Document:

exv10w6

 

Exhibit 10.6

1660 Wynkoop St., Suite 1000

Denver, Colorado 80202-1132

(303) 573-1660

FAX (303) 595-9385

www.royalgold.com

Email: royalgold@royalgold.com

February 28, 2007

Private & Confidential

Mr. Mark Kucher

Chairman

Battle Mountain Gold Exploration Corp.

One East Liberty Street

Sixth Floor, Suite 9

Reno, Nevada 89504

	 	 	 
	Re:

	 	One Year Bridge Facility for Battle Mountain Gold Exploration Corp.
	 

	 	And BMGX (Barbados) Corporation

Dear Mr. Kucher:

     Royal Gold, Inc. (“Royal”) is willing to provide Battle Mountain Gold Exploration Corp.
(“BMGX”) and BMGX (Barbados) Corporation (“BBC”) a secured one year bridge facility for the
repayment of certain bridge funding already in place, for the partial prepayment of certain debt
obligations, and for the acquisition of specified royalty interests on the terms and subject to the
conditions set forth in this letter agreement and in the US $20.0 Million Bridge Loan Term Sheet
attached to and by this reference incorporated into this letter agreement (“Term Sheet”). BMGX and
BBC may accept this offer of finance at any time prior to 5:00 PM PST on Wednesday, February 28,
2007, by executing duplicate original copies of this letter agreement and returning one fully
executed original to Royal.

General Characteristics of Bridge Facility

     The $20.0 Million Bridge Term Loan (the “Facility”) shall be a one-year term loan available
(subject to certain conditions in the final documentation) in up to four advances totalling, in the
aggregate, up to US $20 million. Proceeds from the Facility may be used only for the purposes
specified in the Term Sheet. The amount available under the Facility may be reduced from US $20
million to US $15 million upon the occurrence of the event specified under “Facility Amount” in the
Term Sheet. Advances under the Facility shall bear interest at twelve (12) month LIBOR plus three
percent (3%). Interest shall accrue and be paid, with the outstanding principal, in cash 365 days
from the Closing Date, which shall be March 9, 2007 or such other date as the parties shall agree
in writing.

 

     Royal shall have the right at any time to convert all principal, interest or other expenses
due into common shares of BMGX at the conversion price specified under “Conversion Option” in the
Term Sheet.

     The Facility and all obligations of BMGX and BBC shall be secured by a second ranking security
interest in the assets of BMGX and BBC, ranking only behind the existing Gold Facility Agreement
between BMGX and Macquarie Bank Limited in terms of priority. However, upon completion of certain
prepayments specified under “Security” in the Term Sheet, Royal shall be granted a first priority
perfected security interest in certain royalty interests to be acquired in whole or in part with
proceeds from the Facility, as set forth under “Security” in the Term Sheet.

     The Facility shall include representations, warranties, affirmative and negative covenants,
events of defaults, indemnifications and other provisions customary for transactions of this type,
including but not limited to those set forth in the Term Sheet.

Definitive Documentation

     The “Definitive Documentation” for the Facility is anticipated to include:

	 	•	 	a Bridge Term Loan Agreement between BMGX, BBC and Royal;
	 
	 	•	 	a Deposit Account Control Agreement between BMGX, BBC, Royal and BMGX’s bank in
respect of the proceeds account described under “Royalty Proceeds Account” in the Term
Sheet;
	 
	 	•	 	an intercreditor agreement between BMGX, BBC, Royal, IAMGOLD and Macquarie Bank
Limited;
	 
	 	•	 	a subordination agreement between BMGX, Royal and IAMGOLD; and
	 
	 	•	 	such mortgages, other security documents or other documents as may be necessary to
effect the transactions contemplated in this Letter Agreement and the Facility and to
create and perfect security interests in the assets and royalty interests held by BMGX
and its affiliates, as described under “Security” in the Term Sheet.

Schedule

     Immediately following acceptance of this offer of finance as provided herein, Royal, BBC and
BMGX shall work expeditiously and in good faith to execute and deliver the Definitive Documentation
on or before the Closing Date. Royal, BBC and BMGX anticipate funding the first advance on March
22, 2007.

