Document:

Exhibit
10.1

    EXECUTION
VERSION

    

    INTERCREDITOR
AGREEMENT

     

    Intercreditor
Agreement (this “Agreement”), dated as
of December 10, 2010, among JPMorgan Chase Bank, N.A., as Administrative Agent
(in such capacity, with its successors and assigns, and as more specifically
defined below, the “Senior Debt
Representative”) for the Senior Debt Secured Parties (as defined below),
RGL Royalty AG, a Swiss corporation as purchaser (with its successors and
assigns, the “Purchaser”) of
certain refined gold from Terrane Metals Corp., a company incorporated under the
laws of British Columbia, (the “Vendor”) and the
Vendor.

     

    WHEREAS,
Thompson Creek Metals Company, Inc., a company incorporated under the laws of
British Columbia (“Borrower”), the
subsidiary guarantors, including the Vendor, the Senior Debt Representative and
certain financial institutions and other entities are parties to the Credit
Agreement dated as of the date hereof (the “Existing Senior Debt
Agreement”), pursuant to which such financial institutions and other
entities have agreed to make loans and extend other financial accommodations to
the loan parties party thereto;

     

    WHEREAS,
Borrower, the Vendor, Royal Gold, Inc., a Delaware corporation (“Royal Gold”) and the
Purchaser are parties to the Purchase and Sale Agreement dated as of October 20,
2010 (the “Royal Gold
Purchase Agreement”), pursuant to which,
among other things, (i) the Purchaser has
agreed to pay the Payment Deposit (as defined below), a portion of which will be
used (A) by the Borrower to acquire, directly or indirectly, certain ownership
interests in the Milligan Project (as defined below) and (B) by the Vendor in
connection with the development of the Milligan Project and (ii) upon completion
of the Milligan Project, the Vendor has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Vendor, an amount of
Refined Gold (as defined below) equal to the Designated Percentage of Produced
Gold (as defined below).

     

    WHEREAS,
the Vendor has granted to the Senior Debt Representative security interests and
liens in the Collateral (as defined below) as security for payment and
performance of the Senior Debt Obligations; and

     

    WHEREAS,
the Vendor has granted to the Purchaser security interests and liens in the
Collateral as security for payment and performance of the Royal Gold Obligations
(as defined below).

     

    NOW
THEREFORE, in consideration of the foregoing and the mutual covenants herein
contained and other good and valuable consideration, the existence and
sufficiency of which is expressly recognized by all of the parties hereto, the
parties agree as follows:

     

    SECTION 1.  Definitions; Rules of
Construction.

     

    1.1           UCC and PPSA
Definitions.  The following terms which are defined in the UCC
are used herein as so defined in respect of the Collateral to which the UCC
applies:  Accounts, Chattel Paper, Commercial Tort Claims, Deposit
Accounts, Documents, Equipment, General Intangibles, Goods, Instruments,
Inventory, Investment Property, Letter of Credit, Letter of Credit Rights,
Records, Securities Account and Supporting Obligations. The following terms
which are defined in the PPSA are used herein as so defined in respect of the
Collateral to which the PPSA applies:  Accounts, Chattel Paper,
Documents of Title, Equipment, Fixtures, Intangibles, Goods, Instruments,
Inventory, Investment Property and Money except that the term Goods shall not
include “consumer goods” as defined in the PPSA.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    1.2.           Defined
Terms.  The following terms, as used herein, have the following
meanings:

     

    “Additional Debt” has
the meaning set forth in Section
9.5(b).

     

    “Additional Senior Debt
Agreement” has the meaning set forth in the definition of Senior Debt
Agreement.

     

     “Banking Services
Obligations” means, any obligations of the Vendor, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and substitutions
therefor), owed to any Senior Debt Secured Party (or any of its affiliates) in
respect of the following bank services:  (a) credit cards for
commercial customers (including, without limitation, “commercial credit cards”
and purchasing cards), (b) stored value cards and (c) treasury management
services (including, without limitation, controlled disbursement, automated
clearinghouse transactions, return items, overdrafts and interstate depository
network services).

     

    “Bankruptcy Code”
means the United States Bankruptcy Code (11 U.S.C. §101 et seq.), as amended
from time to time.

     

    “Borrower” has the
meaning set forth in the first WHEREAS clause above.

     

     “Collateral” means,
collectively, all property relating to or arising out of the Milligan Project,
now or hereafter owned by the Vendor or, in or to which the Vendor now or
hereafter has rights, including all such rights and (as the context so admits)
any item or part thereof, upon which a Lien is granted pursuant to the Security
Documents.

    

    “Comparable Security
Document” means, in relation to any Senior Collateral subject to any
Senior Security Document, that Junior Security Document that creates a security
interest in the same Senior Collateral, granted by the Vendor, as
applicable.

     

     “Designated Percentage of
Produced Gold” has the meaning set forth in the Royal Gold Purchase
Agreement as in effect as of the date hereof.

     

    “Enforcement Action”
means, with respect to the Senior Debt Obligations or the Royal Gold
Obligations, the exercise of any rights and remedies with respect to any
Collateral securing such obligations or the commencement or prosecution of
enforcement of any of the rights and remedies under, as applicable, the Senior
Debt Documents or the Royal Gold Documents, or applicable law, including without
limitation the exercise of any rights of set-off or recoupment, and the exercise
of any rights or remedies of a secured creditor under the UCC, PPSA of any
applicable jurisdiction or under any Insolvency Laws.

     

    “Existing Senior Debt
Agreement” has the meaning set forth in the first WHEREAS clause of this
Agreement.

     

    “Insolvency Law” means
the Bankruptcy Code, Bankruptcy and Insolvency Act
(Canada), the Companies’
Creditors Arrangement Act (Canada), the Winding-up and Restructuring
Act (Canada) and any similar statute or law or any corporate law in any
jurisdiction dealing with bankruptcy, insolvency, restructuring of debts or
analogous concepts, and including without limitation, the filing of an
application or commencement of proceedings under provisions of the Canada Business Corporations
Act or the Business
Corporations Act (British Columbia) (or any successors to such statutes
or comparable legislation in other jurisdictions) seeking to impose a stay of
proceedings against creditors, seeking to approve or impose a plan of
arrangement providing for the compromise of claims of creditors or imposing
other limitations or restrictions on creditors’ rights.

     

    
      
        
        

      

      
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     “Insolvency
Proceeding” means (a) any proceeding or filing, whether filed by or
against any Loan Party or its assets, seeking relief under any Insolvency Law,
(b) any voluntary or involuntary appointment of a trustee, Receiver, Monitor,
liquidator, custodian, sequestrator, conservator or any similar official for any
Loan Party or for a substantial part of the property or assets of any Loan
Party, (c) any voluntary or involuntary dissolution, winding-up or liquidation
of any Loan Party or of the business of any Loan Party, or (d) a general
assignment for the benefit of creditors by any Loan Party or any marshalling of
their assets.

     

     “Junior Collateral”
shall mean with respect to any Junior Secured Party, any Collateral on which it
has a Junior Lien.

     

    “Junior Documents”
shall mean, collectively, with respect to any Junior Obligations, any provision
pertaining to such Junior Obligation in any Loan Document or any other document,
instrument or certificate evidencing or delivered in connection with such Junior
Obligation.

     

    “Junior Liens” shall
mean (a) with respect to any Senior Debt Priority Collateral, all Liens securing
the Royal Gold Obligations and (b) with respect to any Royal Gold Priority
Collateral, all Liens securing the Senior Debt Obligations.

     

    “Junior Obligations”
shall mean (a) with respect to any Senior Debt Priority Collateral, all Royal
Gold Obligations and (b) with respect to any Royal Gold Priority Collateral, all
Senior Debt Obligations.

     

    “Junior
Representative” shall mean (a) with respect to any Senior Debt
Obligations or any Senior Debt Priority Collateral, the Purchaser and (b) with
respect to any Royal Gold Obligations or any Royal Gold Priority Collateral, the
Senior Debt Representative.

     

    “Junior Secured
Parties”
shall mean (a) with respect to the Senior Debt Priority Collateral, the
Purchaser and (b) with respect to the Royal Gold Priority Collateral, all Senior
Debt Secured Parties.

     

    “Junior Security
Documents” shall mean with respect to any Junior Secured Party, the
Security Documents that secure the Junior Obligations.

     

    “Lien” means, with
respect to any asset, (a) any mortgage, deed of trust, deed to secure debt,
lien, pledge, hypothecation, assignment, assignation, debenture, encumbrance,
charge or security interest in, on or of such asset, (b) the interest of a
vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities.

     

     “Lien Priority” means
with respect to any Lien of the Senior Debt Representative or Purchaser in the
Collateral, the order of priority of such Lien specified in Section
2.1.

     

    “Loan Documents” shall
mean, collectively, the Senior Debt Document and the Royal Gold
Documents.

     

    “Loan Party” means
Borrower and each direct or indirect affiliate or shareholder (or equivalent) of
Borrower or any of its affiliates that is now or hereafter becomes a party to
any Senior Debt Document.  All references in this Agreement to any
Loan Party shall include such Loan Party as a debtor-in-possession and any
Receiver or Trustee for such Loan Party or its property in any Insolvency
Proceeding.

     

    
      
        
        

      

      
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    “Milligan Project” has
the meaning set forth in the Royal Gold Purchase Agreement as in effect on the
date hereof.

     

    “Milligan Property”
has the meaning set forth in the Royal Gold Purchase Agreement as in effect on
the date hereof.

     

    “Monitor” means any
monitor appointed by a court in any proceedings in respect of a Loan Party under
the Companies’ Creditors
Arrangement Act (Canada).

     

     “Payment Deposit” has
the meaning set forth in the Royal Gold Purchase Agreement as in effect on the
date hereof.

     

    “Person” means any
person, individual, sole proprietorship, partnership, joint venture,
corporation, limited liability company, unincorporated organization,
association, institution, entity, party, including any government and any
political subdivision, agency or instrumentality thereof.

     

    “Post-Petition
Interest” means any interest or entitlement to fees or expenses or other
charges that accrues after the commencement of any Insolvency Proceeding (or
would accrue but for the commencement of an Insolvency Proceeding), whether or
not allowed or allowable in any such Insolvency Proceeding.

     

    “PPSA” means the Personal Property Security
Act as the same may, from time to time, be in effect in the Province of
British Columbia and any
equivalent law of any other applicable jurisdiction.

     

    “Priority Collateral”
means the Senior Debt Priority Collateral or the Royal Gold Priority
Collateral.

     

    “Proceeds” means (a)
all “proceeds,” as defined in Article 9 of the UCC or the PPSA, with respect to
the Collateral, and (b) whatever is recoverable or recovered when any Collateral
is sold, exchanged, collected, or disposed of, whether voluntarily or
involuntarily, including, without limitation, all proceeds of any insurance
policy covering the Collateral.

     

    “Purchaser” has the
meaning set forth in the introductory paragraph hereof.

     

    “Real Property” means
any right, title or interest in and to real property, including any fee
interest, leasehold interest, easement, or license and any other right to use or
occupy real property, including any right arising by contract.

     

    “Receiver” means a
receiver, a manager, a receiver and manager, or an interim receiver, whether
privately appointed or appointed by court order.

     

    “Refined Gold” means
marketable metal bearing material in the form of gold bars or coins that is
refined to a minimum 995 parts per 1,000 fine gold.

     

    “Royal Gold Documents”
means the Royal Gold Purchase Agreement and the Royal Gold Security
Documents.

     

    
      
        
        

      

      
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     “Royal Gold Lien”
means any Lien created by the Royal Gold Security Documents.

     

     “Royal Gold
Obligations” means all obligations of the Vendor and the Borrower for the
performance of covenants, tasks or duties and other obligations under the Royal
Gold Purchase Agreement and the Royal Gold Security Documents, including,
without limitation, the delivery of Refined Gold to the Purchaser, the payment
of monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable and including return
to the Purchaser of the outstanding balance of the Payment Deposit under the
circumstances set forth in the Royal Gold Purchase Agreement), the development
of the Milligan Project, the execution and delivery of the Mineral Offtake
Agreements (as defined in the Royal Gold Purchase Agreement) in respect of gold
produced from the Milligan Project, the maintenance of insurance in respect of
the Milligan Project, the maintenance of the Deposit Record, and all other
covenants, duties or payments of amounts, of any kind or nature, present or
future, absolute or contingent, joint or several or joint and several, direct or
indirect, matured or not, extended or renewed, whenever and however incurred,
whether or not evidenced by any note, agreement, letter of credit agreement or
other instrument, arising under, by reason of, pursuant to or otherwise in
respect of the Royal Gold Purchase Agreement, any Royal Gold Security Document
or any other security agreement granted by the Vendor to the Purchaser, and (as
the context so admits) each and every item or part of any
thereof.  This term includes all principal, interest (including all
interest that accrues after the commencement of, or which would have accrued but
for the commencement of, any Insolvency Proceeding in accordance with and at the
rate, including any late payment or default rate (under the Royal Gold Purchase
Agreement and/or the Royal Gold Security Documents) to the extent lawful,
specified herein or in the Royal Gold Purchase Agreement, whether or not such
interest is an allowable claim in such Insolvency Proceeding), expenses, legal
fees and any other sum chargeable to the Vendor under the Royal Gold Purchase
Agreement, any Royal Gold Security Document or any other purchase or security
agreement granted by the Vendor to the Purchaser, and (as the context so admits)
each and any item or part of any thereof.  To the extent
any payment with respect to any Royal Gold Obligation (whether by or on behalf
of the Vendor, as Proceeds of security, enforcement of any right of setoff or
otherwise) is declared to be a fraudulent conveyance or a preference in any
respect, set aside or required to be paid to a debtor in possession, any Senior
Debt Secured Party, receiver or similar Person, then the obligation or part
thereof originally intended to be satisfied shall, for the purposes of this
Agreement and the rights and obligations of the Senior Debt Secured Parties and
the Purchaser, be deemed to be reinstated and outstanding as if such payment had
not occurred.

     

    “Royal Gold Obligations
Payment Date” means the first date on which (a) the Royal Gold
Obligations (other than those that constitute Unasserted Contingent Obligations)
have been indefeasibly satisfied in full and/or otherwise fully performed under
and in accordance with the Royal Gold Purchase Agreement and the Royal Gold
Security Documents or (b) all Royal Gold Obligations have otherwise been
terminated in accordance with the Royal Gold Purchase Agreement, and so long as
the Senior Debt Obligations Payment Date shall not have occurred, the Purchaser
has delivered a written notice to the Senior Debt Representative stating that
the events described in clauses (a) or (b) have occurred to the satisfaction of
the Purchaser.

     

     “Royal Gold Post-Petition
Assets” has the meaning set forth in Section
5.2(a).

     

    “Royal Gold Priority
Collateral” means all Collateral consisting of the Designated Percentage
of Produced Gold and all proceeds thereof registered pursuant to
PPSA.

     

    “Royal Gold Purchase
Agreement” has the meaning set forth in the second WHEREAS clause of this
Agreement.

     

    
      
        
        

      

      
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    “Royal Gold Security
Documents” means collectively, (i) the Security Agreement entered into as
of October 20, 2010 by and between the Vendor and the Purchaser for the mining
claims and leases with respect to the Milligan Project, (ii) the Security
Agreement entered into as of October 20, 2010 by and between the Vendor and the
Purchaser for all personal property of the Vendor relating to or arising out of
the Milligan Project and (iii) the Security Agreement entered into as of October
20, 2010 by and between the Vendor and the Purchaser creating a floating charge
over the real property relating to or comprising the Milligan
Property.

     

    “Royal Gold Trigger
Event” means when a Vendor Event of Default shall have occurred and be
continuing and the Purchaser shall have given a written notice to the Vendor to
terminate the Royal Gold Purchase Agreement and demand the outstanding balance
of the Payment Deposit, if any.

     

    “Secured Obligations”
shall mean the Senior Debt Obligations and the Royal Gold
Obligations.

     

    “Secured Parties”
means the Senior Debt Secured Parties and the Purchaser.

     

    “Security Documents”
means, collectively, the Senior Debt Security Documents and the Royal Gold
Security Documents.

     

    “Senior Collateral”
shall mean with respect to any Senior Secured Party, any Collateral on which it
has a Senior Lien.

     

    “Senior Debt
Agreement” means the collective reference to (a) the Existing Senior Debt
Agreement, and (b) any other credit agreement, loan agreement, note agreement,
promissory note, indenture or other agreement or instrument evidencing or
governing the terms of any indebtedness or other financial accommodation that
has at any time been incurred by the Vendor in connection with the refinancing
or replacement of the Existing Senior Debt Agreement (an “Additional Senior Debt
Agreement”) unless such agreement or instrument expressly provides that
it is not intended to be and is not a Senior Debt Agreement hereunder; provided
that, the Borrower shall cause the providers of any such financing (to the
extent not represented by the Senior Debt Representative or any successor
thereto) under such Additional Senior Debt Agreement to agree to be bound by the
terms of this Agreement. Any reference to the Senior Debt Agreement hereunder
shall be deemed a reference to any Senior Debt Agreement then
extant.

