Document:

Exhibit
10.20

 

Lease Contract

 

Made and
executed on the 15th day of December, 1995

 

Between

 

Kiryat Weizmann Science Park
Ltd.

Of 13 Ahad Ha’am St., Tel Aviv

(hereinafter: the “Lessor”)

 

Of the First
Part;

 

And

 

QBA Enterprises Ltd.

Private Company No. 51-178878-8

38 Tamar St.

Omer 84965

(hereinafter: the “Lessee”)

 

Of the Second
Part;

 

Whereas:               The
Lessor has rights in the Premises as defined below, under which it is entitled
to lease the Premises to the Lessee;  and

 

Whereas:               The
Lessee wishes to lease the Premises from the Lessor and the Lessor agrees to
such subject to the provisions of this contract;

 

Therefore, it is declared, stipulated and agreed between the Parties as
follows:

 

1.             The
Preamble above forms an integral part of this contract.

 

2.             Interpretation

 

2.1           The
following expressions shall have the meanings set out alongside them, as
follows:

 

The “Park”            that
area of land at Nes Ziona known as Kiryat Weizmann – Science Park

 

The “Building” – the building in the Park on which the Premises are included,
as set out in the Schedule, and as market with a red border in Annex B.

 

The “Premises” – part of the Building, including all of the fixtures
thereon, marked in green on Annex C, and as set out in the Schedule, as may be
increased or decreased with the consent of the Parties.

 

The “Institute” – the Weizmann Institute of Science.

 

The “Schedule” – the schedule to this Contract.

 

2.2           It
is agreed between the Parties that any amendment to this Contract made by the
Parties with respect to the description of the Premises, the term of the Lease,
the Rental and the method of payment thereof, or any other matter may only be
done and shall only be valid if done in writing and signed by all of the
Parties to this Contract.

 

2.3           Headings
of clauses in this Contract shall not constitute part of the Contract and shall
not be taken into account in the interpretation hereof.

 

2.4           The
annexes to this Contract form an integral part of it.

 

2.5           This
Contract is exhaustive of all of the agreements between the Parties and no
negotiations which preceded the execution of it or which took place
contemporaneous with it or any declarations, representations, undertakings or
agreements which preceded or which were a condition of execution of this
Contract shall be taken into account, and all such are hereby null and void. Oral
declarations and notices by the directors, officers or employees of the Lessor
shall not bind the Lessor and the Lessor shall only be bound by this document
when lawfully signed by its authorized signatories.

 

2.6           Should
the Lessee comprise a number of individuals, they shall be bound jointly and
severally by all of its undertakings under this Contract, and under any
documents and deeds signed by it and drafted at its instruction.

 

3.             Delivery

 

(Delete whichever is inapplicable)

 

3.1           [Deleted]

 

3.2           Delivery

 

(Delete whichever is inapplicable)

 

The Premises
shall be made available to the Lessee on the date set out in the Schedule as
being the commencement of the Lease Term (hereinafter: the “Date of Delivery”),
all of the systems in it being in good order.

 

For the
avoidance of doubt, it is hereby declared and agreed that failure by the Lessee
to be present on the Date of Delivery for the purpose of receipt of possession
of the Premises shall not harm any of the Lessee’s undertakings under this
Contract.

 

3.3           [Deleted]

 

3.3.1        [Deleted]

 

3.3.2        [Deleted]

 

3.3.3        “Date
of Delivery” shall mean the date on which the Lessor is ready to deliver the
Premises to the Lessee in accordance with the provisions above and in
accordance with notice as follows even if such readiness is subject to a
reservation, whether in the notice or thereafter, that the Lessee fulfill
undertakings that it is required to fulfill as at such date as a precondition
to delivery, whether delivery actually takes place or otherwise.

 

Notice in
writing from the Lessor to the Lessee to the effect that the Lessor is prepared
to deliver the Premises to the Lessee as aforesaid shall be deemed to be an
integral part of this Contract and the Date of Delivery set out in the notice
shall be deemed for the purposes of this Contract to be the commencement of the
Term of the Lease.

 

3.4           The Premises shall be delivered to the Lessee on the date set out in
the Schedule (hereinafter: the “Date of Delivery”) and the Term of the Lease
shall commence on such date, whether the Lessee is present to receive the
Premises on the Date of Delivery or otherwise.

 

3.5           On the Date of Delivery, the Lessor and the Lessee shall draft a
protocol in writing, to be signed by the Parties, setting out the state of the
Premises and any defects or deficiencies in them, if any (hereinafter: the “Protocol
of Delivery”). The Lessee shall be estopped from making any claim against the
Lessor regarding any defect and/or deficiency and/or incompatibility not noted
in the Protocol of Delivery.

 

4.             Lease and Term of Lease

 

4.1           The Lessor hereby leases the Premises to the Lessee and the Lessee
hereby leases the Premises from the Lessor for the period set out in the
Schedule (hereinafter: the “Term of the Lease”), as of the Date of Delivery. The
Lessee shall have an option to extend the Term of the Lease in the event so
prescribed in the Schedule.

 

4.2           The Lessee shall not be entitled to bring the Lease to an end prior to
the end of the Lease Term. No termination of use of the Premises and/or
vacation of the Premises by the Lessee prior to the end of the Term of the
Lease shall release the Lessee from its undertakings under this Contract,
including, but without derogation from the generality of the aforesaid, the
Lessee’s undertaking to pay the Rental to the Lessor.

 

4.3           The Lease under this Contract is a net lease, and the Lessee shall bear
all of the payments for the Premises for the Term of the Lease, whether such
apply to owners or persons in possession, whether imposed at the time of
execution of this Contract or in the future.

 

4.4           The provisions of this clause constitute a fundamental condition of
this Contract and breach of them shall constitute a fundamental breach of this
Contract.

 

5.             Knowledge of Premises

 

(Built-up Premises)

 

The Lessee declares that it
has inspected the Park, the Building and the Premises, has seen and inspected
them and their surrounds, knows and is aware of all of the plans and details
relating thereto, which might affect its entry into this Contract, and has
found all of the above to be appropriate for all of its purposes, and subject
to delivery of the Premises into its possession in accordance with the
provisions of this Contract, and it hereby waives any claim of incompatibility
and any other claim regarding the Park, the Building, the Premises, the ability
to use them and his entry into this Contract.

 

For the avoidance of doubt,
the Lessee hereby declares that it is taking possession of the Premises as is,
without any alteration and/or change whatsoever, and it confirms that the
Premises in their present condition are indeed suitable to it in all aspects,
and that it shall not require or be entitled to require that the Lessor perform
any alteration and/or change to the Premises.

 

[Deleted]

 

6.             Delivery of the Premises

 

The Lessee undertakes not to
use the Premises for any purpose whatsoever, in any manner whatsoever, other
than for the purpose of the Lease as set out in the Schedule. The provisions of
this clause constitute a fundamental condition of this Contract, and breach
thereof constitutes a fundamental breach of this Contract.

 

7.             Rental

 

7.1           The Lessee undertakes to pay the Lessor the Rental in the following
installments, on the following dates and in the following manner:

 

7.1.1        The base rental during the Term of the Lease is linked to the Index and
shall be paid by the Lessee to the Lessor in advance, on the dates set out in
the Schedule.

 

7.1.2        Payments of the base rental shall be linked to the Index in accordance
with the following provisions:

 

“Index”
– The index known as the consumer price index (including fruit and vegetables)
published by the Central Bureau of

 

Statistics and General
Research, and any such index even if published by a different official
institute or body, and any official index which might stand in lieu of such,
whether constructed on the same data or not.

 

If another index stands in
lieu of such and the bureau, body or institute as aforesaid has not set out the
relationship between it and the index that it replaces [such ratio shall be
prescribed] by the chairman of the board of directors of Bank Leumi Le-Israel
Ltd. or the person in fact acting as such at any time, at the Lessor’s demand.

 

“Base
Index” – as set out in the Schedule

 

“New
Index” – shall mean, for any payment of Rental, the Index known on the date
prescribed for the making of such payment or the date of actual payment,
whichever is the higher.

 

If, on the date of actual
payment of any of the payments of the base rental, the New Index is higher than
the Base Index, then the payment shall increase by the appropriate rate of
increase of the New Index over the Base Index. If on the date of actual payment
of any of the payments of the rental, the New Index is equal or less than the
Base Index, the payment shall remain unchanged.

 

7.2           In order to facilitate the collection of rental payments and the
linkage differentials thereupon, and any other sum owing to the Lessor from the
Lessee, the Lessee undertakes to provide the Lessor, on such date as may be
prescribed by the Lessor and in any event within 7 days of the date of
execution of this Contract or 7 days before the Date of Delivery, whichever is
the earlier, permission to debit its account in the form acceptable at Bank
Leumi Le-Israel Ltd. It is hereby declared, for the avoidance of doubt, that
receipt of such permission and any use thereof made by the Lessor shall not be
deemed to be payment unless all of the payments are indeed made in full and on
time.

 

7.3           Where any two consecutive payments of rental and/or any other sum owing
to the Lesssor by the Lessee are not paid on time in respect of the above
amounts, within 7 days of the giving of notice in writing of such by the Lessor
to the Lessee, then all of the rest of the payments of rental shall become
immediately payable and the Lessee shall be required to pay the entire rental
for the entire Term of the Lease not yet paid as at such date, within two
business days of the Lessor’s first demand, without derogating from the Lessor’s
right to view non-payment on time as breach of the Contract and of its rights
deriving therefrom. It is hereby declared, for the avoidance of doubt, that
collection of the rental in such a case shall not be deemed to be a waiver of
or consent by the Lessor to breach of the Contract by the Lessee.

 

7.4           Notwithstanding the aforesaid, the rental shall be increased at the
beginning of each year, as of the second year of the Term of the Lease, by the
rate set out in the Schedule, and the provisions of clause 7.1 above shall
apply to such increased rental sums mutatis
mutandis.

 

7.5           For the avoidance of doubt, the obligation to pay rental and other
payments owing to the Lessor from the Lessee shall pertain to the Lessee
absolutely, and failure to submit a rental account by the Lessor shall not
derogate from or cause harm to the Lessee’s duty.

 

7.6           The Lessor shall accredit any sum received from the Lessee at its
absolute discretion on account of sums that the Lessee owes the Lessor at such
time.

 

7.7           The provisions of this clause constitute a fundamental condition of the
Contract and breach of them or of any part of them shall constitute a
fundamental breach of the Contract.

 

8.             Taxes, Commissions and Other Payments

 

8.1           In addition to the rental and without derogating from the generality of
the aforesaid in section 4.3 above, the Lessee undertakes to make the following
payments during the Term of the Lease (hereinafter: the “Lessee’s Payments”).

 

8.1.1        All taxes, commissions, rates, levies, mandatory payments and expenses
(hereinafter jointly: “taxes”) whether municipal or governmental, paid at
present and/or to be paid in the future, whether currently existing or to be
imposed in the future, for the Premises and the business being conducted
thereupon, whether such taxes apply by law to owners, lessees or persons in
possession of property, or whether they apply to owners.

 

The taxes applicable to a
lessee or person in possession shall be paid by the Lessee directly to the
competent authorities, and the taxes owed by owners shall be paid by the Lessee
to the Lessor on the date of presentation of a document demanding payment of
such taxes to the competent authority.

 

8.1.2        The commissions and payments for a water meter and an electricity
meter.

 

8.1.3        Value added tax on the rental and any other payment owed by the Lessee
under this Contract, which shall be paid together with any other payment in
respect of which it is owed.

 

8.1.4        Stamp duty owing on this Contract, the documents and other deeds under
or on account of this.

 

8.1.5        All fees and payments made for the consumption of water and electricity
on the Premises, and applying to use of telephone if installed during the Term
of the Lease.

 

8.1.6        Any expense that may be incurred as a result of unreasonable and/or extraordinary
use of the Premises and their environs, including, but without derogating from
the generality of the aforesaid, expenses for the removal of waste caused by
the Lessee, repair of the sewage system, etc.

 

8.1.7        Expenses regarding insurance to be taken out by the Lessor to cover the
Premises (separately or as part of the insurance covering the 

 

Building), against all such
risks as the Lessor may see fit, and at such insurance sum and other conditions
that the Lessor may prescribe from time to time.

 

In the event that any of the
above payments stem from obligations imposed on the Building in full, the
Lessee shall pay a proportionate share of such payments owing on the Building,
in accordance with the ratio of the area of the Premises to the area of the
Building, gross.

 

8.1.8        Other obligations under any law and/or if set out in the Schedule.

 

8.2           In the even that the Lessee does not make any of the Lessee’s Payments
immediately in accordance with the demand of the competent authority or of the Lessor,
then without derogating from such duty, the Lessor shall be entitled, after
giving prior notice to the Lessee of two business days in advance, to pay such
accounts in lieu of the Lessee, and the Lessee shall be required to refund all
moneys paid by the Lessor to cover any of the Lessee’s Payments as aforesaid,
within 7 days of the Lessor’s first demand.

 

8.3           The provisions of this section constitute a fundamental condition of
this Contract and breach of such or of any part thereof shall constitute a
fundamental breach of this Contract.

 

9.             Non-Application of Tenants Protection Law

 

The Lessee declares and
agrees that the construction of the Premises was completed after August 20,
1968, and that the provisions of the Tenants Protection Law (Consolidated
Version), 5732-1972 or any other law that might replace it shall not apply to
the Premises or to the Lease. The Lessee also declares that apart from the
rental set out in the Schedule and its undertakings to pay the Lessee’s
Payments as set out in clause 8 above, it has not paid and is not paying any
sum whatsoever to the Lessor for the lease and use of the Premises either as
key money or in any other manner whatsoever, and that it shall not be entitled
to key payment or any payment whatsoever upon vacation by it of the Premises.

 

10.           Repairs, Maintenance and Service

 

10.1         10.1.1      The
Lessor undertakes to provide cleaning and maintenance services for the common
property in the Building to such extent and at such quality as it may
prescribe, provided that the common property shall be maintained in a good and
reasonable condition. In consideration for such services, the Lessor shall be
entitled to collect a service fee from the tenants of the Building including
the Lessee, which shall be equal to the sum of all of the expenses and
outgoings that the Lessor shall incur in providing the services as set out in
the Schedule, plus 15% (hereinafter – the “Building Service Fee”).

 

The Service Fee which the
Lessee shall be required to pay the Lessor, shall be the same proportion of the
Building Service Fee as the gross area of the Premises is to the total gross
area held by tenants of the Premises [sic], except for the Lessor, so long as
it does not make real use of the area possessed by it, or such other ratio as
may be prescribed by the Lessor taking into account the purpose of the Lease.

 

10.1.2      Supplementary Maintenance Fee for Buildings with Central Cooling System

 

In any building in which
there is a central air conditioning system that relies on a central cooling
tower, the Lessee shall, in addition to the maintenance fee set out above, pay
a sum out of the cost of operation, maintenance and service of the central
cooling system of the Building, equal to the proportionate part of the Premises
out of the entire area of the Building.

 

10.2         Apart from the aforesaid in this clause, the Lessor shall not be under
any obligation or liability for repairs and/or maintenance and/or inspection
and/or services whatsoever (hereinafter: the “Services”) on the Premises and/or
the Building, and the Lessor shall also be under no obligation or liability
whether under this Contract or under any law, for any damage and/or fault
and/or defect of any kind or type whatsoever in the Premises or any equipment
on the Premises, including airconditioning equipment, but with the exception of
the manufacturer’s warranty period, whether such flow from faulty work, faulty
materials, inappropriate materials, or incompatibility with specifications, or
otherwise, whether patent or discoverable, and whether at the beginning of the
Term of the Lease or thereafter, all whether caused by work on the Premises
planned or done by the Lessor, or planned and/or initiated and/or at the
request of the Lessee.

 

10.3         In the event that the Lessor decides, at its discretion and/or is
required by the Institute and/or by any competent, municipal, government or
other authority whatsoever, to perform maintenance and inspection works of any
kind or type whatsoever in any public areas and/or in any private open areas within
the bounds of the Park and/or in any Buildings and/or installations intended to
serve or be used by residents of the Park, or any part thereof, the Lessee
shall be required to pay the Lessor the Service Fee as set out below.

 

The Service Fee that is to be
paid by all of the persons in possession of Buildings at the Park shall be
equal to the sum of all of the expenses and outgoings which the Lessor shall
bear in providing the aforesaid maintenance services, plus 15% (hereinafter:
the “Total Service Fee”). The Service Fee which the Lessee shall be required to
pay the Lessor shall be proportionate to the Total Rental as the gross area of
the Premises is proportionate to the total gross built-up area of all of the
Buildings (including all of the floors) at the Park, held in fact by tenants or
owners, apart from the Lessor, so long as it does not make actual use of the
areas in its possession.

 

Notwithstanding the
aforesaid, the Lessor shall be entitled to charge the Lessee to pay additional
or larger service fees than those that it is required to pay under the above
calculations in the event that the services required as a result of use of the
Premises by the Lessee require greater than usual work or expense than in the
case of other tenants of the Park, or whether the services provided to the
Premises enable greater use of the Premises than that available to other
tenants of the Park. The aforesaid shall apply mutatis
mutandis in the event that the Lessor decides to provide maintenance
and inspection services to the Building.

 

The aforesaid shall not
impose any obligation upon the Lessor to perform any services within the
grounds of the Park or with respect thereto.

 

10.4         In the event that the Lessor is required or decides to effect
maintenance and/or inspection services as set out in clause 10.3 above, the
Lessor shall be entitled to do such via such other body that it may prescribe,
and shall be entitled to require that the Lessee, at any time, enters into a
service contract with such body in the form prescribed by it, provided that the
maintenance and/or inspection fee that the Lessee is required to pay shall be
set in accordance with the principles set out in clause 10.3 above.

 

10.5         It is hereby agreed that the cost of any repair done by the Lessor as
part of the services to be given by it under this clause which is covered by
insurance that the Lessee has participated in paying for shall not be included
in the expenses for the purpose of calculating the Service Fee.

 

11.           Use of the Premises

 

11.1         The Lessee shall be responsible for obtaining all of the licenses
required to run its business on the Premises from the competent authorities,
within the context of the purpose of the Lease, and it undertakes to run such
only in accordance with the aforesaid licenses and the requirements of the law
and any competent authority.

 

The Lessee declares that it
has checked and knows that it is possible to obtain all of the licenses as set
out in this clause, and that the Lessor shall not be under any liability in the
event that the Lessee does not succeed in obtaining such.

 

11.2         The Lessee shall not keep any materials, tools, equipment, produce,
inventory or any other chattels whatsoever (hereinafter termed generally – the “chattels”)
outside of the Premises without the Lessor’s consent. In the event that any
chattels are found outside of the Premises without the Lessor’s consent having
been given to such, the Lessor shall be entitled to remove them from such place
at the Lessee’s expense, and it shall not be responsible for the integrity of
such chattels.

 

11.3         The Lessee shall fulfill all of the laws, regulations and by-laws
applying to the Premises, the use thereof and the business, the work and
operations done therein.

 

11.4         The Premises or any part of them must not be used in such a way that
might result in the causing of noises, odors, shocks, pollution, smoke, dust or
any other nuisances outside the realm of what is reasonable, taking into
account the nature of the Park in general and the nature of the immediate surrounds
of the Premises in particular.

 

11.5         The Lessee shall not throw waste of a quality or quantity that might
harm the sewage system into such system, or that might harm the proper
operation thereof, or that might endanger ordinary use of water sources, rivers,
lakes, the sea or any other source.

 

For the purposes of this
paragraph – the “sewage system” - central sewage or absorbent pits and channel
and drainage systems and water purification plants, if and to the extent in
existence.

 

The Lessee shall be required
to ensure that the waste water does not contain solid substances that might
damage pipes or channels, or that might harm sewage piping, control boxes,
measuring equipment, purification plant, or that might block such.

 

11.6         The Lessee undertakes not to hang, install or paint and signs, symbols
or other advertisements on any part of the Building in which the Premises are
situated without the consent of the Lessor in advance. The Lessee shall have
the right to receive signage at the entrance to the Park, on the Building and
on the floor where the Premises are situated, at its expense.

 

11.7         Places outside of the Premises may only be used in the manner and way
prescribed by the Lessor from time to time.

 

11.8         The Lessee undertakes not to use the Premises or any materials or
instruments on them, nor to do any acts on the Premises which involve risks
that deviate from the insured risks as set out in section 8.1.7 above, unless
the Lessor’s consent to such is given in writing and in advance. Where such
consent is given, the Lessee undertakes to maintain such insurance to the
satisfaction of the Lessor, against any damage to person or property which
might be caused as a result of such risks, without derogating from the Lessor’s
right to take out the additional insurance as above itself, and from the Lessee’s
obligation to refund any sum expended by the Lessor with respect thereto
immediately upon its first demand.

 

11.9         The Lessee shall use the Premises and their surrounds so as not to
cause any disturbance to the other tenants of the Building, to their welfare or
enjoyment of their premises, and maintaining the common property and facilities
in the Building and keeping those clean.

 

11.10       Without derogating from the provisions of this clause above, the Lessee
undertakes that no use will be made of the property which might cause noise
and/or nuisance and/or pollution and/or any auxiliary result which contravenes
the provisions of any law, and without derogating from the generality of the
aforesaid, use shall not be made of the Premises which involves and/or creates,
directly and/or indirectly, any chemical compounds and/or smoke and/or gases
and/or bad odors and/or other active substances which might and/or are likely
to cause harm to the environment in any manner whatsoever.

 

11.11       The provisions of this clause constitute a fundamental condition of the
Contract and breach thereof or of any part thereof shall constitute a
fundamental breach of the Contract.

 

12.           No alterations

 

12.1         The
Lessee undertakes not to effect or perform any alterations, repairs,
improvements, additions or any building works whatsoever of any significance
whatsoever, to the Premises (all such to be known hereinafter as the “Works”),
without receiving the Lessor’s prior written consent to such.

 

It is
particularly emphasized hereby that no bars or airconditioning units shall be
installed without the prior written consent of the Lessor, and in the manner
that the Lessor shall prescribe.

 

Should Works
be done without the Lessor’s consent, then without derogating from its right to
view such as a breach of the Contract, the Lessor shall be entitled:

 

12.1.1      To
require that the Lessee demolish and/or dismantle and/or remove the Works from
the Premises and in such a case, the Lessee shall be required to make such
repairs to the Premises as may be required as a result, in order to return the
Premises to their state prior to the performance of the Works, and to complete
all of the above within 14 days of the Lessor’s demand. In the event that the
Lessee does not do so, the Lessor shall be entitled to do so at the Lessee’s
expense; or

 

12.1.2      To
keep the Works as its own property and the Lessee agrees that such works shall
be the Lessee’s exclusive property without the Lessee being owed anything in
return for such.

 

12.2         Where
Works are done with the Lessor’s consent, then upon vacation of the Premises by
the Lessee, the Lessee shall have the following choice:

 

12.2.1      To
demolish and/or dismantle and/or remove the Works from the Premises in which case
the Lessee shall be required to effect such alterations to the Premises as may
be required as a result of such, in order to restore such part of the Premises
where the Works were performed, to their prior state before performance of the
Works, and to conclude all such no later than the end of the Term of the Lease
under this Contract. Should the Lessee not do so, the Lessor shall be entitled
to do so at the Lessee’s expense;  or

 

12.2.2      To
keep the Works on the Premises in which case, they shall become the Lessor’s
property without the Lessee being owned anything in return for such.

 

12.3         The
provisions of this section constitute a fundamental condition of the Contract
and breach thereof or of any part thereof shall constitute a fundamental breach
of the Contract.

 

13.           Furniture
and equipment

 

The Lessee
shall be entitled to furnish the Premises and to install equipment thereupon
provided that the installation of furniture and equipment shall not harm the
Premises. The equipment which the Lessee shall be entitled to install and
operate on the Premises shall be subject to clause 12 above.

 

14.           Preservation
of Premises

 

14.1         The
Lessee undertakes to use the Premises in a careful and reasonable manner, to
keep the surrounds of the Premises clean, and to prevent any damage or fault to
the Premises, including all of the facilities used in the Premises themselves
or jointly with other premises.

 

14.2         The
Lessee shall be required to remedy any damage and/or fault caused to the
Premises and the facilities as set out in clause 14.1 above immediately, and to
replace any accessory installed on the Premises which may have been lost or
broken with another similar accessory immediately.

 

14.3         Should
the Lessee not effect any repair that it is required to make as aforesaid, or
not replace any unit that it is required to replace as aforesaid, the Lessor
shall be entitled but not required to do so at the Lessee’s expense, and in any
event, the Lessee shall be required to compensate the Lessor in full for any
damage, fault, loss or defacement as aforesaid.

 

14.4         The
provisions of this section constitute a fundamental condition of this Contract
and breach of them or of any part of them shall constitute a fundamental breach
of the Contract.

 

15.           Liability
to Third Party

 

15.1         The
Lessee shall be liable to the Lessor and to any third party for all damage of
any kind or type whatsoever, which may be caused to any person or property,
including, but without derogating from the generality of the aforesaid,
visitors on the Premises, the employees of the Lessee and any other person who
may be on the Premises, stemming from the condition of the Premises and/or the
equipment installed on them and/or the work, business or act or omission which
may occur on the Premises and/or the conduct of the Lessee and/or its employees
and/or invitees and/or suppliers and/or service providers who are on the
Premises or in their surrounds, in the Lessee’s service and/or with the Lessee’s
permission and/or by any other person or entity, whether on the Premises with
permission or otherwise, whether randomly or otherwise.

 

15.2         Without
derogating from the provisions of clause 15.1 above, the Lessee undertakes to
take all steps to cancel any demand and/or suit that may be filed against the
Lessor for any damage as set out in clause 15.1 above, and to indemnify the
Lessor for the sum of all moneys that the Lessor may be required to pay by
virtue of such demand and/or suit as aforesaid, and for all of the other
results thereof, immediately upon the Lessor’s first demand for such.

 

15.3         The
provisions of this clause constitute a fundamental condition of the Contract
and breach thereof or of any part thereof shall constitute a fundamental breach
of the Contract.

 

16.           Insurance

 

16.1         Without
derogating from the Lessee’s undertakings under section 15 above, the Lessee
undertakes to take out, at its expense, and keep throughout the entire Term of
the Lease, third party insurance, including coverage of its employees, against
any bodily injury or damage to property, flowing in any way from the Premises
or relating to the Premises and anything done thereupon, in the sum appropriate
for the risk.

 

The Lessee
shall ensure that the insurance policy is kept in full force throughout the
entire Term of the Lease, and shall pay all premiums in full and on time. Should
the Lessee not take out the insurance contract under the provisions of this
clause, or not pay the premiums, or part thereof, then without derogating from
the Lessee’s liability, the Lessor shall be entitled to do so at the Lessee’s
expense, and the Lessee shall be required to refund the Lessor any expenses
incurred with respect to such, immediately upon its first demand.

 

For the
avoidance of doubt, it is expressly declared that the aforesaid shall not
require that the Lessor arrange any insurance whatsoever, and the Lessee hereby
releases the Lessor in advance from any liability, and in the event that the
Lessor does not arrange the insurance policies or any of them, in general, or
in the event that the Lessor does not arrange them on time, or in the correct
manner, or in the event that the insurance company does not pay for the damage
or the loss, due to a defect in the form of the insurance or due to a failure
of demand, or for some other reason.

 

16.2         The
following provisions shall apply to the above insurance:

 

16.2.1      At
the Lessor’s demand from time to time, the Lessee shall increase the sum of the
insurance so as to comply with the size of the risk at such time, as prescribed
by the Lessor.

 

16.2.2      The
insurance shall be taken out at an insurance company or companies with of
appropriate standing as prescribed by the Lessor and the Lessee.

 

16.2.3      Any
amendment to the conditions of the policy and any warning, demand, suit, claim,
settlement, negotiations, or any other action shall require the consent of the
Lessor and the Lessee.

 

16.2.4      The
policy shall be in the joint names of the Lessor and the Lessee insured under
the policy. The policy shall include a provision that despite any contrary
provision in the policy, for the purposes of insurance thereunder, the world “insured”
shall be deemed to apply to any of the entities included in the insured, as if
the policy were taken out separately for each of them, and that the insurer
waives any right of subrogation against any and all of the insured parties. A
third party insurance policy shall also include a cross-liability clause.

 

16.2.5      The
Lessee must deposit a copy of the policy and all of the appendixes thereto
and/or certificates with similar consequences from the insurers with the Lessor
and any amendment, addition and/or new policies as may be in existence from
time to time, within 30 days of the date of their coming into being, and shall
deposit with the Lessor the receipts for payment of the premiums from time to
time.

 

16.2.6      Should
the Lessor decide to file a claim under the policy, the Lessee undertakes, at
the Lessor’s demand, to cooperate with it in any way that the Lessor may
instruct.

 

16.3         The
provisions of this clause constitute a fundamental condition of the Contract
and breach thereof or of any part thereof shall constitute a fundamental breach
of the Contract.

 

17.           Lessor’s
Access to the Premises

 

17.1         The
right of the Lessor or the Institute or persons acting on their behalf to build
additional levels and/or do other construction work in or around the Building
and/or pass pipes, channels and other conduits for water, sewage, wiring, gas,
electricity, telephone or for any other purpose through (or over) the Premises,
and to do any other work or installation on the Premises, for the purpose of
use of the property near the Premises or for any other similar purpose,
provided that the use of such powers as aforesaid is in such a manner as
reasonably reduces the possibility of discomfort and interference caused as a
result, and on condition that the Lessor or the Institute do such or cause
persons acting on their behalf or working for them to make all necessary
repairs to those parts of the Premises as may be damaged as a result of the
doing of such works, in order to restore them to their previous condition.

 

17.2         The
Lessor or persons acting on its behalf shall have the right, upon coordination
with the Lessee:

 

17.2.1      To
enter the Premises at any acceptable time in order to check whether the
conditions of this Contract are being performed.

 

17.2.2      To
enter the Premises at any acceptable time and to make such repairs as may be
required to be made to the Premises for the purpose of the Building or any part
thereof.

 

17.2.3      In
the last six months of the Lease, to enter the Premises during ordinary working
hours, with visitors.

 

17.2.4      To
instruct the Lessee to permit the performance on the Premises of any repairs
that it may be necessary to make within the Premises, whether such relate to
the Premises or to other parts of the Building.

 

17.3         The
Lessee undertakes not to prevent the Lessor from accessing the Premises as set
out in clauses 17.1 and 17.2 above, and to enable it or the Institute to
perform such works as set out in the above clauses.

 

18.           Non
Transfer of Rights

 

18.1         The
Lessee undertakes not to transfer the lease of the Premises or any part thereof
to any other person, not to deliver, transfer, or lease the Premises or any
part thereof to any other person, not to permit any other person to use the
Premises or any part thereof, not to share in possession and/or use and/or
enjoyment of the Premises or any part thereof or the business being run on the
Premises with any other person, and not to grant any other person any easement
or right whatsoever in the Premises or any part thereof, whether for valuable
consideration or otherwise, and not to transfer, charge or mortgage its rights
under this Contract.

 

18.2         For
the purpose of clause 18.1 above, in the event that the Lessee is a
corporation, then any action of any kind or type whatsoever which might cause a
change in the control of the Lessee shall be deemed to be transfer which
requires the Company’s consent.

 

18.3         The
provisions of this clause constitute a fundamental condition of this Contract and
breach thereof or of any part thereof shall constitute a fundamental breach of
the Contract.

 

19.           Vacation

 

19.1         The
Lessee undertakes that no later than the date of termination of the Term of the
Lease and/or if the Lease is rescinded by the Lessor as a result of breach of
it by the Lessee as set out in clause 23.1 below, it shall vacate the Premises
and deliver them to the Lessor. The Lessee undertakes that on the date of
vacation of the Premises and return of them to the Lessor, the Premises shall
be vacant and free of any person or object, the Premises being in good
condition, fit and orderly, as it received them, subject to the provisions of
clauses 3.2 and 12 above,

 

and subject to
wear and tear flowing from reasonable and cautious use by the Lessee of the
Premises, in accordance with the provisions of this Contract. For the avoidance
of doubt, it is hereby agreed that the Premises shall be returned to the Lessor
newly painted or whitewashed by the Lessee and at its expense, using paint or
whitewash of such color, substance and quality as it received the Premises from
the Lessor.

 

19.2         Should
the Lessee not perform any of its undertakings as set out in clause 19.1 above,
then without derogating from the right of the Lessor to exercise its rights in
such manner as it may see fit and without derogating from any other right that
may be available to the Lessor under any law and/or contract under the
circumstances of the case, the Lessee shall be required to pay the Company, so
long as it has not performed the above undertakings, an appropriate usage fee
in the sum set out in the Schedule, plus VAT, for each day, by way of
liquidated damages.

 

Likewise, the
Lessee shall be required to pay the Service Fee for the Building and the total
Service Fee, plus VAT, for the period of delay in vacating, and it is hereby
agreed that with respect to payment of the Service Fee as aforesaid, delay of
any part of a month in vacating shall be deemed to be delay of one whole month.

 

The
appropriate Service Fee shall be linked to the Index, and the provisions of
clause 7.1 above shall apply mutatis
mutandis.

 

The date of
payment of the liquidated damages with respect to each day of delay in vacating
shall be the beginning of each such day of delay.

 

It is
expressly agreed and declared between the Parties that the sum of liquidated
damages has been set after a careful and considered assessment with reasonable
relation to the damages that might be foreseen at the time of entry into this
Contract, which may be incurred by the Lessor as a result of non-vacation of
the Premises by the Lessee at such time. The Lessee shall not make any claim
that the aforesaid sum amounts to a fine, and the Lessee shall be estopped from
making such a claim.

 

19.3         It
is hereby expressly agreed and declared between the Parties that the provisions
of clause 19.2 above shall not release the Lessor from its undertakings under
clause 19.1 above and/or grant the Lessee any right whatsoever of any kind or
type whatsoever, including, but without derogating from the generality of the
aforesaid, any lease right anchored in any law and/or amount to consent by the
Lessor to extension of the Term of the Lease of the Premises by the Lessee
and/or amount to any waiver whatsoever by the Lessor to the Lessee and/or derogate
or detract from its rights and/or harm the Lessor’s right to receive any other
remedy or relief under this Contract and under any

 

law, including
eviction of the Lessee from the Premises and other compensation for any damage
that might be caused to the Lessor due to failure by the Lessee to vacate the
Premises on time.

 

19.4         In
the event that during vacation of the Premises and return of the Premises to
the Lessor the Premises are not in the condition set out in clause 19.1 above,
then the Lessee shall be required to repay the Lessor, immediately upon its
first demand, any expense that the Lessor may incur in order to bring the
Premises to the condition in which the Lessee was required to restore the
Premises to the Lessor and any expenses incurred in respect thereof, and to
compensate it for any damage, loss or prevention of profits flowing from the
condition of the Premises and/or the need to bring them into a good and proper
state, and from performance of the works required for doing so.

 

19.5         Vacation
of the Premises and return of them to the Lessor shall be in the presence of
the Lessor and the Lessee who shall draft a protocol of vacation reflecting the
condition of the Premises. In the event that vacation is not in the presence of
the Lessee, due to the Lessee’s fault, then the protocol shall be drafted by
the Lessor alone, and the contents of it shall bind the Lessee.

 

19.6         In
addition to any right that the Lessor may have under any law and this Contract,
in the event that the Lessee does not vacate the Premises on time, the Lessor
or a person appointed by it shall be authorized and entitled, and the Lessee
hereby gives its consent and permission to such, to enter the Premises by
breaking and changing the locks, and by use of reasonable force, to take
exclusive possession thereof, and to eject the Lessee’s objects from it and put
them in storage at the Lessee’s expense and liability wherever it may see fit,
and the Lessee shall be required to refund the Lessor any expenses that the
Lessor may incur in respect thereof. The Lessor shall not be liable for any
damage of any kind whatsoever which may be caused to the Lessee and/or its
property, if caused, when doing the aforesaid acts by the Lessor and the Lessee
shall not have, and hereby waives, any right or claim against the Lessor for
doing any of the above acts.

 

19.7         The
provisions of this clause constitute a fundamental clause of the Contract and
the breach thereof or of any part thereof shall constitute a fundamental breach
of the Contract.

 

20.           Securities

 

20.1         20.1.1      In
assurance of the fulfillment of the Lessee’s undertakings under this Contract,
the Lessee shall, within 48 hours of the date of execution of this Contract,
provide the Lessor with a bank guarantee in the form acceptable by the Lessor,
in the sum equal to the rental for 9 months of the Lease plus VAT, and a
maintenance fee of 9 months of the Lease in accordance with

 

the last known
rate prior to the giving of the guarantee as aforesaid, plus VAT. The sum of
the guarantee shall be linked to the Index and the provisions of clause 7.1
above shall apply to the linkage of the sum of the guarantee, mutatis mutandis.

 

20.1.2      Where
the rental and/or maintenance fee and/or VAT rates are updated and/or amended,
the Lessee shall, within 14 days, give the Lessor a substitute or additional
bank guarantee which shall ensure payment of the rental for the period of nine
months in accordance with the new payment rates.

 

20.1.3      The
Lessee undertakes to renew the guarantee or guarantees from time to time, no
more than seven days after the date on which such are going to expire. Should
the Lessee not do so, the Company shall be entitled to exercise such, without
releasing the Lessee from its undertaking to issue a new guarantee or
guarantees to the Company and without releasing the Lessee from any of its
undertakings under this Contract. Should the sum exercised under the guarantee
be greater than the sum owing to the Lessor from the Lessee at such time, the
balance shall be deposited with the Lessor in a deposit under such conditions
as the Company may prescribe at such time. The Lessee shall not be entitled to
any compensation and/or other payment for direct or indirect damage or any
other payment whatsoever for exercise of the guarantee or guarantees by the
Lessor under this section.

 

20.2         In
the event that any money is owing from the Lessee to the Lessor, if owing,
under the provisions of this Contract and/or for breach hereof, the Lessor
shall be entitled to exercise the bank guarantee deposited with it in the total
sum equal to the amounts owing to the Lessor from the Lessee in the event so
owing.

 

20.3         It
is agreed and declared between the Parties that the delivery of the bank
guarantee by the Lessee to the Lessor and/or presentation of it for payment by
the Lessee shall not derogate from the Lessor’s right to collect the damages
caused to it as a result of breach of any of the Lessee’s undertakings under
this Contract from the Lessee in any way possible, and shall not release the
Lessee from any of its undertakings under this Contract and/or grant the Lessee
any right whatsoever that may be protected by law and/or restrict the Lessor in
exercising the aforesaid rights and/or restrict the sum of compensation and/or
damages that the Lessor shall be entitled to receive from the Lessee due to
breach of any of its undertakings under this Contract.

 

20.4         The
Lessor shall be entitled to make use of the bank guarantee and/or guarantees
under clause 20.2 above at its absolute discretion and such use of the guarantees
or any of them shall not harm any of the Lessor’s rights under any contract
and/or law.

 

20.5         Where
the Lessor is not owed any sum from the Lessee under this Contract, the Lessor
shall be required, at the end of 90 days after the date of return of the
Premises to the Lessor by the Lessee, to return the bank guarantee to the
Lessee subject to presentation of all of the receipts and consents of
performance of the various payments by the Lessee.

 

20.6         The
provisions of this clause constitute a fundamental condition of the Contract
and the breach thereof shall constitute a fundamental breach of the Contract.

 

21.           Indemnification
of Lessor

 

In the event
that the Lessee does not perform any of its undertakings under this Contract,
the Lessor shall be entitled (but not required), in addition to and without
derogating from its rights and powers under this Contract and under the law, to
pay for, do and perform whatever the Lessee ought to have done, and the Lessee
shall be required to refund and pay the Lessor, immediately upon its demand,
any sum and any expense that the Lessor shall incur with respect to the above.

 

22.           Interest

 

Without
derogating from any of the Lessor’s rights under the provisions of this
Contract or under any law, in the even that the Lessee delays on any payment
which it is required to make to the Lessor under this Contract, the Lessee
shall be required to pay the Lessor interest on the sum in delay plus VAT at
law. The rate of the interest shall be the maximum rate permitted by law at
such time, and if there is no legal limitation on the rate of interest – then
interest at the maximum rate that Bank Leumi Le-Israel Ltd. collects at such
time for unauthorized overdrafts on current accounts and the certificate of the
manager of the central branch of that bank shall be binding in that
regard;  or interest in the sum of 5% per
month (not linked) or linkage differentials from the increase of the CPI from
the date on which the Lessee was to make the payment to the Lessor, until the
date of actual payment, plus interest at a rate of 48% per year, whichever is
the highest.

 

23.           Breach

 

23.1         Should
either party breach or fail to perform any of its undertakings under this
Contract, it shall be required to compensate the performing party for any
damage and loss incurred to the performing party as a result, without
derogating from the right of the performing party to any remedy or other and/or
additional relief including specific performance or an eviction order.

 

	
   

  	
  23.2

  	
  Should the
  Lessee commit a fundamental breach as defined in this Contract and/or as
  defined in any law, and/or should the Lessee commit a non-fundamental breach
  and not remedy such breach despite 15 days having passed since receipt of a
  warning from the Lessor, the Lessor shall be entitled to give notice to the
  Lessee that the Lease under this Contract is null and void, and the Lessee
  shall be required to vacate the Premises as set out in clause 19 above,
  within 10 days of the date of the notice as aforesaid, without harming the Lessor’s
  rights under this Contract, including but without derogating from the
  generality of the aforesaid, the right to receive all of the rental and other
  sums to which it would have been entitled had the lease remained in force,
  and without derogating from its right to receive any relief or other remedy
  including compensation for any damage that might be caused to the Lessor as a
  result of the breach or non-performance as aforesaid.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  It is agreed
  between the Parties that the above 10 year period has been prescribed by them
  as a reasonable time fro the purposes of the Contracts (Remedies for Breach
  of Contract) Law, 5731-1970.

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  Transfer of
  Rights by the Lessor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Lessor
  shall be entitled to lease and/or sell its rights in the Park and/or the
  Building and/or the Premises to any person and for any purpose (including a
  purpose similar to the purpose of the Lease) which it may see fit, and to do
  all construction works on the Building in which the Premises and their
  surrounds are situated, even if such might constitute a structural change to
  the Building, without needing any consent from the Lessee, without harming
  the Lessee’s rights in the Premises under this Contract. 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  The Lessee
  declares that it is aware that the Lessor does not undertake that no business
  identical to or in competition with the business that the Lessee is running
  on the Premises will be conducted in other units in the Building or anywhere
  else in the Park.

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  25.1

  	
  25.1.1

  	
  No conduct
  by either of the Parties shall be deemed to be a waiver of any of its rights
  under this Contract, or under any law, or as a waiver or consent by such
  Party to any breach or non-performance of a condition of this Contract by the
  other Party, or as granting delay or an extension to do any act which the
  other Party is required to do or as any change, cancellation or addition to
  any condition whatsoever, unless such waiver, consent, delay, change,
  cancellation or addition are made expressly and in writing.

  
	
   

  	
   

  	
   

  
	
   

  	
  25.1.2

  	
  It is hereby
  expressly agreed that performance of all and each of the Lessor’s
  undertakings under this Contract shall be

  

 

conditional
upon the Lessee’s first performing its undertakings under this Contract, as the
case may be, and the Lessor is entitled, without derogating from any other
provision of this Contract, to delay performance of any of its undertakings,
until the Lessee performs its undertakings.

 

25.1.3      It
is agreed and declared that the provisions of this Lease Contract act as a
stipulation on the Leasing and Borrowing Law, 5731-1971, and that the
provisions of Chapter A of that Law shall not apply to the Lease under this
Contract.

 

25.2         In
the event that the Lesssee is a foreign resident, the Lessee undertakes to
perform its undertakings under this Contract in accordance with the Supervision
of Currency Law, 5738-1978 and the regulations, orders and permits made
thereunder.

 

25.3         The
Lessor’s accounts shall be prima facie evidence of any charge and any
accounting contained in them, and any claim by the Lessor of the Lessee the sum
and details of which are approved by an accountant shall bind the Lessee and
the Lessee agrees that a written reference shall be sufficient for submission
of it to court in summary proceedings.

 

25.4         The
Parties agree that the competent Court in the city of Tel Aviv shall have sole
and exclusive jurisdiction with respect to this Contract and the contents of
it.

 

25.5         The
addresses of the Parties shall be as set out alongside their names at the
beginning of this Contract and any notice sent to either Party at the address
appearing alongside their name shall be deemed to have been received by it
within 72 hours of being sent by registered mail.

 

Should the
Lessee be a number of individuals, notice shall be deemed to have been sent to
all of the individuals in the Lessee if sent to one of the individuals of the
Lessee to the above address.

 

In witness whereof, the Parties have hereunto
set their hands on the above date:

 

	
   

  	
  [ILLEGIBLE]

  	
   

  	
   

  	
  /s/ Daniel
  Zurr

  	
   

  
	
   

  	
  The Lessor

  	
   

  	
  The Lessee

  

 

List of
Annexes

 

Annex A – the Schedule

 

Annex B – Location of the
Building in the Park

 

Annex C – Plan of the Premises

 

Annex A

 

Schedule to
QBA Enterprises Ltd. Contract of December
15, 1995

 

For clauses 2, 3, 4, 7

 

	
  No.

  	
   

  	
  The

  Building

  multi-

  purpose

  building

  no., 3

  	
   

  	
  Gross

  area

  in

  sqm

  	
   

  	
  Date of delivery

  and

  commencement

  of Term of Lease

  	
   

  	
  Date of

  termination

  of Term of

  Lease

  	
   

  	
  Base

  Rental

  per

  Month

  	
   

  	
  Linked to

  base

  insterest

  
	
   

  	
   

  	
  Level 4 -
  North wing

  	
   

  	
  393

  	
   

  	
  November
  1995

  	
   

  	
  October 31,
  1998

  	
   

  	
  12,993

  	
   

  	
  Novemeber
  1994 (118.7 points)

  Base – 1994

  

 

	
  For clause 5

  	
   

  	
  1.

  	
   

  	
  The Lessor
  as, at its expense, adjusted the Premises for the Lessee’s needs in
  accordance with an architectural plan submitted to the Lessor and approved by
  the Lessor. The adjustments to include: demolition and construction of
  plaster partitions, acoustic ceiling, carpet, lighting, PVC, telephone point
  and electrical socket (x 3) for every 15 sqm gross, lighting, air con via
  split air conditioners, construction of toilets and kitchenette on Premises.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Work
  standards - $135 per sqm gross not including airconditioning. Work beyond
  above standard to be financed by the Lessee. Payment for additional work to
  be done no later than the date of delivery and as condition of delivery.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.

  	
   

  	
  The Lessor
  shall itself and at its expense install signage setting out the Lessee’s
  name, at the entrance to Kiryat Weizmann, and on the Building in which the
  Premises are situated (at the entrance and on the floor).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  For clause 6

  	
   

  	
  Purpose of
  the Lease: development, manufacture and marketing of biotechnological
  products.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  For clause
  7.1

  	
   

  	
  The base
  rental, plus maintenance fee and VAT at law, to be paid in the following
  installments, on the following dates and in the following manner:

  

 

 

1.             Prior
to execution of this Contract, the rental and maintenance fee shall be paid for
the first three months of the Lease. From this sum, the sum of the downpayment
already paid by the Lessee, linked to the Index, shall be deducted.

 

2.             As
of the 1st day of the fourth month of the Lease, the rental and maintenance fee
for three months shall be paid in advance, on the 1st day of the month every
third month for the coming three months – payment being by way of permission to
debit account.

 

3.             Rental
for the lease of part of a month shall be paid in accordance with the relative
portion of such at the end of the month.

 

For clause 10.1                      The total maintenance fee shall
be NIS 3.07 per sqm gross per month, linked to the Index for October 1994
(117.2 points). The maintenance fee might change in the future.

 

For clause 10.2                      The Lessee shall have a 12 month
warranty from the Lessor for construction and lease of the Premises for the
Lessee’s purpose done by it, in accordance with the plan submitted by the
Lessee and including the air conditioning.

 

For clause 11.8                      Subject to the provisions of
clause 11, and subject to the receipt of all of the permits and consents from
the authorities required under any law, the Lessee shall be entitled use
chemical substances and radioactive substances on the premises as is usual in
the biotechnological industry.

 

For clause 19.2                      Appropriate usage fee per day:
double the monthly rental divided by 30.

 

For clause 20                         In assurance of the Lease
agreement, the Lessee shall provide the Lessor, no more than 7 days after the
date of execution of this Agreement and as a condition of delivery of the
Premises, a bank guarantee the total sum of which shall be equal to the rental
and maintenance fee plus VAT at law for 9 months of th lease.

 

Special conditions

 

1.             The
Lessor shall provide the Lessee with 7 marked parking spaces in the parking
lots of multi-purpose buildings 1-3.

 

2.             Due
to delay in delivery of plans and due to the continued transfer of building
requirements after completion of works, the period of the works extended beyond
what was planned.

 

The
compensation to be paid by the Lessee to the Lessor on account of the above
shall be agreed upon separately before delivery of the Premises to the Lessee.

 

Annex C

 

[Plant of
Multi-Purpose Building – Kiryat Weizmann]

 

Annex B

 

[Plan of
Location of Buildings in Park]

 

Annex
D

 

Date:                          

 

To:

QBA Enterprises Ltd.

P.O. Box. 741

Nes Ziona

 

Dear Sir / Madam,

 

Re:          Use of the Premises

 

In response to your request to
permit                           (hereinafter:
the “invitee”) make use of the premises leased to you, or part thereof, at
Building 3, Kiryat Weizmann Science Park, we hereby inform you that we shall
agree to such subject to the performance of all of the conditions below:

 

1.             The
invitee declares that he has read the Lease Contract of December 15, 1995
between Kiryat Weizmann Science Park Ltd. and
QBA Enterprises Ltd. (hereinafter:
the “Lessee”) and the annexes and schedules thereto (hereinafter: the “Lease Contract”),
has understood the contents of it and agrees and undertakes to fulfill all of
the Lessee’s obligations as are set out in the Lease Contract. That is without
derogating from the Lessee’s undertakings towards the Lessor under the Lease
Contract.