Information

     Each of BBC and BMGX hereby represents and warrants that (i) all information concerning BMGX
and BBC or any of their subsidiaries that has been or will be made available to Royal or any of
Royal’s representatives, subsidiaries or affiliates is, or will be when furnished, complete and
correct in all material respects and does not, or will not when furnished, contain any untrue
statement of a material
fact or omit to state a material fact necessary in order to make the statement contained

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therein
not misleading in light of the circumstances under which such statements are made and (ii) all
financial projections concerning BMGX or BBC that have been or will be made available to Royal have
been prepared or will be prepared in good faith based upon reasonable assumptions at the time they
were made. You agree to supplement, or cause to be supplemented, the information provided to Royal
as described above from time to time until the Closing Date.

Complete Agreement

     This letter agreement constitutes the complete agreement between the parties with respect to
Royal’s provision of the Facility to BMGX and BBC. This letter agreement, together with the Term
Sheet, is intended to constitute legally binding and enforceable obligations of the parties,
subject to execution and delivery of Definitive Documentation, which when executed and delivered
shall supersede and replace this letter agreement in all respects and for all purposes. In the
event the Definitive Documentation is not executed and delivered prior to March 22, 2007, then
Royal nonetheless shall fund in accordance with the Term Sheet and Royal, BBC, and BMGX shall
continue to work diligently toward a closing on the Definitive Documentation at the earliest
possible date.

Termination

     If not accepted by BMGX and BBC in the manner provided herein at or before 5:00 PM PST on
February 28, 2007, this offer of finance shall expire and, in the absence of bad faith, neither
party shall have any duty or obligation to the other. If BMGX and BBC desire to accept this offer
of finance but are unable to do so because Macquarie Bank Limited has not consented to the
transactions contemplated herein, then Royal, BMGX and BBC shall negotiate in good faith a
reasonable extension to the foregoing deadline, and the same deadline set forth in paragraph 9 of
the letter of intent between Royal and BMGX dated February 24, 2007 (the “Letter of Intent”) shall
be amended accordingly. If this offer of finance shall expire without timely acceptance:

	 	•	 	the provisions of the Nondisclosure Agreement between Royal and BMGX dated February
21, 2007, as amended from time to time (the “Nondisclosure Agreement”), shall continue
in full force and effect in accordance with its terms; but
	 
	 	•	 	the Letter of Intent shall terminate in accordance with paragraph 9 thereof in the
absence of bad faith or breach of paragraph 5 thereof.

Indemnification

     BBC and BMGX agree to indemnify and hold harmless Royal and each of its respective affiliates,
directors, officers, employees, partners, representatives and and agents and each of their
respective heirs, successors and assigns (each, an “Indemnified Party”) for any loss, action, suit,
damages, expenses, liability or claim of any kind or nature to which such Indemnified Party may
become subject with respect to the execution, delivery, enforcement and performance of this letter
agreement or the Definitive Documentation.

-3-

 

Confidentiality

     Royal and BMGX ratify and confirm, and agree to continue to be bound by, the terms and
conditions of the Nondisclosure Agreement.

Applicable Law

     This letter agreement shall be governed by and construed in accordance with the laws of the
State of Colorado without giving effect to the conflict of laws provisions thereof.

Confirmation of Acceptance

     If the terms and conditions of finance set out in this letter agreement and the Term Sheet are
acceptable to you, please indicate your acceptance by signing duplicate original copies of this
letter and returning one fully-executed original to us.

	 	 	 	 	 
	 	Very truly yours,

ROYAL GOLD, INC.

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

Accepted for and on behalf of Battle Mountain Gold Exploration Corp.

	 	 	 	 	 
	By:

	 	/s/ Mark D. Kucher
	 	 
	 

	 	 	 	 
	 

	 	Mark D. Kucher	 	 
	 

	 	Chairman	 	 
	Date:

	 	February 28, 2007	 	 

Accepted for and on behalf of BMGX (Barbados) Corporation

	 	 	 	 	 
	By:

	 	/s/ Mark D. Kucher
	 	 
	 

	 	 	 	 
	 

	 	Mark D. Kucher

President 	 	 

Date:  February 28,
2007

-4-

 

BMGX (Barbados) Corporation

a subsidiary of

Battle Mountain Gold Exploration Corp.

