries any case, proceeding or other action of a nature referred to in clause (i) above
(including without limitation any petition or application being filed or made or other proceeding
instituted against such Credit Party seeking a receiving order under the Bankruptcy and Insolvency
Act (Canada) which (A) results in the entry of an order for relief or any such adjudication or
appointment; (B) remains undismissed, undischarged or unbonded for a period of sixty (60) days; or
C) in respect of which such Credit Party files an answer admitting
the material allegations of a petition filed against it in any such proceeding; or (iv) there
shall be commenced against any Credit Party or any of its Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of their assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or iv) any Credit Party or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval of, or acquiescence
in, any of the acts set forth in clause (i), (ii), (iii), or (iv) above; or (vi) any Credit Party
or any of its Subsidiaries shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or




     (g) 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 Two Million Five Hundred Thousand Dollars ($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 their respective Properties or Projects that could reasonably be expected to
result in a Material Adverse Effect; or



     (h) Any involuntary Lien or Liens for amounts then due in the aggregate sum of Two Hundred
Fifty Thousand Dollars ($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



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



     (j) 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



     (k) There shall exist a defect or deficiency in title to any Royalty Interest or the Project
Properties (other than Permitted Liens) which results in a Material Adverse Effect, and



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the Credit
Parties have not remedied such defect or deficiency within ten (10) days after written notice of
default has been given to the Borrower by the Administrative Agent or any Lender; or




     (l) 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 this Agreement or the Security Document related thereto,
or any Credit Party shall so state in writing, and the Credit Parties have not remedied
such default within ten (10) days after written notice of default has been given to the
Borrower by the Administrative Agent or any Lender; or



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



     (n) A 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 any Guaranty; or



     (o) 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(f) above, automatically the Loan
(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 of default to the
Borrower, declare the Loan (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, (ii) 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,
(iii) 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 (iv) 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 as the Administrative
Agent of such Lender under this Agreement, and each such Lender irrevocably authorizes HSBC Bank,
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



62









 




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



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



     Section 9.4 Reliance by Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in
relying, upon the Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or
conversation believed by it in good faith to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee of the 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



63









 




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
Note.




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



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



     Section 9.7 Indemnification. The Lenders agree
to indemnify the Administrative Agent in its capacity hereunder (to the
extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do
so), ratably according to their respective



64









 




Commitment Percentages in effect on the date on which
indemnification is sought under this Section 9.7, 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 Note) 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 Note and all other amounts payable hereunder.




     Section 9.8 Administrative Agent in Its Individual Capacity. The Administrative
Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Administrative Agent were
not the Administrative Agent hereunder. With respect to the Committed Percentage of the Loan made
or renewed by it and the Note (with respect to the portion of the Note corresponding to the
Administrative Agent’s Committed Percentage of the Loan), 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 thirty (30) days’ prior
notice to the Borrower and the Lenders. If the Administrative Agent shall resign as Administrative
Agent under this Agreement and the Note, then the Required Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be approved by the Borrower
with such approval not to be unreasonably withheld (provided, however if an Event of Default shall
exist at such time, no approval of the Borrower shall be required hereunder), whereupon such
successor agent shall succeed to the rights, powers and duties of the Administrative Agent, and the
term “Administrative Agent” shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of the Note. 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.



65









 





     Section 9.11 Quebec Security.



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



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



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



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



ARTICLE X

MISCELLANEOUS




     Section 10.1 Amendments, Waivers and Release of Collateral. Neither this
Agreement, nor the Note, 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 10.1 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



66









 




time to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Credit Documents for the purpose of adding any provisions to
this Agreement or the other Credit Documents or changing in any manner the rights of the Lenders or
of the Borrower hereunder or thereunder or (b) waive, on such terms and conditions as the Required
Lenders may specify in such instrument, any of the requirements of this Agreement or the other
Credit Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement, modification or release
shall:





     (i) (A) reduce or increase the amount or extend the scheduled date of maturity of the
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 Borrower, the other Credit
Parties, the Lenders, the Administrative Agent and all future holders of the Note. In the case of
any waiver, the Borrower, the other Credit Parties, the Lenders, and the Administrative Agent shall
be restored to their former position and rights hereunder and under the outstanding



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Loan and Note
and other Credit Documents, and any Default or Event of Default waived shall be deemed to be cured
and not continuing; but no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.




