Document:

otic-ex101_243.htm

Exhibit 10.1

OTONOMY, INC. 

EXECUTIVE EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into by and between Otonomy, Inc. (the “Company”), and Kathie Bishop, Ph.D. (“Executive”) as of the date the Company and Executive have each executed this Agreement, as set forth below.  The terms of this Agreement will become effective on January 3, 2017 (the “Effective Date”). 

1.Duties and Scope of Employment.

(a)Positions and Duties.  As of the Effective Date, Executive will serve as the Company’s Chief Scientific Officer.  Executive will render such business and professional services in the performance of Executive’s duties, consistent with Executive’s position within the Company, as will reasonably be assigned to Executive by the Company’s Chief Executive Officer.  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

(b)Obligations.  During the Employment Term, Executive will perform Executive’s duties faithfully and to the best of Executive’s ability and will devote Executive’s full business efforts and time to the Company.  For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without the prior approval of the Company’s Board of Directors (the “Board”).  Notwithstanding the foregoing, the Company understands and agrees that Executive may continue providing advisory services to the spinal Muscular Atrophy Foundation in New York and the Myotonic Dystrophy Foundation in San Francisco without violation of this Agreement.  Executive further agrees to comply with all Company policies, including, for the avoidance of any doubt, any insider trading policies and compensation clawback policies currently in existence or that may be adopted by the Company during the Term.

(c)Term of Agreement.  The Agreement shall have an initial term of 4 years (the “Initial Term”) commencing on the Effective Date, subject to earlier termination as provided in this Agreement.  Unless either party gives at least 90 days’ notice prior to the expiration of the Initial Term or the then-current Additional Term (as hereinafter defined), as applicable, this Agreement shall be renewed for a period of 1 year (each, an “Additional Term”), in each case, commencing on the expiration of the Initial Term or the then-current Additional Term, as the case may be, subject to earlier termination as provided in Section 7 of this Agreement.  In the event of a Change of Control, if there is less than twelve (12) months remaining in the Initial Term or then-current Additional Term, as applicable, the term will automatically extend until the twelve (12) month anniversary following the Change of Control.  If Executive becomes entitled to benefits under Section 7 during the Initial Term or the then-current Additional Term of this Agreement, the Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.

2.At-Will Employment.  The parties agree that Executive’s employment with the Company will be “at-will” employment and may be terminated at any time with or without cause or notice.  Executive understands and agrees that neither Executive’s job performance nor promotions, commendations, bonuses or the like from the Company give rise to or in any way serve as the basis for modification, amendment, or extension, by implication or otherwise, of Executive’s employment 

 

 

with the Company.  However, as described in this Agreement, Executive may be entitled to severance benefits depending on the circumstances of Executive’s termination of employment with the Company.

3.Compensation.

(a)Base Salary.  During the Employment Term, the Company will pay Executive an annual salary of $325,000.00 as compensation for services (the “Base Salary”).  The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings.  

(b)Target Bonus.  Executive will be eligible to receive an annual bonus of up to forty percent (40%) of Executive’s Base Salary, less applicable withholdings, upon achievement of performance objectives to be determined by the Board in its sole discretion (the “Target Bonus”).  The Target Bonus, or any portion thereof, will be paid as soon as practicable after the Board determines that the Target Bonus has been earned, but in no event shall the Target Bonus be paid after the later of (i) the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal year in which the Target Bonus is earned or (ii) March 15 following the calendar year in which the Target Bonus is earned. 

(c)Review and Adjustments. Executive’s Base Salary, Target Bonus, and other compensatory arrangements will be subject to review and adjustment in accordance with the Company’s applicable policies, subject to Executive’s ability to resign for Good Reason and receive severance benefits as set forth in Section 7.

4.Employee Benefits.  During the Employment Term, Executive will be entitled to participate in the employee benefit plans currently and hereafter maintained by the Company of general applicability to other senior executives of the Company.  The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.

5.Vacation.  Executive will be entitled to paid vacation of one-hundred and sixty (160) business hours per year in accordance with the Company’s vacation policy, with the timing and duration of specific hours off mutually and reasonably agreed to by the parties hereto.

6.Expenses.  The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in the furtherance of or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time. 

7.Severance Benefits. 

(a)Termination Outside the Change of Control Period.  If, outside the Change of Control Period, the Company or its Affiliates terminate Executive’s employment with the Company or its Affiliates, respectively, other than for Cause, death or Disability, or Executive resigns from such employment for Good Reason, then, subject to Section 8, Executive will receive the following severance benefits:

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(i)Salary Severance.  Continuing payments of severance pay at a rate equal to Executive’s Base Salary, at the highest rate in effect during the Term, for nine (9) months from the date of Executive’s termination of employment, which will be paid in accordance with the Company’s regular payroll procedures.

(ii)Bonus Severance. Executive will receive a lump-sum payment, payable in accordance with the Company’s regular payroll procedures, equal to the portion of the Executive’s Target Bonus as in effect for the fiscal year in which Executive’s termination of employment occurs prorated based on the actual amount of time Executive was employed by the Company during the fiscal year (or the relevant performance period if something different than a fiscal year) during which the termination occurs.

(iii)Continued Employee Benefits.  If Executive elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, the Company will reimburse Executive for the premiums necessary to continue  group health insurance benefits for Executive and Executive’s eligible dependents until the earlier of (A) a period of nine (9) months from the date of Executive’s termination of employment, (B) the date upon which Executive and/or Executive’s eligible dependents becomes covered under similar plans or (C) the date upon which Executive ceases to be eligible for coverage under COBRA (such reimbursements, the “COBRA Premiums”).  However, if the Company determines in its sole discretion that it cannot pay the COBRA Premiums without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will in lieu thereof provide to Executive a taxable monthly payment payable on the last day of a given month (except as provided by the following sentence), in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue Executive’s group health coverage in effect on the date of Executive’s termination of employment (which amount will be based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether Executive elects COBRA continuation coverage and will commence on the month following Executive’s termination of employment and will end on the earlier of (x) the date upon which Executive obtains other employment or (y) the date the Company has paid an amount equal to nine (9) payments.  For the avoidance of doubt, the taxable payments in lieu of COBRA Premiums may be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to all applicable tax withholdings.  Notwithstanding anything to the contrary under this Agreement, if at any time the Company determines in its sole discretion that it cannot provide the payments contemplated by the preceding sentence without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), Executive will not receive such payment or any further reimbursements for COBRA premiums.

(iv)Equity.  Vesting acceleration of Executive’s outstanding unvested Equity Awards on the date of Executive’s termination equal to the number of shares subject to each such Equity Award that would have vested had Executive remained an employee of the Company for an additional twelve (12) months following the date of termination.  If, however, an outstanding Equity Award is to vest and/or the amount of the Equity Award to vest is to be determined based on the achievement of performance criteria, then the Equity Award will vest as to twenty-five percent (25%) of the amount of the Equity Award assuming the performance criteria had been achieved at target levels for the relevant performance period(s).

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(b)Termination without Cause or Resignation for Good Reason within the Change of Control Period.  If, within the Change of Control Period, the Company or its Affiliates terminate Executive’s employment with the Company or its Affiliates, respectively, other than for Cause, death or Disability, or Executive resigns from such employment for Good Reason, then, subject to Section 8, Executive will receive the following severance benefits from the Company:

(i)Salary Severance.  A lump sum severance payment equal to twelve (12) months of Executive’s Base Salary, at the highest rate in effect during the Term, which will be paid in accordance with the Company’s regular payroll procedures.  For the avoidance of doubt, if (A) Executive incurred a termination prior to a Change of Control that qualifies Executive for severance payments under Section 7(a)(i); and (B) a Change of Control occurs within the three (3)-month period following Executive’s termination of employment that qualifies Executive for the superior benefits under this Section 7b)(i), then Executive shall be entitled to a lump-sum payment of the amount calculated under this Section 7(b)(i), less amounts already paid under Section 7(a)(i).

(ii)Bonus Severance. Executive will receive a lump-sum payment, payable in accordance with the Company’s regular payroll procedures, equal to one hundred percent (100%) of the higher of (A) Executive’s target bonus as in effect for the fiscal year in which the Change of Control occurs or (B) Executive’s target bonus as in effect for the fiscal year in which Executive’s termination of employment occurs.  For avoidance of doubt, the amount paid to Executive pursuant to this Section 7(b)(ii) will not be prorated based on the actual amount of time Executive is employed by the Company during the fiscal year (or the relevant performance period if something different than a fiscal year) during which the termination occurs. 

(iii)Continued Employee Benefits.  If Executive elects continuation coverage pursuant to COBRA within the time period prescribed pursuant to COBRA for Executive and Executive’s eligible dependents, the Company will reimburse Executive for the premiums necessary to continue group health insurance benefits for Executive and Executive’s eligible dependents until the earlier of (A) a period of twelve (12) months from the date of Executive’s termination of employment, (B) the date upon which Executive and/or Executive’s eligible dependents becomes covered under similar plans or (C) the date upon which Executive ceases to be eligible for coverage under COBRA (such reimbursements, the “COC COBRA Premiums”).  However, if the Company determines in its sole discretion that it cannot pay the COC COBRA Premiums without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), the Company will in lieu thereof provide to Executive a taxable monthly payment in an amount equal to the monthly COBRA premium that Executive would be required to pay to continue Executive’s group health coverage in effect on the date of Executive’s termination of employment (which amount will be based on the premium for the first month of COBRA coverage), which payments will be made regardless of whether Executive elects COBRA continuation coverage and will commence on the month following Executive’s termination of employment and will end on the earlier of (x) the date upon which Executive obtains other employment or (y) the date the Company has paid an amount equal to twelve (12) payments.  For the avoidance of doubt, the taxable payments in lieu of COBRA Premiums may be used for any purpose, including, but not limited to continuation coverage under COBRA, and will be subject to all applicable tax withholdings.  Notwithstanding anything to the contrary under this Agreement, if at any time the Company determines in its sole discretion that it cannot provide the payments contemplated by the preceding sentence without 

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violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), Executive will not receive such payment or any further reimbursements for COBRA premiums.

(c)Equity.  Vesting acceleration of one hundred percent (100%) of Executive’s outstanding unvested Equity Awards on the date of Executive’s termination. If, however, an outstanding Equity Award is to vest and/or the amount of the Equity Award to vest is to be determined based on the achievement of performance criteria, then the Equity Award will vest as to one hundred percent (100%) of the amount of the Equity Award assuming the performance criteria had been achieved at target levels for the relevant performance period(s).

(d)Voluntary Resignation; Termination for Cause.  If Executive’s employment with the Company or its Affiliates terminates (i) voluntarily by Executive (other than for Good Reason) or (ii) for Cause by the Company, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing severance and benefits plans and practices or pursuant to other written agreements with the Company.

(e)Disability; Death.  If the Company terminates Executive’s employment as a result of Executive’s Disability, or Executive’s employment terminates due to Executive’s death, then Executive will not be entitled to receive severance or other benefits except for those (if any) as may then be established under the Company’s then existing written severance and benefits plans and practices or pursuant to other written agreements with the Company.

(f)Accrued Compensation.  For the avoidance of any doubt, in the event of a termination of Executive’s employment with the Company or its Affiliates, Executive will be entitled to receive all accrued but unpaid vacation, expense reimbursements, wages, and other benefits due to Executive under any Company-provided plans, policies, and arrangements.

(g)Transfer between the Company and Affiliates.  For purposes of this Section 7, if Executive’s employment with the Company or one of its Affiliates terminates, Executive will not be determined to have been terminated without Cause, provided Executive continues to remain employed by the Company or one of its Affiliates (e.g., upon transfer from on Affiliate to another); provided, however, that the parties understand and acknowledge that any such termination could potentially result in Executive’s ability to resign for Good Reason.

(h)Exclusive Remedy.  In the event of a termination of Executive’s employment with the Company or its Affiliates, the provisions of this Section 7 are intended to be and are exclusive and in lieu of any other rights or remedies to which Executive or the Company may otherwise be entitled, whether at law, tort or contract, in equity.  Executive will be entitled to no benefits, compensation or other payments or rights upon termination of employment other than those benefits expressly set forth in this Section 7.

8.Conditions to Receipt of Severance.

(a)Separation Agreement and Release of Claims.  The receipt of any severance pursuant to Sections 7(a) or (b) will be subject to (i) Executive resigning from all positions Executive may hold as an officer or director of the Company or any Affiliates and executing all documents the Company determines, in its sole discretion, are necessary to effectuate such resignations prior to the Release Deadline (as defined below) (such resignation and execution of applicable documents, the 

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“Resignations”), and (ii) Executive signing and not revoking a separation agreement and release of claims in a form attached hereto as Exhibit A (the “Release”) and provided that such Release becomes effective and irrevocable no later than sixty (60) days following the termination date (such deadline, the “Release Deadline”).  If the Resignations and the Release do not become effective and irrevocable by the Release Deadline, Executive will forfeit any rights to severance or benefits under this Agreement.  In no event will severance payments or benefits be paid or provided until the Resignations and the Release become effective and irrevocable.  Except as required by Section 8(b), any installment payments that would have been made to Executive prior to the Resignations and the Release becoming effective and irrevocable but for the preceding sentence will be paid to Executive on the first regularly scheduled Company payroll date following the date the Resignations and the Release becomes effective and irrevocable, and the remaining payments will be made as provided in the Agreement.  

(b)Section 409A.

(i)Notwithstanding anything to the contrary in this Agreement, no Deferred Payments will be paid or otherwise provided until Executive has a “separation from service” within the meaning of Section 409A.  Similarly, no severance payable to Executive, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Executive has a “separation from service” within the meaning of Section 409A.

(ii)Any severance payments or benefits under this Agreement that would be considered Deferred Payments will be paid on, or, in the case of installments, will not commence until, the sixtieth (60th) day following Executive’s separation from service, or, if later, such time as required by Section 8(b)(iii).  Except as required by Section 8(b)(iii), any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s separation from service but for the preceding sentence will be paid to Executive on the sixtieth (60th) day following Executive’s separation from service and the remaining payments shall be made as provided in this Agreement.  In no event will Executive have discretion to determine the taxable year of payment for any Deferred Payments.

(iii)Notwithstanding anything to the contrary in this Agreement, if Executive is a “specified employee” within the meaning of Section 409A at the time of Executive’s separation from service (other than due to death), then the Deferred Payments that are payable within the first six (6) months following Executive’s separation from service, will, to the extent required to be delayed pursuant to Section 409A(a)(2)(B) of the Code, become payable on the date six (6) months and one (1) day following the date of Executive’s separation from service.  All subsequent Deferred Payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit.  Notwithstanding anything herein to the contrary, if Executive dies following Executive’s separation from service, but prior to the six (6) month anniversary of the separation from service, then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Executive’s death and all other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit.  Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.

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(iv)Any amount paid under this Agreement that satisfies the requirements of the “short-term deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations will not constitute Deferred Payments. 

(v)Any amount paid under this Agreement that qualifies as a payment made as a result of an involuntary separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit (as defined below) will not constitute Deferred Payments. 

(vi)The foregoing provisions and all compensation and benefits provided for under this Agreement are intended to comply with or be exempt from the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms herein will be interpreted to be exempt or so comply.  The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Executive under Section 409A.  In no event will the Company reimburse Executive for any taxes that may be imposed on Executive as a result of Section 409A.

9.Limitation on Payments.  In the event that the severance and other benefits provided for in this Agreement or otherwise payable to Executive (i) constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) but for this Section 9, would be subject to the excise tax imposed by Section 4999 of the Code, then Executive’s severance benefits under Section 7 will be either:

(a)delivered in full, or

(b)delivered as to such lesser extent which would result in no portion of such severance benefits being subject to excise tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Section 4999 of the Code, results in the receipt by Executive on an after-tax basis, of the greatest amount of severance benefits, notwithstanding that all or some portion of such severance benefits may be taxable under Section 4999 of the Code.  If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction will occur in the following order: (i) reduction of cash payments; (ii) cancellation of awards granted “contingent on a change in ownership or control” (within the meaning of Code Section 280G); (iii) cancellation of accelerated vesting of equity awards; or (iv) reduction of employee benefits. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of Executive’s equity awards.

Unless the Company and Executive otherwise agree in writing, any determination required under this Section 9 will be made in writing by a nationally recognized certified professional services firm selected by the Company, the Company’s legal counsel or such other person or entity to which the parties mutually agree (the “Firm”) immediately prior to Change of Control, whose determination will be conclusive and binding upon Executive and the Company for all purposes.  For purposes of making 

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the calculations required by this Section 9, the Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and Executive will furnish to the Firm such information and documents as the Accountants may reasonably request in order to make a determination under this Section.  The Company will bear all costs the Firm may reasonably incur in connection with any calculations contemplated by this Section 9.