 

2.             Without
derogating from the provisions of clause 1 above, the invitee undertakes that
he agrees:

 

(a)           To
vacate the Premises in the event that the Lessee is required to vacate the
Premises under the Lease Contract (hereinafter: the “Effective Date”).

 

(b)           That
after the Effective Date he shall be deemed to be in unlawful possession of the
Premises and that the Lessor shall be entitled to enter the Premises, seize
possession of them and remove any object or accessory belonging to the invitee
at the invitee’s expense.

 

(c)           That
he shall not take any steps, legal or otherwise, which might prevent the Lessor
from effecting the provisions set out in sub-clause (b) above, and that he
agrees that he provisions of the clauses in the Contract regarding vacating the
Premises shall apply, mutatis mutandis, to him as well.

 

(d)           That
all remedies available to the Lessor under the Lease Contract as against the
Lessee, including the option to exercise the securities held by the Lessor,
shall also apply to him.

 

(e)           That
his status is as invitee only and he must vacate the Premises or any part
thereof in the event that the Lease Contract with the Lessee terminates for any
reason.

 

3.             Without
derogating from any of the above, the Lessee and the invitee agree and undertake
jointly and severally that this permission may be revoked at any time, at the
exclusive discretion of the Lessor, without the need to give any explanation or
reason, by notice from the Lessor to the Lessee and/or the invitee, and the
invitee undertakes to vacate the Premises from any person or object within 14
days of the date of the notice.

 

 

	
   

  	
  Sincerely

  
	
   

  	
  Kiryat
  Weizmann Science Park Ltd.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  
	
   

  	
   

  
			

 

We the undersigned have read
the contents of this letter above and we agree and undertake, jointly and
severally, to perform all of the conditions set out herein

 

	
   

  	
   

  	
   

  	
   

  
	
                   Lessee

  	
               InviteeExhibit 4.01

 

EXECUTION COPY

 

October 17,
2006

 

AGNICO-EAGLE MINES
LIMITED

 

-
and -

 

EACH BANK AND FINANCIAL 

INSTITUTION NOW OR HEREAFTER 

PARTY HERETO

 

- and -

 

THE BANK OF NOVA SCOTIA, AS

CO-ARRANGER, ADMINISTRATIVE 

AGENT AND TECHNICAL AGENT

 

- and -

 

SOCIÉTÉ GÉNÉRALE (CANADA), AS 

CO-ARRANGER AND SYNDICATION 

AGENT

 

- and -

 

N M ROTHSCHILD & SONS
LIMITED, 

AS CO-ARRANGER AND CO-

DOCUMENTATION AGENT

 

- and -

 

THE TORONTO-DOMINION BANK, 

AS CO-DOCUMENTATION AGENT

 

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

 

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1 INTERPRETATION

  	
   

  	
  2

  
	
  1.1

  	
  Certain Defined Terms

  	
   

  	
  2

  
	
  1.2

  	
  Accounting Terms

  	
   

  	
  28

  
	
  1.3

  	
  Headings, etc.

  	
   

  	
  29

  
	
  1.4

  	
  Provisions Reference

  	
   

  	
  29

  
	
  1.5

  	
  Amendment and Restatement

  	
   

  	
  29

  
	
  1.6

  	
  Schedules, etc.

  	
   

  	
  29

  
	
  1.7

  	
  Construction

  	
   

  	
  30

  
	
  ARTICLE 2 CREDIT FACILITY

  	
   

  	
  30

  
	
  2.1

  	
  Creation of the Credit Facility

  	
   

  	
  30

  
	
  2.2

  	
  Amount, Availability and Purpose

  	
   

  	
  30

  
	
  2.3

  	
  Termination of Credit Facility

  	
   

  	
  31

  
	
  ARTICLE 3 ADVANCES

  	
   

  	
  31

  
	
  3.1

  	
  Drawdown Procedures

  	
   

  	
  31

  
	
  3.2

  	
  Prime Rate, Base Rate and LIBOR Advances

  	
   

  	
  33

  
	
  3.3

  	
  LIBOR Periods

  	
   

  	
  33

  
	
  3.4

  	
  Overdraft Facility

  	
   

  	
  33

  
	
  3.5

  	
  Conversions

  	
   

  	
  34

  
	
  3.6

  	
  Execution of Bankers’ Acceptances

  	
   

  	
  34

  
	
  3.7

  	
  Sale of Bankers’ Acceptances

  	
   

  	
  35

  
	
  3.8

  	
  Size and Maturity of Bankers’ Acceptances and
  Rollovers

  	
   

  	
  35

  
	
  3.9

  	
  Co-ordination of BA Advances

  	
   

  	
  35

  
	
  3.10

  	
  Payment of Bankers’ Acceptances

  	
   

  	
  36

  
	
  3.11

  	
  Deemed Advance - Bankers’ Acceptances

  	
   

  	
  37

  
	
  3.12

  	
  Waiver

  	
   

  	
  37

  
	
  3.13

  	
  Degree of Care

  	
   

  	
  37

  
	
  3.14

  	
  Indemnity

  	
   

  	
  37

  
	
  3.15

  	
  Obligations Absolute

  	
   

  	
  37

  
	
  3.16

  	
  Shortfall on Drawdowns, Rollovers and Conversions

  	
   

  	
  38

  
	
  3.17

  	
  Prohibited Use of L/Cs and Bankers’ Acceptances

  	
   

  	
  38

  
	
  3.18

  	
  Issuance and Maturity of L/Cs

  	
   

  	
  38

  
	
  3.19

  	
  Payment of L/Cs

  	
   

  	
  38

  
	
  3.20

  	
  Cash Collateral

  	
   

  	
  39

  
	
  3.21

  	
  Deemed Advance - L/Cs

  	
   

  	
  40

  
	
  3.22

  	
  Lenders’ Obligations Relating to Overdraft Facility
  and L/Cs

  	
   

  	
  40

  
	
  3.23

  	
  Adjustment of Applicable Percentages

  	
   

  	
  41

  
	
  3.24

  	
  Evidence of Indebtedness

  	
   

  	
  41

  
	
  ARTICLE 4 INTEREST RATES AND FEES

  	
   

  	
  41

  
	
  4.1

  	
  Interest Rate and Payment Dates

  	
   

  	
  41

  
	
  4.2

  	
  Computation of Interest and Fees

  	
   

  	
  42

  
	
  4.3

  	
  Provisions Reference

  	
   

  	
  42

  
	
  4.4

  	
  Interest Act

  	
   

  	
  42

  
	
  4.5

  	
  Prohibited Rates of Interest

  	
   

  	
  43

  

 

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  4.6

  	
  Commitment Fee

  	
   

  	
  43

  
	
  4.7

  	
  L/C Fees

  	
   

  	
  43

  
	
  4.8

  	
  Interest under Overdraft Facility

  	
   

  	
  43

  
	
  ARTICLE 5
  REDUCTIONS AND PAYMENTS

  	
   

  	
  44

  
	
  5.1

  	
  General Rule Regarding Repayments

  	
   

  	
  44

  
	
  5.2

  	
  Term and Repayments

  	
   

  	
  44

  
	
  5.3

  	
  Termination and Reduction of Commitments

  	
   

  	
  46

  
	
  5.4

  	
  Mandatory Prepayments

  	
   

  	
  47

  
	
  5.5

  	
  Indemnity

  	
   

  	
  47

  
	
  5.6

  	
  Exchange Rate Fluctuations

  	
   

  	
  48

  
	
  5.7

  	
  Payments

  	
   

  	
  48

  
	
  5.8

  	
  Authorized Transfer

  	
   

  	
  48

  
	
  5.9

  	
  Provisions Reference

  	
   

  	
  49

  
	
  ARTICLE 6
  CLOSING AND DRAWDOWN CONDITIONS

  	
   

  	
  49

  
	
  6.1

  	
  Conditions Precedent to Amendments

  	
   

  	
  49

  
	
  6.2

  	
  Conditions Precedent to All Advances

  	
   

  	
  50

  
	
  6.3

  	
  Place of Closings and Waiver of Conditions

  	
   

  	
  51

  
	
  ARTICLE 7
  SECURITY

  	
   

  	
  52

  
	
  7.1

  	
  Security

  	
   

  	
  52

  
	
  7.3

  	
  Registration

  	
   

  	
  53

  
	
  7.4

  	
  Bank Act Security

  	
   

  	
  53

  
	
  7.5

  	
  Change of Law and Further Assurances

  	
   

  	
  55

  
	
  7.6

  	
  Security for Hedge Indebtedness

  	
   

  	
  55

  
	
  7.7

  	
  Reaffirmation of Existing Security

  	
   

  	
  55

  
	
  ARTICLE 8
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  56

  
	
  8.1

  	
  Representations and Warranties

  	
   

  	
  56

  
	
  8.2

  	
  Disclosure Schedules

  	
   

  	
  64

  
	
  ARTICLE 9
  REPORTING COVENANTS AND PROCEDURES

  	
   

  	
  65

  
	
  9.1

  	
  General Reporting Requirements

  	
   

  	
  65

  
	
  9.2

  	
  Mine Plan

  	
   

  	
  68

  
	
  9.3

  	
  Operating Budgets

  	
   

  	
  68

  
	
  9.4

  	
  Additional Procedures for Updating Mine
  Plan and Operating Budgets

  	
   

  	
  69

  
	
  9.5

  	
  Review of Monthly Operating Report, Mine
  Plan and Operating Budgets

  	
   

  	
  69

  
	
  ARTICLE 10
  COVENANTS OF THE BORROWER

  	
   

  	
  69

  
	
  10.1

  	
  Financial Covenants

  	
   

  	
  69

  
	
  10.2

  	
  Positive Covenants

  	
   

  	
  70

  
	
  10.3

  	
  Negative Covenants

  	
   

  	
  77

  
	
  ARTICLE 11
  EVENTS OF DEFAULT

  	
   

  	
  89

  
	
  11.1

  	
  Events of Default

  	
   

  	
  89

  
	
  11.2

  	
  Remedies

  	
   

  	
  93

  
	
  11.3

  	
  Cash Collateral

  	
   

  	
  93

  
	
  11.4

  	
  Rights Cumulative

  	
   

  	
  94

  
	
  11.5

  	
  Proofs of Claim, Etc.

  	
   

  	
  94

  
	
  11.6

  	
  Priority of Payments

  	
   

  	
  94

  
	
  ARTICLE 12 THE
  ADMINISTRATIVE AGENT AND THE SECURED PARTIES

  	
   

  	
  95

  
	
  12.1

  	
  Provisions Reference

  	
   

  	
  95

  

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  12.2

  	
  Specific Provisions Relating to Hedge
  Counterparties

  	
   

  	
  95

  
	
  ARTICLE 13
  MISCELLANEOUS

  	
   

  	
  97

  
	
  13.1

  	
  Amendments, Waivers, Etc.

  	
   

  	
  97

  
	
  13.2

  	
  Amendments (Subsidiaries), Etc.

  	
   

  	
  98

  
	
  13.3

  	
  Lenders’ Obligations Several

  	
   

  	
  98

  
	
  13.4

  	
  Reproduction of Documents, etc.

  	
   

  	
  99

  
	
  13.5

  	
  No Merger on Judgment

  	
   

  	
  99

  
	
  13.6

  	
  Independent Engineer and Other Advisers

  	
   

  	
  99

  
	
  13.7

  	
  Survival of Representations, Warranties and
  Covenants

  	
   

  	
  99

  
	
  13.8

  	
  Further Assurances

  	
   

  	
  100

  
	
  13.9

  	
  Severability

  	
   

  	
  100

  
	
  13.10

  	
  Conflicts

  	
   

  	
  100

  
	
  13.11

  	
  Time of Essence

  	
   

  	
  100

  
	
  13.12

  	
  English Language

  	
   

  	
  100

  
	
  13.13

  	
  Judgment Currency

  	
   

  	
  100

  
	
  13.14

  	
  Exculpation Provisions

  	
   

  	
  101

  
	
  13.15

  	
  Permitted Liens

  	
   

  	
  101

  
	
  13.16

  	
  Provisions Reference

  	
   

  	
  101

  
	
  13.17

  	
  Indemnification

  	
   

  	
  101

  
	
  13.18

  	
  Environmental Indemnity

  	
   

  	
  102

  

 

iii

 

THIRD AMENDED AND
RESTATED CREDIT AGREEMENT

 

THIS AGREEMENT made as of the 17TH
day of October, 2006.

 

BETWEEN:

 

AGNICO-EAGLE
MINES LIMITED

 

OF
THE FIRST PART

 

-
and -

 

EACH BANK AND FINANCIAL  

INSTITUTION NOW OR HEREAFTER 

PARTY HERETO

 

OF
THE SECOND PART

 

-
and -

 

THE BANK OF NOVA SCOTIA, AS 

CO-ARRANGER, ADMINISTRATIVE 

AGENT AND TECHNICAL AGENT

 

-
and -

 

OF
THE THIRD PART

 

SOCIÉTÉ GÉNÉRALE (CANADA), AS 

CO-ARRANGER AND SYNDICATION 

AGENT

 

-
and -

 

OF
THE FOURTH PART

 

N M ROTHSCHILD
& SONS LIMITED, 

AS CO-ARRANGER AND CO-

DOCUMENTATION AGENT

 

OF
THE FIFTH PART

 

-
and -

 

THE TORONTO-DOMINION BANK, 

AS CO-DOCUMENTATION AGENT

 

OF
THE SIXTH PART

 

 

WHEREAS the parties to this Agreement are
also parties to an amended and restated credit agreement dated as of March 20,
2003, as further amended by Amendment No. 1 to Amended and Restated Credit
Agreement dated October 30, 2003, Amendment No. 2 to Amended and Restated
Credit Agreement dated December 31, 2003 and Amendment No. 3 to Amended and
Restated Credit Agreement dated January 31, 2004 (the “Original Credit Agreement”), and as further
amended and restated by the Second Amended and Restated Credit Agreement dated
as of December 23, 2004, as amended by Amendment No. 1 to Second Amended and
Restated Credit Agreement dated as of October 17, 2005 (as so amended, the “Existing Credit Agreement”);

 

AND WHEREAS the Borrower has requested
certain amendments to the Existing Credit Agreement, and the parties are
entering into this Agreement to amend and restate the Existing Credit Agreement
to provide for amended terms on which credits under the Existing Credit
Agreement will be continued;

 

AND WHEREAS the Arrangers (as defined below)
have made arrangements with the Borrower relating to certain of the amendments
set out herein;

 

AND WHEREAS the Lenders desire to have the
Administrative Agent continue to act on their behalf with regard to certain
matters associated with the Credit Facility and certain of their rights and
obligations set forth herein;

 

AND WHEREAS the Lenders also desire to have
The Bank of Nova Scotia act as “Technical Agent”, Société Générale (Canada) as “Syndication
Agent” and N M Rothschild & Sons Limited act as “Documentation Agent”, with
regard to this Credit Facility.

 

NOW THEREFORE in consideration of the mutual
covenants and premises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree that the Existing Credit Agreement is hereby amended
and restated so that, as amended and restated, it reads as follows:

 

ARTICLE 1

INTERPRETATION

 

1.1          Certain Defined Terms.  In this Agreement, where the
context does not otherwise require, capitalized terms have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined unless otherwise specified and words
importing gender shall include the masculine, feminine and neuter genders):

 

“Administrative
Agent” means BNS, in its capacity as administrative agent hereunder
(including pursuant to Section 12.2(e)), and its successors in such capacity.

 

“Administrative
Questionnaire” has the meaning ascribed to that term in the Provisions.

 

“Advances”
means a Loan, as defined in the Provisions.

 

“Affiliate”
has the meaning ascribed to that term in the Provisions.

 

2

 

“Agency
Fee Letter” means the letter agreement dated December 23, 2004 between the
Administrative Agent and the Borrower providing for the payment by the Borrower
of certain fees in connection with this Credit Facility, as such letter
agreement is amended, supplemented, restated or replaced from time to time.

 

“Aggregate
Net Hedge Indebtedness” at any date means (a) in respect of the amounts
owing by the Borrower to any Hedge Counterparty, the amount, if any, by which
the aggregate amount of all Hedge Indebtedness owing by the Borrower to such
Hedge Counterparty under Permitted Hedge Agreements with such Hedge
Counterparty as at such date exceeds the aggregate amount, if any, of all Hedge
Indebtedness owing by such Hedge Counterparty to the Borrower under such
Permitted Hedge Agreements; and (b) in respect of amounts owing by the Borrower
to all Hedge Counterparties, the amount, if any, by which the aggregate amount
of all Hedge Indebtedness owing by the Borrower to each Hedge Counterparty
under Permitted Hedge Agreements exceeds the aggregate amount of all Hedge
Indebtedness owing by each Hedge Counterparty to the Borrower under Permitted
Hedge Agreements with each Hedge Counterparty.

 

“Agnico-Eagle
AB” shall mean Agnico-Eagle AB, a Swedish corporation, and its successors.

 

“Agnico-Eagle
Sweden AB” shall mean Agnico-Eagle Sweden AB, a Swedish corporation, and
its successors.

 

“Agreement”
has the meaning ascribed to that term in the Provisions.

 

“Applicable Margin” means, for each
type of Advance or Commitment Fee Rate listed below, the corresponding annual
percentage rate for each listed level of Total Net Debt to EBITDA Ratio set
forth below:

 

	
  Level

  	
   

  	
  Total Net Debt

  to EBITDA 

  Ratio

  	
   

  	
  US $ 

  LIBOR 

  or C$ BA

  	
   

  	
  L/C 

  commission

  	
   

  	
  US$ Base 

  Rate or C$ 

  Prime

  	
   

  	
  Commitment Fee

  Rate

  	
   

  
	
  I

  	
   

  	
  <3.50X

  	
   

  	
  2.00

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  0.75

  	
  %

  
	
  II

  	
   

  	
  <2.5X

  	
   

  	
  1.75

  	
  %

  	
  1.75

  	
  %

  	
  0.75

  	
  %

  	
  0.60

  	
  %

  
	
  III

  	
   

  	
  <2.0X

  	
   

  	
  1.50

  	
  %

  	
  1.50

  	
  %

  	
  0.50

  	
  %

  	
  0.50

  	
  %

  
	
  IV

  	
   

  	
  <1.5X

  	
   

  	
  1.25

  	
  %

  	
  1.25

  	
  %

  	
  0.25

  	
  %

  	
  0.40

  	
  %

  

 

Increases or decreases in the Applicable
Margin resulting from a change in the Total Net Debt to EBITDA Ratio shall be
based on the applicable Compliance Certificate delivered by the Borrower
pursuant to Section 9.1(a); provided that, from the Restatement Date to the
Effective Date (as defined below) in respect of the first full fiscal quarter
of the Borrower immediately following the Restatement Date, the Applicable
Margin shall be set at the applicable “Level” of the corresponding matrix
contained in the definition of “Applicable Margin” set forth in the Existing
Credit Agreement which is in effect on the Restatement Date. Notwithstanding
the foregoing, if the average daily sum of the Lenders’ Available Commitment
during each month is 

 

3

 

greater than 50% of the total Commitments,
the Commitment Fee Rate shall be based on “Level II” of the foregoing matrix,
and if the average daily sum of the Lenders’ Available Commitment during each
month is greater than 65% of the total Commitments, the Commitment Fee Rate
shall be based on “Level I” of the foregoing matrix. Changes in the Applicable
Margin shall be effective as of the earlier of two Business Days following the
day upon which such Compliance Certificate is delivered to the Administrative
Agent and the day upon which such Compliance Certificate could be delivered on
time (the “Effective Date”). For
greater certainty, changes in L/C fees and Bankers’ Acceptance Fees shall be
effective for that portion of the term of any L/Cs or Bankers’ Acceptances on
or after the Effective Date, and any amount owing by the Borrower to the
Lenders with respect to L/Cs or Bankers’ Acceptances shall be paid on the next
Drawdown Date. Without waiving the requirement of the Borrower to deliver the
Compliance Certificate by no later than the last date which it could be
delivered on time (the “Due Date”),
if any Compliance Certificate required to be delivered by the Borrower is
delivered after the Due Date, the then prevailing Applicable Margin shall
continue until such Compliance Certificate is, in fact, delivered. Upon receipt
of any Compliance Certificate which is delivered after the relevant Due Date,
the Administrative Agent shall determine the amount of any overpayment or
underpayment of interest, L/C fees and Bankers’ Acceptance Fees during the
period from the Due Date to and including the date of actual delivery thereof
by the Borrower and notify the Borrower and the Lenders of such amounts. Such
determination by the Administrative Agent shall constitute, in the absence of
manifest error, prima facie
evidence of the amount of such overpayment or underpayment, as the case may be.
In the event of an underpayment, the Borrower shall, upon receipt of such
notice, pay to the Administrative Agent, for the benefit of the Lenders, the
amount of such underpayment. In the event of an overpayment, the amount of such
overpayment shall be credited and applied to succeeding payments by the
Borrower of interest, L/C fees and Bankers’ Acceptance Fees as they become due
until such amount has been fully applied. Should the Administrative Agent,
acting reasonably, determine that the calculation of the Total Net Debt to
EBITDA Ratio in any Compliance Certificate is incorrect, the Administrative
Agent shall advise the Borrower of such error and the Borrower and the
Administrative Agent agree that, absent manifest error, the Applicable Margin
shall be adjusted in accordance with the determination by the Administrative
Agent, acting reasonably, and the Borrower shall pay the amount owing
commencing as of the date when the adjustment would otherwise be effective in
accordance with this provision.

 

“Applicable
Percentage” has the meaning ascribed to that term in the Provisions.

 

“Arranger
Fee Letter” means the letter agreement dated September 26, 2006 between the
Arrangers and the Borrower providing for the payment by the Borrower of certain
fees in connection with this Credit Facility, as such letter agreement is
amended, supplemented, restated or replaced from time to time.

 

“Arrangers”
means, collectively, BNS, Société Générale (Canada) and N M Rothschild &
Sons Limited, in their respective capacities as co-arrangers of the credit
facilities set forth in this Agreement.

 

“Assignment
and Assumption” has the meaning ascribed to that term in the Provisions.

 

4

 

“Assignment
of Metal Hedge Agreements” has the meaning ascribed to that term in Section
7.1(l).

 

“Available
Commitment” means at any time, in respect of all Lenders, the amount, if
any, by which the aggregate of the Lenders’ Commitments exceeds the amount of
the Outstanding Advances at that time and means at any time, in respect of any
particular Lender, the amount, if any, by which the Commitment of such Lender
exceeds the amount of the Outstanding Advances made by such Lender. For greater
certainty, the Available Commitment shall not at any time exceed the Maximum
Facility Amount.

 

“Bank
Act Security” means the “Notice of Intention to Give Security Under Section
427 of the Bank Act” granted to each Lender on November 9, 2001, the “Application
for Credit and Promise to Give Security Under Section 427 of the Bank Act”
granted to each Lender on November 16, 2001, the “Agreement as to Loans and
Advances and Security Therefor. Section 426 and 427 of the Bank Act” granted to
each Lender on November 16, 2001, the “Security Under Section 427 on All
Property of Specified Kinds” granted to each Lender on November 16, 2001 and
the security under Section 426 of the Bank Act granted to each Lender on
November 13, 2001, and any additional security documents pursuant to the Bank Act (Canada) granted by the Borrower
to any Lender in connection with this Agreement, as each may be amended,
restated or otherwise modified from time to time.

 

“BA
Discount Proceeds” means, in respect of any Bankers’ Acceptance, an amount
calculated on the applicable Drawdown Date which is (rounded to the nearest
full cent, with one-half of one cent being rounded up) equal to the face amount
of such Bankers’ Acceptance multiplied by the price, where the price is
calculated by dividing one by the sum of one plus the product of (i) the BA
Discount Rate applicable thereto expressed as a decimal fraction multiplied by
(ii) a fraction, the numerator of which is the actual number of days in the
term of such Bankers’ Acceptance and the denominator of which is 365, which
calculated price will be rounded to the nearest multiple of 0.001%.

 

“BA
Discount Rate” means, (a) with respect to any Bankers’ Acceptance accepted
by a Lender named on Schedule I to the Bank
Act (Canada), the rate
determined by the Administrative Agent as being the CDOR Rate in effect from
time to time, and (b) with respect to any Bankers’ Acceptance accepted by any
other Lender, the rate determined by the Administrative Agent in accordance
with (a) above plus 0.10% per annum.

 

“BA
Equivalent Advance” has the meaning ascribed to it in Section 3.9(e).

 

“Bankers’
Acceptance” means a depository bill as defined in the Depository Bills and Notes Act (Canada) in
Canadian Dollars that is in the form of an order signed by the Borrower and
accepted by a Lender pursuant to this Agreement or, for Lenders not
participating in clearing services contemplated in that Act, a draft or bill of
exchange in Canadian Dollars that is drawn by the Borrower and accepted by a
Lender pursuant to this Agreement. Orders that become depository bills, drafts
and bills of exchange are sometimes collectively referred to in this Agreement
as “orders.”

 

5

 

“Bankers’
Acceptance Fee” means the amount calculated by multiplying the face amount
of each Bankers’ Acceptance by the Applicable Margin and then multiplying the
result by a fraction, the numerator of which is the duration of its term on the
basis of the actual number of days to elapse from and including the date of
acceptance of a Bankers’ Acceptance by the Lender up to but excluding the
maturity date of the Bankers’ Acceptance and the denominator of which is 365.

 

“Banking
Day” means any Business Day on which dealings in foreign currencies and
exchange between lenders may be carried on in London, England and New York, New
York.

 

“Base
Rate” means, on any date, a fluctuating rate of interest per annum
(expressed on the basis of the actual number of days in a calendar year,
rounded upward, if necessary, to the next highest 1/16 of 1%) equal to the
higher of:

 

(a)                                  the reference rate of interest (however designated) of the
Administrative Agent in effect on such day for determining interest chargeable
by it on US Dollar commercial loans made in Canada; and

 

(b)                                 the Federal Funds Rate in effect on such day plus 0.5% per annum.

 

Changes
in the rate of interest on that portion of any Advances maintained as Base Rate
Advances will take effect simultaneously with each change in the Base Rate. The
Administrative Agent will give notice promptly to the Borrower and the Lenders
of changes in the Base Rate; provided that the failure to give such notice
shall not affect the Base Rate in effect after such change.

 

“Base
Rate Advance” means an Advance in US Dollars bearing interest at a
fluctuating rate determined by reference to the Base Rate plus the Applicable
Margin.

 

“Base
Rate Loan” (as used in the Provisions) means a Base Rate Advance.

 

“BNS”
means The Bank of Nova Scotia, a bank to which the Bank Act (Canada) applies. BNS shall be the “Issuing Bank”
referred to in the Provisions.

 

“Bond”
has the meaning ascribed to it in Section 7.1(e).

 

“Borrower”
means Agnico-Eagle Mines Limited, a corporation existing under the laws of the
Province of Ontario and its successors.

 

“Branch
of Account” means the Wholesale Banking Operations – Loan Operations
department of BNS at 720 King Street West, Third Floor, Toronto, Ontario, M5V
2T3 or such other branch as is designated from time to time by the
Administrative Agent.

 

“Business
Day” means each day that is not a Saturday, Sunday or a day on which
commercial banks are not open for normal banking business in Toronto, Ontario
or Montreal, Quebec.

 

“Canadian
Dollars”, “Cdn. Dollars” and “Cdn $” mean lawful money of
Canada.

 

“Canadian
Lender” has the meaning ascribed to it in Section 7.4(a).

 

6

 

“Capital
Expenditures” shall mean, with respect to any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
expenditures for capitalized lease obligations) by the Borrower during such
period that are required by GAAP to be included as a non-current asset on the
balance sheet of the Borrower.

 

“Capital
Stock” means any and all shares, interests, participations, warrants,
options or other equivalents (however designated) of capital stock of a
corporation, any securities convertible into such capital stock or any and all
equivalent ownership interests in a Person.

 

“Cash Collateral” means Collateral
consisting of cash (in Canadian Dollars or US Dollars) or Cash Equivalents on
which the Administrative Agent has a first priority Lien.

 

“Cash Equivalents” means:

 

(a)                                  investments in direct obligations of Canada or the United States of
America, including Canadian or United States of America federal, provincial or
state obligations, with remaining maturities of one year or less from the date
of acquisition of the investment;

 

(b)                                 investments in direct obligations of municipalities (having
short-term credit ratings of at least A1 by Standard & Poor’s Ratings Group
or P1 by Moody’s Investors Service) in Canada or the United States of America
with remaining maturities of one year or less from the date of acquisition of
the investment;

 

(c)                                  investments in certificates of deposit with remaining maturities of
one year or less, issued by commercial banks in Canada or the United States of
America having capital and surplus in excess of US $500,000,000 and having
short-term credit ratings of at least A1 by Standard & Poor’s Ratings
Group, P1 by Moody’s Investors Service, Inc. or R-1 (middle) by Dominion Bond
Rating Service Limited;

 

(d)                                 investments in commercial paper issued by issuers resident in Canada
or the United States of America of maturities of not more than 270 days
rated at least A1 by Standard & Poor’s Ratings Group, P1 by Moody’s
Investors Service, Inc. or R-1 (middle) by Dominion Bond Rating Service
Limited;

 

(e)                                  investments in securities that are obligations of Canada or the
United States of America purchased by the Borrower or any Subsidiary of the
Borrower under repurchase agreements pursuant to which arrangements are made
with selling financial institutions (being a financial institution having
unimpaired capital and surplus of not less than US $500,000,000 and with
short-term credit ratings of at least A1 by Standard & Poor’s Ratings
Group, P1 by Moody’s Investors Service, Inc. or R-1 (middle) by Dominion Bond
Rating Service Limited) for such financial institutions to repurchase such
securities within 30 days from the date of purchase by the Borrower or such
Subsidiary, and other similar short-term investments made in connection with
the Borrower’s or any of its Subsidiary’s cash management practices; provided
that the Borrower shall take possession of 

 

7

 

all securities
purchased by the Borrower or any such Subsidiary under repurchase agreements
and shall adhere to customary margin and mark-to-market procedures with respect
to fluctuations in value; or

 

(f)                                    investments in any security issued by an investment company
registered under section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8) that is a money market fund in
compliance with all applicable requirements of SEC Rule 2a-7 (17 CFR 270.2a-7).

 

“CDOR
Rate” shall mean, on any day, the annual rate of interest which is the
arithmetic average of the 1, 2, 3 or 6 month rates applicable to Bankers’
Acceptances issued by banks listed on Schedule I of the Bank Act (Canada) identified as such on
the Reuters Screen CDOR Page at approximately 10:00 a.m. (Toronto time) on such
day (as adjusted by the Administrative Agent after 10:00 a.m. to reflect any
error in any posted rate or in the posted average annual rate). If the rate
does not appear on the Reuters Screen CDOR Page as contemplated above, then the
CDOR Rate on any day shall be calculated as the arithmetic average of the
discount rates applicable to one month Bankers’ Acceptances of, and as quoted
by, any two Lenders which are banks listed on Schedule I of the Bank Act (Canada), chosen by the
Administrative Agent in its discretion, as of 10:00 a.m. on such day, or if
such day is not a Business Day, then on the immediately preceding Business Day.
If less than two such Lenders quote the aforementioned rate, the CDOR Rate
shall be the rate quoted by the Administrative Agent.

 

“Change
of Control” means:

 

(a)                                  the acquisition, directly or indirectly by any means whatsoever, by
any Person, or group of Persons acting jointly or in concert, (collectively, an
“offeror”) of beneficial ownership of, or the power to exercise control or
direction over, or securities convertible or exchangeable into, any securities
of the Borrower carrying in aggregate (assuming the exercise of all such
conversion or exchange rights in favour of the offeror) more than 50% of the
aggregate votes represented by the Voting Stock then issued and outstanding or
otherwise entitling the offeror to elect a majority of the board of directors
of the Borrower;

 

(b)                                 the occupation of a majority of the seats (other than vacant seats)
on the board of directors of the Borrower by Persons who were neither (i)
directors on the Closing Date nor (ii) nominated or appointed by a majority
vote of the board of directors of the Borrower in circumstances where such
nomination or appointment is made other than as a result of a dissident proxy
solicitation, whether actual or threatened; or

 

(c)                                  the consummation of any amalgamation, statutory arrangement
(involving a business combination) or other reorganization of or involving the
Borrower (i) in which the Borrower is not the continuing corporation or (ii)
pursuant to which any Voting Stock of the Borrower would be reclassified,
changed or converted into or exchanged for cash, securities or other property;
other than (in each case) an amalgamation, statutory arrangement or other
reorganization of or involving the Borrower in which the holders of the Voting
Stock of the Borrower on the 

 

8

 

Closing Date
continue to have, directly or indirectly, more than 50% of the Voting Stock of
the continuing corporation immediately after such transaction and in respect of
which neither of the events described in (a) or (b) of this definition shall
have occurred.

 

“Closing
Date” means November 23, 2001.

 

“Closing
and Amendment Fee Letter” means the letter agreement dated October 17, 2006
between the Administrative Agent and the Borrower providing for the payment by
the Borrower of certain fees in connection with this Credit Facility, as such
letter agreement is amended, supplemented, restated or replaced from time to
time.

 

“Collateral”
means the property and interests in property subject to or to be subject to the
Liens of the Security Documents.

 

“Commitment”
means, in respect of each Lender, at any time, the commitment of such Lender to
provide the amount of Advances set opposite its name on Annex 2, as modified
from time to time in accordance with the terms hereof. If a Lender has more
than one Commitment hereunder, each Commitment shall be deemed to be a separate
Commitment for purposes of this Agreement.

 

“Commitment
Fee Rate” means the applicable percentage per annum set forth in the
pricing matrix under the “Commitment Fee Rate” column in the definition of
Applicable Margin.

 

“Compliance
Certificate” means a compliance certificate of the Borrower, in the form of
Exhibit E, delivered by the Borrower to the Administrative Agent pursuant to
Section 9.1(a) and certified (without personal liability) by the chief
financial officer or chief executive officer of the Borrower.

 

“Constating Documents” means a Person’s articles or certificate of incorporation,
amendment, amalgamation or continuance, memorandum of association, by-laws,
declaration of trust, partnership agreement, limited liability company
agreement or other similar document, as applicable, and all unanimous
shareholder agreements, other shareholder agreements, voting trust agreements
and similar arrangements applicable to such Person’s Capital Stock.

 

“Contractual
Obligation” means as to any Person, any provision of any security issued by
such Person or any agreement, instrument or undertaking to which such Person is
a party or by which it or any of its property is bound and, for greater
certainty, shall include in the case of the Borrower, the Material Contracts
and contracts and agreements relating to Indebtedness of the Restricted
Parties.

 

“Control”
has the meaning ascribed to that term in the Provisions.

 

“Convertible
Debentures” means the 4.5% senior subordinated convertible debentures of
the Borrower which were issued under the Trust Indenture, and which were
redeemed in full by the Borrower on February 15, 2006.

 

9

 

“Copper”
means metal which contains 0.999 cathode copper, which is registered or
registrable, and is in conformity in all respects with the requirements for
good delivery, on the London Metals Exchange.

 

“Credit
Facility” means the credit facility which the Lenders have agreed to
establish in favour of the Borrower pursuant to, and on the terms and
conditions set out in, this Agreement in the amount of the Maximum Facility
Amount.

 

“Current
Ratio” means, in respect of the Borrower, at the date of determination, the
ratio calculated by dividing the Borrower’s then current assets by its then
current liabilities as the same would be shown on a balance sheet of the
Borrower prepared on a consolidated basis in accordance with GAAP consistently
applied.

 

“Default”
has the meaning ascribed to that term in the Provisions.

 

“Demand”
has the meaning ascribed to it in Section 3.19(b).

 

“Designated
Account” means, in respect of any Advance, the account or accounts
(including in Cdn. Dollars and US Dollars) maintained by the Borrower at a
branch of the Administrative Agent in Toronto, Ontario that the Borrower
designates in writing from time to time.

 

“Development
Plan” means, collectively, the Mine Plan and the Operating Budget, as
updated from time to time in accordance with Sections 9.2 and 9.3; and, to the
extent of any inconsistency between such documents, the document having the
later date shall govern.

 

“Documents”
means the Financing Documents and the other documents delivered under Articles
6 and 7 hereof and all instruments, agreements, certificates and other
documents delivered to the Administrative Agent and/or Lenders pursuant to or
in connection with any of the foregoing.

 

“Drawdown
Date” means the date on which an Advance is made to the Borrower pursuant to
the terms hereof and which shall be a Banking Day.

 

“Drawdown
Notice” means a notice delivered by the Borrower pursuant to Section 3.1
and substantially in the form of Exhibit A.

 

“Due
Date” has the meaning specified in the definition for Applicable Margin.

 

“EBITDA”  means, for any period, on a
consolidated basis, an amount equal to the Borrower’s revenue from the sale of
Product from Mines, less:

 

(a)           onsite
and offsite cash operating costs for such period;

 

(b)           general
and administrative expenses for such period;

 

(c)           cash
capital taxes for such period; and

 

(d)           cash
reclamation expenditures for such period;

 

each component of which is to be calculated
in accordance with GAAP consistently applied.

 

10

 

“Effective Date” has the meaning
specified in the definition for Applicable Margin.

 

“El
Coco Documents” means (a) the Net Smelter Royalty Agreement dated as of
June 21, 1999 among Barrick Gold Corporation, Lac Exploration Inc. and the
Borrower and (b) the Net Profits Royalty Agreement dated as of June 21, 1999
among Barrick Gold Corporation, Lac Exploration Inc. and the Borrower, true and
complete copies of which (together with all amendments, supplements and
restatements thereof or thereto) have been delivered to the Administrative
Agent.

 

“Eligible
Assignee” has the meaning ascribed to that term in the Provisions.

 

“Environmental Liability” means any claim (including sums paid in settlement of claims),
action, administrative proceeding, judgment, lien, damages, penalty, fine,
cost, liability or loss, including reasonable legal fees and expenses and all
other costs and expenses of any kind or nature that are incurred or arise
directly or indirectly from or in connection with any Requirement of
Environmental Law, or any failure or breach in respect thereof, or any Release
of Hazardous Materials, that, in either case, is applicable to the Borrower or
any other Subsidiary, or its respective properties or operations.

 

“Equivalent
Amount” means, on any day, for the purpose of calculations under this
Agreement, the amount of Canadian Dollars into which US Dollars may be
converted or the amount of US Dollars into which Canadian Dollars may be
converted using the Bank of Canada noon spot rate, if available, and if not available,
the Administrative Agent’s mid-rate (i.e. the average of the Administrative
Agent’s spot buying and selling rates) for converting the first currency to the
other currency at the relevant time on that day; or as the context requires,
the amount of Euros into which US Dollars may be converted or the amount of US
Dollars into which Euros may be converted using the noon spot rate of the
Federal Reserve Bank of New York, if available, and if not available, the
Administrative Agent’s mid-rate (i.e. the average of the Administrative Agent’s
spot buying and selling rates) for converting the first currency to the other
currency at the relevant time on that day.

 

“Euro”
means the lawful currency of the member states of the European Union
participating in the third stage of the European monetary union.

 

Event
of Default” means any event specified
in Section 11.1.

 

“Exchange
Rate Hedge Agreement” shall mean any contract for the sale, purchase or
exchange or for future delivery of foreign currency (whether or not the subject
currency is to be delivered or exchanged), or any currency swap agreements,
option contracts, futures contracts, options on futures contracts, spot or
forward contracts or other agreements to purchase or sell currency or any other
arrangements entered into by a Person related to movements in the rates of
exchange of currencies or other similar currency derivatives transactions
entered into by such Person or any other currency contract or arrangement
having the same economic effect as the foregoing, whether at, above or below
current market prices.

 

“Existing
Credit Agreement” has the meaning defined in the first recital to this
Agreement.

 

11

 

“Exploration
Expenditures” shall mean, with respect to any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
expenditures for capitalized lease obligations) made by the Borrower during
such period in respect of prospecting, sampling, drilling and other work
involved in searching for gold doré, copper concentrate and zinc concentrate
and any other base or precious metal (whether in concentrate, doré or other
form).

 

“Facility
Indebtedness” means all present and future indebtedness, liabilities and
obligations of the Borrower to the Administrative Agent and the Lenders under
or in connection with the Financing Documents, whether direct or indirect,
absolute or contingent, matured or not, at any time owing by the Borrower to
the Administrative Agent or the Lenders in any currency or remaining unpaid by
the Borrower to the Administrative Agent or the Lenders under or in connection
with the Financing Documents, and whether incurred by the Borrower alone or
with another or others and whether as principal or surety, in each case whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including all fees, legal and other
costs, charges and expenses of or incurred by the Administrative Agent or the
Lenders under or in connection with the Financing Documents which are required
to be paid thereunder), but in any event excluding Hedge Indebtedness.

 

“Federal
Funds Rate” means for any day, an annual interest rate equal to the
weighted average of the rates on overnight United States federal funds
transactions with members of the Federal Reserve System arranged by United
States federal funds brokers, as published for such day (or if such day is not
a Banking Day, for the next preceding Banking Day) by the Federal Reserve Bank
of New York or for any Banking Day on which such rate is not so published, the
arithmetic average of the quotations for such day on such transactions received
by the Administrative Agent from three United States federal funds brokers of
recognized standing selected by it.

 

“Final
Permitted Hedge Counterparties” means each Permitted Hedge Counterparty
which has outstanding Hedge Agreements with the Borrower at the time that the
Facility Indebtedness is indefeasibly paid in full and all Commitments are
terminated.

 

“Financial
Parameters” means the “Financial Parameters” set forth on Annex 3.

 

“Financing
Documents” means this Agreement, the Security Documents, all other
agreements, undertakings or commitments entered into by any Restricted Party
pursuant to or in connection with this Agreement and the transactions
contemplated hereby, including agreements with the Administrative Agent in
connection with consolidation and electronic fund transfer arrangements and
credit cards, and the Hedge Agreements entered into with each Permitted Hedge
Counterparty.

 

“Financing
Lease” means (a) any lease, including by way of sale and leaseback, of
property, whether real or immovable or personal or movable, if the then present
value of the minimum rental commitment thereunder should, in accordance with
GAAP, be capitalized on a balance sheet of the lessee and (b) any other such
lease the obligations under which are capitalized on the balance sheet of the
lessee.

 

“Free
Cash Flow” means, for any period, EBITDA less Maintenance Capital
Expenditures.

 

12

 

“GAAP”
means generally accepted accounting principles in effect from time to time in
the United States of America.

 

“Gold”
means gold having a minimum fineness of 0.995 and which is registered or
registrable, and is in conformity in all respects with the requirements for
good delivery, on the London Bullion Market.

 

“Gold
Equivalent” means a quantity of a Metal having an economic value expressed
in ounces of Gold and calculated by multiplying the quantity of the Metal by an
assumed price for that Metal and dividing the product by an assumed price for
Gold, where such prices are determined using the Financial Parameters.

 

“Gold
Equivalent Proven and Probable Reserves” means the sum of (a) Proven
Reserves and Probable Reserves of Gold at the Mines which are Included Property
and (b) Proven Reserves and Probable Reserves of Silver, Zinc and Copper at
such Mines multiplied by the applicable price for the relevant metal as determined
using the Financial Parameters, divided by the relevant Gold price as
determined using the Financial Parameters.

 

“Goldex
Mine” means the Borrower’s Goldex mining operations and property located in
or around the City of Val-d’Or, Quebec, as presently constituted and as the
same may be developed or expanded from time to time in accordance with the
Development Plan or otherwise (which property and operations currently include
(a) the Mining Assets relating to the Goldex mine, (b) the 22 mining claims
comprising the Goldex mine referred to in Schedule 8.1(l) and (c) the immovable
property comprising the Goldex mine referred to in Schedule 8.1(l)), and any
replacements, substitutions and modifications thereof, together with all
applications, surveys, easements, rights of way, rights, titles or interests of
every kind and description which the Borrower or its Affiliates have rights to,
otherwise own or control, relating to or acquired in connection with one or
more of said operations, properties and claims.

 

“Governmental
Authority” has the meaning ascribed to that term in the Provisions.

 

“Guarantee
Obligation” means, as to any Person, (a) any obligation of such Person
guaranteeing any obligations, contingent or otherwise, or indebtedness of other
Persons, and (b) any other contingent obligations of such Person in respect of,
or obligations to purchase or otherwise acquire or to assure payment or
satisfaction of, any indebtedness or obligations of any other Person, directly
or indirectly.

 

“Hedge
Agreements” means all Metal Hedge Agreements, Exchange Rate Hedge
Agreements, Interest Rate Hedge Agreements, and all other derivative
transactions, at any time entered into by the Borrower including without
limitation the Hedge Agreements identified in Section 8.1(cc).

 

“Hedge
Counterparty” means a Permitted Hedge Counterparty or an Unsecured Hedge
Counterparty.

 

“Hedge
Indebtedness” means with respect to the indebtedness or obligations of any
Person under or pursuant to any Permitted Hedge Agreement on any date, the aggregate
amount, if any, determined on such date which would have to be paid on such
date by such Person to a replacement counterparty to enter into a replacement
transaction on substantially the same terms 

 

13

 

as
the then existing transaction, with a term from such date to the scheduled
termination date of the existing transaction.

 

“Hypothec”
means the deed of hypothec referred to in Section 7.1(f), together with any and
all other deeds of hypothec executed and delivered by the Borrower in favour of
the Trustee.

 

“Included Property” means (a) the
LaRonde Mine, the Goldex Mine, the Kittila Mine and the Lapa Mine and (b) (i)
any other Mine located in a Permitted Jurisdiction, (ii) which Mine is
operating to the satisfaction of the Majority Lenders in consultation with
their independent consultants, (iii) which Mine is wholly owned, controlled and
operated by a Person referred to in clauses (a) or (b) of the definition of
Restricted Party, (iv) on which Mine the Administrative Agent, for and on
behalf of the Secured Parties, has been granted an exclusive Lien to secure the
Senior Secured Indebtedness pursuant to Section 10.2(n), and (v) for which the
Administrative Agent has provided the Borrower written notice that such Mine is
Included Property pursuant to Section 10.2(n).

 

“Indebtedness”
of a Person means, at a particular date, the sum (without duplication) of:

 

(a)                                  all obligations of such Person for borrowed money and obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(b)                                 all obligations of such Person (whether contingent or otherwise) in
respect of bankers’ acceptances, letters of credit, surety or other bonds and
similar instruments;

 

(c)                                  all obligations of such Person to pay the deferred purchase price of
property or services (other than for borrowed money);

 

(d)                                 all obligations of such Person under Financing Leases in respect of
which such Person is liable, contingently or otherwise, as obligor, guarantor
or otherwise, or in respect of which obligations such Person otherwise assures
a creditor against loss;

 

(e)                                  all Guarantee Obligations of such Person;

 

(f)                                    indebtedness of others secured by any Lien upon Property owned by
such Person, whether or not assumed;

 

(g)                                 all obligations of such Person to deliver goods or services in
consideration of advance payments; and

 

(h)                                 all Hedge Indebtedness of such Person;

 

provided that
trade payables and accrued liabilities that are current liabilities incurred in
the ordinary course of business do not constitute Indebtedness.

 

“Indemnified
Party” has the meaning ascribed to it in Section 13.17.

 

14

 

“Independent
Engineer” means the current Independent Engineer, Roscoe Postle Associates
Inc. together with Hatch Associates Inc., or such other independent engineer as
may be selected by the Majority Lenders pursuant to Section 13.6.

 

“Indicated
Resource” means that portion of a mineral resource expressed as tons and
grade which has been designated as such by the Borrower, audited and approved
by the Independent Engineer, after consultation with the Administrative Agent,
on the basis of drill holes, underground openings or other sampling procedures
spaced closely enough to give a reasonable indication of continuity and where
geological data is reasonably well known.

 

“Initial
Mine Plan” means the Initial Model and Budget as of the date hereof.

 

“Initial
Model and Budget” means the mine plan for the Life of Mine and the annual
operating budget for the Included Properties, delivered by the Borrower to the
Lenders, reviewed and approved by the Independent Engineer and accepted by the
Lenders, attached as Annex 6.

 

“Instrument
of Adhesion” means an instrument of adhesion on the terms and in the form
of Exhibit B.

 

“Intellectual
Property” shall have the meaning ascribed to it in Section 8.1(o).

 

“Interest Coverage Ratio” means, for any period, the ratio of Free Cash Flow for such period
to Total Interest Expense for such period.

 

“Interest
Period” means, with respect to any LIBOR Advance:

 

(a)                                  the period commencing on and including the applicable Drawdown Date
with respect to such LIBOR Advance and, subject as hereinafter provided, ending
on but excluding the date which is one, two, three or six months thereafter, as
selected by the Borrower in its Drawdown Notice; and

 

(b)                                 thereafter, each period commencing on the last day of the last
preceding Interest Period applicable to such LIBOR Advance and, subject as
hereinafter provided, ending on but excluding the date which is one, two, three
or six months thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not less than 3 Banking Days prior to the last day of
the then current Interest Period with respect to such Advance;

 

provided
that, all of the foregoing provisions relating to Interest Periods are subject
to the following:

 

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

 

15

 

(d)                                 any Interest Period that would otherwise extend beyond the Maturity
Date, shall end on the Maturity Date; and

 

(e)                                  any Interest Period that begins on the last Banking Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Banking Day of a calendar month.

 

“Interest
Rate Hedge Agreements” shall mean any interest rate swap, option contract,
futures contract, option on futures contract, cap, floor, collar, or any other
similar arrangement entered into by a Person related to movements in interest
rates or any other similar interest rate derivatives transaction entered into
by such Person or any other interest rate contract or arrangement having the
same economic effect, whether at, above or below current market prices.

 

“Investment”
means, as to any Person, any direct or indirect acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of
Capital Stock or debt or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee Obligation or assumption of
Indebtedness of, or purchase or other acquisition of any other Indebtedness or
equity participation or interest in, another Person, including any partnership
or joint venture interest in such other Person, or (c) the purchase or
other acquisition (in one transaction or a series of transactions) of all or
substantially all of the property and assets or business of another Person or assets
constituting a business unit, line of business or division of such Person. For
purposes of covenant compliance, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

 

“Investment
Conditions” means, with respect to any Investment that: (a) no Default has
occurred and is continuing or would result therefrom (without duplicating
subsection (e) below); (b) any Person in which such Investment is made is in
the business of mining or mining related activities or the asset acquired is a
mining or mining related asset; (c) immediately after giving effect to any such
Investment no Material Adverse Change would be reasonably expected to occur
(without duplicating subsection (e) below); (d) such Investment does not
breach, conflict with or violate any Requirements of Law; and (e) immediately
after giving effect to such Investment, the Borrower shall be in compliance
with all covenants set forth in Section 10.1 on a pro forma basis.