US$20.0 million Bridge Loan Term Sheet

February 2007

 

 

	 	 	 
	

	 	Page -2-

	 	 	 
	Co – Borrowers:

	 	BMGX (Barbados) Corporation (“BBC”) and Battle
Mountain Gold Exploration Corp. (“BMGX”) on a
joint and several basis
	 
	 	 
	Lender:

	 	Royal Gold, Inc., a Delaware corporation
	 
	 	 
	Facility:

	 	A term loan available in up to four draws
	 
	 	 
	Purpose:

	 	To part finance (i) the acquisition of the 2%
NSR royalty on gold and silver production from
the Dolores project (the “Dolores Royalty II”)
for cash consideration of not more than
US$9,450,000, (ii) the acquisition of a royalty
interest in Interest A for cash consideration of
not more than US$5,000,000 (the “Interest A
Royalty”), (iii) the acquisition of a royalty
interest in Interest B for cash consideration of
not more than US$3,500,000 (the “Interest B
Royalty”), (iv) the prepayment of the Gold
Facility Agreement for which advances under the
Facility shall not be more than US$600,000 and
(v) the repayment and cancellation of the
US$4,000,000 Bridge Finance Facility Agreement,
between Battle Mountain Gold Exploration Corp.
and 1212500 Alberta Ltd., as Borrowers, and
Macquarie Bank Limited, as Bridge Lender, dated
April 25, 2006 (the “Bridge Loan”), which
payment may include accrued interest of up to
US$450,000, provided, however, that the Borrower
may not use the Facility for the purpose
outlined in (iv) or (v) above until after, or
simultaneously with, the closing of the Dolores
Royalty II acquisition.
	 
	 	 
	Facility Amount:

	 	Up to US$20,000,000, provided, however, that to
the extent the acquisition of Interest A Royalty
has not been completed by March 31, 2007 (the
“Transition Date”), the available Facility
Amount will be reduced to US$15,000,000.
	 
	 	 
	Interest Rate:

	 	Advances under the Facility shall bear interest
at twelve (12) month LIBOR plus 3%. LIBOR
shall be determined with reference to the quote
contained in the Wall Street Journal on the date
of the giving of a Notice of Borrowing.
	 
	 	 
	Default Rate:

	 	Upon the occurrence and continuation of a
Default or Event of Default, advances under the
Facility shall bear interest at an interest rate
of the Interest Rate plus 2% per annum.
	 
	 	 
	Interest Payments:

	 	Interest payable under the Facility shall accrue
and be paid in cash on the Maturity Date, unless
paid prior to the Maturity Date as the result of
a Mandatory Prepayment.
	 
	 	 
	Maturity Date:

	 	365 days from the Closing Date
	 
	 	 
	Amortization:

	 	All amounts outstanding under the Facility shall
mature on the Maturity Date. Any amounts repaid
under the Facility may not be re-borrowed.

 

 

	 	 	 
	

	 	Page -3-

	 	 	 
	Security:

	 	The Facility shall be secured by a second
ranking security interest in the assets of the
Borrowers, ranking only behind the Gold Facility
Agreement in terms of priority. However, upon
completion of the Initial Gold Facility
Prepayment and the Secondary Gold Facility
Prepayment, the Lender shall be granted a first
priority perfected security interest in the
Dolores Royalty II, the Interest A Royalty, the
Interest B Royalty and the Royalty Proceeds
Account.
	 
	 	 
	Royalty Proceeds Account:

	 	 Upon completion of the Initial Gold Facility
Prepayment and the Secondary Gold Facility
Prepayment, the Borrowers will establish a
proceeds account into which royalty payments
from the Dolores Royalty II, the Interest A
Royalty and the Interest B Royalty must be
deposited.
	 
	 	 
	Mandatory
Prepayments:

	 	To the extent the Facility Amount has been
reduced due to a failure to complete the
acquisition of the Interest A Royalty by the
Transition Date, any advances in excess of
US$15,000,000 shall be repaid within five
business days of the Transition Date.
 

Advances under the Facility shall be subject to
mandatory prepayments as follows:

	 	(a)	 	100% of the net proceeds received
from any debt issuance by the Borrowers;
	 
	 	(b)	 	100% of the net proceeds received
from any equity issuance by the BMGX;
	 
	 	(c)	 	100% of the net proceeds received
from any permitted asset sale by the Borrowers. and
	 
	 	(d)	 	100% of any proceeds received in
the Royalty Proceeds Account.

	 	 	 
	 

	 	Net proceeds shall be defined as gross proceeds received less (i) all
costs and expenses associated with the issuance of capital securities
or the sale of assets and any mandatory prepayment and (ii) all
mandatory prepayments required under the Gold Facility Agreement.
Mandatory Prepayments shall first be applied to accrued but unpaid
interest and then to principal.
	 