10.Definition of Terms.  The following terms referred to in this Agreement will have the following meanings:

(a)Affiliate.  “Affiliate” means the Company and any other parent or subsidiary corporation of the Company, as such terms are defined in Section 424(e) and (1) of the Code.

(b)Cause.  “Cause” means the occurrence of any of the following events, as determined by the Board or a committee designated by the Board, in its sole discretion: (i) Executive’s conviction of, or plea of nolo contendere to, any felony or any crime involving moral turpitude or dishonesty; (ii) Executive’s participation in a fraud or material act of dishonesty against the Company or any Affiliate; (iii) Executive’s willful and material breach of Executive’s duties hereunder that is not cured within thirty (30) days after Executive’s receipt of written notice from the Board of such breach; (iv) Executive’s intentional and material damage to the property of the Company or an Affiliate; (v) Executive’s material breach of the Confidential Information Agreement; or (vi) Executive’s failure to cooperate fully with the Company in connection with any and all existing or future litigation, arbitrations, mediations or investigations whether internal or brought by or against the Company or any of its Affiliates in which the Company reasonably deems Executive’s cooperation is necessary or desirable.  Notwithstanding the foregoing, prior to determining that “Cause” under this Section 10(b) has occurred, the Company shall (A) provide to Executive in writing, in reasonable detail, the reasons for the determination that such Cause exists, (B) other than with respect to clause (iii), above, which specifies the applicable period of time for Executive to remedy Executive’s breach, afford Executive a reasonable opportunity to remedy any such breach, unless the Board determines in good faith that such opportunity would be futile or result in material harm to the Company or its Affiliates, and (C) make any decisions that such Cause exists in good faith.

(c)Change of Control.  “Change of Control” means the occurrence of any of the following events:

(i)A change in the ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than fifty percent (50%) of the total voting power of the stock of the Company; provided, however, that for purposes of this subsection, the acquisition of additional stock by any one Person, who is considered to own more than fifty percent (50%) of the total voting power of the stock of the Company will not be considered a Change of Control; or 

(ii)A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election.  For purposes of this clause (ii), if any Person is 

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considered to be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change of Control; or

(iii)A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the Company’s stock, (2) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding stock of the Company, or (4) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3).  For purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

For purposes of this definition, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company.

Notwithstanding the foregoing, a transaction will not be deemed a Change of Control unless the transaction qualifies as a change in control event within the meaning of Code Section 409A, as it has been and may be amended from time to time, and any proposed or final Treasury Regulations and Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from time to time.

Further and for the avoidance of doubt, a transaction will not constitute a Change of Control if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.

(d)Change of Control Period.  “Change of Control Period” means the period beginning on the date three (3) months prior to, and ending on the date that is twelve (12) months following, a Change of Control. 

(e)Code.  “Code” means the Internal Revenue Code of 1986, as amended.

(f)Deferred Payment.  “Deferred Payment” means any severance pay or benefits to be paid or provided to Executive (or Executive’s estate or beneficiaries) pursuant to this Agreement and any other severance payments or separation benefits, that in each case, when considered together, are considered deferred compensation under Section 409A.

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(g)Disability.  “Disability” means that the Employee has been unable to perform Executive’s Company duties as the result of Executive’s incapacity due to physical or mental illness, and such inability, at least twenty-six (26) weeks after its commencement or 180 days in any consecutive twelve (12) month period, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Executive or Executive’s legal representative (such agreement as to acceptability not to be unreasonably withheld).  Termination resulting from Disability may only be effected after at least thirty (30) days’ written notice by the Company of its intention to terminate the Employee’s employment.  In the event that the Employee resumes the performance of substantially all of Executive’s duties hereunder before the termination of Executive’s employment becomes effective, the notice of intent to terminate will automatically be deemed to have been revoked.

(h)Equity Awards. “Equity Awards” means Executive’s outstanding stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance stock units and any other Company equity compensation awards.

(i)Good Reason. “Good Reason” means Executive’s resignation within thirty (30) days following the expiration of any Company cure period (discussed below) following the occurrence of one or more of the following, without Executive’s express written consent: (i) a material diminution of Executive’s authority, duties or responsibilities relative to Executive’s authority, duties or responsibilities in effect immediately prior to such diminution; (ii) a material reduction by the Company in the salary or bonus opportunity of the Executive as in effect immediately prior to such reduction; (iii) the relocation of Executive to a facility or a location more than thirty (30) miles from Executive’s then-present location; or (iv) any other action that constitutes a material breach by the Company of its obligations to Executive under this Agreement.  Executive’s resignation will not be deemed to be for Good Reason unless Executive has first provided the Company with written notice of the acts or omissions constituting the grounds for “Good Reason” within ninety (90) days of the initial existence of the grounds for “Good Reason” and a reasonable cure period of not less than thirty (30) days following the date the Company receives such notice, and such condition has not been cured during such period.

(j)Section 409A.  “Section 409A” means Section 409A of the Code and any final regulations and guidance thereunder and any applicable state law equivalent, as each may be amended or promulgated from time to time.

(k)Section 409A Limit.  “Section 409A Limit” will mean two (2) times the lesser of: (i) Executive’s annualized compensation based upon the annual rate of pay paid to Executive during the Executive’s taxable year preceding the Executive’s taxable year of Executive’s separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which Executive’s separation from service occurred.

11.Confidential Information Agreement.  As a condition of Executive’s continuing employment, Executive is required to sign and comply with an At‐Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement in substantially the same form as attached hereto as Exhibit B (the “Confidential Information Agreement”) which requires, among other provisions, the assignment of patent rights to any invention made during Executive’s employment at 

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the Company, and non‐disclosure of Company proprietary information. In the event of any dispute or claim relating to or arising out of Executive’s employment relationship, Executive and the Company agree that (i) any and all disputes between Executive and the Company shall be fully and finally resolved by binding arbitration, (ii) Executive is waiving any and all rights to a jury trial but all court remedies will be available in arbitration, (iii) all disputes shall be resolved by a neutral arbitrator who shall issue a written opinion, (iv) the arbitration shall provide for adequate discovery, and (v) the Company shall pay all the arbitration fees, except an amount equal to the filing fees Executive would have paid had Executive filed a complaint in a court of law.  Notwithstanding any language in the Confidential Information Agreement to the contrary, the Company agrees and acknowledges that Executive is under existing contractual obligations to Ionis Pharmaceuticals and Biogen, Inc., and that Executive may continue to have access to confidential information of those entities (all such information, the “Outside Confidential Information”).  Executive agrees that Executive will not misuse such Outside Confidential Information in violation of her existing contractual obligations, nor will Executive utilize any Outside Confidential Information in performing her duties pursuant to this Agreement.  To the extent there is a conflict between any provision of the Confidential Information Agreement and this Section 11 with respect to the Outside Confidential Information, this Section 11 shall control.  

12.Assignment.  This Agreement will be binding upon and inure to the benefit of (a) the heirs, executors and legal representatives of Executive upon Executive’s death and (b) any successor of the Company.  Any such successor of the Company will be deemed substituted for the Company under the terms of this Agreement for all purposes.  For this purpose, “successor” means any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company.  None of the rights of Executive to receive any form of compensation payable pursuant to this Agreement may be assigned or transferred except by will or the laws of descent and distribution.  Any other attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.

13.Notices.  All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (i) on the date of delivery if delivered personally, (ii) one (1) day after being sent by a well-established commercial overnight service, or (iii) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:

If to the Company:

Otonomy, Inc.

Attn: Chief Financial Officer

4796 Executive Drive

San Diego, CA 92121

 

If to Executive:

at the last residential address known by the Company.

-11-

 

14.Severability.  In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.

15.Integration.  This Agreement and the Confidential Information Agreement (as modified in Section 11, herein) represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral.  This Agreement may be modified only by agreement of the parties by a written instrument executed by the parties that is designated as an amendment to this Agreement. 

16.Waiver of Breach.  The waiver of a breach of any term or provision of this Agreement, which must be in writing, will not operate as or be construed to be a waiver of any other previous or subsequent breach of this Agreement.

17.Headings.  All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.

18.Tax Withholding.  All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.

19.Governing Law.  This Agreement will be governed by the laws of the State of California (with the exception of its conflict of laws provisions).

20.Acknowledgment.  Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from Executive’s private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, and is knowingly and voluntarily entering into this Agreement.

21.Counterparts.  This Agreement may be executed in counterparts, and each counterpart will have the same force and effect as an original and will constitute an effective, binding agreement on the part of each of the undersigned.

-12-

 

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by their duly authorized officers, as of the day and year set forth below.

 

COMPANY:

OTONOMY, INC.

	
By: 
	
/s/ David A. Weber
	
 
	
Date: 
	
January 4, 2017

	
Title:
	
President and Chief Executive Officer
	
 
	
 
	
 

 

EXECUTIVE:

	
 
	
/s/ Kathie M. Bishop
	
 
	
Date: 
	
December 19, 2016

	
 
	
 
	
 
	
 
	
 

	
 
	
Print Name:
	
 
	
 
	
 
	
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT AGREEMENT]

 

-13-

 

EXHIBIT A

 

RELEASE AND WAIVER OF CLAIMS

TO BE SIGNED FOLLOWING TERMINATION WITHOUT CAUSE
OR RESIGNATION FOR GOOD REASON

In consideration of the payments and other benefits set forth in the Employment Agreement dated ______________ (the “Employment Agreement”), to which this form is attached, I, __________, hereby furnish Otonomy, Inc.  (the “Company”), with the following release and waiver (“Release and Waiver”).

In exchange for the consideration provided to me by Section 7 of the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release the Company and its directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, Affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct, or omissions occurring prior to my signing this Release and Waiver.  This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), and the California Fair Employment and Housing Act (as amended).

Notwithstanding the foregoing, nothing in this Release and Waiver shall constitute a release by me of any claims or damages based on any right I may have to enforce the Company’s executory obligations under the Agreement, any right I may have to vested or earned compensation and benefits, or my eligibility for indemnification under applicable law, Company governance documents, my indemnification agreement with the Company or under any applicable insurance policy with respect to my liability as an employee or officer of the Company.

I also acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows:  “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”  I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect with respect to any claims I may have against the Company.

I acknowledge that, among other rights, I am waiving and releasing any rights I may have under ADEA, that this Release and Waiver is knowing and voluntary, and that the consideration given for this Release and Waiver is in addition to anything of value to which I was already entitled as an 

-14-

 

executive of the Company.  If I am 40 years of age or older upon execution of this Release and Waiver, I further acknowledge that I have been advised, as required by the Older Workers Benefit Protection Act, that: (a) the release and waiver granted herein does not relate to claims under the ADEA which may arise after this Release and Waiver is executed; (b) I should consult with an attorney prior to executing this Release and Waiver; and (c) I have twenty-one (21) days from the date of termination of my employment with the Company in which to consider this Release and Waiver (although I may choose voluntarily to execute this Release and Waiver earlier); (d) I have seven (7) days following the execution of this Release and Waiver to revoke my consent to this Release and Waiver; and (e) this Release and Waiver shall not be effective until the seven (7) day revocation period has expired.

I acknowledge my continuing obligations under my At‐Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement.  Pursuant to the At‐Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement I understand that among other things, I must not use or disclose any confidential or proprietary information of the Company and I must immediately return all Company property and documents (including all embodiments of proprietary information) and all copies thereof in my possession or control.  I understand and agree that my right to the severance pay I am receiving in exchange for my agreement to the terms of this Release and Waiver is contingent upon my continued compliance with my At‐Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement.

I understands that nothing in this Release and Waiver shall in any way limit or prohibit me from engaging for a lawful purpose in any Protected Activity.  For purposes of this Release and Waiver, “Protected Activity” shall mean filing a charge or complaint, or otherwise communicating, cooperating, or participating with, any state, federal, or other governmental agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, and the National Labor Relations Board.  Notwithstanding any restrictions set forth in this Release and Waiver, I understand that I am not required to obtain authorization from the Company prior to disclosing information to, or communicating with, such agencies, nor am I obligated to advise the Company as to any such disclosures or communications.  Notwithstanding, in making any such disclosures or communications, I agree to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information under my At‐Will Employment, Confidential Information, Invention Assignment and Arbitration Agreement to any parties other than the relevant government agencies.  I further understand that “Protected Activity” does not include my disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Release and Waiver. 

-15-

 

This Release and Waiver constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof.  I am not relying on any promise or representation by the Company that is not expressly stated herein.  This Release and Waiver may only be modified by a writing signed by both me and a duly authorized officer of the Company.

	
Date:
	
 
	
 
	
 
	
By:
	
 

	
 
	
 
	
 
	
 
	
Name:
	
 

 

-16-

 

EXHIBIT B

 

AT-WILL EMPLOYMENT, CONFIDENTIAL INFORMATION,

INVENTION ASSIGNMENT, AND ARBITRATION AGREEMENT

 

 

-17-Klondex Mines Ltd.: Exhibit 10.1- Filed by newsfilecorp.com

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

Execution Version 

	Dated 	MARCH 23, 2016 
	 	 

UP TO US$25,000,000 

SECURED REVOLVING FACILITY AGREEMENT 

between 

KLONDEX MINES LTD. 
as Borrower 

and 

KLONDEX CANADA LTD., 0985472 B.C. LTD, KLONDEX HOLDINGS (USA)

INC., KLONDEX MIDAS HOLDINGS LIMITED, KLONDEX MIDAS

OPERATIONS INC. and KLONDEX GOLD & SILVER MINING COMPANY

as Guarantors 

with 

INVESTEC BANK PLC 
as Lender and Hedge Counterparty

and 

INVESTEC BANK PLC 
acting as Security Agent

 

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

Contents 

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

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

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

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

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

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

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

	(1) 	
      KLONDEX MINES LTD, a company incorporated under
      the laws of the Province of British Columbia (the
  Borrower);

	 	 
	(2) 	
      KLONDEX CANADA LTD, a company incorporated under
      the laws of the Province of British Columbia as guarantor (Klondex
      Canada);

	 	 
	(3) 	
      0985472 B.C. LTD, a company incorporated under the
      laws of the Province of British Columbia as guarantor
    (0985472);

	 	 
	(4) 	
      KLONDEX HOLDINGS (USA) INC., a company
      incorporated under the laws of the State of Nevada as guarantor
      (Klondex Holdings);

	 	 
	(5) 	
      KLONDEX MIDAS HOLDINGS LIMITED, a company
      incorporated under the laws of the State of Nevada as guarantor
      (Klondex Midas);

	 	 
	(6) 	
      KLONDEX MIDAS OPERATIONS INC., a company
      incorporated under the laws of the State of Nevada as guarantor
      (Klondex Operations);

	 	 
	(7) 	
      KLONDEX GOLD & SILVER MINING COMPANY, a
      company incorporated under the laws of the State of Nevada as guarantor
      (Klondex Gold, together, the Guarantors);

	 	 
	(8) 	
      INVESTEC BANK PLC, under the laws of England and
      Wales whose registered office is at 2 Gresham Street, London, EC2V 7QP and
  with registered number 00489604 (the Lender and Hedge Counterparty);

	 	 
	(9) 	
      INVESTEC BANK PLC, as security agent for the
      Secured Parties (the Security Agent).

IT IS AGREED as follows: 

INTERPRETATION 

	1 	
      Definitions and
Interpretation

	1.1 	
      Definitions

In this Agreement: 

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

Accounting Reference Date means
31 December. 

Affiliate means, in relation to
any person:

	 	(a) 	
      a Subsidiary of that person;

	 	 	 
	 	(b) 	
      a Holding Company of that person; or

	 	 	 
	 	(c) 	
      any other Subsidiary of that Holding
  Company,

1 

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

(including head offices and branches of
the above). 

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

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

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

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

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

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

	 	(a) 	
      the conduct of the business of any member of the
      Group;

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

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

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

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

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

Available Commitment means the
Commitment minus: 

	 	(a) 	
      the amount of any outstanding Loans; and

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

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

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

2 

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

Bail-In Legislation means: 

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

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

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

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

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

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

exceeds: 

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

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

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

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

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

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

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

3 

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

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

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

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

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

	 	(a) 	
      any member of the Group or any of its advisers;
  or

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

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

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

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

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

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

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

4 

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

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

	 	(a) 	
      purchases by way of assignment or transfer;

	 	 	 
	 	(b) 	
      enters into any sub-participation in respect of;
  or

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

any Commitment or amount outstanding
under this Agreement. 

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

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

Designated Person means a person
or entity: 

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

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

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

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

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

Disruption Event means either or
both of: 

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

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

	 	(i) 	
      from performing its payment obligations under the Finance
      Documents; or

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

5 

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

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

Distribution means, in respect
of a person: 

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

	 	 	 
	 	(b) 	
      repaying or distributing any dividend or share premium
      reserve;

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

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

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

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

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

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

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

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

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

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

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

6 

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

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

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

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

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

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

Excluded Assets means any
Material Licences. 