     

    “Senior Debt
Creditors” means, collectively, the “Lenders” and the “Secured Parties”
(or other equivalent terms), each as defined in the Senior Debt
Agreement.

     

    “Senior Debt DIP
Financing” has the meaning set forth in Section
5.2(a).

     

    “Senior Debt
Documents” means the Senior Debt Agreement, each Senior Debt Security
Document, each Senior Debt Guarantee and each other “Loan Document” as defined
in the Senior Debt Agreement.

     

    “Senior Debt
Guarantee” means any guarantee by the Vendor of any or all of the Senior
Debt Obligations.

     

    “Senior Debt
Lien” means
any Lien created by the Senior Debt Security Documents.

     

    
      
        
        

      

      
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    “Senior Debt
Obligations” means (a) with respect to the Existing Senior Debt
Agreement, all “Obligations” of each Loan Party as defined in the “Guarantee and
Collateral Agreements” referred to in the Existing Senior Debt Agreement and (b)
with respect to each other Senior Debt Agreement, (i) all principal of and
interest (including without limitation any Post-Petition Interest) and premium
(if any) on all loans made pursuant to the Senior Debt Agreement or any Senior
Debt DIP Financing by the Senior Debt Creditors, (ii) all reimbursement
obligations (if any) and interest thereon (including without limitation any
Post-Petition Interest) with respect to any letter of credit or similar
instruments issued pursuant to the Senior Debt Agreement, (iii) all Swap
Obligations, (iv) all Banking Services Obligations and (v) all guarantee
obligations, indemnities, fees, expenses and other amounts payable from time to
time pursuant to the Senior Debt Documents, in each case whether or not allowed
or allowable in an Insolvency Proceeding. To the extent any payment with respect
to any Senior Debt Obligation (whether by or on behalf of the Vendor, as
Proceeds of security, enforcement of any right of setoff or otherwise) is
declared to be a fraudulent conveyance or a preference in any respect, set aside
or required to be paid to a debtor in possession, the Purchaser, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall, for the purposes of this Agreement and the rights and
obligations of the Senior Debt Secured Parties and the Purchaser, be deemed to
be reinstated and outstanding as if such payment had not occurred.

     

    “Senior Debt Obligations
Payment Date” means the first date on which (a) the Senior Debt
Obligations (other than those that constitute Unasserted Contingent Obligations)
have been indefeasibly paid in cash in full (or cash collateralized or defeased
in accordance with the terms of the Senior Debt Documents), (b) all commitments
to extend credit under the Senior Debt Documents have been terminated, (c) there
are no outstanding letters of credit or similar instruments issued under the
Senior Debt Documents (other than such as have been cash collateralized or
defeased in accordance with the terms of the Senior Debt Documents), and (d) so
long as the Royal Gold Obligations Payment Date shall not have occurred, the
Senior Debt Representative has delivered a written notice to the Purchaser
stating that the events described in clauses (a), (b) and (c) have occurred to
the satisfaction of the Senior Debt Secured Parties.

     

    “Senior Debt Post-Petition
Assets” has the meaning set forth in Section
5.2(b).

     

    “Senior Debt Priority
Collateral” means all Collateral
other than the Royal Gold Collateral.

     

    “Senior Debt
Representative” has the meaning set forth in the introductory paragraph
hereof.  In the case of any Additional Senior Debt Agreement, the
Senior Debt Representative shall be the Person identified as such in such
Agreement.

     

    “Senior Debt Secured
Parties” means the Senior Debt Representative, the Senior Debt Creditors
and any other holders of the Senior Debt Obligations.

     

    “Senior Debt Security
Documents” means the “Security Documents” as defined in the Existing
Senior Debt Agreement, and any other documents that are designated under the
Senior Debt Agreement as “Senior Debt Security Documents” for purposes of this
Agreement.

     

    “Senior Documents”
shall mean, collectively, with respect to any Senior Obligation, any provision
pertaining to such Senior Obligation in any Loan Document or any other document,
instrument or certificate evidencing or delivered in connection with such Senior
Obligation.

     

    “Senior Liens” shall
mean (a) with respect to the Senior Debt Priority Collateral, all Liens securing
the Senior Debt Obligations and (b) with respect to the Royal Gold Priority
Collateral, all Liens securing the Royal Gold Obligations.

     

    
      
        
        

      

      
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    “Senior Obligations”
shall mean (a) with respect to any Senior Debt Priority Collateral, all Senior
Debt Obligations and (b) with respect to any Royal Gold Priority Collateral, all
Royal Gold Obligations.

     

    “Senior Obligations
Payment
Date” shall mean (a) with respect to Senior Debt Obligations, the Senior
Debt Obligations Payment Date and (b) with respect to any Royal Gold
Obligations, the Royal Gold Obligations Payment Date.

     

    “Senior
Representative” shall mean (a) with respect to any Senior Debt Priority
Collateral, the Senior Debt Representative and (b) with respect to any Royal
Gold Priority Collateral, the Purchaser.

     

     “Senior Secured
Parties” shall mean (a) with respect to the Senior Debt Priority
Collateral, all Senior Debt Secured Parties and (b) with respect to the Royal
Gold Priority Collateral, the Purchaser.

     

    “Senior Security
Documents” shall mean with respect to any Senior Secured Party, the
Security Documents that secure the Senior Obligations.

     

    “Standstill Period”
has the meaning set forth in Section 3.2(a).

     

    “Swap Obligations”
means, any obligations of the Vendor owed to any Senior Debt Creditor (or any of
its affiliates) in respect of any swap, forward, future or derivative
transaction or option or similar agreement involving, or settled by reference
to, one or more rates, currencies, commodities, equity or debt instruments or
securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination
of these transactions or any and all cancellations, buy backs, reversals,
terminations or assignments of any these transactions.

     

     “Unasserted Contingent
Obligations” shall mean, at any time, Senior Debt Obligations or Royal
Gold Obligations, as applicable, for taxes, costs, indemnifications,
reimbursements, damages and other liabilities (excluding (a) the principal of,
and interest and premium (if any) on, and fees and expenses relating to, any
Senior Debt Obligation or Royal Gold Obligation, as applicable, and (b) with
respect to Senior Debt Obligations contingent reimbursement obligations in
respect of amounts that may be drawn under outstanding letters of credit) in
respect of which no assertion of liability (whether oral or written) and no
claim or demand for payment (whether oral or written) has been made (and, in the
case of Senior Debt Obligations or Royal Gold Obligations, as applicable, for
indemnification, no notice for indemnification has been issued by the
indemnitee) at such time.

     

    “UCC” shall mean the
Uniform Commercial Code as in effect from time to time in the applicable
jurisdiction (except to the extent that the Uniform Commercial Code or other
applicable law requires that the perfection, the effect of perfection or
non-perfection, the priority of Liens, or the enforcement of remedies with
respect to the Collateral, be governed by the laws of another
jurisdiction).

     

     “Vendor Event of
Default” has the meaning set forth in the Royal Gold Purchase Agreement
as in effect on the date hereof.

     

    
      
         

      

      
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    1.3           Rules of
Construction.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include”, “includes” and “including” shall
be deemed to be followed by the phrase “without limitation”. The word “will”
shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires otherwise (a) any definition of
or reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. For purposes of this Agreement, all references to the Royal
Gold Purchase Agreement and Royal Gold Security Documents shall be to refer to
the Royal Gold Purchase Agreement and Royal Gold Security Documents, as
applicable, as in effect on the date hereof (it being understood that to the
extent such agreements are amended after the date hereof, such amendments shall
be without prejudice to the rights and obligations of the parties hereunder
which shall be not affected by any such amendments or waivers.

     

    SECTION 2.  Lien Priority.

     

    2.1          Lien
Subordination.  Notwithstanding the date, manner or order of
grant, attachment or perfection of any Junior Lien in respect of any Collateral
or of any Senior Lien in respect of any Collateral and notwithstanding any
provision of the UCC or the PPSA, any applicable law, any Security Document, any
alleged or actual defect or deficiency in any of the foregoing or any other
circumstance whatsoever, the Junior Representative, on behalf of each Junior
Secured Party, in respect of its respective Collateral hereby agrees
that:

     

    (a)           any
Senior Lien in respect of such Collateral, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise, shall be and
shall remain senior and prior to any Junior Lien in respect of such Collateral
(whether or not such Senior Lien is subordinated to any Lien securing any other
obligation); and

     

    (b)           any
Junior Lien in respect of such Collateral, regardless of how acquired, whether
by grant, statute, operation of law, subrogation or otherwise, shall be junior
and subordinate in all respects to any Senior Lien in respect of such
Collateral.

     

    2.2          Prohibition on Contesting
Liens.  Subject to the Lien Priority set forth herein, each of
the Purchaser and the Senior Debt Representative (on behalf of the Senior Debt
Secured Parties) hereby agrees, without prejudice to its rights under this
Agreement, that it shall not, and hereby waives any right to:

     

    (a)           contest,
or support any other Person in contesting, in any proceeding (including any
Insolvency Proceeding), the priority, validity or enforceability of any Senior
Lien or Junior Lien, as applicable, on such Collateral; or

     

    (b)           demand,
request, plead or otherwise assert or claim the benefit of any marshalling,
appraisal, valuation or similar right which it may have in respect of such
Collateral or the Senior Liens or Junior Liens, as applicable,  on
such Collateral, except to the extent that such rights are expressly granted in
this Agreement.

     

    
      
         

      

      
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    2.3           Nature of
Obligations.  The Purchaser acknowledges that a portion of the
Senior Debt Obligations represents debt that is revolving in nature and that the
amount thereof that may be outstanding at any time or from time to time may be
increased, reduced or repaid and subsequently reborrowed, and that the terms of
the Senior Debt Obligations and any Senior Debt Agreement or any provision
thereof may be waived, modified, extended, amended, restated or supplemented
from time to time, and that the aggregate amount of the Senior Debt Obligations
may be increased, replaced or refinanced, in each event, without notice to or
consent by the Purchaser and without affecting the provisions
hereof.  The Senior Debt Representative on behalf of itself and the
other Senior Debt Secured Parties acknowledges that the amount of any Royal Gold
Obligations may be increased, reduced, or repaid pursuant to the Royal Gold
Purchase Agreement as in effect as of the date hereof, and any Royal Gold
Document or any provision thereof may be waived, modified, extended, amended,
restated or supplemented from time to time, and that the aggregate amount of the
Royal Gold Obligations may be increased pursuant to the Royal Gold Purchase
Agreement as in effect as of the date hereof, in each event, without notice to
or consent by the Senior Debt Secured Parties and without affecting the
provisions hereof.  The Lien Priorities provided in Section 2.1 shall not
be altered or otherwise affected by any such amendment, modification,
supplement, extension, repayment, reborrowing, increase, replacement, renewal,
restatement or refinancing of either the Senior Debt Obligations or the Royal
Gold Obligations, or any portion thereof.

     

    2.4           No New
Liens.  (a)  Until the Senior Debt Obligations
Payment Date, the Purchaser shall not acquire or hold any Lien on any assets of
the Vendor securing any Royal Gold Obligation which assets are not also subject
to the Lien of the Senior Debt Representative under the Senior Debt Documents,
subject to the Lien Priority set forth herein.  If the Purchaser shall
(nonetheless and in breach hereof) acquire or hold any Lien on any assets of any
Loan Party securing any Royal Gold Obligation which assets are not also subject
to the Lien of the Senior Debt Representative under the Senior Debt Documents,
subject to the Lien Priority set forth herein, then the Purchaser shall,
notwithstanding anything to the contrary in any other Royal Gold Document, be
deemed to also hold and have held such lien for the benefit of the Senior Debt
Representative as security for the Senior Debt Obligations (subject to the Lien
Priority and other terms hereof) and shall promptly notify the Senior Debt
Representative in writing of the existence of such Lien.

     

    (b)  Until
the Royal Gold Obligations Payment Date, no Senior Debt Secured Party shall
acquire or hold any Lien on any assets of the Vendor securing any Senior Debt
Obligation which assets are not also subject to a Lien under the Royal Gold
Documents, subject to the Lien Priority set forth herein.  If any
Senior Debt Secured Party shall (nonetheless and in breach hereof) acquire or
hold any Lien on any assets of any Loan Party securing any Senior Debt
Obligation which assets are not also subject to a Lien under the Royal Gold
Documents, subject to the Lien Priority set forth herein, then the Senior Debt
Representative (or the relevant Senior Debt Secured Party) shall, without the
need for any further consent of any other Senior Debt Secured Party and
notwithstanding anything to the contrary in any other Senior Debt Document be
deemed to also hold and have held such lien for the benefit of the Purchaser as
security for the Royal Gold Obligations (subject to the Lien Priority and other
terms hereof) and shall promptly notify the Purchaser in writing of the
existence of such Lien.

     

    
      
         

      

      
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    2.5           Separate Grants of
Security.  Each Secured Party acknowledges and agrees that the
grants of Liens pursuant to the Senior Debt Security Documents and the Royal
Gold Security Documents constitute two separate and distinct grants of Liens. If
it is held that the claims of the Senior Debt Secured Parties and the Purchaser
in respect of the Collateral constitute claims in the same class, then the
Senior Debt Secured Parties and the Purchaser hereby acknowledge and agree that
all distributions shall be made as if there were separate classes of Senior Debt
Obligation claims and Royal Gold Obligation claims against the Vendor (with the
effect being that, to the extent that the aggregate value of the Senior Debt
Priority Collateral or Royal Gold Priority Collateral is sufficient (for this
purpose ignoring all claims held by the other Secured Parties), the Senior Debt
Secured Parties or the Purchaser, respectively, shall be entitled to receive, in
addition to amounts distributed to them in respect of principal, pre-petition
interest and other claims, all amounts owing in respect of Post-Petition
Interest that are available from each pool of Priority Collateral for each of
the Senior Debt Secured Parties and the Purchaser, respectively, before any
distribution is made in respect of the claims held by the other Secured Parties,
with the other Secured Parties hereby acknowledging and agreeing to turn over to
the respective other Secured Parties amounts otherwise received or receivable by
them to the extent necessary to effectuate the intent of this sentence, even if
such turnover has the effect of reducing the aggregate recoveries). The Purchaser further
agrees that it will not support or vote in favor of any plan or similar
arrangement (and shall be deemed to have voted to reject any plan or similar
arrangement) that involves the Borrower and/or some or all of
its  affiliates and subsidiaries, including the Vendor, unless such
plan, arrangement, liquidation, reorganization, proposal, compromise or similar
arrangement pursuant to or relating to any Insolvency Proceeding (a “Plan”) (a) pays off,
in immediately available funds, all Senior Debt Obligations or (b) is accepted
by the Senior Debt Creditors voting thereon or (c) is supported by the Senior
Debt Representative for the Senior Debt Creditors and the Senior Debt
Representative for the Senior Debt Creditors so advises the Purchaser in writing
(a “Senior Supported
Plan”).  In the event that the Plan is supported by the Senior
Debt Representative and the Senior Debt Representative has so advised the
Purchaser in writing, the Purchaser shall vote in favor of such Senior Supported
Plan so long as (i) in the event a Royal Gold Trigger Event has not occurred,
the Plan provides that the rights of the Purchaser and the obligations of the
Vendor under the Royal Gold Purchase Agreement and the Royal Gold Security
Documents (whether such obligations are to be performed by the Vendor or a
designee or other successor of the Vendor reasonably acceptable to Purchaser)
are preserved in all material respects or (ii) in the event a Royal Gold Trigger
Event has occurred, the Plan provides for the Purchaser receiving (A) all Royal
Gold Priority Collateral (which, for greater certainty, the Purchaser has not
already received) calculated and determined as at the date the Plan becomes
effective in accordance with its terms or the equivalent value thereof in cash,
and (B) without duplication, cash equal to the value of the Royal Gold Liens on
all Collateral on the date set in the Insolvency Proceedings as the date for
proving and valuing claims generally.

     

    2.6           Agreements Regarding Actions
to Perfect Liens.  (a)  The
Purchaser  agrees that all mortgages, debentures, deeds of trust,
deeds and similar instruments (collectively, “mortgages”) now or
hereafter filed against Real Property in favor of or for the benefit of the
Purchaser shall contain the following notation:  “The lien created by
this mortgage on the property described herein is junior and subordinate to the
lien on such property created by any mortgage, deed of trust or similar
instrument now or hereafter granted to JPMorgan Chase Bank, N.A., as Senior Debt
Representative, in accordance with the provisions of the Intercreditor Agreement
dated as of October 20, 2010, as amended from time to time.”