	 	 
	 

	 	To the extent the Definitive Merger Agreement has not been executed
within the timeframe contemplated by the Letter of Intent, and the
deadline for execution has not been extended, or the Lender and BMGX
terminate discussions regarding the Definitive Merger Agreement, BMGX
shall make a mandatory prepayment in an amount equal to the net
proceeds available in the Escrow Account, net of estimated expenses
of this transaction and customary costs and expenses associated with
the equity issuance.

 

 

	 	 	 
	

	 	Page -4-

	 	 	 
	Conversion Option:

	 	The Lender shall have the right at any time to convert
all principal, interest or other expenses due into
common shares of the Guarantor at a conversion price
of US$0.60 per share, provided, however, that if the
Definitive Merger Agreement has not been executed
within the timeframe contemplated by the Letter of
Interest, and the deadline for execution has not been
extended, or the Lender and BMGX terminate discussions
regarding the Definitive Merger Agreement, the Lender
shall have 45 days after such termination to exercise
its conversion option. If not exercised within 45
days of the such termination date, the conversion
option shall terminate.
	 
	 	 
	Representations and
Warranties:

	 	The Borrowers and their subsidiaries will make
customary Representations and Warranties, on the
Closing Date and each date on which an advance is
requested, including, but not limited to:

	 	(a)	 	Organization and
Ownership: The Borrowers are duly organized and validly
existing under the laws of the jurisdictions in which they are
incorporated and are qualified to do business in all
jurisdictions where the nature of their business or the
ownership of their assets so requires. The Borrowers have all
requisite power and authority to own or lease their property
and carry on their business.
	 
	 	(b)	 	Financial Condition: The
financial statements delivered to the Lender as and when
required under the Facility are complete and correct and fairly
present, in all material respects, the consolidated financial
condition of the Borrowers, all in accordance with GAAP. There
are no material liabilities or obligations of any nature
whatsoever except as fully disclosed in the financial
statements.
	 
	 	(c)	 	Ownership: The capital
of BBC is beneficially owned by BMGX and no other person has a
beneficial interest in the shares of BBC, other than an interest
created by the security documents under the Gold Facility
Agreement.
	 
	 	(d)	 	Authority: The Borrowers
have the authority to enter into the financing and security
documents associated with the Facility.
	 
	 	(e)	 	Binding Agreement: Each
financing and security document executed in connection with the
Facility has been duly authorized and executed and constitutes a
valid and binding obligation enforceable against the Borrowers.
	 
	 	(f)	 	No Conflicts: The
execution and delivery of the documentation associated with the
Facility do not conflict with or violate the terms of the Gold
Facility Agreement or any other agreement of the Borrowers.
	 
	 	(g)	 	Consents and Approvals:
All consents and approvals that are necessary for the execution
and delivery of the financing and security documents and the
performance of the Borrowers of their obligations under the
Facility shall be in full force and effect, including, for the
avoidance of doubt, all consents and
approvals required under the Gold Facility Agreement and the
IAMGOLD Debenture.

 

 

	 	 	 
	

	 	Page -5-

	 	(h)	 	Litigation: Except as
disclosed to the Lender, there are no material actions, suits or
proceedings against, or to the knowledge of the Borrowers,
threatened against the Borrowers or their properties.
	 
	 	(i)	 	Immunity: The Borrowers
have no immunity from jurisdiction of any court or from any
legal process.
	 
	 	(j)	 	Title to Royalties: The
Borrowers have good title to their royalty interests and have
duly registered the royalty agreement in the local jurisdiction
as necessary or desirable under local law.
	 
	 	(k)	 	Taxes: The Borrowers
have filed or caused to be filed all material tax returns
required to be filed and have paid all taxes shown to be due and
payable on such returns. There are no material disputes pending
or threatened against the Borrowers.
	 
	 	(l)	 	No Default: No Default
or Event of Default has occurred and is continuing.

	 	 	 
	Affirmative Covenants:

	 	The Borrowers, and their subsidiaries, agree to enter into covenants
customary for transactions of this type, until the obligations under the Facility have been
paid in full and the commitments terminated, including but not limited to:

	 	(a)	 	Information: The
Borrowers will provide to the Lender all reserve, operating and
projected technical and financial information provided to them
by the operators of the properties in which either party owns a
royalty interest. The Borrowers will, within five business days
of receipt, provide to the Lender all supporting statements
provided by the operators of the properties in which either
party has a royalty interest that accompany any royalty payment.
	 