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

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

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

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

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

FATCA means: 

	 	(a) 	
      the Foreign Account Tax Compliance Act, being

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

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

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

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

7 

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

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

Fee Letter means:

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

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

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

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

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

Financial Indebtedness means any
indebtedness for or in respect of: 

	 	(a) 	
      moneys borrowed;

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

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

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

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

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

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

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

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

8 

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

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

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

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

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

Government means the Government
of Canada. 

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

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

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

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

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

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

	 	(i) 	
      [****]% of 0-90 days;

	 	 	 
	 	(ii) 	
      [****]% of 91-180 days;

	 	 	 
	 	(iii) 	
      [****]% of 181-273 days; and

	 	 	 
	 	(iv) 	
      [****]% of 274-365 days.

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

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

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

9 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

10 

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

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

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

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

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

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

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

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

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

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

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

Legal Reservations means: 

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

	 	 	 
	 	(b) 	
      the time barring of claims under the Limitation
    Act;

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

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

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

LIBOR means, in relation to any
Loan: 

	 	(a) 	
      the applicable Screen Rate;

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

11 

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

	 	(c) 	
      if:

	 	(i) 	
      no Screen Rate is available for dollars; or

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

the Reference Bank Rate, 

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

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

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

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

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

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

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

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

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

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

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

12 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Party means a party to this
Agreement. 

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

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

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

13 

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

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

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

	 	 	 
	 	(c) 	
      of assets in the ordinary course of trading of the
      disposing entity; or

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

Permitted Equipment Financing
means: 

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

	 	 	 
	 	(b) 	
      finance or capital leases of vehicles, plant, equipment
      or computers,

provided that: 

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

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

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

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

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

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

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

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

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

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

14 

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

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

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

Relevant Interbank Market means
the London interbank market. 

Relevant Jurisdiction means, in
relation to an Obligor: 

	 	(a) 	
      its Original Jurisdiction;

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

	 	 	 
	 	(c) 	
      any jurisdiction where it conducts its business;
    and

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

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

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

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

Restricted Party means a person
that is: 

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

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

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

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

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

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

15 

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

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

Rollover Loan means one or more
Loans: 

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

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

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

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

	 	(a) 	
      the United States government;

	 	 	 
	 	(b) 	
      the United Nations;

	 	 	 
	 	(c) 	
      the European Union;

	 	 	 
	 	(d) 	
      the United Kingdom; or

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

(together, the Sanctions
Authorities). 

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

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

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

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

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

16 

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

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

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

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

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

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

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

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

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

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

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

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

US means the United States of
America. 

US Tax Obligor means: 

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

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

Utilization means a Utilization
of the Facility. 

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

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

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

World Bank Standards means: 

17 

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

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

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

	 	 	 
	 	(c) 	
      the IFC Performance Standards; and

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

Write-down and Conversion Powers
means: 

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

	 	 	 
	 	(b) 	
      in relation to any other applicable Bail-In
      Legislation:

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

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

	1.2 	
      Construction

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

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

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

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

18 

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

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

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

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

	 	 	 
	 	(vii) 	
      the term including shall be construed to mean
      including without limitation;

	 	 	 
	 	(viii) 	
      an obligation means any duty, obligation or
      liability of any kind;

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

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

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

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

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

	 	 	 
	 	(xiv) 	
      a time of day is a reference to Pacific Time;
  and

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

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

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

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

19 

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

	1.3 	
      Currency symbols and
definitions

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

	1.4 	
      Third Party Rights

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

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

	1.5 	
      Calculations

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

20 

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

THE FACILITY 

	2 	
      The Facility

	2.1 	
      The Facility

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

	2.2 	
      Amendment to
Commitment

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

	 	 	 
	 	(b) 	
      The Borrower may not deliver an Amendment Request
      unless:

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

	 	 	 
	 	(ii) 	
      the Repeating Representations are true on the date of the
      Amendment Request.

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

	 	 	 
	 	(d) 	
      An amendment to the Commitment will only be effective
      on:

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

	 	 	 
	 	(ii) 	
      the execution by the Lender of an Amendment
      Confirmation.

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

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

	2.3 	
      Reduction in Commitment

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

	2.4 	
      Finance Parties' rights and
  obligations

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

21 

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

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

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

	2.5 	
      Obligors' Agent

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

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

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

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

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

	3 	
      Purpose

	3.1 	
      Purpose

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

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

	 	 	 
	 	(b) 	
      general corporate requirements of the
  Borrower;

22 

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

	 	(c) 	
      working capital requirements of the Borrower or its
      Subsidiaries; and

	 	 	 
	 	(d) 	
      capital investments and expenditures of the Borrower or
      its Subsidiaries.

	3.2 	
      Monitoring

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

	4 	
      Conditions of
Utilization

	4.1 	
      Initial conditions
precedent

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

	4.2 	
      Further conditions
precedent

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

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

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

23 

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

UTILIZATION 

	5 	
      Utilization

	5.1 	
      Delivery of a Utilization
Request

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

	5.2 	
      Completion of a Utilization
  Request

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

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

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

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

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

	5.3 	
      Currency and amount

	 	(a) 	
      The currency specified in a Utilization Request must be
      dollars.

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

	5.4 	
      Lender’s obligations

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

	5.5 	
      Cancellation of Commitment

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

24 

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

REPAYMENT, PREPAYMENT AND CANCELLATION 

	6 	
      Repayment

	6.1 	
      Repayment of Loans

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

	6.2 	
      Extension option

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

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

	 	 	 
	 	(ii) 	
      the Repeating Representations are true on the date of the
      Extension Request.

	 	(b) 	
      An Extension Request shall be irrevocable.

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

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

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

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

	7 	
      Prepayment and
Cancellation

	7.1 	
      Illegality

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

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

25 

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

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

	7.2 	
      Mandatory prepayment - change of
  control

	 	(a) 	
      If a Change of Control
occurs:

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

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

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

	 	(i) 	
      control of a person
means:

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

	 	(1) 	
      cast, or control the casting of, more than fifty percent
      (50%) of the maximum number of votes that might be cast at a general
      meeting of that person; or

	 	 	 
	 	(2) 	
      appoint or remove all, or the majority, of the directors
      or other equivalent officers of that person; or

	 	 	 
	 	(3) 	
      give directions with respect to the operating and
      financial policies of that person with which the directors or other
      equivalent officers of that person are obliged to comply;
  or

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

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

	7.3 	
      Mandatory prepayment – reduction in
    Commitment

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

26 

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

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

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

	7.4 	
      Automatic cancellation

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

	7.5 	
      Restrictions

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

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

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

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

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

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

27 

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

COSTS OF UTILIZATION 

	8 	
      Interest

	8.1 	
      Calculation of interest

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

	 	(a) 	
      Margin;

	 	 	 
	 	(b) 	
      LIBOR; and

	 	 	 
	 	(c) 	
      Risk Premium.

	8.2 	
      Payment of interest

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

	8.3 	
      Default interest

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

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

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

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

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

	8.4 	
      Notification of rates of
interest

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

28 

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

	9 	
      Interest Periods

	9.1 	
      Selection of Interest
Periods

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

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

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

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

	 	 	 
	 	(e) 	
      A Loan has one (1) Interest Period
only.

	9.2 	
      Non-Business Days

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

	10 	
      Changes to the Calculation of
  Interest

	10.1 	
      Absence of quotations

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

	10.2 	
      Market disruption

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

	 	(i) 	
      the Margin; and

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

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

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

	 	 	 
	 	(d) 	
      In this Agreement Market Disruption Event
      means:

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

29 

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

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

	10.3 	
      Alternative basis of interest or
  funding

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

	10.4 	
      Break Costs

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

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

	11 	
      Fees

	11.1 	
      Commitment fee

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

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

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

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

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

	11.2 	
      Establishment fee

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

30 

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

ADDITIONAL PAYMENT OBLIGATIONS 

	12 	
      Tax Gross Up and
Indemnities

	12.1 	
      Definitions

	 	(a) 	
      In this Agreement:

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

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

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

Tax Refund means a refund of
any Tax. 

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

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

	12.2 	
      Tax gross-up

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

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

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

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

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

31 

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

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

	12.3 	
      Tax indemnity

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

	 	 	 
	 	(b) 	
      Paragraph 0 above shall not
apply:

	 	(i) 	
      with respect to any Tax assessed on a Finance
    Party:

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

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

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

	 	(ii) 	
      to the extent a loss, liability or
cost:

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

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

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

	12.4 	
      Tax Refund

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

32 

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

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

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

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

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

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

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

	12.5 	
      Stamp taxes

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

	12.6 	
      VAT

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

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

33 

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

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

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

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

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

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

	12.7 	
      FATCA Information

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

	 	(i) 	
      confirm to that other Party whether it
  is:

	 	(A) 	
      a FATCA Exempt Party; or

	 	 	 
	 	(B) 	
      not a FATCA Exempt Party;

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

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

34 

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

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

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

	 	(i) 	
      any law or regulation;

	 	 	 
	 	(ii) 	
      any fiduciary duty; or

	 	 	 
	 	(iii) 	
      any duty of confidentiality.

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

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

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

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

Lender shall supply: 

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

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

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

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

35 

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

	12.8 	
      FATCA Deduction

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

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

	13 	
      Increased Costs

	13.1 	
      Increased costs

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

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

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

	 	 	 
	 	(iii) 	
      is a Basel III Increased
Cost.

	 	(b) 	
      In this Agreement:

Increased Costs means: 

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

	 	 	 
	 	(ii) 	
      an additional or increased cost; or

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

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

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

Basel III means: 

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

36 

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

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

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

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

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

	13.2 	
      Increased cost claims

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

	13.3 	
      Exceptions

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

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

	 	 	 
	 	(ii) 	
      attributable to a FATCA Deduction required to be made by
      a Party;

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

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

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

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

37 

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

	14 	
      Other Indemnities

	14.1 	
      Currency indemnity

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

	 	(i) 	
      making or filing a claim or proof against that Obligor;
      or

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

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

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

	14.2 	
      Other indemnities

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

	 	(i) 	
      the occurrence of any Event of Default;

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

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

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

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

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

38 

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

	14.3 	
      Indemnity to the Lender

The Borrower shall indemnify the Lender
immediately on demand against: 

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

	 	(i) 	
      investigating any event which it reasonably believes is a
      Default;

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

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

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

	15 	
      Mitigation by the
Lender

	15.1 	
      Mitigation

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

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

	15.2 	
      Limitation of
liability

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

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

	16 	
      Costs and Expenses

	16.1 	
      Transaction expenses

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

39 

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

	16.2 	
      Amendment costs

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

	16.3 	
      Enforcement costs

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

40 

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

GUARANTEE 

	17 	
      Guarantee and
Indemnity

	17.1 	
      Guarantee and indemnity

Each Guarantor irrevocably and
unconditionally jointly and severally: 

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

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

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

	17.2 	
      Continuing guarantee

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

	17.3 	
      Reinstatement

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

	17.4 	
      Waiver of defences

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

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

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

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

41 

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

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

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

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

	 	 	 
	 	(g) 	
      any insolvency or similar
proceedings.

	17.5 	
      Guarantor intent

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

	17.6 	
      Immediate recourse

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

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

	17.7 	
      Appropriations

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

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

42 

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

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

	17.8 	
      Deferral of Guarantors'
rights

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

	 	(a) 	
      to be indemnified by an Obligor;

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

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

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

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

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

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

	17.9 	
      Additional security

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

	17.10 	
      Further assurance

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

43 

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

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT 

	18 	
      Representations

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

	18.1 	
      Status

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

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

	 	 	 
	 	(c) 	
      It and each of its Subsidiaries has the power
  to:

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

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

	18.2 	
      Binding obligations

Subject to the Legal Reservations: 

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

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

	18.3 	
      Non-conflict with other
  obligations

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

	 	(a) 	
      any Applicable Law;

	 	 	 
	 	(b) 	
      its or any of its Subsidiaries' charter documents;
    or

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

	18.4 	
      Power and authority

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

44 

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

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

	18.5 	
      Validity and admissibility in
  evidence

	 	(a) 	
      All Authorizations required or
  desirable:

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

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

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

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

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

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

	18.6 	
      Governing law and
enforcement

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

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

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

	18.7 	
      Insolvency

No: 

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

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

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

45 

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

	18.8 	
      Deduction of Tax

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

	18.9 	
      No filing or stamp taxes

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

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

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

	18.10 	
      No default

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

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

	18.11 	
      No misleading
information

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

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

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

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

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

46 

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

	18.12 	
      Financial statements

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

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

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

	 	(i) 	
      have been prepared in accordance with Accounting
      Principles; and

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

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

	18.13 	
      Pari passu ranking

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

	18.14 	
      No proceedings pending or
  threatened

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

	18.15 	
      No breach of laws

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

	 	 	 
	 	(b) 	
      It is in compliance with all Authorizations in all
      material respects.

	18.16 	
      Environmental
compliance

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

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

47 

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

	18.17 	
      Taxation

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

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

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

	18.18 	
      Anti-corruption law

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

	18.19 	
      Sanctions

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

	 	(i) 	
      is a Restricted Party; or

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

	18.20 	
      Security and Financial
  Indebtedness

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

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

	18.21 	
      Transaction Security

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

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

48 

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

	18.22 	
      Legal and beneficial
ownership

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

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

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

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

	18.23 	
      Intellectual Property

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

	18.24 	
      Group Structure Chart

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

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

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

	18.25 	
      Accounting Reference Date

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

	18.26 	
      No amendment

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

49 

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

	18.27 	
      Ownership of Obligors

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

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

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

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

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

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

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

	18.28 	
      Insurances

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

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

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

	18.29 	
      Material Adverse Effect

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

	18.30 	
      No adverse
consequences

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

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

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

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

50 

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

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

	18.31 	
      No immunity

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

	18.32 	
      [Intentionally
Deleted]

	18.33 	
      Repetition

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

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

	19 	
      Information Undertakings

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

	19.1 	
      Financial statements

The Borrower shall supply to the
Lender: 

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

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

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

51 

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

	19.2 	
      Compliance Certificate

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

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

	19.3 	
      Requirements as to financial
  statements

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

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

	19.4 	
      Annual Budget and Base Case
Model

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

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

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

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

52 

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

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

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

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

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

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

	19.5 	
      Report undertakings

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

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

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

	19.6 	
      Environmental matters

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

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

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

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

53 

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

	19.7 	
Reserves and resources

	 	(a) 	
      The Borrower shall ensure that it
  maintains

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

	 	 	 
	 	(ii) 	
      [****].

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

	19.8 	
      Information: miscellaneous

The Borrower shall supply to the
Lender: 

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

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

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

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

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

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

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

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

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

54 

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

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

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

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

	19.9 	
      Amendment of charter
documents

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

	19.10 	
      Notification of
default

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

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

	19.11 	
      [Intentionally
deleted]

	19.12 	
      Know your customer checks

If: 

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

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

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

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

55 

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

	20 	
      Financial Covenants

	20.1 	
      Financial definitions

In this Agreement: 

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

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

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

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

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

	 	(a) 	
      Borrower Current Assets on the Test Date; to

	 	 	 
	 	(b) 	
      Borrower Current Liabilities on the Test
  Date.

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

	 	(c) 	
      Borrower Total Debt on the Test Date; to

	 	 	 
	 	(d) 	
      Borrower Adjusted EBITDA for that Relevant
  Period.

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

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

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

56 

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

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

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

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

Sustaining Capital Expenditures
means [****]. 

Test Date means every Quarter
Date in each year. 

	20.2 	
      Interpretation

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

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

	 	(i) 	
      the Lender’s Spot Rate of Exchange; or

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

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

	20.3 	
      Financial condition

The Borrower shall ensure that: 

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

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

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

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

	20.4 	
      Financial testing

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

57 

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

	20.5 	
      Annual Budget undertaking

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

	21 	
      General Undertakings

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

	21.1 	
      Authorizations

The Borrower shall promptly: 

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

	 	 	 
	 	(b) 	
      upon request, supply certified copies to the Lender
      of,

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

	 	(A) 	
      enable it to perform its obligations under the Finance
      Documents;

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

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

	 	(ii) 	
      any Material Licence.

	21.2 	
      Default

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

	21.3 	
      Compliance with laws

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

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

	 	 	 
	 	(c) 	
      The Borrower shall ensure that
no:

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

58 

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

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

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

	21.4 	
      Defence of claims

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

	21.5 	
      Negative pledge

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

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

	 	 	 
	 	(b) 	
      The Borrower shall not:

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

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

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

	 	 	 
	 	(iv) 	
      enter into any other preferential arrangement having a
      similar effect,

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

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

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

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

59 

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

	 	(iii) 	
      any Security or Quasi-Security arising under the Finance
      Documents;

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

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

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

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

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

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

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

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

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

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

	21.6 	
      Disposals

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

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

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

60 

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

	 	(ii) 	
      made with the prior written consent of the
  Lender.