 

“Issuing
Bank” has the meaning ascribed to that term in the Provisions.

 

“Kittila
Mine” shall mean Agnico-Eagle AB’s Kittila mining operations and property
located in or around Kittila, Finland, as presently constituted and as the same
may be developed or expanded from time to time in accordance with the
Development Plan or otherwise (which property and operations currently include
(a) the Mining Assets relating to the Kittila mine, (b) the mining claims and
mining concessions comprising the Kittila mine referred to in Schedule 8.1(l)
and (c) the real or immovable property comprising the Kittila mine referred to
in Schedule 8.1(l)), and any replacements, substitutions and modifications
thereof, together with all applications, surveys, easements, rights of way,
rights, titles or interests of every kind and description which the Borrower,
Agnico-Eagle AB or their Affiliates have rights to, otherwise 

 

16

 

own
or control, relating to or acquired in connection with one or more of said
operations, properties and claims.

 

“Lapa
Mine” shall mean means the Borrower’s Lapa mining operations and property
located approximately 11 kilometers east of the LaRonde Mine, as presently
constituted and as the same may be developed or expanded from time to time in
accordance with the Development Plan or otherwise (which property and
operations currently include (a) the Mining Assets relating to the Lapa mine,
(b) the one concession and the 43 mining claims comprising the Lapa mine
referred to in Schedule 8.1(l) and (c) the immovable property comprising the
Lapa mine referred to in Schedule 8.1(l)), and any replacements, substitutions
and modifications thereof, together with all applications, surveys, easements,
rights of way, rights, titles or interests of every kind and description which
the Borrower or its Affiliates have rights to, otherwise own or control,
relating to or acquired in connection with one or more of said operations,
properties and claims.

 

“LaRonde
Mine” means the Borrower’s LaRonde mining operations and property located
in or around Cadillac and Bousquet, Quebec, as presently constituted and as the
same may be developed or expanded from time to time in accordance with the
Development Plan or otherwise (which property and operations currently include
(a) the Mining Assets relating to the LaRonde mine, (b) the property covered by
the LaRonde Mining Leases as described in surveys dated January 23, 1998 and
November 11, 1999 prepared by Jean-Luc Corriveau, which surveys have been made
available by the Borrower to the Administrative Agent and to Lenders’ Counsel,
(c) the 22 mining claims constituting the “El Coco Property” which claims are
described in the El Coco Documents, (d) the 34 mining claims located adjacent
to the LaRonde mine comprising the LaRonde mine tailings dam), and any
replacements, substitutions and modifications thereof, together with all
applications, surveys, easements, rights of way, rights, titles or interests of
every kind and description which the Borrower or its Affiliates have rights to,
otherwise own or control, relating to or acquired in connection with one or
more of said operations, properties and claims and (e) the 20 mining claims
constituting the “Terrex Property” which mining claims are described in
Schedule 8.1(l) under the caption “Terrex Property”.

 

“LaRonde
Mining Leases” means those certain mining leases number BM796 entered into
between Les Mines Dumagami Ltée on March 12, 1991 and the Government of Quebec
on April 19, 1991, as the same was transferred to the Borrower on December 29,
1992, and number BM854 entered into between the Borrower on April 26, 2001 and
the Government of Quebec on June 5, 2001, and as the same may be renewed,
amended, supplemented or restated in accordance with the terms of this
Agreement from time to time.

 

“L/C”
means a standby letter of credit, letter of guarantee or commercial letter of
credit, in US Dollars, Canadian Dollars or Euros, and in a form satisfactory to
BNS issued by BNS at the request of the Borrower in favour of a third party to
secure the payment or performance of an obligation of the Borrower or a
Subsidiary to the third party. For purposes of the Provisions, “Letter of
Credit” shall mean “L/C”.

 

“Lenders”
means the Lenders listed on Annex 2 hereof and their respective successors and
assigns, and any other Eligible Assignee which becomes party to this Agreement
pursuant to Sections 3.3(b) or 10 of the Provisions, and “Lender” means any one
of them.

 

17

 

“Lenders’
Counsel” means Borden Ladner Gervais LLP.

 

“Lending
Office” means, as to any Lender, the office or offices of such Lender
described as such in such Lender’s Administrative Questionnaire, or such other
office or offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.

 

“LIBO
Rate” means, with respect to any Advance for any Interest Period, the
product of (a) (i) the interest rate per annum shown on Telerate Page 3750 or
any successor page as the composite offered rate for London interbank deposits
with a period comparable to the Interest Period for such Advance as shown under
the  heading “USD” at 11:00 a.m. (London
time) on the LIBO Rate Determination Date for such Interest Period, or (ii) if
the rate in clause (i) of this definition is not shown for any particular day,
the average (rounded upwards to the nearest whole multiple of one sixteenth of
one percent) of the respective rates notified to the Administrative Agent by
the Reference Banks at which deposits in US Dollars are offered by such
Reference Banks to prime banks in the London interbank market at approximately
11:00 a.m. (London time) on the LIBO Rate Determination Date for such Interest
Period for delivery on the first day of such Interest Period for a period
identical to such Interest Period and in an amount comparable to the amount of
such Advance, times (b) Statutory Reserves (if greater than one), if
applicable.

 

“LIBO
Rate Determination Date” means a day which is two Banking Days prior to the
first day of an Interest Period.

 

“LIBO
Rate Loan” (as used in the Provisions) means a LIBOR Advance.

 

“LIBOR
Advance” means an Advance in US Dollars bearing interest at a fluctuating
rate determined by reference to the LIBO Rate plus the Applicable Margin.

 

“LIBOR
Tranche” means a LIBOR Advance or LIBOR Advances having the same Interest
Period (whether or not originally made on the same day).

 

“Lien”
shall mean any interest in property securing or intended to secure payment or
performance of an obligation owed to a Person other than the owner of the
property, whether such interest is based on contract, common law or statutory
law, and including but not limited to the lien or security interest arising
from a mortgage, hypothec, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. The term “Lien” shall also include reservations, exceptions,
encroachments, easements, rights of way, liens, prior claims and other
statutory or common law rights of landlords, leases and other title exceptions
affecting property, and the filing or registering of any financing statement or
other registration document under the Civil
Code  of Quebec, the
Ontario Personal Property Security Act
or any other comparable law of any jurisdiction for the purpose of protecting
or perfecting such Lien to the extent that the mere filing of the same has the
effect in and of itself of giving the beneficiary thereof an interest in
property.

 

“Life
of Mine” means the period during which all Reserves at the Mines
constituting Included Property are projected to be extracted through planned
mining activities (for the LaRonde Mine, currently through to the year 2016).

 

“Loan
Documents” (as used in the Provisions) means Financing Documents.

 

18

 

“London
Bullion Market” means the London Bullion Market Association, London,
England.

 

“London
Metals Exchange” means the London Metals Exchange, London, England.

 

“Maintenance Capital Expenditures”  means, for any period, the sum of
all Capital Expenditures made during such period on commercially operating
mines held directly or indirectly by the Borrower, which Capital Expenditures
are required or anticipated to be required in accordance with customary and
prudent mining industry practice to maintain the operations of such mines at
the unit operating cost, design capacity and utilization levels contemplated in
the Operating Budget provided from time to time by the Borrower to the Lenders.

 

“Majority
Lenders” means, at any time, two or more Lenders, the Commitments of which
are in the aggregate greater than 50% of the aggregate Commitments of all
Lenders.

 

“Material
Adverse Change” means any material adverse change in the business, assets,
liabilities, condition (financial or otherwise), properties or prospects of the
Restricted Parties on a consolidated basis, or of their Mines that constitute
Included Property taken as a whole.

“Material
Adverse Effect” means (a) any Material Adverse Change or (b) any material
adverse effect on (i) the ability or prospects of the Borrower on an individual
basis to carry out its business, including the operation of the Mines owned and
operated directly or indirectly by it that constitute Included Property, (ii)
the ability of the Restricted Parties, on a consolidated basis, to perform
their obligations under the Financing Documents in accordance with their
respective terms or (iii) the rights and remedies of the Administrative Agent
or the Lenders under the Financing Documents.

 

“Material
Contracts” means the contracts listed on Schedule 8.1(p) relating to
Included Property to which each Restricted Party is a party, the Mining Leases
and the Hedge Agreements, true and complete copies of which (together with all
amendments, supplements and restatements thereof or thereto) have been
delivered to the Administrative Agent.

 

“Material Subsidiary” means any
Subsidiary of the Borrower the consolidated total assets of which, at any time,
have a book value of US $20,000,000 or more or the consolidated total revenue
of which, at any time, is US $10,000,000 or more (on an annual basis); provided
that, once a Subsidiary of the Borrower has become a Material Subsidiary, it
shall not cease to be a Material Subsidiary until the Borrower
provides written notice to the Administrative Agent in which the Borrower
represents and warrants to the Administrative Agent that the book value of such Subsidiary is less than US $20,000,000 and
the consolidated total revenue of such Subsidiary is less than US $10,000,000
(on an annual basis); and provided further that, notwithstanding any of the foregoing, if
any Restricted Party (excluding the Borrower) is not a “Material Subsidiary”
pursuant to the foregoing part of this definition, such Restricted Party shall
be deemed for all purposes of this Agreement to be a “Material Subsidiary” and,
for greater certainty, such Person shall not cease to be a “Material Subsidiary”
as long as such Person is a Restricted Party.

 

“Maturity
Date” means December 23, 2011, or if such date has been extended in
accordance with the terms of Section 5.2, such extended date.

 

19

 

“Maximum
Facility Amount” means US $300,000,000, as the same is reduced in
accordance with the terms of this Agreement.

 

“Measured
Resource” means that portion of a mineral resource expressed as tons and
grade which has been designated as such by the Borrower, audited and approved
by the Independent Engineer, after consultation with the Administrative Agent,
on the basis of drill holes, underground openings or other sampling procedures
spaced closely enough to confirm continuity to a high degree of confidence, and
where geological data is reliably known.

 

“Metal”
means Gold, Silver, Copper or Zinc derived from Product, together with any
other base or precious metal produced by the Mines which are registered or
registrable, and is in conformity in all respects with the requirements for
good delivery, on the London Metals Exchange or London Bullion Market.

 

“Metal
Hedge Agreement” shall mean any contract or commitment for or representing
the sale or purchase for future delivery of a Metal (whether or not the subject
Metal is to be delivered) and any option, put option, synthetic put option,
call option, collar, spot, spot deferred, fixed forward and floating lease rate
forward or other similar contract or arrangement entered into by a Person in
respect of Metal prices or other similar metal derivatives transactions entered
into by such Person or other metal contract or arrangement having the same
economic effect as any of the foregoing, whether at, below or above the current
market price of such Metal.

 

“Mine”
means the LaRonde Mine or any other Mining Assets directly or indirectly owned,
controlled or operated by the Borrower or its Subsidiaries; and “Mines”
means all such mines.

 

“Mine
Plan” means the Initial Model and Budget and each subsequent “Mine Plan”,
as updated and modified from time to time in accordance with the procedures set
out in Section 9.2 and as updated in accordance with Section 9.4 to include
reference to any additional Mines constituting Included Property acquired by
the Borrower or its Subsidiaries in accordance with this Agreement.

 

“Mining
Assets” means the Mining Properties and all other present and
after-acquired property and assets used in connection with or relating to an
operating mine or facility for the extraction or processing of ore (including
all corresponding underground and surface facilities and infrastructure and all
related plant, buildings, fixtures, equipment, chattels and machinery),
together with all inventory and accounts receivable thereof, whether situate on
or off such mine or facility, and all replacements, substitutions and additions
thereto made in accordance with the terms of this Agreement.

 

“Mining
Claims” means all mining rights and claims, licences, mining leases and
concessions and other similar rights and interest forming part of the Mining
Properties relating to operating mines.

 

“Mining
Leases” means the LaRonde Mining Leases and any other mining leases as the
same may be renewed, amended, supplemented or restated in accordance with the
terms of this Agreement from time to time.

 

20

 

“Mining
Properties” means the lands, premises, Mining Leases, surface leases and
rights, mining rights and claims, mining concessions and other rights to
extract surface minerals from real or immovable property, now owned or
hereafter acquired, which relate to a mine.

 

“Monthly
Operating Report” means a report as to the operations of the LaRonde Mine,
the construction, development and operations of the Goldex Mine, the Lapa Mine
and the Kittila Mine, and the construction, development and operations of any
additional Mines constituting Included Property acquired by the Borrower or its
Subsidiaries in accordance with this Agreement, and certain other required
information, in the form or substantially in the form last delivered to the “Administrative
Agent” under the Existing Credit Agreement.

 

“Net
Cash Proceeds” means with respect to any sale or other disposition of any
asset (other than Product) by any Person (a) the gross amount of cash or cash
equivalent received by such Person in connection with such transaction minus
(b) the amount, if any, of all taxes (including the amount, if any, estimated
by such Person in good faith at the time of such sale or other disposition for
taxes payable by such Person on or measured by net income or gain resulting
from such transaction), fees, commissions, costs and other expenses which are
incurred or payable by such Person in connection with such transaction, but
only to the extent not already deducted in arriving at the amount referred to
in clause (a) above.

 

“Non
BA Lender” has the meaning ascribed to it in Section 3.9(e).

 

“Non-Bank
Act Security” has the meaning ascribed to it in Section 7.4(c).

 

“Operating
Budget” means the Initial Model and Budget and each of the Borrower’s
subsequent annual operating budgets, in the form or substantially in the form
of the Operating Budget last delivered to the Administrative Agent under the
Existing Credit Agreement and as updated in accordance with Section 9.5 to
include reference to any additional Mines constituting Included Property,
acquired by the Borrower or its Subsidiaries in accordance with this Agreement.

 

“Original Credit Agreement” has the
meaning ascribed to it in the first recital to this Agreement.

 

“Original
Currency” shall have the meaning ascribed to it in Section 13.13.

 

“Other
Senior Indebtedness” shall have the meaning ascribed thereto in Section
10.3(c)(vi).

 

“Outstanding
Advances” means, at any time, the aggregate of the outstanding balance of
all Advances which remain outstanding and have not been repaid to zero at such
time together with the undrawn face amount of outstanding L/Cs and the face
amount of outstanding Bankers’ Acceptances.

 

“Overdraft
Facility” shall have the meaning ascribed thereto in Section 2.2(c).

 

“Permits”
shall mean all permits, consents, waivers, licences, certificates, approvals,
authorizations, registrations, franchises, rights, privileges and exemptions or
any item with similar effect as the foregoing issued or granted by any
applicable Governmental Authority or by any other third party, including,
without limitation, environmental permits.

 

21

 

“Permitted
Acquisition” shall mean any Investment which is permitted under Sections
10.3(b)(vi), (vii), (viii) and (ix).

 

“Permitted
Hedge Agreements” shall mean any Hedge Agreements, in the case of a
Permitted Hedge Counterparty, and any Metal Hedge Agreements, in the case of an
Unsecured Hedge Counterparty.

 

“Permitted
Hedge Counterparty” means, at any time, (a) any Lender or Affiliate of a
Lender which was a “Permitted Hedge Counterparty” under the Original Credit
Agreement and which, in accordance with the terms of the Existing Credit
Agreement, became a Permitted Hedge Counterparty thereunder and (b) any other
Lender or Affiliate of a Lender, if such Person has executed and delivered an
Instrument of Adhesion to the Administrative Agent and has provided to the
Administrative Agent copies of all Hedge Agreements such Person has entered
into with the Borrower, which Hedge Agreements must include the provisions set
out in Annex 5 hereof. If, at any time, a “Permitted Hedge Counterparty” is not
in compliance with the applicable terms and conditions set out in this
definition or the relevant “Instrument of Adhesion” (as defined in the Existing
Credit Agreement) or Instrument of Adhesion, as applicable, it shall cease to
be a “Permitted Hedge Counterparty”. For purposes of this definition, after the
indefeasible payment in full of the Facility Indebtedness and termination of
all Commitments, “Lender”, “Person” and “Affiliate” shall have the meanings
given to them immediately prior to the indefeasible payment of the Facility
Indebtedness and termination of all Commitments.

 

“Permitted
Jurisdiction” means Canada, the United States of America, Mexico, Chile,
Peru, Brazil, Panama, Costa Rica, Australia, New Zealand or the European Union.

 

“Permitted
Liens” in respect of any Person means the following Liens from time to
time:

 

(a)                                  Liens for taxes, duties or other governmental charges not yet due or
which are being contested in good faith by appropriate proceedings; provided
that adequate reserves with respect thereto are maintained on the books of such
Person, in conformity with GAAP;

 

(b)                                 carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s,
or other like Liens arising in the ordinary course of business and not overdue
for a period of more than 60 days or which are being contested in good faith by
appropriate proceedings provided that adequate reserves with respect thereto
are maintained on the books of such Person, in conformity with GAAP;

 

(c)                                  pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation and other
obligations of a like nature incurred in the ordinary course of business;

 

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

 

22

 

(e)                                  easements, servitudes, rights-of-way, restrictions, exceptions and
other similar encumbrances (including for public utilities) which, in the
aggregate, are not substantial in amount and which do not in any case
materially interfere with such Person or business or the use of the affected
property by such Person;

 

(f)                                    reservations, limitations, provisos and conditions in any original
grant from the Crown or any freehold lessor of any of the properties of such
Person and statutory exceptions to title or reservations of rights which do not
in any case materially interfere with such Person or business or the use of the
affected property by such Person;

 

(g)                                 any obligations or duties affecting any of the Property of such
Person or its Subsidiaries to any municipality or other Governmental Authority
with respect to any franchise, grant, licence 
or permit which do not materially impair the use of such property for
the purposes for which it is held;

 

(h)                                 Liens created pursuant to the Security Documents;

 

(i)                                     Liens created in connection with Financing Leases permitted by
Section 10.3(c)(ii);

 

(j)                                     any Liens for unpaid royalties or duties not yet due pursuant to
Mining Leases, claims or other mining rights running in favour of any
Governmental Authority;

 

(k)                                  Liens on equipment and the proceeds thereof (and on no other
property) created or assumed to finance the acquisition or secure the unpaid
purchase price of such equipment (including the principal amount of any Financing
Lease) to the extent permitted by Section 10.3(c);

 

(l)                                     Liens that (i) exist at the time such Person is, or the assets
subject to such Liens are, acquired by a Restricted Party and (ii) extend only
to the assets acquired or the assets of the Person acquired, as applicable;

 

(m)                               royalty agreements or other rights or claims to royalties on or
affecting any property acquired by a Restricted Party pursuant to Section
10.3(b)(vi), (vii), (viii) or (ix) which royalty agreements or other such
rights or claims are in existence at the time of such acquisition;

 

(n)                                 pledges or deposits of cash or cash equivalent instruments for
purposes of securing obligations to financial institutions issuing letters of
credit to secure obligations under retirement plans or for government
reclamation costs, or  pledges or
deposits of cash or cash equivalent instruments to other issuers of letters of
credit in the ordinary course of such Person’s business provided that such
pledging or deposit does not result in a Default under any provision of this
Agreement (without reference to Section 10.3(a));

 

(o)                                 Liens in existence on the Restatement Date and listed on Schedule
8.1(m) hereto and any extensions, renewals or replacements of any such Lien
provided that the 

 

23

 

principal
amount of the Indebtedness or obligations secured thereby is not increased and
that any such extension, renewal or replacement is limited to the property
originally encumbered thereby; and

 

(p)                                 Liens securing Other Senior Indebtedness to the extent permitted by
Section 10.3(c)(vi), but for greater certainty, not including any Liens in any
present or after acquired Included Property.

 

“Person”
has the meaning ascribed to that term in the Provisions.

 

“Plan”
shall mean any pension plan within the meaning of the Pension Benefits Act (Ontario), the Supplemental Pension Plans Act (Quebec) or
any other similar legislation pursuant to which the Borrower or any of its
Subsidiaries makes contributions in respect of its employees.

 

“Pledge
Agreement” means any and all deeds of movable hypothec on a specific claim
pursuant to the terms of which the Bond is hypothecated in favour of the
Secured Parties, therein acting and represented by the Administrative Agent.

 

“Prime
Rate” means, on any day, a fluctuating rate of interest (rounded upwards if
necessary to the next highest 1/16th of 1%) equal to the greater of:

 

(a)                                  the annual rate of interest expressed as a percentage per annum
announced by BNS on that day as its reference rate for commercial loans made by
it in Canada in Canadian Dollars; and

 

(b)                                 the average rate for 30 day Canadian Dollar bankers’ acceptances
that appears on the Reuters Screen CDOR Page at 10:00 a.m. Toronto time on that
day, plus 0.50% per annum.

 

“Prime
Rate Advance” means an Advance in Canadian Dollars bearing interest at a
fluctuating rate determined by reference to the Prime Rate plus the Applicable
Margin.

 

“Probable
Reserve” means that portion of an Indicated Resource which has been
adjusted for mining dilution and mining recovery which has been designated as
such by the Borrower, audited and approved by the Independent Engineer, to be
technically and economically mineable under current economic and operating
conditions, all in accordance with the Canadian Institute of Mining, Metallurgy
and Petroleum standard therefor.

 

“Proceeding”
shall have the meaning ascribed thereto in Section 9.1(j).

 

“Product”
means gold doré, copper concentrate and zinc concentrate and any other base or
precious metal (whether in concentrate, doré or other form) derived from or
produced at a Mine.

 

“Proven
Reserve” means that portion of a Measured Resource which has been adjusted
for mining dilution and mining recovery and which has been designated as such
by the Borrower, audited and approved by the Independent Engineer, to be
technically and economically mineable under current economic and operating
conditions, all in accordance with the Canadian Institute of Mining, Metallurgy
and Petroleum standard therefor.

 

24

 

“Provisions”
means the model credit agreement provisions attached as Annex 1.

 

“Recourse
Assets” means entities or properties (i) which are located in Permitted
Jurisdictions, and (ii) to which any part of Total Debt, excluding Indebtedness
under Subordinated Indebtedness and any other part of Total Debt which is
unsecured and not ranking, or capable of ranking, senior to or pari passu with
Total Debt, has direct recourse, whether as primary or secondary obligor, contingent
or otherwise, secured or unsecured.

 

“Reference
Banks” means BNS and any Lender or Lenders designated by the Administrative
Agent, together with any replacement Lender or Lenders determined in accordance
with Section 4.2(d), so that there are at least two Reference Banks.

 

“Release of Hazardous
Materials” means any
release, discharge, spill, emission, leakage, disposal, leaching or removal, in
the indoor or outdoor environment, including through or in the air, soil,
surface water, ground water or property, of any substance, product, waste,
residue, pollutant, material, chemical, contaminant, dangerous good,
constituent or other material which is or becomes listed, regulated, defined or
addressed under or subject to any Requirements of Environmental Law or any
applicable Permit.

 

“Required
Lenders” (as used in the Provisions) means Majority Lenders.

 

“Requirements
of Environmental Law” means duties under any Requirements of Law to the
extent that such are intended in any way to prevent, limit, control or
otherwise regulate any effects or risks on human health, the environment or
property, including such Requirements of Law relating to: (a) the use, storage,
presence, generation, discharge, emission, release, disposal, arrangement for
disposal, remediation, or removal of any substance (including heat or
radiation), or (b) the placement, construction, modification, maintenance, use,
or removal of any structure, or (c) the modification, maintenance, use, or
removal of any land, wetland or waterway (including anything beneath the
surfaces thereof); and any amendments to or regulations promulgated thereunder.

 

“Requirements
of Law” means (a) any domestic or foreign statute, law (including common
and civil law), treaty, code, ordinance, rule, regulation, restriction or
by-law (zoning or otherwise); (b) any judgement, order, writ, injunction,
decision, ruling, decree or award; (c) any regulatory policy, practice,
guideline or directive; in each case, applicable to and binding upon such
Person or any of its property or to which such Person is subject as a legally
enforceable requirement; or (d), as to any Person, its Constating Documents.

 

“Reserves”
means Proven Reserves and Probable Reserves.

 

“Restatement
Date” means the date the conditions precedent set out in Section 6.1 are
completed to the satisfaction of the Majority Lenders, as evidenced by a
written notice delivered by the Administrative Agent to the Borrower.

 

“Restricted
Party” means (a) the Borrower and (b) each wholly-owned Subsidiary which
directly or indirectly wholly owns, controls and operates a Mine; where the
Mine directly or indirectly owned by each such Person has been determined to be
Included Property.

 

25

 

“Restricted
Payment” shall have the meaning ascribed to it in Section 10.3(d).

 

“Reuters
Screen CDOR Page” shall mean the display designated as page CDOR on the
Reuters Monitor Money Rates Service or such other page as may, from time to
time, replace that page on that service for the purpose of displaying bid
quotations for Bankers’ Acceptances accepted by Canadian banks.

 

“Riddarhyttan
Resources AB” shall mean Riddarhyttan Resources AB, a Swedish corporation,
and its successors.

 

“Scandinavian
Subsidiaries” shall mean Agnico-Eagle Sweden AB, Riddarhyttan Resources AB
and Agnico-Eagle AB, and any other Subsidiary which is incorporated or formed
under Swedish or Finnish law; and “Scandinavian Subsidiary” means any one of
them.

 

“Second
Currency” shall have the meaning ascribed to it in Section 13.13.

 

“Secured
Parties” means, collectively, the Administrative Agent, the Lenders and
each Permitted Hedge Counterparty, and in each case, each of their permitted
successors and assigns.

 

“Security”
means all security now held or to be held pursuant to this Agreement
(including, without limitation the security described in Article 7 hereof) or
hereafter received by the Administrative Agent (or by the Trustee for and on
behalf of the Administrative Agent) for and on behalf of the Secured Parties
for any Indebtedness of the Borrower (whether Indebtedness of the Borrower
itself or Indebtedness of any other Person directly or indirectly liable for
the Indebtedness of the Borrower) to the Secured Parties or any of them
hereunder or under Hedge Agreements to which they are a party in accordance
with the terms hereof and thereof (as the same may be amended, restated or
otherwise modified from time to time). For greater certainty, prior to the
indefeasible payment of all Facility Indebtedness and the termination of all
Commitments, to the maximum extent permitted by law, each Permitted Hedge
Counterparty shall be permitted to share the benefit of the Bank Act Security
(including, to the maximum extent permitted by law, all payments or other
recoveries thereunder), as part of the Security; and after the indefeasible
payment of all Facility Indebtedness and the termination of the Commitments,
the Final Permitted Hedge Counterparties shall not be entitled to the benefit
of the Bank Act Security and the Security shall not include the Bank Act
Security.

 

“Security
Documents” means all mortgages, security agreements, hypothecs, pledge
agreements, guarantees and other documents, instruments and agreements
constituting or evidencing the Security, as the same may be amended, restated
or otherwise modified from time to time.

 

“Senior
Secured Indebtedness” means the Facility Indebtedness and, without
duplication, the Hedge Indebtedness owed to each Permitted Hedge Counterparty.

 

“Silver”
means silver having a minimum fineness of 0.999 and which is registered or
registrable, and is in conformity in all respects with the requirements for
good delivery, on the London Bullion Market.

 

“Statutory
Reserves” shall mean a number (expressed as a decimal), determined by
dividing the number one by the number one minus the aggregate of the maximum
applicable reserve 

 

26

 

percentages,
including any marginal, special, emergency or supplemental reserves, (expressed
as a decimal) to the extent established by any banking authority to which any
Lender is subject for LIBOR Advances or any other category of deposits or
liabilities by reference to which the LIBO Rate is determined. LIBOR Advances
shall be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender. Statutory  Reserves shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.

 

“Subordinated
Indebtedness” shall have the meaning ascribed thereto in Section
10.3(c)(vii).

 

“Subsidiary”
with respect to a corporation, has the meaning ascribed to such term in the Business Corporations Act (Ontario) on the
date hereof, and with respect to a partnership, joint venture or other entity,
a partnership, joint venture or other entity of which more than
fifty percent (50%) of the outstanding equity interests having voting power to
elect a majority of the board of directors or equivalent thereof of such
partnership, joint venture or other entity are, directly or indirectly, owned
by the relevant Person. Unless otherwise specified, references to a “Subsidiary”
shall mean a Subsidiary of the Borrower.

 

“Super
Majority Lenders” means, at any time, Lenders, the Commitments of which are
in the aggregate not less than 66 2/3% of the aggregate Commitments of all
Lenders; provided that, if a Lender does not consent to an extension of the
Maturity Date which is requested by the Borrower pursuant to Section 5.2, such
Lender (if still a Lender at the relevant time) shall not be entitled to vote
on any subsequent extension request made by the Borrower pursuant to Section
5.2, and for the purpose of any such subsequent vote such Lender’s Commitment
shall not be included in the denominator of “Super Majority Lenders”.

 

“Tangible
Net Worth” means, at the date of determination, the aggregate value of the
Borrower’s then stated share capital, other paid-in capital and contributed
surplus (but excluding any deficit or shares of the Borrower held by any of its
Subsidiaries) less the aggregate value of all intangibles (including, without
limitation, goodwill) all as determined on a consolidated basis in accordance
with GAAP consistently applied.

 

“Total Debt”
means all Indebtedness of the Borrower on a consolidated basis, but excluding
Indebtedness of the Borrower on a consolidated basis that does not have direct
recourse (as primary or secondary obligor, whether contingent or otherwise) to
any Restricted Party or any property of any Restricted Party.

 

“Total Interest Expense” means, for any period, without duplication, the aggregate expense
incurred by the Borrower on a consolidated basis during such period for
interest, other financing charges and equivalent costs under or in connection
with Indebtedness, including but not limited to (i) interest, (ii) cash
expenditures for interest whether expensed or capitalized, (iii) commissions,
(iv) discounts, (v) the interest or time value of money component of costs
related to factoring or securitizing receivables or monetizing inventory, (vi)
bankers’ acceptance fees, if any, (vii) discounts on bankers’ acceptances, if
any, (viii) fees and charges payable with respect to letters of credit and
letters of guarantee, (ix) the interest portion of any capital lease payments,
(x) net payments, if any, pursuant to Hedge Agreements and (xi) all fees and
other compensation 

 

27

 

paid
to any Person that has extended credit to the Borrower, all calculated in
accordance with GAAP consistently applied.

 

“Total Net Debt” means Total Debt (excluding Subordinated Indebtedness) less
Unencumbered Cash.

 

“Total Net Debt to EBITDA Ratio”  means, for any period, the ratio of
Total Net Debt to EBITDA.

 

“Trust
Indenture” means the trust indenture dated as of February 15, 2002 between
the Borrower and Computershare Trust Company of Canada, as trustee.

 

“Trustee”
means Computershare Trust Company of Canada in its capacity as the fondé de pouvoir under the Hypothec.

 

“Unanimous
Lenders” means, at any time, all Lenders.

 

“Unencumbered Cash” means all cash and Cash Equivalents held by the Borrower in OECD
countries that are not subject to any Lien by any Person other than the
Administrative Agent. For the avoidance of doubt, any cash or Cash Equivalents
held by any joint ventures that is proportionately consolidated into the
Borrower’s balance sheet shall not constitute Unencumbered Cash.

 

“United
States Dollars”, “US Dollars” and “US $” mean lawful money of
the United States of America.

 

“Unsecured
Hedge Counterparty” means, in respect of any Metal Hedge Agreements entered
into by the Borrower, the Persons listed on Annex 4, as such Annex is amended
from time to time at the request of the Borrower and with the consent of the
Majority Lenders, acting reasonably; provided that, there shall be no more than
two Persons listed on Annex 4 at any time; provided further, that each such
Person listed on Annex 4 has executed the “Consent” to the Assignment of Metal
Hedge Agreement (in substantially the form of such Consent) and the Borrower
has delivered such executed consent to the Administrative Agent.

 

“Voting
Stock” of any Person shall mean capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.

 

“Zinc”
means zinc metal of a minimum 0.99995 purity which is registered or
registrable, and is in conformity in all respects with the requirements for
good delivery, on the London Metals Exchange.

 

1.2          Accounting
Terms.  All accounting terms used herein but not
specifically defined herein, shall be construed in accordance with GAAP
consistently applied and all financial data submitted pursuant to this
Agreement shall be prepared in accordance with such principles.

 

28

 

1.3          Headings, etc.  The headings in this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement. All text included in sections or subsections entitled, “Provisions
Reference”, in this Agreement are also inserted for convenience only and shall
not affect the meaning or interpretation of this Agreement.

 

1.4          Provisions Reference.  Reference is made to Section 2 of the
Provisions for other definitional and interpretative principles applicable to
this Agreement.

 

1.5          Amendment and Restatement.   This Agreement is and shall for all purposes
be a further amendment and a restatement of the provisions of the Existing
Credit Agreement. This Agreement shall supersede the Existing Credit Agreement
insofar as it constitutes the entire agreement between the parties concerning
the subject matter of this Agreement, but does not constitute a novation of the
Existing Credit Agreement, the Security held under the Existing Credit
Agreement or any of the indebtedness, liabilities or obligations of the
Borrower thereunder. All Advances (as defined in the Existing Credit Agreement)
shall be Advances under this Agreement, and all of the Facility Indebtedness
(as defined in the Existing Credit Agreement) shall be Facility Indebtedness
under this Agreement. Without in any way limiting the terms of the Existing
Credit Agreement, the Borrower confirms that the existing Security shall
continue to secure all of the Facility Indebtedness and Hedge Indebtedness,
including but not limited to that arising under this Agreement and the other
Financing Documents and the Hedge Agreements to which each Permitted Hedge
Counterparty is a party.

 

1.6          Schedules, etc.  The following Schedules, Annexes and Exhibits
are deemed to be part of this Agreement: 

 

	
  Annex 1

  	
  -

  	
  Model Credit Agreement Provisions

  
	
  Annex 2

  	
  -

  	
  Commitments

  
	
  Annex 3

  	
  -

  	
  Financial Parameters

  
	
  Annex 4

  	
   

  	
  Unsecured Hedge Counterparties

  
	
  Annex 5

  	
  -

  	
  Hedge Agreement Terms

  
	
  Annex 6

  	
  -

  	
  Initial Model and Budget

  
	
  Annex 7

  	
   

  	
  Closing Agenda

  
	
  Schedule 8.1(h)

  	
  -

  	
  Litigation

  
	
  Schedule 8.1(l)

  	
  -

  	
  Mining Properties

  
	
  Schedule 8.1(m)

  	
  -

  	
  Certain Permitted Liens

  
	
  Schedule 8.1(p)

  	
  -

  	
  Certain Contracts

  
	
  Schedule 8.1(q)

  	
  -

  	
  Permits

  
	
  Schedule 8.1(t)

  	
  -

  	
  Subsidiaries and Capital Stock

  
	
  Schedule 8.1(u)

  	
  -

  	
  Environmental

  
	
  Schedule 8.1(v)

  	
  -

  	
  Labour

  
	
  Schedule 8.1(w)

  	
  -

  	
  Employee Matters

  
	
  Schedule 8.1(y)

  	
   

  	
  Partnerships and Other Associations

  
	
  Schedule 8.1(z)

  	
  -

  	
  Investments and Indebtedness

  
	
  Schedule 8.1(cc)

  	
  -

  	
  Hedge Information

  
	
  Schedule 8.1(dd)

  	
  -

  	
  Royalties

  
	
  Exhibit A

  	
  -

  	
  Drawdown Notice

  
	
  Exhibit B

  	
  -

  	
  Instrument of Adhesion

  

 

29

 

	
  Exhibit C

  	
  -

  	
  Assignment of Metal Hedge Agreement

  
	
  Exhibit D

  	
  -

  	
  Assignment of Contracts

  
	
  Exhibit E

  	
  -

  	
  Compliance Certificate

  
	
  Exhibit F

  	
  -

  	
  Investment Certificate (Securities
  Acquisition)

  
	
  Exhibit G

  	
  -

  	
  Investment Certificate (Asset Acquisition)

  
	
  Exhibit H

  	
  -

  	
  Indebtedness Certificate (Other Senior
  Indebtedness)

  
	
  Exhibit I

  	
   

  	
  Indebtedness Certificate (Subordinated
  Indebtedness)

  

 

1.7          Construction.  This Agreement has been negotiated by each
party hereto with the benefit of legal representation, and any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not apply to the construction or interpretation of this
Agreement.

 

ARTICLE 2

CREDIT FACILITY

 

2.1          Creation of the Credit Facility.  Each Lender hereby severally, but not
jointly, agrees to make available to the Borrower, upon and subject to the
terms and conditions hereof, such Lender’s Applicable Percentage of the Credit
Facility.

 

2.2          Amount,
Availability and Purpose.

 

(a)                                  The Outstanding Advances expressed as an Equivalent Amount in US
Dollars shall not exceed at any time the Maximum Facility Amount, and shall
reduce in accordance with the terms and conditions of this Agreement. The
Credit Facility shall be available by way of Prime Rate Advances, Base Rate
Advances, LIBOR Advances, the issuance of L/Cs and/or by presenting orders to a
Lender for acceptance as Bankers’ Acceptances.

 

(b)                                 The aggregate face amount of L/Cs outstanding at any time under the
Credit Facility (calculated by reference to the face amount of each L/C at its
time of issuance) expressed as an Equivalent Amount in US Dollars shall not
exceed US $80,000,000.

 

(c)                                  At the option of the Borrower, up to US $10,000,000 of the Credit
Facility may be used, subject to the terms hereof, by incurring overdrafts in
the Designated Account with BNS, which shall be deemed to be Prime Rate
Advances (if made in Canadian Dollars) and Base Rate Advances (if made in US
Dollars) (the “Overdraft Facility”).

 

(d)                                 Upon and subject to the terms hereof, each Lender shall severally
make Advances to the Borrower from time to time prior to the Maturity Date in
an amount equal to its Applicable Percentage of the Maximum Facility Amount;
provided that the aggregate amount of Advances made by each Lender shall not
exceed such Lender’s Commitment and provided further that the Advances by way
of the Overdraft Facility shall be made solely by BNS.

 

30

 

(e)                                  Prior to the Maturity Date, the principal amount of any Advance
which is prepaid other than pursuant to Sections 5.3 and 5.4 may, subject to
the terms hereof, be reborrowed.

 

(f)                                    All Advances shall be applied by the Borrower for general corporate
purposes, including for acquisitions, to meet working capital needs and for
Capital Expenditures on existing and new projects, to the extent permitted by
this Agreement.

 

2.3          Termination
of Credit Facility. Unless otherwise
accelerated and terminated in accordance with Section 11.2, or unless
terminated in accordance with Section 5.3, all outstanding Facility
Indebtedness shall be repaid in full, and the Commitments and Credit Facility
terminated, on the Maturity Date.

 

ARTICLE 3

ADVANCES

 

3.1          Drawdown
Procedure.

 

(a)                                  Unless otherwise specified herein, the Borrower may obtain Advances
under the Credit Facility, subject to the provisions hereof, by delivering to
the Administrative Agent at the Branch of Account not less than four Banking
Days’ prior to each proposed Drawdown Date for LIBOR Advances, four Business
Days’ prior to each proposed Drawdown Date for Advances by way of Bankers’
Acceptances, two Business Days’ prior to each proposed Drawdown Date for
Advances by way of Prime Rate Advances and Base Rate Advances, and such notice
period in respect of Advances by way of L/Cs as BNS may reasonably require so
that it has sufficient time to review the proposed form of L/C, a Drawdown
Notice, specifying among other things, the type of Advance, the amount to be borrowed,
the requested Drawdown Date and, if applicable, the length of the Interest
Period (for LIBOR Advances) or term (for Bankers’ Acceptances); provided that,
if the Borrower fails to give such notice with respect to the roll-over of any
outstanding LIBOR Advances or Advances by way of Bankers’ Acceptances prior to
any applicable Interest Period or maturity date, as the case may be, such
Advances shall be deemed to be Base Rate Advances, in the case of LIBOR
Advances, and Prime Rate Advances, in the case of Bankers’ Acceptances, and
shall bear interest at a rate per annum equal to the Base Rate plus the
Applicable Margin or the Prime Rate plus the Applicable Margin, as the case may
be (provided that at any time thereafter the Borrower may, provided no Default
has occurred and is continuing, convert such Advances into LIBOR Advances or
request the issuance of Bankers’ Acceptances upon giving notice as set forth in
this Section 3.1(a)).

 

(b)                                 Upon receipt of each Drawdown Notice for a Prime Rate Advance, Base
Rate Advance and LIBOR Advance, the Administrative Agent shall forthwith notify
the Lenders thereof specifying the amount of the Advance being requested, the 

 

31

 

proposed
Drawdown Date, each Lender’s Applicable Percentage of the proposed Advance and,
if applicable, the Interest Period thereof.

 

(c)                                  Each Lender shall make available to the Administrative Agent such
Lender’s Applicable Percentage of the relevant Prime Rate Advance, Base Rate
Advance or LIBOR Advance before 11:00 a.m. (Toronto time) on the relevant
Drawdown Date, by transfer through the interbank payment system in immediately
available funds, to the account designated by the Administrative Agent at the
Branch of Account.

 

(d)                                 Provided that the applicable conditions set forth in Article 6 have
been fulfilled after receipt by the Administrative Agent of the funds
transferred to it pursuant to Section 3.1(c), the Administrative Agent shall
forthwith make such funds available to the Borrower by debiting the account(s)
referred to in Section 3.1(c) and by crediting the Designated Account or by
paying the Borrower, as the Borrower shall otherwise direct, like funds in the
aggregate of such funds received by the Administrative Agent from the Lenders prior
to 2:00 p.m. (Toronto time) on the Drawdown Date, but if the conditions
precedent to the Advance are not met by 2:00 p.m. (Toronto time) on the
Drawdown Date, the Administrative Agent shall return such funds to the Lenders
or invest them in an overnight investment as orally instructed by each Lender
until such time as the Advance is made.

 

(e)                                  Each Drawdown Notice shall be irrevocable and binding on the
Borrower. In respect of the Advance specified in any Drawdown Notice, the
Borrower shall indemnify the Administrative Agent and each Lender and hold the
Administrative Agent and each Lender harmless from any and all loss or expense
incurred or sustained by the Administrative Agent and such Lender as a result
of (i) failure by the Borrower to borrow such Advance in accordance with the
terms hereof and the relevant Drawdown Notice after giving a Drawdown Notice in
respect thereof or (ii) the Advance not occurring on a Drawdown Date due to the
failure by the Borrower to fulfil any of the applicable conditions set forth in
Article 6 or the occurrence of a Default; which loss or expense shall include,
without limitation, any loss or expense incurred by reason of the liquidation
or re-employment of deposits or other funds obtained by the Administrative
Agent or any Lender to fund the requested Advance, but shall not include any
compensation for loss of the amount of the Applicable Margin which would
otherwise have been earned by the Lenders if such Advance had been made or if
such Advance had been made on the requested Drawdown Date. The Borrower shall,
on demand from the Administrative Agent, pay to the Administrative Agent for or
on behalf of itself or any Lender the amount of such loss or expense and the
certificate of the Administrative Agent or each such Lender setting out the
amount of such loss or expense shall, in the absence of manifest error, be
prima facie evidence thereof. The indemnity set out in this Section shall
survive the termination of the Commitments and the repayment of all amounts
outstanding hereunder and under the Financing Documents.

 

32

 

(f)                                    Provisions Reference: Reference is made to Section 6(a) of the
Provisions regarding “Funding by Lenders” and “Presumption by Administrative
Agent”.

 

(g)                                 The failure of any Lender to make its Applicable Percentage of an
Advance to be made by it shall not relieve any other Lender of its obligation,
if any, hereunder to make its Applicable Percentage of an Advance on the
relevant Drawdown Date, but no Lender shall be responsible for the failure of
any other Lender to make an Advance to be made by the defaulting Lender on such
Drawdown Date.

 

(h)                                 If any Lender shall fail to advance its Applicable Percentage of an
Advance, the Administrative Agent shall, if requested in writing by the
Borrower, for 20 days after such request, invite other Eligible Assignees to
assume thenceforth all of the obligations of such Lender under the Credit
Facility in accordance with the procedures set out in Section 3.3(b) of the
Provisions. In accordance with such procedures, if such Eligible Assignee is a
Lender or an Affiliate of a Lender, no consent of the Borrower shall be
required. If such invitee is an Eligible Assignee which is not a Lender or an
Affiliate of a Lender, the consent of the Borrower as to the replacement Lender
shall be required, which consent shall not be unreasonably withheld; provided
that the Borrower’s consent shall not be required if a Default has occurred and
is continuing. Such defaulting Lender shall reimburse the Administrative Agent
for all reasonable out-of-pocket costs and expenses incurred by the
Administrative Agent in connection therewith. If such defaulting Lender fails
to so reimburse the Administrative Agent within three Business Days after
demand therefor, the Borrower shall reimburse the Administrative Agent for all
such costs and expenses, without limiting the rights of the Borrower against
the defaulting Lender. The defaulting Lender and any Affiliate of such Lender
which is a Permitted Hedge Counterparty shall, effective as of the assignment
to the replacement Lender, assign, at price determined in a reasonable manner
from market quotations in accordance with customary market practices, all Hedge
Agreements it or they hold with the Borrower to such replacement Lender or to
another Lender or Permitted Hedge Counterparty.

 

3.2          Prime Rate, Base Rate and LIBOR
Advances. Except with respect to Advances made under the Overdraft Facility,
each Prime Rate Advance shall be in an aggregate minimum amount of Cdn.
$1,000,000 and in a whole multiple of Cdn. $1,000,000. Each LIBOR Advance or
Base Rate Advance shall be in minimum amount of US $1,000,000 and a whole
multiple of US $1,000,000. The Borrower shall pay interest to the
Administrative Agent for the account of the Lenders at the Branch of Account on
any such Advances outstanding to it from time to time hereunder at the
applicable rate of interest specified in Article 4.

 

3.3          LIBOR Tranches. There
shall not at any time be more than six different LIBOR Tranches.

 

3.4          Overdraft
Facility. All Advances
under the Overdraft Facility shall be made solely by BNS and records concerning
Advances under the Overdraft Facility shall be maintained solely by BNS. All
payments of principal, interest, fees and other amounts relating to the
Overdraft Facility shall be made solely to BNS at the Branch of Account. Any
notices by the Borrower in 

 

33

 

connection
with the Overdraft Facility shall be made to BNS. Neither the notice periods
set out in Section 3.1(a) nor minimum amount requirements for Advances shall
apply to Advances by way of overdraft under the Overdraft Facility. In
addition, in respect of Advances by way of overdraft under the Overdraft
Facility, the Borrower shall not be required to deliver a Drawdown Notice
pursuant to Section 6.2(c). In connection with Advances under the Overdraft
Facility, BNS shall ascertain the position or net position of the Borrower’s
Designated Account at the close of business daily. If the Canadian Dollar
position or net position is a debit in favour of BNS, the debit will (if the
Borrower is entitled to an Advance) be deemed to be a Prime Rate Advance under
the Overdraft Facility in the amount of the debit. If the US Dollar position or
net position is a debit in favour of BNS, the debit will (if the Borrower is
entitled to an Advance) be deemed to be a Base Rate Advance under the Overdraft
Facility in the amount of the debit. If a position or net position is a credit
in favour of the Borrower, the credit will be deemed to be a repayment of a
Prime Rate Advance or Base Rate Advance, as the case may be, under the
Overdraft Facility in the amount of the credit to the extent of any principal
amounts owing in respect thereof.

 

3.5          Conversions. 
Subject to the other terms of this Agreement, the Borrower may from time
to time convert all or any part of the outstanding amount of any Advance into
another form of Advance permitted by this Agreement.

 

3.6          Execution
of Bankers’ Acceptances.

 

(a)                                  To facilitate the acceptance of Bankers’ Acceptances hereunder, the
Borrower hereby appoints each Lender as its attorney to sign and endorse on its
behalf, as and when considered necessary by the Lender, an appropriate number
of orders in the form prescribed by that Lender.

 

(b)                                 Each Lender may, at its option, execute any order in handwriting or
by the facsimile or mechanical signature of any of its authorized officers, and
the Lenders are hereby authorized to accept or pay, as the case may be, any
order of the Borrower which purports to bear such a signature notwithstanding
that any such individual has ceased to be an authorized officer of the Lender.
Any such order or Bankers’ Acceptance shall be as valid as if such officer were
an authorized officer at the date of issue of the order or Bankers’ Acceptance.

 

(c)                                  Any order or Bankers’ Acceptance signed by a Lender as attorney for
the Borrower, whether signed in handwriting or by the facsimile or mechanical
signature of an authorized officer of a Lender may be dealt with by the
Administrative Agent or any Lender to all intents and purposes and shall bind
the Borrower as if duly signed and issued by the Borrower.

 

(d)                                 The receipt by the Administrative Agent of a request for an Advance
by way of Bankers’ Acceptances shall be each Lender’s sufficient authority to
execute, and each Lender shall, subject to the terms and conditions of this
Agreement, execute orders in accordance with such request and the advice of the
Administrative Agent given pursuant to Section 3.9, and the orders so executed
shall thereupon be deemed to have been presented for acceptance.

 

34

 

3.7          Sale
of Bankers’ Acceptances.

 

(a)                                  It shall be the responsibility of each Lender to arrange, in
accordance with normal market practice, for the sale on each Drawdown Date of
the Bankers’ Acceptances issued by the Borrower and to be accepted by that
Lender, failing which the Lender shall purchase its Bankers’ Acceptances.

 

(b)                                 In accordance with the procedures set forth in Section 3.9, the
Administrative Agent will make the net proceeds of the requested Advance by way
of Bankers’ Acceptances received by it from the Lenders available to the
Borrower on the Drawdown Date by crediting the Designated Account with such amount.