	 	(b)	 	Financial Statements:
The Borrowers will provide quarterly income, balance sheet and
cash flow statements for the first three fiscal quarters of each
year within 45 days of each quarter end and will provide an
annual income, balance sheet and cash flow statement to the
Lender within 90 days of each fiscal year end. All annual
financial statements issued by BMGX shall be audited in
accordance with GAAP by a recognized international accounting
firm.
	 
	 	(c)	 	Notices of Extraordinary
Events: The Borrowers will provide notices of any material
event, including (i) any Default or Event of Default, (ii) any
litigation, arbitration or governmental proceeding affecting its
operations or the properties on which a royalty interest is
held, and (iii) any default or termination of any material
contract, including, without limitation any royalty contract or
the Gold Facility Agreement.
	 
	 	(d)	 	Existence: The Borrowers
will take all steps necessary to maintain their existence and to
continue their current business.
	 
	 	(e)	 	Maintain Royalty
Interests: The Borrowers shall take all action required to
maintain its royalty contracts as validly existing, fully
registered with the mining or other public registries, and

 

 

	 	 	 
	

	 	Page -6-

	 	 	 	legalized and notarized (where required) in their local
jurisdiction.
	 
	 	(f)	 	Payment of Taxes: The
Borrowers will ensure that all mining taxes, withholding taxes
and other taxes applicable to all royalty interests are paid and
discharged as and when they become due. The Borrowers shall
gross up any interest or principal payment made to the Lender
for any withholding tax associated with such payment.
	 
	 	(g)	 	Compliance with Law: The
Borrowers shall comply with all laws, rules and regulations
applicable in the jurisdictions in which they operate.
	 
	 	(h)	 	Gold Facility
Prepayments: BMGX shall use reasonable commercial efforts
to complete the Initial Gold Facility Prepayment and the
Secondary Gold Facility Prepayment within three (3) months of
the initial advance under the Facility and take all action
necessary to facilitate the exercise of common share warrants.

	 	 	 
	Negative Covenants:

	 	The Borrowers, and their subsidiaries, agree to enter into covenants customary
for transactions of this type, until the obligations under the Facility have been paid in full
and the commitments terminated, including but not limited to:

	 	(a)	 	Asset Sales: The
Borrowers may not sell or transfer any royalty contract or
interest, including sales or transfers to affiliates, parent
entities or subsidiaries.
	 
	 	(b)	 	Limitations on
Indebtedness: The Borrowers may not incur additional
indebtedness of any kind, unless the proceeds from such issuance
are used to make a required Mandatory Prepayment under the
Facility.
	 
	 	(c)	 	Limitations on Liens:
The Borrowers may not incur or suffer to exist any lien on its
assets, other than existing liens associated with the Gold
Facility Agreement and the IAMGOLD Debenture and liens created
under the Facility.
	 
	 	(d)	 	Limitation on Dividends:
The Borrowers shall not make any cash dividend payment,
subordinated interest or debt payment or any common share
repurchase payment, provided, however, that the BBC may make
dividend payments to BMGX.
	 
	 	(e)	 	Limitation on Issuance of
Securities: Prior to execution of the Definitive Merger
Documentation, the Borrowers shall not issue any additional
securities, including without limitation, removing any
securities from the escrow account established with Jones, Gable
& Co. in connection with BMGX’s sale of common stock (the
“Escrow Account”).
	 
	 	(f)	 	Amendment to Material
Contracts: The Borrowers may not amend any material
contract, including, without limitation, royalty contracts or
the Gold Facility Agreement without the prior written approval
of the Lender, provided, however, that the Gold Facility
Agreement may be amended without Lender approval if the
amendments do not increase the loan amount,

 

 

	 	 	 
	

	 	Page -7-

	 	 	 	increase the applicable interest rates or accelerate the
scheduled amortization of the loan. For the avoidance of doubt,
Lender approval shall not be required for any acceleration of the
scheduled amortization under the Gold Facility Agreement as a
result of the existing terms and conditions of that facility,
including the making of mandatory prepayments and any exercise by
Macquarie of its right of offset.
	 
	 	(g)	 	Amendments to Organizational
Documents: The Borrowers shall not amend their by-laws or
other organizational documents.
	 
	 	(h)	 	Use of Proceeds: The
Borrowers may not use proceeds advanced under the Facility other
than as outlined under Purpose above.
	 