	21.7 	
      Arm's length basis

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

	 	 	 
	 	(b) 	
      Paragraph (a) above does not apply
to:

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

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

	21.8 	
      Acquisition of Real
Property

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

	 	(i) 	
      notify the Lender; and

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

	21.9 	
      No guarantees or
indemnities

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

	 	 	 
	 	(b) 	
      Paragraph 0 does not apply to a guarantee which
  is:

	 	(i) 	
      permitted under clause 0 (Financial indebtedness);
      or

	 	 	 
	 	(ii) 	
      granted with the prior written consent of the
    Lender.

	21.10 	
      Dividends and share
redemption

	 	(a) 	
      The Borrower shall not make any Distribution.

	 	 	 
	 	(b) 	
      Paragraph (a) above does not apply
to:

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

61 

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

	 	(ii) 	
      the making of a Distribution, provided
  that:

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

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

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

	21.11 	
      Financial Indebtedness

	 	(a) 	
      Neither the Borrower, nor any of the Obligors,
    shall:

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

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

	 	(b) 	
      Paragraph 0 above does not apply to any Financial
      Indebtedness:

	 	(i) 	
      arising under a Finance Document;

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

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

	 	 	 
	 	(iv) 	
      arising under any Permitted Equipment
Financing;

	 	 	 
	 	(v) 	
      arising under intercompany loans to any
Obligor;

	 	 	 
	 	(vi) 	
      arising under any unsecured
debt,

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

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

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

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

62 

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

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

	 	 	 
	 	(x) 	
      owed by the Borrower to another Obligor; or

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

(together, Permitted
Indebtedness). 

	21.12 	
      Merger

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

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

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

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

	21.13 	
      Change of business

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

	21.14 	
      Joint Ventures

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

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

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

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

63 

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

	21.15 	
      Acquisitions

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

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

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

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

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

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

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

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

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

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

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

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

64 

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

(together, Permitted Acquisitions). 

	21.16 	
      Finance Documents

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

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

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

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

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

	21.17 	
      Environmental
compliance

	 	(a) 	
      The Borrower shall:

	 	(i) 	
      comply in all respects with all Environmental
  Law;

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

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

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

	21.18 	
      Preservation of assets

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

	21.19 	
      Access to the site

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

	21.20 	
      Principal place of
business

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

65 

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

	21.21 	
      Accounting systems

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

	21.22 	
      Accounting Reference Date

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

	21.23 	
      Auditors

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

	21.24 	
      Construction, operation and
  maintenance

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

	21.25 	
      Amendment of charter
documents

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

	21.26 	
      Anti-corruption law

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

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

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

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

	21.27 	
      Sanctions

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

66 

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

	 	(a) 	
      involving or for the benefit of any Restricted Party;
      or

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

	21.28 	
      Taxation

	 	(a) 	
      The Borrower shall (and shall ensure that each member of
      the Group will) pay and discharge all Taxes imposed upon it or its assets
      within the time period allowed without incurring penalties unless and only
      to the extent that:

	 	(i) 	
      such payment is being contested in good faith;
  and

	 	(A) 	
      adequate reserves are being maintained for those Taxes
      and the costs required to contest them which have been disclosed in its
      latest financial statements delivered to the Lender under clause 0
      (Financial statements); and

	 	 	 
	 	(B) 	
      such payment can be lawfully withheld and failure to pay
      those Taxes does not have or is not reasonably likely to have a Material
      Adverse Effect; or

	 	(ii) 	
      the amount of such unpaid Taxes is not material, the
      non-payment results from an administrative oversight or error by a member
      of the Group and such payment is made promptly (and in any event within
      three (3) Business Days) after a member of the Group becoming aware of
      such non-payment.

	 	(b) 	
      No member of the Group may change its residence for Tax
      purposes.

	21.29 	
      Critical assets

Notwithstanding any other provision of
this Agreement the Borrower shall not sell, lease, transfer or otherwise dispose
of any Material Licence or of any other asset critical to the operation of the
Properties without the prior written consent of the Lender. For greater
certainty the obligations under this clause 21.29 shall include obtaining,
maintaining or renewing, as applicable, any Material Licenses, approvals or
consents necessary at the time for the carrying out of the Borrower’s business
and operations. 

	21.30 	
      Intellectual Property

The Borrower shall, to the extent that
it has the right to the same, preserve and maintain the subsistence and validity
of all material Intellectual Property necessary for the Properties including in
relation to all patents, trade marks, service marks, designs, utility models,
copyrights, design rights, inventions, confidential information, know-how and
rights of like nature. 

	21.31 	
      Insurance

	 	(a) 	
      The Borrower shall effect and maintain or cause to be
      effected and maintained in full force and effect the following Insurances
      with reputable independent insurance companies or
  underwriters:

67 

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

	 	(i) 	
      property damage insurance covering all risks of physical
      loss, destruction, or damage to all insurable assets of the
    Properties;

	 	 	 
	 	(ii) 	
      insurance of all risks of direct physical loss or damage
      on a “warehouse to warehouse” basis arising from the transport or
      temporary storage of Product or equipment;

	 	 	 
	 	(iii) 	
      liability insurance on an occurrence basis against claims
      filed anywhere in the world and occurring anywhere in the world for an
      Obligor’s liability arising out of claims for personal injury (including
      bodily injury and death) and property damage;

	 	 	 
	 	(iv) 	
      employers’ liability insurance in accordance with
      statutory requirements;

	 	 	 
	 	(v) 	
      directors’ and officers’ liability insurance;
  and

	 	 	 
	 	(vi) 	
      all insurances required to be in effect by the laws of
      the countries of incorporation of each
Obligor.

	21.32 	
      Pari passu ranking

The Borrower shall ensure that at all
times any unsecured and unsubordinated claims of a Finance Party against it
under the Finance Documents rank at least pari passu with the claims of
all its other unsecured and unsubordinated creditors except those creditors
whose claims are mandatorily preferred by laws of general application to
companies. 

	21.33 	
      Access

The Borrower shall ensure that each
member of the Group will, (not more than once in every calendar year unless the
Lender reasonably suspects a Default is continuing or may occur) permit the
Lender and/or the Security Agent and/or accountants or other professional
advisers and contractors of the Lender or the Security Agent free access at all
reasonable times and on reasonable notice at the risk and cost of the Borrower
to (a) the premises, assets, books, accounts and records of each member of the
Group and (b) meet and discuss matters with management of the Group. 

	21.34 	
      Further assurance

	 	(a) 	
      The Borrower shall (and shall procure that each other
      member of the Group will) promptly do all such acts or execute all such
      documents (including assignments, transfers, mortgages, charges, notices
      and instructions) as the Security Agent may reasonably specify (and in
      such form as the Security Agent may reasonably require in favour of the
      Security Agent or its nominee(s)):

	 	(i) 	
      to perfect the Security created or intended to be created
      under or evidenced by the Transaction Security Documents or for the
      exercise of any rights, powers and remedies of the Security Agent or the
      Finance Parties provided by or pursuant to the Finance Documents or by
      law; and/or

	 	 	 
	 	(ii) 	
      to facilitate the realisation of the assets which are, or
      are intended to be, the subject of the Transaction
  Security.

	 	(b) 	
      The Borrower shall (and shall procure that each other
      member of the Group will) take all such action as is available to it
      (including making all filings and registrations) as may be necessary for
      the purpose of the creation, perfection, protection or maintenance of
      any Security conferred or intended to be conferred on the Security
Agent or the Finance Parties by or pursuant to the Finance Documents. 

68 

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

	21.35 	
      Preservation of Transaction
  Security

Other than as expressly permitted under
the Finance Documents, the Borrower shall not do, or consent to the doing of,
anything that reasonably could be expected to prejudice the validity of any of
the security granted pursuant to the Transaction Security Documents. 

	21.36 	
      Abandonment or
suspension

	 	(a) 	
      The Borrower shall not:

	 	(i) 	
      abandon the conduct of the Properties or any material
      part thereof; or

	 	 	 
	 	(ii) 	
      suspend the operation of any of the Properties for a
      continuous period of more than thirty five (35)
days.

	 	(b) 	
      If an event of force majeure occurs that the Borrower
      anticipates (acting reasonably) may result in the abandonment of the
      conduct of any of the Properties or a suspension of construction or
      operation of any of the Properties for a continuous period in excess of
      the relevant periods specified in clause 0, the Borrower immediately shall
      notify and consult with the Lender.

	21.37 	
      Immunity

The Borrower shall not in any
proceedings in Canada or in any other jurisdiction in relation to any Finance
Document, claim or seek in any way to claim, for itself or any of its assets,
immunity from execution, attachment or other similar legal process. 

	21.38 	
      Hedging programme

	 	(a) 	
      The Borrower shall undertake in good faith to offer risk
      management business to the Lender, subject to the Lender’s ability to
      execute such business effectively and promptly, and offer competitive
      commercial terms.

	 	 	 
	 	(b) 	
      The Borrower shall not carry out any hedging transactions
      other than:

	 	(i) 	
      pursuant to a Counterparty Hedging Agreement, provided
      that at no time shall the aggregate of all outstanding Loans and
      marked-to-market trading exposures of the Obligors owed to the Finance
      Parties under this Agreement and the Counterparty Hedging Agreement exceed
      $[****];

	 	 	 
	 	(ii) 	
      [****]; or

	 	 	 
	 	(iii) 	
      with the prior written consent of the
  Lender.

	21.39 	
      Press announcements

The Borrower shall not, and shall
procure that no member of the Group will, make any press announcement or other
media communication (including by making any information available on any
website) in relation to the Facility without the prior written consent of the
Lender, save where an announcement is required by any applicable Canadian or US
securities laws or the requirements of the TSX or NYSE (provided that, to the
extent permitted to do so by such law, rules or regulation, the Borrower shall inform the Lender of
the contents of such announcement or communication as soon as possible before
such announcement or communication is made). 

69 

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

	21.40 	
      Klondex Canada

Klondex Canada shall deliver within 30
days of the Financial Close the Transaction Security Documents set out in
Schedule 21.40, in form and substance satisfactory to the Finance Parties,
acting reasonably. 

	22 	
      Events of Default

Each of the events or circumstances set
out in clause 0 is an Event of Default (save for clause 22.28
(Acceleration)). 

	22.1 	
      Non-payment

An Obligor does not pay on the due date
any amount payable pursuant to a Finance Document at the place and in the
currency in which it is expressed to be payable. 

	22.2 	
      Other obligations

	 	(a) 	
      An Obligor does not comply with any provision of the
      Finance Documents (other than those referred to in clause 22.1
      (Non-payment)).

	 	 	 
	 	(b) 	
      No Event of Default under paragraph 0 above will occur if
      the failure to comply is capable of remedy and is remedied within ten (10)
      Business Days (or such other time as may be expressly provided in this
      Agreement) of the earlier of (A) the Lender giving notice to the Borrower
      and (B) the Borrower becoming aware of the failure to comply.

	 	 	 
	 	(c) 	
      For the purposes of paragraph (b) above, any failure to
      comply with clauses 19.1, 19.2, 19.3, 19.4, 19.8(e), and 19.10, clause 0
      (Financial covenants), or any provision of any Transaction Security
      Document shall not be capable of remedy.

	22.3 	
      Misrepresentation

Any representation or statement made or
deemed to be made by an Obligor in the Finance Documents or any other document
delivered by or on behalf of any Obligor under or in connection with any Finance
Document is or proves to have been incorrect or misleading in any material
respect when made or deemed to be made unless the underlying circumstances (if
capable of remedy) are remedied within ten (10) Business Days of the statement
being made or deemed repeated. 

	22.4 	
      Cross default

	 	(a) 	
      Any event of default as described in the Gold Purchase
      Agreement.

	 	 	 
	 	(b) 	
      Any Financial Indebtedness of any member of the Group is
      not paid when due nor within any originally applicable grace
  period.

	 	 	 
	 	(c) 	
      Any Financial Indebtedness of any member of the Group is
      declared to be or otherwise becomes due and payable prior to its specified
      maturity as a result of an event of default (however described).

	 	 	 
	 	(d) 	
      Any commitment for any Financial Indebtedness of any
      member of the Group is cancelled or suspended by a creditor of any member of the Group as
  a result of an event of default (however described).

70 

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

	 	(e) 	
      Any creditor of any member of the Group becomes entitled
      to declare any Financial Indebtedness of any member of the Group due and
      payable prior to its specified maturity as a result of an event of default
      (however described).

	 	 	 
	 	(f) 	
      No Event of Default will occur under this clause 22.4 if
      the aggregate amount of Financial Indebtedness or commitment for Financial
      Indebtedness falling within paragraphs 0 to 0 above is less than
      US$[****] (or its Equivalent).

	22.5 	
      Insolvency

	 	(a) 	
      A member of the Group is unable or admits inability to
      pay its debts as they fall due, suspends making payments on any of its
      debts or, by reason of actual or anticipated financial difficulties,
      commences negotiations with one or more of its creditors (excluding any
      Finance Party in its capacity as such) with a view to rescheduling any of
      its indebtedness.

	 	 	 
	 	(b) 	
      The value of the assets of any member of the Group is
      less than its liabilities (taking into account contingent and prospective
      liabilities).

	 	 	 
	 	(c) 	
      A moratorium is declared in respect of any indebtedness
      of any member of the Group. If a moratorium ends, the ending of the
      moratorium will not remedy any Event of Default caused by that
      moratorium.

	22.6 	
      Insolvency proceedings

	 	(a) 	
      Any corporate action, legal proceedings or other
      procedure or step is taken in relation to:

	 	(i) 	
      the suspension of payments, a moratorium of any
      indebtedness, winding-up, dissolution, administration or reorganisation
      (by way of voluntary arrangement, scheme of arrangement or otherwise) of
      any member of the Group or the Borrower other than a solvent liquidation
      or reorganisation of any member of the Group which is not an
    Obligor;

	 	 	 
	 	(ii) 	
      a composition, compromise, assignment or arrangement with
      any creditor of any member of the Group;

	 	 	 
	 	(iii) 	
      the appointment of a liquidator (other than in respect of
      a solvent liquidation of a member of the Group which is not an Obligor),
      receiver, administrative receiver, administrator, compulsory manager or
      other similar officer in respect of any member of the Group or the
      Borrower or any of its assets; or

	 	 	 
	 	(iv) 	
      enforcement of any Security over any assets of any member
      of the Group,

or any analogous procedure or step is
taken in any jurisdiction. 

	 	(b) 	
      This clause 22.6 shall not apply
to:

	 	(i) 	
      any winding-up petition which is frivolous or vexatious
      and is discharged, stayed or dismissed within thirty (30) days of
      commencement; or

	 	 	 
	 	(ii) 	
      the solvent liquidation of any member of the Group that
      is not an Obligor so long as any payments or assets distributed as a result of such
liquidation are distributed to other members of the Group. 

71 

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

	22.7 	
      Creditors' process

Any expropriation, attachment,
sequestration, execution or other enforcement action or any analogous process in
any jurisdiction affects any asset or assets of a member of the Group having an
aggregate value of US$[****] and is not discharged within thirty (30)
days. 

	22.8 	
      Failure to comply with court judgment or arbitral
      award

	 	(a) 	
      Any member of the Group fails to comply with or pay by
      the required time any sum due from it under any final judgment or any
      final order made or given by a court or arbitral tribunal or other
      arbitral body, in each case of competent jurisdiction.

	 	 	 
	 	(b) 	
      No Event of Default under paragraph 0 above will occur if
      the aggregate liability under that judgment or order is less than
      US$[****] (or its Equivalent) and is discharged within thirty (30)
      days.

	22.9 	
      Unlawfulness and
invalidity

	 	(a) 	
      It is or becomes unlawful for an Obligor to perform any
      of its obligations under the Finance Documents or any Transaction Security
      created or expressed to be created by the Transaction Security Documents
      ceases to be effective or any subordination created under the
      Intercreditor Agreement ceases to be effective.

	 	 	 
	 	(b) 	
      Any obligation or obligations of any Obligor under any
      Finance Documents are not (subject to the Legal Reservations) or cease to
      be legal, valid, binding or enforceable and the cessation individually or
      cumulatively materially and adversely affects the interests of the Lender
      under the Finance Documents.

	 	 	 
	 	(c) 	
      Any Finance Document ceases to be in full force and
      effect or any Transaction Security or any subordination created under the
      Intercreditor Agreement ceases to be legal, valid, binding, enforceable or
      effective or is alleged by a party to it (other than a Finance Party) to
      be ineffective.

	22.10 	
      Repudiation and rescission of
  agreements

An Obligor (or other relevant party)
rescinds or purports to rescind or repudiates or purports to repudiate a Finance
Document or any of the Transaction Security or evidences an intention to rescind
or repudiate a Finance Document or any Transaction Security. 

	22.11 	
      Intercreditor Agreement

Any party to the Intercreditor
Agreement (other than a Finance Party or an Obligor) fails to comply with the
provisions of, or does not perform its obligations under, the Intercreditor
Agreement, provided if the non-compliance or circumstances are capable of
remedy, it is not remedied within thirty (30) days of the Lender giving notice
to that party. 