 

3.8          Size
and Maturity of Bankers’ Acceptances and Rollovers.
Each Advance of Bankers’ Acceptances shall be in a
minimum amount of Cdn. $1,000,000. Each Bankers’ Acceptance shall have a term
of 30 to 180 days after the date of acceptance of the order by a Lender, but no
Bankers’ Acceptance may mature on a date which is not a Business Day or on a
date after the Maturity Date. The face amount at maturity of a Bankers’
Acceptance may be renewed as a Bankers’ Acceptance or converted into another
form of Advance permitted by this Agreement.

 

3.9          Co-ordination of BA Advances. Each
Lender shall advance its Applicable Percentage of each Advance by way of
Bankers’ Acceptances in accordance with the provisions set forth below.

 

(a)                                  The Administrative Agent, promptly following receipt of a notice
from the Borrower pursuant to Section 3.1(a) requesting an Advance by way of
Bankers’ Acceptances, shall advise each Lender of the aggregate face amount and
term(s) of the Bankers’ Acceptances to be accepted by it, which term(s) shall
be identical for all Lenders. The aggregate face amount of Bankers’ Acceptances
to be accepted by a Lender shall be determined by the Administrative Agent by
reference to the respective Commitments of the Lenders, except that, if the
face amount of a Bankers’ Acceptance would not be a whole multiple of Cdn.
$1,000, the face amount shall be increased or decreased by the Administrative
Agent in its sole discretion to the nearest whole multiple of Cdn. $1,000.

 

(b)                                 Each Lender shall transfer to the Administrative Agent at the Branch
of Account for value on each Drawdown Date immediately available Cdn. Dollars
in an aggregate amount equal to the BA Discount Proceeds of all Bankers’
Acceptances accepted and sold or purchased by the Lender on such Drawdown Date
net of the applicable Bankers’ Acceptance Fee and net of the amount required to
pay any of its previously accepted Bankers’ Acceptances that are maturing on
the Drawdown Date or any of its other Advances that are being converted to
Bankers’ Acceptances on the Drawdown Date.

 

(c)                                  If the Administrative Agent determines that all the conditions
precedent to an Advance specified in this Agreement have been met, it shall
advance to the Borrower the amount delivered by each Lender by crediting the
Designated Account or by paying the Borrower, as the Borrower shall otherwise
direct, prior 

 

35

 

to 2:00 p.m.
(Toronto time) on the Drawdown Date, but if the conditions precedent to the
Advance are not met by 2:00 p.m. (Toronto time) on the Drawdown Date, the
Administrative Agent shall return the funds to the Lenders or invest them in an
overnight investment as orally instructed by each Lender until such time as the
Advance is made. To the extent that any such funds are returned to a Lender,
such funds (less the Bankers’ Acceptance Fee) shall be deemed to be a
reimbursement by the Borrower to such Lender of corresponding amounts payable
by such Lender under any Bankers’ Acceptance which were issued.

 

(d)                                 Notwithstanding any other provision hereof, for the purpose of
determining the amount to be transferred by a Lender to the Administrative
Agent for the account of the Borrower in respect of the sale of any Bankers’
Acceptance issued by the Borrower and accepted by such Lender, the proceeds of
sale thereof shall be deemed to be an amount equal to the BA Discount Proceeds
calculated with respect thereto. Accordingly, in respect of any particular
Bankers’ Acceptance accepted by it, a Lender, in addition to its entitlement to
retain the applicable Bankers’ Acceptance Fee for its own account, shall be
entitled to retain for its own account the amount, if any, by which the actual
proceeds of sale thereof exceed the BA Discount Proceeds calculated with
respect thereto, and shall be required to pay out of its own funds the amount,
if any, by which the actual proceeds of sale thereof are less than the BA
Discount Proceeds calculated with respect thereto.

 

(e)                                  Whenever the Borrower requests an Advance that includes Bankers’
Acceptances, each Lender that is not permitted by any Requirements of Law or by
customary market practice to accept a Bankers’ Acceptance (a “Non BA Lender”) shall, in lieu of accepting its pro rata
amount of such Bankers’ Acceptances, make available to the Borrower on the
Drawdown Date an Advance (a “BA Equivalent Advance”)
in Canadian Dollars and in an amount equal to the BA Discount Proceeds of the
Bankers’ Acceptances that the Non BA Lender would have been required to accept
on the Drawdown Date if it were able to accept Bankers’ Acceptances. Each Non
BA Lender shall also be entitled to deduct from the BA Equivalent Advance an
amount equal to the Bankers’ Acceptance Fee that would have been applicable had
it been able to accept Bankers’ Acceptances. The BA Equivalent Advance shall
have a term equal to the term of the Bankers’ Acceptances that the Non BA
Lender would otherwise have accepted and the Borrower shall, at the end of that
term, be obligated to pay the Non BA Lender an amount equal to the aggregate face
amount of the Bankers’ Acceptances that it would otherwise have accepted. All
provisions of this Agreement applicable to Bankers’ Acceptances and Lenders
that accept Bankers’ Acceptances shall apply mutatis
mutandis to BA Equivalent Advances and Non BA Lenders and, without
limiting the foregoing, Advances shall include BA Equivalent Advances.

 

3.10        Payment
of Bankers’ Acceptances. The Borrower shall provide for the payment to the Administrative
Agent at the Branch of Account for the account of the applicable Lenders of the
full face amount of each Bankers’ Acceptance accepted for its account on the
earlier of (a) the date of maturity of a Bankers’ Acceptance and (b) the date
on which any Facility Indebtedness 

 

36

 

becomes
due and payable hereunder. Any amount payment of which has not been provided
for by the Borrower in accordance with this Section shall be automatically
converted to Prime Rate Advances in accordance with Section 3.1(a).

 

3.11        Deemed
Advance - Bankers’ Acceptances. Except for amounts which are paid from the proceeds of a rollover of
a Bankers’ Acceptance or for which payment has otherwise been funded by the
Borrower (including by way of automatic conversion in accordance with Section
3.1(a)), any amount which a Lender pays to any third party on or after the date
of maturity of a Bankers’ Acceptance in satisfaction of the face amount thereof
or which is owing to the Lender in respect of such a Bankers’ Acceptance on or
after the date of maturity of such a Bankers’ Acceptance resulting from such
Lender paying an amount in satisfaction of the face amount of such Bankers’
Acceptance to the holder thereof, shall be deemed to be a Prime Rate Advance to
the Borrower. Each Lender shall forthwith give notice to the Administrative
Agent of the making of such a payment and the Administrative Agent shall
promptly give similar notice to the other Lenders and to the Borrower. Interest
shall be payable on such Prime Rate Advance in accordance with the terms applicable
to Prime Rate Advances.

 

3.12        Waiver. The Borrower shall not claim from a
Lender any days of grace for the payment at maturity of any Bankers’
Acceptances presented and accepted by the Lender pursuant to this Agreement. The
Borrower waives any defence to payment which might otherwise exist if for any
reason a Bankers’ Acceptance shall be held by a Lender in its own right at the
maturity thereof, and the doctrine of merger shall not apply to any Bankers’
Acceptance that is at any time held by a Lender in its own right.

 

3.13        Degree
of Care. Any executed
orders to be used as Bankers’ Acceptances shall be held in safekeeping with the
same degree of care as if they were the Lender’s own property, and shall be
kept at the place at which such orders are ordinarily held by such Lender.

 

3.14        Indemnity. The Borrower shall indemnify and hold
the Lenders, and each of them, harmless from any loss, cost, damage or expense
with respect to any Bankers’ Acceptance dealt with by the Lenders for the
Borrower’s account, but shall not be obliged to indemnify a Lender for any
loss, cost, damage or expense caused by the gross negligence or wilful
misconduct of that Lender.

 

3.15        Obligations Absolute. The
obligations of the Borrower with respect to Bankers’ Acceptances under this
Agreement shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including,
without limitation, the following circumstances:

 

(a)                                  any lack of validity or enforceability of any order accepted by a
Lender as a Bankers’ Acceptance; or

 

(b)                                 the existence of any claim, set-off, defence or other right which
the Borrower may have at any time against the holder of a Bankers’ Acceptance,
a Lender or any other Person, whether in connection with this Agreement or
otherwise.

 

37

 

3.16        Shortfall on Drawdowns, Rollovers
and Conversions. The Borrower agrees that:

 

(a)                                  the difference between the amount of an Advance requested by the Borrower
by way of Bankers’ Acceptances and the actual proceeds of the Bankers’
Acceptances;

 

(b)                                 the difference between the actual proceeds of a Bankers’ Acceptance
and the amount required to pay a maturing Bankers’ Acceptance, if a Bankers’
Acceptance is being rolled over; and

 

(c)                                  the difference between the actual proceeds of a Bankers’ Acceptance
and the amount required to repay any Advance which is being converted to a
Bankers’ Acceptance;

 

shall be
funded and paid by the Borrower from its own resources, by 11:00 a.m. on the
applicable Drawdown Date or may be advanced as a Prime Rate Advance if the
Borrower is otherwise entitled to such an Advance.

 

3.17        Prohibited
Use of L/Cs and Bankers’ Acceptances. The Borrower shall not enter into any agreement or arrangement of
any kind with any Person to whom Bankers’ Acceptances have been delivered
whereby the Borrower undertakes to replace such Bankers’ Acceptances on a
continuing basis with other Bankers’ Acceptances, nor shall the Borrower
directly or indirectly take, use or provide Bankers’ Acceptances or L/Cs as
security for funds loaned or advanced from any other Person. For greater
certainty, L/Cs may be used as security for deferred amounts and purchase price
adjustments owing in connection with acquisitions permitted by this Agreement.

 

3.18        Issuance
and Maturity of L/Cs.

 

(a)                                  A request for an Advance by way of L/C shall be made by the Borrower
in accordance with Section 3.1(a) except that a request shall be made to BNS. A
request shall include the details of the L/C to be issued. BNS shall promptly
notify the Borrower of any comment concerning the form of the L/C requested by
the Borrower and shall, if the Borrower is otherwise entitled to an Advance,
issue the L/C to the Borrower on the Drawdown Date or as soon thereafter as BNS
is satisfied with the form of L/C to be issued.

 

(b)                                 Each L/C issued under this Agreement shall have a term which is not
more than one year after its issuance date or renewal date. An L/C may be
renewed by the Borrower subject to complying with the terms of this Agreement
applicable to an Advance by way of L/C.

 

3.19        Payment
of L/Cs.

 

(a)                                  The Borrower shall provide for the payment to BNS at the Branch of
Account of the full face amount of each L/C (or the amount actually paid in the
case of a partial payment) on the earlier of (i) the date on which BNS makes a
payment to the beneficiary of an L/C, and (ii) the date on which any Facility
Indebtedness becomes due and payable hereunder, provided that any amount paid
by the 

 

38

 

Borrower under
this clause (ii) shall for all purposes be deemed to be Cash Collateral under
Section 3.20. Any amount payment of which has not been provided for by the
Borrower in accordance with this Section shall be automatically converted to a
Prime Rate Advance or Base Rate Advance as set out in Section 3.21.

 

(b)                                 The obligation of the Borrower to reimburse BNS for a payment to a
beneficiary of an L/C shall be absolute and unconditional (without prejudice to
the Borrower’s right, if applicable, after reimbursing BNS, to claim damages
for matters directly resulting from BNS’s gross negligence or wilful
misconduct) and shall not be reduced by any demand or other request for payment
of an L/C (a “Demand”), which is paid or acted
upon in good faith and in conformity with laws, regulations or customs
applicable thereto, being invalid, insufficient, fraudulent or forged, nor
shall the Borrower’s obligation be subject to any defence or be affected by any
right of set-off, counter-claim or recoupment which the Borrower may now or
hereafter have against the beneficiary, BNS or any other Person for any reason
whatsoever, including the fact that BNS paid a Demand or Demands (if
applicable) aggregating up to the amount of the L/C notwithstanding any
contrary instructions from the Borrower to BNS (other than instructions
contained in the L/C, which instructions need be complied with only to the same
extent and in accordance with the same standards set forth above) or the
occurrence of any event including, but not limited to, the commencement of
legal proceedings to prohibit payment by BNS of a Demand. Any action, inaction
or omission taken or suffered by BNS under or in connection with an L/C or any
Demand, if in good faith and in conformity with laws, regulations or customs
applicable thereto, shall be binding on the Borrower and shall not place BNS
under any resulting liability to the Borrower. Without limiting the generality
of the foregoing, BNS may receive, accept, or pay as complying with the terms
of the L/C, any Demand otherwise in order which may be signed by, or issued to,
any administrator, executor, trustee in bankruptcy, receiver or other Person or
entity acting as the representative or in place of, the beneficiary.

 

3.20        Cash Collateral. Except where any amounts under this Agreement have become
immediately due and payable, if any L/C is outstanding on the Maturity Date or
on any other date that all Commitments are terminated, then on the Maturity
Date or such other date, the Borrower shall, promptly on demand by the
Administrative Agent, deposit with the Administrative Agent for the benefit of
the Secured Parties Cash Collateral in an amount equal to the full undrawn
principal amount at maturity of all L/Cs then outstanding. Such Cash Collateral
shall be held by the Administrative Agent, as security for, and to provide for
the payment of, the Borrower’s obligations in respect of such outstanding L/Cs.
The Administrative Agent may at any time after the Maturity Date apply any or
all of such Cash Collateral to the payment of any or all of the Borrower’s
obligations in respect of such L/Cs which become due and payable. At the
Borrower’s request, but subject to the Administrative Agent’s reasonable
approval, the Administrative Agent shall invest any Cash Collateral consisting
of cash and any proceeds of Cash Collateral consisting of cash in Cash
Equivalents, and any commissions, expenses and penalties incurred by the
Administrative Agent in connection with any investment and redemption of such
Cash Collateral shall be payable by the Borrower on demand, shall bear 

 

39

 

interest
at the rates provided herein for in Section 4.1(c) on the basis of the Prime
Rate in effect from time to time, and shall be charged to any accounts of the
Borrower, or, at the Administrative Agent’s option, shall be paid out of the
proceeds of any earnings received by the Administrative Agent from the
investment of such Cash Collateral provided herein or out of such cash itself.
Neither the Administrative Agent nor the Secured Parties make any
representation or warranty as to, and shall not be responsible for, the rate of
return, if any, earned on any Cash Collateral. Any earnings on Cash Collateral
shall be held as additional Cash Collateral on the terms set forth in this
Section 3.20.

 

3.21        Deemed Advance - L/Cs. Except
for amounts which have been funded by the Borrower, any amount which BNS pays
to any third party in respect of an L/C in satisfaction or partial satisfaction
thereof shall also be deemed to be a Prime Rate Advance in the case of Canadian
Dollar L/Cs or a Base Rate Advance in the case of Euro L/Cs (based upon the
Equivalent Amount of such amount in US Dollars) or US Dollar L/Cs. BNS shall
forthwith give notice of the making of such an Advance to the Borrower and to
the Lenders. Interest shall be payable on such Advances in accordance with the
terms applicable to such Advances.

 

3.22        Lenders’ Obligations Relating to
Overdraft Facility and L/Cs. Notwithstanding that Advances under the
Overdraft Facility and Advances made by way of L/Cs are for the time being made
by BNS, it is the intention of the parties that the ultimate credit risk and
exposure of any Lender in respect of all Advances be in accordance with its
Applicable Percentage. Accordingly, immediately upon the issuance of an L/C or
the making of Advance under the Overdraft Facility in accordance with this
Agreement, each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from BNS, without recourse or warranty, an undivided
interest and participation therein to the extent of such Lender’s Applicable
Percentage. Each Lender shall, on the date a draft or demand under any L/C is
honoured, from time to time as requested by the Administrative Agent or
otherwise upon the occurrence of a Default, without regard to any other
provision of this Agreement or any of the other Financing Documents, or any
defence any Lender may have in connection with such payment or any defence any
Lender may have in connection with such participation, pay its Applicable
Percentage of the amount paid by BNS with respect to an L/C and not reimbursed
by the Borrower, and pay its Applicable Percentage by way of Overdraft
Facility, by payment to the Administrative Agent for reimbursement of BNS on
such day in immediately available funds. If and to the extent such Lender shall
not make such payment available to the Administrative Agent, such Lender and
the Borrower severally agree to pay to the Administrative Agent for
reimbursement of BNS forthwith on demand such amount together with interest
thereon, for each day from the date such amount was paid or credited by BNS
until such amount is made available to the Administrative Agent at a per annum
rate equal to the Prime Rate plus the Applicable Margin or the Base Rate plus
the Applicable Margin, as the case may be. The failure of any Lender to pay its
Applicable Percentage of any such amount shall not relieve any other Lender, or
the Borrower, of its obligation to make available any amount required to be
paid by it under this Section, but no Lender shall be responsible for the
failure of any other Lender to make such payment. If any Lender fails to take
the actions required under this Section, the Administrative Agent may, without
prejudice to the Borrower’s obligation to pay the Administrative Agent for
reimbursement of BNS as contemplated in Section 3.19 and this Section 3.22, and
until the required action has been taken by such Lender, make appropriate
adjustments to the payments to 

 

40

 

the
defaulting Lender of amounts otherwise required to be made to such Lender under
this Agreement.

 

3.23        Adjustment of Applicable
Percentages. While BNS is the sole Lender making Advances under the Overdraft
Facility and issuing L/Cs, its participation in Advances and payments
(including standby fees) under the other Advances hereunder shall be reduced
and shall be adjusted by the Administrative Agent from time to time, so that
the aggregate of the Advances it has made or committed to make under those
other Advances reflects as closely as reasonably possible its overall
Applicable Percentage of those other Advances.

 

3.24        Evidence of Indebtedness.  The Advances made by the Lenders shall be
evidenced by records maintained by the Administrative Agent and by each Lender
concerning those Advances it has made. The Administrative Agent shall also
maintain records of Advances by way of Bankers’ Acceptances and L/Cs, and each
Lender shall also maintain records relating to Bankers’ Acceptances that it has
accepted. BNS shall also maintain records relating to L/Cs that it has issued. The
records maintained by the Administrative Agent, and by BNS relating to L/Cs,
shall constitute, in the absence of manifest error, prima facie evidence of the Facility Indebtedness and all
details relating thereto. The failure of the Administrative Agent or any Lender
to correctly record any such amount or date shall not, however, adversely
affect the obligation of the Borrower to pay the Facility Indebtedness in
accordance with this Agreement.

 

ARTICLE 4

INTEREST RATES AND FEES

 

4.1          Interest
Rate and Payment Dates.

 

(a)                                  Subject to Sections 4.1(c) and 4.4, (i) LIBOR Advances shall bear
interest for each day during each Interest Period with respect thereto on the
unpaid principal amount thereof at a rate per annum equal to the LIBO Rate
determined for such day plus the Applicable Margin, (ii) Prime Rate Advances
shall bear interest on the unpaid principal amount thereof at a rate per annum
equal to the Prime Rate plus the Applicable Margin, (iii) Base Rate Advances
shall bear interest on the unpaid principal amount thereof at a rate per annum
equal to the Base Rate plus the Applicable Margin and (iv) the rate per annum
for calculating the Bankers’ Acceptance Fee shall be the Applicable Margin
therefor.

 

(b)                                 All interest payable in respect of an Advance shall accrue from the
date of each Advance and shall, with respect to LIBOR Advances, become due and
payable in arrears on the last day of each Interest Period in respect thereof
and, if the Interest Period is longer than three months, every three months
after the date of the relevant LIBOR Advance and, in the case of all other
Advances (other than Advances by way of Bankers’ Acceptances and L/Cs), on the
last Business Day of each calendar month.

 

(c)                                  If all or a portion of the principal amount or interest of any of
the Advances shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise) such overdue amount shall, to the extent permitted
by all applicable 

 

41

 

Requirements
of Law, bear interest at a rate which is 2% greater than the rate which would
otherwise be applicable pursuant to Section 4.1(a) (in the case of LIBOR
Advances, based on the existing LIBO Rate until the expiry of the then
applicable Interest Period and thereafter based on successive Interest Periods
of one month) from the date of such non-payment until paid in full (as well
after, as before Default, maturity or judgment) with interest on overdue
interest bearing interest at the same rate.

 

4.2          Computation
and Determination of Interest and Fees.

 

(a)                                  Interest in respect of LIBOR Advances shall be calculated on the
basis of a 360 day year for the actual number of days elapsed in each Interest
Period. Interest in respect of Base Rate Advances shall be calculated on the
basis of a 365 or 366 day year, as the case may be. Interest in respect of
Prime Rate Advances shall be calculated on the basis of a 365 or 366 day year,
as the case may be.

 

(b)                                 Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall constitute prima facie
evidence of such interest rate. The Administrative Agent shall, at the request
of the Borrower, deliver to the Borrower a statement showing the basis used by
the Administrative Agent in determining any interest rate pursuant to Article
4.

 

(c)                                  When requested by the Administrative Agent in the event that
Telerate Page 3750 or any successor page is not functioning or available, each
Reference Bank shall use its best efforts to furnish quotations of LIBO Rates
to the Administrative Agent as contemplated hereby. If any Reference Bank shall
in such case be unable or otherwise fail to supply such rates to the
Administrative Agent upon its request, the LIBO Rate shall be determined on the
basis of the quotations of the remaining Reference Bank.

 

(d)                                 If any Reference Bank’s Commitment shall terminate (otherwise than
on termination of all the Commitments), or all of its Advances are assigned for
any reason whatsoever, such Reference Bank shall thereupon cease to be a
Reference Bank, and if, as a result of the foregoing, there shall only be one
Reference Bank remaining, then the Administrative Agent (after consultation
with the Borrower and the Lenders) may, by notice to the Borrower and the
Lenders, designate another Lender that is a bank as a Reference Bank.

 

4.3          Provisions Reference.  Reference is made to Section 3.5 of the
Provisions regarding “Inability to Determine Rates”.

 

4.4          Interest Act.  Each rate of interest which is calculated
with reference to a period (the “deemed interest period”) that is less than the
actual number of days in the calendar year of calculation is, for the purposes
of the Interest Act (Canada),
equivalent to a rate based on a calendar year calculated by multiplying such
rate of interest by the actual number of days in the calendar year of
calculation and dividing by the number of days in the deemed interest period.

 

42

 

4.5          Prohibited Rates of Interest.  Notwithstanding any other provision of this
Agreement or any other Financing Documents, the Borrower shall not be obliged
to make any payment of interest or other amounts payable to the Administrative
Agent or Lenders in an amount or at a rate that would be prohibited by law or
would result in the receipt of interest at a criminal rate, as the terms “interest”
and “criminal rate” are defined under the Criminal
Code (Canada), or that would contravene any usury laws which may be
applicable to any obligations of the Borrower in connection with this Agreement
or the other Financing Documents. In any such case, any payment, collection or
demand for interest in excess of the maximum permitted rate shall,
notwithstanding such provision, be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in a receipt by the
Administrative Agent or Lender of “interest” at a “criminal rate”.

 

4.6          Commitment Fee.  The Borrower shall pay to the Administrative
Agent on the last Business Day of each month, commencing on the last Business
Day of the month in which the Restatement Date occurs, for the account of each
Lender, a commitment fee calculated on the average daily sum of each Lender’s
Available Commitment during each month (or such shorter period with respect to
the first such payment date) at the Commitment Fee Rate, payable in arrears and
calculated on the basis of a 365 or 366 day year, as applicable. Such
commitment fee shall be distributed by the Administrative Agent to the Lenders
based on their Applicable Percentage.

 

4.7          L/C Fees. Payment
of L/C fees shall be made by the Borrower to BNS at the Branch of Account. The
L/C fees which accrue during each calendar quarter shall be paid in arrears one
Business Day after such calendar quarter. L/C fees shall be calculated at the
annual rate of the then Applicable Margin on the face amount of each L/C for
the duration of its term on the basis of the actual number of days to elapse
from and including the date of issuance or renewal by BNS to but not including
the expiry date of the L/C. Such L/C fees shall be distributed by the
Administrative Agent to the Lenders based on their Applicable Percentage. An
additional L/C fronting fee shall be payable by the Borrower to BNS, for BNS’s
sole benefit, at the Branch of Account. The L/C fronting fee which accrues
during each calendar quarter shall be paid in arrears one Business Day after
such calendar quarter. The L/C fronting fee shall be calculated at the annual
rate of 0.12% per annum on the face amount of each L/C for the duration of its
term on the basis of the actual number of days to elapse from and including the
date of issuance or renewal by BNS to but not including the expiry date of the
L/C. L/C fees shall be calculated on the basis of a 365 or 366 day year, as
applicable.

 

4.8          Interest under Overdraft Facility. All payments of interest and any other amount with respect to the
Overdraft Facility shall be payable by the Borrower to the Administrative Agent
at the Branch of Account for the account of the Lenders. Such interest and
other amounts shall be distributed by the Administrative Agent to the Lenders
based on their Applicable Percentage, upon the Administrative Agent making
adjustments to its participation in Advances under Section 3.23.

 

43

 

ARTICLE 5

REDUCTIONS AND PAYMENTS

 

5.1          General Rule Regarding Repayments. 
Subject to Section 11.6 hereof and Section 5
of the Provisions, repayment of an outstanding Advance made by the Borrower
shall be applied by the Administrative Agent among all Lenders on the basis of
their Applicable Percentage.

 

5.2          Term and Repayments.

 

(a)                                  Unless due and payable sooner in accordance with this Agreement, all
Facility Indebtedness shall be due and payable on December 23, 2011, unless
this Agreement is extended, upon the irrevocable request of the Borrower (which
request may be made at its option), with the consent of the Super Majority
Lenders, in their sole discretion, for three additional one year terms in
accordance with this Section 5.2.

 

(b)                                 Each request for an extension of this Agreement must be made by the
Borrower (if it wishes to exercise its option to make such request) providing
the Administrative Agent with irrevocable written notice of such request at
least 60, but not more than 90, days before the applicable anniversary date of
the Restatement Date. If the Super Majority Lenders consent to a request for an
extension made before the first anniversary of the Restatement Date, then
unless due and payable sooner in accordance with this Agreement, all Facility
Indebtedness shall be due and payable on December 23, 2012 and all remaining
Commitments shall be cancelled at such time. In that case, and if the Super
Majority Lenders consent to a request by the Borrower for an extension made at
least 60, but not more than 90, days before the second anniversary of the
Restatement Date, then unless due and payable sooner in accordance with this
Agreement, all Facility Indebtedness shall be due and payable on December 23,
2013 and all remaining Commitments shall be cancelled at such time. In that
case, and if the Super Majority Lenders consent to a request by the Borrower
for an extension made at least 60, but not more than, 90 days before the third
anniversary of the Restatement Date, then unless due and payable sooner in
accordance with this Agreement, all Facility Indebtedness shall be due and
payable on December 23, 2014 and all remaining Commitments shall be cancelled
at such time.

 

(c)                                  Notwithstanding Section 5.2(b), if the Borrower has not requested an
extension of this Agreement before the first anniversary of the Restatement
Date, the Borrower can (if it wishes to exercise its option to make such
request) provide the Administrative Agent with irrevocable written notice of a
request for an extension of this Agreement at least 60, but not more than 90,
days before the second anniversary of the Restatement Date. If the Super
Majority Lenders consent to such a request for an extension, then unless due
and payable sooner in accordance with this Agreement, all Facility Indebtedness
shall be due and payable on December 23, 2012 and all remaining Commitments
shall be cancelled at such time. In that case, the Borrower can (if it wishes
to exercise its option to make 

 

44

 

such request)
provide the Administrative Agent with irrevocable written notice of a request
at least 60, but not more than 90, days before the third anniversary of the
Restatement Date. If the Super Majority Lenders consent to such a request for
an extension, then unless due and payable sooner in accordance with this
Agreement, all Facility Indebtedness shall be due and payable on December 23,
2013 and all remaining Commitments shall be cancelled at such time.

 

(d)                                 Notwithstanding Sections 5.2(b) and (c), if the Borrower has not
requested an extension of this Agreement before the first and the second
anniversary dates of the Restatement Date, the Borrower can (if it wishes to
exercise its option to make such request) provide the Administrative Agent with
irrevocable written notice of a request for an extension of this Agreement at
least 60, but not more than 90, days before the third anniversary of the
Restatement Date. If the Super Majority Lenders consent to such a request for
an extension, then unless due and payable sooner in accordance with this
Agreement, all Facility Indebtedness shall be due and payable on December 23,
2012 and all remaining Commitments shall be cancelled at such time.

 

(e)                                  Notwithstanding Section 5.2(b), (c) and (d), if the Borrower has
requested an extension of this Agreement before the first anniversary of the
Restatement Date, and the Super Majority Lenders consent to such a request for
an extension as set out in Section 5.2(b), but the Borrower does not provide
the Administrative Agent with irrevocable written notice of a request at least
60, but not more than 90, days before the second anniversary of the Restatement
Date, the Borrower can (if it wishes to exercise its option to make such
request) provide the Administrative Agent with irrevocable written notice of a
request at least 60, but not more than 90, days before the third anniversary of
the Restatement Date. If the Super Majority Lenders consent to such a request
for an extension, then unless due and payable sooner in accordance with this Agreement,
all Facility Indebtedness shall be due and payable on December 23, 2013 and all
remaining Commitments shall be cancelled at such time.

 

(f)                                    Upon receipt by the Administrative Agent of any such request by the
Borrower for an extension of this Agreement, the Administrative Agent shall
provide prompt written notice of such request to each Lender. Each Lender’s
determination of whether or not it consents to such extension shall be made in
such Lender’s sole discretion. If a Lender has not provided the Administrative
Agent with written notice of whether or not such Lender consents to such
requested extension 30 days after written notice of such request has been
provided by the Administrative Agent to such Lender, such Lender shall be
irrevocably deemed to have not consented to such extension.

 

(g)                                 If the Super Majority Lenders consent to any extension requested by
the Borrower pursuant to this Section 5.2, but any Lender does not so consent,
that dissenting Lender (if it is still a Lender at the relevant time) shall not
be entitled to vote on any extensions subsequently requested by the Borrower
pursuant to this Section 

 

45

 

5.2 (and the
denominator in the definition of Super Majority Lender shall, for such purpose,
be reduced by such Lender’s Commitment).

 

(h)                                 If the Super Majority Lenders consent to any requested extension of
this Agreement pursuant to this Section 5.2, but any Lender does not so
consent, the Borrower may require that:

 

(i)                                     any such dissenting Lender assign its Commitment in accordance with
Section 3.3(b) of the Provisions;

 

(ii)                                  the Commitment of any such dissenting Lender be permitted to
terminate at the end of the then current term of this Agreement (with the
Maximum Facility Amount reducing by the amount of such Lender’s Commitment at
that time); or

 

(iii)                               such dissenting Lender’s Commitments immediately terminate.

 

In the case of
clause (iii), the Borrower shall immediately repay such Lender its pro rata
share of all outstanding Advances, together with all other amounts owing by the
Borrower to that Lender under Section 5.5, and upon receipt by such Lender of
such amount such Lender’s Commitment shall be cancelled (with the Maximum
Facility Amount reducing by the amount of such Lender’s Commitment at that
time). Any assigning Lender or any Lender whose Commitments terminate before
the Maturity Date (if extended in accordance with the foregoing provisions)
shall, upon such assignment or termination, assign, or cause any of its
Affiliates which is a Permitted Hedge Counterparty, to assign, at a price
determined in a reasonable manner from market quotations in accordance with
customary market practices, all Hedge Agreements it or they hold with the
Borrower to the applicable Eligible Assignee or to another Lender or Permitted
Hedge Counterparty.

 

(i)                                     If the Super Majority Lenders do not consent to any extension
requested by the Borrower pursuant to the foregoing procedures, all Facility
Indebtedness shall, unless due and payable sooner in accordance with this
Agreement, be due and payable on the Maturity Date then in effect and all
remaining Commitments shall be cancelled at such time.

 

5.3          Termination and Reduction of
Commitments. The Borrower may at any time, upon at least five (5) Business Days’
irrevocable written notice provided to the Administrative Agent, without
penalty, terminate entirely at any time, or partially reduce on a permanent
basis from time to time, by an aggregate amount of US $1,000,000 or the
Equivalent Amount in Canadian Dollars or multiples thereof, the Commitments of
all Lenders; and any such termination or reduction shall reduce each Lender’s
Commitment on the basis of its Applicable Percentage; provided that,
prepayments of LIBOR Advances may not occur during an Interest Period unless
the Borrower pays the required amount under Section 5.5. Upon receipt of such
notice the Administrative Agent shall promptly notify each Lender thereof. Any
such reduction shall also reduce the Maximum Facility Amount by that amount. If
the Maximum Facility Amount and the 

 

46

 

Commitments
of all Lenders are reduced to zero and the Credit Facility is terminated in its
entirety, all Facility Indebtedness, together with all other amounts owing by the
Borrower under Section 5.5, shall be due and payable by the Borrower on the
effective date of such termination. If the Maximum Facility Amount and the
Commitments of all Lenders are partially reduced, the outstanding Advances
(including, for greater certainty, the face amount of all Bankers’ Acceptances)
which, if not repaid, would be in excess of the Maximum Facility Amount and the
Commitments of all Lenders, together with all other amounts owing by the
Borrower under Section 5.5, shall be due and payable by the Borrower on the
effective date of such reduction.

 

5.4          Mandatory
Prepayments.

 

(a)                                  If at any time the Borrower or any Subsidiary receives any insurance
proceeds relating to Included Property, except for insurance proceeds which the
Borrower or any Subsidiary is permitted to retain pursuant to Section
10.2(j)(ii) or which the Borrower has remitted to the Administrative Agent to
be held as part of the Security in accordance with Section 10.2(j)(ii), the
Borrower shall remit such proceeds to the Administrative Agent to prepay or
repay the outstanding Advances.

 

(b)                                 If at any time the Borrower or any Subsidiary, in one or more
transactions, sells, transfers, leases, assigns or otherwise disposes of any
assets not permitted to be sold, transferred, leased, assigned or otherwise
disposed, or in excess of the amounts permitted, under Section 10.3(e), the
Borrower shall remit the aggregate Net Cash Proceeds received therefrom which
relate to Included Property to the Administrative Agent to prepay or repay the
outstanding Advances.

 

(c)                                  If at any time the Borrower or any Subsidiary receives any proceeds
of expropriation relating to any Included Property, the Borrower or such
Subsidiary shall remit such proceeds to the Administrative Agent to prepay or
repay outstanding Advances.

 

(d)                                 Without limiting the other rights and remedies of the Administrative
Agent and the Lenders under the Financing Documents, the Commitments and the
Maximum Facility Amount shall be reduced by any amounts received by the
Administrative Agent pursuant to Sections 5.4(a), (b) and (c).

 

5.5          Indemnity. The
Borrower agrees to indemnify each Lender and the Administrative Agent and to
hold each Lender and the Administrative Agent harmless from any loss or expense
which such Lender or the Administrative Agent may sustain or incur as a
consequence of (a) default by the Borrower in payment when due of the principal
amount of or interest on any Advances, (b) default by the Borrower in making
any prepayment after the Borrower has given a notice in accordance with Section
5.3 resulting in the making of a prepayment of a LIBOR Advance on a day which
is not the last day of an Interest Period with respect thereto, including
without limitation, in each case any such loss or expense arising from the re-employment
of funds obtained by it to maintain its Advances hereunder or from fees payable
to terminate the deposits from which such funds were obtained to the extent not
recovered in connection with such re-employment of funds if applicable (but in
any event excluding any loss of profits or other 

 

47

 

consequential
damages and the Applicable Margin applicable to such Advances). This covenant
shall survive termination of all Commitments and payment of the outstanding
Facility Indebtedness.

 

5.6          Exchange Rate Fluctuations. If
fluctuations in rates of exchange in effect between US Dollars and Cdn. Dollars
cause the amount of outstanding Advances (expressed in US Dollars based on the
Equivalent Amount from time to time) to exceed the Maximum Facility Amount then
in effect by five percent or more at any time, the Borrower shall pay the
Administrative Agent for the benefit of the Lenders immediately on demand such
amount as is necessary to repay the excess. If the Borrower is unable to
immediately pay that amount because Interest Periods have not ended, Bankers’
Acceptances have not matured or L/Cs (or any portion thereof) have not been
drawn, the Borrower shall, immediately on demand, post Cash Collateral with the
Administrative Agent in the amount of the excess, which shall form part of the
Security and be held until the amount of the excess is paid in full or is less
than five percent. If, on the date of any Advance (whether by rollover,
conversion or otherwise), the amount of Advances (expressed as described above)
exceeds the maximum amount permitted herein because of fluctuations in rates of
exchange, the Borrower shall immediately pay the Lenders the excess and shall
not be entitled to any Advance that would result in the amount permitted
hereunder being exceeded.

 

5.7          Payments. All
payments (including prepayments) made by the Borrower on account of principal,
interest and fees hereunder shall be made without set-off or counterclaim
including, without limitation, any set-off or counterclaim based on any law,
rule or policy or, any governmental authorization or order which is now or
hereafter promulgated by any Governmental Authority and which may adversely
affect the Borrower’s obligation to make, or the right of any Lender to
receive, such payments. All such payments shall be made to the Administrative
Agent, for the account of the Lenders, at the Branch of Account, in the same
currency as the relevant Advance, and, in each case, in immediately available
funds. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Advances) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal and
interest thereon, shall be payable at the then applicable interest rate(s)
hereunder during such extension. If any payment on an Advance becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month in which
event such payment shall be made on the immediately preceding Business Day (and
such reduction or extension of time shall in such case be included in computing
interest in connection with such payment).

 

5.8          Authorized Transfer. The
Borrower hereby irrevocably authorizes the Administrative Agent to effect the
making of all payments whether of principal, interest, fees or any other
charges whatsoever hereunder which the Borrower is required to pay the Lenders,
the Administrative Agent or any other Person by charging any designated bank
account maintained by the Borrower with the Administrative Agent. Nothing
herein limits or restricts the right of the Lenders and/or the Administrative
Agent under Section 4 of the Provisions. Payment by the Borrower to the
Administrative Agent of any amount owed by the Borrower to the Lenders
hereunder shall discharge the Borrower’s obligation to pay such amount to the
Lenders.

 

48

 

5.9          Provisions Reference. Reference
is made to Sections 3.1, 3.2, 3.3 and 3.4 of the Provisions regarding “Increased
Costs”, “Taxes”, “Mitigation Obligations; Replacement of Lenders” and “Illegality”,
respectively.

 

ARTICLE 6

CLOSING AND DRAWDOWN CONDITIONS

 

6.1          Conditions Precedent to Amendments. The
amendments to the Existing Credit Agreement effected hereby shall be subject to
the satisfaction of the following conditions:

 

(a)                                  The following Documents shall have been executed by a duly
authorized officer or duly authorized Person of each of the parties thereto and
delivered to the Administrative Agent, in sufficient number as the
Administrative Agent shall reasonably require, all in form and substance
satisfactory to the Administrative Agent:

 

(i)                                     a certified copy of the articles, by-laws, authorizing resolutions
and certificate of incumbency of each Restricted Party, certified by a senior
officer of such party as being true, complete and correct copies thereof, as
well as a copy of certificates dated as of a recent date from the appropriate
Governmental Authority evidencing the existence of such Person in its
jurisdiction of incorporation and, where required by any Requirements of Law,
its qualification to conduct its business in each jurisdiction where the
ownership, lease or operation of property or the conduct of business requires
such qualification;

 

(ii)                                  this Agreement;

 

(iii)                               the Arranger Fee Letter;

 

(iv)                              the Closing and Amendment Fee Letter;

 

(v)                                 the executed legal opinions of Borrower’s (including counsel to the
Scandinavian Subsidiaries) legal counsel;

 

(vi)                              the items listed in the “closing matters” section of the closing
agenda attached as Annex 7;

 

(vii)                           to the extent not previously delivered to the Administrative Agent,
the Security Documents set forth in Article 7;

 

(viii)                        true, complete and correct copies of all consents, authorizations
and filings, and any documents or instruments relating thereto, required or
advisable under any Requirements of Law applicable to, or by any Contractual
Obligation of, the Borrower in connection with the execution, delivery, performance,
validity or enforceability of this Agreement (to the extent not delivered under
the Existing Credit Agreement), together with a certificate of a senior officer
of the Borrower, stating that the foregoing 

 

49

 

are true
copies and are all the consents, authorizations and filings, and any documents
or instruments relating thereto, so required, and such consents,
authorizations, and filings, and any documents or instruments relating thereto,
shall be satisfactory in form and substance to the Administrative Agent and be
in full force and effect; and

 

(ix)                                such other Documents reasonably required by the Administrative
Agent.

 

(b)                                 Since October 17, 2005, no event shall have occurred which has had
or could reasonably be expected to have a Material Adverse Effect.

 

(c)                                  No suit, action, investigation, inquiry or other proceeding
(including, without limitation, the enactment or promulgation of a statute or
rule) by or before any arbitrator or any Governmental Authority shall be
pending and no preliminary or permanent injunction or order by a provincial,
state, federal or other court shall have been entered (i) in connection with
any Document, or any of the transactions contemplated hereby or thereby or (ii)
which could reasonably be expected to have a Material Adverse Effect.

 

(d)                                 The Borrower shall have paid in full all fees and expenses payable
by it to the Administrative Agent, the Arrangers and the Lenders, including,
without limitation, the fees payable under the Arranger Fee Letter and the
Closing and Amendment Fee Letter, and all other Persons in connection with this
Agreement and the transaction contemplated herein that are payable by it on or
before the Restatement Date pursuant to written agreements with each such
Person.

 

Unless otherwise required by the
Administrative Agent, as determined by the Administrative Agent acting
reasonably, Documents delivered in connection
with the Existing Credit Agreement need not be delivered again in connection
with this Agreement.

 

6.2          Conditions Precedent to All
Advances. The obligations of the Lenders to make any Advances under this
Agreement shall be subject to the fulfilment of the conditions precedent set
out in Sections 6.1 (when required as specified therein) and the following
conditions precedent on or prior to each Drawdown Date:

 

(a)                                  All Documents and other documents delivered pursuant to Section 6.1
shall be in full force and effect and the Borrower and all other parties shall
be in good standing under them.

 

(b)                                 After the making of the requested Advance, the outstanding Advances
expressed as an Equivalent Amount in US Dollars would not be greater than the
Maximum Facility Amount.

 

(c)                                  The Administrative Agent shall have received a Drawdown Notice in
accordance with the terms of this Agreement.

 

(d)                                 No request by Canada Revenue Agency for payment pursuant to Section
224(1.1) or any successor section of the Income
Tax Act (Canada) or any comparable

 

50

 

provision of any
other taxing statute shall have been received by any Person in respect of the
Borrower.

 

(e)                                  Each of the statements set forth in clauses (i), (ii) and (iii)
below shall be true and correct on the Drawdown Date (both before and after the
making of each such Advance (excluding rollovers and conversions)):

 

(i)                                     each representation and warranty of each Restricted Party contained
in the Financing Documents is true and correct on the Drawdown Date (where such
representation or warranty is qualified by “Material Adverse Effect” or any
other “materiality” concept), and in all other cases true and correct in all
material respects on the Drawdown Date, as though such representation and
warranty had been made on and as of the Drawdown Date (unless such representation
and warranty is expressly limited to an earlier date or is no longer true and
correct solely as a result of transactions not prohibited by the Financing
Documents);

 

(ii)                                  no Material Adverse Change has occurred since the Restatement Date
(in the case of the first Advance made after the Restatement Date) or since the
effective date of the last financial statements of the Borrower delivered to
the Administrative Agent pursuant to Section 9.1(b) or (c) (in the case of each
subsequent Advance); and

 

(iii)                               no Default has occurred and is continuing.

 

Notwithstanding
the foregoing, the acceptance by the Borrower of each Advance shall be deemed
to be a statement by the Borrower that each of the statements referred to in
this Section 6.2(e) above are true and correct in the manner described in this
Section 6.2(e) as at such date as though made on and as of such date.

 

(f)                                    There is no objectively ascertainable and reasonable expectation
that the Borrower will not be in compliance with all covenants contained in
Section 10.1 at the end of its current fiscal quarter and was not in compliance
with those covenants at the end of its immediately preceding fiscal quarter if
it has not yet delivered its Compliance Certificate for that quarter.

 

6.3          Place of Closings and Waiver of
Conditions.

 

(a)                                  The delivery of the Documents and satisfaction of the conditions
precedent set forth in Section 6.1 shall occur at the offices of Lenders’
Counsel in Toronto, Ontario, and the delivery of the Documents and satisfaction
of the conditions precedent set forth in Section 6.2 shall occur at such place
or places as the Administrative Agent may designate, acting reasonably.

 

(b)                                 The conditions precedent set forth in Sections 6.1 and 6.2 are
included in this Agreement solely for the benefit of the Lenders and may be
waived or varied in whole or in part only by the consent of the Majority
Lenders.

 

51

 

ARTICLE 7

SECURITY

 

7.1          Security. The
Borrower shall execute and deliver (or, with respect to Security Documents
executed and delivered prior to or at the time of the Restatement Date, shall
have executed and delivered) to the Administrative Agent or as otherwise
specified in this Section 7.1, for and on behalf of the Secured Parties, or as
otherwise directed by the Administrative Agent, as continuing collateral
security for the payment and performance by the Borrower of its indebtedness,
liabilities and obligations hereunder or under any of the Financing Documents
to which it is a party and for any of its indebtedness, liabilities and
obligations to the Secured Parties or any of them under the Hedge Agreements to
which they are a party, the following security, all in form and substance
satisfactory to the Administrative Agent, providing the Administrative Agent
(or the Trustee for and on behalf of the Administrative Agent) for and on
behalf of the Secured Parties with a first priority Lien, subject only to
Permitted Liens, in the Collateral charged thereunder, as applicable:

 

(a)                                  a security agreement dated as of November 13, 2001 granted by the
Borrower in favour of the Administrative Agent;

 

(b)                                 an assignment of the “Indemnity regarding Encumbrances on El Coco
Property” dated June 21, 1999 by Barrick Gold Corporation and Lac Exploration
Inc., dated November 16, 2001 granted by the Borrower to the Administrative
Agent;

 

(c)                                  a letter dated November 13, 2001 by the Administrative Agent
appointing Computershare Trust Company of Canada as Trustee;

 

(d)                                 a delivery order dated November 22, 2001 by the Borrower to the
Trustee;

 

(e)                                  a collateral mortgage demand bond dated November 21, 2001 granted by
the Borrower to the Administrative Agent and certified by the Trustee (the “Bond”);

 

(f)                                    a deed of hypothec dated November 13, 2001 between the Borrower and
the Trustee;

 

(g)                                 a deed of movable hypothec on a specific claim dated November 22,
2001 between the Borrower and the Administrative Agent;

 

(h)                                 a deed of movable
hypothec on a specific claim to be dated December 23, 2004 between the Borrower
and the Administrative Agent;

 

(i)                                     such consents, assignments and assurances as the Administrative
Agent may require from the Borrower, any applicable Governmental Authority or
other third party in order to obtain or evidence a valid first mortgage,
charge, hypothec and/or security interest in and to the Included Property and
Restricted Parties, subject to Permitted Liens, and to be able to practically
realize on all such assets after the occurrence of any Event of Default;

 

52

 

(j)                                     an assignment of insurance dated November 13, 2001 granted by the
Borrower in favour of the Administrative Agent;

 

(k)                                  an assignment of accounts agreement dated as of March 20, 2003
granted by the Borrower in favour of the Administrative Agent;

 

(l)                                     an assignment of metal hedge agreements entered into by the Borrower
with each Unsecured Hedge Counterparty executed and delivered by the Borrower
in favour of the Administrative Agent substantially in the form of Exhibit C
(the “Assignment of Metal Hedge Agreements”)
whereby the Borrower charges a security interest in such Metal Hedge Agreements
and proceeds thereof, consented to by each such Unsecured Hedge Counterparty;
and

 

(m)                               such other security documents granting Liens on the property of the
Restricted Parties as the Administrative Agent may reasonably request, together
with all such other agreements, documents and instruments required by the
Administrative Agent to provide the Secured Parties with continuing collateral
security for the performance by the Borrower of all obligations hereunder or
under any of the Financing Documents.

 

7.2          [Intentionally Deleted.]

 

7.3          Registration. All
Security Documents shall, at the Borrower’s expense, be registered, filed or
recorded in all offices in such jurisdictions as the Administrative Agent,
after consultation with Lenders’ Counsel, may from time to time reasonably
require, where such registration, filing or recording is, in the opinion of the
Administrative Agent, necessary or desirable to the creation, perfection and
preservation of the Security including, without limitation, at any land
registry or land title offices.

 

7.4          Bank
Act Security.

 

(a)                                  On the date hereof, the Borrower shall have executed and delivered,
and following the date hereof, each other Restricted Party, shall, to the
extent permitted by all applicable Requirements of Law, execute and deliver as
required by Sections 6.1(d)(vi) and 10.2(n), to each Lender that is a bank
incorporated under the Bank Act
(Canada) (each, a “Canadian Lender”),
or as otherwise directed by the Administrative Agent, as continuing collateral
security for the Facility Indebtedness, the Bank Act Security, providing the
Lenders with a first priority Lien, subject only to Permitted Liens, in the
Collateral charged thereunder.

 

(b)                                 Subject to Section 5 of the Provisions and Section 11.6, each
Canadian Lender irrevocably designates and appoints the Administrative Agent as
the collateral agent of such Canadian Lender in respect of Bank Act Security,
and each such Canadian Lender irrevocably authorizes the Administrative Agent,
in such capacity, to take such action on its behalf under the Bank Act Security
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and as are expressly
set out 

 

53

 

in such Bank
Act Security, together with such other powers that are reasonably incidental
thereto. The Administrative Agent may perform any of its duties hereunder or
thereunder by or through its agents, officers or employees, its Affiliates or
its Affiliates’ agents, officers or employees. In addition, without limiting
the foregoing, each Canadian Lender grants to the Administrative Agent a power
of attorney, for the purposes of laws applicable to the Bank Act Security from
time to time, to sign documents comprising the Bank Act Security from time to
time, for it and in its name, and also grants to the Administrative Agent the
right to delegate its authority as attorney to any other Person, whether or not
an officer or employee of the Administrative Agent. Notwithstanding any
provision to the contrary elsewhere in this Agreement or the Bank Act Security,
the Administrative Agent shall not have any duties or responsibilities except
those expressly set forth herein or therein, or any fiduciary relationship with
any Canadian Lender or other Secured Party, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or the Bank Act Security or otherwise exist against the
Administrative Agent in such capacity.