	 	(i)	 	Arms Length Transactions:
The Borrowers shall not undertake any transaction with a
related party unless such terms are no less favorable than those
that could be obtained in a transaction with a third party.
	 
	 	(j)	 	Subsidiaries: The
Borrowers shall not establish any new subsidiaries or
affiliates.
	 
	 	(k)	 	Hedging: The Borrowers
may not undertake any metal hedging transactions, including
forward sales, options, gold loans or any other instrument that
fixes, caps or otherwise limits the future metal prices to be
received from the future royalty payments.

	 	 	 
	Events of Default:

	 	The Facility shall include customary Events of Default, including the following:

	 	(a)	 	Payment Default: Failure
to pay principal or interest when due;
	 
	 	(b)	 	Representations and
Warranties: Representations and warranties made by the
Borrowers are false or misleading when made;
	 
	 	(c)	 	Covenants: The breach of
any covenant or other obligation under the Facility;
	 
	 	(d)	 	Cross Default: A cross
default to all indebtedness of the Borrowers or the Guarantor,
except for the Gold Facility Agreement;
	 
	 	(e)	 	Judgments: Any judgment
for the payment of money in excess of US$250,000 that remains
unstayed on appeal, undismissed or undischarged within 60 days.
	 
	 	(f)	 	Project Suspension: The
projects associated with the Dolores Royalty II, the Interest A
Royalty or the Interest B Royalty are abandoned or placed on
care and maintenance for a period of in excess of 90 days.
	 
	 	(g)	 	Project Agreement
Default: Any default occurs under any royalty contract in
which the Borrowers have an interest.
	 
	 	(h)	 	Security Interest
Invalid: Any security interest granted to Lender is
determined to be not valid, perfected or having the priority
agreed upon at the Closing Date.

 

 

	 	 	 
	

	 	Page -8-

	 	(i)	 	Attachment of Collateral:
A person other than the Lender attaches or institutes
proceedings to attach all or any part of the collateral securing
the Facility.
	 
	 	(j)	 	Change in Control: Any
person, other than BMGX in the case of BBC, shall own more than
25% of the outstanding common shares of the Borrowers, other
than the Lender.
	 

	 	 	 
	Conditions Precedent:

	 	The conditions to the Closing Date shall include:

	 	(a)	 	The execution and delivery of the
financing and security documentation associated with the
Facility;
	 
	 	(b)	 	The receipt, by either Borrower,
as appropriate, of the required consents and approvals required
under the Bridge Loan, the Gold Facility Agreement and the
IAMGOLD Debenture and Lender’s satisfaction with the terms and
conditions of such approval.
	 
	 	The conditions to the initial advance shall include, but not be
limited to:
	 
	 	(a)	 	The receipt of satisfactory legal
opinions,
	 
	 	(b)	 	The execution and delivery of the
Definitive Merger Documentation,
	 
	 	(c)	 	The execution of satisfactory
intercreditor agreements with Macquarie Bank Limited and
IAMGOLD,
	 
	 	(d)	 	Validity of the Representations
and Warranties,
	 
	 	(e)	 	No Default or Event of Default
exists,
	 
	 	(f)	 	There has been no material
adverse change in the condition (financial or otherwise),
business, operations, performance or prospects of the Borrowers
nor has there been any material adverse change to the ability of
the Borrowers to repay its obligations under the Facility as and
when due or in the security interests created under the
Facility.
	 
	 	(g)	 	Receipt by the Lender of a Notice
of Borrowing not less than three business days prior to the
proposed funding date of the advance.

	 	 	 
	 

	 	The conditions to each subsequent advance under the Facility shall
include:

	 	(a)	 	Validity of the Representations
and Warranties,
	 
	 	(b)	 	No Default or Event of Default
exists;
	 
	 	(c)	 	There has been no material
adverse change in the condition (financial or otherwise),
business, operations, performance or prospects of the Borrowers
nor has there been any material adverse change to the ability of
the Borrowers to repay its obligations under the Facility as and
when due or in the security interests created under the
Facility.
	 
	 	(d)	 	Receipt by the Lender of a Notice
of Borrowing not less than three business days prior to the
proposed funding date of the advance.

 

 

	 	 	 
	

	 	Page -9-

	 	 	 
	 

	 	To the extent advances under the Facility are intended for the
acquisition of the Dolores Royalty II, the Interest A Royalty or the
Interest B Royalty, the Borrowers shall provide documentation
evidencing the closing of the transaction.
	 