     

    
      
         

      

      
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    (b)  Each
of the Senior Debt Representative and the Purchaser hereby acknowledges that, to
the extent that it holds, or a third party holds on its behalf, physical
possession of or “control” (as defined in the UCC and the PPSA) over Collateral
pursuant to the Senior Debt Security Documents or the Royal Gold Security
Documents, as applicable, such possession or control is also for the benefit of
the Purchaser or the Senior Debt Representative and the other Senior Debt
Secured Parties, as applicable, solely to the extent required to perfect their
security interest in such Collateral.  Nothing in the preceding
sentence shall be construed to impose any duty on the Senior Debt Representative
or the Purchaser (or any third party acting on either such Person's behalf) with
respect to such Collateral or provide the Purchaser, the Senior Debt
Representative or any other Senior Debt Secured Party, as applicable, with any
rights with respect to such Collateral beyond those specified in this Agreement,
the Senior Debt Security Documents and the Royal Gold Security Documents, as
applicable, provided that
subsequent to the occurrence of the Senior Debt Obligations Payment Date (so
long as the Royal Gold Obligations Payment Date shall not have occurred), the
Senior Debt Representative shall (i) deliver to the Purchaser, at the Vendor’s
sole cost and expense, the Collateral in its possession or control together with
any necessary endorsements to the extent required by the Royal Gold Documents or
(ii) direct and deliver such Collateral as a court of competent jurisdiction
otherwise directs; provided, further, that
subsequent to the occurrence of the Royal Gold Obligations Payment Date (so long
as the Senior Debt Obligations Payment Date shall not have occurred), the
Purchaser shall (i) deliver to the Senior Debt Representative, at the Vendor’s
sole cost and expense, the Collateral in its possession or control together with
any necessary endorsements to the extent required by the Senior Debt Documents
or (ii) direct and deliver such Collateral as a court of competent jurisdiction
otherwise directs; provided, further, that (i)
prior to the occurrence of the Royal Gold Obligations Payment Date, upon the
request of the Purchaser, the Senior Debt Representative shall turn over to the
Purchaser any Royal Gold Priority Collateral of which it has physical
possession, and (ii) prior to the occurrence of the Senior Debt Obligations
Payment Date, upon the request of the Senior Debt Representative, the Purchaser
shall turn over to the Senior Debt Representative any Senior Debt Priority
Collateral of which it has physical possession.  The provisions of
this Agreement are intended solely to govern the respective Lien priorities as
between the Senior Debt Secured Parties and the Purchaser and shall not impose
on the Senior Debt Secured Parties or the Purchaser any obligations in respect
of the disposition of any Collateral (or any proceeds thereof) that would
conflict with prior perfected Liens or any claims thereon in favor of any other
Person that is not a Secured Party.

     

    SECTION 3.  Enforcement
Rights.

     

    3.1           Exclusive
Enforcement. Until the Senior Obligations Payment Date has occurred,
whether or not an Insolvency Proceeding has been commenced by or against the
Vendor, the Senior Secured Parties shall have the exclusive right to take and
continue any Enforcement Action (including the right to credit bid their debt)
with respect to the Senior Collateral, without any consultation with or consent
of any Junior Secured Party, but subject to Section 3.2(b) and
Section 4.1 and
the provisos set forth in Section 3.2(a) and
Section
5.1.  Upon the occurrence and during the continuance of a
default or an event of default under the Senior Documents but subject to the
terms and conditions of the Senior Documents, the Senior Representative and the
other Senior Secured Parties may take and continue any Enforcement Action with
respect to the Senior Obligations and the Senior Collateral in such order and
manner as they may determine in their sole discretion.

     

    3.2           Standstill and
Waivers.  (a) Each Junior Representative, on behalf of itself
and the other Junior Secured Parties, agrees that, until the Senior Obligations
Payment Date has occurred, but subject to the proviso set forth in Section
5.1:

     

    (i)  they
will not take or cause to be taken any action, the purpose or effect of which is
to make any Lien on any Senior Collateral that secures any Junior Obligation
pari passu with or senior to, or to give any Junior Secured Party any preference
or priority relative to, the Liens on the Senior Collateral securing the Senior
Obligations;

     

    (ii)  they
will not contest, oppose, object to, interfere with, hinder or delay, in any
manner, whether by judicial proceedings (including without limitation the filing
of an Insolvency Proceeding) or otherwise, any foreclosure, sale, lease,
exchange, transfer or other disposition of the Senior Collateral by any Senior
Secured Party or any other Enforcement Action taken (or any forbearance from
taking any Enforcement Action) in respect of the Senior Collateral by or on
behalf of any Senior Secured Party;

     

    (iii)  they
have no right to (x) direct either the Senior Representative or any other Senior
Secured Party to exercise any right, remedy or power with respect to the Senior
Collateral or pursuant to the Senior Security Documents in respect of the Senior
Collateral or (y) consent or object to the exercise by the Senior Representative
or any other Senior Secured Party of any right, remedy or power with respect to
the Senior Collateral or pursuant to the Senior Security Documents with respect
to the Senior Collateral or to the timing or manner in which any such right is
exercised or not exercised (or, to the extent they may have any such right
described in this clause (iii), whether as a junior lien creditor in respect of
the Senior Collateral or otherwise, they hereby irrevocably waive such
right);

     

    
      
        
        

      

      
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    (iv)  they
will not institute any suit or other proceeding or assert in any suit,
Insolvency Proceeding or other proceeding any claim against any Senior Secured
Party seeking damages from or other relief by way of specific performance,
instructions or otherwise, with respect to, and no Senior Secured Party shall be
liable for, any action taken or omitted to be taken by any Senior Secured Party
with respect to the Senior Collateral or pursuant to the Senior Documents in
respect of the Senior Collateral;

     

    (v)  they
will not commence judicial or nonjudicial foreclosure proceedings with respect
to, seek to have a trustee, receiver, liquidator or similar official appointed
for or over, attempt any action to take possession of any Senior Collateral,
exercise any right, remedy or power with respect to, or otherwise take any
action to enforce their interest in or realize upon, the Senior Collateral;
and

     

    (vi)  they
will not seek, and hereby waive any right, to have the Senior Collateral or any
part thereof marshaled upon any foreclosure or other disposition of the Senior
Collateral.

     

    provided that,
notwithstanding the foregoing, the Purchaser may exercise its rights and
remedies in respect of the Collateral under the Royal Gold Security Documents or
applicable law after the passage of a period of 120 days (the “Standstill Period”)
from the date of delivery of a notice in writing to the Senior Debt
Representative of its intention to exercise such rights and remedies, which
notice may only be delivered following the occurrence of a Royal Gold Trigger
Event; provided, further, however,
that, notwithstanding the foregoing, in no event shall the Purchaser exercise or
continue to exercise any such rights or remedies if, notwithstanding the
expiration of the Standstill Period, (i) the Senior Debt Representative shall
have commenced and be diligently pursuing the exercise of any of its rights and
remedies with respect to all or any material portion of the Collateral (prompt
notice of such exercise to be given to the Purchaser), (ii) there is a stay or
prohibition against the Senior Debt Representative’s exercise of any of its
rights and remedies with respect to all or material portion of the Collateral
and the Senior Debt Representative shall be diligently attempting in good faith
to vacate such stay or prohibition, or (iii) an Insolvency Proceeding in respect
of the Vendor shall have been commenced and the Senior Debt Representative is
continuing to monitor and taking other reasonable actions as are necessary to
diligently pursue and protect its rights and interest in such Insolvency
Proceeding; and provided, further, that (x) in
any Insolvency Proceeding commenced by or against the Vendor, the Purchaser may
take any action expressly permitted by Section 5 and (y) the Purchaser may,
prior to a Royal Gold Trigger Event, seek remedies intended to ensure
performance by the Vendor of its obligations under the Royal Gold Purchase
Agreement so long as such remedies do not involve the appointment of a Receiver
or similar Person with respect to the Vendor or any Collateral or do not involve
any Enforcement Action with respect to the Collateral or any sale, foreclosure,
restriction or limitation on the Collateral or otherwise impair or interfere
with the rights of the Senior Secured Parties under the Senior Debt Documents or
this Agreement (it being understood that in no event may the Purchaser exercise
remedies as a “secured party” in violation of this Agreement).

     

    (b)
Notwithstanding anything to the contrary in this Agreement, nothing in this
Agreement shall prevent the Senior Debt Representative, on behalf of itself and
the other Senior Debt Secured Parties, in an Insolvency Proceeding or otherwise,
from commencing, taking and continuing any Enforcement Action against all
Collateral; provided that, any
sale or disposition of the Royal Gold Priority Collateral pursuant to such
Enforcement Action shall be in accordance with the requirements set forth in
Section 4.1(a)(i) and the proceeds thereof shall be distributed in the order set
forth in Section 4.1(a)(ii).

     

    
      
        
        

      

      
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    3.3            Judgment
Creditors.  In the event that the Purchaser becomes a judgment
lien creditor in respect of Collateral as a result of its enforcement of its
rights as an unsecured creditor, such judgment lien shall be subject to the
terms of this Agreement for all purposes (including in relation to the Senior
Debt Liens and the Senior Debt Obligations) to the same extent as all other
Liens securing the Royal Gold Obligations are subject to the terms of this
Agreement.  In the event that any Senior Debt Secured Party becomes a
judgment lien creditor in respect of Collateral as a result of its enforcement
of its rights as an unsecured creditor, such judgment lien shall be subject to
the terms of this Agreement for all purposes (including in relation to the Royal
Gold Liens and the Royal Gold Obligations) to the same extent as all other Liens
securing the Senior Debt Obligations are subject to the terms of this
Agreement.

     

    3.4           Cooperation.  The
Purchaser agrees that it shall take such actions as the Senior Debt
Representative shall request in connection with the exercise by the Senior Debt
Secured Parties of their rights set forth herein in respect of the Senior Debt
Priority Collateral. The Senior Debt Representative, on behalf of itself and the
other Senior Debt Secured Parties, agrees that each of them shall take such
actions as the Purchaser shall request in connection with the exercise by the
Purchaser of their rights set forth herein in respect of the Royal Gold Priority
Collateral.

     

    3.5           No Additional Rights For the
Vendor Hereunder.  Except as provided in Section 3.6 hereof,
if any Senior Debt Secured Party or the Purchaser shall enforce its rights or
remedies in violation of the terms of this Agreement, the Vendor shall not be
entitled to use such violation as a defense to any action by any Senior Debt
Secured Party or the Purchaser, nor to assert such violation as a counterclaim
or basis for set off or recoupment against any Senior Debt Secured Party or the
Purchaser.

     

    3.6           Actions Upon
Breach.  (a)  If any Senior Debt Secured Party or the
Purchaser, contrary to this Agreement, commences or participates in any action
or proceeding against the Vendor or the Collateral, the Vendor, with the prior
written consent of the Senior Debt Representative or the Purchaser, as
applicable, may interpose as a defense or dilatory plea the making of this
Agreement, and any Senior Debt Secured Party or the Purchaser, as applicable,
may intervene and interpose such defense or plea in its or their name or in the
name of such Loan Party.

     

    (b)  Should
any Senior Debt Secured Party or the Purchaser, contrary to this Agreement, in
any way take, attempt to or threaten to take any action with respect to the
Collateral (including, without limitation, any attempt to realize upon or
enforce any remedy with respect to this Agreement), or fail to take any action
required by this Agreement, any Senior Debt Secured Party or the Purchaser (in
its own name or in the name of the relevant Loan Party), as applicable, or the
relevant Loan Party, may obtain relief against such Senior Debt Secured Party or
the Purchaser, as applicable, by injunction, specific performance and/or other
appropriate equitable relief, it being understood and agreed by each of the
Senior Debt Representative on behalf of each Senior Debt Secured Party and the
Purchaser that (i) the Senior Debt Secured Parties' or Purchaser', as
applicable, damages from its actions may at that time be difficult to ascertain
and may be irreparable, and (ii) the Purchaser or Senior Debt Secured Party, as
applicable, waives any defense that the Vendor and/or the Purchaser and/or
Senior Debt Secured Parties, as applicable, cannot demonstrate damage and/or be
made whole by the awarding of damages.

     

    
      
         

      

      
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    SECTION 4.  Application of Proceeds
of Senior Collateral; Dispositions and Releases of Lien; Notices and
Insurance.

     

    4.1          Disposition and Application
of Proceeds.

     

    (a)  Disposition and Application
of Proceeds of Senior Collateral.

     

    (i)           Prior
to the occurrence of a Royal Gold Trigger Event, the Purchaser agrees that it
will not oppose any sale or disposition of any Collateral consented or made by
the Senior Debt Representative so long as (A) the transferee pursuant to such
sale or disposition agrees in writing that (x) such transferee’s interests in
the Collateral are subject to the rights of the Purchaser under the Royal Gold
Purchase Agreement and the liens of granted pursuant to the Royal Gold Security
Documents and (y) such transferee acknowledges and agrees to the terms of this
Agreement and (B) such sale or disposition does not result in a breach of the
obligations of the Vendor under the Royal Gold Purchase Agreement. The Purchaser
further agrees that prior to the Royal Gold Trigger Event, the Purchaser shall
not sell or dispose of, in whole or in part, its interests in or rights under
the Royal Gold Purchase Agreement, including the Royal Gold Priority Collateral,
or release the Royal Gold Lien in connection with such sale or disposal, unless
the transferee pursuant to such sale or disposition shall acknowledge and agree
to the terms of this Agreement, it being understood and agreed by the parties hereto
that the Purchaser or any affiliate of the Purchaser may sell, transfer or otherwise dispose of Refined
Gold (not obtained as a result of an Enforcement Action, unless the Senior Debt
Representative shall agree to such further sale, transfer or disposition) in the
ordinary course without any further action or agreement by
the transferee of such Refined Gold, which sale, transfer or other disposition
shall be made free and clear of all liens or other encumbrances arising under
the Royal Gold Documents or the Senior Debt Documents.  The Senior
Debt Secured Parties agree that transferees of their interests shall
be bound by the terms of this Agreement as a result of the execution of this
Agreement by the Senior Debt Representative on their behalf. 

     

    (ii)           After
the occurrence of a Royal Gold Trigger Event, the Senior Representative and
Junior Representative hereby agree that all Senior Collateral, and all Proceeds
thereof, received by either of them in connection with the collection, sale or
disposition of Senior Collateral shall be applied:

     

    first, to the payment
of costs and expenses (including reasonable attorneys’ fees and expenses and
court costs) of the Senior Representative in connection with such Enforcement
Action,

     

    second, to the
payment of the Senior Obligations in accordance with the Senior Documents until
the Senior Obligations Payment Date,

     

    third, to the payment
of the Junior Obligations in accordance with the Junior Documents,
and

     

    fourth, the balance,
if any, to the Vendor or to whosoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.

     

    (b)  Limited Obligation or
Liability.  In exercising remedies, whether as a secured
creditor or otherwise, the Senior Representative shall have no obligation or
liability to the Junior Representative or to any Junior Secured Party, regarding
the adequacy of any Proceeds or for any action or omission, save and except
solely for an action or omission that breaches the express obligations
undertaken by each party under the terms of this Agreement.

     

    (c)  Segregation of
Collateral.  Until the occurrence of the Senior Obligations
Payment Date, any Senior Collateral that may be received by any Junior Secured
Party in violation of this Agreement shall be segregated and held in trust and
promptly paid over to the Senior Representative, for the benefit of the Senior
Secured Parties, in the same form as received, with any necessary endorsements,
and each Junior Secured Party hereby authorizes the Senior Representative to
make any such endorsements as agent for the Junior Representative (which
authorization, being coupled with an interest, is irrevocable).

     

    
      
         

      

      
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    4.2          Releases of
Liens.   (a) (i) Upon any release, sale or disposition of
Senior Debt Priority Collateral permitted pursuant to the terms of the Senior
Debt Documents that results in the release of the Senior Debt Lien (other than
release of the Senior Debt Lien due to the occurrence of the Senior Debt
Obligations Payment Date, and any release of the Senior Debt Lien after the
occurrence and during the continuance of any event of default under the Royal
Gold Purchase Agreement) on any Senior Debt Priority Collateral, the Royal Gold
Lien on such Senior Debt Priority Collateral (excluding any portion of the
proceeds of such Senior Debt Priority Collateral remaining after the Senior Debt
Obligations Payment Date occurs) shall be automatically and unconditionally
released with no further consent or action of any Person so long as such
release, sale or disposition of Senior Debt Priority Collateral is permitted
pursuant to the terms of the Royal Gold Documents.

     

    (ii)  Upon any release, sale
or disposition of Senior Debt Priority Collateral pursuant to any Enforcement
Action that results in the release of the Senior Debt Lien (other than release
of the Senior Debt Lien due to the occurrence of the Senior Debt Obligations
Payment Date) on any Senior Debt Priority Collateral pursuant to any Enforcement
Action, the Royal Gold Lien on such Senior Debt Priority Collateral (excluding
any portion of the proceeds of such Senior Debt Priority Collateral remaining
after the Senior Debt Obligations Payment Date occurs) shall be automatically
and unconditionally released with no further consent or action of any Person so
long as the proceeds of such Senior Debt Priority Collateral are applied in
accordance with Section 4.1(a) (with,
in the case of Senior Debt Obligations consisting of debt of a revolving nature,
a corresponding permanent reduction in the commitments thereto).