	22.12 	
      Major damage

The whole or any part (the book value
of which is twenty percent (20%) or more of the book value of the aggregate of
the assets of the Borrower on a consolidated basis) of any asset of the Borrower is destroyed or otherwise damaged. 

72 

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

	22.13 	
      Cessation of business

Any member of the Group suspends or
ceases to carry on (or threatens to suspend or cease to carry on) all or a
material part of its business. 

	22.14 	
      Abandonment

Abandonment, loss, damage or forfeiture
of all or substantially all of the Properties or the mining rights, including
the Material Licences. 

	22.15 	
      Authorizations

	 	(a) 	
      Any Authorization is suspended, cancelled, revoked,
      forfeited, surrendered or terminated (whether in whole or in part thereof)
      or otherwise is not, or ceases to be, in full force and effect, or any
      person is, or becomes entitled to revoke, cancel, suspend, surrender or
      terminate any Authorization (whether in whole or in part thereof), and
      which is likely to have a Material Adverse Effect.

	 	 	 
	 	(b) 	
      No Event of Default under clause 24.15(a) will occur
      if:

	 	(i) 	
      the mining operations are continuing uninterrupted;
      and

	 	 	 
	 	(ii) 	
      the circumstances discussed in clause 24.15(a) are
      capable of remedy and are remedied within sixty (60) days of their
      occurrence.

	22.16 	
      Audit qualification

The auditors of any Obligor
include:

	 	(a) 	
      a going concern qualification in their audit opinion;
      or

	 	 	 
	 	(b) 	
      any other material qualification or any emphasis of
      matter statement,

in relation to any financial statements
required to be delivered pursuant to clause 0 (Financial statements),
which qualification or emphasis, or the matters in relation to which such
qualification or emphasis is made, would have a Material Adverse Effect. 

	22.17 	
      Litigation

	 	(a) 	
      Other than as disclosed in the Disclosure Schedule, any
      litigation, arbitration, administrative, governmental, regulatory or other
      investigation, proceeding or dispute is commenced or
  threatened:

	 	(i) 	
      in relation to the Finance Documents or the transactions
      contemplated in the Finance Documents; or

	 	 	 
	 	(ii) 	
      otherwise against any member of the Group or its assets
      (or against the directors of any member of the
Group),

which (in each case) in the opinion of
the Lender is reasonably likely to be adversely determined and, if adversely
determined, will have or is reasonably likely to have a Material Adverse Effect. 

73 

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

	 	(b) 	
      Any litigation, arbitration or administrative proceeding
      of or before any court, arbitral body or agency, or any other claim or
      dispute, has been finally settled (by non-appealable judgment, decision or
      other determination) against, or settled by, any member of the Group that
      has a determination or settlement value which:

	 	(i) 	
      is more than US$[****]; or

	 	 	 
	 	(ii) 	
      in the opinion of the Lender has or could reasonably be
      expected to increase the Borrower’s environmental, social and/or tax
      liabilities, and which in each case could have a Material Adverse
      Effect.

	22.18 	
      Expropriation

The authority or ability of any member
of the Group to conduct its business is limited or wholly or substantially
curtailed by any seizure, expropriation, nationalisation, compulsory
acquisition, intervention, restriction or other action by or on behalf of any
governmental, regulatory or other authority or other person in relation to any
member of the Group or any of its assets or the shares in that member of the
Group (including without limitation the displacement of all or part of the
management of any member of the Group). 

	22.19 	
      Convertibility/Transferability

Any foreign exchange law is amended,
enacted or introduced or is reasonably likely to be amended, enacted or
introduced in any Relevant Jurisdiction that (in the opinion of the Lender):

	 	(a) 	
      has or is reasonably likely to have the effect of
      prohibiting, or restricting or delaying in any material respect any
      payment that any Obligor is required to make pursuant to the terms of any
      of the Finance Documents; or

	 	 	 
	 	(b) 	
      is materially prejudicial to the interests of the Finance
      Parties under or in connection with any of the Finance
  Documents.

	22.20 	
      Material Licences

Any:

	 	(a) 	
      Material Licence is terminated, cancelled, suspended or
      revoked (whether wholly or in part);

	 	 	 
	 	(b) 	
      restrictions or conditions are imposed on any Material
      Licence;

	 	 	 
	 	(c) 	
      Material Licence is modified or varied in a way that is
      adverse in any material respect to the interests of the relevant member or
      members of the Group; or

	 	 	 
	 	(d) 	
      Material Licence expires and is not renewed on
      substantially the same terms,

unless the mining operations are
continuing uninterrupted and the circumstances leading to the relevant
occurrences referred to in paragraphs (a) to (d) above are capable of remedy and
are remedied within sixty (60) days of their occurrence. 

74 

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

	22.21 	
      [Intentionally Deleted]

	22.22 	
      [Intentionally
Deleted]

	22.23 	
      Insurance

	 	(a) 	
      Any Insurance:

	 	(i) 	
      is not, or ceases to be, in full force and
  effect;

	 	 	 
	 	(ii) 	
      is unavailable at the time it is required to be effected;
      or

	 	 	 
	 	(iii) 	
      is avoided or reduced,

in a manner which would have a
Material Adverse Effect. 

	 	(b) 	
      Any insurer is entitled to avoid or otherwise reduce its
      liability under the policy relating to any Insurance or other insurance
      required to be effected under any Finance Document, unless the Insurance
      is, prior to its cession, replaced by insurance on substantially similar
      or more favourable terms and in form and substance satisfactory to the
      Lender.

	22.24 	
      Material adverse change

Any event or circumstance occurs which
the Lender reasonably believe has or is reasonably likely to have a Material
Adverse Effect. 

	22.25 	
      Acceleration

On and at any time after the occurrence
of an Event of Default which is continuing the Lender may, by notice to the
Borrower: 

	 	(a) 	
      cancel the Commitment whereupon they shall immediately be
      cancelled;

	 	 	 
	 	(b) 	
      declare that all or part of the Loans, together with
      accrued interest, and all other amounts accrued or outstanding under the
      Finance Documents be immediately due and payable, whereupon they shall
      become immediately due and payable;

	 	 	 
	 	(c) 	
      declare that all or part of the Loans be payable on
      demand, whereupon they shall immediately become payable on demand by the
      Lender; and/or

	 	 	 
	 	(d) 	
      exercise or direct the Security Agent to exercise any or
      all of its rights, remedies, powers or discretions under the Finance
      Documents.

75 

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

CHANGES TO PARTIES 

	23 	
      Changes to the Lender

	23.1 	
      Assignments and transfers by the
  Lender

Subject to this clause 0 and to clause
0 (Restriction on Debt Purchase Transactions), the Lender (the
Existing Lender) may, upon the written consent of the Borrower (such
consent not to be unreasonably withheld or delayed): 

	 	(a) 	
      assign any of its rights; or

	 	 	 
	 	(b) 	
      transfer by novation any of its rights and
      obligations,

to another bank or financial
institution or to a trust, fund or other entity which is regularly engaged in or
established for the purpose of making, purchasing or investing in loans, debt
securities or other similar debt instruments or facilities (the New
Lender); provided however that the consent of the Borrower shall not
be required where the assignment is to an Affiliate of the Lender or after the
occurrence and during the continuation of an Event of Default. 

	23.2 	
      Conditions of assignment or
  transfer

	 	(a) 	
      An assignment or transfer of part of the Lender's
      participation in Commitment or Loans must be in a minimum amount of
      US$[****].

	 	 	 
	 	(b) 	
      An assignment will only be effective
on:

	 	(i) 	
      receipt by the Existing Lender (whether in the Assignment
      Agreement or otherwise) of written confirmation from the New Lender (in
      form and substance satisfactory to the Lender) that the New Lender will
      assume the same obligations to the other Finance Parties and the other
      Secured Parties as it would have been under if it was the
Lender;

	 	 	 
	 	(ii) 	
      the New Lender entering into the documentation required
      for it to accede as a party to the Intercreditor Agreement; and

	 	 	 
	 	(iii) 	
      performance by the Existing Lender of all necessary know
      your customer or other similar checks under all applicable laws and
      regulations in relation to such assignment to a New
  Lender.

	 	(c) 	
      A transfer will only be effective if the New Lender
      enters into the documentation required for it to accede as a party to the
      Intercreditor Agreement and if the procedure set out in clause 0
      (Procedure for transfer) is complied with.

	 	 	 
	 	(d) 	
      If:

	 	(i) 	
      the Lender assigns or transfers any of its rights or
      obligations under the Finance Documents or changes its Facility Office;
      and

	 	 	 
	 	(ii) 	
      as a result of circumstances existing at the date the
      assignment, transfer or change occurs, an Obligor would be obliged to make
      a payment to the New Lender or Lender acting through its new Facility
      Office under clause 0 (Tax gross-up and indemnities) or clause 0
      (Increased Costs),

76 

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

then the New Lender or Lender acting through its new Facility
Office is only entitled to receive payment under those clauses to the same
extent as the Existing Lender or Lender acting through its previous Facility
Office would have been if the assignment, transfer or change had not
occurred.

	23.3 	
      Limitation of responsibility of the Existing
      Lender

	 	(a) 	
      Unless expressly agreed to the contrary, the Existing
      Lender makes no representation or warranty and assumes no responsibility
      to a New Lender for:

	 	(i) 	
      the legality, validity, effectiveness, adequacy or
      enforceability of the Finance Documents, the Transaction Security or any
      other documents;

	 	 	 
	 	(ii) 	
      the financial condition of any Obligor;

	 	 	 
	 	(iii) 	
      the performance and observance by any Obligor of its
      obligations under the Finance Documents or any other documents;
  or

	 	 	 
	 	(iv) 	
      the accuracy of any statements (whether written or oral)
      made in or in connection with any Finance Document or any other
      document,

and any representations or warranties
implied by law are excluded. 

	 	(b) 	
      Each New Lender confirms to the Existing Lender, the
      other Finance Parties and the Secured Parties that
it:

	 	(i) 	
      has made (and shall continue to make) its own independent
      investigation and assessment of the financial condition and affairs of
      each Obligor and its related entities in connection with its participation
      in this Agreement and has not relied exclusively on any information
      provided to it by the Existing Lender or any other Finance Party in
      connection with any Finance Document or the Transaction Security;
    and

	 	 	 
	 	(ii) 	
      will continue to make its own independent appraisal of
      the creditworthiness of each Obligor and its related entities whilst any
      amount is or may be outstanding under the Finance Documents or any
      Commitment is in force.

	 	(c) 	
      Nothing in any Finance Document obliges an Existing
      Lender to:

	 	(i) 	
      accept a re-transfer or re-assignment from a New Lender
      of any of the rights and obligations assigned or transferred under this
      clause 23; or

	 	 	 
	 	(ii) 	
      support any losses directly or indirectly incurred by the
      New Lender by reason of the non-performance by any Obligor of its
      obligations under the Finance Documents or
otherwise.

	23.4 	
      Procedure for transfer

	 	(a) 	
      Subject to the conditions set out in clause 23.2
      (Conditions of assignment or transfer) a transfer is effected in
      accordance with paragraph 0 below when the Existing Lender executes an
      otherwise duly completed Transfer Certificate by the New Lender. The
      Existing Lender shall, subject to paragraph 0 below, as soon as reasonably
      practicable after receipt by it of a duly completed Transfer Certificate
      appearing on its face to comply with the terms of this Agreement and
      delivered in accordance with the terms of this Agreement, execute that Transfer
Certificate. 

77 

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

	 	(b) 	
      The Borrower and the other Finance Parties irrevocably
      authorise the Lender to execute any Transfer Certificate on their behalf,
      without any consultation with them.

	 	 	 
	 	(c) 	
      The Lender shall only be obliged to execute a Transfer
      Certificate delivered to it once it is satisfied that it has complied with
      all necessary know your customer or other similar checks under all
      applicable laws and regulations in relation to the transfer to such New
      Lender.

	 	 	 
	 	(d) 	
      Subject to clause 0 (Pro rata interest
      settlement), on the Transfer Date:

	 	(i) 	
      to the extent that in the Transfer Certificate the
      Existing Lender seeks to transfer by novation its rights and obligations
      under the Finance Documents and in respect of the Transaction Security
      each of the Obligors and the Existing Lender shall be released from
      further obligations towards one another under the Finance Documents and in
      respect of the Transaction Security and their respective rights against
      one another under the Finance Documents and in respect of the Transaction
      Security shall be cancelled (being the Discharged Rights and
      Obligations);

	 	 	 
	 	(ii) 	
      each of the Obligors and the New Lender shall assume
      obligations towards one another and/or acquire rights against one another
      which differ from the Discharged Rights and Obligations only insofar as
      that Obligor and the New Lender have assumed and/or acquired the same in
      place of that Obligor and the Existing Lender;

	 	 	 
	 	(iii) 	
      the New Lender shall acquire the same rights and assume
      the same obligations in respect of the Transaction Security as they would
      have acquired and assumed had the New Lender been the Lender with the
      rights and/or obligations acquired or assumed by it as a result of the
      transfer and to that extent the Security Agent and the Existing Lender
      shall each be released from further obligations to each other under the
      Finance Documents; and

	 	 	 
	 	(iv) 	
      the New Lender shall become a Party as the
  Lender.

	23.5 	
      Procedure for
assignment

	 	(a) 	
      Subject to the conditions set out in clause 23.2
      (Conditions of assignment or transfer) an assignment may be
      effected in accordance with paragraph 0 below when the Lender executes an
      otherwise duly completed Assignment Agreement delivered to it by the New
      Lender. The Lender shall, subject to paragraph 0 below, as soon as
      reasonably practicable after receipt by it of a duly completed Assignment
      Agreement appearing on its face to comply with the terms of this Agreement
      and delivered in accordance with the terms of this Agreement, execute that
      Assignment Agreement.

	 	 	 
	 	(b) 	
      The Borrower and the other Finance Parties irrevocably
      authorise the Lender to execute any Assignment Agreement on their behalf,
      without any consultation with them

	 	 	 
	 	(c) 	
      The Lender shall only be obliged to execute an Assignment
      Agreement delivered to it by the New Lender once it is satisfied it has
      complied with all necessary know your customer or other similar checks
      under all applicable laws and regulations in relation to the assignment to
      such New Lender.

78 

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

	 	(d) 	
      Subject to clause 23.8 (Pro rata interest
      settlement), on the Transfer Date:

	 	(i) 	
      the Existing Lender will assign absolutely to the New
      Lender its rights under the Finance Documents and in respect of the
      Transaction Security expressed to be the subject of the assignment in the
      Assignment Agreement;

	 	 	 
	 	(ii) 	
      the Existing Lender will be released from the obligations
      (the Relevant Obligations) expressed to be the subject of the
      release in the Assignment Agreement (and any corresponding obligations by
      which it is bound in respect of the Transaction Security); and

	 	 	 
	 	(iii) 	
      the New Lender shall become a Party as the Lender and
      will be bound by obligations equivalent to the Relevant
  Obligations.

	 	(e) 	
      The Lender may utilise procedures other than those set
      out in this clause 23.5 to assign their rights under the Finance Documents
      (but not, without the consent of the relevant Obligor or unless in
      accordance with clause 23.4 (Procedure for transfer), to obtain a
      release by that Obligor from the obligations owed to that Obligor by the
      Lender nor the assumption of equivalent obligations by a New Lender)
      provided that they comply with the conditions set out in clause 0
      (Conditions of assignment or transfer).

	23.6 	
      Copy of Transfer Certificate, Assignment Agreement or
      Amendment Confirmation to Borrower

The Lender shall, as soon as reasonably
practicable after it has executed a Transfer Certificate, an Assignment
Agreement or an Amendment Confirmation, send to the Borrower a copy of that
Transfer Certificate, Assignment Agreement or Amendment Confirmation. 

	23.7 	
      Security over the Lender’s
rights

In addition to the other rights
provided the Lender under this clause 23, the Lender may without consulting with
or obtaining consent from any Obligor, at any time charge, assign or otherwise
create Security in or over (whether by way of collateral or otherwise) all or
any of its rights under any Finance Document to secure obligations of that
Lender including, without limitation: 

	 	(a) 	
      any charge, assignment or other Security to secure
      obligations to a federal reserve or central bank; and

	 	 	 
	 	(b) 	
      in the case of the Lender which is a fund, any charge,
      assignment or other Security granted to any holders (or trustee or
      representatives of holders) of obligations owed, or securities issued, by
      that Lender as security for those obligations or
  securities,

except that no such charge, assignment
or Security shall: 

	 	(i) 	
      release the Lender from any of its obligations under the
      Finance Documents or substitute the beneficiary of the relevant charge,
      assignment or Security for the Lender as a party to any of the Finance
      Documents; or

	 	 	 
	 	(ii) 	
      require any payments to be made by an Obligor other than
      or in excess of, or grant to any person any more extensive rights than,
      those required to be made or granted to the relevant Lender under the
      Finance Documents.