 

(c)                                  The parties acknowledge that, subject to Section 5 of the Provisions
and Section 11.6, the Bank Act Security shall secure all Facility Indebtedness,
including all loans and advances made by the Canadian Lenders, but that all
payments or other recoveries under the Bank Act Security shall, to the maximum
extent permitted by law, be shared by the Secured Parties in accordance with
Section 11.6 and Section 5 of the Provisions. To the extent practicable, the
Administrative Agent will make every reasonable effort to, and each other party
hereto shall permit the Administrative Agent (and the Trustee) to, realize on
all security granted by the Restricted Parties to the Administrative Agent (or
the Trustee) pursuant to this Agreement or any other Document (the “Non-Bank Act Security”) prior to the
Administrative Agent realizing on the Bank Act Security. Notwithstanding the
foregoing, the Borrower, for itself and for all other Restricted Parties,
acknowledges that any Security granted by or pursuant to this Agreement may be
enforced or realized in any order, whether sequentially, concurrently or
otherwise, and the Borrower, for itself and for all other Restricted Parties,
waives any defence it may have in respect thereof. If the Bank Act Security is
enforced concurrently with the Non-Bank Act Security, any recoveries or
payments thereon which are not specifically realized from the Bank Act Security
and identified as such shall be deemed to have been realized under the Non-Bank
Act Security. Nothing contained in this Section 7.4 shall prohibit or restrict
the right or ability of the Administrative Agent or, subject to Sections 11.6
and 12.2 hereof and Section 5 of the Provisions, the Canadian Lenders, to take
at any time such actions as are necessary or desirable to preserve or protect
the Bank Act Security or to realize thereon in respect of assets not
effectively charged under the Non-Bank Act Security or in the event that the
Non-Bank Act Security is determined to be invalid or unenforceable or to not
constitute a valid prior charge on all or any of the assets of the Borrower or
any other Restricted Party which are subject to the Bank Act Security. In the
event that it shall not be lawful for amounts realized on the Bank Act Security
to be shared among the Secured Parties in 

 

54

 

accordance
with Sections 11.6 and 12.2 hereof and Section 5 of the Provisions, then, to
the maximum extent permitted by all applicable Requirements of Law, the amounts
the Canadian Lenders receive from the Non-Bank Act Security shall be reduced to
the extent of amounts received by the Canadian Lenders from the Bank Act
Security.

 

(d)                                 The provisions set out in this Section 7.4 are solely for the
benefit of the Administrative Agent and the Secured Parties, and the Borrower
shall not have any rights as a third party beneficiary in respect thereof.

 

7.5          Change of Law and Further
Assurances. The Borrower acknowledges that the laws and regulations relating to
the Security and its registration may change. The Borrower agrees that the
Administrative Agent shall have the right to require that such documentation
and/or registrations be amended or supplemented from time to time to reflect
any changes in such laws, whether arising as a result of statutory amendments,
court decisions or otherwise, in order to grant to the Administrative Agent on
behalf of the Secured Parties the Liens on all Included Property or as
otherwise intended to be created and perfected thereby. In addition, the
Borrower shall, from time to time, upon request of the Administrative Agent,
execute and deliver, or cause to be executed and delivered by any other
applicable Restricted Party, all such further instruments of hypothecation,
assignment, transfer, mortgage, pledge or charge as the Administrative Agent
may reasonably request to grant the Administrative Agent on behalf of the
Secured Parties valid Liens intended to be created and perfected thereby,
including, without limitation, assignments of all Material Contracts and Metal
Hedge Agreements, now or hereafter entered into by any Restricted Party,
substantially in the form of Exhibit D and the Assignment of Metal Hedge
Agreements, or in such other form reasonably requested by the Administrative
Agent, acknowledged and consented to on terms satisfactory to the
Administrative Agent by each counterparty thereto, as well as pledges by the
Restricted Parties of all securities and other equity interests now or
hereafter held by a Restricted Party in any other Restricted Party, pledges of
all indebtedness now or hereafter owing by any Restricted Party to any other
Restricted Party and a first priority Lien, subject to Permitted Liens, on any
Included Property now owned or hereafter acquired by the Borrower or any other
Restricted Party.

 

7.6          Security for Hedge Indebtedness. The
Borrower acknowledges and agrees that the Security shall, without limitation,
to the maximum extent permitted by all applicable Requirements of Law, secure
all obligations and liabilities of the Borrower to each Permitted Hedge
Counterparty under Hedge Agreements entered into with them and, so long as any
such Hedge Agreements are outstanding with any Permitted Hedge Counterparty,
unless otherwise agreed by the applicable Permitted Hedge Counterparty, the
Security shall not be discharged, released or terminated as a result of the
termination of the Commitments and/or the repayment or satisfaction of all
Facility Indebtedness, but shall, upon such termination and/or repayment or
satisfaction continue, to the maximum extent permitted by all applicable
Requirements of Law, in full force and effect for the benefit of the Final
Permitted Hedge Counterparties in accordance with Section 12.2(e).

 

7.7          Reaffirmation of Existing Security. Without
in any way limiting any other provision of Article 7, and notwithstanding any
other provision which may be to the contrary in any Financing Document, the
Borrower hereby irrevocably (a) reaffirms and ratifies the continuing 

 

55

 

effectiveness
of all Security granted by the Borrower prior to the Restatement Date (other
than any Security previously released by the Administrative Agent or any Lender),
(b) confirms that all such Security remains in full force and effect, unamended
and (c) confirms that, to the maximum extent permitted by all applicable
Requirements of Law, all such Security secures all Facility Indebtedness and
Hedge Indebtedness.

 

ARTICLE 8

REPRESENTATIONS AND WARRANTIES

 

8.1          Representations and Warranties. To
induce the Lenders and the Administrative Agent to enter into this Agreement
and to induce the Lenders to make Advances, the Borrower represents, warrants
and, where applicable, covenants to the Administrative Agent and the Lenders as
follows:

 

(a)                                  Authority to Carry on Business. Each of
the Borrower and each Material Subsidiary is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
amalgamation or formation, has the corporate (or other required) power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct its business, and is duly
qualified to carry on its business and is in good standing under the laws of
each jurisdiction where the conduct of its business requires such
qualification, except where the failure to so qualify could not be reasonably
expected to have a Material Adverse Effect.

 

(b)                                 Corporate Power and Authority. Each
Restricted Party has the corporate (or other required) power and authority, and
the legal right, to execute and deliver the Financing Documents to which it is
a party and to perform its obligations thereunder. Each Restricted Party has
taken all necessary corporate (or other required) action to authorize the
execution and delivery of the Financing Documents to which it is a party and
the performance by it of its respective obligations thereunder.

 

(c)                                  Consents, No Restriction, etc. No
consent or authorization of, filing with or other act by or in respect of any
Governmental Authority or pursuant to any Requirements of Law is required
except those obtained or made or where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, in order to permit
the borrowings under this Agreement by the Borrower, the execution, delivery
and performance of the Financing Documents by each Restricted Party party
thereto, and the creation or perfection of the Liens under the Security
Documents.

 

(d)                                 Burdensome Provisions. There is no
provision in the articles or by-laws of any Restricted Party, nor is there any
statute, rule or regulation, or any judgment, decree or order of any court or
agency binding on any Restricted Party which would be contravened by the
execution, delivery and performance by such Restricted Party of the Financing
Documents to which it is a party, other than 

 

56

 

those
contraventions, if any, that could not reasonably be expected to have a
Material Adverse Effect.

 

(e)                                  Enforceability of Financing Documents. Each
Document to which each Restricted Party is a party has been or will be duly
executed and delivered by such Restricted Party, as the case may be. Each
Document to which such Restricted Party is a party constitutes, or when
executed and delivered, will constitute, a legal, valid and binding obligation
of such Restricted Party, as the case may be, enforceable against such
Restricted Party, as the case may be, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles.

 

(f)                                    No Violation of Law or Contractual Obligation. The execution, delivery and performance of the Financing Documents
to which each Restricted Party is a party, the borrowings by the Borrower under
this Agreement, the use of the proceeds thereof and the granting of the Liens
pursuant to the Security Documents will not violate any Requirements of Law or
any Contractual Obligation of the Borrower or any Material Subsidiary, will not
be restricted or prohibited by any Governmental Authority, except to the extent
that the same, if any, could not reasonably be expected to have a Material
Adverse Effect, and will not result in, or require, the creation or imposition
of any Lien on any properties or revenues of the Borrower or Material
Subsidiary pursuant to any Requirements of Law or Contractual Obligation (other
than the Liens created by the Financing Documents or contemplated hereby).

 

(g)                                 No Default under Contractual Obligations.
Neither the Borrower nor any Material Subsidiary is in default under or with respect
to any Contractual Obligation in any respect which could, with the giving of
notice, the lapse of time, or both, reasonably be expected to have a Material
Adverse Effect.

 

(h)                                 Absence of Litigation. Except as set
forth in Schedule 8.1(h), there is no litigation, action, suit, inquiry,
investigation, claim, proceeding, arbitration or dispute in each case pending
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower, any Subsidiaries of the Borrower, or against their revenues or
property, the adverse determination of which could reasonably be expected to
have a Material Adverse Effect.

 

(i)                                     Financial Statements. The Borrower’s
2005 annual audited, consolidated financial statements and the Borrower’s
second quarter 2006 unaudited, consolidated financial statements contained in
the Borrower’s report to its shareholders, copies of which have been furnished
to the Administrative Agent and Lenders, are complete and correct in all
material respects, have been prepared in accordance with GAAP and present
fairly the consolidated financial condition of the Borrower, as at such dates,
and the results of its operations and changes in financial position for each
period then ended. All such financial statements, including the related schedules
and notes thereto, have been prepared in 

 

57

 

accordance
with GAAP applied consistently throughout the periods involved (except as
disclosed therein, if applicable). The Borrower and its Subsidiaries had, at
the date of the most recent balance sheets referred to above, no material
Guarantee Obligation, contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in the foregoing statements or in the notes thereto. During
the period from June 30, 2006 to and including the date of this Agreement,
there has not been any sale, transfer or other disposition by the Borrower of
any material part of its business or property and there has been no purchase or
agreement to purchase (other than pursuant to any Material Contracts) or other
acquisition of any business or property (including any Capital Stock of any
other Person) which is material in relation to the financial condition of the
Borrower since June 30, 2006.

 

(j)                                     No Material Adverse Change. Since the
later of June 30, 2006 and the effective date of the last financial statements
of the Borrower delivered to the Administrative Agent pursuant to Sections
9.1(b) and (c), there has been no Material Adverse Change.

 

(k)                                  No Default. No Default has occurred and
is continuing.

 

(l)                                     Ownership of Mining Properties. Schedule
8.1(l) is a complete and accurate list of all Mining Properties in which the
Borrower or any Material Subsidiary has an interest. Schedule 8.1(l) discloses
the nature of the Borrower’s and each Material Subsidiary’s interests in
respect thereof (whether owned, leased, licenced, etc.), together with a
description of each applicable lease, claim or licence, as the case may be. All
Mining Properties are owned, leased or licenced by the Borrower or such
Material Subsidiary, as the case may be, subject only to Permitted Liens. Except
as set forth on Schedule 8.1(l) and except for any applicable Permitted Liens,
the Borrower and each Material Subsidiary enjoy peaceful and undisturbed
possession under all leases, claims, concessions or licences comprising Mining
Properties. Except as set forth on Schedule 8.1(l) and except for any
applicable Permitted Liens, all of such leases, claims, concessions or licences
are valid and subsisting leases, claims, concessions or licences and no default
exists under any of them that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.

 

(m)                               Collateral and Security. The Restricted
Parties own good and marketable title to all Mines constituting Included
Property and the other Collateral, free and clear of all Liens, other than
Permitted Liens. The Security provides the Administrative Agent with a first
priority Lien in the Mines constituting Included Property and the other
Collateral, subject only to Permitted Liens, and secures the Senior Secured
Indebtedness.

 

(n)                                 No Other Commitments, etc. Except for
sales of Product or agreements to sell Product in the ordinary course of
business, no Person has any direct or indirect agreement, right or option to
acquire any interest in any Mine that constitutes 

 

58

 

Included
Property, and no commitment has been made to any such Person with respect
thereto.

 

(o)                                 Intellectual Property. Each of the
Borrower and each Material Subsidiary owns, or is licenced to use, all
trademarks, tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted that are
material to its condition (financial or otherwise), business, or operations (“Intellectual Property”). To the best of the
Borrower’s knowledge or as otherwise disclosed on Schedule 8.1(h), no claim has
been asserted or is pending by any Person with respect to the use of any such
Intellectual Property, or challenging or questioning the validity or
effectiveness of any such Intellectual Property. To the best of the Borrower’s
knowledge, the use of such Intellectual Property by the Borrower or such
Material Subsidiary does not infringe the rights of any Person where such
infringement could be reasonably expected to have a Material Adverse Effect.

 

(p)                                 Material Contracts. The Borrower is not
a party to or bound by any outstanding or executory agreement, contract or
commitment, whether written or oral, relating to the ownership or operations of
any Mine that constitutes Included Property or the marketing and sale of the
Product from any Included Property, except for: (i) the Financing Documents and
the Material Contracts; and (ii) any contract, lease or agreement, whether or
not made in the ordinary course of business (including construction contracts)
under which the Borrower has a financial obligation of less than US $5,000,000
or which can be terminated by the Borrower without payment of any damages,
penalty or other amount by giving not more than 30 days’ notice. No other
Restricted Party is a party to or bound by any outstanding or executory
agreement, contract or commitment, whether written or oral, relating to the
ownership or operations of any mining properties constituting Included
Property, or the marketing and sale of Product from any Included Property
except for (iii) the Financing Documents and the Material Contracts; and (iv)
any contract, lease or agreement, whether or not made in the ordinary course of
business (including construction contracts) under which such Restricted Party
has a financial obligation of less than US $5,000,000 or which can be
terminated by such Restricted Party without payment of any damages, penalty or
other amount by giving not more than 30 days’ notice. None of the Material
Contracts has been amended, varied, terminated or rescinded in any way as at
the date hereof, and each is enforceable in accordance with its terms and is in
full force and effect, and no default by any Restricted Party, or to the
knowledge of the Borrower, any other Person party to any Material Contract, has
occurred and is continuing, whether or not any requirement for the giving of
notice, the lapse of time, or both, or any other condition, event or act has
been satisfied, except to the extent that such default could not reasonably be
expected to have a Material Adverse Effect. No Restricted Party has assigned,
granted an interest in, or entered into any agreement to assign or grant an
interest in, the Material Contracts to which it is a party, except, with
respect to the Borrower, pursuant to the Financing Documents, and each
Restricted Party’s interests in the Material Contracts is, to the best of the
Borrower’s knowledge, free and clear of any adverse claim.

 

59

 

(q)                                 Licences, Permits, etc. Each of the
Borrower and each Material Subsidiary holds, maintains in effect and complies
with all Permits which are required by any applicable Governmental Authority or
Requirements of Law to be held by it other than Permits the absence of which (either
individually or in the aggregate) could not reasonably be expected to have a
Material Adverse Effect, and complies with all Requirements of Law applicable
to it or to the conduct of its business in all applicable jurisdictions except
to the extent any such non-compliance (either individually or in aggregate)
could not reasonably be expected to have a Material Adverse Effect; and neither
the Borrower nor any Material Subsidiary is the subject of, or has received
notice which could result in, any audit or investigation in respect of any
Permits or Requirements of Law other than any audit or investigations the
results of which, individually or in aggregate, could not reasonably be
expected to have a Material Adverse Effect. Schedule 8.1(q) sets forth a list
of the material Permits currently held by the Borrower and each Material
Subsidiary.

 

(r)                                    Development Plan. The Development Plan
fully reflects the understanding of the Borrower as to the nature and scope of
the Mines constituting Included Property, the anticipated production of Product
and gold doré, copper concentrate, zinc concentrate or other base or precious
metal (whether in concentrate, doré or other form) from each Included Property
for each applicable period of time referred to in the Development Plan and the
financial performance of the Mines constituting Included Property, as at the
date of the Development Plan. The Restricted Parties’ interest in the Mines
constituting Included Property is sufficient to allow the Restricted Parties to
mine, process and sell the Product and such other product in the amounts and in
the manner contemplated by the Development Plan.

 

(s)                                  Taxes. Each of the Borrower and each
Material Subsidiary has filed or caused to be filed with all applicable
Governmental Authorities all tax returns required to be filed by it and has
paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental
Authority and no tax Lien has been filed and, to the knowledge of the Borrower,
no claim has or is being asserted with respect to any such tax, fee or other
charge; other than, in each case, any taxes, fees or other charges (i) the amount
or validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves where required by GAAP have been
provided on the books of the Borrower or (ii) the failure of which to pay could
not be reasonably expected to have a Material Adverse Effect.

 

(t)                                    Subsidiaries, etc. The Borrower has no
Subsidiaries except as listed on Schedule 8.1(t). All Material Subsidiaries are
identified as such on Schedule 8.1(t). Schedule 8.1(t) also lists the
authorized Capital Stock and the number or amount of issued and outstanding
Capital Stock of the Borrower and each Material Subsidiary. All issued and
outstanding shares of each Restricted Party which becomes a Subsidiary after
the date of this Agreement are free and clear of all Liens except Permitted
Liens granted to the Administrative Agent.

 

60

 

(u)                                 Environmental. Except as disclosed on
Schedule 8.1(u), each of the Borrower and each Material Subsidiary is in
compliance in all material respects with, has not violated, has not done or
suffered any act which could give rise to liability under, and is not otherwise
exposed to any liability under, any Requirements of Environmental Law. Except
as disclosed on Schedule 8.1(u), neither the Borrower nor any Material
Subsidiary has received any notice, claim, demand, suit, or request for
information of any kind from any Governmental Authority or private entity of
any failure or alleged failure to comply with, or any liability or alleged
liability under, any Requirement of Environmental Law which would reasonably be
expected to have a Material Adverse Effect, nor, to the best knowledge of the
Borrower, has any other entity whose liability therefor, in whole or in part,
may be attributed to the Borrower or any Material Subsidiary, received such
notice, claim, demand, suit, or request for information except as disclosed on
Schedule 8.1(u). Neither the Borrower nor any Material Subsidiary has notified
any Governmental Authority under any Requirement of Environmental Law regarding
the presence or suspected presence at, on, above, beneath, near, or within its
property or the release by it in any way of any substance which may require
treatment or remediation of any kind under any Requirement of Environmental Law
except as disclosed on Schedule 8.1(u) and except to the extent that the same,
either individually or in aggregate, could not reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 8.1(u) and except for
substances the existence of which could not reasonably be expected to have a
Material Adverse Effect, there exists no substance at, on, above, beneath,
near, or within any facilities, properties previously used for the disposal of
waste, or lands owned or operated by the Borrower or any Material Subsidiary or
any entity whose liability in whole or in part may be attributed to such party
or Material Subsidiary thereof the investigation, clean-up, removal, or
remediation of which may be required under any Requirement of Environmental Law.
Except as disclosed on Schedule 8.1(u) and except for those which could not
reasonably be expected to have a Material Adverse Effect, neither the Borrower
nor any Material Subsidiary is subject to any agreements, consent orders,
licences, permits, or other final orders or directives of any applicable
Governmental Authority which relates to or has arisen from any Requirement of
Environmental Law. Without limiting the foregoing, the information contained in
the documents and instruments referred to in Schedule 8.1(u) with respect to
any matter that does not pertain to the LaRonde Mine, could not reasonably be
expected to have a Material Adverse Effect.

 

(v)                                 Labour, etc. Except as set out in
Schedule 8.1(v), to the best knowledge of the Borrower, no labour or employee
disturbance exists with its employees or with the employees of its Subsidiaries
or is imminent that could reasonably be expected to have a Material Adverse
Effect, and the Borrower has not been advised by (i) its principal suppliers,
contractors or customers, (ii) its Material Subsidiaries or (iii) its Material
Subsidiaries’ principal suppliers, contractors or customers of any existing or
imminent labour disturbance by the employees of any of the foregoing that could
reasonably be expected to have a Material Adverse Effect. Except as set out in
Schedule 8.1(v), there are no complaints, 

 

61

 

claims or
charges outstanding, or to the Borrower’s knowledge, threatened, nor are there
any orders, decisions, directions or convictions currently registered or
outstanding by any tribunal or agency against or in respect of the Borrower or
any of its Material Subsidiaries, under any Requirements of Law relating to
labour or employment matters, other than those which could not reasonably be
expected to have a Material Adverse Effect.

 

(w)                               Employee Benefits.

 

(i)                                     Except as could not reasonably be expected to have a Material
Adverse Effect, (A) the Borrower and its Material Subsidiaries have complied in
all respects with all applicable Requirements of Law regarding each Plan
(including, where applicable, the Pension
Benefits Act (Ontario), the Supplemental
Pension Plans Act (Quebec) and the Income
Tax Act (Canada)); and (B) each Plan is, and has been, maintained
and administered in substantial compliance with its terms, applicable
collective bargaining agreements, and all applicable Requirements of Law
(including, where applicable, the Pension
Benefits Act (Ontario), the Supplemental
Pension Plans Act (Quebec) and the Income
Tax Act (Canada)).

 

(ii)                                  There exists no material outstanding liability of the Borrower or
any of its Material Subsidiaries with respect to any Plan that has been
terminated.

 

(iii)                               Except as could not reasonably be expected to have a Material
Adverse Effect, full payment when due has been made of all amounts which the
Borrower or any of its Material Subsidiaries is required under the terms of
each Plan or all applicable Requirements of Law to have paid as contributions
to such Plan.

 

(iv)                              Except as set out in Schedule 8.1(w), each Plan is fully funded, on
a going concern basis, in accordance with its terms and regulatory requirements
as outlined by the Pension Benefits Act
(Ontario) or the Supplemental Pension Plans
Act (Quebec), administrative requirements of the Financial Services
Commission of Ontario or the Regie des Rentes du Québec and the most recent
actuarial report filed with the Financial Services Commission of Ontario or the
Regie des Rentes du Québec in respect of such Plan, as and to the extent
applicable, except to the extent that any such funding deficiency could not
reasonably be expected to have a Material Adverse Effect.

 

(v)                                 Except as expressly permitted pursuant to Section 10.3(m)(iii), neither
the Borrower nor any Material Subsidiary of the Borrower sponsors, maintains or
contributes to, or has at any time in the preceding six-year period sponsored,
maintained or contributed to any “multi-employer pension plan” (as defined in
the Pension Benefits Act (Ontario)).

 

62

 

(x)                                   [Intentionally Deleted.]

 

(y)                                 Partnerships or Other Associations. Except
for the El Coco Documents and as set forth in Schedule 8.1(y), the Borrower is
not, a partner or participant in any partnership, joint venture, profit-sharing
arrangement or other association of any kind and is not party to any agreement
under which the Borrower agrees to carry on any part of its business in such
manner or by which the Borrower agrees to share any revenue or profit of its
business with any other Person. No Material Subsidiary is, in relation to any
Mine constituting Included Property or Mining Properties constituting Included
Property owned or held by it, or any Product derived from such properties, a partner
or participant in any partnership, joint venture, profit-sharing arrangement or
other association of any kind and is not party to any agreement under which it
agrees to carry on any part of its business in such manner or by which it
agrees to share any revenue or profit of its business with any other Person.

 

(z)                                   Investments and Indebtedness. On the
date hereof, none of the Borrower nor its Material Subsidiaries has made any
investments in or advances to any Person, nor has entered into, nor is bound by
any Indebtedness or Guarantee Obligations, except (i) any such investments,
advances, Indebtedness or Guarantee Obligations in an amount (a) individually,
equal to or less than US $2,000,000 and (b) in aggregate, equal to or less than
US $20,000,000, or (ii) as disclosed in Schedule 8.1(z).

 

(aa)                            Casualties; Taking of Properties. Neither
the business or properties of the Restricted Parties, nor any Mine constituting
Included Property, has been affected in a manner that has had or could
reasonably be expected to have a Material Adverse Effect as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, embargo,
requisition or taking of property or cancellation of contracts, Permits or
concessions by any domestic or foreign government or any agency thereof, riot,
activities of armed forces or acts of God or of any public enemy.

 

(bb)                          Insurance. All policies of fire,
liability, worker’s compensation, casualty, flood, business interruption and
other forms of insurance owned or held by the Borrower and each of its Material
Subsidiaries are sufficient for compliance with all applicable Requirements of
Law and of all agreements to which the Borrower or any of its Material
Subsidiaries is a party, are valid, unexpired and enforceable policies, provide
adequate insurance coverage in at least such amounts and against at least such
risks (but including in any event public liability) as are usually insured
against in the same general area by companies engaged in the same or a similar
business for the assets and operations of the Borrower and each of its Material
Subsidiaries, and will not in any way be affected by, or terminate or lapse by
reason of, the transactions contemplated by this Agreement. All such material
policies are in full force and effect, all premiums with respect thereto have
been paid in accordance with their respective terms, and no notice of
cancellation or termination has been received with respect to any such policy, 

 

63

 

other than any
such policies cancelled voluntarily by the Borrower or a Material Subsidiary
where such cancellation does not breach or conflict with any requirement in the
Financing Documents. Neither the Borrower nor any of its Material Subsidiaries
maintains any formalized self-insurance program with respect to its assets or
operations or material risks with respect thereto in excess of US $5,000,000 in
the aggregate. The certificate of insurance delivered to the Lenders pursuant
to Section 10.2(j)(i) contains an accurate and complete description of all
material policies of insurance owned or held by the Restricted Parties with
respect to Included Property on the Restatement Date.

 

(cc)                            Hedge Agreements. On the Restatement
Date, the Borrower and its Subsidiaries were not party to any Hedge Agreement
with any counterparty, except for the Borrower which was a party to Hedge
Agreements with the counterparties listed in Schedule 8.1(cc). Schedule 8.1(cc)
lists on the Restatement Date, the aggregate net Hedge Indebtedness with each
such counterparty.

 

(dd)                          Royalties. Except as set out in Schedule
8.1(dd), there are no registered or unregistered royalty agreements or other
rights or claims to royalties of or effecting the Mining Properties
constituting Included Property of the Restricted Parties.

 

(ee)                            Accuracy and Completeness of Information.
All written information, reports and other papers and data with respect to the
Borrower, the Subsidiaries of the Borrower or the Mines that have been
furnished by the Borrower to the Administrative Agent and the Lenders were, at
the time the same were so furnished to the Administrative Agent and the
Lenders, complete and correct in all material respects, or have been
subsequently supplemented in writing to the extent necessary to make the
information contained therein complete and accurate in all material respects. At
the date hereof, no fact, circumstance or event is known to the Borrower which
constitutes a Material Adverse Effect or which is reasonably likely (so far as
can be reasonably foreseen) to have a Material Adverse Effect, in each case,
which has not been set forth in the audited, consolidated financial statements
most recently delivered to the Administrative Agent or otherwise disclosed in
writing to the Administrative Agent and the Lenders by the Borrower. No
document furnished or statement made in writing to the Administrative Agent and
the Lenders by the Borrower in connection with the negotiation, preparation or
execution of the Financing Documents contains any untrue statement of a
material fact or omits to state a material fact which is necessary to make the
statements contained in such documents true and accurate in all material
respects which has not been corrected, supplemented or remedied by subsequent
documents furnished or statements made in writing to the Administrative Agent
and the Lenders.

 

8.2          Disclosure Schedules. The
Borrower may from time to time supplement each Schedule hereto with respect to
any matter arising after the date hereof which, if existing or occurring at the
date hereof, would have been required to be set forth or described in such
Schedule or which is necessary to correct any information in such Schedule
which has been rendered inaccurate 

 

64

 

thereby
(and, in the case of any supplements to any Schedule, such Schedule shall be
appropriately marked to show the changes made therein). No such supplement to
any such Schedule shall be or be deemed a waiver of any Default arising as a
result of the information disclosed in such supplement, except as consented to
by the Majority Lenders or, with the written consent of the Majority Lenders,
the Administrative Agent. No supplement shall be permitted as to
representations and warranties that relate solely to the date hereof. For the
purpose of any requirement under the Financing Documents that the Borrower or
one of its officers confirms, repeats or is deemed to have repeated, the
accuracy of a representation and warranty which relies upon a Schedule for
disclosure of information as at any time after the date hereof, the Schedule
referred to in that representation and warranty shall, if so consented to by
the Majority Lenders or if applicable the Administrative Agent (but, in each
case, only to the extent such consent is required to waive any Default), be
deemed to be a reference to the most recent amended or supplemented Schedule.

 

ARTICLE 9

REPORTING COVENANTS AND PROCEDURES

 

9.1          General Reporting Requirements. The
Borrower covenants and agrees that during the term of this Agreement, it shall
deliver to the Administrative Agent, for the use of the Administrative Agent
and the Lenders (excepting therefrom those terms which are stated to survive
the termination of this Agreement), in such number as the Administrative Agent
may reasonably require:

 

(a)                                  as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of the Borrower, and as soon as
available and in any event within 120 days after the end of each of the last
fiscal quarter of the Borrower, a Compliance Certificate, stating that (i) no
Default has occurred and is continuing, or if a Default has occurred and is
continuing, a detailed description of same, (ii) the Borrower has complied in
all material respects with all covenants set forth in this Agreement on its
part to be performed or complied with including, without limitation, the
covenants set forth in Sections 10.1, 10.2(j)(ii), 10.2(q), 10.3(a), 10.3(b), 10.3(c),
10.3(d), 10.3(e) and 10.3(h)(vi) in accordance with the
terms thereof, (iii) no Material Adverse Change has occurred since the last
fiscal quarter of the Borrower and (iv) setting out the Aggregate Net Hedge
Indebtedness of the Borrower to all Hedge Counterparties;

 

(b)                                 as soon as available and in any event within 45 days after the end
of each of the first three fiscal quarters of the Borrower’s fiscal year,
unaudited consolidated financial statements of the Borrower for such fiscal
quarter, including a balance sheet and statement of profit and loss, all in
reasonable detail, such statements to be prepared in accordance with GAAP
(except for changes accompanied by a reconciliation statement);

 

(c)                                  as soon as available and in any event within 120 days after the end
of each fiscal year of the Borrower, the audited consolidated financial
statements of the Borrower for such fiscal year, including a balance sheet,
statements of profit and loss and surplus and changes in financial condition
for each such year, together 

 

65

 

with notes
thereto, all prepared in accordance with GAAP (except for changes which are
accompanied by a reconciliation statement) in reasonable detail and accompanied
by a report thereon of auditors of national standing, which report shall state
that such consolidated financial statements present fairly in all material
respects the consolidated financial condition as at the end of such fiscal year
of the Borrower in accordance with GAAP applied on a consistent basis (provided
that such report may be qualified to the extent only that there are changes in
accounting policies which changes are in accordance with GAAP);

 

(d)                                 [Intentionally Deleted.]

 

(e)                                  as soon as available and in any event within 25 days after the end
of each month, deliver to the Administrative Agent, in sufficient copies for
the Administrative Agent and the Lenders, a Monthly Operating Report as of the
last day of such month;

 

(f)                                    forthwith and in any event within 5 Business Days after the mailing,
filing, or making thereof, copies of all registration statements, periodic
reports and other documents (excluding the related exhibits except to the
extent expressly requested by the Administrative Agent) (collectively, “Material”) filed by the Borrower with the
Ontario Securities Commission, The Toronto Stock Exchange, the Securities and
Exchange Commission of the United States of America (or any successor thereto)
or any other national securities exchange in the United States of America (each
individually, a “Commission”), except
in cases where the Commission (not at the Borrower’s request) requires that the
Borrower keep the applicable Material confidential, and the Commission has not
waived such requirement;

 

(g)                                 forthwith and in any event within 5 Business Days after any senior
officer or director of the Borrower obtains knowledge of the occurrence of a
Default which is continuing, a statement of an officer of the Borrower setting
forth details of such Default and the action which the Borrower has taken and
proposes to take with respect thereto;

 

(h)                                 forthwith and in any event within 5 days after any officer or
director of the Borrower becomes aware of the same, the Borrower shall notify
the Administrative Agent of any event or condition that constitutes a Material
Adverse Effect;

 

(i)                                     forthwith and in any event within 3 Business Days after any senior
officer or director of the Borrower obtains knowledge of the occurrence of a
default or event of default under any agreement evidencing or relating to any
Other Senior Indebtedness, any Subordinated Indebtedness, any unsecured
Indebtedness under Section 10.3(c)(ix), or any “Event of Default”, “Termination
Event” or “Additional Termination Event” under any Hedge Agreement, a statement
of an officer of the Borrower setting forth details thereof and the action
which the Borrower has taken and proposes to take with respect thereto;

 

66

 

(j)                                     forthwith and in any event within 5 Business Days after any officer
or director of the Borrower becomes aware of the same, give notice to the
Administrative Agent of any action, suit, inquiry, litigation, claim,
proceeding or dispute (each a, “Proceeding”)
commenced or threatened against or affecting the Borrower or any Subsidiary or
any of their properties by or before any court, tribunal, governmental
authority or agency or any other board or authority in which, individually or
in the aggregate (where more than one Proceeding is threatened or commenced in
connection with the same subject matter), the amount claimed thereunder
(including any general, special and punitive damages) exceeds US $2,000,000 or
where the adverse determination of such Proceeding could have a Material
Adverse Effect; and the Borrower shall energetically defend and contest all
such Proceedings;

 

(k)                                  forthwith and in any event within 5 Business Days after any Person
becomes a Subsidiary or a Material Subsidiary, or any Subsidiary ceases to be a
Subsidiary, or the consolidated total assets of any Material Subsidiary, at any
time, have a book value of less than US $20,000,000 or the consolidated total
revenues, at any time, are less than US $10,000,000 (on an annual basis), the
Borrower shall provide written notice thereof to the Administrative Agent;

 

(l)                                     forthwith, and in any event within 5 Business Days after entering
into any Hedge Agreement or any amendment to a Permitted Hedge Agreement,
deliver a true and complete copy of such Hedge Agreement or amendment to the
Administrative Agent (except for copies of Hedge Agreements and amendments
thereof which will have been delivered by the Borrower to the Administrative
Agent pursuant to Sections 6.1), and if the Hedge Agreement entered into is
with a Hedge Counterparty that is required to execute an Instrument of
Adhesion, the fully-executed Instrument of Adhesion;

 

(m)                               forthwith and in any event within 5 Business Days after any officer
or director of the Borrower becomes aware of the same, the Borrower shall
notify the Administrative Agent of any cadastral amendment, lot cancellation,
suspension or annulment of rights or any other change that may affect (i) the
Mining Assets or Mining Claims relating to any Included Property or the description
thereof, (ii) the registration of the Mining Assets or Mining Claims relating
to any Included Property made in any register in which such Mining Assets or
Mining Claims are from time to time registered or reflected, including, without
limitation, at any Land Registry Office for the Province of Québec and at the
register held pursuant to the Mining Act (Québec), or (iii) the legal
description of any property that forms part of the Mining Assets or Mining
Claims relating to any Included Property or that is affected thereby;

 

(n)                                 forthwith and in any event within 5 Business Days after the Borrower
acquires or otherwise becomes the owner, the grantee or the holder of any
additional rights or interest related to or in addition to the Mining Assets or
Mining Claims relating to any Included Property as they exist as of the date
hereof, the Borrower shall notify the Administrative Agent of such event or
occurrence; and

 

67

 

(o)                                 upon request, such other information as the Administrative Agent and
the Lenders may from time to time reasonably request.

 

9.2          Mine Plan. The
Borrower shall deliver each year to the Administrative Agent, with sufficient
copies for the Lenders, no later than May 31 each year a Mine Plan, which has
been approved by the board of directors of the Borrower. Each such Mine Plan
shall:

 

(a)                                  save as may be otherwise agreed by the Administrative Agent, be in
substantially the form of, and contain the same type of data, projections,
forecasts, calculations and other information as, the Initial Model and Budget;

 

(b)                                 include an explanation of any deviation in the amount attributed to
any line item specified in the Mine Plan where such deviation is 10% or more of
the amount attributed to the same line item in the Initial Model and Budget;
and

 

(c)                                  include such other information as the Administrative Agent may
reasonably request with respect to any Mine Plan.

 

If the Mine Plan is in compliance with the
foregoing requirements and the Independent Engineer (and, as applicable, other
independent consultant) is not required to review the Mine Plan pursuant to
Section 9.5, the Mine Plan shall be deemed to be accepted by the Administrative
Agent and the Lenders upon such delivery to the Administrative Agent. In all
other cases, the Mine Plan shall not be considered accepted. If the Mine Plan
does not comply with the requirements in subparagraphs (a), (b) and (c) above,
the Borrower shall within 20 Business Days after consultation with the
Administrative Agent, submit an appropriately revised Mine Plan to the
Administrative Agent, with sufficient copies for the Lenders, which is
otherwise in accordance with this Section 9.2. If the Independent Engineer
(and, as applicable, other independent consultant) is required to review the
Mine Plan pursuant to Section 9.5, the Borrower shall, following completion of
the Independent Engineer’s (and, as applicable, other independent consultant’s)
review, within 20 Business Days after consultation with the Administrative
Agent, submit an appropriately revised Mine Plan to the Administrative Agent,
with sufficient copies for the Lenders, which is otherwise in accordance with
this Section 9.2.

 

9.3          Operating Budgets. The
Borrower shall deliver each year to the Administrative Agent, with sufficient
copies for the Lenders, no later than January 31 of each year, a monthly
Operating Budget for that fiscal year, which has been approved by the board of
directors of the Borrower. Each such Operating Budget shall:

 

(a)                                  save as may be otherwise agreed by the Administrative Agent, be in
substantially the form of, and contain the same type of data, projections,
forecasts, calculations and other information as, the Initial Model and Budget;

 

(b)                                 set out a line item comparison, comparing the actual results for the
previous twelve month period of the year ending against the Operating Budget in
respect of such year covered by the Operating Budget; and

 

(c)                                  include such other information as the Administrative Agent may
reasonably request with respect to any Operating Budget.

 

68

 

If
the Operating Budget is in compliance with the foregoing requirements and the
Independent Engineer (and, as applicable, other independent consultant) is not
required to review the Operating Budget pursuant to Section 9.5, the Operating
Budget shall be deemed to be accepted by the Administrative Agent and the
Lenders upon such delivery to the Administrative Agent. In all other cases, the
Operating Budget shall not be considered accepted. If the Operating Budget does
not comply with the requirements in subparagraphs (a), (b) and (c) above, the
Borrower shall within 20 Business Days after consultation with the
Administrative Agent, submit an appropriately revised Operating Budget to the
Administrative Agent, with sufficient copies for the Lenders, which is
otherwise in accordance with this Section 9.3. If the Independent Engineer
(and, as applicable, other independent consultant) is required to review the
Operating Budget pursuant to Section 9.5, the Borrower shall, following
completion of the Independent Engineer’s (and, as applicable, other independent
consultant’s) review, within 20 Business Days after consultation with the
Administrative Agent, submit an appropriately revised Operating Budget to the
Administrative Agent, with sufficient copies for the Lenders, which is
otherwise in accordance with this Section 9.3.

 

9.4          Additional
Procedures for Updating Mine Plan and Operating Budgets. If any Person which is a Restricted
Party acquires any Mines constituting Included Property or other Mining
Properties or other Persons as permitted by this Agreement, within 60 Business
Days of such acquisition, the Borrower shall, in accordance with the
requirements set out in Sections 9.2 and 9.3 (except for the date of delivery
thereof, which shall be governed by this Section 9.4), submit an updated Mine
Plan and Operating Budget to the Administrative Agent together with the
supporting documents required by those Sections.

 

9.5          Review
of Monthly Operating Report, Mine Plan and Operating Budgets.   If there has been any adverse variation in
actual ore processed, Gold Equivalent produced or operating costs per tonne of
ore at the Mines constituting Included Property as reported in the December Monthly
Operating Report or in any publicly-filed documents referred to in Section
9.1(f) in respect of the previous year by 15% or more as compared to the
projections for such items set out in the previous year’s Mine Plan, the
Administrative Agent shall arrange for the Monthly Operating Report in respect
of the months of March, June, September and December for the current year, the
Mine Plan for the current year and the Operating Budgets for the current year,
to be reviewed by the Independent Engineer on behalf of the Lenders. In such
case, the Administrative Agent may also, if reasonably considered appropriate,
consult with (and arrange for reviews by) any other independent consultant who
is competent to advise on the relevant matter, in reviewing the Mine Plan and
the Operating Budgets.

 

ARTICLE 10

COVENANTS OF THE BORROWER

 

10.1        Financial
Covenants.  During
the term of this Agreement (excepting therefrom those terms which are stated to
survive the termination of this Agreement):

 

(a)                                  Total Net Debt to EBITDA Ratio. The
Borrower shall, at all times, maintain a Total Net Debt to EBITDA Ratio of not
more than 3.50:1.00, on a rolling four-quarter basis.

 

69

 

(b)                                 Interest Coverage Ratio. The Borrower
shall, at all times, maintain an Interest Coverage Ratio of not less than
2.00:1.00, on a rolling four-quarter basis.

 

(c)                                  Current Ratio. The Borrower shall, at
all times, maintain a Current Ratio of not less than 1.10:1.00, on quarterly
basis.

 

(d)                                 Reserve Tail. The Borrower shall, at all
times, ensure that the Gold Equivalent Proven and Probable Reserves calculated
in the Mine Plan forecast to exist on the day immediately following the
Maturity Date (based on forecast production of Product from the Maturity Date
through the remainder of the Life of Mine as set forth in the Mine Plan using
the Financial Parameters) shall, at all times, equal no less than 35% of the
Reserves of Product as of June 30, 2005 as calculated in the Initial Mine Plan
using the Financial Parameters. For the purposes of this Section 10.1(d), Gold
Equivalent Proven and Probable Reserves shall be calculated in the manner set
forth in the Initial Mine Plan using the Financial Parameters as verified and
accepted by the Independent Engineer.

 

(e)                                  Tangible Net Worth. The Borrower shall,
at all times, maintain a Tangible Net Worth in an amount of not less than US
$650,000,000, plus 50% of the Borrower’s consolidated net income for
each of the Borrower’s fiscal quarters, on a cumulative basis, commencing with
its fiscal quarter ending September 30, 2006 (excluding any fiscal quarters in
which the Borrower incurs a net loss) (all as determined on a consolidated
basis in accordance with GAAP consistently applied), plus 50% of the net
proceeds of any public offerings of Capital Stock of the Borrower received
during such fiscal quarters, on a cumulative basis.

 

(f)                                    [Intentionally Deleted.]

 

(g)                                 [Intentionally Deleted.]

 

(h)                                 [Intentionally Deleted.]

 

10.2        Positive Covenants. During the term of this Agreement (excepting therefrom those terms
which are stated to survive the termination of this Agreement):

 

(a)                                  Status and Power. Each of the Borrower
and each Material Subsidiary shall at all times maintain in good standing its
corporate (or other) existence, power, capacity and authority, and the rights,
privileges and franchises under each jurisdiction where it owns properties or
carries on business. Each of the Borrower and each Material Subsidiary shall
remain duly qualified to do business and own property in each such jurisdiction
in which such qualification is necessary or desirable in the normal conduct of
its business, except to the extent that not doing so would not have a Material
Adverse Effect.

 

(b)                                 Business. The Borrower and each Material
Subsidiary shall conduct business in a businesslike manner and in accordance
with good business and mining practice, including operating the Mines in
accordance with good mining practice and the Development Plan. Each of the
Borrower and each Material Subsidiary shall 

 

70

 

maintain,
preserve and protect all of its material properties and equipment necessary in
the operation of its business in good working order, repair and condition,
ordinary wear and tear excepted and casualty or expropriation excepted, and
make all necessary renewals, replacements, modifications, improvements,
upgrades, extensions and additions thereof or thereto in accordance with
prudent industry practice.

 

(c)                                  Records, etc. Each of the Borrower and
each Material Subsidiary shall keep or cause to be kept proper books of account
in conformity with GAAP and sound accounting practice and all applicable
Requirements of Law and, on reasonable notice, shall make such books of account
and all records, ledgers, reports, contracts and other documents and computer
files (including records relating to its assets) in connection with its
business available to the Administrative Agent or Lenders (or their respective
advisers or representatives) on reasonable notice during regular business hours
for the purpose of inspecting or auditing the same, and shall permit them to
make extracts of the same and to have access to its computer and management
system to inspect such documents and computer files.

 

(d)                                 Payment Obligations. Each of the
Borrower and each Material Subsidiary shall pay, discharge or otherwise satisfy
as the same shall become due and payable (a) all tax liabilities, assessments
and governmental charges or levies upon it or its properties or assets, unless
the same are being contested in good faith by appropriate proceedings
diligently conducted and adequate reserves in accordance with GAAP are being
maintained by the Borrower or such Material Subsidiary; and (b) all lawful
claims which, if unpaid, would by any Requirements of Law become a Lien upon
its property, unless the same are being contested in good faith by appropriate
proceedings diligently conducted and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Material Subsidiary; and except,
in each case, to the extent the failure to pay or discharge the same would not
have a Material Adverse Effect.

 

(e)                                  Licences, etc. Each of the Borrower and
each Material Subsidiary shall (i) obtain, hold and maintain in full force and
good standing all Permits applicable to it or necessary to own its assets and
to carry on its business and (ii) duly observe, conform and comply in all
material respects with all valid requirements of all Permits, except, in each
case, to the extent that not doing so would not have a Material Adverse Effect.

 

(f)                                    Compliance with Law. The Borrower and
its Material Subsidiaries shall operate the Mines and generally conduct their
business in compliance with all applicable Requirements of Law and maintain
such authorizations as are required to operate the Mines and conduct their
business in compliance therewith, except to the extent that not doing so would
not have a Material Adverse Effect.

 

(g)                                 Environmental. Except as described on
Schedule 8.1(u), each of the Borrower and each Material Subsidiary shall
generate, treat, store or dispose of any hazardous substance or hazardous waste
only in the ordinary course of its 

 

71

 

business, and
then only if done so in compliance with all applicable Requirements of
Environmental Law. Each of the Borrower and each Material Subsidiary shall at
all times be in compliance with all Requirements of Environmental Law
applicable to it and to the Mines, except where such non-compliance would not
have a Material Adverse Effect and where appropriate remedial action acceptable
to the applicable Governmental Authority is being diligently undertaken. The
Borrower shall diligently mitigate any violations of applicable Requirements of
Environmental Law which relate to the LaRonde Mine resulting from the discharge
of ammonia and other toxic effluent as described on Schedule 8.1(u) pursuant to
and in accordance with the terms of such Requirements of Environmental Law.

 

(h)                                 Contractual Obligations/Material Contracts. Each Restricted Party shall at all times, observe and comply in
all respects with all of the material terms, conditions and covenants of all
Contractual Obligations under all Material Contracts (and any material
documents or instruments delivered pursuant thereto), and shall ensure that
there is no termination, rescission or material amendment, modification, waiver
or variation of the Material Contracts (or any material documents or
instruments delivered pursuant thereto) where the same would have a Material
Adverse Effect. Each Restricted Party shall, at all times, ensure that there is
no default in the observance or performance of any Contractual Obligations
under any Material Contract (or contained in any material instrument or
agreement evidencing, securing or relating thereto) and that no event occurs or
condition exists, the effect of which is:

 

(i)                                     to permit the other party or parties thereto to terminate such
Contractual Obligations; or

 

(ii)                                  to create additional liabilities or obligations on the part of any
Restricted Party;

 

which either
individually or in the aggregate with other terminations and/or creations of
additional liabilities or obligations, as applicable, would have a Material
Adverse Effect.

 

(i)                                     Mining Leases. Without limiting Section
10.2(h), the Borrower and each Material Subsidiary shall keep the Mining Leases
which relate to Recourse Assets to which it is a party in full force and effect
at all times, including, without limiting the generality of the foregoing,
paying all fees and other charges required to be paid under or in connection
with such Mining Leases, and each of the Borrower and each Material Subsidiary
shall defend its respective right, title and interest in, to and under such
Mining Leases against any adverse or competing claim. Each of the Borrower and
each Material Subsidiary shall renew, and take all steps necessary to renew
such Mining Leases, on or before each renewal date of such Mining Leases. Each
of the Borrower and each Material Subsidiary shall keep the other rights and
concessions necessary for the operation of the Mines constituting Recourse
Assets owned or held by it in full force and effect.

 

72

 

(j)                                     Insurance.

 

(i)
The Borrower and its Material Subsidiaries shall, at all times, maintain in
force insurance policies against such perils and in such amounts as is
customarily maintained by companies similarly geographically situated and
conducting the same or similar businesses and in accordance with any Requirements
of Law, and with such insurers as are rated “A” or higher by A.M. Best Company,
or an equivalent rating by such other insurance rating agency selected by the
Administrative Agent (except in the case of marine cargo insurance in which
case the insurer hereof shall be rated BBBpi or higher by Standard & Poor’s
Ratings Group or an equivalent rating); all such insurance relating to Included
Property shall name the Administrative Agent, the Trustee and, if required by
the Administrative Agent, the Secured Parties, as additional insureds and/or
first loss payees (as the Administrative Agent may determine) and shall provide
that no cancellation or termination thereof shall, for any reason whatsoever,
take effect unless the insurer has given the Administrative Agent not less than
30 days’ prior written notice thereof and all insurance proceeds for property
damage or loss or for business interruption shall be payable to the
Administrative Agent and the Trustee for the benefit of the Secured Parties,
and the Borrower shall provide such evidence as is satisfactory to the
Administrative Agent, as and when requested by the Administrative Agent,
confirming that such insurance policies are in full force and effect.