     

    (iii)  The Purchaser shall
promptly execute and deliver such release documents and instruments and shall
take such further actions as the Senior Debt Representative shall request in
writing to evidence any release of the Royal Gold Lien described
herein.  The Purchaser hereby appoints the Senior Debt Representative
and any officer or duly authorized person of the Senior Debt Representative,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power of attorney in the place and stead of the Purchaser and
in the name of the Purchaser or in the Senior Debt Representative’s own name,
from time to time, in the Senior Debt Representative’s sole discretion, for the
purposes of carrying out the terms of this Section 4.2, to take
any and all appropriate action and to execute and deliver any and all documents
and instruments as may be necessary or desirable to accomplish the purposes of
this Section
4.2, including, without limitation, any financing statements,
endorsements, assignments, releases or other documents or instruments of
transfer (which appointment, being coupled with an interest, is
irrevocable).

     

    (b)  (i)
Subject to the next succeeding sentence, upon any release, sale or disposition
of Royal Gold Priority Collateral permitted pursuant to the terms of the Royal
Gold Documents that results in the release of the Royal Gold Lien (other than
release of the Royal Gold Lien due to the occurrence of the Royal Gold
Obligations Payment Date, and any release of the Royal Gold Lien after the
occurrence and during the continuance of any event of default under the Senior
Debt Agreement) on any Royal Gold Priority Collateral, the Senior Debt Lien on
such Royal Gold Priority Collateral (excluding any portion of the proceeds of
such Royal Gold Priority Collateral remaining after the Royal Gold Obligations
Payment Date occurs) shall be automatically and unconditionally released with no
further consent or action of any Person so long as such release, sale or
disposition of Royal Gold Priority Collateral is permitted pursuant to the terms
of the Senior Debt Documents. Notwithstanding the foregoing, any sale, release
or disposition of Royal Gold Priority Collateral prior to the Royal Gold Trigger
Event, shall be subject to the requirements set forth in Section
4.1(a)(i).

    
      
         

      

      
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    (ii)  Upon any release, sale
or disposition of Royal Gold Priority Collateral pursuant to any Enforcement
Action that results in the release of the Royal Gold Lien (other than release of
the Royal Gold Lien due to the occurrence of the Royal Gold Obligations Payment
Date) on any Royal Gold Priority Collateral pursuant to any Enforcement Action,
the Senior Debt Lien on such Royal Gold Priority Collateral (excluding any
portion of the proceeds of such Royal Gold Priority Collateral remaining after
the Royal Gold Obligations Payment Date occurs) shall be automatically and
unconditionally released with no further consent or action of any Person so long
as the proceeds of such Royal Gold Priority Collateral are applied in accordance
with Section
4.1(a) (with, in the case of Royal Gold Obligations consisting of debt of
a revolving nature, a corresponding permanent reduction in the commitments
thereto).

     

    (iii)  The Senior Debt
Representative shall promptly execute and deliver such release documents and
instruments and shall take such further actions as the Purchaser shall request
in writing to evidence any release of the Senior Debt Lien described
herein.  The Senior Debt Representative hereby appoints the Purchaser
and any officer or duly authorized person of the Purchaser, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power of attorney in the place and stead of the Senior Debt Representative and
in the name of the Senior Debt Representative or in the Purchaser’s own name,
from time to time, in the Purchaser’s sole discretion, for the purposes of
carrying out the terms of this Section 4.2, to take any and all appropriate
action and to execute and deliver any and all documents and instruments as may
be necessary or desirable to accomplish the purposes of this Section 4.2,
including, without limitation, any financing statements, endorsements,
assignments, releases or other documents or instruments of transfer (which
appointment, being coupled with an interest, is irrevocable).

     

    4.3          Certain Real Property
Notices; Insurance.  (a)  The Senior Debt
Representative shall give the Purchaser at least 30 days notice prior to
commencing any Enforcement Action against any Real Property owned by the Vendor
at which Royal Gold Priority Collateral is stored or otherwise located or to
dispossess any Loan Party from such Real Property.

     

    (b)  Proceeds
of Collateral include insurance proceeds and therefore the Lien Priority shall
govern the ultimate disposition of casualty insurance proceeds.  The
Senior Debt Representative and Purchaser shall be named as additional insureds
and loss payees with respect to all insurance policies relating to
Collateral.  The Senior Debt Representative shall have the sole and
exclusive right, as against the Purchaser, to adjust settlement of insurance
claims in the event of any covered loss, theft or destruction of Senior Debt
Priority Collateral.  The Purchaser shall have the sole and exclusive
right, as against the Senior Debt Representative, to adjust settlement of
insurance claims in the event of any covered loss, theft or destruction of Royal
Gold Priority Collateral.  All proceeds of such insurance shall be
remitted to the Senior Debt Representative or the Purchaser, as the case may be,
and each of the Purchaser and Senior Debt Representative shall cooperate (if
necessary) in a reasonable manner in effecting the payment of insurance proceeds
in accordance with Section
4.1.

     

    SECTION 5.  Insolvency
Proceedings.

     

    5.1          Filing of
Motions.  Subject to Section 3.2(b), until the Senior
Obligations Payment Date has occurred, the Junior Representative agrees on
behalf of itself and the other Junior Secured Parties that no Junior Secured
Party shall, in or in connection with any Insolvency Proceeding, file any
pleadings or motions, take any position at any hearing or proceeding of any
nature, or otherwise take any action whatsoever, in each case in respect of any
of the Senior Collateral, including, without limitation, with respect to the
determination of any Liens or claims held by the Senior Representative
(including the validity and enforceability thereof) or any other Senior Secured
Party in respect of any Senior Collateral or the value of any claims of such
parties under Section 506(a) of the Bankruptcy Code or similar provision of any
other applicable Insolvency Law; provided that the
Junior Representative may (i) file a proof of claim in an Insolvency Proceeding,
(ii) file any necessary or appropriate responsive or defensive pleadings in
opposition of any motion or other pleadings made by any Person objecting to or
otherwise seeking the disallowance or subordination, in whole or in part, of its
claims, subject to the limitations contained in this Agreement, and (iii) take
any other action with the consent of the Senior Representative.

    
      
         

      

      
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    5.2          Financing
Matters.  (a)  If
the Vendor becomes subject to any Insolvency Proceeding at any time prior to the
Senior Debt Obligations Payment Date, and if the Senior Debt Representative or
the other Senior Debt Secured Parties desire to consent (or not object) to the
use of cash collateral under any Insolvency Law, to the extent applicable or to
provide financing to the Vendor under applicable Insolvency Laws or to consent
(or not object) to the provision of such financing to any Loan Party by any
third party (any such financing, “Senior Debt DIP
Financing”), then the Purchaser agrees  that  the
Purchaser (i) (x) will consent and (and will be deemed hereunder to have
consented) to, will raise no objection to, nor support any other Person
objecting to, the use of such cash collateral or to such Senior Debt DIP
Financing on the grounds of a failure to provide “adequate protection” for the
Royal Gold Lien on the Collateral to secure the Royal Gold Obligations or on any
other grounds and (y) will not request any adequate protection, to the extent
applicable in subject Insolvency Proceeding, solely as a result of such Senior
Debt DIP Financing except, to the extent applicable, as set forth in Section 5.4 below and
(ii) will subordinate (and will be deemed hereunder to have subordinated) the
Royal Gold Liens on any Senior Debt Priority Collateral (A) to such Senior Debt
DIP Financing on the same terms as the Senior Debt Liens are subordinated
thereto (and such subordination will not alter in any manner the terms of this
Agreement), (B) to any adequate protection provided to the Senior Debt Secured
Parties, (C) to any “carve-out” agreed to by the Senior Debt Representative or
the other Senior Debt Secured Parties and (D) to any court-ordered charge
ranking senior to the Senior Debt Liens agreed to by the Senior Debt
Representative or other Senior Debt Parties, so long as (x) the Purchaser
retains its Lien on the Collateral to secure the Royal Gold Obligations (in each
case, including Proceeds thereof arising after the commencement of the
Insolvency Proceeding) and, as to the Royal Gold Priority Collateral only, such
Lien has the same priority as existed prior to the commencement of the case
under applicable Insolvency Law and any Lien securing such Senior Debt DIP
Financing is junior and subordinate to the Lien of the Purchaser on the Royal
Gold Priority Collateral, (y) all Liens on Senior Debt Priority Collateral
securing any such Senior Debt DIP Financing shall be senior to or on a parity
with the Liens of the Senior Debt Representative and the Senior Debt Lenders
securing the Senior Debt Obligations on Senior Debt Priority Collateral and (z)
if the Senior Debt Representative receives a replacement or adequate protection
Lien on post-petition assets of the debtor to secure the Senior Debt
Obligations, and such replacement or adequate protection Lien is on any of the
Royal Gold Priority Collateral, (1) such replacement or adequate protection Lien
on such post-petition assets which are part of the Royal Gold Priority
Collateral (the “Royal
Gold Post-Petition Assets”) is junior and subordinate to the Lien in
favor of the Purchaser on the Royal Gold Priority Collateral and (2) the
Purchaser also receives a replacement or adequate protection Lien on such Royal
Gold Post-Petition Assets of the debtor to secure the Royal Gold
Obligations.  In no event will any of the Senior Debt Secured Parties
seek to obtain a priming Lien to secure any Senior Debt DIP Financing on any of
the Royal Gold Priority Collateral and nothing contained herein shall be deemed
to be a consent by the Purchaser to any adequate protection payments using Royal
Gold Priority Collateral.  Without prejudice to the rights of the
Purchaser under this Agreement, the Senior Debt Representative may seek the
appointment of a Receiver by the court over all of the Collateral (including all
or any part of the Royal Gold Priority Collateral) and propose to the court that
it grant the Receiver priming liens over all such Collateral for funding the
costs of the receivership as is customary in Canadian receivership proceedings;
provided,
however, the Senior Debt Representative will not commence any Insolvency
Proceeding for the appointment of a Receiver by a court with less notice to the
Purchaser than is required by the applicable rules of court
procedure,  unless (i) the Senior Debt Representative reasonably
determines that such an action is necessary to preserve and/or protect such
Collateral from immediate damage or significant diminution in value and (ii) the
Senior Debt Representative provides the Purchaser with no less than three (3)
business day’s prior written notice of the hearing of the application to the
court, to the extent possible; provided, however, that the Senior Debt
Representative will not have any personal liability to the Purchaser for failure
to provide the Purchaser with such prior written notice.  The
immediately forgoing sentence is not intended and shall not be construed as a
waiver by the Purchaser of any statutory right to receive earlier notice from
the Senior Debt Representative or other Person in connection with the
appointment of a Receiver or an application to the court for the appointment of
a Receiver.  In no event shall the Purchaser sell or obtain a priming
lien on any Senior Debt Priority Collateral in any Insolvency Proceedings or
otherwise.  Notwithstanding the granting of any priming liens by a
court in favor of a Receiver over such Collateral, all rights and obligations of
the Purchaser and the Senior Debt Representative are intended to be and shall be
deemed to be subject to the Lien Priority and other terms and conditions of this
Agreement.

    
      
         

      

      
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    (b)  All
Liens granted to the Purchaser or the Senior Debt Representative in any
Insolvency Proceeding, whether as adequate protection or otherwise, are intended
to be and shall be deemed to be subject to the Lien Priority and the other terms
and conditions of this Agreement.

    

    5.3          Relief from the Automatic
Stay.  Until the Senior Debt Obligations Payment Date, the
Purchaser agrees, that it will not seek relief from the automatic stay or from
any other stay in any Insolvency Proceeding or take any action in derogation
thereof, in each case in respect of any Senior Debt Priority Collateral, without
the prior written consent of the Senior Debt Representative.  Until
the Royal Gold Obligations Payment Date, the Senior Debt Representative agrees,
on behalf of itself and the other Senior Debt Secured Parties, that none of them
will seek relief from the automatic stay or from any other stay in any
Insolvency Proceeding or take any action in derogation thereof, in each case in
respect of any Royal Gold Priority Collateral, without the prior written consent
of the Purchaser.  In addition, neither the Purchaser nor the Senior
Debt Representative shall seek any relief from the automatic stay with respect
to any Collateral without providing 30 days’ prior written notice to the other,
unless otherwise agreed by both the Senior Debt Representative and the
Purchaser.

     

    5.4          Adequate
Protection.  (a)  The Purchaser agrees that, prior to
the Senior Debt Obligations Payment Date, so long as the Senior Debt
Representative and the other Senior Debt Secured Parties comply with Section 5.4(b), it
shall not object, contest, or support any other Person objecting to or
contesting, (i) any request by the Senior Debt Representative or the other
Senior Debt Secured Parties for adequate protection of its interest in the
Collateral or any adequate protection provided to the Senior Debt Representative
or the other Senior Debt Secured Parties or (ii) any objection by the Senior
Debt Representative or any other Senior Debt Secured Parties to any motion,
relief, action or proceeding based on a claim of a lack of adequate protection
in the Collateral or (iii) the payment of interest, fees, expenses or other
amounts to the Senior Debt Representative or any other Senior Debt Secured Party
under Section 506(b) or 506(c) of the Bankruptcy Code or similar provision of
any other applicable Insolvency Law; provided that any
action described in the foregoing clauses (i) and (ii) does not violate Section
5.2.  The Purchaser, further agrees that, prior to the Senior
Debt Obligations Payment Date, none of them shall assert or enforce any claim
under Section 506(b) or 506(c) of the Bankruptcy Code or similar provision of
any other applicable Insolvency Law that is senior to or on a parity with the
Senior Debt Liens for costs or expenses of preserving or disposing of any Senior
Debt Priority Collateral.  Notwithstanding anything to the contrary
set forth in this Section and in Section 5.2(a)(i)(y),
but subject to all other provisions of this Agreement (including, without
limitation, Section
5.2(a)(i)(x) and Section 5.3), in any
Insolvency Proceeding, if the Senior Debt Secured Parties (or any subset
thereof) are granted adequate protection consisting of additional collateral
that constitutes Senior Debt Priority Collateral (with replacement liens on such
additional collateral) and superpriority claims in connection with any Senior
Debt DIP Financing or use of cash collateral, and the Senior Debt Secured
Parties do not object to the adequate protection being provided to them, then in
connection with any such Senior Debt DIP Financing or use of cash collateral the
Purchaser, may, as adequate protection of their interests in the Senior Debt
Priority Collateral, seek or accept (and the Senior Debt Representative and the
Senior Debt Secured Parties shall not object to) adequate protection consisting
solely of (x) a replacement Lien on the same additional collateral, subordinated
to the Liens securing the Senior Debt Obligations and such Senior Debt DIP
Financing on the same basis as the other Royal Gold Liens on the Senior Debt
Priority Collateral are so subordinated to the Senior Debt Obligations under
this Agreement and (y) superpriority claims junior in all respects to the
superpriority claims granted to the Senior Debt Secured Parties, provided,
however, that the Purchaser shall have irrevocably agreed, pursuant to Section
1129(a)(9) of the Bankruptcy Code or similar provision of any other applicable
Insolvency Law in any stipulation and/or order granting such adequate
protection, that such junior superpriority claims may be paid under any plan of
reorganization in any combination of cash, debt, equity or other property having
a value on the effective date of such plan equal to the allowed amount of such
claims.

    
      
         

      

      
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    (b)  The
Senior Debt Representative, on behalf of itself and the other Senior Debt
Secured Parties, agrees that, prior to the Royal Gold Obligations Payment Date,
so long as the Purchaser  complies with Section 5.4(a), none
of them shall object, contest, or support any other Person objecting to or
contesting, (i) any request by the Purchaser   for adequate
protection of its interest in the Collateral or any adequate protection provided
to the Purchaser  or (ii) any objection by the Purchaser  to
any motion, relief, action or proceeding based on a claim of a lack of adequate
protection in the Collateral or (iii) the payment of interest, fees, expenses or
other amounts to the Purchaser  under Section 506(b) or 506(c) of the
Bankruptcy Code or similar provision of any other applicable Insolvency Law;
provided that any action described in the foregoing clauses (i) and (ii) does
not violate Section
5.2.  The Senior Debt Representative, on behalf of itself and
the other Senior Debt Secured Parties, further agrees that, prior to the Royal
Gold Obligations Payment Date, none of them shall assert or enforce any claim
under Section 506(b) or 506(c) of the Bankruptcy Code or similar provision of
any other applicable Insolvency Law that is senior to or on a parity with the
Royal Gold Liens for costs or expenses of preserving or disposing of any Royal
Gold Priority Collateral.  Notwithstanding anything to the contrary
set forth in this Section and in Section 5.2(b)(i)(y),
but subject to all other provisions of this Agreement (including, without
limitation, Section
5.2(b)(i)(x) and Section 5.3), in any
Insolvency Proceeding, if the Purchaser is granted adequate protection
consisting of additional collateral that constitutes Royal Gold Priority
Collateral (with replacement liens on such additional collateral) and
superpriority claims in connection with any DIP Financing or use of cash
collateral, and the Purchaser does not object to the adequate protection being
provided to it, then in connection with any such DIP Financing or use of cash
collateral the Senior Debt Representative, on behalf of itself and any of the
Senior Debt Secured Parties, may, as adequate protection of their interests in
the Royal Gold Priority Collateral, seek or accept (and the Purchaser shall not
object to) adequate protection consisting solely of (x) a replacement Lien on
the same additional collateral, subordinated to the Liens securing the Royal
Gold Obligations on the same basis as the other Senior Debt Liens on the Royal
Gold Priority Collateral are so subordinated to the Royal Gold Obligations under
this Agreement and (y) superpriority claims junior in all respects to the
superpriority claims granted to the Purchaser, provided, however, that the
Senior Debt Representative shall have irrevocably agreed , pursuant to Section
1129(a)(9) of the Bankruptcy Code or similar provision of any other applicable
Insolvency Law, on behalf of itself and the Senior Debt Secured Parties, in any
stipulation and/or order granting such adequate protection, that such junior
superpriority claims may be paid under any plan of reorganization in any
combination of cash, debt, equity or other property having a value on the
effective date of such plan equal to the allowed amount of such
claims.