79 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 
	23.8 	
      Pro rata interest
settlement

	 	(a) 	
      Any interest or fees in respect of the relevant
      participation which are expressed to accrue by reference to the lapse of
      time shall continue to accrue in favour of the Existing Lender up to but
      excluding the Transfer Date (Accrued Amounts) and shall become due
      and payable to the Existing Lender (without further interest accruing on
      them) on the last day of the current Interest Period (or, if the Interest
      Period is longer than six (6) Months, on the next of the dates which falls
      at six (6) Monthly intervals after the first day of that Interest
      Period).

	 	 	 
	 	(b) 	
      The rights assigned or transferred by the Existing Lender
      will not include the right to the Accrued Amounts, so that, for the
      avoidance of doubt:

	 	(i) 	
      when the Accrued Amounts become payable, those Accrued
      Amounts will be payable to the Existing Lender; and

	 	 	 
	 	(ii) 	
      the amount payable to the New Lender on that date will be
      the amount which would, but for the application of this clause 23.8, have
      been payable to it on that date, but after deduction of the Accrued
      Amounts.

	 	(c) 	
      In this clause references to 23.8Interest Period
      shall be construed to include a reference to any other period for
      accrual of fees.

	24 	
      Restriction on Debt Purchase
  Transactions

The Borrower shall not, and shall
procure that and each other member of the Group shall not, enter into any Debt
Purchase Transaction or beneficially own all or any part of the share capital of
a company that is the Lender or a party to a Debt Purchase Transaction. 

	25 	
      Changes to the
Obligors

	25.1 	
      Assignments and transfer by
  Obligors

No Obligor may assign any of its rights
or transfer any of its rights or obligations under the Finance Documents. 

80 

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

ADMINISTRATION 

	26 	
      Payment Mechanics

	26.1 	
      Distributions to an
Obligor

The Lender may (with the consent of the
Obligor or in accordance with clause 27 (Set-off)) apply any amount
received by it for that Obligor in or towards payment (on the date and in the
currency and funds of receipt) of any amount due from that Obligor under the
Finance Documents or in or towards purchase of any amount of any currency to be
so applied. 

	26.2 	
      Clawback

	 	(a) 	
      Where a sum is to be paid to the Lender under the Finance
      Documents for another Party, the Lender is not obliged to pay that sum to
      that other Party (or to enter into or perform any related exchange
      contract) until it has been able to establish to its satisfaction that it
      has actually received that sum.

	 	 	 
	 	(b) 	
      If the Lender pays an amount to another Party and it
      proves to be the case that such Party had not actually received that
      amount, then the Party to whom that amount (or the proceeds of any related
      exchange contract) was paid by the Lender shall on demand refund the same
      to the Lender together with interest on that amount from the date of
      payment to the date of receipt by the Lender, calculated by the Lender to
      reflect its cost of funds.

	26.3 	
      Partial payments

	 	(a) 	
      If the Lender receives a payment that is insufficient to
      discharge all the amounts then due and payable by an Obligor under the
      Finance Documents, the Lender shall apply that payment towards the
      obligations of that Obligor under the Finance Documents in the following
      order:

	 	(i) 	
      first, in or towards payment pro rata of any
      unpaid fees, costs and expenses of the Lender or the Security Agent under
      the Finance Documents;

	 	 	 
	 	(ii) 	
      secondly, in or towards payment pro rata of any
      accrued interest, fee or commission due but unpaid under this
      Agreement;

	 	 	 
	 	(iii) 	
      thirdly, in or towards payment pro rata of any
      principal due but unpaid under this Agreement; and

	 	 	 
	 	(iv) 	
      fourthly, in or towards payment pro rata of any
      other sum due but unpaid under the Finance
Documents.

	 	(b) 	
      The Lender may vary the order set out in paragraphs 00 to
      0 above.

	 	(c) 	
      Paragraphs 0 and 0 above will override any appropriation
      made by an Obligor.

	26.4 	
      No set-off by Obligors

All payments to be made by an Obligor
under the Finance Documents shall be calculated and be made without (and free
and clear of any deduction for) set-off or counterclaim. 

81 

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

	26.5 	
      Business Days

	 	(a) 	
      Any payment under the Finance Documents which is due to
      be made on a day that is not a Business Day shall be made on the next
      Business Day in the same calendar month (if there is one) or the preceding
      Business Day (if there is not).

	 	 	 
	 	(b) 	
      During any extension of the due date for payment of any
      principal or Unpaid Sum under this Agreement interest is payable on the
      principal or Unpaid Sum at the rate payable on the original due
    date.

	26.6 	
      Currency of account

	 	(a) 	
      Subject to paragraphs 0 and 0 below, dollars is the
      currency of account and payment for any sum due from an Obligor under any
      Finance Document.

	 	 	 
	 	(b) 	
      Each payment in respect of costs, expenses or Taxes shall
      be made in the currency in which the costs, expenses or Taxes are
      incurred.

	 	 	 
	 	(c) 	
      Any amount expressed to be payable in a currency other
      than dollars shall be paid in that other
currency.

	26.7 	
      Change of currency

	 	(a) 	
      Unless otherwise prohibited by law, if more than one
      currency or currency unit are at the same time recognised by the central
      bank of any country as the lawful currency of that country,
  then:

	 	(i) 	
      any reference in the Finance Documents to, and any
      obligations arising under the Finance Documents in, the currency of that
      country shall be translated into, or paid in, the currency or currency
      unit of that country designated by the Lender (after consultation with the
      Borrower); and

	 	 	 
	 	(ii) 	
      any translation from one currency or currency unit to
      another shall be at the official rate of exchange recognised by the
      central bank for the conversion of that currency or currency unit into the
      other, rounded up or down by the Lender (acting
  reasonably).

	 	(b) 	
      If a change in any currency of a country occurs, this
      Agreement will, to the extent the Lender (acting reasonably and after
      consultation with the Borrower) specifies to be necessary, be amended to
      comply with any generally accepted conventions and market practice in the
      Relevant Interbank Market and otherwise to reflect the change in
      currency.

	26.8 	
      Disruption to Payment Systems
  etc.

If either the Lender determines (in its
discretion) that a Disruption Event has occurred or the Lender is notified by
the Borrower that a Disruption Event has occurred: 

	 	(a) 	
      the Lender may, and shall if requested to do so by the
      Borrower, consult with the Borrower with a view to agreeing with the
      Borrower such changes to the operation or administration of the Facility
      as the Lender may deem necessary in the circumstances;

	 	 	 
	 	(b) 	
      the Lender shall not be obliged to consult with the
      Borrower in relation to any changes mentioned in paragraph 0 if, in its
      opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to
agree to such changes; 

82 

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

	 	(c) 	
      the Lender may consult with the Finance Parties in
      relation to any changes mentioned in paragraph 0 but shall not be obliged
      to do so if, in its opinion, it is not practicable to do so in the
      circumstances;

	 	 	 
	 	(d) 	
      any such changes agreed upon by the Lender and the
      Borrower shall (whether or not it is finally determined that a Disruption
      Event has occurred) be binding upon the Parties as an amendment to (or, as
      the case may be, waiver of) the terms of the Finance Documents
      notwithstanding the provisions of clause 32 (Amendments and
      Waivers);

	 	 	 
	 	(e) 	
      the Lender shall not be liable for any damages, costs or
      losses whatsoever (including, without limitation for negligence, gross
      negligence or any other category of liability whatsoever but not including
      any claim based on the fraud of the Lender) arising as a result of its
      taking, or failing to take, any actions pursuant to or in connection with
      this clause 26.8; and

	 	 	 
	 	(f) 	
      the Lender shall notify the Finance Parties of all
      changes agreed pursuant to paragraph 0 above.

	27 	
      Set-Off

A Finance Party may set off any matured
obligation due from an Obligor under the Finance Documents (to the extent
beneficially owned by that Finance Party) against any matured obligation owed by
that Finance Party to that Obligor, regardless of the place of payment, booking
branch or currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market rate of
exchange in its usual course of business for the purpose of the set-off. 

	28 	
      Notices

	28.1 	
      Communications in writing

Any communication to be made under or
in connection with the Finance Documents shall be made in writing and, unless
otherwise stated, may be made by fax or letter. 

	28.2 	
      Addresses

The address and fax number (and the
department or officer, if any, for whose attention the communication is to be
made) of each Party for any communication or document to be made or delivered
under or in connection with the Finance Documents is: 

	 	(a) 	
      in the case of any Obligor, that identified with its name
      below;

	 	 	 
	 	(b) 	
      in the case of the Lender or the Security Agent, that
      identified with its name below,

or any substitute address or fax number
or department or officer as the Party may notify to the Lender by not less than
five (5) Business Days' notice. 

	28.3 	
      Delivery

	 	(a) 	
      Any communication or document made or delivered by one
      person to another under or in connection with the Finance Documents will
      only be effective:

83 

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

	 	(i) 	
      if by way of fax, when received in legible form;
  or

	 	 	 
	 	(ii) 	
      if by way of letter, when it has been left at the
      relevant address or five Business Days after being deposited in the post
      postage prepaid in an envelope addressed to it at that address;

	 	 	 
	 		
      and, if a particular department or officer is specified
      as part of its address details provided under clause 28.2
      (Addresses), if addressed to that department or
  officer.

	 	(b) 	
      Any communication or document to be made or delivered to
      the Lender or the Security Agent will be effective only when actually
      received by Lender or the Security Agent and then only if it is expressly
      marked for the attention of the department or officer identified with the
      Lender’s or the Security Agent’s signature below (or any substitute
      department or officer as the Lender or the Security Agent shall specify
      for this purpose).

	 	 	 
	 	(c) 	
      All notices from or to an Obligor shall be sent through
      the Lender.

	 	 	 
	 	(d) 	
      Any communication or document made or delivered to the
      Borrower in accordance with this clause will be deemed to have been made
      or delivered to each of the Obligors.

	 	 	 
	 	(e) 	
      Any communication or document which becomes effective, in
      accordance with paragraphs 0 to 0 above, after 5:00 p.m. in the place of
      receipt shall be deemed only to become effective on the following day
      (unless mutually agreed otherwise by all parties to the communication or
      document).

	28.4 	
      Notification of address and fax
  number

Promptly upon receipt of notification
of an address or fax number or change of address or fax number pursuant to
clause 28.2 (Addresses) or changing its own address or fax number, the
Lender shall notify the other Parties. 

	28.5 	
      Electronic
communication

	 	(a) 	
      Any communication to be made between any two Parties
      under or in connection with the Finance Documents may be made by
      electronic mail or other electronic means, to the extent that those two
      Parties agree that, unless and until notified to the contrary, this is to
      be an accepted form of communication and if those two
  Parties:

	 	(i) 	
      notify each other in writing of their electronic mail
      address and/or any other information required to enable the sending and
      receipt of information by that means; and

	 	 	 
	 	(ii) 	
      notify each other of any change to their address or any
      other such information supplied by them by not less than five (5) Business
      Days' notice.

	 	(b) 	
      Any electronic communication made between those two
      Parties will be effective only when actually received in readable form and
      in the case of any electronic communication made by a Party to the Lender
      or the Security Agent only if it is addressed in such a manner as the
      Lender or Security Agent shall specify for this purpose.

	 	 	 
	 	(c) 	
      Any electronic communication which becomes effective, in
      accordance with paragraph 0 above, after 5.00 p.m. in the place of receipt
      shall be deemed only to become effective on the following
  day.

84 

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

	28.6 	
      English language

	 	(a) 	
      Any notice given under or in connection with any Finance
      Document must be in English.

	 	 	 
	 	(b) 	
      All other documents provided under or in connection with
      any Finance Document must be:

	 	(i) 	
      in English; or

	 	 	 
	 	(ii) 	
      if not in English, and if so required by the Lender,
      accompanied by a certified English translation and, in this case, the
      English translation will prevail unless the document is a constitutional,
      statutory or other official document.

	29 	
      Calculations and
Certificates

	29.1 	
      Accounts

In any litigation or arbitration
proceedings arising out of or in connection with a Finance Document, the entries
made in the accounts maintained by a Finance Party are prima facie
evidence of the matters to which they relate. 

	29.2 	
      Certificates and
Determinations

Any certification or determination by a
Finance Party of a rate or amount under any Finance Document is, in the absence
of manifest error, conclusive evidence of the matters to which it relates. 

	29.3 	
      Day count convention

Any interest, commission or fee
accruing under a Finance Document will accrue from day to day and is calculated
on the basis of the actual number of days elapsed and a year of three hundred
sixty (360) days or, in any case where the practice in the Relevant Interbank
Market differs, in accordance with that market practice. 

	30 	
      Partial Invalidity

If, at any time, any provision of the
Finance Documents is or becomes illegal, invalid or unenforceable in any respect
under any law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction will in
any way be affected or impaired. 

	31 	
      Remedies and Waivers

No failure to exercise, nor any delay
in exercising, on the part of any Finance Party or Secured Party, any right or
remedy under a Finance Document shall operate as a waiver of any such right or
remedy or constitute an election to affirm any Finance Document. No election to
affirm any Finance Document on the part of any Finance Party or Secured Party
shall be effective unless it is in writing. No single or partial exercise of any
right or remedy shall prevent any further or other exercise or the exercise of
any other right or remedy. The rights and remedies provided in each Finance
Document are cumulative and not exclusive of any rights or remedies provided by
law. 

85 

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

	32 	
      Amendments and Waivers

	32.1 	
      Intercreditor Agreement

This clause 32 is subject to the terms
of the Intercreditor Agreement. 

	32.2 	
      Required consents

	 	(a) 	
      Subject to clause 32.3 (Lender matters) and clause
      32.4 (Other exceptions), any term of the Finance Documents may be
      amended or waived only with the consent of Lender and the Obligors and any
      such amendment or waiver will be binding on all Parties.

	 	 	 
	 	(b) 	
      The Lender may effect, on behalf of any Finance Party,
      any amendment or waiver permitted by this clause 32.

	 	 	 
	 	(c) 	
      Notwithstanding clause (a) and (b) above, the Lender
      shall not amend, supplement or restate the terms of any Finance Document
      in such a way that such amendment, supplement or restatement would,
      materially affect the rights of the Hedge Counterparty without the prior
      written consent of the Hedge Counterparty.

	32.3 	
      Lender matters

	 	(a) 	
      An amendment, waiver or (in the case of a Transaction
      Security Document) a consent of, or in relation to, any term of any
      Finance Document that has the effect of changing or which relates
    to:

	 	(i) 	
      an extension to the date of payment of any amount under
      the Finance Documents;

	 	 	 
	 	(ii) 	
      a reduction in the Margin or a reduction in the amount of
      any payment of principal, interest, fees or commission payable;

	 	 	 
	 	(iii) 	
      an increase in the Commitment (except pursuant to clause
      0 (Amendment to Commitment), an extension of the Availability
      Period or any requirement that a cancellation reduces the Commitment of
      the Lender under the Facility;

	 	 	 
	 	(iv) 	
      a change to the Borrower or the Guarantors;

	 	 	 
	 	(v) 	
      any provision which expressly requires the consent of all
      the Lender;

	 	 	 
	 	(vi) 	
      clause 0 (Finance Parties' rights and
      obligations), clause 0 (Extension option), clause 0 (Changes
      to the Lender), this clause 32, the governing law of any Finance
      Document or clause 0 (Jurisdiction of British Columbia
    courts);

	 	 	 
	 	(vii) 	
      the nature or scope of:

	 	(A) 	
      the guarantee and indemnity granted under clause 0
      (Guarantee and Indemnity);

	 	 	 
	 	(B) 	
      the Charged Property; or

	 	 	 
	 	(C) 	
      the manner in which the proceeds of enforcement of the
      Transaction Security are distributed,

(except, in the case of paragraphs (B)
and (C) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction
Security where such sale or disposal is expressly permitted under this Agreement
or any other Finance Document); 

86 

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

	 	(viii) 	
      the release of any guarantee and indemnity granted under
      clause 0 (Guarantee and indemnity) or of any Transaction Security
      (unless permitted under this Agreement or any other Finance Document or
      relating to a sale or disposal of an asset which is the subject of the
      Transaction Security where such sale or disposal is expressly permitted
      under this Agreement or any other Finance Document); or

	 	 	 
	 	(ix) 	
      any amendment to the order of priority or subordination
      under the Intercreditor Agreement,

shall not be made or given without the
prior consent of all the Lender. 

	32.4 	
      Other exceptions

An amendment or waiver which relates to
the rights or obligations of the Lender or the Security Agent (each in their
capacity as such) may not be effected without the consent of the Lender or the
Security Agent. 