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



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



     Section 10.2 Substitution of Lenders. In the event (a) the
Borrower receives a claim from any Lender for compensation under
Section 2.10 hereof, (b) the Borrower receives notice from any Lender of any illegality
pursuant to Section 2.9 hereof, (c) any Lender is in default in any material respect with
respect to its obligations under the Credit Documents, or (d) a Lender or Participant fails to
consent to an amendment or waiver requested under Section 10.1 or Section 10.7(b)
hereof, as applicable, at a time when the Required Lenders or other Participants, as applicable,
have approved such amendment or waiver (any such Lender or Participant referred to in clause (a),
(b), (c), or (d) above being hereinafter referred to as an “Affected Lender”), the Borrower
may, so long as no Default or Event of Default has occurred and remains outstanding, in addition to
any other rights the Borrower may have hereunder or under applicable law, require, at its expense,
any such Affected Lender to assign, at par, without recourse, all of its interest, rights, and
obligations
hereunder (including all of its Commitments and the Loan and other amounts at any time owing
to it hereunder and the other Credit Documents) to an Eligible Assignee specified by the Borrower,
provided that (i) such assignment shall not conflict with or violate any law, rule or regulation or
order of any court or other governmental authority, (ii) the Borrower shall have paid to the
Affected Lender all monies (together with amounts due such Affected Lender hereunder as if the Loan
owing to it were prepaid rather than assigned) other than such principal owing to it hereunder, and
(iii) the assignment is entered into in accordance with, and subject to the consents required by
(other than the consent of the Affected Lender), Section 10.7 hereof (provided any
assignment fees and reimbursable expenses due thereunder shall be paid by the Borrower).



     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 (3rd) 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




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by the “return receipt requested” function, as available, return e-mail or other written
acknowledgment), provided that if such notice, request or demand is not sent during the normal
business hours of the recipient, such notice, request or demand shall be deemed to have been sent
at the opening of business on the next Business Day for the recipient, in each case, addressed as
follows in the case of the Borrower, the other Credit Parties and the Administrative Agent, and,
with respect to each Lender, as set forth in the Lenders’ Administrative Details Schedule, or to
such other address as may be hereafter notified by the respective parties hereto and any future
holders of the Note:




     The Borrower and the other Credit Parties:


c/o Royal Gold, Inc.

1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202-1132

Attention: Chief Financial Officer

Facsimile: (303) 595-9385

E-mail:swenger@royalgold.com

Telephone: (303) 573-1660



with a copy to:



c/o Royal Gold, Inc.

1660 Wynkoop Street, Suite 1000

Denver, Colorado 80202-1132

Attention: General Counsel

Facsimile: (303) 595-9385

E-mail:bkirchhoff@royalgold.com

Telephone: (303) 573-1660




     The Administrative Agent:


HSBC Bank USA, National Association

452 Fifth Avenue

New York, New York 10018

Attention: Mr. Bill Edge

Facsimile: (212) 525-6581

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

Telephone: (212) 525-6481




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



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



     Section 10.6 Payment of Expenses and Taxes; Indemnification.



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



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attorneys’ fees and expenses) on demand as they are incurred in connection with the investigation
of, preparation for or defense or prosecution of any pending or threatened Third Party Claim or any
action or proceeding arising therefrom; provided, however, that the Borrower shall
not have any obligation hereunder to the Administrative Agent or any Lender with respect to Third
Party Claims arising from (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 Borrower in writing upon becoming aware of the initiation of any Third Party Claim against it,
(ii) the Borrower shall be entitled to participate in the defense of any such Third Party Claim
and, if the Borrower so chooses, to assume the defense, at the Borrower’s expense, of any such
Third Party Claim with counsel selected by the Borrower (it being understood that any Indemnified
Party shall have the right to participate in such defense and employ counsel separate from the
counsel employed by the Borrower, and that such counsel shall be at the expense of such Indemnified
Party unless such Indemnified Party shall have been advised by counsel that there may be legal
defenses available to it that are inconsistent with or in addition to those available to the
Borrower, in which case such counsel shall be at the Borrower’s expense) and (iii) no Indemnified
Party shall settle any Third Party Claim without the Borrower’s prior written consent (such consent
not to be unreasonably withheld). The agreements in this Section 10.6 shall survive
repayment of the Loan, Note 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 Borrower, the
Lenders, the Administrative Agent, all future holders of the Note and their respective successors
and assigns, except that the Borrower and the Guarantors may not assign or transfer any of their
rights or obligations under this Agreement or the other Credit Documents without the prior written
consent of all the Lenders.