     

    
      
         

      

      
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    5.5          Avoidance
Issues.  If any Senior Secured Party is required in any
Insolvency Proceeding or otherwise to disgorge, turn over or otherwise pay to
the estate of the Vendor, because such amount was avoided or ordered to be paid
or disgorged for any reason, including without limitation because it was found
to be a fraudulent or preferential transfer, any amount (a “Recovery”), whether
received as proceeds of security, enforcement of any right of set-off or
otherwise, then the Senior Obligations shall be reinstated to the extent of such
Recovery and deemed to be outstanding as if such payment had not occurred and
the Senior Obligations Payment Date shall be deemed not to have
occurred.  If this Agreement shall have been terminated prior to such
Recovery, this Agreement shall be reinstated in full force and effect, and such
prior termination shall not diminish, release, discharge, impair or otherwise
affect the obligations of the parties hereto.  The Junior Secured
Parties agree that none of them shall be entitled to benefit from any avoidance
action affecting or otherwise relating to any distribution or allocation made in
accordance with this Agreement, whether by preference or otherwise, it being
understood and agreed that the benefit of such avoidance action otherwise
allocable to them shall instead be allocated and turned over for application in
accordance with the priorities set forth in this Agreement.

     

    5.6          Asset Dispositions in an
Insolvency Proceeding.   (a) The Purchaser shall not, in
an Insolvency Proceeding or otherwise, oppose any sale or disposition of any
Senior Debt Priority Collateral that is supported by the Senior Debt Secured
Parties, and the Purchaser will consent (and will be deemed hereunder to have
consented), under the applicable Insolvency Laws to any sale of any Senior Debt
Priority Collateral supported by the Senior Debt Secured Parties and to have
released the Junior Liens on such assets. Notwithstanding the foregoing, it is
agreed that no Senior Debt Secured Party shall convey or approve a transfer of
any mineral tenures necessary or desirable for the extraction of gold at the
Milligan Property without requiring such transferee to agree in writing that its
interests in such mineral tenures are subject to the obligations of the Vendor
under the Royal Gold Purchase Agreement; provided that the
Purchaser shall not oppose any such transfer of mineral tenures in compliance
with the foregoing requirement.

     

    (b)
Neither the Senior Debt Representative nor any Senior Debt Secured Party shall,
in an Insolvency Proceeding or otherwise, oppose any sale or disposition of any
Royal Gold Priority Collateral that is supported by the Purchaser, and the
Senior Debt Representative and the Senior Debt Secured Parties will consent (and
will be deemed hereunder to have consented) under Section 363 of the Bankruptcy
Code or similar provision of any other applicable Insolvency Law, to any sale of
any Royal Gold Priority Collateral supported by the Purchaser and to have
released the Junior Liens on such assets.

     

    5.7          Other
Matters.   To the extent that the Senior Representative or
any Senior Secured Party has or acquires rights, under Section 363 or Section
364 of the Bankruptcy Code or similar provision of any other applicable
Insolvency Law, with respect to any of the Collateral on which it has a Junior
Lien, such Senior Representative agrees, on behalf of itself and the other
Senior Secured Parties, not to assert any of such rights without the prior
written consent of the Junior Representative; provided that if
requested by the Junior Representative, such Senior Representative shall timely
exercise such rights in the manner requested by the Junior Representative,
including any rights to payments in respect of such rights.

     

    5.8          Effectiveness in Insolvency
Proceedings.  This Agreement, which the parties hereto
expressly acknowledge is a “subordination agreement” under section 510(a) of the
Bankruptcy Code or similar provision of any other applicable Insolvency Law,
shall be effective before, during and after the commencement of an Insolvency
Proceeding.

    
      
         

      

      
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    SECTION 6.  Royal Gold Documents and
Senior Debt Documents.

     

    (a)  The
Vendor and the Purchaser agrees that it shall not at any time execute or deliver
any amendment or other modification to any of the Royal Gold Documents in
violation of this Agreement.

     

    (b)  The
Vendor and the Senior Debt Representative, on behalf of itself and the Senior
Debt Secured Parties, agrees that it shall not at any time execute or deliver
any amendment or other modification to any of the Senior Debt Documents in
violation of this Agreement.

     

    (c)  In
the event the Senior Debt Representative enters into any amendment, waiver or
consent in respect of any of the Senior Security Documents for the purpose of
adding to, or deleting from, or waiving or consenting to any departures from any
provisions of, any Senior Security Document or changing in any manner the rights
of any parties thereunder, in each case solely with respect to any Senior
Collateral, then such amendment, waiver or consent shall apply automatically to
any comparable provision of the Comparable Security Document without the consent
of or action by any Junior Secured Party (with all such amendments, waivers and
modifications subject to the terms hereof); provided that, (i) no
such amendment, waiver or consent shall have the effect of removing assets
subject to the Lien of any Junior Security Document, except to the extent that a
release of such Lien is permitted by Section 4.2, (ii) any
such amendment, waiver or consent that materially and adversely affects the
rights of the Junior Secured Parties and does not affect the Senior Secured
Parties in a like or similar manner shall not apply to the Junior Security
Documents without the consent of the Junior Representative, (iii) no such
amendment, waiver or consent with respect to any provision applicable to the
Junior Representative under the Junior Loan Documents shall be made without the
prior written consent of the Junior Representative, (iv) notice of such
amendment, waiver or consent shall be given to the Junior Representative no
later than 30 days after its effectiveness, provided that the
failure to give such notice shall not affect the effectiveness and validity
thereof and (v) such amendment, waiver or modification to the applicable Junior
Security Documents shall be approved by the Borrower in writing.

     

    SECTION 7.  Reliance; Waivers;
etc.

     

    7.1          Reliance.  The
Senior Debt Documents are deemed to have been executed and delivered, and all
extensions of credit thereunder are deemed to have been made or incurred, in
reliance upon this Agreement.  The Purchaser expressly waives all
notice of the acceptance of and reliance on this Agreement by the Senior Debt
Representative and the other Senior Debt Secured Parties.  The Royal
Gold Documents are deemed to have been executed and delivered and all extensions
of credit thereunder are deemed to have been made or incurred, in reliance upon
this Agreement.  The Senior Debt Representative, on behalf of itself
and the other Senior Debt Secured Parties, expressly waives all notices of the
acceptance of and reliance on this Agreement by the Purchaser.

     

    7.2          No Warranties or
Liability.  The Purchaser and the Senior Debt Representative
acknowledge and agree that neither has made any representation or warranty with
respect to the execution, validity, legality, completeness, collectability or
enforceability of any other Senior Debt Document or any Royal Gold
Document.  Except as otherwise provided in this Agreement, the
Purchaser and the Senior Debt Representative will be entitled to manage and
supervise the respective extensions of credit to the Vendor in accordance with
law and their usual practices, modified from time to time as they deem
appropriate.

     

    7.3          No
Waivers.  No right or benefit of any party hereunder shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of such party or any other party hereto or by any noncompliance by the
Vendor with the terms and conditions of any of the Senior Debt Documents or the
Royal Gold Documents.

    
      
         

      

      
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    SECTION 8.  Obligations
Unconditional.

     

    All
rights, interests, agreements and obligations hereunder of the Senior
Representative and the Senior Secured Parties in respect of any Collateral and
the Junior Representative and the Junior Secured Parties in respect of such
Collateral shall remain in full force and effect regardless of:

     

    (a)           any
lack of validity or enforceability of any Senior Document or any Junior Document
and regardless of whether the Liens of the Senior Representative and Senior
Secured Parties are not perfected or are voidable for any reason;

     

    (b)           any
change in the time, manner or place of payment of, or in any other terms of, all
or any of the Senior Obligations or Junior Obligations, or any amendment or
waiver or other modification, including any increase in the amount thereof or
any refinancing, whether by course of conduct or otherwise, of the terms of any
Senior Document or any Junior Document;

     

    (c)           any
exchange, release, order of perfection or lack of perfection of any Lien on any
Collateral or any other asset, or any amendment, waiver or other modification,
whether in writing or by course of conduct or otherwise, of all or any of the
Senior Obligations or Junior Obligations or any guarantee thereof;

     

    (d)           the
commencement of any Insolvency Proceeding in respect of the Vendor;
or

     

    (e)           any
other circumstances which otherwise might constitute a defense available to, or
a discharge of, the Vendor in respect of any Secured Obligation or of any Junior
Secured Party in respect of this Agreement.

     

    SECTION 9.  Miscellaneous.

     

    9.1           Rights of
Subrogation.  The Purchaser agrees that no payment to the
Senior Debt Representative or any Senior Debt Secured Party pursuant to the
provisions of this Agreement shall entitle the Purchaser to exercise any rights
of subrogation in respect thereof until the Senior Debt Obligations Payment
Date.  Following the Senior Debt Obligations Payment Date, the Senior
Debt Representative agrees to execute such documents, agreements, and
instruments as the Purchaser  may reasonably request to evidence the
transfer by subrogation to any such Person of an interest in the Senior Debt
Obligations resulting from payments to the Senior Debt Representative by such
Person, so long as all costs and expenses (including all reasonable legal fees
and disbursements) incurred in connection therewith by the Senior Debt
Representative are paid by such Person upon request for payment
thereof.  The Senior Debt Representative, for and on behalf of itself
and the Senior Debt Secured Parties, agrees that no payment to the
Purchaser  pursuant to the provisions of this Agreement shall entitle
the Senior Debt Representative or any Senior Debt Secured Party to exercise any
rights of subrogation in respect thereof until the Royal Gold Obligations
Payment Date.  Following the Royal Gold Obligations Payment Date, the
Purchaser agrees to execute such documents, agreements, and instruments as the
Senior Debt Representative or any Senior Debt Secured Party may reasonably
request to evidence the transfer by subrogation to any such Person of an
interest in the Royal Gold Obligations resulting from payments to the Purchaser
by such Person, so long as all costs and expenses (including all reasonable
legal fees and disbursements) incurred in connection therewith by the Purchaser
are paid by such Person upon request for payment thereof.

    
      
         

      

      
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    9.2           Further
Assurances.  Each of the Purchaser and the Senior Debt
Representative will, at their own expense and at any time and from time to time,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that the other party may
reasonably request, in order to protect any right or interest granted or
purported to be granted hereby or to enable the Senior Debt Representative or
the Purchaser to exercise and enforce its rights and remedies hereunder; provided, however, that no
party shall be required to pay over any payment or distribution, execute any
instruments or documents, or take any other action referred to in this Section 9.2, to the
extent that such action would contravene any law, order or other legal
requirement or any of the terms or provisions of this Agreement, and in the
event of a controversy or dispute, such party may interplead any payment or
distribution in any court of competent jurisdiction, without further
responsibility in respect of such payment or distribution under this Section
9.2.

     

    9.3           Conflicts.  In
the event of any conflict between the provisions of this Agreement and the
provisions of any Senior Debt Document or any Royal Gold Document, the
provisions of this Agreement shall govern.

     

    9.4           Continuing Nature of
Provisions.  Subject to Section 5.5, this
Agreement shall continue to be effective, and shall not be terminable by any
party hereto, until the earlier of (i) the Senior Debt Obligations Payment Date
and (ii) the Royal Gold Obligations Payment Date; provided that if a
Additional Senior Debt Agreement or Replacement Royal Gold Agreement, as
applicable, is entered into following such termination, the relevant Secured
Parties agree to, upon the request of the Vendor, restore this Agreement on the
terms and conditions set forth herein until the earlier to occur of the next
following Senior Debt Obligations Payment Date or Royal Gold Obligations Payment
Date.  This is a continuing agreement and the Senior Debt Secured
Parties and the Purchaser may continue, at any time and without notice to the
other parties hereto, to extend credit and other financial accommodations, lend
monies and provide indebtedness to, or for the benefit of, the Vendor on the
faith hereof.  In furtherance of the foregoing:

     

    Upon
receipt of a notice from the Vendor stating that the Vendor have entered into
entered into a Additional Senior Debt Agreement (which notice shall include the
identity of the new Senior Debt Representative), the Purchaser shall promptly
(i) enter into such documents and agreements (including amendments or
supplements to this Agreement) as the Vendor or the new Senior Debt
Representative shall reasonably request in order to provide to the new Senior
Debt Representative the rights contemplated hereby, in each case consistent in
all material respects with the terms of this Agreement, (ii) deliver to the new
Senior Debt Representative any Senior Debt Priority Collateral held by it,
together with any necessary endorsements (or otherwise allow the new Senior Debt
Representative to obtain control of such Senior Debt Priority Collateral), and
(iii) take such other actions as the Vendor or the new Senior Debt
Representative may reasonably request to provide the new Senior Debt
Representative or the applicable the Senior Debt Creditors the benefits of this
Agreement.  The new Senior Debt Representative shall agree in a
writing addressed to the Purchaser to be bound by the terms of this
Agreement.

     

    9.5           Amendments;
Waivers.  (a)  No amendment or modification of or
supplement to any of the provisions of this Agreement shall be effective unless
the same shall be in writing and signed by the Senior Debt Representative and
the Purchaser, and, in the cases of (i) amendments or modifications of Sections 2.6(b), 3.5, 3.6, 4.2, 6, 9.4, 9.5, 9.7 or 9.8 that indirectly
or directly affect the rights or duties of the Vendor and (ii) amendments or
modifications of or supplements to this Agreement that directly affect the
rights or duties of the Vendor, the Vendor.  The Senior Debt
Representative and the Purchaser shall notify the Borrower at the address
specified in the signature pages to this Agreement of any amendment or
modification of or supplement to any provisions of this Agreement which does not
need to be signed by the Vendor and provide the Borrower with a copy of such
amendment, modification or supplement.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    (b)  It
is understood that the Senior Debt Representative and the Purchaser, without the
consent of any other Senior Debt Secured Party or the Purchaser, may in their
discretion determine that a supplemental agreement (which may take the form of
an amendment and restatement of this Agreement) is necessary or appropriate to
facilitate having additional indebtedness or other obligations (“Additional Debt”) of
the Vendor become Senior Debt Obligations or Royal Gold Obligations, as the case
may be, under this Agreement, which supplemental agreement shall specify whether
such Additional Debt constitutes Senior Debt Obligations or Royal Gold
Obligations, provided, that such
Additional Debt is permitted to be incurred by the Senior Debt Agreement and
Royal Gold Purchase Agreement then extant, and is permitted by such agreements
to be subject to the provisions of this Agreement as Senior Debt Obligations or
Royal Gold Obligations, as applicable.

     

    (c)           Notwithstanding
the terms of Section 9.5(a) and (b), in the event that the Purchaser does not
take the actions contemplated by clause (i) of the second paragraph of Section
9.4 in connection with any permitted Additional Debt within 10 days after the
delivery of a written request to do so, the Senior Debt Representative, without
the consent of the Purchaser, may modify this Agreement (which modification may
take the form of an amendment and restatement of this Agreement) solely for the
purpose of having any Additional Senior Debt Agreement or Additional Debt of the
Vendor become Senior Debt Obligations under this Agreement, which agreement
shall specify that such Additional Senior Debt Agreement or Additional Debt
constitutes Senior Debt Obligations, provided, that such
Additional Debt is permitted to be incurred pursuant to each Royal Gold Purchase
Agreement then extant, and is permitted by such agreements (as determined by the
Senior Debt Representative in good faith and certified by an officer of the
Borrower to the Purchaser) to be subject to the provisions of this Agreement as
Senior Debt Obligations, as applicable.