	 	 
	 

	 	To the extent advances under the Facility are intended to repay the
Bridge Loan, the Borrowers shall provide evidence of the cancellation
and termination of that agreement.
	 
	 	 
	Amendments and Waivers:

	 	The documentation associated with the Facility may not be amended, modified or waived without
the prior written consent of the Lender and the Borrowers.
	 
	 	 
	Assignment:

	 	The Borrowers may not assign the obligations under the Facility. The Lender may assign its
rights and obligations under the Facility with the consent of the Borrowers, such consent not
to be unreasonably withheld.
	 
	 	 
	Indemnity:

	 	The Borrowers agree to indemnify and hold harmless the Lender for any loss, liability or
claim with respect to the execution, delivery, enforcement and performance of the financing
and security documentation.
	 
	 	 
	Costs and Expenses:

	 	Each party shall bear their own costs and expenses associated with the establishment of the
Facility.
	 
	 	 
	Definitions:
	 	 
	 
	 	 
	Closing Date:

	 	March 9, 2007 or such other date as the parties shall agree in writing.
	 
	 	 
	Default

	 	means any event, which with the passage of time or the giving of notice, or both, would
constitute an Event of Default.
	 
	Definitive Merger Documentation: 

	 	means the Definitive Agreement as that term is defined in the Letter of Intent dated February
24, 2007 between Royal Gold, Inc. and Battle Mountain Gold Exploration Corp. (the “Letter of
Intent”)
	 
	 	 
	Gold Facility Agreement:

	 	means the gold facility agreement between 1212500 Alberta Ltd, as Facility User, Battle
Mountain Gold Exploration Corp., as Guarantor and Macquarie Bank Limited, as Facility
Provider, dated April 25, 2006.
	 
	 	 
	IAMGOLD Debenture:

	 	means the debenture issued to IAMGOLD, dated April 25, 2006, in the amount of US$2 million,
which shall be subordinated to the obligations of the Borrower and the Guarantor under the
Facility.

 

 

	 	 	 
	

	 	Page -10-

	 	 	 
	Initial Gold Facility Prepayment:

	 	means the prepayment of the May 2007, August 2007 and November 2007 gold deliveries under the
Gold Facility Agreement.
	 
	 	 
	Interest A:

	 	means the interests described in Section 1 of Schedule A to the February 21, 2007
Nondisclosure Agreement between the Guarantor and the Lender
	 
	 	 
	Interest B:

	 	means the interests described in Section 4 of Schedule A to the February 21, 2007
Nondisclosure Agreement between the Guarantor and the Lender.
	 
	Macquarie Proceeds Account:

	 	means the Proceeds Account as that terms is defined in the Gold Facility Agreeement.
	 
	 	 
	Secondary Gold Facility
Prepayment:

	 	means the prepayment of the February 2008 and May 2008 gold deliveries under the Gold
Facility Agreement from proceeds received from the exercise of common share warrants.exv10w5

 

Exhibit 10.5

LONG-TERM INCENTIVE PLAN OF

CENTERPOINT ENERGY, INC.

(As Amended and Restated Effective May 1, 2004)

First Amendment

          CenterPoint Energy, Inc., a Texas corporation, having reserved the right under Section 12 of
the Long-Term Incentive Plan of CenterPoint Energy, Inc., as amended and restated effective as of
May 1, 2004 (the “Plan”), to amend the Plan, does hereby amend the Plan, effective as of January 1,
2007, as follows:

The term “Change of Control” in Section 1 of the Plan is hereby amended to be
“Change in Control” and all references in the Plan to the term “Change of Control”
are replaced with the term “Change in Control.”

          IN WITNESS WHEREOF, CenterPoint Energy, Inc. has caused these presents to be executed by its
duly authorized officer in a number of copies, all of which shall constitute one and the same
instrument, which may be sufficiently evidenced by any executed copy hereof, on this 28th of
February, 2007, but effective as provided above.

	 	 	 	 	 
	 	 	CENTERPOINT ENERGY, INC.
	 
	 	 	 	 
	 

	 	By
	 	/s/ David M. McClanahan
	 

	 	 	 	 
	 

	 	 	 	David M. McClanahan
	 

	 	 	 	President and Chief Executive Officer

ATTEST:

	 	 	 
	/s/ Richard Dauphin
 

	 	  
	Richard Dauphin
	 	 
	Assistant Secretary

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