 

(ii)
Unless otherwise specified in this Section 10.2(j)(ii), all proceeds of
insurance maintained by the Restricted Parties relating to Included Property
shall be paid to the Administrative Agent to be applied by it to reduce the
principal amount of the Facility Indebtedness. Any insured claim, judgment,
settlement or money compromise and any insured expenses associated with its
defence or investigation payable by commercial general liability insurance
shall be paid first to any Person entitled to payment of such unpaid insured
claim, judgment, settlement or money compromise and entitled to payment of such
unpaid insured expenses and thereafter to the Borrower. If no Default has
occurred and is continuing, proceeds of insurance covering loss or damage to
Included Property in an amount of less than US $10,000,000 per claim may be
paid by the insurer directly to the Borrower or other affected Restricted Party
to be applied by the Borrower or such Restricted Party to repair the damage or
replace the loss; but nothing herein shall affect the rights of any Person
holding a Permitted Lien in respect of such Included Property which has
priority over the Security. If the Borrower or such other Restricted Party
fails to commence such repair or replacement of such lost or damaged property
within 6 months of such casualty, loss or damage, or having commenced such
repair or replacement during such period, does not diligently pursue the same
until such repair or replacement is completed, or if the Borrower, for itself
or on behalf of such other Restricted Party, otherwise elects by notice to the
Administrative Agent, not to effect such repairs or replacement, such insurance
proceeds shall be applied by it to reduce the principal amount of the Facility
Indebtedness. Subject to the rights of any holder of a Permitted Lien 

 

73

 

that has
priority over the Security, proceeds of insurance covering loss of or damage to
Included Property in an amount of US $10,000,000 or more but less than US
$20,000,000 per claim shall be paid to the Administrative Agent and shall be
disbursed by the Administrative Agent to the Borrower or the affected
Restricted Party on conditions appropriate to a construction credit, to fund
the repair or replacement of the Included Property in respect of which the
insurance proceeds are payable, provided that:

 

(A)                              no Default has occurred and is continuing; and

 

(B)                                the Majority Lenders are satisfied, acting reasonably, that the
proceeds of such insurance together with other resources available to the
Borrower or such other Restricted Party (the use of which would not contravene
this Agreement) are sufficient to repair or replace the Included Property in
respect of which the insurance proceeds are payable within a reasonable period
of time, and in any event not later than the Maturity Date then in effect, such
that the affected Included Property is returned to as good or better condition
than it was in before the event occurred that caused the insurance proceeds to
be paid.

 

If either of
clause (A) or (B) above is not satisfied, such insurance proceeds shall be
applied to reduce the principal amount of the Facility Indebtedness. All
insurance proceeds held by the Administrative Agent shall, unless and until the
same are applied to payment of the principal amount of the Facility
Indebtedness or released to the Borrower, be held as part of the Security.

 

(k)                                  Inspection of Properties. At all
reasonable times and on reasonable notice, the Restricted Parties shall allow
the Administrative Agent and its representatives and, if the Independent
Engineer is conducting a review of a Monthly Operating Report, the Mine Plan or
the Operating Budget pursuant to Article 9, the Independent Engineer or its
representatives, to visit and inspect (without any invasive or intrusive testing)
all or any of the properties relating to the Included Property and to discuss
the operations, affairs, finances and accounts of the Restricted Parties with
any of the Restricted Parties’ senior employees or senior officers all at the
cost of the Borrower. One time during each calendar quarter and on reasonable
notice, the Restricted Parties shall allow the Lenders and their respective
representatives to visit and inspect (without any invasive or intrusive
testing) all or any of the properties relating to the Included Property and to
discuss the operations, affairs, finances and accounts of the Restricted
Parties with any of the Restricted Parties’ senior employees or senior officers
all at the cost of the Borrower. If a Default has occurred and is continuing,
at all reasonable times and on reasonable notice, the Borrower and each
Material Subsidiary shall allow the Administrative Agent and its
representatives and the Independent Engineer and its representatives, to visit
and inspect any or all of the properties of the Borrower and its Material
Subsidiaries and to discuss the operations, affairs, finances and accounts of
the Borrower and its Material Subsidiaries with any of the Borrower’s 

 

74

 

and such Material
Subsidiaries’ senior employees or senior officers all at the cost of the
Borrower.

 

(l)                                     Compliance with Development Plan. The
Borrower shall, and shall cause its applicable Material Subsidiaries to, carry
on business at, and operate and manage, the Mines constituting Included
Property in a manner consistent with the Development Plan, as updated from time
to time in accordance with this Agreement, and, where applicable, proceed
diligently with the development and maintenance of the Mines constituting Included
Property in accordance with the Development Plan as so updated from time to
time.

 

(m)                               Use of Proceeds. The Borrower shall
apply all Advances for the purposes herein set out.

 

(n)                                 Included Property. If the Borrower
provides a written request to the Administrative Agent requesting that any Mine
held or acquired pursuant to Section 10.3(b)(vii) or (ix) be Included Property,
the Administrative Agent shall deliver a copy of such request to the Lenders. If
the Majority Lenders, following receipt of such request and consultation with
its independent consultants (including the Independent Engineer), agree that
such Mine is eligible to be Included Property, the Administrative Agent shall
provide notice of such determination to the Borrower. The Borrower shall then
execute and deliver, or cause to be executed and delivered by each wholly-owned
Subsidiary which wholly owns, controls and operates such Mine and each other
wholly-owned Subsidiary, if any, which indirectly, through such first-mentioned
Subsidiary, wholly owns, controls and operates such Mine, all guarantees,
security agreements, hypothecations, assignments, transfers, mortgages,
pledges, charges or other applicable security documents as the Administrative
Agent may request, in form and substance satisfactory to the Administrative
Agent, acting reasonably, to grant the Administrative Agent (or if required by
any Requirements of Law, a trustee or other similar Person) on behalf of the
Secured Parties valid and effective first-priority Liens, subject only to
Permitted Liens, on such Mine, in the case of Persons which wholly own, control
and operate Mines, and on all of its present and after-acquired property, in
the case of Persons (other than the Borrower) which own Capital Stock of other
Persons which directly or indirectly wholly own, control and operate such Mine,
in each case to secure the Senior Secured Indebtedness, together with such
additional documentation, insurance certificates and opinions which the
Administrative Agent requests in support thereof (including, without
limitation, all documentation and opinions that would have been required to
have been delivered under Sections 6.1 and 7.5 if the Included Property had
been Included Property at any relevant time specified therein), in form and substance
satisfactory to the Administrative Agent, acting reasonably. An insurance
advisor shall also, at the election of the Majority Lenders, conduct a review
of the insurance policies of the Borrower or its Subsidiaries relating to the
proposed Included Property, which review must be satisfactory to the Majority
Lenders, in their sole discretion. Where applicable, the Borrower shall also
execute and deliver, or cause to be executed and delivered by

 

75

 

each wholly-owned
Subsidiary which indirectly wholly owns, controls and operates such Mine, a
pledge agreement, in form and substance satisfactory to the Administrative
Agent, pledging to the Administrative Agent on behalf of the Secured Parties
all present and after-acquired Capital Stock and Indebtedness held by each such
pledgor in any Subsidiary held by it as security for the Senior Secured
Indebtedness. Upon all of the applicable foregoing requirements and (without
duplication) the other requirements specified in the definition of Included
Property being met to the satisfaction of the Majority Lenders, in their sole
discretion, the Administrative Agent shall provide written notice to the
Borrower that such Mine constitutes Included Property, and upon the delivery of
such notice to the Borrower such Mine shall constitute Included Property.
Notwithstanding that the Lapa Mine is, on and after the date hereof, Included
Property, the Borrower shall deliver all items relating to the Lapa Mine which
are listed in the “post-closing matters” section of the closing agenda attached
as Annex 7 (excluding items for which the closing agenda specifies that it is
the responsibility of Lenders’ Counsel to prepare) within 45 days after the
Restatement Date.

 

(o)                                 Control of Mines. The Borrower shall
maintain active operating, management and financial control of the LaRonde
Mine, the Goldex Mine and the Lapa Mine, shall use commercially reasonable
efforts to protect its interest in and to the LaRonde Mine, the Goldex Mine and
the Lapa Mine, and shall take no steps to dispose of its rights in and to the
LaRonde Mine (or any part thereof), the Goldex Mine (or any part thereof) or
the Lapa Mine (or any part thereof). The Borrower shall cause Agnico-Eagle AB
to maintain active operating, management and financial control of the Kittila
Mine, shall cause Agnico-Eagle AB to use commercially reasonable efforts to
protect its interest in and to the Kittila Mine, and shall cause Agnico-Eagle
AB to take no steps to dispose of its rights in and to the Kittila Mine (or any
part thereof). Each of the Borrower and each Material Subsidiary which acquires
any other Mine which is a Recourse Asset shall maintain active operating,
management and financial control of such Mine, shall use commercially reasonable
efforts to protect its interest in and to such Mine and shall take no steps to
dispose of its rights in and to such Mine or any part thereof.

 

(p)                                 Instruments of Adhesion. The Borrower
shall execute and deliver to the Administrative Agent the “Specific
Acknowledgement Regarding Security” contained in each Instrument of Adhesion
within 15 Business Days of being requested to do so by the Administrative
Agent; provided that, failure to so execute and deliver the “Specific
Acknowledgement Regarding Security” contained in each such Instrument of
Adhesion shall not affect the validity of such Instrument of Adhesion, and the
Borrower shall, upon the execution and delivery of the Instrument of Adhesion
by the applicable Permitted Hedge Counterparty, be deemed to have made the
statements contained in the “Specific Acknowledgement Regarding Security”.

 

(q)                                 [Intentionally Deleted.]

 

76

 

(r)                                    Plan Compliance. The Borrower shall
make, and cause each Material Subsidiary to make, to the extent required by any
Requirements of Law, full payment when due of all amounts which, under the
provisions of any Plan, the Borrower or any Material Subsidiary, is required to
pay as contributions to such Plan, except where the failure to make such
payments would not have a Material Adverse Effect.

 

(s)                                  Covenants of Subsidiaries. The Borrower
shall cause the Subsidiaries of the Borrower to comply with all covenants and
agreements of or relating to such Subsidiaries herein and in the Financing
Documents.

 

(t)                                    Expenditures. The Borrower shall ensure
that any Capital Expenditures or Exploration Expenditures relating to any
Included Property are made in a manner which is consistent with the Development
Plan and in accordance with good mining practice.

 

(u)                                 Mining Claims. Without limiting Sections
10.2(h) and 10.2(i), the Borrower and each Material Subsidiary shall (i) keep
all Mining Claims in full force and effect at all times and (ii) without
limiting the generality of the foregoing, comply with the provisions of all
laws and regulations creating and/or applicable to the Mining Claims except
where such non-compliance would not have a Material Adverse Effect. Without
limiting Sections 10.2(h) and 10.2(i), the Borrower and each Material Subsidiary
shall also do all such actions and works required to be performed on a regular
basis or from time to time for the Mining Claims to stay in full force and
effect, without the Borrower or the Material Subsidiary holding the rights,
title and interest in, to and under such Mining Claims losing the benefit of
any such rights, title and interest, and each of the Borrower and each Material
Subsidiary shall defend its respective rights, titles and interest in, to and
under such Mining Claims against any adverse or competing claims. Each of the
Borrower and each Material Subsidiary shall renew, and take all steps necessary
to renew such Mining Claims, on or before each renewal date of such Mining
Claims.

 

(v)                                 Post-Restatement Date Requirements. In
addition to the obligations of the Borrower set out in the last sentence of
Section 10.2(n), the Borrower shall deliver or complete, as applicable, all
other items which are listed in the “post-closing matters” section of the
closing agenda attached as Annex 7 (excluding items for which the closing
agenda specifies that it is the responsibility of Lenders’ Counsel to prepare)
within 45 days after the Restatement Date.

 

10.3        Negative
Covenants. During the term of this Agreement
(excepting therefrom those terms which are stated to survive the termination of
this Agreement):

 

(a)                                  Negative Pledge. Neither the Borrower,
nor any Material Subsidiary, shall create or assume, have outstanding or suffer
to permit, any Lien on any of its present or after-acquired undertaking, property
or assets (excluding the present and after-acquired issued and outstanding
shares of each Scandinavian Subsidiary) except for Permitted Liens. Neither the
Borrower, nor any Material Subsidiary, shall 

 

77

 

create or
assume, have outstanding or suffer to permit, any Lien on any of the present or
after-acquired issued and outstanding shares of any Scandinavian Subsidiary,
except the Lien granted by the Borrower to the Administrative Agent in the
shares of Agnico-Eagle Sweden AB. Neither the Borrower, nor any Material
Subsidiary, shall create or assume, have outstanding or suffer to permit, any
royalties, including royalty agreements and rights or claims to royalties or
royalty agreements, on any of its present or after-acquired undertaking,
property or assets except for those listed on Schedule 8.1(dd) and those
permitted by subparagraph (m) of the definition of Permitted Liens.

 

(b)                                 Investments. The Borrower shall not
make, whether in one transaction or in a series of transactions, or hold any
Investments in any Person or permit any of its Subsidiaries to make, whether in
one transaction or in a series of transactions, any Investments in any Person,
or hold any Investments in any Person, other than:

 

(i)                                     loans, advances or capital contributions the material details of
which have been set forth in the financial statements referred to in Section
8.1(i);

 

(ii)                                  without duplicating Section 10.3(b)(i), any Subsidiary may make
loans or advances to any Restricted Party on an unsecured basis; provided that,
if the Subsidiary making such loan or advance is not a Restricted Party, that
Subsidiary must subordinate and postpone such indebtedness owed to it to the
Senior Secured Indebtedness;

 

(iii)                               without duplicating Section 10.3(b)(i), the Borrower may make loans
or advances to, or capital contributions in, any Subsidiary, and any Subsidiary
may make loans or advances to, or capital contributions in, any other
Subsidiary, if, at the time of such loan, advance or capital contribution, the
Investment Conditions shall have been satisfied and such loan or capital
contribution to, or in, any such Subsidiary is used by such Subsidiary (I) for
the purposes set out in, and in accordance with, Section 10.3(b)(vii) or (ix)
or (II) for operating, exploration, reclamation or capital expenditures of such
Subsidiary; provided that, in the case of any loans or advances made by the
Borrower to any Scandinavian Subsidiary, the Borrower has assigned such
indebtedness to the Administrative Agent;

 

(iv)                              investments in Cash Equivalents;

 

(v)                                 investments in readily marketable securities of companies which
trade on any senior nationally-recognized securities exchange in any Permitted
Jurisdiction;

 

(vi)                              [Intentionally Deleted.]

 

(vii)                           Investments by way of purchase of securities of any Person which is
not an Affiliate of the Borrower or any Subsidiary of the Borrower, where the
consideration paid therefor is (a) Capital Stock of the Borrower (if the
acquiring Person is the Borrower) or Capital Stock of an acquiring 

 

78

 

Subsidiary (if
the acquiring Person is a Subsidiary) or (b) cash; provided that:

 

(A)                              if any Indebtedness is assumed as a result of such Investment it
must comply with Section 10.3(c);

 

(B)                                if proceeds of any Advance are used to make such Investment or used
to refinance other funding of any such Investment, any such Investment is not
hostile;

 

(C)                                the Investment Conditions shall have been satisfied; and

 

(D)                               where the Investment requires the payment by the Borrower of cash
consideration in excess of US $50,000,000, in reasonably sufficient time prior
to the completion of the transaction pursuant to which the Investment is to be
made, the Borrower has delivered a certificate to the Administrative Agent in
the form of Exhibit F, providing information on the proposed Investment, in
detail reasonably satisfactory to the Administrative Agent, and evidencing
compliance with the requirements set out in subparagraphs (A) to (C) above;

 

(viii)                        [Intentionally Deleted.]

 

(ix)                                Investments by way of the purchase or other acquisition (in one
transaction or a series of transactions) of all or substantially all of the
property and assets or business of another Person (which is not an Affiliate of
the Borrower or any Subsidiary of the Borrower) or assets constituting a
business unit, line of business or division of such Person (which is not an
Affiliate of the Borrower or any Subsidiary of the Borrower) where the
consideration is paid by way of (a) Capital Stock of the Borrower (if the
acquiring Person is the Borrower) or Capital Stock of an acquiring Subsidiary
(if the acquiring Person is a Subsidiary) or (b) cash; provided that:

 

(A)                              if any Indebtedness is assumed as a result of such Investment it
must comply with Section 10.3(c);

 

(B)                                the Investment Conditions shall have been satisfied; and

 

(C)                                where the Investment requires the payment by the Borrower of cash
consideration in excess of US $50,000,000, in reasonably sufficient time prior
to the completion of the transaction pursuant to which the Investment is to be
made, the Borrower has delivered a certificate to the Administrative Agent in
the form of Exhibit G, providing information on the proposed Investment, in
detail reasonably satisfactory to the Administrative Agent, and 

 

79

 

evidencing
compliance with the requirements set out in subparagraphs (A) and (B) above;
and

 

(x)                                   to the extent permitted by all applicable Requirements of Law, loans
or advances to employees of the Borrower and its Subsidiaries not to exceed US
$10,000,000 in the aggregate at any time outstanding.

 

The completion
of any Investment pursuant to Section 10.3(b) which does not require the
delivery to the Administrative Agent to evidence compliance with the respective
conditions to such Investment set out herein shall be deemed to be a
representation and warranty by the Borrower to the Administrative Agent and the
Lenders that all such applicable conditions have been satisfied.

 

(c)                                  Limitation on Indebtedness. Neither the
Borrower nor any Material Subsidiary shall create, incur, assume or suffer to
exist any Indebtedness, except:

 

(i)                                     the Senior Secured Indebtedness;

 

(ii)                                  Indebtedness under Financing Leases in an aggregate principal amount
not exceeding US $20,000,000 at any one time outstanding;

 

(iii)                               Indebtedness secured by Permitted Liens (other than Financing Leases
and other than Permitted Liens described in subparagraph (l) of the definition
of “Permitted Liens” in an amount greater than US $10,000,000);

 

(iv)                              [Intentionally Deleted.]

 

(v)                                 any Guarantee Obligation by the Borrower or any Material Subsidiary
of the Borrower entered into in the ordinary course of its business provided
that the aggregate liability, contingent or otherwise, of the Borrower and its
Material Subsidiaries under all outstanding Guarantee Obligations, together
with all amounts paid after the Closing Date under Guarantee Obligations, does
not at any time exceed US $15,000,000;

 

(vi)                              any other Indebtedness of the types referred to in subsections (a),
(b), (d) or (e) of the definition of Indebtedness, so long as no Default has
occurred and is continuing, the creation, incurrence, assumption or existence
of such Indebtedness would not result in a Material Adverse Change or breach,
conflict with or violate any Requirements of Law, or result in the Borrower
breaching any covenant set out in Section 10.1 on a pro forma basis; provided
that:

 

(A)                              the terms and conditions of such Indebtedness shall be no more
onerous to the debtor(s) thereunder than any terms and conditions hereunder
(with the exception of pricing and fees);

 

(B)                                if secured by a Lien on property which is not Included Property
where the committed Indebtedness secured is greater than US 

 

80

 

$10,000,000,
such Indebtedness shall be subject to an intercreditor agreement in form and
substance satisfactory to the Lenders, addressing, among other issues, mutual
acknowledgement by the holders of such Indebtedness and the Administrative
Agent of priority claims of assets, agreement by the holders of such
Indebtedness and the Administrative Agent to provide notice of covenant breach
by the Borrower or its Affiliates, mutual stand-still by the holders of such
Indebtedness and the Administrative Agent of enforcement rights in the event of
default and agreement by the holders of such Indebtedness and the
Administrative Agent to vote as separate classes in bankruptcy or insolvency
proceedings;

 

(C)                                such Indebtedness shall not be secured by any Lien on any Included
Property;

 

(D)                               such Indebtedness shall be used for the development of a Recourse
Asset acquired by the Borrower or any Material Subsidiary after the Restatement
Date or, if a Recourse Asset has been acquired by the Borrower or any Material
Subsidiary before the Restatement Date, such Recourse Asset was not in
commercial production on the Restatement Date;

 

(E)                                 the terms of which Indebtedness do not require repayment of any
principal prior to the Maturity Date then in effect; and

 

(F)                                 in reasonably sufficient time prior to the completion of the
transaction pursuant to which the creation, incurrence, or assumption of such
Indebtedness is to be made, where the committed amount of such Indebtedness
exceeds US $10,000,000, the Borrower shall have delivered a certificate to the
Administrative Agent in the form of Exhibit H, providing information on the
proposed Indebtedness, in detail reasonably satisfactory to the Administrative
Agent, and evidencing compliance with the applicable requirements set forth in
this Section 10.3(c)(vi);

 

(such
Indebtedness, if all requirements set out in this Section 10.3(c)(vi) have been
complied with, is referred to herein as “Other
Senior Indebtedness”);

 

(vii)                           any other Indebtedness of the types referred to in subsections (a),
(b) or (e) of the definition of Indebtedness, so long as no Default has
occurred and is continuing, the creation, incurrence, assumption or existence
of such Indebtedness would not result in a Material Adverse Change or breach,
conflict with or violate any Requirements of Law, or result in the 

 

81

 

Borrower
breaching any covenant set out in Section 10.1 on a pro forma basis; provided
that:

 

(A)                              the terms and conditions of such Indebtedness shall be no more
onerous to the debtor(s) thereunder than any terms and conditions under the
Convertible Debentures or the Trust Indenture (with the exception of pricing
and fees);

 

(B)                                neither the Borrower nor any Material Subsidiary shall grant any
Lien in its property to secure such Indebtedness;

 

(C)                                the terms of such Indebtedness do not require the repayment of
principal thereof prior to twelve (12) months after the then current Maturity
Date of this Credit Facility; and

 

(D)                               in reasonably sufficient time prior to the completion of the
transaction pursuant to which the creation, incurrence, or assumption of such
Indebtedness is to be made, where the committed amount of such Indebtedness
exceeds US $10,000,000, the Borrower shall have delivered a certificate to the
Administrative Agent in the form of Exhibit I, providing information on the
proposed Indebtedness, in detail reasonably satisfactory to the Administrative
Agent, and evidencing compliance with the applicable requirements set forth in
this Section 10.3(c)(vii);

 

(such
Indebtedness, if all requirements set out in this Section 10.3(c)(vii) have
been complied with, is referred to herein as “Subordinated
Indebtedness”);

 

(viii)                        Restricted Parties may incur, assume or suffer to exist Indebtedness
owing to Subsidiaries to the extent permitted by, and on the terms and
conditions set out in, Section 10.3(b)(ii);

 

(ix)                                any Indebtedness of the Borrower or any Material Subsidiary of the
Borrower other than the types referred to in subsections (d) and (e) of the
definition of Indebtedness which is incurred in the ordinary course of its
business, provided that the aggregate liability, contingent or otherwise, of
the Borrower and its Material Subsidiaries under all such Indebtedness does not
at any time exceed US $75,000,000 and such Indebtedness is unsecured; provided
that, upon the creation, incurrence, or assumption of such Indebtedness, no
Default has occurred and is continuing, the creation, incurrence, assumption or
existence of such Indebtedness would not result in a Material Adverse Change or
breach, conflict with or violate any Requirements of Law, or result in the
Borrower breaching any covenant set out in Section 10.1 on a pro forma basis;
and

 

82

 

(x)                                   Material Subsidiaries may incur, assume or suffer to exist
Indebtedness owing to the Borrower, or to other Subsidiaries, to the extent
permitted by, and on the terms and conditions set out in, Section 10.3(b)(iii).

 

Except
as provided by Section 10.3(b)(iii), but notwithstanding any other provision
hereof, no Subsidiary (excluding Material Subsidiaries) shall create, incur,
assume or suffer to exist any Indebtedness if the outstanding Indebtedness of
all Subsidiaries (excluding Material Subsidiaries), in the aggregate, would
exceed US $20,000,000.

 

Notwithstanding
any other provision hereof, neither the Borrower nor any Subsidiary shall
create, incur, assume or suffer to exist any Indebtedness which has recourse to
any Scandinavian Subsidiary or any assets held by any Scandinavian Subsidiary
if such outstanding Indebtedness, in the aggregate, would exceed US
$10,000,000. For greater certainty, for the purposes of the immediately
preceding sentence only, “recourse” shall not include any rights conferred on a
Person as a result of the ownership of shares of any Scandinavian Subsidiary.

 

(d)                                 Restricted Payments. Neither the
Borrower nor any Material Subsidiary shall make, pay or declare any
distributions or dividends (other than distributions or payments of additional
shares of the Borrower or any Material Subsidiary or rights or warrants to
acquire additional shares of the Borrower or any Material Subsidiary) on any
shares of its Capital Stock, or redeem or purchase or otherwise acquire any of
its shares of its Capital Stock, reduce or repay capital, make any payments or
prepayments of principal on, any unsecured Indebtedness under Section
10.3(c)(ix), make any payments or prepayments of, or redeem, principal on any
Subordinated Indebtedness prior to the Maturity Date then in effect, or in each
case, set aside any funds for any such purpose, (collectively, “Restricted Payments”), if at such time a
Default has occurred and is continuing or if, upon the making of such
Restricted Payment, a Default or Material Adverse Effect would occur; provided
that, to the extent permitted hereunder, the aggregate amount of Restricted
Payments in any fiscal year of the Borrower shall not exceed US $40,000,000
(excluding therefrom Restricted Payments made by a Restricted Party to another
Restricted Party and any payments or prepayments on any unsecured Indebtedness
under Section 10.3(c)(ix) in an amount up to US $75,000,000). The
redemption of any Subordinated Indebtedness, if in accordance with its terms,
shall not be included in such monetary cap if the consideration paid therefor
to the holder thereof on the exercise of such respective redemption right by
the Borrower is common shares of the Borrower. The Borrower shall not make any
voluntary prepayments of principal of the Other Senior Indebtedness prior to
the Maturity Date then in effect if at such time a Default has occurred and is
continuing or if, upon the making such payment, a Default or Material Adverse
Effect would occur.

 

83

 

(e)                                  Sale of Assets. No Restricted Party
shall (whether in one transaction or in a series of transactions) sell,
transfer, lease, assign or otherwise dispose of (or commit to same) all or any
of its assets whether now owned or hereafter acquired except:

 

(i)                                     as permitted under Section 10.3(f);

 

(ii)                                  for the sale of redundant, obsolete, damaged or worn out assets
provided that they are replaced to the extent the same are used at the time of
disposition in the operation of the Mines or the other Mining Properties owned
or controlled by the Borrower or such Subsidiary, or for the sale of Product or
product derived from such Mines or other Mining Properties in the ordinary
course of its business;  or

 

(iii)                               if doing so will not directly or indirectly result in a Default or
restrict or impair the Restricted Parties’ ability, on a consolidated basis, to
perform their obligations under any Financing Documents and the aggregate book
or market value (whichever shall be higher) of all such additional assets sold,
transferred, assigned or disposed of under this clause (iii) in any calendar
year does not exceed US $10,000,000.

 

(f)                                    Fundamental Changes. Neither the
Borrower nor any Material Subsidiary shall (whether in one transaction or in a
series of transactions) amalgamate, merge or consolidate with any Person, or
become a party to any transaction whereby all or substantially all of its
property or assets becomes the property or assets of any other Person, except
if no Default has occurred and is continuing or would result therefrom, if no
Material Adverse Effect has occurred or would result therefrom and if such
transaction does not breach any Requirements of Law:

 

(i)                                     any Subsidiary may amalgamate with the Borrower, and any Subsidiary
which is a Restricted Party may amalgamate or merge with, or acquire all or
substantially all of the property and assets of, any other Subsidiary;

 

(ii)                                  the Borrower may amalgamate with, or acquire all or substantially
all of the property and assets of, any Subsidiary;

 

(iii)                               any Subsidiary which is not a Restricted Party may amalgamate or
merge with any other Subsidiary which is not a Restricted Party, or acquire all
or substantially all of the property and assets of, any other Subsidiary which
is not a Restricted Party; and

 

(iv)                              the Borrower or any Subsidiary which is a Restricted Party may
merge, amalgamate or consolidate with any Person in order to effect an
Investment permitted under Section 10.3(b)(vi), (vii), (viii) or (ix);

 

provided that
in the case of a merger, amalgamation or consolidation permitted by Sections
10.3(f)(i), (ii) and (iv):

 

(A)                              the surviving or resulting Person is a Restricted Party;

 

84

 

(B)                                the Administrative Agent has a first priority Lien on all property
which constitutes Included Property of such surviving or resulting Person,
subject only to Permitted Liens;

 

(C)                                if any holder of Other Senior Indebtedness has a Lien on the
property of such surviving or resulting Person that holder shall have provided
an acknowledgement to the Administrative Agent, in form satisfactory to the
Administrative Agent, acting reasonably, that such holder has no interest in
any Included Property of such surviving or resulting Person; and

 

(D)                               the surviving or resulting Person shall have executed and delivered
to the Administrative Agent an assumption agreement, whereby such Person
acknowledges that it is bound by all obligations of the applicable predecessor
Persons, in a form acceptable to the Administrative Agent, acting reasonably.

 

(g)                                 Nature of Business. Neither the
Borrower, nor any Material Subsidiary, shall permit any material change to be
made in the nature of its business or the business of any Material Subsidiary
as carried on at the date hereof (or, if applicable, at the time a Person
becomes a Material Subsidiary), which business shall at all times be mining or
mining related activities.

 

(h)                                 Restriction on Hedge Agreements.

 

(i)                                     The Borrower shall not enter into or maintain any Hedge Agreements
with Persons other than Hedge Counterparties and shall only enter into
Permitted Hedge Agreements in the ordinary course of the Borrower’s business
and not for the purposes of speculation. No Subsidiary shall enter into any
Metal Hedge Agreement, Exchange Rate Hedge Agreement or Interest Rate Hedge
Agreement, except that a Subsidiary which is not a Restricted Party may enter
into Metal Hedge Agreements, Exchange Rate Hedge Agreements or Interest Rate
Hedge Agreements if doing so is required as a condition of creating or incurring
Indebtedness which is permitted hereunder, is for the purpose of financing the
acquisition or development of property as permitted hereunder and is not for
speculative purposes; and, if any such Metal Hedge Agreements, Exchange Rate
Hedge Agreements or Interest Rate Hedge Agreements are guaranteed by any
Restricted Party, any negative net mark-to-market position thereunder shall be
included in Indebtedness for purposes of calculating all applicable covenants
in Section 10.1.

 

(ii)                                  The Borrower shall not on or after the Restatement Date enter into
or maintain any Hedge Agreement with any Permitted Hedge Counterparty that does
not contain the provisions described in Annex 5 hereof; provided that, the
Borrower shall be permitted to maintain Hedge Agreements with any Person which
was a “Permitted Hedge Counterparty” under the 

 

85

 

Original
Credit Agreement if such Person became a Permitted Hedge Counterparty under the
Existing Credit Agreement. The Borrower shall not, with respect to all Hedge
Agreements that comply with the provisions of Annex 6 of the Original Credit
Agreement or Annex 5 hereof, as applicable, amend, modify or agree to any
waiver of any of the terms described therein.

 

(iii)                               The Borrower shall not grant to, or permit any Hedge Counterparty to
have, any security (including margin deposited with or held by or for the
benefit of a Hedge Counterparty), except, in the case of each Permitted Hedge
Counterparty, as it forms part of the Security held by the Administrative Agent
or the Trustee for the benefit of all Secured Parties. For greater security,
the Borrower shall not permit any Unsecured Hedge Counterparty to hold or have
the benefit of any security (including margin deposited with or held by or for
the benefit of an Unsecured Hedge Counterparty) or otherwise. Neither shall the
Borrower enter into any Hedge Agreement which, by its terms, could result in
any requirement for the Borrower to grant any Hedge Counterparty any security,
except as expressly permitted in the first sentence of this clause (iii).

 

(iv)                              The Borrower shall not permit the any material representations,
warranties or covenants, or any termination events (including additional
termination events), in any Metal Hedge Agreement entered into with an
Unsecured Hedge Counterparty to be more onerous to the Borrower than the
material representations, warranties and covenants, and termination events
(including additional termination events), in any Hedge Agreement entered into
with any Permitted Hedge Counterparty.

 

(v)                                 The Borrower shall not enter into (I) any leveraged option
transactions or other Hedge Agreements that could require the delivery of any
amount over the notional amount of the subject matter of the Hedge Agreement
(whether metal, currency, interest rates or otherwise) or (II) any “knock-down”
option or put or any other Hedge Agreement in which the obligation to deliver
(by physical delivery or cash settlement) or the pricing of the subject matter
of the Hedge Agreement (whether metal, currency, interest rates or otherwise)
is subject to any contingency.

 

(vi)                              The Borrower shall at no time permit the maximum quantity of Gold,
Copper, Silver or Zinc or other metal which the Borrower is obligated
(contingently or otherwise) to deliver (or that could be called for delivery or
cash settlement) for any future 12-month period under all Metal Hedge
Agreements to which the Borrower is a party under any circumstances, conditions
or outcomes, whether or not then existing (including, for greater certainty (A)
all quantities of metal subject to spot, spot deferred, fixed forwards and
floating lease rate forward contracts, (B) the total face value of any quantity
of metal sold under call options, and (C) any other arrangements that have the economic
effect of a sale or a sold call option 

 

86

 

or other
similar derivative transactions) to exceed 75% of the Borrower’s projected
production of that Metal for such 12-month period. The Borrower shall at no
time permit the maximum quantity of Gold, Copper, Silver or Zinc or other metal
which any Subsidiary is obligated (contingently or otherwise) to deliver (or
that could be called for delivery or cash settlement) for any future 12-month
period under all Metal Hedge Agreements to which such Subsidiary is a party
under any circumstances, conditions or outcomes, whether or not then existing
(including, for greater certainty (A) all quantities of metal subject to spot,
spot deferred, fixed forwards and floating lease rate forward contracts, (B)
the total face value of any quantity of metal sold under call options, and (C)
any other arrangements that have the economic effect of a sale or a sold call
option or other similar derivative transactions) to exceed 75% of such
Subsidiary’s projected production of that Metal for such 12-month period.

 

(i)                                     Corporate Documents, etc. No Restricted
Party shall change its name, restrict its corporate (or other) powers or move
its registered or executive office without giving the Administrative Agent five
days prior written notice of such change.

 

(j)                                     Fiscal Year. The Borrower shall not
change its fiscal year-end to end on a day other than December 31 of each year
without the prior written consent of the Majority Lenders, such consent not to
be unreasonably withheld.

 

(k)                                  Conflicting Agreements. Neither the
Borrower nor any other Restricted Party shall enter into, become subject to or
be bound by any Contractual Obligation which in any case or in the aggregate
when combined with other Contractual Obligations in Material Contracts or
otherwise, materially restricts or impairs the ability of the Borrower or any
such Restricted Party to perform its obligations under, or conflicts with any
material provision of, any of the Financing Documents to which it is a party,
or constitutes, or the performance of which will constitute, a Default.

 

(l)                                     Transactions with Affiliates. Neither
the Borrower nor any Material Subsidiary shall enter into or conduct any
transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate of the
Borrower or such Material Subsidiary unless any such transaction is upon fair
and reasonable terms no less favourable to the Borrower or such Material
Subsidiary than it would obtain in a comparable arm’s length transaction with a
Person not an Affiliate, and is otherwise not restricted or prohibited, and is
permitted, under this Agreement. Notwithstanding the foregoing, the Borrower
and any Material Subsidiary may enter into and complete any transaction with
any Subsidiary of the Borrower or Material Subsidiary and any such Subsidiary
may enter into or complete any transaction with any other Subsidiary of the
Borrower or Material Subsidiary as permitted under this Agreement; in each
case, so long as, with respect to any such 

 

87

 

transaction
(i) no Default has occurred and is continuing or would result therefrom
(without duplicating subsection (iv) below); (ii) immediately after giving
effect to any such transaction no Material Adverse Effect would be reasonably
expected to occur (without duplicating subsection (iv) below); (iii) such
transaction does not breach, conflict with or violate any Requirements of Law;
and (iv) immediately after giving effect to such transaction, the Borrower
shall be in compliance with all covenants set forth in Section 10.1 on a pro
forma basis. The completion of any such transaction shall be deemed to be a
representation and warranty by the Borrower to the Administrative Agent and the
Lenders that all such conditions have been satisfied.

 

(m)                               Plan Compliance. The Borrower shall not:

 

(i)                                     permit to exist, or allow a Material Subsidiary of the Borrower to
permit to exist, any accumulated funding deficiency, whether or not waived,
with respect to any Plan in an amount which would cause a Material Adverse
Effect;

 

(ii)                                  contribute to or assume an obligation to contribute to, or permit a
Material Subsidiary of the Borrower to contribute to or assume an obligation to
contribute to, any “multi-employer pension plan” as such term is defined in the
Pension Benefits Act (Ontario) or
Supplemental Pension Plan Act
(Quebec);

 

(iii)                               acquire, or permit a Subsidiary of the Borrower to acquire, an
interest in any Person if such Person sponsors, maintains or contributes to, or
at any time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to any “multi-employer pension plan” as such term is
defined in the Pension Benefits Act
(Ontario) or Supplemental Pension Plan Act
(Quebec); provided that, the Borrower or a Material Subsidiary of the Borrower
may acquire an interest in any such Person if (A) such Person is acquired as a
Permitted Acquisition and (B) neither the Borrower nor any of its other
Material Subsidiaries has any legal liability to perform such Person’s
obligations or assume such Person’s liabilities;

 

(iv)                              permit, or allow a Material Subsidiary of the Borrower to permit,
the actuarial present value of the benefit liabilities (computed on an
accumulated benefit obligation basis in accordance with GAAP) under all Plans
in the aggregate to exceed the current value of the assets of all Plans in the
aggregate that are allocable to such benefit liabilities, in each case only to
the extent such liabilities and assets relate to benefits to be paid to
employees of the Borrower or its Subsidiaries, by an amount that would cause a
Material Adverse Effect.

 

(n)                                 Sale or Discount of Receivables. No
Restricted Party shall discount or sell (with or without recourse) any of its
notes receivable or accounts receivable.

 

(o)                                 Margin Calls. No Restricted Party shall
purchase or carry any margin securities.

 

88

 

(p)                                 New Subsidiaries. No Scandinavian
Subsidiary shall create any new Subsidiary unless it is wholly-owned by such
Scandinavian Subsidiary.

 

ARTICLE 11

EVENTS OF DEFAULT

 

11.1        Events of Default. Each
of the following events shall constitute an event of default (“Event of Default”):

 

(a)                                  the Borrower fails to pay any principal amount of any Advance when
due and payable;

 

(b)                                 the Borrower fails to pay any interest, fees or other amounts
payable in respect of the Facility Indebtedness (including fees payable to the
Administrative Agent in its capacity as agent hereunder) within 3 Business Days
of such amount becoming due and payable;

 

(c)                                  any representation or warranty made by the Borrower or deemed to
have been made by the Borrower pursuant to Section 6.2(e), or any
representation or warranty made by an officer of any Restricted Party in any
Document or in any certificate, agreement, instrument or written statement
delivered by any Restricted Party or by an officer of any Restricted Party
pursuant thereto was, at the time the same was made, incorrect in any material
respect;

 

(d)                                 any Restricted Party fails to perform or observe or shall be in
breach of any term, covenant or agreement contained in this Agreement or any
other Financing Document on its part to be performed or observed (other than as
provided in subsections (a), (b) or (c) above and subsection (e) below, and
other than in respect of events otherwise specifically provided for elsewhere
in this Section 11.1), and such failure or breach remains unremedied for 20
Business Days after written notice thereof has been given by the Administrative
Agent to the Borrower;

 

(e)                                  the Borrower fails to perform or observe or shall be in breach of
any term, covenant or agreement contained in Sections 9.1(g), (h) and (i) or in
Section 10.1 of this Agreement;

 

(f)                                    any Restricted Party shall be in default on any date in any payment
of principal or interest on any Indebtedness (whether in connection with the
same or similar events or occurrences or more than one event or occurrence),
including any Indebtedness or payment due under any Hedge Agreement, or in the
payment when due under any Guarantee Obligation, in an aggregate cumulative
amount (when combined, if applicable, with the amount of any other Indebtedness
subject to acceleration under Sections 11.1(r) and (s)) greater than US
$20,000,000, or default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or Guarantee Obligation (or
contained in any instrument or agreement evidencing, securing or relating
thereto), or any other event shall occur or condition exist, the effect of
which is to cause, or permit the 

 

89

 

holder or
holders of such Indebtedness or the beneficiary or beneficiaries of such
Guarantee Obligation to cause, such Indebtedness to become in any manner due
prior to its stated maturity or such Guarantee Obligation to become payable;

 

(g)                                 any Restricted Party commits an act of bankruptcy or becomes
bankrupt or insolvent, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due generally, or makes an
assignment for the benefit of creditors or files a petition in bankruptcy; or
petitions or applies to any tribunal for, or consents to, the appointment of
any receiver, receiver-manager, trustee or similar officer for it or for all or
any substantial part of its property; or admits the material allegations of a
petition or application filed with respect to it in any proceeding commenced in
respect of it under any Requirements of Law relating to bankruptcy, insolvency,
reorganization, arrangement, proposal, readjustment of debt, dissolution,
winding-up or liquidation; or takes any corporate action for the purpose of
effecting any of the foregoing;

 

(h)                                 there shall occur registration of any prior notice of exercise of
hypothecary right affecting the Collateral in favour of any creditor (other
than under the Security Documents) which shall continue uncancelled for a
period of 20 consecutive days from its respective publication or registration;

 

(i)                                     any bankruptcy, insolvency, reorganization, arrangement, proposal,
readjustment of debt, dissolution, winding-up or liquidation proceeding, or any
similar proceeding or process, relating to a Restricted Party under any
existing or future legislation or otherwise of any jurisdiction, domestic or
foreign, respecting such matters shall be instituted (by petition, application
or otherwise) by or against a Restricted Party which, if brought against such
Restricted Party, results in an order for relief or appointment or adjudication
with respect to any such matter; provided that, if any such order for relief or
appointment or adjudication is made with respect to any such matter and any
such proceeding or process commenced or order for relief granted is contested
diligently and in good faith by such Restricted Party and any relief or
remedies upon or against such Restricted Party’s property have been stayed,
such proceeding, process or order remains undismissed or not vacated for a
period of 45 consecutive days from the date of commencement of the same;

 

(j)                                     except as otherwise permitted under Section 10.3(f), any Restricted
Party ceases or threatens to cease to carry on its business or a resolution is
passed authorizing or approving such action; or a petition is filed or an order
is made or resolution passed for the winding-up, liquidation or dissolution of
such Restricted Party or if, without the consent of the Administrative Agent, a
resolution is passed authorizing the sale, transfer or assignment of all or
substantially all of the assets of a Restricted Party;

 

(k)                                  there shall be commenced against any Restricted Party one or more
proceedings or other actions seeking issuance of a warrant of attachment,
execution, distraint or similar process against its assets in an aggregate
amount of US $5,000,000 or

 

90

 

more which, if
contested diligently and in good faith by such Restricted Party, remains
undismissed or unstayed for a period of 45 consecutive days; or any Restricted
Party shall take any action in furtherance of, or indicate its consent to,
approval of, or acquiescence in, any such act or proceeding;

 

(l)                                     one or more judgments or decrees is entered against any Restricted
Party involving in the aggregate a liability of US $5,000,000 or more and (i)
such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 45 consecutive days of entry thereof or (ii) such Restricted
Party is not contesting such judgments or decrees in good faith and by
appropriate proceedings and adequate reserves in accordance with GAAP have not
been set aside on its books;

 

(m)                               this Agreement or any Security Document, or any material provision
thereof, shall at any time after its execution and delivery, for any reason, be
determined to be (or is contested by any Restricted Party to be or to have
ceased to be) or ceases to be a legal, valid and binding obligation of any
Restricted Party, enforceable against it in accordance with its terms (subject
only to applicable bankruptcy, insolvency, moratorium or similar laws affecting
the rights of creditors generally and to any equitable remedies available in
the discretion of a court) or if the Security Documents fail, for any reason,
to provide the Administrative Agent (or the Trustee) for and on behalf of the
Secured Parties with a first priority Lien, subject only to Permitted Liens, in
and to the Collateral (excluding Collateral which is disposed of in accordance
with the terms of this Agreement), unless such invalidity or failure can be
cured and such invalidity or failure is cured within 30 days of notice thereof
being given by the Administrative Agent to the Borrower of the occurrence of
such invalidity or failure, unless such invalidity or failure occurred as a
result of a contest initiated, acquiesced in or consented to by a Restricted
Party or otherwise could reasonably be expected to have a Material Adverse
Effect;

 

(n)                                 any Included Property or any material Recourse Asset, or any
material part thereof, is expropriated;

 

(o)                                 there occurs any “Event of Default”, “Termination Event” or “Additional
Termination Event” (as defined in the relevant Hedge Agreement) under any Hedge
Agreement which has continued for 3 consecutive Business Days and the same has
not been waived;

 

(p)                                 any Borrower or Subsidiary (i) abandons, or permits to be abandoned,
any Recourse Asset or (ii) suspends or materially reduces, or permits the
suspension or material reduction, of operations at any Included Property or any
material Recourse Asset for 14 consecutive Business Days;

 

(q)                                 [Intentionally Deleted.]

 

91

 

(r)                                    the Borrower or any
Subsidiary fails to observe or perform any covenant or agreement contained in
any instrument evidencing Subordinated Indebtedness or Indebtedness under
Section 10.3(c)(ix) within any applicable grace period provided for therein, if
the effect of such failure or other event is to accelerate, or to permit the
holders of such Subordinated Indebtedness or Indebtedness under Section
10.3(c)(ix) or any other Person to accelerate, the maturity thereof, where the aggregate cumulative amount of such Indebtedness where
the creditor thereof has direct recourse (as primary or secondary obligor,
whether contingent or otherwise) to a Restricted Party or its property (when
combined, if applicable, with the amount of any other Indebtedness subject to
acceleration under Sections 11.1(f) and (s)) is greater than US $20,000,000; or, without the
written consent of the Majority Lenders, any material provision of any
instrument evidencing Subordinated Indebtedness or Indebtedness under Section
10.3(c)(ix) is amended, varied or rescinded so that such Subordinated Indebtedness
fails to comply with the requirements set out in Section 10.3(c)(vii), in the
case of Subordinated Indebtedness, or so that such other Indebtedness fails to
comply with the requirements set out in Section 10.3(c)(ix);

 

(s)                                  the Borrower or any Subsidiary
fails to observe or perform any covenant or agreement contained in any
instrument evidencing Other Senior Indebtedness within any applicable
grace period provided for therein, if the effect of such failure or other event
is to accelerate, or to permit the holders of such Other
Senior Indebtedness or any other Person to accelerate, the maturity
thereof, where the aggregate cumulative amount of such
Indebtedness where the creditor thereof has direct recourse (as primary or
secondary obligor, whether contingent or otherwise) to a Restricted Party or
its property (when combined, if applicable, with the amount of any other
Indebtedness subject to acceleration under Sections 11.1(f) and (r)) is greater
than US $20,000,000;
or, without the written consent of the Majority Lenders, any material provision
of any instrument evidencing Other Senior Indebtedness is amended, varied
or rescinded so that such Other Senior Indebtedness fails to comply with
the requirements set out in Section 10.3(c)(vi);

 

(t)                                    there occurs any Change of Control of the Borrower;

 

(u)                                 if, at any time after the Restatement Date, (A) subject to the
proviso set out in Section 10.3(h)(ii), a Person (other than the Borrower)
which is not a Hedge Counterparty is a party to a Hedge Agreement with the
Borrower, or (B) an Unsecured Hedge Counterparty is a party to a Hedge
Agreement with the Borrower which is not a Metal Hedge Agreement; and, in
either case, such Person continues to be a party to such a Hedge Agreement for
3 “Local Business Days” (as defined in the relevant Hedge Agreement); and

 

(v)                                 (a) the Borrower ceases to own all of the issued and outstanding
Capital Stock of any Subsidiary which owns or controls an Included Property, or
(b) the Borrower ceases to own all of the issued and outstanding Capital Stock
of any Subsidiary which owns the Capital Stock of another Subsidiary which owns
or controls an Included Property, or (c) any Subsidiary which owns the issued
and outstanding 

 

92

 

Capital Stock
of another Subsidiary which owns an Included Property or which owns the issued
and outstanding Capital Stock of another Subsidiary which owns or controls an
Included Property ceases to own all such issued and outstanding Capital Stock;
provided that, until such time as Agnico-Eagle Sweden AB has completed the
compulsory acquisition procedure under Swedish law in respect of the 2.7% of
the shares of Riddarhyttan Resources AB that it does not own on the date
hereof, the holding by Agnico-Eagle Sweden AB of 97.3% of the shares of
Riddarhyttan Resources AB shall not constitute an Event of Default, but the
holding by Agnico-Eagle Sweden AB of less than 97.3% of the shares of
Riddarhyttan Resources AB shall constitute an Event of Default.

 

11.2        Remedies. If
an Event of Default occurs and is continuing, the Administrative Agent may, and
at the request of the Majority Lenders, the Administrative Agent shall, for and
on behalf of the Secured Parties, take any one or more of the following
actions:

 

(a)                                  declare the Commitments terminated, whereupon the same shall
immediately terminate and the Lenders shall be under no obligation to make any
further Advances;

 

(b)                                 by notice to the Borrower, declare the whole of the unpaid principal
amount of all Facility Indebtedness to be immediately due and payable,
whereupon the same shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower;

 

(c)                                  realize on and/or enforce the Security; or

 

(d)                                 take any other action, exercise any other right, pursue any other
remedy or proceed by action, suit, remedy or other proceeding to enforce the
rights and/or remedies of the Administrative Agent and the Secured Parties
whether arising or accruing under the Financing Documents, by law, in equity or
otherwise.

 

Notwithstanding
the foregoing, upon the occurrence of an Event of Default specified in Section
11.1(g), (h) or (i), the Commitments shall automatically and immediately
terminate and the outstanding Advances, all accrued interest thereon and all
other amounts payable hereunder, shall immediately become due and payable.