     

    9.6           Information Concerning
Financial Condition of the Vendor; Notice of Event of
Default.     Each of the Purchaser and the
Senior Debt Representative hereby assume responsibility for keeping itself
informed of the financial condition of the Vendor and all other circumstances
bearing upon the risk of nonpayment of the Senior Debt Obligations or the Royal
Gold Obligations. The Purchaser and the Senior Debt Representative hereby agree
that no party shall have any duty to advise any other party of information known
to it regarding such condition or any such circumstances (except as otherwise
provided in the Senior Debt Documents and Royal Gold Documents).  In
the event the Purchaser or the Senior Debt Representative, in its sole
discretion, undertakes at any time or from time to time to provide any
information to any other party to this Agreement, it shall be under no
obligation (a) to provide any such information to such other party or any other
party on any subsequent occasion, (b) to undertake any investigation not a part
of its regular business routine, or (c) to disclose any other information.
Notwithstanding the foregoing, (i) the Purchaser hereby agrees to promptly
notify the Senior Debt Representative in writing of any material breach under
any Royal Gold Document, including a Vendor Event of Default or any other event
of default as defined in any document, instrument or agreement delivered by the
Vendor in connection with any Royal Gold Document and (ii) the Senior Debt
Representative hereby agrees to promptly notify the Purchaser in writing of any
event of default as defined in any Senior Debt Document or any other document,
instrument or agreement delivered by the Vendor in connection with any Senior
Debt Document; provided that failure
by the Purchaser or the Senior Debt Representative to deliver such notice shall
not be deemed to be a waiver of any of its respective rights or remedies under
this Agreement.

     

    9.7           Governing
Law.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK, EXCEPT AS OTHERWISE REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT REMEDIES PROVIDED BY
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK ARE GOVERNED BY
THE LAWS OF SUCH JURISDICTION.

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    9.8           Submission to Jurisdiction;
JURY TRIAL WAIVER.  (a)  Each Senior Debt Secured Party,
the Purchaser and the Vendor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each such
party hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal
court.  Each such party agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Agreement shall affect any right that the any
Senior Debt Secured Party or the Purchaser may otherwise have to bring any
action or proceeding against the Vendor or its properties in the courts of any
jurisdiction.

     

    (b)  Each
Senior Debt Secured Party, the Purchaser and each Vendor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so (i) any objection it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
court referred to in paragraph (a) of this Section and (ii) the defense of an
inconvenient forum to the maintenance of such action or proceeding.

     

    (c)  Each
party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.9.  Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.

     

    (d)   EACH
PARTY HERETO HEREBY WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.  EACH
PARTY HERETO REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     

    9.9           Notices.  Unless
otherwise specifically provided herein, any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied, or sent by overnight express courier service or United
States mail and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of a telecopy or five days after deposit in the
United States mail (certified, with postage prepaid and properly
addressed).  For the purposes hereof, the addresses of the parties
hereto (until notice of a change thereof is delivered as provided in this Section 9.9) shall be
as set forth below each party's name on the signature pages hereof, or, as to
each party, at such other address as may be designated by such party in a
written notice to all of the other parties.

     

    9.10         Successors and
Assigns.  This Agreement
shall be binding upon and inure to the benefit of each of the parties hereto and
each of the Senior Debt Secured Parties and the Purchaser and their respective
successors and assigns, and nothing herein is intended, or shall be construed to
give, any other Person any right, remedy or claim under, to or in respect of
this Agreement or any Collateral.

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    9.11         Headings.  Section
headings used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

     

    9.12         Severability.  Any provision of
this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

     

    9.13         Other
Remedies.  For avoidance of doubt, it is understood that
nothing in this Agreement shall prevent any Senior Debt Secured Party or the
Purchaser from exercising any available remedy to accelerate the maturity of any
indebtedness or other obligations owing under the Senior Debt Documents or the
Royal Gold Documents, as applicable, or to demand payment under any guarantee in
respect thereof.

     

    9.14         Counterparts; Integration;
Effectiveness.  This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  Delivery of an executed counterpart of a signature
page of this Agreement by telecopy or other electronic means of transmission
shall be effective as delivery of a manually executed counterpart of this
Agreement. This Agreement shall become effective when it shall have been
executed by each party hereto.

     

    [SIGNATURE
PAGES TO FOLLOW]

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above.

     

    
      
        
          
            	 
      	
                    JPMORGAN
      CHASE BANK, N.A., as Senior Debt

                    Representative
      for and on behalf of the Senior Debt

                    Secured
      Parties

                  
	 	 
	 
      	
                    By: 

                  	
                    /s/ Brian Knapp

                  
	 
      	
                    Name:  Brian
      Knapp

                  
	 
      	
                    Title:  Vice
      President

                  

          

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      	 
      	
                              Address
      for Notices:

                            
	 
      	 
      
	 
      	
                              JPMorgan
      Chase Bank, N.A.

                            
	 
      	
                              1111
      Fannin, 10th Floor

                            
	 
      	
                              Houston,
      TX 77002-6925

                            
	 
      	
                              Attention:

                            	
                              Nina
      Guinchard

                            
	 
      	
                              Telecopy No:

                            	
                              (713)
      427-6307

                            
	 
      	
                              E-mail:
      Maria.g.guinchard@jpmchase.com

                            

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  
                    
                      	 
      	
                              with
      a copy to:

                            
	 
      	 
      
	 
      	
                              JPMorgan
      Chase Bank, N.A.

                            
	 
      	
                              1111
      Fannin, 10th Floor

                            
	 
      	
                              Houston,
      TX 77002-6925

                            
	 
      	
                              Attention:

                            	
                              Siraz
      Maknojia]

                            
	 
      	
                              Telecopy No:

                            	
                              (713)
      427-6416

                            
	 
      	
                              E-mail:

                            	
                              siraz.x.maknojia@jpmorgan.com

                            

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    
      
        
          	 
      	
                  RGL
      ROYALTY AG

                
	 
      	 
      	 
      
	 
      	
                  By: 

                	
                  /s/ Tony A. Jensen

                
	 
      	
                  Name:  Tony
      A. Jensen

                
	 
      	
                  Title:
      Chairman

                

        

      

    

     

    
      
        	 
      	
                By: 

              	
                /s/ Martin Weber

              
	 
      	
                Name:  Martin
      Weber

              
	 
      	
                Authorized
      Signatory:  Board
Member

              

      

    

    

    
      
        
          
            
              
                
                  	 
      	
                          Address
      for Notices:

                        
	 
      	 
      	 
      
	 
      	
                          RGL
      Royalty AG

                        
	 
      	
                          c/o
      Royal Gold, Inc.

                        
	 
      	
                          1660
      Wynkoop Street, Suite 1000

                        
	 
      	
                          Denver,
      CO 80202-1132 USA

                        
	 
      	
                          Attention:

                        	
                          Vice
      President and General Counsel

                        
	 
      	
                          Facsimile:

                        	
                          (303)
      595-9385

                        

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                
                  	 
      	
                          with
      a copy, which shall not constitute notice, to:

                        
	 
      	 
      	 
      
	 
      	
                          Hogan
      Lovells US LLP

                        
	 
      	
                          One
      Tabor Center

                        
	 
      	
                          1200
      Seventeenth Street, Suite 1500

                        
	 
      	
                          Denver,
      CO 80202 USA

                        
	 
      	
                          Attention:

                        	
                          Paul
      Hilton, Esq.

                        
	 
      	
                          Facsimile:

                        	
                          (303)
      899-7333

                        

                

              

            

          

        

      

    

    

    
      [SIGNATURE
PAGE – INTERCREDITOR AGREEMENT]

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    
      
        
          	 
      	
                  TERRANE
      METALS CORP.

                
	 	 
	 
      	
                  By: 

                	
                  /s/ Pamela Saxton

                
	 
      	
                  Name:  Pamela
      Saxton

                
	 
      	
                  Title:  Chief
      Financial Officer

                

        

      

    

    

    
      
        
          
            
              	 
      	
                      Address
      for Notices:

                    
	 
      	 
      
	 
      	
                      Thompson
      Creek Metals Company Inc.

                    
	 
      	
                      26
      West Dry Creek Circle, Suite 810

                    
	 
      	
                      Littleton,
      CO  80120

                    
	 
      	
                      Attention:

                    	
                      Chief
      Financial Officer

                    
	 
      	
                      Telecopy
      No.:

                    	
                      (303)
      762-3507

                    
	 
      	
                      Telephone No.: 

                    	
                      (303)
      761-8801

                    
	 
      	
                      E-mail:

                    	
                      psaxton@tcrk.com

                    

            

          

        

      

    

     

    
      [Intercreditor
Agreement]Exhibit
10.1

     

    Conformed
Copy

     

    AMENDED
AND RESTATED SECURITIES PURCHASE AGREEMENT

     

    This
Amended and Restated Securities Purchase Agreement (this “Agreement”) is dated
as of December 9, 2010, by and between MGT Capital Investments, Inc., a Delaware
corporation (the “Company”), and
Laddcap Value Partners, LP, a Delaware limited partnership company, or an
Affiliate (defined below) thereof (collectively, the “Purchaser”), and
amends and restates in its entirety the Securities Purchase Agreement (the
“Original
Agreement”), dated as of November 16, 2010, by and between the Company
and the Purchaser.

     

    WHEREAS,
the Company and the Purchaser entered into the Original Agreement on November
16, 2010, and subsequently agreed to amend and restate such agreement with this
Agreement, and the parties desire that this Agreement supersede the Original
Agreement in all respects;

     

    WHEREAS,
subject to the terms and conditions set forth in this Agreement, the Company
desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, securities of the Company as more fully described in
this Agreement.

     

    NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and the Purchaser agree as
follows:

     

    ARTICLE
I

     

    DEFINITIONS

     

    Section
1.1         Definitions.  In
addition to the terms defined elsewhere in this Agreement, for all purposes of
this Agreement, the following terms have the meanings set forth in this Section
1.1:

     

    “Action” shall have
the meaning ascribed to such term in Section 3.1(k).

     

    “Affiliate” means any
Person that, directly or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with a Person as such terms are
used in and construed under Rule 405 under the Securities Act.

     

    “Board of Directors”
means the board of directors of the Company.

     

    “Business Day” means
any day except any Saturday, any Sunday, any day which is a federal legal
holiday in the United States or any day on which banking institutions in the
State of New York are authorized or required by law or other governmental action
to close.

     

    “Closing” means the
closing of the purchase and sale of the Securities pursuant to Section
2.1.

     

    
      
        
           

        

        
          1

          
            

          

        

        
           

        

      

    

     

    “Closing Date” means
the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
the Purchasers’ obligations to pay the Subscription Amount and (ii) the
Company’s obligations to deliver the Securities, in each case, have been
satisfied or waived, but in no event later than the Drop-Dead Date (defined
below).

     

    “Commission” means the
United States Securities and Exchange Commission.

     

    “Common Stock” means
the common stock of the Company, par value $0.001 per share, and any other class
of securities into which such securities may hereafter be reclassified or
changed.

     

    “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries
which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options,
warrants or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

     

    “Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently
herewith.

     

    “Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(s).

     

    “Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

     

    “GAAP” shall have the
meaning ascribed to such term in Section 3.1(h).

     

    “Indebtedness” shall
have the meaning ascribed to such term in Section 3.1(cc).

     

    “Intellectual Property
Rights” shall have the meaning ascribed to such term in Section
3.1(p).

     

    “Liens” means a lien,
charge, security interest, encumbrance, right of first refusal, preemptive right
or other restriction.

     

    “Material Adverse
Effect” shall have the meaning assigned to such term in Section
3.1(b).

     

    “Permits” shall have
the meaning ascribed to such term in Section 3.1(n).

     

    “Person” means an
individual or corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any
kind.

     

    “Proceeding” means an
action, claim, suit, investigation or proceeding (including, without limitation,
an informal investigation or partial proceeding, such as a deposition), whether
commenced or threatened in writing.

     

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

    “Purchaser Party”
shall have the meaning ascribed to such term in Section 4.6.

     

    “Registration Rights
Agreement” means the Registration Rights Agreement, dated as of the
Closing Date, by and between the Company and the Purchaser, in the form attached
hereto as Exhibit B.

     

    “Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e).

     

    “Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.

     

    “SEC Reports” shall
have the meaning ascribed to such term in Section 3.1(h).

     

    “Securities” means the
Shares.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “Shares” shall have
the meaning ascribed to such term in Section 2.1.

     

    “Short Sales” means
all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange
Act (but shall not be deemed to include the location and/or reservation of
borrowable shares of Common Stock).

     

    “Subscription Amount”
means One Million dollars ($1,000,000.00), in United States dollars and in
immediately available funds.

     

    “Subsidiary” means any
subsidiary of the Company with respect to which the Company owns in excess of
50% of any class of such subsidiary’s outstanding securities, and shall, where
applicable, also include any direct or indirect subsidiary of the Company formed
or acquired after the date of the Original Agreement, which in each case will be
owned by the Company at the Closing.

     

    “Trading Day” means a
day on which the principal Trading Market is open for trading.

     

    “Trading Market” means
any of the following markets or exchanges on which the Common Stock is listed or
quoted for trading on the date in question: the OTC Bulletin Board, the OTC QB,
the OTC QX, NYSE AMEX, the Nasdaq Capital Market, the Nasdaq Global Market, the
Nasdaq Global Select Market, or the New York Stock Exchange (or any successors
to any of the foregoing).

     

    “Transaction
Documents” means this Agreement, the Registration Rights Agreement and
any other documents or agreements executed in connection with the transactions
contemplated hereunder.

     

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

     

    “Transfer Agent” means
Standard Registrar & Transfer, and any successor transfer agent of the
Company.

     

    ARTICLE
II

     

    PURCHASE
AND SALE

     

    Section
2.1          Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein,
the Company agrees to sell, and the Purchaser agrees to purchase, Six Million
Five Hundred Thousand (6,500,000) shares of Common Stock of the Company (the
“Shares”) for
the Subscription Amount.  The Purchaser shall deliver to the Company,
via wire transfer of immediately available funds, an amount equal to the
Subscription Amount and the Company shall deliver to the Purchaser the Shares,
and the Company and the Purchaser shall deliver the other items set forth in
Section 2.2 deliverable at the Closing.  Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Seward & Kissel LLP, One Battery Park Plaza, New
York, NY 10004, or such other location (including remotely by exchange of
electronic or .pdf documents) as the parties shall mutually agree.

     

    Section
2.2           Deliveries.

     

    (a)           On
or prior to the Closing Date, the Company shall deliver or cause to be delivered
to the Purchaser the following:

     

    (i)           this
Agreement duly executed by the Company;

     

    (ii)          a
legal opinion of Company Counsel, substantially in the form of Exhibit A attached
hereto;

     

    (iii)         the
Registration Rights Agreement, duly executed as of the Closing Date by the
Company;

     

    (iv)         a
certificate evidencing the Shares, which certificate shall be registered in the
name of the Purchaser and shall bear the legend referenced in Section 4.10(b) of
this Agreement;

     

    (v)          a
copy of irrevocable instructions to the Company’s transfer agent instructing the
transfer agent to deliver the Shares, registered in the name of the
Purchaser;

     

    (vi)         a
letter of resignation from Tim Paterson-Brown (with respect to his position as a
member of a Board of Directors) effective as of on or before the
Closing;

     

    (vii)        a
certificate duly executed by an executive officer of the Company, dated as of
the Closing Date, certifying as to the matters set forth in Sections 2.3(b)(i) –
(viii).

     

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

     

    (b)           On
or prior to the Closing Date, the Purchaser shall deliver or cause to be
delivered to the Company the following:

     

    (i)           this
Agreement duly executed by such Purchaser; and

     

    (ii)          the
Purchaser’s Subscription Amount by wire transfer to the account as specified in
writing by the Company.

     

    Section
2.3           Closing
Conditions.

     

    (a)           The
obligations of the Company hereunder in connection with the Closing are subject
to the following conditions being met:

     

    (i)           the
accuracy in all material respects on the Closing Date of the representations and
warranties of the Purchaser contained herein (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date);

     

    (ii)          all
obligations, covenants and agreements of the Purchaser required to be performed
at or prior to the Closing Date shall have been performed; and

     

    (iii)         the
receipt by the Company of a favorable opinion from Broadmark Capital that the
transactions contemplated hereby are in the best interests of the shareholders
of the Company;

     

    (iv)         the
delivery by the Purchaser of the items set forth in Section 2.2(b) of this
Agreement.

     

    (b)           The
obligation of the Purchaser hereunder in connection with the Closing is subject
to the following conditions being met:

     

    (i)           the
accuracy in all material respects when made and on the Closing Date of the
representations and warranties of the Company contained herein (except for the
representations and warranties that speak as of a specific date, which shall be
made as of such date);

     

    (ii)          all
obligations, covenants and agreements of the Company required to be performed at
or prior to the Closing Date shall have been performed;

     

    (iii)         the
delivery by the Company of the items set forth in Section 2.2(a) of this
Agreement;

     

    (iv)         Tim
Paterson-Brown shall have resigned from his role as a member of the Board of
Directors;

     

    (v)          the
Board of Directors shall have appointed Robert B. Ladd  to the Board
of Directors as a replacement for Tim Patterson-Brown;

     

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

     

    (vi)         the
Board of Directors shall have elected Peter Venton as Chairman of the Board of
Directors;

     

    (vii)        there
shall have been no Material Adverse Effect with respect to the Company since the
date of the Original Agreement; and

     

    (viii)       from
the date of the Original Agreement to the Closing Date, trading in the Common
Stock shall not have been suspended by the Commission or the Company’s principal
Trading Market (except for any suspension of trading of limited duration agreed
to by the Company, which suspension shall be terminated prior to the Closing),
and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg L.P. shall not have been suspended or limited, or minimum
prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities which,
in the reasonable judgment of the Purchaser, makes it impracticable or
inadvisable to purchase the Securities at the Closing.