	33 	
      Confidentiality

	33.1 	
      Confidential Information

Each Finance Party agrees to keep all
Confidential Information confidential and not to disclose it to anyone, save to
the extent permitted by clause 0 (Disclosure of Confidential
Information), and to ensure that all Confidential Information is protected
with security measures and a degree of care that would apply to its own
confidential information. 

	33.2 	
      Disclosure of Confidential
  Information

Any Finance Party may disclose: 

	 	(a) 	
      to any of its Affiliates (including branches) and Related
      Funds and any representatives in any jurisdiction and any of its or their
      officers, directors, employees, professional advisers, insurers, insurance
      brokers, service providers, rating agencies, direct or indirect providers
      of credit protection, auditors, partners and Representatives such
      Confidential Information as that Finance Party shall consider appropriate
      if any person to whom the Confidential Information is to be given pursuant
      to this paragraph 0 is informed in writing of its confidential nature and
      that some or all of such Confidential Information may be price- sensitive
      information except that there shall be no such requirement to so inform if
      the recipient is subject to professional obligations to maintain the
      confidentiality of the information or is otherwise bound by requirements
      of confidentiality in relation to the Confidential Information;

	 	 	 
	 	(b) 	
      to any person:

	 	(i) 	
      to (or through) whom it assigns or transfers (or may
      potentially assign or transfer) all or any of its rights and/or
      obligations under one or more Finance Documents or which succeeds (or
      which may potentially succeed) it as Lender or Security Agent and, in each
      case, to any of that person's Affiliates, Related Funds, Representatives
      and professional advisers;

87 

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

	 	(ii) 	
      with (or through) whom it enters into (or may potentially
      enter into), whether directly or indirectly, any sub-participation,
      insurance or brokerage arrangement in relation to, or any other
      transaction under which payments are to be made or may be made by
      reference to, one or more Finance Documents and/or one or more Obligors
      and to any of that person's Affiliates, Related Funds, Representatives and
      professional advisers;

	 	 	 
	 	(iii) 	
      appointed by any Finance Party or by a person to whom
      paragraph 00 or 0 above applies to receive communications, notices,
      information or documents delivered pursuant to the Finance Documents on
      its behalf;

	 	 	 
	 	(iv) 	
      who invests in or otherwise finances (or may potentially
      invest in or otherwise finance), directly or indirectly, any transaction
      referred to in paragraph 00 or 00 above;

	 	 	 
	 	(v) 	
      to whom information is required or requested to be
      disclosed by any court of competent jurisdiction or any governmental,
      quasi-governmental, administrative, supervisory, banking, taxation or
      other regulatory authority or similar body, court or tribunal, the rules
      of any relevant stock exchange or pursuant to any applicable law or
      regulation;

	 	 	 
	 	(vi) 	
      to whom information is required to be disclosed in
      connection with, and for the purposes of, any litigation, arbitration,
      administrative or other investigations, proceedings or disputes;

	 	 	 
	 	(vii) 	
      to whom or for whose benefit that Finance Party charges,
      assigns or otherwise creates Security (or may do so) pursuant to clause 0
      (Security over Lender’s rights);

	 	 	 
	 	(viii) 	
      who is a Party; or

	 	 	 
	 	(ix) 	
      with the consent of the Borrower;

in each case, such Confidential
Information as that Finance Party shall consider appropriate if: 

	 	(A) 	
      in relation to paragraphs 00, 00 and 00 above, the person
      to whom the Confidential Information is to be given has entered into a
      confidentiality undertaking except that there shall be no requirement for
      a confidentiality undertaking if the recipient is a professional adviser
      and is subject to professional obligations to maintain the confidentiality
      of the Confidential Information;

	 	 	 
	 	(B) 	
      in relation to paragraph 00 above, the person to whom the
      Confidential Information is to be given has entered into a confidentiality
      undertaking or is otherwise bound by requirements of confidentiality in
      relation to the Confidential Information they receive and is informed that
      some or all of such Confidential Information may be price-sensitive
      information;

	 	 	 
	 	(C) 	
      in relation to paragraphs 00, 00 and 00 above, the person
      to whom the Confidential Information is to be given is informed of its
      confidential nature and that some or all of such Confidential Information
      may be price-sensitive information; and

88 

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

	 	(c) 	
      to any person appointed by that Finance Party or by a
      person to whom paragraph (b)(i) or (b)(ii) above applies to provide
      administration or settlement services in respect of one or more of the
      Finance Documents including without limitation, in relation to the trading
      of participations in respect of the Finance Documents, such Confidential
      Information as may be required to be disclosed to enable such service
      provider to provide any of the services referred to in this paragraph 0 if
      the service provider to whom the Confidential Information is to be given
      has entered into a confidentiality agreement substantially in a form
      attached hereto as Schedule 33.2(c);

	 	 	 
	 	(d) 	
      to any rating agency (including its professional
      advisers) such Confidential Information as may be required to be disclosed
      to enable such rating agency to carry out its normal rating activities in
      relation to the Finance Documents and/or the Obligors if the rating agency
      to whom the Confidential Information is to be given is informed of its
      confidential nature and that some or all of such Confidential Information
      may be price-sensitive information; and

	 	 	 
	 	(e) 	
      where such Finance Party is the Lender, at its own
      expense, its involvement in the Facility by way of internal and external
      pitch documents and the placement of “tombstone” or other advertisements
      in financial and other newspapers and journals (and such other methods of
      publication as the Lender may choose from time to
time).

	33.3 	
      Entire agreement

This clause 33 (Confidentiality)
constitutes the entire agreement between the Parties in relation to the
obligations of the Finance Parties under the Finance Documents regarding
Confidential Information and supersedes any previous agreement, whether express
or implied, regarding Confidential Information. 

	33.4 	
      Inside information

Each of the Finance Parties
acknowledges that some or all of the Confidential Information is or may be
price-sensitive information and that the use of such information may be
regulated or prohibited by applicable legislation including securities law
relating to insider dealing and market abuse and each of the Finance Parties
undertakes not to use any Confidential Information for any unlawful purpose.

	33.5 	
      Notification of disclosure

Each of the Finance Parties agrees (to
the extent permitted by law and regulation) to inform the Borrower: 

	 	(a) 	
      of the circumstances of any disclosure of Confidential
      Information made pursuant to paragraph 00 of clause 0 (Disclosure of
      Confidential Information) except where such disclosure is made to any
      of the persons referred to in that paragraph during the ordinary course of
      its supervisory or regulatory function; and

	 	 	 
	 	(b) 	
      upon becoming aware that Confidential Information has
      been disclosed in breach of this clause 0
  (Confidentiality).

	33.6 	
      Continuing obligations

The obligations in this clause 0
(Confidentiality) are continuing and, in particular, shall survive and
remain binding on each Finance Party for a period of twelve (12) months from the
earlier of: 

89 

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

	 	(a) 	
      the date on which all amounts payable by the Obligors
      under or in connection with this Agreement have been paid in full and all
      Commitment have been cancelled or otherwise cease to be available;
    and

	 	 	 
	 	(b) 	
      the date on which such Finance Party otherwise ceases to
      be a Finance Party.

	34 	
      Interest Act of Canada

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

	35 	
      Usury

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

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

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

in each case, if necessary, to be
effected by repayment by such Finance Party to the Borrower of any amount
already received by such Finance Party that would be reduced by this Section (it
being agreed that such Finance Party may elect whether to effect such repayment
and reduction by return of shares or by payment of the applicable amount in cash
to the Borrower). 

	36 	
      Future Financings

The Borrower agrees in good faith to
provide the Lender with the right to offer future debt finance ([****])
and trading business on an equal basis with any other parties; further in the
event that a club of syndicated transaction is proposed with another arranger
that requires more than one lender, the Borrower will use reasonable commercial
efforts to offer the Lender the opportunity to participate on an equal basis in
the transaction. The Borrower will also undertake to consider using the Lender’s
corporate advisory services should the opportunity arise. For greater certainty,
this provision shall not restrict the Borrower from fulfilling prior agreements
entered into with other financial institutions in relation to non-lending
services.

	37 	
      Counterparts

Each Finance Document may be executed
in any number of counterparts, and this has the same effect as if the signatures
on the counterparts were on a single copy of the Finance Document. 

90 

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

	38 	
      Contractual Recognition of
  Bail-In

Notwithstanding any other term of any
Finance Document or any other agreement, arrangement or understanding between
the Parties, each Party acknowledges and accepts that any liability of any Party
to any other Party under or in connection with the Finance Documents may be
subject to Bail-In Action by the relevant Resolution Authority and acknowledges
and accepts to be bound by the effect of:

	 	(a) 	
      any Bail-In Action in relation to any such liability,
      including (without limitation):

	 	(i) 	
      a reduction, in full or in part, in the principal amount,
      or outstanding amount due (including any accrued but unpaid interest) in
      respect of any such liability;

	 	 	 
	 	(ii) 	
      a conversion of all, or part of, any such liability into
      shares or other instruments of ownership that may be issued to, or
      conferred on, it; and

	 	 	 
	 	(iii) 	
      a cancellation of any such liability;
  and

	(b) 	
      a variation of any term of any Finance Document to the
      extent necessary to give effect to any Bail-In Action in relation to any
      such liability.

GOVERNING LAW AND ENFORCEMENT 

	39 	
      Governing Law

This Agreement and any non-contractual
obligations arising out of or in connection with it are governed by laws of the
Province of British Columbia, and the federal laws of Canada as applicable
herein. 

	40 	
      Enforcement

	40.1 	
      Jurisdiction of British Columbia
  courts

	 	(a) 	
      The courts of British Columbia have exclusive
      jurisdiction to settle any dispute arising out of or in connection with
      this Agreement (including a dispute relating to the existence, validity or
      termination of this Agreement or any non-contractual obligation arising
      out of or in connection with this Agreement) (a Dispute).

	 	 	 
	 	(b) 	
      The Parties agree that the courts of British Columbia are
      the most appropriate and convenient courts to settle Disputes and
      accordingly no Party will argue to the contrary.

	 	 	 
	 	(c) 	
      This clause 0 is for the benefit of the Finance Parties
      and the Secured Parties only. As a result, no Finance Party or Secured
      Party shall be prevented from taking proceedings relating to a Dispute in
      any other courts with jurisdiction. To the extent allowed by law, the
      Finance Parties and the Secured Parties may take concurrent proceedings in
      any number of jurisdictions.

	40.2 	
      Service of process

	 	(a) 	
      Without prejudice to any other mode of service allowed
      under any relevant law, each Obligor, other than the Borrower, 0985472 and
      Klondex Canada (the Non-British Columbia Obligors):

91 

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

	 	(i) 	
      irrevocably appoints the Borrower as its agent for
      service of process in relation to any proceedings before the British
      Columbia courts in connection with any Finance Document; and

	 	 	 
	 	(ii) 	
      agrees that failure by an agent for service of process to
      notify the relevant Non- British Obligor of the process will not
      invalidate the proceedings concerned.

	 	(b) 	
      If any person appointed as an agent for service of
      process is unable for any reason to act as agent for service of process,
      the Borrower (on behalf of all Non-British Obligors) must immediately (and
      in any event within five (5) Business Days of such event taking place)
      appoint another agent on terms acceptable to the
Lender.

	41 	
      Waiver of immunity

	41.1 	
      Waiver of Immunity

Each Obligor irrevocably and
unconditionally: 

	 	(a) 	
      agrees not to claim in any jurisdiction, for itself or in
      respect of its assets, immunity from suit, execution, attachment (whether
      in aid of execution, before judgment or otherwise) or other legal process
      and waives such present or future immunity, whether claimed or not;
    and

	 	 	 
	 	(b) 	
      consents generally to the giving of any relief or the
      issue of any process in connection with any proceedings, including the
      making, enforcement or execution against any property of any nature
      (irrespective of its use or intended use) of any order or judgement which
      may be made or given in any proceedings.

This Agreement has been entered into on the date stated at
the beginning of this Agreement. 

92 

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

Schedule 1 
Conditions Precedent 

	1 	
      Original Obligors

	 	(a) 	
      A copy of the charter documents of each
Obligor.

	 	 	 
	 	(b) 	
      A copy of a resolution of the board of directors of each
      Obligor:

	 	(i) 	
      approving the terms of, and the transactions contemplated
      by, the Finance Documents to which it is a party and resolving that it
      execute the Finance Documents to which it is a party;

	 	 	 
	 	(ii) 	
      authorising a specified person or persons to execute the
      Finance Documents to which it is a party on its behalf; and

	 	 	 
	 	(iii) 	
      authorising a specified person or persons, on its behalf,
      to sign and/or despatch all documents and notices (including, if relevant,
      any Utilization Request) to be signed and/or despatched by it under or in
      connection with the Finance Documents to which it is a
  party.

	 	(c) 	
      A specimen of the signature of each person authorised by
      the resolution referred to in paragraph 0 above.

	 	 	 
	 	(d) 	
      A copy of a resolution signed by all the holders of the
      issued shares in the Borrower approving the terms of, and the transactions
      contemplated by, the Finance Documents to which that Obligor is a
      party.

	 	 	 
	 	(e) 	
      A certificate of each Obligor (signed by a director or by
      the Chief Financial Officer or Treasurer) confirming that borrowing or
      guaranteeing or securing, as appropriate, the Commitment would not cause
      any borrowing, guarantee, security or similar limit binding on it to be
      exceeded.

	 	 	 
	 	(f) 	
      A certificate of an authorised signatory of each Obligor
      certifying that each copy document relating to it specified in this Part I
      of 0is correct, complete and in full force and effect and has not been
      amended or superseded as at a date no earlier than the date of this
      Agreement.

	 	 	 
	 	(g) 	
      A certified copy of the register of members/shareholders
      of each Obligor (other than the Borrower).

	 	 	 
	 	(h) 	
      A certified copy of each Material Licence.

	 	 	 
	 	(i) 	
      Any applicable Fee Letters duly executed by all
      parties.

	2 	
      Finance Documents

	 	(a) 	
      This Agreement duly executed by all original parties to
      it.

	 	 	 
	 	(b) 	
      The Intercreditor Agreement executed by the parties
      thereto (other than the Finance Parties) on or prior to the Utilisation
      Date.

	 	 	 
	 	(c) 	
      At least two (2) originals of each Transaction Security
      Document executed by the relevant Obligor, including the following 

93 

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

	 	(i) 	
      The guarantees from each Guarantor in favour of the
      Lender;

	 	 	 
	 	(ii) 	
      The general security agreements and first lien security
      agreements granted to the Lender by the Borrower and each
  Guarantor;

	 	 	 
	 	(iii) 	
      The securities pledge agreements granted to the Lender by
      each of the Borrower, 0985472 B.C. Ltd., Klondex Holdings (USA) Inc. and
      Klondex Midas Holdings Limited; and

	 	 	 
	 	(iv) 	
      The perfection certificate provided by the Borrower to
      the Lender;

	 	 	 
	 	(v) 	
      The fee and leasehold deed of trust, assignment of leases
      and rents and security agreement dated February 10, 2014 from Klondex Gold
      & Silver Mining Company in relation to the Fire Creek Mine, as
      amended;

	 	 	 
	 	(vi) 	
      The deed of trust, assignment of leases and rents and
      security agreement dated February 10, 2014 from Klondex Gold & Silver
      Mining Company in relation to the Hot Springs Property, as
  amended;

	 	 	 
	 	(vii) 	
      The deed of trust, assignment of leases and rents and
      security agreement dated February 11, 2014, from Klondex Gold & Silver
      Mining Company in relation to the Maggie Creek Property, as
  amended;

	 	 	 
	 	(viii) 	
      The deed of trust, assignment of leases and rents and
      security agreement dated February 10, 2014, from Klondex Gold & Silver
      Mining Company in relation to the Reef Property, as amended;

	 	 	 
	 	(ix) 	
      The Fee and Leasehold Deed of Trust, Assignment of Leases
      and Rents and Security Agreement dated February 11, 2014, from Klondex
      Midas Operations Inc., in relation to the Midas Property, as
    amended;

	 	 	 
	 	(x) 	
      The environmental indemnity agreement issued by Klondex
      Gold & Silver Mining Company and Klondex Midas Operations Inc. in
      favour of the Lender;

	 	 	 
	 	(xi) 	
      The Ontario and Manitoba debentures made by Klondex
      Canada Ltd. in favour of the Lender; and

	 	 	 
	 	(xii) 	
      All instruments, financing statements, stock powers,
      documents, guarantees and agreements executed in relation to the above
      listed Transaction Security Documents by or on behalf of any Obligor for
      the Lender, Hedge Counterparty or Security
Agent.

	 	(d) 	
      A copy of all notices required to be sent under the
      Transaction Security Documents executed by the relevant Obligors and duly
      acknowledged by the addressee.

	 	 	 
	 	(e) 	
      A copy of all share certificates, transfers and stock
      transfer forms or equivalent duly executed by the relevant Obligor in
      blank in relation to the assets subject to or expressed to be subject to
      the Transaction Security and other documents of title to be provided under
      the Transaction Security Documents.