 

11.3        Cash Collateral. Immediately
upon any amounts becoming due and payable under Section 11.2, the Borrower
shall, without necessity of further act or evidence, be and become thereby
unconditionally obligated to deposit forthwith with the Administrative Agent
for the Secured Parties’ benefit Cash Collateral equal to the full undrawn
principal amount at maturity of all L/Cs and Bankers’ Acceptances then
outstanding for its account and the Borrower hereby unconditionally promises
and agrees to deposit with the Administrative Agent immediately upon such
demand Cash Collateral in the amount so demanded. The Borrower authorizes the
Lenders, or any of them, to debit its accounts with the amount required to pay
such L/Cs and to pay such Bankers’ Acceptances, notwithstanding that such
Bankers’ Acceptances may be held by the Lenders, or any of them, in their own
right at maturity. Amounts paid to the Administrative 

 

93

 

Agent
pursuant to such a demand in respect of Bankers’ Acceptances and L/Cs shall,
subject to Section 11.6, be applied against, and shall reduce, pro rata among
the Lenders, to the extent of the amounts paid to the Administrative Agent in
respect of Bankers’ Acceptances and L/Cs, respectively, the obligations of the
Borrower to pay amounts then or thereafter payable under Bankers’ Acceptances
and L/Cs, respectively, at the times amounts become payable thereunder.

 

11.4        Rights Cumulative. The
rights and remedies of the Administrative Agent and the Secured Parties
hereunder shall be in addition to, and not in substitution for, any other
rights or remedies available to them, at law, in equity or otherwise. No remedy
for the enforcement of the rights of the Administrative Agent and the Secured
Parties shall be exclusive of any other rights or remedies provided hereunder,
under any other Document, by law, in equity or otherwise or dependent upon any
other such right or remedy and any one or more of such rights or remedies may
from time to time be exercised independently or in combination. No failure to
exercise, and no delay in exercising, on the part of the Administrative Agent
or Secured Party, any right or remedy shall operate as a waiver thereof, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise thereof or the exercise of any other right or remedy. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law or otherwise.

 

11.5        Proofs of Claim, Etc.  In addition to their rights under Section
11.2, the Administrative Agent or the Secured Parties may file such proofs of
claim and other papers and documents as may be necessary or desirable to have
the claims of the Administrative Agent or the Secured Parties lodged in any
bankruptcy, winding-up or other judicial proceeding relating to the Borrower.

 

11.6        Priority of Payments. Upon
any acceleration pursuant to Section 11.2 of the Facility Indebtedness, all
payments made by the Borrower and all amounts, if any, obtained by the
Administrative Agent or Secured Parties on the enforcement of any Security
shall be applied as follows:

 

(a)                                  firstly, to pay all amounts owing to the Administrative Agent in its
capacity as Administrative Agent and to the Trustee and all other expenses
incurred by the Administrative Agent and the Trustee on behalf of the Secured
Parties and payable by the Borrower hereunder, under the Agency Fee Letter and
under the other Documents, together with all amounts owing to BNS in respect of
L/C fronting fees payable by the Borrower hereunder;

 

(b)                                 secondly, to pay, on a pro rata
basis in accordance with the amounts owing to the Secured Parties, all Senior
Secured Indebtedness; and

 

(c)                                  thirdly, to pay the balance, if any, to the Borrower or as otherwise
required by all applicable Requirements of Law;

 

and
the Borrower shall have no right to require any inconsistent appropriation.

 

94

 

ARTICLE 12

THE ADMINISTRATIVE AGENT AND THE SECURED PARTIES

 

12.1        Provisions Reference. Reference
is made to Section 4 of the Provisions regarding “Right of Setoff”, Section 5
of the Provisions regarding “Sharing of Payments by Lenders” and Section 7 of
the Provisions regarding “Agency” matters.

 

12.2        Specific
Provisions Relating to Hedge Counterparties.

 

(a)                                  Notwithstanding anything contained herein to the contrary, upon the
occurrence of any “Event of Default”, “Termination Event” or “Additional
Termination Event” (as defined in any relevant Hedge Agreement) under any
Permitted Hedge Agreement to which a Hedge Counterparty is a party, such Hedge
Counterparty may, to the extent permitted under such Permitted Hedge Agreement,
and in addition to any other rights hereunder, take any one or more of the
following actions:

 

(i)                                     “close out” any or all transactions entered into by the Borrower
under any Permitted Hedge Agreement with the Hedge Counterparty;

 

(ii)                                  set off all indebtedness or obligations owing by the Hedge
Counterparty to the Borrower under Permitted Hedge Agreements with the Borrower
against all indebtedness or obligations owing by the Borrower to the Hedge
Counterparty under Permitted Hedge Agreements with such Hedge Counterparty;
provided that, for purposes of this clause (ii), any Lender and Affiliate of
such Lender which are each a Permitted Hedge Counterparty may consolidate their
indebtedness and obligations owing to the Borrower under their Permitted Hedge
Agreements with the Borrower and set off all such consolidated indebtedness and
obligations against all indebtedness and obligations owing by the Borrower to
such Permitted Hedge Counterparties under Permitted Hedge Agreements with such
Permitted Hedge Counterparties;

 

(iii)                               sue or bring action against the Borrower for any such indebtedness
owing under Permitted Hedge Agreements.

 

(b)                                 (i) Notwithstanding any other provision hereof, no Permitted Hedge
Counterparty shall have any claim to any Hedge Indebtedness
except for the Aggregate Net Hedge Indebtedness owed to such
Permitted Hedge Counterparty; provided that, for purposes of calculating the
Aggregate Net Hedge Indebtedness of a Lender and an Affiliate of such Lender
which are each a Permitted Hedge Counterparty their indebtedness and
obligations owing to the Borrower under their Permitted Hedge Agreements with
the Borrower shall be consolidated, and such consolidated indebtedness and
obligations owing by such Permitted Hedge Counterparties to the Borrower shall
be netted against the indebtedness and obligations owing by the Borrower to
such Permitted Hedge Counterparties under their Permitted Hedge Agreements with
the Borrower. (ii) No Permitted Hedge 

 

95

 

Counterparty
shall set off or net any amount of Aggregate Net Hedge Indebtedness owing by
such Hedge Counterparty against Facility Indebtedness or other indebtedness
payable to it by the Borrower, unless such Permitted Hedge Counterparty shares
such amount with the other Secured Parties in accordance with Section 5 of the
Provisions. Except as set out in Section 12.2(a)(ii), no Unsecured Hedge
Counterparty shall set off or net any amount of Hedge Indebtedness owing by
such Unsecured Hedge Counterparty against any Indebtedness or other
indebtedness payable to it by the Borrower.

 

(c)                                  The Aggregate Net Hedge Indebtedness owed to each Permitted Hedge
Counterparty shall at all times be secured by the Security unless a Permitted
Hedge Counterparty has otherwise agreed in writing to forego the benefit of
such Security. No Hedge Indebtedness owed to any Hedge Counterparty may be
secured by margin deposited with or held by or for the benefit of a Hedge
Counterparty or by any other security (except, in the case of each Permitted
Hedge Counterparty, as it forms part of the Security held by the Administrative
Agent or the Trustee for the benefit of all Secured Parties).

 

(d)                                 Notwithstanding that the Security secures the Aggregate Net Hedge
Indebtedness owing to each Permitted Hedge Counterparty, all decisions
concerning the Security and its enforcement or realization (so long as any
Facility Indebtedness has not been indefeasibly paid in full and all
Commitments have not been terminated) shall be made by the Administrative Agent
or by the required Lenders as specified in this Agreement. No Hedge
Counterparty shall have any right to vote on, or otherwise influence, any
matters involving the realization of the Security or the enforcement thereof,
or any matter under or relating to this Agreement or any other Financing
Document, as long as any Facility Indebtedness is outstanding and all
Commitments have not been terminated.

 

(e)                                  Upon the Facility Indebtedness being indefeasibly paid in full and
all Commitments being terminated, (i) the Lenders shall release their interests
in the Security and (ii) the Security shall continue to be held by the
Administrative Agent for the benefit of the Final Permitted Hedge
Counterparties and shall continue to secure any Aggregate Net Hedge
Indebtedness owed from time to time to the Final Permitted Hedge Counterparties.
Without limiting any other provisions of this Agreement which survive
termination of all Commitments all provisions of this Agreement required to
make this Section 12.2(e) operational, shall for purposes of the Security
survive, mutatis mutandis, the
indefeasible payment of the Facility Indebtedness and termination of all
Commitments. All references in such provisions to “Majority Lenders”, “Super
Majority Lenders”, “Unanimous Lenders” and such other terms used by reference
to the Lenders and the Secured Parties shall, unless otherwise provided in
writing by all Final Permitted Hedge Counterparties, be deemed to mean all
Final Permitted Hedge Counterparties. For greater certainty, and
notwithstanding any other provision hereof, at no time following repayment of
the Facility Indebtedness in full and the termination of all Commitments, shall
the Security (excluding the Bank Act Security) be discharged or amended, or
shall any Person be granted the benefit of

 

96

 

the Security
except for the Final Permitted Hedge Counterparties, in each case unless each
Final Permitted Hedge Counterparties, as well as the Borrower, has given its
prior written consent. In addition, the defined terms which are incorporated in
the Security Documents by reference shall continue to have the same meanings
notwithstanding the indefeasible payment of all Facility Indebtedness and
termination of all Commitments, except for any necessary changes resulting from
the indefeasible payment of all Facility Indebtedness and termination of all
Commitments, mutatis mutandis.

 

(f)                                    The provisions of this Section 12 are solely for the benefit of the
Secured Parties and neither the Borrower nor any Subsidiary shall have rights
as a third party beneficiary of such provisions.

 

ARTICLE 13

MISCELLANEOUS

 

13.1        Amendments, Waivers, Etc.  Neither this Agreement nor any other
Document, nor any terms hereof or thereof, may be amended, supplemented or
modified except in accordance with the provisions of this Section. Unless
otherwise specified in this Agreement, the Majority Lenders may, or, with the
written consent of the Majority Lenders, the Administrative Agent shall, from
time to time, (X) enter into with the Borrower, written amendments, supplements
or modifications hereto and to the other Financing Documents for the purpose of
amending, adding, remaining or replacing any provisions to this Agreement or to
the other Financing Documents or changing in any manner the rights or
obligations of the Lenders or the Borrower hereunder or thereunder or (Y)
waive, at the Borrower’s request, on such terms and conditions as the Majority
Lenders or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Documents or
any Default and its consequences; provided, however, that, subject to Section
5.2, no such waiver and no such amendment, supplement or modification shall:

 

(a)                                  reduce the amount or extend the scheduled date of maturity of any
Advance or any other obligation or of any scheduled installment thereof; or
reduce the stated rate of any interest or fees payable hereunder; or extend the
scheduled date of any payment thereof or modify any provision that provides for
the sharing by the Lenders of any payment or prepayment of indebtedness to
provide for a non-ratable sharing thereof; or increase the amount or extend the
expiration date of any Commitments; or change the currency in which any Advance
is payable; or amend, modify or waive any provision of this Section 13.1; or
reduce the required percentages of Majority Lenders, Super Majority Lenders or
Unanimous Lenders as specified in this Agreement; in each case, without the
prior written consent of the Unanimous Lenders;

 

(b)                                 release the Borrower from its obligations under the Financing
Documents or any of the Collateral, without the written consent of the
Unanimous Lenders; provided that the Administrative Agent shall release
(without consent from the Lenders) any Collateral sold, transferred or
otherwise disposed of which is permitted by Section 10.3(e);

 

97

 

(c)                                  amend, modify or waive any provision of Section 7 of the Provisions
or any other provision dealing with the rights and duties of the Administrative
Agent without the written consent of the Administrative Agent;

 

(d)                                 amend, modify or waive any provision dealing with the rights and
duties of the Issuing Bank without the written consent of the Issuing Bank; or

 

(e)                                  amend, modify or waive any provision of Sections 11.6 or 12.2 hereof
or Section 5 of the Provisions without the written consent of the
Administrative Agent and the Unanimous Lenders.

 

Any
waiver and any amendment, supplement or modification pursuant to this Section
13.1 shall apply to each Lender and shall be binding upon the Borrower, the
Lenders, the Secured Parties and the Administrative Agent and all future
holders of the Advances. In the case of any waiver, the Borrower, the Lenders,
the Secured Parties, the Administrative Agent shall be restored to their former
position and rights hereunder and under the other Financing Documents, and any
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default, or impair any right
consequent thereon. Notwithstanding anything contained in this Section 13.1 to
the contrary, the foregoing provisions do not apply to Hedge Agreements, nor to
any amendment, supplement, modification or waiver of any of the terms thereof.

 

13.2        Amendments (Subsidiaries), Etc.  Notwithstanding Section 13.1, no Document to
which a Subsidiary is a party, nor any terms thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section. Unless otherwise specified in this Agreement, the Majority Lenders
may, or, with the written consent of the Majority Lenders, the Administrative
Agent shall, from time to time, enter into with any Subsidiary, written
amendments, supplements or modifications of the Documents to which any such
Subsidiary is a party for the purpose of adding any provisions to the Documents
or changing in any manner the rights or obligations of the Lenders or any
Subsidiary thereunder; provided, however, that, subject to Section 5.2, no such
amendment, supplement or modification shall reduce the amount or extend the
scheduled date of maturity of any obligation; or extend the scheduled date of
any payment thereof or modify any provision that provides for the sharing by
the Lenders of any payment or prepayment of indebtedness to provide for a
non-ratable sharing thereof, in each case, without the prior written consent of
the Unanimous Lenders. Any amendment, supplement or modification pursuant to
this Section 13.2 shall apply to each Lender and shall be binding upon the
Borrower, the applicable Subsidiary, the Lenders, the Secured Parties and the
Administrative Agent and all future holders of the Advances. Notwithstanding
anything contained in this Section 13.2 to the contrary, the foregoing
provisions do not apply to Hedge Agreements, nor to any amendment, supplement,
modification or waiver of any of the terms thereof.

 

13.3        Lenders’ Obligations Several. The
obligations of the Lenders hereunder, including those relating to the making of
any Advances, are several and not joint with respect to the other Lenders.

 

98

 

13.4        Reproduction of Documents, etc.  This Agreement, all other Documents and all
documents relating hereto and thereto may be reproduced by the Lenders or by
the Administrative Agent by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process and the Lenders or
the Administrative Agent may destroy any original documents so reproduced. The
Borrower agrees that any such reproduction shall be as admissible in evidence
as the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by the Administrative Agent or the Lenders in the regular course of business)
and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.

 

13.5        No Merger on Judgment. The
taking of any judgment shall not operate as a merger of any Facility
Indebtedness or other liability of the Borrower to the Administrative Agent or
the Secured Parties or any part thereof or in any way suspend payment or affect
or prejudice the rights, remedies and powers, legal or equitable, which the
Administrative Agent or the Secured Parties may have in connection with such
Indebtedness or other liability.

 

13.6        Independent
Engineer and Other Advisers.

 

(a)                                  The Majority Lenders shall have the right at any time and from time
to time to appoint an Independent Engineer to act on behalf of the
Administrative Agent and the Lenders for such purposes as the Administrative
Agent or the Lenders may determine including the following: (i) conduct a
technical and environmental review of the Mines constituting Included Property,
(ii) on an annual basis, review and, if appropriate, recommend the then current
Development Plan (including Reserves for use in the Mine Plan) in accordance with
Article 9, as applicable, (iii) carry out such other duties as may be set forth
in this Agreement or as may be required by the Administrative Agent or the
Lenders from time to time.

 

(b)                                 The Administrative Agent and the Lenders may consult and retain any
other independent consultants determined by them to be appropriate to: (i)
advise them on whether property which is proposed by the Borrower as Included
Property is eligible to be Included Property in accordance with Section 10.2(n)
and (ii) carry out such other duties as may be set forth in this Agreement.

 

(c)                                  The Majority Lenders may at any time and from time to time replace
the Independent Engineer or such other consultants. The Administrative Agent
shall provide the Borrower with reasonable notice of such replacement
Independent Engineer or other consultants following such replacement being made.
All rights and remedies of any such replacement Independent Engineer or other
consultants under this Agreement shall be the same as the rights and remedies of
such replaced Independent Engineer or other consultants.

 

13.7        Survival of Representations,
Warranties and Covenants. All agreements, representations,
warranties, covenants and indemnities made by or on behalf of the Borrower
herein or in any other Document or any certificate or document delivered
pursuant hereto, shall be considered to have been relied on by the
Administrative Agent and the Lenders and shall 

 

99

 

survive
the execution and delivery of this Agreement, the execution and delivery of
each other Document, and the making of each Advance, notwithstanding any
investigation made at any time by or on behalf of the Administrative Agent or
Lender.

 

13.8        Further Assurances. The
Borrower shall execute and deliver or cause to be done, executed and delivered,
all such further acts, documents and things as the Administrative Agent and the
Lenders may reasonably request for the purpose of giving effect to this
Agreement and the other Documents or for the purpose of establishing compliance
with the representations, warranties, covenants and conditions of same.

 

13.9        Severability. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

 

13.10      Conflicts. In
the event of any conflict or inconsistency between the provisions of this
Agreement and any other Financing Documents, the provisions of this Agreement
shall prevail.

 

13.11      Time of Essence. Time
shall, in all respects, be of the essence hereof.

 

13.12      English Language. The
Financing Documents have been negotiated in English and will be or have been
executed in the English language. Les soussignés ont expressément demandé que
ce document soit rédigé en langue anglaise. All paper writings given or
delivered pursuant to this Agreement and the other Financing Documents shall,
if requested by the Administrative Agent, be in the English language or, if
not, shall be accompanied by a certified English translation thereof. The
English language version of any document shall, absent manifest error, control
the meaning and interpretation of the matters set forth therein.

 

13.13      Judgment Currency. If
for the purpose of obtaining judgment in any court it is necessary to convert
an amount due under any Document from the currency in which it is due (the “Original Currency”) into another currency
(the “Second Currency”), the rate
of exchange applied shall be that at which, in accordance with normal banking
procedures, the Administrative Agent could purchase, in the Toronto foreign
exchange market, the Original Currency with the Second Currency two Business
Days preceding that on which judgment is given. The Borrower agrees that its
obligation in respect of any Original Currency due hereunder shall,
notwithstanding any judgment or payment in such other currency, be discharged
only to the extent that, on the Business Day following the date the
Administrative Agent receives payment of any sum so adjudged to be due
hereunder in the Second Currency, the Administrative Agent may, in accordance
with normal banking procedures, purchase, in the Toronto foreign exchange
market the Original Currency with the amount of the Second Currency so paid. If
the amount of the Original Currency so purchased or that could have been so
purchased is less than the amount originally due in the Original Currency, the
Borrower agrees as a separate obligation and notwithstanding any such payment
or judgment to indemnify the Administrative Agent and Lenders against such loss.
The term “rate of exchange” means the spot rate at which the Administrative
Agent in accordance with normal practices is able on the relevant date to
purchase the Original Currency with the Second Currency and includes any
premium and costs of exchange payable in connection with such purchase.

 

100

 

13.14      Exculpation Provisions. Each
of the parties hereto specifically agrees that it has read this Agreement and
the other Documents and agrees that it is charged with notice and knowledge of
the terms of this Agreement and the other Documents; that it is fully informed
and has full notice and knowledge of the terms, conditions and effects of this
Agreement; that it has been represented by legal counsel of its choice
throughout the negotiations preceding its execution of this Agreement and the
other Documents; and has received the advice of its legal counsel in entering
into this Agreement and the other Documents; and that it recognizes that
certain of the terms of this Agreement and the other Documents result in one
party assuming liability inherent in some aspects of the transaction and
relieving other parties of responsibility for such liability. Each party hereto
agrees and covenants that it will not contest the validity or enforceability of
any exculpatory provision of this Agreement and the other Documents on the
basis that the party had no notice or knowledge of such provision or that the
provision is not “conspicuous.”

 

13.15      Permitted Liens. The
designation of a Lien as a Permitted Lien is not, and shall not be deemed to
be, an acknowledgment by the Administrative Agent or the Lenders to any Person
that the Lien shall have priority over the Security.

 

13.16      Provisions Reference. Reference
is made to Section 8 of the Provisions regarding “Notices; Effectiveness;
Electronic Communications”, Section 9 of the Provisions regarding “Expenses;
Indemnity; Damage Waivers”, Section 10 of the Provisions regarding “Successors
and Assigns”, Section 11 of the Provisions regarding “Governing Law;
Jurisdictions; etc.”, Section 12 of the Provisions regarding “Waiver of Jury
Trials”, Section 13 of the Provisions regarding “Counterparts; Integration;
Effectiveness; Electronic Execution” and Section 14 of the Provisions regarding
“Confidentiality”.

 

13.17      Indemnification. The
Borrower shall indemnify and hold harmless the Administrative Agent and each
Secured Party and each of their Affiliates and their officers, directors,
employees, agents and advisers (each, an “Indemnified
Party”) from and against any and all claims, damages, losses,
liabilities, costs and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of, the preparation for the defence of, any investigation, litigation or
proceeding brought by Persons other than an Indemnified Party arising out of,
related to or in connection with:

 

(a)           this
Agreement and the other Financing Documents; or

 

(b)                                 any of the transactions contemplated herein or therein or the actual
or proposed use of the proceeds of the Advances;

 

whether
or not such investigation, litigation or proceeding is brought by any
Restricted Party, its directors, shareholders or creditors or by an Indemnified
Party or by any other Person, or any Indemnified Party is otherwise a party
thereto, and whether or not the transactions contemplated hereby are
consummated; except to the extent such claim, damage, loss, liability or
expense results from such Indemnified Party’s gross negligence or wilful
misconduct. The Borrower agrees not to assert any claim against any Indemnified
Party, and, without in any way limiting any of their other rights or remedies
hereunder or at law, each Lender and the Administrative Agent, also agrees not
to assert any claim against any Restricted Party, its officers, directors, 

 

101

 

employees,
agents or advisors, on any theory of liability for special, indirect,
consequential or punitive damages arising out of or otherwise relating to this
Agreement and the other Financing Documents and any of the transactions
contemplated herein or therein or the actual or proposed use of the proceeds of
the Advances. The agreements in this Section 13.17 shall survive the
termination of the Commitments and the repayment of all other amounts
outstanding hereunder and under the other Financing Documents.

 

13.18      Environmental Indemnity. The
Borrower shall exonerate, indemnify, pay and protect, defend and hold each
Indemnified Party harmless from and against, and reimburse said Persons for,
any claims (including, without limitation, third party claims, whether for
personal injury or real (or immoveable) or personal property damage or
otherwise), actions, administrative proceedings (including informal
proceedings), judgments, liens, damages, punitive damages, penalties, fines,
costs, liabilities (including sums paid in settlement of claims), interest or
losses, including reasonable legal fees and expenses (including any such fees
and expenses incurred in enforcing the Documents or collecting any sums due
under same), consultant fees, and expert fees, together with all other costs
and expenses of any kind or nature that arise directly or indirectly from or in
connection with any Requirements of Environmental Law, or any failure or breach
in respect thereof, that is or allegedly is applicable to any Restricted Party,
its respective properties, operations or actions to the extent the same arose
out of the relationships and arrangements created and contemplated hereby,
provided that any such proceeding for which indemnification is sought is not
brought by an Indemnified Party. The agreements in this Section 13.18 shall
survive the termination of the Commitments and the repayment of all other
amounts outstanding hereunder and under the other Financing Documents.

 

[Execution
Pages Follow]

 

102

 

IN
WITNESS WHEREOF each of the undersigned has caused this Agreement to be
executed by its respective duly authorized officer(s).

 

	
  THE
  BORROWER

  	
   

  	
   

  
	
   

  	
   

  	
  AGNICO-EAGLE MINES LIMITED

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “David
  Garofalo” (signed)

  
	
   

  	
  Name:

  	
   David Garofalo

  
	
  145 King Street East, Suite 500

  Toronto, Ontario

  	
  Title:

  	
   Vice-President, Finance and Chief

   Financial Officer

  
	
  M5C 2Y7

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: David Garofalo

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telecopier: (416) 367-4681

  	
   

  	
   

  

 

S-1

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  CO-ARRANGER
  AND 

  ADMINISTRATIVE AGENT

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NOVA SCOTIA, as Co-

  Arranger, Administrative Agent and 

  Technical Agent

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Alastair
  Borthwick” (signed)

  
	
   

  	
  Name:

  	
   Alastair
  Borthwick

  
	
  40 King Street West

  	
  Title:

  	
   Director

  
	
  Scotia Plaza, 62nd Floor

  	
   

  	
   

  
	
  Toronto, Ontario

  	
   

  	
   

  
	
  M5W 2X6

  	
   

  	
   

  
	
   

  	
  By:

  	
   “Alicia
  Osegueda” (signed)

  
	
  Attention: Robert Hosie

  	
  Name:

  	
   Alicia Osegueda

  
	
   

  	
  Title:

  	
   Associate Director

  
	
  Telecopier: (416) 866-3329

  	
   

  	
   

  

 

S-2

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  CO-ARRANGER
  AND 

  SYNDICATION AGENT

  	
   

  	
   

  
	
   

  	
   

  	
  SOCIÉTÉ GÉNÉRALE (CANADA), as 

  Co-Arranger and Syndication Agent

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “David
  Baldoni” (signed)

  
	
   

  	
  Name:

  	
   David Baldoni

  
	
  1501 McGill College Avenue

  	
  Title:

  	
   Managing Director

  
	
  Suite 1800

  	
   

  	
   

  
	
  Montreal, Quebec

  	
   

  	
   

  
	
  H3A 3M8

  	
   

  	
   

  
	
   

  	
  By:

  	
   “Paul
  Primavesi” (signed)

  
	
  Attention: Mariette Jean

  	
  Name:

  	
   Paul Primavesi

  
	
   

  	
  Title:

  	
   Vice
  President

  
	
  Telecopier: (514) 841-6250

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1221 Avenue
  of the Americas

  New York, New
  York

  U.S.A. 10020

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Chris Henstock

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telecopier: (212) 278-5675

  	
   

  	
   

  

 

S-3

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  CO-ARRANGER
  AND CO-

  DOCUMENTATION AGENT

  	
   

  	
   

  
	
   

  	
   

  	
  N M ROTHSCHILD & SONS 

  LIMITED, as Co-Arranger and Co-

  Documentation Agent

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Nicholas
  Wood” (signed)

  
	
   

  	
  Name:

  	
   Nicholas
  Wood

  
	
  New Court

  	
  Title:

  	
   Director

  
	
  St. Swithin’s Lane

  	
   

  	
   

  
	
  London, England

  	
   

  	
   

  
	
  EC4P 4DU

  	
   

  	
   

  
	
   

  	
  By:

  	
   “George
  Pyper” (signed)

  
	
  Attention: 

  	
  Andrew Johnson / Paul Innocent

  	
  Name:

  	
   George Pyper

  
	
   

  	
  Title:

  	
   Assistant Director

  
	
  Telecopier: +44 20 7280 5403

  	
   

  	
   

  
				

 

 

S-4

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  CO-DOCUMENTATION
  AGENT

  	
   

  	
   

  
	
   

  	
   

  	
  THE TORONTO-DOMINION BANK, 

  as Co-Documentation Agent

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Rohan
  Appadurai” (signed)

  
	
   

  	
  Name:

  	
   Rohan Appadurai

  
	
  66 Wellington Street West

  	
  Title:

  	
   Managing Director

  
	
  TD Tower, 8th Floor

  	
   

  	
   

  
	
  Toronto, Ontario

  	
   

  	
   

  
	
  M5K 1A2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Rohan Appadurai

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telecopier: (416) 944-5164

  	
   

  	
   

  

 

S-5

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  LENDER

  	
   

  	
   

  
	
   

  	
   

  	
  THE BANK OF NOVA SCOTIA

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Ray Clarke”
  (signed)

  
	
   

  	
  Name:

  	
   Ray
  Clarke

  
	
  40 King Street West

  	
  Title:

  	
   Director

  
	
  Scotia Plaza, 62nd Floor

  	
   

  	
   

  
	
  Toronto, Ontario

  	
   

  	
   

  
	
  M5W 2X6

  	
   

  	
   

  
	
   

  	
  By:

  	
   “Derek
  Tovich” (signed)

  
	
  Attention: Ray Clarke

  	
  Name:

  	
   Derek Tovich

  
	
   

  	
  Title:

  	
   Associate Director

  
	
  Telecopier: (416) 866-2010

  	
   

  	
   

  

 

S-6

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  LENDER

  	
   

  	
   

  
	
   

  	
   

  	
  SOCIÉTÉ GÉNÉRALE (CANADA)

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “David
  Baldoni” (signed)

  
	
   

  	
  Name:

  	
   David Baldoni

  
	
  1501 McGill College Avenue

  	
  Title:

  	
   Managing
  Director

  
	
  Suite 1800

  	
   

  	
   

  
	
  Montreal, Quebec

  	
   

  	
   

  
	
  H3A 3M8

  	
   

  	
   

  
	
   

  	
  By:

  	
   “Paul
  Primavesi” (signed)

  
	
  Attention: Mariette Jean

  	
  Name:

  	
   Paul Primavesi

  
	
   

  	
  Title:

  	
   Vice President

  
	
  Telecopier: (514) 841-6250

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1221 Avenue
  of the Americas

  New York, New
  York

  U.S.A. 10020

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Chris Henstock

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telecopier: (212) 278-5675

  	
   

  	
   

  

 

S-7

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  LENDER

  	
   

  	
   

  
	
   

  	
   

  	
  N M ROTHSCHILD & SONS LIMITED

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Nicholas
  Wood” (signed)

  
	
   

  	
  Name:

  	
   Nicholas
  Wood

  
	
  New Court

  	
  Title:

  	
   Director

  
	
  St. Swithin’s Lane

  	
   

  	
   

  
	
  London, England

  	
   

  	
   

  
	
  EC4P 4DU

  	
   

  	
   

  
	
   

  	
  By:

  	
   “George
  Pyper” (signed)

  
	
  Attention:

  	
  Andrew Johnson / Paul Innocent

  	
  Name:

  	
   George Pyper

  
	
   

  	
  Title:

  	
   Assistant Director

  
	
  Telecopier: +44 20 7280 5403

  	
   

  	
   

  
				

 

S-8

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  LENDER

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONAL BANK OF CANADA

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Andre
  Marenger” (signed)

  
	
   

  	
  Name:

  	
   Andre
  Marenger

  
	
  1155 Metcalfe Street

  	
  Title:

  	
   Director

  
	
  5th Floor

  	
   

  	
   

  
	
  Montreal, Quebec

  	
   

  	
   

  
	
  H3B 4S9

  	
   

  	
   

  
	
   

  	
  By:

  	
   “Rejean
  Guevremont” (signed)

  
	
  Attention: Andre Marenger

  	
  Name:

  	
   Rejean Guevremont

  
	
   

  	
  Title:

  	
   Managing Director

  
	
  Telecopier: (514) 390-7860

  	
   

  	
   

  

 

S-9

 

IN WITNESS WHEREOF each of the undersigned
has caused this Agreement to be executed by its respective duly authorized
officer(s).

 

	
  LENDER

  	
   

  	
   

  
	
   

  	
   

  	
  THE TORONTO-DOMINION BANK

  
	
   

  	
   

  	
   

  
	
  Address:

  	
  By:

  	
   “Rohan
  Appadurai” (signed)

  
	
   

  	
  Name:

  	
   Rohan Appadurai

  
	
  66 Wellington Street West

  	
  Title:

  	
   Managing Director

  
	
  TD Tower, 8th Floor

  	
   

  	
   

  
	
  Toronto, Ontario

  	
   

  	
   

  
	
  M5K 1A2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention: Rohan Appadurai

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telecopier: (416) 944-5164

  	
   

  	
   

  

 

S-10

 

ANNEX 1

 

TO AMENDED AND RESTATED CREDIT AGREEMENT

 

The
attached model credit agreement provisions, which have been revised under the
direction of the Canadian Bankers’ Association Secondary Loan Market Specialist
Group from provisions prepared by The Loan Syndications and Trading
Association, Inc., form part of this Agreement, subject to the following
variations:

 

1.             Section
1 is amended by deleting the definitions of “Agreement”, “Applicable Law”, “Applicable
Percentage” and “Loan”, and replacing them, respectively, as follows:

 

“Agreement”
means this third amended and restated credit agreement, together with all
Schedules, Annexes and Exhibits hereto, each as amended, restated, replaced or
otherwise modified from time to time.

 

“Applicable
Law” means Requirements of Law, as defined in the Agreement.

 

“Applicable
Percentage” means with respect to any Lender, the percentage of the total
Commitments, at any time, represented by such Lender’s Commitment, at such time.
If the Commitments have terminated or expired, the Applicable Percentage with
respect to any Lender shall be the percentage of the total outstanding Loans
(including participations in respect of Letters of Credit and the Overdraft
Facility) represented by such Lender’s outstanding Loans (including
participations in respect of Letters of Credit and the Overdraft Facility).

 

“Loan”
means an availment of the Credit Facility by the Borrower by way of Prime Rate
Advances, Base Rate Advances, Bankers’ Acceptances (including BA Equivalent
Advances), LIBOR Advances or Letters of Credit, including overdrafts under the
Overdraft Facility, deemed Advances and conversions, renewals and rollovers of
existing Advances, and any reference relating to the amount of Advances shall
mean the sum of all outstanding Prime Rate Advances, Base Rate Advances and
LIBOR Advances, plus the face amount of all outstanding Bankers’ Acceptances
and Letters of Credit.

 

2.             Section
1 is also amended by adding the following:

 

“bankers’
acceptance” means Bankers’ Acceptance, as defined in the Agreement.

 

3.             The
definition of “Excluded Taxes” in Section 1 is amended by deleting it in its
entirety and replacing it with the following:

 

“Excluded
Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account
of any obligation of an Obligor hereunder, (a) taxes imposed on or measured by
its net income or capital, and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending
office is located, (b) any branch profits taxes or any similar tax imposed by
any jurisdiction in which the Lender is located, (c) in the case of a 

 

 

Foreign Lender
(other than (i) an assignee pursuant to a request by the Borrower under Section
3.3(b), (ii) an assignee pursuant to an Assignment and Assumption made when an
Event of Default has occurred and is continuing or (iii) any other assignee to
the extent that the Borrower has expressly agreed that any withholding tax
shall be an Indemnified Tax), any withholding tax and (d) any interest,
additional tax or penalties applicable to items (a), (b) or (c) above. For
greater certainty, for purposes of item (c) above, a withholding tax
constitutes any Tax that a Foreign Lender is required to pay pursuant to Part
XIII of the Income Tax Act (Canada) or any successor provision thereto.

 

4.             Section
3.1(a) is amended by adding at the end of it:

 

“Notwithstanding
the foregoing, the Borrower shall only be obligated to pay such additional
amount or amounts under this Section if the affected Lender, as a general
practice, also requires compensation therefor from its other customers, where
such other customers are bound by similar provisions to the foregoing
provisions of this Section and where, due to the type of credit facility or
other arrangements such other customers have with such Lender or the industry
or jurisdiction where such other customers carries on business, such Lender
would be similarly affected (and because of such Lender’s confidentiality
obligations to its other customers, such conditions, if applicable, shall be
confirmed as having been satisfied by such Lender in the certificate referred
to in Section 3.1(c) of the Provisions, which certificate shall be conclusive
absent manifest error).

 

5.             Section
3.1(c) is deleted in its entirety and replaced with the following:

 

Certificates
for Reimbursement. A certificate of a
Lender setting forth the amount or amounts necessary to compensate such Lender
or its holding company, as the case may be, as specified in paragraph (a) or
(b) of this Section, including reasonable detail of the basis of calculation of
the amount or amounts, and delivered to the Borrower shall constitute prima
facie evidence of such amount of amounts. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 30 days after receipt
thereof.

 

6.             Section
3.2(c) is deleted in its entirety and replaced with the following:

 

Indemnification
by the Borrower. The Borrower shall
indemnify the Administrative Agent and each Lender, within 30 days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) paid by the Administrative
Agent or such Lender and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be prima facie evidence of such amount or payment.

 

2

 

7.             Section
3 is amended by adding the following as Section 3.2(g):

 

“(g)         Non-Application
for Non-Residents. Notwithstanding anything to the
contrary contained herein, any Lender, Administrative Agent or Participant
under a Loan Document which is a non-resident Person under the Income Tax Act (Canada) as at the time
that a payment is made to such Lender, Administrative Agent or Participant
under a Loan Document shall not have the benefit of this Section 3.2 with
respect to any withholding Tax obligations exigible under the Income Tax Act (Canada) arising as a
result of such Lender, Administrative Agent or Participant under a Loan
Document being, at such time, a Person that is a non-resident of Canada under
the Income Tax Act (Canada). If
any such withholding Tax obligation arises in respect of any payments made by
the Borrower to any Lender, Administrative Agent or Participant under a Loan
Document, the Borrower shall pay the full amount deducted or withheld to the
relevant taxation authority or other authority in accordance with Requirements
of Law and, promptly thereafter, send to such Lender, Administrative Agent or
Participant, for its account, a certified copy of an original receipt showing
payment thereof.”

 

8.             Section
3.3(b) is amended by adding after “hereunder” in the 5th line
thereof, “or any Lender does not consent to a request for extension pursuant to
Section 5.2 of the Agreement and the Borrower requests that such Lender assign
its Commitments,” by replacing “assignee” in the 9th line thereof
with “Eligible Assignee”, and by adding the following after clause (iv):

 

“(v)         no
Default has occurred and is continuing;

 

(vi)          each
such replacement Lender shall be reasonably satisfactory to the Majority
Lenders and the Administrative Agent;

 

(vii)         no
replacement of a Lender shall result in the prepayment of any Loans held by any
Lender being replaced immediately prior to such replacement;

 

(viii)        such
assignment shall be at no cost to the remaining Lenders and the Administrative
Agent, and subject to Section 3.3(b)(vii) above, the Borrower; and

 

(ix)           the
assigning Lender or any of its Affiliates which is a Permitted Hedge
Counterparty assigns, at price determined in a reasonable manner from market
quotations in accordance with customary market practices, all Hedge Agreements
it or they hold with the Borrower to the Eligible Assignee or to another Lender
or Permitted Hedge Counterparty.”

 

7.             Section
3.4 is amended by adding, “other than as a result of any breach of the Criminal Code (Canada) or the Interest Act (Canada)” after “any
particular rate” in the 7th line thereof.

 

8.             Section
4 is deleted in its entirety and replaced as follows:

 

“Right
of Set-off.

 

If
an Event of Default has occurred and is continuing, each Secured Party is
hereby authorized, subject to Section 12.2(b)(i) of the Agreement, at any time
and from time to 

 

3

 

time
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by such Secured Party for
the credit or the account of any Obligor against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement or any other
Loan Document to such Lender, irrespective of whether or not such Secured Party
has made any demand under this Agreement or any other Loan Document and
although such obligations of the Obligor may be contingent or unmatured or are
owed to a branch or office of such Secured Party different from the branch or
office holding such deposit or obligated on such indebtedness. The rights of
each Secured Party under this Section are in addition to other rights and
remedies (including other rights of set-off, consolidation of accounts and
bankers’ lien) that the Secured Parties may have. Each Secured Party agrees to
promptly notify the Borrower and the Administrative Agent after any such
set-off and application, but the failure to give such notice shall not affect
the validity of such set-off and application. If any such Secured Party
exercises any rights under this Section 4, it shall share the benefit received
in accordance with Section 5 as if the benefit had been received by the Lender
of which it is an Affiliate. This Section shall not be deemed to create any
obligation on the part of any Secured Party to take any action which if taken
would result in such Secured Party obtaining any payment or recovery in excess
of its share.”

 

9.             Section
5 is amended by:

 

(a)           adding
to the beginning of such Section, “If no Event of Default has occurred and is
continuing,” and by deleting clause (a) in its entirety and replacing it with
the following:

 

“(a)
promptly notify the Administrative Agent of such fact,”

 

(b)           adding
the following to the end of Section 5:

 

“If
an Event of Default has occurred and is continuing, all Secured Parties and the
Administrative Agent shall share in all proceeds or other recoveries from the
Borrower or under the Security (including amounts received on any exercise of
any right of set-off in respect of any Aggregate Net Hedge Indebtedness owing
by a Permitted Hedge Counterparty to the Borrower, any other right of counterclaim,
set-off, banker’s lien or similar right and amounts recovered on the
realization of the Security) such that, subject to Section 11.6 of the
Agreement, (i) the Secured Parties shall share such amounts pro rata based on their respective pro rata share of the Senior Secured
Indebtedness. For the purposes hereof, a Permitted Hedge Counterparty’s pro rata share, at any time, of the
Aggregate Net Hedge Indebtedness, shall be equal to the pro rata portion that such Permitted Hedge
Counterparty’s Aggregate Net Hedge Indebtedness at such time is to the
Aggregate Net Hedge Indebtedness of each Permitted Hedge Counterparty at such
time.

 

If,
while an Event of Default has occurred and is continuing, any Secured Party
obtains any payment or other recovery whether by set-off in respect of any
Aggregate Net Hedge Indebtedness owing by the Secured Party to the Borrower,
any other right of set-off, counterclaim, banker’s lien or otherwise, and
whether voluntary, involuntary or 

 

4

 

otherwise,
in respect of the Senior Secured Indebtedness in excess of its entitlement to
payments and other recoveries obtained from time to time by all Secured Parties
on account of Senior Secured Indebtedness, such first Secured Party shall promptly
notify the Administrative Agent of such fact and purchase from the other
Secured Parties a participation in the Aggregate Net Hedge Indebtedness and, if
applicable, Facility Indebtedness, so as to cause such purchasing Secured Party
to share the excess payment or other recovery rateably with each of them or
make such other adjustments as shall be equitable, so that the benefit of all
such payments shall be shared by the Secured Parties rateably in accordance
with the aggregate amount of principal and accrued interest on the respective
Loans and other amounts owing to them; provided, however, that, if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Secured Party by the Borrower, the purchase shall be rescinded
and the purchase price paid by the purchasing Secured Party to the other
Secured Parties shall be returned to the purchasing Secured Party to the extent
of such recovery but without interest. This Section shall not be deemed to
create any obligation on the part of any Secured Party to take any action which
if taken would result in such Secured Party obtaining any payment or recovery
in excess of its share.”

 

10.           Section
7.1 is amended by adding to the end of it the following:

 

“Each
Permitted Hedge Counterparty irrevocably confirms the appointment under the
Original Credit Agreement of the Administrative Agent as its agent and
fondé de pouvoir, and irrevocably confirms that such
appointment continues under this Agreement, for the purpose of holding and
realizing on the Security in accordance with and subject to the terms hereof,
and authorizes it on behalf of such Permitted Hedge Counterparty to take such
action and to exercise such rights, powers and discretions as are expressly
granted to it under this Agreement and the other Documents and on the terms
hereof or thereof together with such other rights, powers and discretions as
are reasonably incidental thereto. To the extent necessary, each Secured Party
irrevocably confirms the appointment under the Original Credit Agreement of the
Administrative Agent as its agent, and irrevocably confirms that such
appointment continues under this Agreement, to hold in the name of the
Administrative Agent, for the benefit of the Secured Parties, any of the bonds
issued and outstanding from time to time under the Hypothec, and authorizes the
Administrative Agent to continue the appointment of the Trustee as the person
holding the power of attorney for the bondholders under the Hypothec for all
purposes of Article 2692 of the Civil Code
of Quebec. In addition, without limiting the foregoing, each Secured
Party grants to the Administrative Agent a power of attorney, for the purposes
of laws applicable to the Security from time to time, to sign documents comprising
the Security from time to time (as the party accepting the grant of the
Security), and also grants to the Administrative Agent the right to delegate
its authority as attorney to any other Person, whether or not an officer or
employee of the Administrative Agent.”

 

5

 

11.           Section
7.2 is amended by deleting the first sentence thereof and replacing it with the
following:

 

“The
Person serving as the Administrative Agent hereunder shall have the same rights
and powers in its capacity as a Lender or Permitted Hedge Counterparty as any
other Lender or Permitted Hedge Counterparty and may exercise the same as
though it were not the Administrative Agent and the term “Lender”, “Lenders” or
“Permitted Hedge Counterparty” shall, unless otherwise expressly indicated or
unless the context otherwise requires, include the Person serving as the
Administrative Agent hereunder in its individual capacity.”

 

12.           Section
7.7 is amended by:

 

(a)           replacing
“Required Lenders” with “Super Majority Lenders” wherever used; and

 

(b)           by
adding the following as Section 7.7(4):

 

“(4)         For
greater certainty, this Section 7.7 shall survive, mutatis mutandis, the indefeasible payment of the Facility
Indebtedness and termination of all Commitments.”

 

13.           Section
7.9 is amended by replacing the word “Lender”, wherever used with “Secured
Party” and the word “Lenders” wherever used with “Secured Parties”, with
corresponding grammatical changes resulting therefrom.

 

14.           The
following shall be added to the end of Section 7:

 

“7.11       Fees of
Administrative Agent and Arrangers The Administrative Agent and the
Arrangers shall be entitled to receive such consideration for acting as
Administrative Agent and Arrangers hereunder as they may agree upon with the Borrower.
The Borrower shall pay all such fees directly to the Administrative Agent
pursuant to the Arranger Fee Letter and the Agency Fee Letter.

 

7.12         Majority
Lenders Except as otherwise provided herein or therein, where the terms of
this Agreement or the other Documents refer to any action to be taken hereunder
or thereunder by the Lenders (other than all of the Lenders) or to any such
action that requires the consent of the Lenders (other than all of the Lenders)
the action may be taken or consent given by any one or more Lenders which
constitute the Majority Lenders. Any such approval, requirement, instruction or
other expression shall be binding on all Secured Parties. Any approval,
requirement, instruction or other expression of the Majority Lenders may be
expressed either in writing or by a resolution passed at a meeting of Lenders.”

 

15.           Section
9(a) shall be amended by:

 

(a)           deleting
“and its Affiliates” from the 2nd line thereof; and

 

(b)           adding
the following to the end of it:

 

“For
greater certainty, and without limiting the foregoing, the Borrower shall also
pay or reimburse the Administrative Agent, the Arrangers and the Lenders for
all reasonable out-of-pocket costs and expenses of any local agents, the
Trustee, the Independent 

 

6

 

Engineer,
and any other consultants, agents or advisers of the Administrative Agent or
Arrangers. The Borrower shall pay or reimburse the Administrative Agent and the
Lenders for all such amounts whether or not any of the transactions
contemplated hereby are consummated. The agreements in this Section 9(a) shall
survive the termination of the Commitments and the repayment of all other
amounts outstanding hereunder and under the other Financing Documents. Finally,
the “fees, charges and disbursements of counsel” referred to in clause (iii) of
this Section 9(a) shall mean the fees, charges and disbursements of one set of
counsel for the Administrative Agent and the Lenders as a collective unit,
without limiting that collective unit from retaining as many counsel in as many
jurisdictions as that collective unit requires, acting together, and the
reasonable fees, charges and disbursements of all such counsel shall be covered
by clause (iii) of Section 9(a).”

 

16.           Sections
9(b) and 9(d) are deleted.

 

17.           Section
10(a) is amended by deleting clause (iii) thereof.

 

18.           Section
10(b)(i) is amended by deleting, “in the case of any assignment in respect of a
revolving facility, or $1,000,000, in the case of any assignment in respect of
a term facility”, and by adding “US” before “$5,000,000”.

 

19.           Section
10(b)(iii) shall be deleted in its entirety and replaced as follows:

 

“(iii)        any
assignment of a Commitment relating to a credit under which Letters of Credit
may be issued must be approved by any Issuing Bank (such approval not to be
unreasonably withheld or delayed, unless the Person that is the proposed
assignee has a credit rating of less than BBB by Standard & Poor’s Ratings
Group or Baa2 by Moody’s Investors Service, in which case, such approval to be
in the Issuing Bank’s sole discretion) unless the Person that is the proposed
assignee is itself already a Lender with a Commitment under that credit;”

 

20.           Section
10(b)(vi) shall be amended by adding the following to the end of it:

 

“Each
assignee shall pay the Administrative Agent a processing and recordation fee of
US $3,000.”

 

21.           Section
10 shall be amended by adding the following as Section 10(b)(vii):

 

“(vii)
the assigning Lender or any Permitted Hedge Counterparty which is an Affiliate
of such Lender shall assign, at price determined in a reasonable manner from
market quotations in accordance with customary market practices, all Hedge
Agreements it or they hold with the Borrower to the assignee Lender or to
another Lender or Permitted Hedge Counterparty.”

 

22.           The
following shall be added to the end of Section 10(b):

 

“The
Borrower covenants to and shall execute and deliver to the Administrative Agent
the “Specific Acknowledgement Regarding Security” contained in each Assignment
and 

 

7

 

Acceptance;
provided that, if the Borrower does not so execute and deliver to the
Administrative Agent such acknowledgement, the failure to so execute and
deliver the “Specific Acknowledgement Regarding Security” shall not affect the
validity of the Assignment and Acceptance, and the Borrower shall, upon the
execution and delivery of each such Assignment and Acceptance by all other
parties thereto, be deemed to have made the statements set out in the “Specific
Acknowledgement Regarding Security” with respect to each such Assignment and
Acceptance.”

 

23.           Section
10(e) shall be amended by adding, “, and has consented to the same,” after the
first reference to “Participant” in the 6th line thereof.

 

24.           Section
10(f) is amended by deleting the entire Section.

 

25.           Section
11(a) is amended by adding the following to the end of it:

 

“The
Province referred to above is the Province of Ontario.”

 

26.           Section
11(b) is amended by adding the following to the end of it:

 

“The
Borrower hereby irrevocably and unconditionally submits for itself and its
property in any legal action or proceeding relating to the Loan Documents or
for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive jurisdiction of the courts of the Province of Ontario and the
Province of Quebec.”

 

27.           Section
11 is amended by adding the following as Section 11(d):

 

“(d)         The
Borrower hereby irrevocably and unconditionally (i) consents to the service of
process in any of the aforementioned jurisdictions in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to the Borrower at its address set out on the execution page
hereof, such service to become effective 30 days after such mailing, and (ii)
agrees that nothing herein shall affect the right to effect service of process
in any other manner permitted by law or shall limit the right to sue in any
other jurisdiction.”

 

28.           Section
13(a) is amended by deleting the second sentence in its entirety and replaced
as follows:

 

This Agreement
and the other Loan Documents and any separate letter agreements with respect to
fees payable to the Administrative Agent or the Arrangers constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof.