     

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES

     

    Section
3.1          Representations and
Warranties of the Company.  Except as set forth in the
Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof
and shall qualify any representation or otherwise made herein to the extent of
the disclosure contained in the corresponding section of the Disclosure
Schedules or otherwise referenced in the Disclosure Schedules in such a manner
that it is reasonably identifiable to which section such disclosure corresponds,
the Company hereby represents and warrants as of the date of the Original
Agreement and as of the Closing Date (except for the representations and
warranties that speak as of a specific date, which shall be made as of such
date) to the Purchaser as follows:

     

    (a)          Subsidiaries.  All
of the direct and indirect Subsidiaries of the Company, or entities of which the
Company owns greater than 50% of the outstanding equity, are as set forth in
Section 3.1(a) of the Disclosure Schedule.  The Company owns, directly
or indirectly, the amount(s) set forth in Section 3.1(a) of the Disclosure
Schedule of capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all such issued and outstanding shares of capital stock
of each Subsidiary are validly issued and are fully paid, and
non-assessable.

     

    
      
        
           

        

        
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    (b)           Organization and
Qualification.  The Company and each of the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any Subsidiary is in violation nor
default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter
documents.  Each of the Company and the Subsidiaries is duly qualified
to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
have or reasonably be expected to result in: (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or (iii) a material adverse effect on the
Company’s ability to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such
power and authority or qualification.

     

    (c)           Authorization;
Enforcement.  The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each
of the Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder including, without limitation, the issuance of the
Shares.  The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection
therewith other than in connection with the Required Approvals.  Each
Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the
terms hereof and thereof, will constitute the valid and binding obligation of
the Company enforceable against the Company in accordance with its terms, except
(i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.

     

    (d)           No
Conflicts.  The execution, delivery and performance by the
Company of the Transaction Documents, the issuance and sale of the Securities
and the consummation by it of the transactions contemplated hereby and thereby
to which it is a party do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as would not reasonably be expected to result in a Material Adverse
Effect.

     

    
      
        
           

        

        
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    (e)           Filings, Consents and
Approvals.  The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.3 of this Agreement, (ii)
the filing with the Commission of a registration statement in accordance with
the Registration Rights Agreement, (iii) application(s) to each applicable
Trading Market for the listing of the Securities for trading thereon in the time
and manner required thereby and (iv) such filings as are required to be made
under applicable state securities laws (collectively, the “Required
Approvals”).

     

    (f)           Issuance of the
Securities.  The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company.

     

    (g)           Capitalization.  The
capitalization of the Company is as set forth in Section 3.1(g) of the
Disclosure Schedule.  The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange
Act.  No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents.  There are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any Person any
right to subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings or arrangements by which the Company or any
Subsidiary is or may become bound to issue additional shares of Common Stock or
Common Stock Equivalents.  The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange or reset price under any of such securities. All of the outstanding
shares of capital stock of the Company are validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and none of such outstanding shares was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase
securities.  No further approval or authorization of any stockholder,
the Board of Directors or others is required for the issuance and sale of the
Securities.  There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s stockholders.

     

    
      
        
           

        

        
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    (h)           SEC Reports; Financial
Statements.  The Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under
the Securities Act and the Exchange Act, including pursuant to Section 13(a) or
15(d) thereof, for the two years preceding the date of the Original Agreement
(or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, being collectively referred to
herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any
such extension.  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in effect at the
time of filing.  Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated Subsidiaries as of and for the
dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.

     

    (i)           Material Changes;
Undisclosed Events, Liabilities or Developments.  Except as
contemplated by the Transaction Documents, since the date of the latest audited
financial statements included within the SEC Reports, except as specifically
disclosed in a subsequent SEC Report filed prior to the date of the Original
Agreement, (i) there has been no event, occurrence or development that has had
or that could reasonably be expected to result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its capital stock and except for this agreement (v) the Company has not issued
any equity securities to any officer, director or Affiliate, except pursuant to
existing Company stock option plans.  The Company does not have
pending before the Commission any request for confidential treatment of
information.  Except for the issuance of the Securities contemplated
by this Agreement, no event, liability, fact, circumstance, occurrence or
development has occurred or exists or is reasonably expected to occur or exist
with respect to the Company or its Subsidiaries or their respective business,
prospects, properties, operations, assets or financial condition that would be
required to be disclosed by the Company under applicable securities laws at the
time this representation is made or deemed made that has not been publicly
disclosed at least 1 Trading Day prior to the date that this representation is
made.

     

    
      
        
           

        

        
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    (j)           No Undisclosed Events,
Liabilities, Developments or Circumstances. No event, liability,
development or circumstance has occurred or exists, or is reasonably expected to
exist or occur with respect to the Company, any of the Subsidiaries or their
respective business, properties, liabilities, prospects, operations (including
results thereof) or condition (financial or otherwise), that (i) would be
required to be disclosed by the Company under applicable securities laws on a
registration statement filed with the SEC relating to an issuance and sale by
the Company of its Common Stock and which has not been publicly announced or
(ii) could have a Material Adverse Effect.

     

    (k)           Litigation.  There
is no action, suit, notice of inquiry, violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i)
adversely affects or challenges the legality, validity or enforceability of any
of the Transaction Documents or the Securities or (ii) would, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect.  Neither the Company nor any Subsidiary, nor any
director or officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state securities laws or a
claim of breach of fiduciary duty.  To the knowledge of the Company,
there has not been, and there is not pending or contemplated, any investigation
by the Commission involving the Company or any current or former director or
officer of the Company.  The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities
Act.

     

    (l)           Labor
Relations.  No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company.  None of the Company’s or its Subsidiaries’ employees is
a member of a union that relates to such employee’s relationship with the
Company or such Subsidiary, and neither the Company nor any of its Subsidiaries
is a party to a collective bargaining agreement, and the Company and its
Subsidiaries believe that their relationships with their employees are
good.  Except as contemplated in Section 2.3(b) of this Agreement, no
executive officer (as defined in Rule 501(f) promulgated under the Securities
Act) or other key employee of the Company or any of the Subsidiaries has
notified the Company or any such Subsidiary that such officer intends to leave
the Company or any such Subsidiary or otherwise terminate such officer’s
employment with the Company or any such Subsidiary.  No executive
officer or other key employee, to the knowledge of the Company, is, or is now
expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such
executive officer or key employee, to the knowledge of the Company, does not
subject the Company or any of its Subsidiaries to any liability with respect to
any of the foregoing matters.  The Company and its Subsidiaries are in
material compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours.

     

    
      
        
           

        

        
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    (m)           Compliance.  Neither
the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or governmental body or (iii) is or has been in
violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local
laws relating to taxes, environmental protection, occupational health and
safety, product quality and safety and employment and labor
matters.

     

    (n)           Regulatory
Permits.  The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses (“Permits”), and
neither the Company nor any Subsidiary has received any notice of proceedings
relating to the revocation or modification of any Permit.

     

    (o)           Title to
Assets.  The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them and good and
marketable title in all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear of all
Liens, except for Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries and Liens for the payment of
federal, state or other taxes, the payment of which is neither delinquent nor
subject to penalties.  Any real property and facilities held under
lease by the Company and the Subsidiaries are to their knowledge held by them
under valid, subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance.

     

    (p)           Patents and
Trademarks.  The Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or
material for use in connection with their respective businesses as described in
the SEC Reports (collectively, the “Intellectual Property
Rights”).  None of, and neither the Company nor any Subsidiary
has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to
expire or terminate or be abandoned, within two (2) years from the date of this
Agreement.  Neither the Company nor any Subsidiary has received, since
the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any
Person.  All such Intellectual Property Rights are enforceable and to
the knowledge of the Company there is no existing infringement by another Person
of any of the Intellectual Property Rights.  The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.

     

    
      
        
           

        

        
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    (q)           Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are
customary in the businesses in which the Company and the Subsidiaries are
engaged, including, but not limited to, directors and officers insurance
coverage at least equal to the aggregate Subscription Amount.  Neither
the Company nor any such Subsidiary has any reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.

     

    (r)           Transactions With Affiliates
and Employees.  None of the officers or directors of the
Company and, to the knowledge of the Company, none of the employees of the
Company is presently a party to any transaction with the Company or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee of the Company has a
substantial interest or is an officer, director, trustee or partner, in each
case in excess of $120,000 other than for (i) payment of salary or consulting
fees for services rendered, (ii) reimbursement for expenses incurred on behalf
of the Company and (iii) other employee benefits, including stock option
agreements under any stock option plan of the Company.

     

    (s)           Sarbanes-Oxley; Internal
Accounting Controls.  Except as described in the SEC Reports,
the Company is in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date of the
Original Agreement, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date of the Original
Agreement and as of the Closing Date.  Except as described in the SEC
Reports, the Company and the Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that: (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms.  The Company’s
certifying officers have evaluated the effectiveness of the Company’s disclosure
controls and procedures as of the end of the period covered by the Company’s
most recently filed Quarterly Report on Form 10-Q under the Exchange Act (such
date, the “Evaluation
Date”).  The Company presented in its most recently filed
periodic report under the Exchange Act the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation
Date, there have been no changes in the Company’s internal control over
financial reporting (as such term is defined in the Exchange Act) that have
materially affected, or are reasonably likely to materially affect, the
Company’s internal control over financial reporting.

     

    
      
        
           

        

        
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    (t)           Subsidiary Rights.
The Company or one of the Subsidiaries has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of the Subsidiaries as owned by the
Company or such Subsidiary.

     

    (u)           Off Balance Sheet
Arrangements. There is no transaction, arrangement, or other relationship
between the Company or any of the Subsidiaries and an unconsolidated or other
off balance sheet entity that is required to be disclosed by the Company in its
Exchange Act filings and is not so disclosed or that otherwise could be
reasonably likely to have a Material Adverse Effect. Confirm.

     

    (v)           Certain
Fees.  No brokerage or finder’s fees or commissions are or will
be payable by the Company to any broker, financial advisor or consultant,
finder, placement agent, investment banker, bank or other Person with respect to
the transactions contemplated by the Transaction Documents.  The
Purchasers shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated
in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.

     

    (w)           Investment Company.
The Company is not, and is not an Affiliate of, and immediately after receipt of
payment for the Securities, will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of 1940, as
amended.

     

    (x)           Registration
Rights.  Other than the rights of the Purchaser under the
Registration Rights Agreement, no Person has any right to cause the Company to
effect the registration under the Securities Act of any securities of the
Company.

     

    (y)           Listing and Maintenance
Requirements.  The Common Stock is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to terminate, or which to its knowledge is likely to have the effect of
terminating, the registration of the Common Stock under the Exchange Act nor has
the Company received any notification that the Commission is contemplating
terminating such registration.  The Company is, and has no reason to
believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements.  The Company has
not received any notice of deficiency from the exchange on which its Common
Stock is listed, nor is it aware of any violations of any listing requirements
in respect of the rules of such exchange.

     

    
      
        
           

        

        
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    (z)           Application of Takeover
Protections.  The Company and the Board of Directors have taken
all necessary action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the laws of its
state of incorporation that is or could become applicable to the Purchasers as a
result of the Purchasers and the Company fulfilling their obligations or
exercising their rights under the Transaction Documents, including without
limitation as a result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

     

    (aa)         Disclosure.  Except
with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it
nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or
might constitute material, non-public information  The Company
understands and confirms that the Purchasers will rely on the foregoing
representation in effecting transactions in securities of the
Company.  All of the disclosure furnished by or on behalf of the
Company to the Purchasers regarding the Company, its business and the
transactions contemplated hereby, including this Agreement, the Disclosure
Schedules to this Agreement and any certificate furnished in connection
herewith, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.

     

    (bb)        No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, neither the Company, nor any of its
Affiliates, nor any Person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would cause this offering of the
Securities to be integrated with prior offerings by the Company for purposes of
any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.

     

    
      
        
           

        

        
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    (cc)         Solvency.  Based
on the consolidated financial condition of the Company as of the Closing Date,
after giving effect to the receipt by the Company of the proceeds from the sale
of the Securities hereunder, (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including known contingent
liabilities) as they mature, and (ii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its liabilities when such
amounts are required to be paid.  The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its
debt).  The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within 6 months
from the Closing Date.  Section 3.1(cc) of the Disclosure Schedule
sets forth as of the date of the Original Agreement all outstanding secured and
unsecured Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments.  For the purposes of this
Agreement, “Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $75,000
(other than trade accounts payable incurred in the ordinary course of business),
(y) all guaranties, endorsements and other contingent obligations in respect of
indebtedness of others, whether or not the same are or should be reflected in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of
any lease payments in excess of $75,000 due under leases required to be
capitalized in accordance with GAAP.  Neither the Company nor any
Subsidiary is in default with respect to any Indebtedness.

     

    (dd)        Tax
Status.  Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary (i) has made or filed all United States
federal and state income and all foreign income and franchise tax returns,
reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision reasonably adequate
for the payment of all material taxes for periods subsequent to the periods to
which such returns, reports or declarations apply.  There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction.

     

    (ee)         Foreign Corrupt
Practices.  To the knowledge of the Company, neither the
Company, nor to the knowledge of the Company, any agent or other person acting
on behalf of the Company, has (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.

     

    (ff)          Accountants.  The
Company’s accounting firm is EisnerAmper LLP.  To the knowledge and
belief of the Company, such accounting firm is a registered public accounting
firm as required by the Exchange Act.

     

    (gg)        Purchasers’ Purchase of
Securities.  The Purchaser is acting solely in the capacity of
an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby.  The Purchaser is not acting as a
financial advisor to the Company (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated thereby and any
advice given by the Purchaser or any of its respective representatives or agents
in connection with the Transaction Documents and the transactions contemplated
thereby is merely incidental to the Purchaser’s purchase of the
Securities.  The Company’s decision to enter into this Agreement and
the other Transaction Documents has been based solely on the independent
evaluation of the transactions contemplated hereby by the Company and its
representatives.

     

    
      
        
           

        

        
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    (hh)        Regulation M
Compliance.  The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any Person any compensation for soliciting another to purchase any other
securities of the Company, other than, in the case of clauses (ii) and (iii),
compensation paid to the Company’s placement agent in connection with the
placement of the Securities.

     

    (ii)           Office of Foreign Assets
Control.  Neither the Company nor, to the Company’s knowledge,
any director, officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).

     

    (jj)           U.S. Real Property Holding
Corporation.  The Company is not and has never been a U.S. real
property holding corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify upon
Purchaser’s request.

     

    (kk)         Bank Holding Company
Act.  Neither the Company nor any of its Subsidiaries or
Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”) and to
regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”).  Neither the Company nor any of its Subsidiaries or
Affiliates owns or controls, directly or indirectly, five percent (5%) or more
of the outstanding shares of any class of voting securities or twenty-five
percent or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve.  Neither the
Company nor any of its Subsidiaries or Affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve.

     

    (ll)           Money
Laundering.  The operations of the Company are in material
compliance with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended,
applicable money laundering statutes and applicable rules and regulations
thereunder (collectively, the “Money Laundering
Laws”), and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.

     

    
      
        
           

        

        
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    (mm)       Environmental
Matters. Except as disclosed in the SEC Reports, to the knowledge of the
Company, neither the Company nor any of its Subsidiaries (i) is in
violation of any statute, rule, regulation, decision or order of any
governmental agency or body or any court, domestic or foreign, relating to the
use, disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, “Environmental Laws”),
(ii) is liable for any off-site disposal or contamination pursuant to any
Environmental Laws, or (iii) is subject to any claim relating to any
Environmental Laws; in each case, which violation, contamination, liability or
claim has had or would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect; and, to the Company’s Knowledge, there is
no pending or threatened investigation that might lead to such a
claim.

     

    (nn)        Application of Anti-Takeover
Provisions.  There is no control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Certificate of
Incorporation (or similar charter documents) or applicable law that would become
applicable to the Purchaser as a result of the issuance of the
Securities.

     

    (oo)        Shell
Company.  The Company is not now and has not been, at any time
during the past three (3) years, a shell company as defined by Rule 405 of the
Securities Act and has never been an issuer subject to Rule 144(i) under the
Securities Act.

     

    Section
3.2           Representations and
Warranties of the Purchasers.  The Purchaser hereby represents
and warrants as of the date of the Original Agreement and as of the Closing Date
(except for the representations and warranties that speak as of a specific date,
which shall be made as of such date) to the Company as follows:

     

    (a)           Organization;
Authority.  The Purchaser is either an individual or an entity
which one? duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization with full right, corporate, partnership
or limited liability company power and authority to enter into and to consummate
the transactions contemplated by this Agreement and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and performance by the Purchaser of the transactions contemplated by
this Agreement have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the
part of the Purchaser.  Each Transaction Document to which it is a
party has been duly executed by the Purchaser, and when delivered by the
Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable
law.