     (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 the Loan owing to such Lender, the 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, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve any amendment to or waiver
of this Agreement or any other Credit Document except to the extent such amendment or waiver would
(i) extend the scheduled maturity of the 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



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




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



     (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 Loan owing to, each
Lender from time to time. The entries in such register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent and the Lenders may treat



72









 




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 Three Thousand Five Hundred Dollars ($3,500) for
each Purchasing Lender (other than an affiliate of such Lender or an Approved Fund) listed in such
Assignment Agreement and the Note subject to such Assignment Agreement, the Administrative Agent
shall (i) accept such Assignment Agreement and (ii) give prompt notice of such acceptance and
recordation to the Lenders and the Borrower.



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



     Section 10.8 Adjustments; Set-off.



     (a) Each Lender agrees that if any Lender shall at any time receive any payment of all or part
of its Commitment Percentage of the Loan, 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(f), 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
Commitment Percentage of the Loan, 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
Commitment Percentage of the Loan, or shall provide such other Lenders with the benefits of any
such Collateral, or the proceeds thereof, as shall be necessary to cause such benefited Lender to
share the excess payment or benefits of such Collateral or proceeds ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such benefited Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery, but without interest.
The Borrower agrees that each Lender so purchasing a portion of another Lender’s Loan may exercise
all rights of payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.



     (b) In addition to any rights and remedies of the Lenders provided by law (including, without
limitation, other rights of set-off), each Lender shall have the right, without prior notice to the
Borrower or the applicable Credit Party, any such notice being expressly waived by the Credit
Parties to the extent permitted by applicable law, upon the occurrence and during the continuance
of any Event of Default, to set-off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held by or owing to such Lender or any branch or
agency thereof to or for the credit or the account of the Borrower or any other Credit Party, or



73









 




any part thereof in such amounts as such Lender may elect, against and on account of such
Lender’s Commitment Percentage of the Loan and other Obligations of the Borrower and the other
Credit Parties to the Administrative Agent and the Lenders and claims of every nature and
description of the Administrative Agent and the Lenders against the Borrower and the other Credit
Parties, in any currency, whether arising hereunder or under any other Credit Document, as such
Lender may elect, whether or not the Administrative Agent or the Lenders have made any demand for
payment and although such obligations, liabilities and claims may be contingent or unmatured. The
aforesaid right of set-off may be exercised by such Lender against the Borrower, any other Credit
Party or against any trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of the Borrower or any other
Credit Party, or against anyone else claiming through or against the Borrower, any other Credit
Party or any such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor, notwithstanding the fact that
such right of set-off shall not have been exercised by such Lender prior to the occurrence of any
Event of Default. Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off and application.




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



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



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



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



     Section 10.13 Integration. This Agreement and the Note 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 Note. This Agreement amends, restates,



74









 







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 NON-EXCLUSIVE 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.



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, IF ANY SHALL
BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE IN WHICH THEY ARE FILED.




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     Section 10.16 Confidentiality. The Administrative Agent and each Lender agree that they will not disclose
without the prior consent of the Borrower any non-public, confidential or proprietary information
of or with respect to any Credit Party or any Subsidiary thereof which is furnished pursuant to
this Agreement, any other Credit Document or any documents contemplated by or referred to herein or
therein (the “Information”), except that the Administrative Agent and any Lender may
disclose any such Information (a) to its employees, affiliates, agents, representatives, auditors,
consultants, engineers or counsel or to another Administrative Agent or Lender each of whom shall
have been made aware of this confidentiality requirement and shall have agreed to abide by its
provisions, (b) as has become generally available to the public other than by a breach of this
Section 10.16, (c) as may be required or appropriate in any report, statement or testimony
submitted to any Governmental Authority having or claiming to have jurisdiction over such Lender or
Agent or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or the Office of
the Comptroller of the Currency or the National Association of Insurance Commissioners or similar
organizations (whether in the United States, Canada or any other jurisdiction) or their successors,
(d) as may be required or appropriate in response to any summons or subpoena or any Requirement of
Law applicable to such Lender or Agent, (e) to (i) any prospective Participant or assignee in
connection with any contemplated transfer pursuant to Section 10.7 or (ii) any actual or
prospective counterparty (or its advisors) to any Hedging Agreement relating to the Borrower,
provided that such prospective counterparty or transferee shall have been made aware of
this Section 10.16 and shall have agreed to be bound by its provisions as if it were a
party to this Credit Agreement, (f) to Gold Sheets and other similar bank trade
publications; such information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such publications, (g) in
connection with any claim, suit, action or proceeding for the purpose of defending itself, reducing
its liability, or protecting or exercising any of its claims, rights, remedies or interests under
or in connection with the Credit Documents, or (h) any nationally recognized rating agency that
requires access to information about a Lender’s investment portfolio in connection with ratings
issued with respect to such Lender; provided, however, that in the case of any
disclosure pursuant to clause (d), the Administrative Agent or Lender shall give the Borrower at
least (10) ten days prior written notice (unless less time is permitted by the applicable
proceeding) before disclosing any of the Information in any such proceeding and, in making such
disclosure, the Administrative 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;



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



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



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



     Section 10.20 Proceeds of Crime.