	 	 	 
	 	(f) 	
      The relevant Obligors have signed all other documents and
      taken all other actions requested by the Lender or the Security Agent to
      enable the Transaction Security to be perfected including all filings, stampings, registrations,
notifications and other actions (or documents to effect such actions) in all
relevant jurisdictions necessary or, in the opinion of legal advisors to the
Lender, acting reasonably, advisable, in order to create in favour of the
Security Agent valid perfected Security over all of the assets purported to be
covered by the Transaction Security. 

94 

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

	 	(g) 	
      Evidence that any applicable stamp, registration or other
      fees payable in connection with the registration and perfection of the
      creation of the Transaction Security, have been paid.

	 	 	 
	 	(h) 	
      Evidence showing that there is no other Security (other
      than the Transaction Security or Permitted Security) registered against
      the assets of the Obligors.

	3 	
      Finance Documents

A certified copy of each of the Finance
Documents (other than the Finance Documents) executed by the parties to those
documents. 

	4 	
      Insurance

	 	(a) 	
      A letter from the Borrower’s insurance brokers addressed
      to the Lender and the Security Agent listing the insurance policies of the
      Group and confirming that they are on risk and that the insurance for the
      Group at the date of this Agreement is at a level acceptable to the Lender
      and covering appropriate risks for the business carried out by the
      Group.

	 	 	 
	 	(b) 	
      Evidence of insurance cover in full force and effect that
      accords with the terms of this Agreement.

	5 	
      Legal opinions

The following legal opinions, each
addressed to the Finance Parties. 

	 	(a) 	
      A legal opinion of Bennett Jones LLP, Dorsey &
      Whitney LLP and Erwin & Thompson LLP, legal advisers to the
      Borrower.

	6 	
      Other documents and
evidence

	 	(a) 	
      Certified true copies of the Shoreline Asset Purchase
      Agreement and Shoreline Promissory Note.

	 	 	 
	 	(b) 	
      The Base Case Model.

	 	 	 
	 	(c) 	
      A certified copy of the Original Financial
    Statements.

	 	 	 
	 	(d) 	
      Evidence of the Lender’s internal credit approval to
      provide the Facility.

	 	 	 
	 	(e) 	
      An updated list of the fixed assets of each
    Obligor.

	 	 	 
	 	(f) 	
      Evidence that the fees, costs and expenses then due from
      the Borrower pursuant to clause 0 (Fees) and clause 0 (Costs and
      expenses) have been paid or will be paid by the first Utilization
      Date.

	 	 	 
	 	(g) 	
      Satisfactory completion of all "know your customer"
  requirements of the Finance Parties.

95 

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

	 	 	 
	 	(h) 	A copy of any other Authorization or other document,
      opinion or assurance which the Lender considers to be necessary or desirable (if it has
      notified the Borrower accordingly) in connection with the entry into and performance of the
      transactions contemplated by any Finance Document or for the validity and enforceability
      of any Finance Document. 

96 

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

Schedule 2 
Requests 

Part I 
Utilization Request 

From: Klondex Mines Ltd 

To:     [Lender] 

Dated: 

Dear Sirs 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [          ] 2016
(the Agreement) 

	1 	
      We refer to the Agreement. This is a Utilization Request.
      Terms defined in the Agreement have the same meaning in this Utilization
      Request unless given a different meaning in this Utilization
    Request.

	 	 
	2 	
      We wish to borrow a Loan on the following
  terms:

	 	Proposed Utilization Date: 	[     ] (or, if that is not
      a Business Day, the next Business Day) 
	 	 	 
	 	Currency of Loan: 	[     ] 
	 	 	 
	 	Amount: 	[     ] or, if less, the
      Available Commitment 
	 	 	 
	 	Interest Period: 	[          ]  

	3 	
      We confirm that each condition specified in clause 0
      (Further conditions precedent) is satisfied on the date of this
      Utilization Request.

	 	 
	4 	
      [This Loan is to be made in [whole]/[part] for the
      purpose of refinancing [identify maturing Loan.] [The proceeds of
      this Loan should be credited to [account].]

	 	 
	5 	
      This Utilization Request is
irrevocable.

Yours faithfully 

....................................................

authorised signatory for 

Klondex Mines Ltd 

97 

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

Part II 
Extension Request 

From: Klondex Mines Ltd 

To:     [Lender] 

Dated: 

Dear Sirs 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [          ] 2016
(the Agreement) 

	1 	
      We refer to the Agreement. This is an Extension Request.
      Terms defined in the Agreement have the same meaning in this Extension
      Request unless given a different meaning in this Extension
  Request.

	 	 
	2 	
      We hereby request pursuant to clause 0 (Extension
      option) to extend the Original Final by a further 12 month period to
      ______________.

	 	 
	3 	
      We confirm that no Default is continuing or would result
      from this Extension Request.

	 	 
	4 	
      This Extension Request is
irrevocable.

Yours faithfully 

....................................................

authorised signatory for 

Klondex Mines Ltd 

98 

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

Part III 
Amendment Request 

From: Klondex Mines Ltd 

To:     [Lender] 

Dated: 

Dear Sirs 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [          ] 2016
(the Agreement) 

	1 	
      We refer to the Agreement. This is an Amendment Request.
      Terms defined in the Agreement have the same meaning in this Amendment
      Request unless given a different meaning in this Amendment
  Request.

	 	 
	2 	
      We hereby request pursuant to clause 0 (Amendment to
      Commitment) that the Commitment be amended to US$[     ].

	 	 
	3 	
      We confirm that no Default is continuing or would result
      from this Amendment Request.

	 	 
	4 	
      This Amendment Request is
irrevocable.

Yours faithfully 

....................................................

authorised signatory for 

Klondex Mines Ltd 

99 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 3
Form of Transfer Certificate 

To:     Investec Bank PLC 

From: [The New Lender] (the New Lender) 

Dated: 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [          ] 2016
(the Agreement) 

	1 	
      We refer to the Facility Agreement and to the
      Intercreditor Agreement (as defined in the Facility Agreement). This
      agreement (the Agreement) shall take effect as a Transfer Certificate for
      the purpose of the Facility Agreement. Terms defined in the Facility
      Agreement have the same meaning in this Agreement unless given a different
      meaning in this Agreement.

	 	 
	2 	
      We refer to clause 0 (Procedure for
    transfer):

	 	(a) 	
      The Existing Lender and the New Lender agree to the
      Existing Lender transferring to the New Lender by novation, and in
      accordance with clause 0 (Procedure for transfer), all of the
      Existing Lender's rights and obligations under the Agreement and the other
      Finance Documents which relate to that portion of the Existing Lender's
      Commitment and participations in Loans under the Agreement as specified in
      the Schedule.

	 	 	 
	 	(b) 	
      The proposed Transfer Date is [          ].

	 	 	 
	 	(c) 	
      The Facility Office and address, fax number and attention
      details for notices of the New Lender for the purposes of clause 0
      (Addresses) are set out in the
Schedule.

	3 	
      The New Lender expressly acknowledges the limitations on
      the Existing Lender's obligations set out in paragraph 0 of clause 0
      (Limitation of responsibility of Existing Lender).

	 	 
	4 	
      This Transfer Certificate may be executed in any number
      of counterparts and this has the same effect as if the signatures on the
      counterparts were on a single copy of this Transfer Certificate.

	 	 
	5 	
      This Transfer Certificate and any non-contractual
      obligations arising out of or in connection with it are governed by laws
      of the Province of British Columbia, and the federal laws of Canada as
      applicable therein.

	 	 
	6 	
      This Transfer Certificate has been entered into on the
      date stated at the beginning of this Transfer
  Certificate.

100 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

THE SCHEDULE 

Commitment/rights and obligations to be transferred 

[insert relevant details] 
[Facility Office
address, fax number and attention details for notices and account details for
payments,] 

	[Existing Lender] 	[New Lender] 
	 	 
	By: 	By: 

This Agreement is accepted as a Transfer Certificate for the
purposes of the Facility Agreement by the Lender, the Security Agent, and the
Transfer Date is confirmed as
[          ]. 

By: 

101 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 4
Form of Assignment Agreement 

From: [the New Lender] (the New Lender) 

To:     [the Existing Lender] (the
Existing Lender) 

Dated: 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [           ]
2016 (the Agreement) 

	1 	
      We refer to the Facility Agreement and to the
      Intercreditor Agreement (as defined in the Facility Agreement). This is an
      Assignment Agreement. This agreement (the Agreement) shall take effect as
      an Assignment Agreement for the purpose of the Facility Agreement and as a
      Creditor/Creditor Representative Accession Undertaking for the purposes of
      the Intercreditor Agreement (and as defined in the Intercreditor
      Agreement). Terms defined in the Facility Agreement have the same meaning
      in this Agreement unless given a different meaning in this
    Agreement.

	 	 
	2 	
      We refer to clause 0 (Procedure for
      assignment):

	 	(a) 	
      The Existing Lender assigns absolutely to the New Lender
      all the rights of the Existing Lender under the Agreement and the other
      Finance Documents and in respect of the Transaction Security which relate
      to that portion of the Existing Lender's Commitment and participations in
      Loans under the Agreement as specified in the Schedule.

	 	 	 
	 	(b) 	
      The Existing Lender is released from all the obligations
      of the Existing Lender which correspond to that portion of the Existing
      Lender's Commitment and participations in Loans under the Agreement
      specified in the Schedule.

	 	 	 
	 	(c) 	
      The New Lender becomes a Party as the Lender and is bound
      by obligations equivalent to those from which the Existing Lender is
      released under paragraph (b) above.

	3 	
      The proposed Transfer Date is [    
      ].

	 	 
	4 	
      On the Transfer Date the New Lender becomes Party to the
      Finance Documents as the Lender.

	 	 
	5 	
      The Facility Office and address, fax number and attention
      details for notices of the New Lender for the purposes of clause 0
      (Addresses) are set out in the Schedule.

	 	 
	6 	
      The New Lender expressly acknowledges the limitations on
      the Existing Lender's obligations set out in paragraph 0 of clause 0
      (Limitation of responsibility of Existing Lender).

	 	 
	7 	
      This Assignment Agreement acts as notice to the Lender
      (on behalf of each Finance Party) and, upon delivery in accordance with
      clause 0 (Copy of Transfer Certificate, Assignment Agreement or
      Amendment Confirmation to Borrower), to the Company (on behalf of each
      Obligor) of the assignment referred to in this Assignment
  Agreement.

	 	 
	8 	
      This Assignment Agreement may be executed in any number
      of counterparts and this has the same effect as if the signatures on the
      counterparts were on a single copy of this Assignment Agreement.

	 	 
	9 	
      This Assignment Agreement and any non-contractual
      obligations arising out of or in connection with it are governed by laws of the Province of British
Columbia, and the federal laws of Canada as applicable therein. 

102 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

	10 	
      This Assignment Agreement has been entered into on the
      date stated at the beginning of this Assignment
  Agreement.

103 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

THE SCHEDULE 

Rights to be assigned and obligations to be released and
undertaken 

[insert relevant details] 

[Facility office address, fax number and attention details for
notices and account details for payments] 

	[Existing Lender] 	[New Lender] 
	 	 
	By: 	By: 

This Agreement is accepted as an Assignment Agreement for the
purposes of the Facility Agreement by the Lender, the Security Agent, and the
Transfer Date is confirmed as [ ]. 

Signature of this Assignment Agreement by the Lender
constitutes confirmation by the Lender of receipt of notice of the assignment
referred to herein, which notice the Lender receives on behalf of each Finance
Party. 

104 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 5
Form of Amendment Confirmation 

To:     [Lender] and [Security Agent]

From: [          ]
as Borrower, for and on behalf of each Obligor 

Dated: 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [          ] 2016
(the Agreement) 

	1 	
      We refer to the Facility Agreement. This agreement (the
      Agreement) shall take effect as an Amendment Confirmation for the purpose
      of the Facility Agreement. Terms defined in the Facility Agreement have
      the same meaning in this Agreement unless given a different meaning in
      this Agreement.

	 	 
	2 	
      We refer to [clause 0 (Amendment to Commitment)]
      of the Facility Agreement.

	 	 
	3 	
      The proposed date on which the amendment is to take
      effect (the Amendment Date) is [     ].

	 	 
	4 	
      On the Amendment Date, the Commitment shall be amended to
      be US$[          ].

	 	 
	1 	
      This Agreement may be executed in any number of
      counterparts and this has the same effect as if the signatures on the
      counterparts were on a single copy of this Agreement.

	 	 
	2 	
      This Agreement and any non-contractual obligations
      arising out of or in connection with it are governed by the laws of the
      Province of British Columbia, and the federal laws of Canada as applicable
      therein.

	 	 
	3 	
      This Agreement has been entered into on the date stated
      at the beginning of this Agreement.

105 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

THE SCHEDULE 

Relevant Commitment/rights and obligations to be assumed by
the Increase Lender 

[insert relevant details] 

[Facility office address, fax number and attention details
for notices and account details for payments] [Increase Lender] By: 

This Agreement is accepted as an Amendment Confirmation for the
purposes of the Facility Agreement by the Lender, the Security Agent and the
Amendment Date is confirmed as [     ]. 

Lender 

By: 

 

Security Agent 

By: 

106 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 6
Form of Compliance Certificate 

To:     [     ] as
Lender 

From: [Company] 

Dated: 

Dear Sirs 

Klondex Mines Ltd – Up to US$25,000,000 Secured Revolving
Facility dated [          ] 2016
(the Agreement) 

	1 	
      We refer to the Agreement. This is a Compliance
      Certificate. Terms defined in the Agreement have the same meaning when
      used in this Compliance Certificate unless given a different meaning in
      this Compliance Certificate.

	 	 
	2 	
      We confirm that: [Insert details of covenants to be
      certified]

	 	 
	3 	
      [We confirm that no Default is continuing.]1
      *

	Signed: 	............ 	............ 

Director or Chief Financial Officer

of 

[Borrower] 

__________________________________________

	1 	*	If this statement cannot be made, the
      certificate should identify any Default that is continuing and the steps,
      if any, being taken to remedy it. 

107 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 7 

Timetables 

	Delivery of a duly 	10.00am three 
	completed Utilization 	Business Days 
	Request (clause 0 	before the 
	(Delivery of a Utilization 	proposed 
	Request)) 	Utilization Date 
	  	  
	LIBOR is fixed 	Quotation Day as 
	  	of 11:00 a.m. EST 

108 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 8 - Disclosure Schedule 

109 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 21.40 

Guarantee 

Debenture 

Such other security documents required to effect the grant by
Klondex Canada of a security interest that is pari passu with the
security granted to Franco-Nevada. 

1 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

Schedule 33.2(C) 

1 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

SIGNATURES 

LENDER 

INVESTEC BANK PLC 

	By: 	/s/
      “Anthony Rowe” 
	  	Name: Anthony Rowe 
	  	Title: Authorized Signatory 
	  	  
	 	 
	By: 	/s/
      “Oliver Tagg” 
		Name: Oliver Tagg 
	  	Title: Authorized Signatory

HEDGE COUNTERPARTY 

INVESTEC BANK PLC 

	By: 	/s/
      “Andrew Lillywhite” 
	  	Name: Andrew Lillywhite 
	  	Title: Authorized Signatory 
	  	  
	 	 
	By: 	/s/
      “Paul Geddes” 
		Name: Paul Geddes 
	  	Title: Authorized Signatory

BORROWER 

KLONDEX MINES LTD 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     Suite 2200, 1055 West Hastings
Street, Vancouver, BC, V6E 2E9, Canada 

GUARANTORS 

0985472 B.C. LTD

1 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     Suite 2200, 1055 West Hastings
Street, Vancouver, BC, V6E 2E9, Canada 

KLONDEX HOLDINGS (USA) INC. 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     360 Western Road, Suite 1,
Reno, Nevada, USA 89506 

KLONDEX MIDAS HOLDINGS LIMITED 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     360 Western Road, Suite 1,
Reno, Nevada, USA 89506 

KLONDEX MIDAS OPERATIONS INC. 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     360 Western Road, Suite 1,
Reno, Nevada, USA 89506 

KLONDEX GOLD & SILVER MINING COMPANY 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     360 Western Road, Suite 1,
Reno, Nevada, USA 89506 

2 

NOTE: PORTIONS OF THIS EXHIBIT INDICATED BY “[****]” ARE
SUBJECT TO A CONFIDENTIAL TREATMENT REQUEST FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, AND HAVE BEEN OMITTED FROM THIS EXHIBIT. COMPLETE,
UNREDACTED COPIES OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION AS PART OF THIS COMPANY’S CONFIDENTIAL TREATMENT
REQUEST. 

KLONDEX CANADA LTD. 

	By: 	/s/
      “Barry Dahl” 
	  	Barry Dahl 

Address:     Suite 2200, 1055 West Hastings
Street, Vancouver, BC, V6E 2E9, Canada 

3

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