     

    
      
        
           

        

        
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    (b)           Understandings or
Arrangements.  The Purchaser is acquiring the Securities as
principal for its own account and has no direct or indirect arrangement or
understandings with any other persons to distribute or regarding the
distribution of such Securities (this representation and warranty not limiting
the Purchaser’s right to sell the Securities pursuant to a registration
statement or otherwise in compliance with applicable federal and state
securities laws).  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.

     

    (c)           Purchaser
Status.  At the time the Purchaser was offered the Securities,
it was, and as of the date of this Agreement it is, either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.  The Purchaser is not required to be
registered as a broker-dealer under Section 15 of the Exchange Act.

     

    (d)           Experience of the
Purchaser.  The Purchaser, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Securities, and has so evaluated the merits
and risks of such investment.  The Purchaser is able to bear the
economic risk of an investment in the Securities and, at the present time, is
able to afford a complete loss of such investment.  The Company has
provided the Purchaser with access to the Company and its books and records, and
the Purchaser has had the opportunity to ask questions of the Company and, as of
the date of the Original Agreement, has received any information that it has
requested from the Company.

     

    (e)           Certain Transactions and
Confidentiality.  Other than consummating the transactions
contemplated hereunder, and otherwise disclosed in its SEC filings, the
Purchaser or any of Affiliate, has not, nor has any Person acting on behalf of
or pursuant to any understanding with the Purchaser, directly or indirectly
executed any purchases or sales, including Short Sales, of the securities of the
Company during the period commencing August 1, 2010 and ending the latter of (i)
immediately prior to the execution hereof or the (ii) the date on which the
Company publicly announces the transactions contemplated by this
Agreement.  Other than to other Persons party to this Agreement, such
Purchaser has maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing
contained herein shall constitute a representation or warranty, or preclude any
actions, with respect to the identification of the availability of, or securing
of, available shares to borrow in order to effect Short Sales or similar
transactions in the future.

     

    (f)           Certain
Fees.  To the knowledge of the Purchaser, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any
broker, financial advisor or consultant, finder, placement agent, investment
banker, bank or other Person with respect to the transactions contemplated by
the Transaction Documents.

     

    
      
        
           

        

        
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    The
Company acknowledges and agrees that the representations contained in Section
3.2 shall not modify, amend or affect such Purchaser’s right to rely on the
Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transaction contemplated
hereby.  The Purchaser hereby further represents and warrants that, as
of the date of the Original Agreement, it does not have any actual knowledge of
any inaccuracy of the representations and warranties of the Company set forth in
Section 3.1.

     

    ARTICLE
IV

     

    OTHER
AGREEMENTS OF THE PARTIES

     

    Section
4.1            Furnishing of
Information.  Until the time that the Purchaser no longer owns
any of the Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all
reports required to be filed by the Company after the date of the Original
Agreement pursuant to the Exchange Act so long as the Company is then subject to
the reporting requirements of the Exchange Act.  As long as the
Purchaser owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities, including without
limitation, under Rule 144. The Company further covenants that it will take such
further action as any holder of Securities may reasonably request, to the extent
required from time to time to enable such Person to sell such Securities without
registration under the Securities Act, including without limitation, within the
requirements of the exemption provided by Rule 144.

     

    Section
4.2            Integration.  The
Company shall not sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in Section 2 of the Securities
Act) that would be integrated with the offer or sale of the Securities for
purposes of the rules and regulations of any Trading Market such that it would
require shareholder approval prior to the closing of such other transaction
unless shareholder approval is obtained before the closing of such subsequent
transaction.

     

    Section
4.3            Securities Laws Disclosure;
Publicity.  The Company shall, during or prior to the Trading
Day immediately following the second business day following the date hereof,
issue a press release disclosing the material terms of the transactions
contemplated hereby, and issue a Current Report on Form 8-K (which shall include
this Agreement as an exhibit thereto) disclosing the material terms of the
transactions contemplated hereby, and including the Transaction Documents as
exhibits thereto within the time required by the Exchange Act.  From
and after the issuance of such press release, the Company shall have publicly
disclosed all material, non-public information delivered to the Purchaser by the
Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated
by the Transaction Documents. The Company and the Purchaser shall consult with
each other in issuing any other press releases with respect to the transactions
contemplated hereby, and neither the Company nor any Purchaser shall issue any
such press release nor otherwise make any such public statement without the
prior consent of the Company, with respect to any press release of any
Purchaser, or without the prior consent of the Purchaser, with respect to any
press release of the Company, which consent shall not unreasonably be withheld
or delayed, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.

     

    
      
        
           

        

        
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    Section
4.4            Use of
Proceeds.  The Company shall use the net proceeds from the sale
of the Securities for general working capital purposes, and shall not use such
proceeds for: (a) the satisfaction of any portion of the Company’s debt (other
than payment of trade payables in the ordinary course of the Company’s business
and prior practices), (b) the redemption of any Common Stock or Common Stock
Equivalents or (c) the settlement of any outstanding litigation or (d) in
violation of the FCPA or OFAC regulations.

     

    Section
4.5            Indemnification of
Purchasers.  Subject to the provisions of this Section 4.6, the
Company will indemnify and hold the Purchaser and its shareholders, members,
partners, directors, managers, officers, employees and agents (and any other
Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who
controls the Purchaser (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the shareholders, members, partners,
directors, managers, officers, employees and agents (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against a Purchaser
in any capacity, or any of them or their respective Affiliates, by any
stockholder of the Company who is not an Affiliate of such Purchaser, with
respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of the Purchaser’s representations,
warranties or covenants under the Transaction Documents or any agreements or
understandings the Purchaser may have with any such stockholder or any
violations by the Purchaser of state or federal securities laws or any conduct
by the Purchaser which constitutes fraud, gross negligence, willful misconduct
or malfeasance).  If any action shall be brought against any Purchaser
Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the
Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party (in this regard,
Gersten Savage shall be deemed to be reasonably acceptable to
Purchaser).  Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate
counsel.  The Company will not be liable to any Purchaser Party under
this Agreement (y) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or
delayed; or (z) to the extent, but only to the extent, that a loss, claim,
damage or liability is attributable to any Purchaser Party’s breach of any of
the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents. The
indemnification required by this Section 4.6 shall be made by periodic payments
of the amount thereof during the course of the investigation or defense, as and
when bills are received. The indemnity agreements contained herein shall not be
an exclusive remedy but shall be in addition to any cause of action or similar
right in law or in equity of any Purchaser Party against the Company or others,
and (y) any liabilities the Company may be subject to pursuant to
law.

     

    
      
        
           

        

        
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    Section
4.6            Listing of Common
Stock. The Company hereby agrees to use commercially reasonable efforts
to maintain the listing or quotation of the Common Stock on the Trading Market
on which it is currently listed, and concurrently with the Closing, the Company
shall apply to list or quote all of the Shares on such Trading Market and
promptly secure the listing of all of the Shares on such Trading Market. The
Company further agrees, if the Company applies to have the Common Stock traded
on any other Trading Market, it will then include in such application all of the
Shares, and will take such other action as is reasonably necessary to cause all
of the Shares to be listed or quoted on such other Trading Market as promptly as
possible.  The Company will then take all action reasonably necessary
to continue the listing and trading of its Common Stock on a Trading Market and
will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market.

     

    Section
4.7            Certain Transactions and
Confidentiality. The Purchaser covenants that neither it nor any
Affiliate or any other Person acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period commencing with the
execution of the Original Agreement and ending at such time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section
4.3.  The Purchaser covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to
the initial press release as described in Section 4.3, the Purchaser will
maintain the confidentiality of the existence and terms of this transaction and
the information included in the Disclosure Schedules.  Notwithstanding
the foregoing and notwithstanding anything contained in this Agreement to the
contrary, the Company has been informed that (i) the Purchaser does not make any
representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the Closing Date, (ii) the
Purchaser shall not be restricted or prohibited from effecting any transactions
in any securities of the Company in accordance with applicable securities laws
from and after the Closing Date, and (iii) Purchaser shall not have any duty of
confidentiality to the Company or its Subsidiaries after the issuance of the
initial press release as described in Section 4.3.

     

    
      
         

      

      
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    Section
4.8            Transfers;
Legend.

     

    (a)           Securities
may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of the Securities other than pursuant to an
effective registration statement, to the Company, to an Affiliate of an
Purchaser or in connection with a pledge as contemplated in Section 4.08(b), the
Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred Shares under the
Securities Act

     

    (b)           Certificates
evidencing the Shares will contain the following legend, until such time as they
are not required under Section 4.08(c):

     

    THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT SECURED BY SUCH SECURITIES IN ACCORDANCE WITH APPLICABLE
LAW.

     

    The
Company has been informed that the Purchaser may from time to time pledge,
and/or grant a security interest in some or all of the Securities pursuant to a
bona fide margin agreement in connection with a bona fide margin account and, if
required under the terms of such agreement or account, the Purchaser may
transfer pledged or secured Securities to the pledgees or secured parties in
accordance with applicable law. Such a pledge or transfer would not be subject
to approval or consent of the Company and no legal opinion of legal counsel to
the pledgee, secured party or pledgor shall be required in connection with the
pledge, but such legal opinion may be required in connection with a subsequent
transfer following default by the Purchaser transferee of the pledge. No notice
shall be required of such pledge. At the Purchaser’s expense, the Company will
execute and deliver such reasonable documentation as a pledgee or secured party
of Securities may reasonably request in connection with a pledge or transfer of
the Securities. Except as otherwise provided in Section 4.10(c), any Securities
subject to a pledge or security interest as contemplated by this Section 4.10(b)
shall continue to bear the legend set forth in Section 4.1(b) and be subject to
the restrictions on transfer set forth in Section 4.10(a).

     

    (c)           Certificates
evidencing Securities shall not contain any legend (including the legend set
forth in Section 4.1(b)): (i) following a sale or transfer of such Securities
pursuant to an effective registration statement (including a Registration
Statement), or (ii) following a sale or transfer of such Shares pursuant to Rule
144 (assuming the transferee is not an Affiliate of the Company), or (iii) while
such Securities are eligible for sale without volume limitations pursuant to
Rule 144.  If the Purchaser shall make a sale or transfer of
Securities either (x) pursuant to Rule 144 or (y) pursuant to a registration
statement and in each case shall have delivered to the Company or the Company’s
transfer agent the certificate representing Securities containing a restrictive
legend which are the subject of such sale or transfer and a representation
letter in customary form.

     

    
      
        
           

        

        
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    Section
4.9            Restriction on trading in
the Company’s Securities

     

    For the
period from the date of the Original Agreement to the Closing Date, it is
understood and acknowledged by the Purchaser that: (i) each of the Purchaser and
its Affiliates  has been asked by the Company to agree, and the
Purchaser (on behalf of its self and its Affiliates) has agreed, to desist from
purchasing or selling, long and/or short, securities of the Company, or
“derivative” securities based on securities issued by the Company; (ii) the
Purchaser has agreed to desist from future open market or other transactions by
the Purchaser, specifically including, without limitation, Short Sales or
“derivative” transactions, before or after the closing of this private placement
transactions; (iii) the Purchaser, and counter-parties in “derivative”
transactions to which the Purchaser is a party, directly or indirectly,
presently may not have a “short” position in the Common Stock, and (iv) the
Purchaser shall not have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction.

     

    Section
4.10          Cooperation of the
Parties.

     

    Each of
the Company (subject to its exercise of the fiduciary duties owned to its
shareholders) and the Purchaser agree that they will use their commercially
reasonable efforts to close the transaction contemplated hereby by the Closing
Date.  The Company and the Purchaser further agree that they shall
each provide reasonable cooperation to the other party for all necessary filings
made by the Company and/or the Purchaser incident to the transactions
contemplated hereby, whether before or after the Closing Date.

     

    ARTICLE
V

     

    MISCELLANEOUS

     

    Section
5.1            Termination.  This
Agreement may be terminated by either the Company or the Purchaser by written
notice to the other party if the Closing has not been consummated on or before
December 31, 2010 (the “Drop-Dead Date”);
provided, however, that no such termination will affect the right of any party
to sue for any breach by the other party.  Subject to Section 4.11,
the Company may terminate this Agreement prior to the Drop-Dead Date if (and
only if) the Company receives a bonafide, written offer for a transaction at
least as favorable to the Company, and on terms more favorable to the Company,
as the transaction contemplated hereby (collectively, the “Company Termination
Option”).  In the event that the Company Termination Option has
not be exercised by the Drop-Dead Date, the Company’s right to exercise the
Company Termination Option shall expire in its entirety, without regard to
whether the Closing has (or has not) occurred by such date.

     

    
      
        
           

        

        
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    Section
5.2            Fees and
Expenses.  Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, provided, however, that, in the
event that the Closing has not occurred on or before the Drop-Dead Date, unless
such Closing has not occurred because of a breach by the Purchaser of its
obligations under this Agreement, the Company shall reimburse the Purchaser for
all of their reasonable out-of-pocket expenses (including reasonable legal fees)
up to a maximum of $35,000.  The Company shall pay all Transfer Agent
fees and stamp taxes levied in connection with the delivery of any Securities to
the Purchasers.

     

    Section
5.3            Entire
Agreement.  The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and
schedules.

     

    Section
5.4            Notices.  Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the second (2nd) Trading Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service or (d) upon actual
receipt by the party to whom such notice is required to be given.  The
address for such notices and communications shall be as set forth on the
signature pages attached hereto.

     

    Section
5.5            Amendments;
Waivers.  No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and the Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waived provision is
sought.  No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right.

     

    Section
5.6            Headings.  The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.

     

    Section
5.7            Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted
assigns.  The Company may not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
Purchaser.  The Purchaser may assign any or all of its rights under
this Agreement to any Person to whom the Purchaser assigns or transfers any
Securities.

     

    Section
5.8            No Third-Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, except as otherwise set forth in Section 4.6.

     

    
      
        
           

        

        
          24

          
            

          

        

        
           

        

      

    

    

    Section
5.9            Governing
Law.  All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law
thereof.  Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or is an inconvenient venue for such proceeding.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law.  If either party shall commence
an action or proceeding to enforce any provisions of the Transaction Documents,
then, in addition to the obligations of the Company under Section 4.6, the
prevailing party in such action or proceeding shall be reimbursed by the other
party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.

     

    Section
5.10          WAIVER OF JURY
TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION
BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND
INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY
JURY.

     

    Section
5.11           Survival.  The
representations and warranties contained herein shall survive the Closing and
the delivery of the Securities.

     

    Section
5.12          Execution.  This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party, it being understood that both parties need not sign the same
counterpart.  In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such
signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.

     

    Section
5.13          Severability.  If
any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

     

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

     

    Section
5.14          Rescission and Withdrawal
Right.  Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other Transaction
Documents, in the event that the Company or the Purchaser has materially
breached any of its representations or warranties contained herein, then the
Purchaser or the Company, as the case may be, may rescind or withdraw, in its
sole discretion upon written notice to the other party, the transactions
contemplated by this Agreement.

     

    Section
5.15          Replacement of
Securities.  If any certificate or instrument evidencing any
Securities is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation
thereof (in the case of mutilation), or in lieu of and substitution therefor, a
new certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction.  The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

     

    Section
5.16          Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, each of the Purchasers and the Company will
be entitled to specific performance under the Transaction
Documents.  The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any action for specific performance of any such obligation the
defense that a remedy at law would be adequate.

     

    Section
5.17          Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    Section
5.18          Construction. The
parties agree that each of them and/or their respective counsel has reviewed and
had an opportunity to revise the Transaction Documents and, therefore, the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the interpretation
of the Transaction Documents or any amendments hereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common
Stock that occur after the date of this Agreement.

     

    (Signature
Pages Follow)

    

    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

     

    
      
        	
                MGT
      CAPITAL INVESTMENTS, INC.

              
	 
      	 
      
	
                By:

              	
                /s/ Tim Paterson-Brown

              
	
                Name:
      Tim Paterson-Brown

              
	
                Title:CEO

              
	 
      	 
      
	
                By:

              	
                Allan J. Rowley

              
	
                Name:
      Allan J. Rowley

              
	
                Title:
      CFO

              
	 
      	 
      
	
                LADDCAP
      VALUE PARTNERS, LP

              
	 
      	 
      
	
                By:

              	
                /s/ Robert Ladd

              
	
                Name:
      Robert Ladd

              
	
                Title:
      Managing Member of General
Partner

              

      

    

     

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

    

    Exhibit
A

     

    Form of
Opinion

     

    
      
        
           

        

        
          28

          
            

          

        

        
           

        

      

    

    

    Exhibit
B

     

    Form of
Registration Rights Agreement

     

    
      
        
           

        

        
          29

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