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



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




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




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


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




ARTICLE XI

GUARANTY




     Section 11.1 The Guaranty. In order to induce the Lenders to enter into this Credit Agreement and the Note
and to extend credit hereunder and thereunder and in recognition of the direct benefits to be
received by the Guarantors from the Loan 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 Borrower to the Administrative
Agent and the Lenders whether or not due or payable by the Borrower upon the occurrence of any of
the events specified in Section 8.1(f), and unconditionally promises to pay such
Obligations to the Administrative Agent for the account of the Lenders, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to the extent that
the Borrower or a Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment



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or transfer or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, or otherwise is avoided,
and/or required to be repaid to the Borrower or a Guarantor, the estate of the Borrower or a
Guarantor, a trustee, receiver or any other party under any Bankruptcy Law, common law or equitable
cause or other Requirement of Law, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and continued in full force
and effect as if said payment had not been made.



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



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



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



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



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and the Lenders in their discretion may determine and (d) release or
substitute any one or more endorsers, Guarantors, the Borrower or other obligors.



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



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



     Section 11.9 Waiver.



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



80









 







and
agrees that neither the Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or risks.



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



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



     (e) Each of the Guarantors hereby agrees it will not exercise any rights of subrogation which
it may at any time otherwise have as a result of this Guaranty (whether contractual, under
applicable Bankruptcy Law, or otherwise) to the claims of the Administrative Agent or the
Lenders against any Borrower or any other guarantor of the Obligations of a Borrower owing to
the Administrative Agent or the Lenders 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 Commitment has 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 Commitment has been
terminated.



     (f) Each Guarantor irrevocably renounces to any rights it may have to be released from this
Guarantee under Article 2362 of the Civil Code of Québec and agrees to renew its guarantee
hereunder at the request of the Administrative Agent by executing such documents as the
Administrative Agent may request from time to time; provided, however, nothing in this
clause (f) shall prohibit the release of RGLD Canada or the RGLD Canada Security Documents as
contemplated in Section 4.5.



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



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     At such time as the Obligations which are the subject of this Guaranty have been irrevocably
paid in full and the Commitment has 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.



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



	 	 	 	 	 
	BORROWER:	ROYAL GOLD, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Stefan Wenger
 	 
	 	 	Name:  	Stefan Wenger 	 
	 	 	Title:  	CFO and Treasurer 	 
	 



[signature pages continue]


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	GUARANTORS:	ROYAL GOLD CHILE LIMITADA,

a Chilean limited partnership

 	 
	 	By:  	/s/ Tony Jensen
 	 
	 	 	Name:  	Tony Jensen 	 
	 	 	Title:  	Representative 	 
	 
	 	 	 
	 	By:  	/s/ Stefan Wenger
 	 
	 	 	Name:  	Stefan Wenger 	 
	 	 	Title:  	Representative 	 
	 
	 	ROYAL GOLD, INC.,

a Delaware corporation,

in its capacity as partner of Royal Gold Chile Limitada

 	 
	 	By:  	/s/ Stefan Wenger
 	 
	 	 	Name:  	Stefan Wenger 	 
	 	 	Title:  	CFO and Treasurer 	 
	 
	 	HIGH DESERT MINERAL RESOURCES, INC.,

a Delaware corporation,

in its capacity as partner of Royal Gold Chile Limitada

 	 
	 	By:  	/s/ Stefan Wenger
 	 
	 	 	Name:  	Stefan Wenger 	 
	 	 	Title:  	Vice President and Treasurer 	 
	 
	 	RGLD GOLD CANADA, INC.,

a British Columbia corporation

 	 
	 	By:  	/s/ Bruce C. Kirchhoff
 	 
	 	 	Name:  	Bruce C. Kirchhoff 	 
	 	 	Title:  	Vice President 	 
	 
	 	HIGH DESERT MINERAL RESOURCES, INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Karen Gross
 	 
	 	 	Name:  	Karen Gross 	 
	 	 	Title:  	Vice President and Secretary 	 



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	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 	 
	 
	LENDER:	THE BANK OF NOVA SCOTIA

as a Lender

 	 
	 	By:  	/s/ J.F. Todd
 	 
	 	 	Name:  	J.F. Todd 	 
	 	 	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 	 
	 



Amended and Restated Term Loan Facility Agreement Signature Page