 

29.           Section
14 shall be amended by changing the reference to “Lender” and “Lenders”, wherever
used, to “Secured Party” and “Secured Parties”, respectively, with
corresponding grammatical changes resulting therefrom.

 

8

 

30.           Section
14(1) shall be amended by adding at the end:

 

“provided
that, for purposes of any Information received by any Secured Parties pursuant
to Section 9.1(f) of the Agreement, the exception stated in clause (f)(i) of
this Section 14(1) shall not apply; provided further that, nothing herein shall
relieve a Secured Party of its obligations under this Section 14(1) if such
Secured Party has, pursuant to this Section 14(1), disclosed any Information to
(a) any person referred to in clause (a) of Section 14(1) of the Provisions or
(b) any assignee of or Participant in or prospective assignee of or Participant
in any of such Secured Party’s rights or obligations under this Agreement.

 

31.           Section
14 shall be amended by adding the following as Section 14(4):

 

“(4)         If the
Administrative Agent or any Secured Party is compelled to disclose such
confidential Information in a proceeding requesting such disclosure or
otherwise pursuant to law or regulation, such Administrative Agent or Secured
Party shall (a) only disclose such Information as it is compelled or otherwise
legally required to disclose and (b) if applicable, use reasonable commercial
efforts to seek to obtain assurance that such confidential treatment will be
accorded such Information by the Governmental Authority to which it is
disclosed; provided, however, that such Administrative Agent or Secured Party
shall have no liability for the failure to obtain such treatment.”

 

32.           The
following shall be added to the 16th line of Section 1.2 of Annex 1
(the Standard Terms and Conditions for Assignment and Assumption) after “Credit
Agreement, “assuming for this purpose that the Borrower has requested the same,”.

 

33.           The
following provision shall be added to the end of the Assignment and Assumption:

 

“SPECIFIC ACKNOWLEDGEMENT OF THE BORROWER
REGARDING SECURITY:

 

The
Borrower does hereby acknowledge, declare, agree and confirm that the Assignee,
through its designation, appointments, and authorizations of and in respect to
the Administrative Agent under the Credit Agreement:

 

1.             has
all the benefits of and is hereby acknowledged for all purposes of the Security
Documents as being entitled, together with the other Secured Parties, to the
benefit of the Bond;

 

2.             has
all the benefits of and is hereby acknowledged for all purposes of the Security
Documents as being a pledgee, together with other Secured Parties, under the
Pledge Agreement to secure the indebtedness, liabilities and obligations of the
Borrower under and pursuant to the Credit Agreement and under the Borrower’s
Secured Hedge Agreements (if applicable) with the Assignee; and

 

3.             has
all the benefits of and is hereby acknowledged for all purposes of the other
Security Documents granted to or in favour of the Administrative Agent, as
being, together with the other Secured Parties, a Secured Party thereunder;

 

9

 

as
fully as though the Assignee were an original party thereto.

 

 

	
   

  	
  AGNICO-EAGLE MINES LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:”

  

 

10

 

MODEL
CREDIT AGREEMENT PROVISIONS

 

1.                                       Definitions

 

“Administrative Questionnaire” means
an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a
specified Person, another Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled by or is under common Control
with the Person specified.

 

“Agreement” means the credit agreement
of which these Provisions form part.

 

“Applicable Law” means (a) any
domestic or foreign statute, law (including common and civil law), treaty,
code, ordinance, rule, regulation, restriction or by-law (zoning or otherwise);
(b) any judgement, order, writ, injunction, decision, ruling, decree or award;
(c) any regulatory policy, practice, guideline or directive; or (d) any
franchise, licence, qualification, authorization, consent, exemption, waiver,
right, permit or other approval of any Governmental Authority, binding on or
affecting the Person referred to in the context in which the term is used or
binding on or affecting the property of such Person, in each case whether or
not having the force of law.

 

“Applicable Percentage” means with
respect to any Lender, the percentage of the total Commitments represented by
such Lender’s Commitment. If the Commitments have terminated or expired, the
Applicable Percentages shall be the percentage of the total outstanding Loans
and participations in respect of Letters of Credit represented by such Lender’s
outstanding Loans and participations in respect of Letters of Credit.

 

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

 

“Assignment and Assumption” means an assignment
and assumption entered into by a Lender and an Eligible Assignee and accepted
by the Administrative Agent, in substantially the form of Exhibit A or any
other form approved by the Administrative Agent.

 

“Change in Law” means the occurrence,
after the date of this Agreement, of any of the following: (a) the adoption or
taking effect of any Applicable Law, (b) any change in any Applicable Law or in
the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any Applicable Law by any
Governmental Authority.

 

“Control” means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. “Controlling” and “Controlled” have
corresponding meanings.

 

“Default” means any event or condition
that constitutes an Event of Default or that would constitute an Event of
Default except for satisfaction of any condition subsequent required to 

 

 

make the event or condition an Event of
Default, including giving of any notice, passage of time, or both.

 

“Eligible Assignee” means any Person
(other than a natural person, any Obligor or any Affiliate of an Obligor), in
respect of which any consent that is required by Section 10(b) has been
obtained.

 

“Excluded Taxes” means, with respect
to the Administrative Agent, any Lender, the Issuing Bank or any other
recipient of any payment to be made by or on account of any obligation of an
Obligor hereunder, (a) taxes imposed on or measured by its net income, and
franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the laws of which
such recipient is organized or in which its principal office is located or, in
the case of any Lender, in which its applicable lending office is located, (b)
any branch profits taxes or any similar tax imposed by any jurisdiction in
which the Lender is located and (c) in the case of a Foreign Lender (other than
(i) an assignee pursuant to a request by the Borrower under Section 3.3(b),
(ii) an assignee pursuant to an Assignment and Assumption made when an Event of
Default has occurred and is continuing or (iii) any other assignee to the
extent that the Borrower has expressly agreed that any withholding tax shall be
an Indemnified Tax), any withholding tax that (A) is not imposed or assessed in
respect of a Loan that was made on the premise that an exemption from such
withholding tax would be available where the exemption is subsequently
determined, or alleged by a taxing authority, not to be available and (B) is
required by Applicable Law to be withheld or paid in respect of any amount
payable hereunder or under any Loan Document to such Foreign Lender at the time
such Foreign Lender becomes a party hereto (or designates a new lending office)
or is attributable to such Foreign Lender’s failure or inability (other than as
a result of a Change in Law) to comply with Section 3.2(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from an Obligor with respect to such withholding tax
pursuant to Section 3.2(a). For greater certainty, for purposes of item (c)
above, a withholding tax includes any Tax that a Foreign Lender is required to
pay pursuant to Part XIII of the Income Tax Act (Canada) or any successor
provision thereto.

 

“Foreign Lender” means any Lender that
is not organized under the laws of the jurisdiction in which the Borrower is
resident for tax purposes and that is not otherwise considered or deemed in
respect of any amount payable to it hereunder or under any Loan Document to be
resident for income tax or withholding tax purposes in the jurisdiction in
which the Borrower is resident for tax purposes by application of the laws of
that jurisdiction. For purposes of this definition Canada and each Province and
Territory thereof shall be deemed to constitute a single jurisdiction and the
United States of America, each State thereof and the District of Columbia shall
be deemed to constitute a single jurisdiction.

 

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

 

“Governmental Authority” means the
government of Canada or any other nation, or of any political subdivision thereof,
whether state or local, and any agency, authority,

 

2

 

instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government, including any supra-national bodies such as the European Union or
the European Central Bank and including a Minister of the Crown, Superintendent
of Financial Institutions or other comparable authority or agency.

 

“Indemnified Taxes” means Taxes other
than Excluded Taxes.

 

“Issuing Bank” means the Person named
elsewhere in this Agreement as the issuer of Letters of Credit on the basis
that it is “fronting” for other Lenders and not on the basis that it is the
attorney of other Lenders to sign Letters of Credit on their behalf, or any
successor issuer of Letters of Credit. For greater certainty, where the context
requires, references to “Lenders” in these Provisions include the Issuing Bank.

 

“Loan” means any extension of credit
by a Lender under this Agreement, including by way of bankers’ acceptance or
LIBO Rate Loan, except for any Letter of Credit or participation in a Letter of
Credit.

 

“Obligors” means, collectively, the
Borrower and each of the guarantors of the Borrower’s obligations that are
identified elsewhere in this Agreement.

 

“Other Taxes” means all present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies arising from any payment made hereunder or under any
other Loan Document or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement or any other Loan Document.

 

“Participant” has the meaning assigned
to such term in Section 10(d) .

 

“Person” means any natural person,
corporation, limited liability company, trust, joint venture, association,
company, partnership, Governmental Authority or other entity.

 

“Provisions” means these model credit
agreement provisions.

 

“Related Parties” means, with respect
to any Person, such Person’s Affiliates and the directors, officers, employees,
agents and advisors of such Person and of such Person’s Affiliates.

 

“Taxes” means all present or future
taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

2.                                       Terms Generally

 

(1)                                  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) 

 

3

 

any definition of or reference to any
agreement, instrument or other document herein (including this Agreement) shall
be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented, restated or otherwise modified
(subject to any restrictions on such amendments, supplements, restatements or
modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person’s successors and permitted 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) unless otherwise expressly stated, all references in
these Provisions to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
these Provisions, but all such references elsewhere in this Agreement shall be
construed to refer to this Agreement apart from these Provisions, (e) any
reference to any law or regulation herein shall, unless otherwise specified,
refer to such law or regulation as amended, modified or supplemented from time
to time and (f) 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.

 

(2)                                  If there is any conflict or inconsistency between these Provisions
and the other terms of this Agreement, the other terms of this Agreement shall
govern to the extent necessary to resolve the conflict or inconsistency.

 

3.                                       Yield Protection

 

3.1                                 Increased Costs.

 

(a)                                  Increased Costs Generally. If any Change
in Law shall:

 

(i)                                     impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender;

 

(ii)                                  subject any Lender to any Tax of any kind whatsoever with respect to
this Agreement, any Letter of Credit, any participation in a Letter of Credit
or any Loan made by it, or change the basis of taxation of payments to such
Lender in respect thereof, except for Indemnified Taxes or Other Taxes covered
by Section 3.2 and the imposition, or any change in the rate, of any Excluded
Tax payable by such Lender; or

 

(iii)                               impose on any Lender or any applicable interbank market any other
condition, cost or expense affecting this Agreement or Loans made by such
Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing shall
be to increase the cost to such Lender of making or maintaining any Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or the Issuing Bank hereunder (whether of principal,
interest or any other amount), then upon request of such Lender the Borrower
will pay to such Lender such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered.

 

4

 

(b)                                 Capital Requirements. If any Lender
determines that any Change in Law affecting such Lender or any lending office
of such Lender or such Lender’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s capital or on the capital of such Lender’s holding company, if
any, as a consequence of this Agreement, the Commitments of such Lender or the
Loans made by, or the Letters of Credit issued or participated in by such
Lender, to a level below that which such Lender or its holding company could
have achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of its holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender or its holding
company for any such reduction suffered.

 

(c)                                  Certificates for Reimbursement. A
certificate of a Lender setting forth the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section, including reasonable detail of the
basis of calculation of the amount or amounts, and delivered to the Borrower
shall be conclusive absent manifest error. The Borrower shall pay such Lender
the amount shown as due on any such certificate within 10 days after receipt
thereof.

 

(d)                                 Delay in Requests. Failure or delay on
the part of any Lender to demand compensation pursuant to this Section shall
not constitute a waiver of such Lender’s right to demand such compensation,
except that the Borrower shall not be required to compensate a Lender pursuant
to this Section for any increased costs incurred or reductions suffered more
than nine months prior to the date that such Lender notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s intention to claim compensation therefore, unless the Change in Law
giving rise to such increased costs or reductions is retroactive, in which case
the nine-month period referred to above shall be extended to include the period
of retroactive effect thereof.

 

3.2                                 Taxes.

 

(a)                                  Payments Subject to Taxes. If any
Obligor, the Administrative Agent, or any Lender is required by Applicable Law
to deduct or pay any Indemnified Taxes (including any Other Taxes) in respect
of any payment by or on account of any obligation of an Obligor hereunder or
under any other Loan Document, then (i) the sum payable shall be increased by
that Obligor when payable as necessary so that after making or allowing for all
required deductions and payments (including deductions and payments applicable
to additional sums payable under this Section) the Administrative Agent or
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions or payments been required, (ii) the Obligor
shall make any such deductions required to be made by it under Applicable Law
and (iii) the Obligor shall timely pay the full amount required to be deducted
to the relevant Governmental Authority in accordance with Applicable Law.

 

(b)                                 Payment of Other Taxes by the Borrower.
Without limiting the provisions of paragraph (a) above, the Borrower shall
timely pay any Other Taxes to the relevant Governmental Authority in accordance
with Applicable Law.

 

5

 

(c)                                  Indemnification by the Borrower. The
Borrower shall indemnify the Administrative Agent and each Lender, within 10
days after demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) paid by the
Administrative Agent or such Lender and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender (with a copy to the
Administrative Agent), or by the Administrative Agent on its own behalf or on
behalf of a Lender, shall be conclusive absent manifest error.

 

(d)                                 Evidence of Payments. As soon as
practicable after any payment of Indemnified Taxes or Other Taxes by an Obligor
to a Governmental Authority, the Obligor shall deliver to the Administrative
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Administrative
Agent.

 

(e)                                  Status of Lenders. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax under the
law of the jurisdiction in which the Borrower is resident for tax purposes, or
any treaty to which such jurisdiction is a party, with respect to payments
hereunder or under any other Loan Document shall, at the request of the
Borrower, deliver to the Borrower (with a copy to the Administrative Agent), at
the time or times prescribed by Applicable Law or reasonably requested by the
Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by Applicable Law as will permit such payments to be
made without withholding or at a reduced rate of withholding. In addition, (a)
any Lender, if requested by the Borrower or the Administrative Agent, shall
deliver such other documentation prescribed by Applicable Law or reasonably
requested by the Borrower or the Administrative Agent as will enable the
Borrower or the Administrative Agent to determine whether or not such Lender is
subject to withholding or information reporting requirements, and (b) any
Lender that ceases to be, or to be deemed to be, resident in Canada for
purposes of Part XIII of the Income Tax Act (Canada) or any successor provision
thereto shall within five days thereof notify the Borrower and the
Administrative Agent in writing.

 

(f)                                    Treatment of Certain Refunds and Tax Reductions. If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which an
Obligor has paid additional amounts pursuant to this Section or that, because
of the payment of such Taxes or Other Taxes, it has benefited from a reduction
in Excluded Taxes otherwise payable by it, it shall pay to the Borrower or
Obligor, as applicable, an amount equal to such refund or reduction (but only
to the extent of indemnity payments made, or additional amounts paid, by the
Borrower or Obligor under this Section with respect to the Taxes or Other Taxes
giving rise to such refund or reduction), net of all out-of-pocket expenses of
the Administrative Agent or such Lender, as the case may be, and without
interest (other than any net after-Tax interest paid by the relevant
Governmental Authority with respect to such refund). The Borrower or Obligor as
applicable, upon the request of the Administrative Agent or such Lender, agrees
to repay the amount paid over to the Borrower or Obligor (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
the Administrative Agent or such Lender if 

 

6

 

the
Administrative Agent or such Lender is required to repay such refund or
reduction to such Governmental Authority. This paragraph shall not be construed
to require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person, to arrange its affairs in
any particular manner or to claim any available refund or reduction.

 

3.3                                 Mitigation Obligations: Replacement of Lenders.

 

(a)                                  Designation of a Different Lending Office. If any Lender requests compensation under Section 3.1, or requires
the Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.2, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 3.1 or 3.2 , as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender
in connection with any such designation or assignment.

 

(b)                                 Replacement of Lenders. If any Lender
requests compensation under Section 3.1, if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 3.2, if any Lender’s obligations are
suspended pursuant to Section 3.4 or if any Lender defaults in its obligation
to fund Loans hereunder, then the Borrower may, at its sole expense and effort,
upon 10 days’ notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in, and consents required by, Section 10), all of
its interests, rights and obligations under this Agreement and the related Loan
Documents to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment), provided that:

 

(i)                                     the Borrower pays the Administrative Agent the assignment fee
specified in Section 10(b)(vi);

 

(ii)                                  the assigning Lender receives payment of an amount equal to the
outstanding principal of its Loans and participations in disbursements under
Letters of Credit, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder and under the other Loan Documents (including any
breakage costs and amounts required to be paid under this Agreement as a result
of prepayment to a Lender) from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all other
amounts);

 

(iii)                               in the case of any such assignment resulting from a claim for
compensation under Section 3.1 or payments required to be made pursuant to
Section 3.2, such assignment will result in a reduction in such compensation or
payments thereafter; and

 

7

 

(iv)                              such assignment does not conflict with Applicable Law.

 

A Lender shall not be required to make any
such assignment or delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.

 

3.4                                 Illegality.

 

If any Lender determines that any Applicable
Law has made it unlawful, or that any Governmental Authority has asserted that
it is unlawful, for any Lender or its applicable Lending Office to make or
maintain any Loan (or to maintain its obligation to make any Loan), or to
participate in, issue or maintain any Letter of Credit (or to maintain its
obligation to participate in or to issue any Letter of Credit), or to determine
or charge interest rates based upon any particular rate, then, on notice
thereof by such Lender to the Borrower through the Administrative Agent, any
obligation of such Lender with respect to the activity that is unlawful shall
be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if conversion
would avoid the activity that is unlawful, convert any Loans, or take any
necessary steps with respect to any Letter of Credit in order to avoid the
activity that is unlawful. Upon any such prepayment or conversion, the Borrower
shall also pay accrued interest on the amount so prepaid or converted. Each
Lender agrees to designate a different Lending Office if such designation will
avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.

 

3.5                                 Inability to Determine Rates Etc.

 

If the Required Lenders determine that for
any reason a market for bankers’ acceptances does not exist at any time or the
Lenders cannot for other reasons, after reasonable efforts, readily sell
bankers’ acceptances or perform their other obligations under this Agreement
with respect to bankers’ acceptances, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the Borrower’s right to
request the acceptance of bankers’ acceptances shall be and remain suspended
until the Required Lenders determine and the Agent notifies the Borrower and
each Lender that the condition causing such determination no longer exists. If
the Required Lenders determine that for any reason adequate and reasonable
means do not exist for determining the LIBO Rate for any requested Interest
Period with respect to a proposed LIBO Rate Loan, or that the LIBO Rate for any
requested Interest Period with respect to a proposed LIBO Rate Loan does not
adequately and fairly reflect the cost to such Lenders of funding such Loan,
the Administrative Agent will promptly so notify the Borrower and each Lender. Thereafter,
the obligation of the Lenders to make or maintain LIBO Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a borrowing, conversion or continuation of LIBO
Rate Loans or, failing that, will be deemed to have converted such request into
a request for a borrowing of Base Rate Loans in the amount specified therein.

 

8

 

4.                                       Right of Setoff.

 

If an Event of Default has occurred and is
continuing, each of the Lenders and each of their respective Affiliates is
hereby authorized at any time and from time to time to set off and apply any
and all deposits (general or special, time or demand, provisional or final, in
whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender or any such Affiliate to or for the
credit or the account of any Obligor against any and all of the obligations of
the Borrower now or hereafter existing under this Agreement or any other Loan
Document to such Lender, irrespective of whether or not such Lender has made
any demand under this Agreement or any other Loan Document and although such
obligations of the Obligor may be contingent or unmatured or are owed to a
branch or office of such Lender different from the branch or office holding
such deposit or obligated on such indebtedness. The rights of each the Lenders
and their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff, consolidation of
accounts and bankers’ lien) that the Lenders or their respective Affiliates may
have. Each Lender agrees to promptly notify the Borrower and the Administrative
Agent after any such setoff and application, but the failure to give such
notice shall not affect the validity of such setoff and application. If any
Affiliate of a Lender exercises any rights under this Section 4, it shall share
the benefit received in accordance with Section 5 as if the benefit had been
received by the Lender of which it is an Affiliate.

 

5.                                       Sharing of Payments by Lenders.

 

If any Lender, by exercising any right of
setoff or counterclaim or otherwise, obtains any payment or other reduction
that might result in such Lender receiving payment or other reduction of a
proportion of the aggregate amount of its Loans and accrued interest thereon or
other obligations hereunder greater than its pro rata share thereof as provided
herein, then the Lender receiving such payment or other reduction shall (a)
notify the Administrative Agent of such fact, and (b) purchase (for cash at
face value) participations in the Loans and such other obligations of the other
Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders rateably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

 

(i)                                     if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest,

 

(ii)                                  the provisions of this Section shall not be construed to apply to
(x) any payment made by any Obligor pursuant to and in accordance with the
express terms of this Agreement or (y) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in disbursements under Letters of Credit to any
assignee or participant, other than to any Obligor or any Affiliate of an
Obligor (as to which the provisions of this Section shall apply); and

 

(iii)                               the provisions of this Section shall not be construed to apply to
(w) any payment made while no Event of Default has occurred and is continuing
in respect of 

 

9

 

obligations of
the Borrower to such Lender that do not arise under or in connection with the
Loan Documents, (x) any payment made in respect of an obligation that is
secured by a Permitted Lien or that is otherwise entitled to priority over the
Borrower’s obligations under or in connection with the Loan Documents, (y) any
reduction arising from an amount owing to an Obligor upon the termination of
derivatives entered into between the Obligor and such Lender, or (z) any
payment to which such Lender is entitled as a result of any form of credit
protection obtained by such Lender.

 

The Obligors consent to the foregoing and
agree, to the extent they may effectively do so under Applicable Law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against each Obligor rights of setoff and counterclaim and similar
rights of Lenders with respect to such participation as fully as if such Lender
were a direct creditor of each Obligor in the amount of such participation.

 

6.                                       Administrative Agent’s Clawback

 

(a)                                  Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any advance of funds that such Lender will
not make available to the Administrative Agent such Lender’s share of such
advance, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with the provisions of this
Agreement concerning funding by Lenders and may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable advance
available to the Administrative Agent, then the applicable Lender shall pay to
the Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the Borrower to but excluding the date of payment to the Administrative
Agent, at a rate determined by the Administrative Agent in accordance with
prevailing banking industry practice on interbank compensation. If such Lender
pays such amount to the Administrative Agent, then such amount shall constitute
such Lender’s Loan included in such advance. If the Lender does not do so
forthwith, the Borrower shall pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon at the interest rate
applicable to the advance in question. Any payment by the Borrower shall be
without prejudice to any claim the Borrower may have against a Lender that has
failed to make such payment to the Administrative Agent.

 

(b)                                 Payments by Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of any Lender hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute the amount due to the Lenders. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at a rate determined
by the Administrative Agent in accordance with prevailing banking industry
practice on interbank compensation.

 

10

 

7.                                       Agency.

 

7.1                                 Appointment and Authority. Each of the
Lenders and the Issuing Bank hereby irrevocably appoints the Person identified
elsewhere in this Agreement as the Administrative Agent to act on its behalf as
the Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto. The provisions of this Article are solely for the benefit
of the Administrative Agent, the Lenders and the Issuing Bank, and no Obligor
shall have rights as a third party beneficiary of any of such provisions.

 

7.2                                 Rights as a Lender. The Person serving
as the Administrative Agent hereunder shall have the same rights and powers in
its capacity as a Lender as any other Lender and may exercise the same as
though it were not the Administrative Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as the Administrative Agent hereunder in
its individual capacity. Such Person and its Affiliates may accept deposits
from, lend money to, act as the financial advisor or in any other advisory
capacity for and generally engage in any kind of business with any Obligor or
any Affiliate thereof as if such Person were not the Administrative Agent and
without any duty to account to the Lenders.

 

7.3                                 Exculpatory Provisions.

 

(1)                                  The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents.
Without limiting the generality of the foregoing, the Administrative Agent:

 

(a)                                  shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative
Agent is required to exercise as directed in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for in the Loan Documents), but the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its counsel,
may expose the Administrative Agent to liability or that is contrary to any
Loan Document or Applicable Law; and

 

(c)                                  shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Affiliates that is communicated to or obtained by the person serving as the
Administrative Agent or any of its Affiliates in any capacity.

 

(2)                                  The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as is necessary, or as the
Administrative Agent believes in good faith is necessary,

 

11

 

under the provisions of the Loan Documents)
or (ii) in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default
unless and until notice describing the Default is given to the Administrative
Agent by the Borrower or a Lender.

 

(3)                                  Except as otherwise expressly specified in this Agreement, the
Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any
condition specified in this Agreement, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.

 

7.4                                 Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet posting or other distribution) believed by it to
be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Administrative Agent also may rely upon any statement made
to it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon. In determining
compliance with any condition hereunder to the making of a Loan, or the
issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction
of a Lender or the Issuing Bank, the Administrative Agent may presume that such
condition is satisfactory to such Lender or the Issuing Bank unless the
Administrative Agent shall have received notice to the contrary from such
Lender or the Issuing Bank prior to the making of such Loan or the issuance of
such Letter of Credit. The Administrative Agent may consult with legal counsel
(who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

 

7.5                                 Indemnification of Administrative Agent.
Each Lender agrees to indemnify the Administrative Agent and hold it harmless
(to the extent not reimbursed by the Borrower), rateably according to its
Applicable Percentage (and not jointly or jointly and severally) from and
against any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel, which may be
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of the Loan Documents or the transactions therein contemplated. However,
no Lender shall be liable for any portion of such losses, claims, damages,
liabilities and related expenses resulting from the Administrative Agent’s
gross negligence or wilful misconduct.

 

7.6                                 Delegation of Duties. The Administrative
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by the Administrative Agent from among the Lenders
(including the Person serving as Administrative Agent) and their respective
Affiliates. The 

 

12

 

Administrative
Agent and any such sub-agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
provisions of this Article and other provisions of this Agreement for the
benefit of the Administrative Agent shall apply to any such sub-agent and to
the Related Parties of the Administrative Agent and any such sub-agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as
Administrative Agent.

 

7.7                                 Replacement of Administrative Agent.

 

(1)                                  The Administrative Agent may at any time give notice of its
resignation to the Lenders, the Issuing Bank and the Borrower. Upon receipt of
any such notice of resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor, which shall be a Lender
having a Commitment to a revolving credit if one or more is established in this
Agreement and having an office in Toronto, Ontario or Montréal, Québec, or an
Affiliate of any such Lender with an office in Toronto or Montréal. The
Administrative Agent may also be removed at any time by the Required Lenders
upon 30 days’ notice to the Administrative Agent and the Borrower as long as
the Required Lenders, in consultation with the Borrower, appoint and obtain the
acceptance of a successor within such 30 days, which shall be a Lender having a
Commitment to a revolving credit if one or more is established in this
Agreement and having an office in Toronto or Montréal, or an Affiliate of any
such Lender with an office in Toronto or Montréal.

 

(2)                                  If no such successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications specified in Section 7.7(1),
provided that if the Administrative Agent shall notify the Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in
the case of any collateral security held by the Administrative Agent on behalf
of the Lenders under any of the Loan Documents, the retiring Administrative
Agent shall continue to hold such collateral security until such time as a
successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender directly, until
such time as the Required Lenders appoint a successor Administrative Agent as
provided for above in the preceding paragraph.

 

(3)                                  Upon a successor’s appointment as Administrative Agent hereunder,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the former Administrative Agent, and the
former Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged
therefrom as provided in the preceding paragraph). The fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the termination of the service of the former Administrative
Agent, the provisions of this Section 7 and of Section 9 shall continue in
effect for the benefit of such former Administrative Agent, its sub-agents and
their 

 

13

 

respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while the former
Administrative Agent was acting as Administrative Agent.

 

7.8                                 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the Issuing Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and the Issuing Bank also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

7.9                                 Collective Action of the Lenders. Each
of the Lenders hereby acknowledges that to the extent permitted by Applicable
Law, any collateral security and the remedies provided under the Loan Documents
to the Lenders are for the benefit of the Lenders collectively and acting
together and not severally and further acknowledges that its rights hereunder
and under any collateral security are to be exercised not severally, but by the
Administrative Agent upon the decision of the Required Lenders (or such other
number or percentage of the Lenders as shall be expressly provided for in the
Loan Documents). Accordingly, notwithstanding any of the provisions contained
herein or in any collateral security, each of the Lenders hereby covenants and
agrees that it shall not be entitled to take any action hereunder or thereunder
including, without limitation, any declaration of default hereunder or
thereunder but that any such action shall be taken only by the Administrative
Agent with the prior written agreement of the Required Lenders (or such other
number or percentage of the Lenders as shall be expressly provided for in the
Loan Documents). Each of the Lenders hereby further covenants and agrees that
upon any such written agreement being given, it shall co-operate fully with the
Administrative Agent to the extent requested by the Administrative Agent. Notwithstanding
the foregoing, in the absence of instructions from the Lenders and where in the
sole opinion of the Administrative Agent, acting reasonably and in good faith,
the exigencies of the situation warrant such action, the Administrative Agent
may without notice to or consent of the Lenders take such action on behalf of
the Lenders as it deems appropriate or desirable in the interest of the
Lenders.

 

7.10                           No Other Duties. etc. Anything herein to
the contrary notwithstanding, none of the Bookrunners, Arrangers or holders of
similar titles, if any, specified in this Agreement shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent
or a Lender hereunder.

 

8.                                       Notices: Effectiveness; Electronic Communication

 

(a)                                  Notices Generally. Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as-provided in paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered
by hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier to the addresses or telecopier numbers specified elsewhere
in this Agreement or, if to a 

 

14

 

Lender, to it
at its address or telecopier number specified in the Register or, if to an
Obligor other than the Borrower, in care of the Borrower.

 

Notices sent by hand or overnight courier
service, or mailed by certified or registered mail, shall be deemed to have
been given when received; notices sent by telecopier shall be deemed to have
been given when sent (except that, if not given on a business day between 9:00
a.m. and 5:00 p.m. local time where the recipient is located, shall be deemed
to have been given at 9:00 a.m. on the next business day for the recipient).
Notices delivered through electronic communications to the extent provided in
paragraph (b) below, shall be effective as provided in said paragraph (b).

 

(b)                                 Electronic Communications. Notices and
other communications to the Lenders and the Issuing Bank hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices to
any Lender of Loans to be made or Letters of Credit to be issued if such Lender
has notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

 

Unless the
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

 

(c)                                  Change of Address. Etc. Any party hereto
may change its address or telecopier number for notices and other
communications hereunder by notice to the other parties hereto.

 

9.                                       Expenses; Indemnity: Damage Waiver 

 

(a)                                  Costs and Expenses. The Borrower shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Administrative Agent, in connection with the syndication of the
credit facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
Issuing Bank in connection with the issuance, amendment, renewal or extension
of any Letter of Credit or any demand for payment thereunder and (iii) all
reasonable out-of-pocket expenses incurred by the Administrative Agent, any
Lender or the 

 

15

 

Issuing Bank,
including the reasonable fees, charges and disbursements of counsel, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

 

(b)                                 Indemnification by the Borrower. The
Borrower shall indemnify the Administrative Agent (and any sub-agent thereof),
each Lender and the Issuing Bank, and each Related Party of any of the
foregoing Persons (each such Person being called an “Indemnitee”) against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by any Obligor arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance or non-performance by the parties hereto of
their respective obligations hereunder or thereunder or the consummation or
non-consummation of the transactions contemplated hereby or thereby, (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under
a Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any actual
or alleged presence or Release of Hazardous Materials on or from any property
owned or operated by any Obligor, or any Environmental Liability related in any
way to any Obligor, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory, whether brought by a third party or by an
Obligor and regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of
such Indemnitee or (y) result from a claim brought by the Borrower or any other
Obligor against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Loan Document, if the Obligor has
obtained a final and nonappealable judgment in its favour on such claim as
determined by a court of competent jurisdiction, nor shall it be available in
respect of matters specifically addressed in Sections 3.1, 3.2 and 9(a).

 

(c)                                  Reimbursement by Lenders. To the extent
that the Borrower for any reason fails to indefeasibly pay any amount required
under paragraph (a) or (b) of this Section to be paid by it to the
Administrative Agent (or any sub-agent thereof), the Issuing Bank or any
Related Party of any of the foregoing, each Lender severally agrees to pay to
the Administrative Agent (or any such sub-agent), the Issuing Bank or such
Related Party, as the case may be, such Lender’s Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or
indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Administrative
Agent (or any such sub-agent) or the Issuing Bank in its capacity as such, or
against any Related Party of any of the foregoing acting for the Administrative
Agent (or any such sub-agent) or Issuing Bank in connection with such capacity.
The obligations of the Lenders under this paragraph (c) are subject to the
other provisions of this Agreement concerning several liability of the Lenders.

 

16

 

(d)                                 Waiver of Consequential Damages. Etc. To
the fullest extent permitted by Applicable Law, the Obligors shall not assert,
and hereby waive, any claim against any Indemnitee, on any theory of liability,
for indirect, consequential, punitive, aggravated or exemplary damages (as
opposed to direct damages) arising out of, in connection with, or as a result
of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby (or any breach thereof), the transactions contemplated
hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it
through telecommunications, electronic or other information transmission
systems in connection with this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby.

 

(e)                                  Payments. All amounts due under this
Section shall be payable promptly after demand therefor. A certificate of the
Administrative Agent or a Lender setting forth the amount or amounts owing to
the Administrative Agent, Lender or a sub-agent or Related Party, as the case
may be, as specified in this Section, including reasonable detail of the basis
of calculation of the amount or amounts, and delivered to the Borrower shall be
conclusive absent manifest error.

 

10.                                 Successors and Assigns

 

(a)                                  Successors and Assigns Generally. The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted
hereby, except that no Obligor may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an Eligible Assignee
in accordance with the provisions of paragraph (b) of this Section, (ii) by way
of participation in accordance with the provisions of paragraph (d) of this
Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of paragraph (f) of this Section (and any
other attempted assignment or transfer by any party hereto shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
paragraph (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)                                 Assignments by Lenders. Any Lender may
at any time assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that:

 

(i)                                     except if an Event of Default has occurred and is continuing or in
the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment being assigned
(which for this purpose includes Loans outstanding thereunder) or, if the
applicable Commitment is not then in effect, the principal outstanding balance
of the Loan of the assigning Lender subject to each such 

 

17

 

assignment
(determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent or, if “Trade Date” is
specified in the Assignment and Assumption, as of the Trade Date) shall not be
less than $5,000,000, in the case of any assignment in respect of a revolving
facility, or $1,000,000, in the case of any assignment in respect of a term
facility, unless each of the Administrative Agent and, so long as no Default
has occurred and is continuing, the Borrower otherwise consent to a lower
amount (each such consent not to be unreasonably withheld or delayed);

 

(ii)                                  each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Loan or the Commitment assigned, except that
this clause (ii) shall not prohibit any Lender from assigning all or a portion
of its rights and obligations among separate credits on a non-pro rata basis;

 

(iii)                               any assignment of a Commitment relating to a credit under which
Letters of Credit may be issued must be approved by any Issuing Bank (such
approval not to be unreasonably withheld or delayed) unless the Person that is
the proposed assignee is itself already a Lender with a Commitment under that
credit;

 

(iv)                              any assignment must be approved by the Administrative Agent (such
approval not to be unreasonably withheld or delayed) unless:

 

(x)
in the case of an assignment of a Commitment relating to a revolving credit,
the proposed assignee is itself already a Lender with the same type of
Commitment,

 

(y)
no Event of Default has occurred and is continuing, and the assignment is of a
Commitment relating to a non-revolving credit that is fully advanced, or

 

(z)
the proposed assignee is a bank whose senior, unsecured, non-credit enhanced,
long term debt is rated at least A3, A- or A low by at least two of Moody’s
Investor Services Inc., Standard & Poor’s, a division of The McGraw-Hill
Companies, Inc. and Dominion Bond Rating Service Limited, respectively;

 

(v)                                 any assignment must be approved by the Borrower (such approval not
to be unreasonably withheld or delayed) unless the proposed assignee is itself
already a Lender with the same type of Commitment or a Default has occurred and
is continuing; and

 

(vi)                              the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee in an amount specified elsewhere in this Agreement and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

 

18

 

Subject to acceptance and recording thereof
by the Administrative Agent pursuant to paragraph (c) of this Section, from and
after the effective date specified in each Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Assignment and Assumption, have the
rights and obligations of a Lender under this Agreement and the other Loan
Documents, including any collateral security, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all of the assigning Lender’s
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto) but shall continue to be entitled to the benefits of Sections 3
and 9, and shall continue to be liable for any breach of this Agreement by such
Lender, with respect to facts and circumstances occurring prior to the
effective date of such assignment. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section. Any payment by an assignee to an assigning
Lender in connection with an assignment or transfer shall not be or be deemed
to be a repayment by the Borrower or a new Loan to the Borrower.

 

(c)                                  Register. The Administrative Agent shall
maintain at one of its offices in Toronto, Ontario or Montréal, Québec a copy
of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, absent manifest error, and the Borrower, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

 

(d)                                 Participations. Any Lender may at any
time, without the consent of, or notice to, the Borrower or the Administrative
Agent, sell participations to any Person (other than a natural person, an
Obligor or any Affiliate of an Obligor) (each, a “Participant”) in all or a
portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. Any payment by a Participant to a Lender in
connection with a sale of a participation shall not be or be deemed to be a
repayment by the Borrower or a new Loan to the Borrower.

 

Subject to
paragraph (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Section 3 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 4 as though it were a Lender, provided
such Participant agrees to be subject to Section 5 as though it were a
Lender.

 

19

 

(e)                                  Limitations upon Participant Rights. A
Participant shall not be entitled to receive any greater payment under
Section 3.1 and 3.2 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.2 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
Section 3.2(e) as though it were a Lender.

 

(f)                                    Certain Pledges. Any Lender may at any
time pledge or assign a security interest in all or any portion of its rights
under this Agreement to secure obligations of such Lender, but no such pledge
or assignment shall release such Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.

 

11.                                 Governing Law: Jurisdiction: Etc.

 

(a)                                  Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the Province
specified elsewhere in this Agreement and the laws of Canada applicable in that
Province.

 

(b)                                 Submission to Jurisdiction. Each Obligor
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the courts of the Province specified elsewhere in
this Agreement, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or any other Loan
Document, or for recognition or enforcement of any judgment, and each of the parties
hereto irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such court. Each of
the parties hereto 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 or in any other Loan Document shall affect any right that the
Administrative Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or any other Loan Document against any
Obligor or its properties in the courts of any jurisdiction.

 

(c)                                  Waiver of Venue. Each Obligor
irrevocably and unconditionally waives, to the fullest extent permitted by
Applicable Law, any objection that it may now or hereafter have to the laying
of venue of any action or proceeding arising out of or relating to this
Agreement or any other Loan Document in any court referred to in paragraph (b)
of this Section. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by Applicable Law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

12.                                 WAIVER OF JURY TRIAL

 

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR 

 

20

 

THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

13.                                 Counterparts: Integration: Effectiveness: Electronic Execution

 

(a)                                  Counterparts: Integration:
Effectiveness. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement and the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in the conditions
precedent Section(s) of this Agreement, this Agreement shall become effective
when it has been executed by the Administrative Agent and when the
Administrative Agent has received counterparts hereof that, when taken together,
bear the signatures of each of the other parties hereto. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or by
sending a scanned copy by electronic mail shall be effective as delivery of a
manually executed counterpart of this Agreement.

 

(b)                                 Electronic Execution of Assignments. The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or
the use of a paper-based recordkeeping system, as the case may be, to the
extent and as provided for in any Applicable Law, including Parts 2 and 3 of
the Personal Information Protection and Electronic Documents Act (Canada), the
Electronic Commerce Act, 2000 (Ontario) and other similar federal or provincial
laws based on the Uniform Electronic Commerce Act of the Uniform Law Conference
of Canada or its Uniform Electronic Evidence Act, as the case may be.

 

14.                                 Treatment of Certain Information: Confidentiality

 

(1)                                  Each of the Administrative Agent and the Lenders agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to it, its Affiliates and its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority), (c) to the extent required
by Applicable Laws or regulations or by any subpoena or similar legal process,
(d) to any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other 

 

21

 

Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee
of or Participant in, or any prospective assignee of or Participant in, any of
its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap, derivative, credit-linked
note or similar transaction relating to the Borrower and its obligations, (g)
with the consent of the Borrower or (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Section
or (y) becomes available to the Administrative Agent or any Lender on a
non-confidential basis from a source other than an Obligor.

 

(2)                                  For purposes of this Section, “Information” means all information
received in connection with this Agreement from any Obligor relating to any
Obligor or any of its Subsidiaries or any of their respective businesses, other
than any such information that is available to the Administrative Agent or any
Lender on a non-confidential basis prior to such receipt. Any Person required
to maintain the confidentiality of Information as provided in this Section
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information. In addition, the Administrative Agent may disclose to any agency
or organization that assigns standard identification numbers to loan facilities
such basic information describing the facilities provided hereunder as is
necessary to assign unique identifiers (and, if requested, supply a copy of
this Agreement), it being understood that the Person to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to make available to the public only such Information as such person
normally makes available in the course of its business of assigning
identification numbers.

 

(3)                                  In addition, and notwithstanding anything herein to the contrary,
the Administrative Agent may provide the information described on Exhibit B
concerning the Borrower and the credit facilities established herein to Loan
Pricing Corporation and/or other recognized trade publishers of information for
general circulation in the loan market.

 

22

 

EXHIBIT A

 

ASSIGNMENT AND ASSUMPTION

 

This Assignment and Assumption (the “Assignment
and Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of Assignor] (the “Assignor”) and
[Insert name of Assignee] (the “Assignee”). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended, the “Credit Agreement”), receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex 1 attached hereto are hereby agreed to and incorporated
herein by reference and made a part of this Assignment and Assumption as if set
forth herein in full.

 

For an agreed consideration, the Assignor
hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Effective Date inserted by the Administrative Agent as contemplated
below (i) all of the Assignor’s rights and obligations in its capacity as a
Lender under the Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including
without limitation any letters of credit, guarantees, and swingline loans
included in such facilities) and (ii) to the extent permitted to be assigned
under Applicable Law, all claims, suits, causes of action and any other right
of the Assignor (in its capacity as a Lender) against any Person, whether known
or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan-transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice
claims, statutory claims and all other claims at law or in equity related to
the rights and obligations sold and assigned pursuant to clause (i) above (the
rights and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as, the “Assigned Interest”). Such sale
and assignment is without recourse to the Assignor and, except as expressly
provided in this Assignment and Assumption, without representation or warranty
by the Assignor.

 

	
  1.

  	
   

  	
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  [and is an Affiliate/Approved Fund of
  [identify Lender](1)]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrower(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative Agent:                                     ,
  as the administrative agent under the Credit Agreement

  

 

(1)                                  Select as applicable.

 

 

	
  5.

  	
   

  	
  Credit
  Agreement:     [The [amount] Credit Agreement dated as of
                 
  among [name of Borrower(s)], the Lenders parties thereto, [name of
  Administrative Agent], as Administrative Agent, and the other agents parties
  thereto]

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned
  Interest:

  

 

	
  Facility

  Assigned(2)

  	
   

  	
  Aggregate Amount

  of 

  Commitment/Loans 

  for all Lenders(3)

  	
   

  	
  Amount of 

  Commitment/Loans 

  Assigned(3)

  	
   

  	
  Percentage Assigned

  of Commitment/Loans(4)

  	
   

  	
  CUSIP Number

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  

 

	
  [7.

  	
   

  	
  Trade
  Date:                                                          ](5)

  

 

(2)                                  Fill in the appropriate terminology for the types of facilities
under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving
Credit Commitment,” “Term Loan Commitment,” etc.)

 

(3)                                  Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.

 

(4)                                  Set forth, to at least 9 decimals, as a percentage of the
Commitment/Loans of all Lenders thereunder.

 

(5)                                  To be completed if the Assignor and the Assignee intend that the
minimum assignment amount is to be determined as of the Trade Date.

 

2

 

Effective Date:                    ,
20     [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

 

The terms set forth in this Assignment and
Assumption are hereby agreed to:

 

	
   

  	
  ASSIGNOR

  [NAME OF ASSIGNOR]

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  [NAME OF ASSIGNEE]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [Consented to and](6) Accepted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [NAME OF ADMINISTRATIVE 

  AGENT], as

  Administrative Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [Consented to:](7)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [NAME OF RELEVANT PARTY]

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

(6)                                  To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.

 

(7)                                  To be added only if the consent of the Borrower and/or other parties
(e.g. Swingline Lender, L/C Issuer) is required by the terms of the Credit
Agreement.

 

3

 

 

ANNEX 1 to Assignment and Assumption

 

[                                   ](1)

 

STANDARD TERMS
AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.                                       Representations and Warranties.

 

1.1                                 Assignor. The Assignor (a) represents
and warrants that (i) it is the legal and beneficial owner of the Assigned
Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance
or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and
to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or
representations made in or in connection with the Credit Agreement or any other
Loan Document(2), (ii) the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

 

1.2                                 Assignee. The Assignee (a) represents
and warrants that (i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it meets all requirements of an Eligible Assignee
under the Credit Agreement (subject to receipt of such consents as may be
required under the Credit Agreement), (iii) from and after the Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the obligations
of a Lender thereunder, (iv) it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section      thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Administrative Agent or
any other Lender, and (v) if it is a Foreign Lender(3), attached to the
Assignment and Assumption is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee; and (b) agrees that (i) it will, independently and without
reliance on the Administrative Agent, the Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in 

 

(1)                                  Describe Credit Agreement at option of Administrative Agent.

 

(2)                                  The term “Loan Document” should be conformed to the term used in the
Credit Agreement.

 

(3)                                  The concept of “Foreign Lender” should be conformed to the section
in the Credit Agreement governing withholding taxes and gross-up.

 

 

taking
or not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

2.                                       Payments. From and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to, on or
after the Effective Date. The Assignor and the Assignee shall make all
appropriate adjustments in payments by the Administrative Agent for periods
prior to the Effective Date or with respect to the making of this assignment
directly between themselves.

 

3.                                       General Provisions. This Assignment and
Assumption shall be binding upon, and inure to the benefit of, the parties
hereto and their respective successors and permitted assigns. This Assignment
and Assumption may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment and Assumption by telecopy or by sending a
scanned copy by electronic mail shall be effective as delivery of a manually
executed counterpart of this Assignment and Assumption. This Assignment and
Assumption shall be governed by, and construed in accordance with, the law
governing the Credit Agreement.

 

2

 

EXHIBIT B

 

LOAN MARKET DATA
TEMPLATE

 

Recommended Data Fields – At Close

 

The items highlighted in bold are those that
Loan Pricing Corporation (LPC) deem essential. The remaining items are those
that LPC has seen become more prominent over time as transparency has increased
in the U.S. Loan Market.

 

	
  Company Level

  	
   

  	
  Deal Specific

  	
   

  	
  Facility Specific

  
	
  Issuer Name

  	
   

  	
  Currency/Amount

  	
   

  	
  Currency/Amount

  
	
  Location

  	
   

  	
  Date

  	
   

  	
  Type

  
	
  SIC (Cdn)

  	
   

  	
  Purpose

  	
   

  	
  Purpose

  
	
  Identification
  Number(s)

  	
   

  	
  Sponsor

  	
   

  	
  Tenor

  
	
  Revenue

  	
   

  	
  Financial Covenants

  	
   

  	
  Term Out Option

  
	
   

  	
   

  	
   

  	
   

  	
  Expiration Date

  
	
   

  	
   

  	
  Target Company

  	
   

  	
  Facility Signing
  Date

  
	
  *Measurement
  of Risk

  	
   

  	
  Assignment Language

  	
   

  	
  Pricing

  
	
  S&P Sr. Debt

  	
   

  	
  Law Firms

  	
   

  	
  Base Rate(s)/Spread(s)/BA/LIBOR

  
	
  S&P Issuer

  	
   

  	
  MAC Clause

  	
   

  	
  Initial Pricing Level

  
	
  Moody’s Sr. Debt

  	
   

  	
  Springing lien

  	
   

  	
  Pricing Grid (tied to, levels)

  
	
  Moody’s Issuer

  	
   

  	
  Cash Dominion

  	
   

  	
  Grid Effective Date

  
	
  Fitch Sr.Debt

  	
   

  	
  Mandatory
  Prepays

  	
   

  	
  Fees

  
	
  Fitch Issuer

  	
   

  	
  Restrct’d Payments (Neg Covs)

  	
   

  	
  Participation Fee (tiered also)

  
	
  S&P
  Implied

  	
   

  	
   

  	
   

  	
   

  
	
  (internal
  assessment)

  	
   

  	
  Other Restrictions

  	
   

  	
  Commitment Fee

  
	
  DBRS

  	
   

  	
   

  	
   

  	
   

  
	
  Other
  Ratings

  	
   

  	
   

  	
   

  	
  Annual Fee

  
	
  *Industry Classification

  	
   

  	
   

  	
   

  	
  Utilization Fee

  
	
  Moody’s
  Industry

  	
   

  	
   

  	
   

  	
  LC Fee(s)

  
	
  S&P Industry

  	
   

  	
   

  	
   

  	
  BA Fee

  
	
  Parent

  	
   

  	
   

  	
   

  	
  Prepayment Fee

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financial Ratios

  	
   

  	
   

  	
   

  	
  Other Fees to Market

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Security

  
	
   

  	
   

  	
   

  	
   

  	
  Secured/Unsecured

  
	
   

  	
   

  	
   

  	
   

  	
  Collateral
  and Seniority of Claim

  
	
   

  	
   

  	
   

  	
   

  	
  Collateral
  Value

  
	
   

  	
   

  	
   

  	
   

  	
  Guarantors

  
	
   

  	
   

  	
   

  	
   

  	
  Lenders Names/Titles

  
	
   

  	
   

  	
   

  	
   

  	
  Lender Commitment
  ($)

  
	
   

  	
   

  	
   

  	
   

  	
  Commited/Uncommited

  
	
   

  	
   

  	
   

  	
   

  	
  Distribution
  method

  
	
   

  	
   

  	
   

  	
   

  	
  Amortization Schedule

  
	
   

  	
   

  	
   

  	
   

  	
  Borrowing Base/Advance Rates

  
	
   

  	
   

  	
   

  	
   

  	
  New Money Amount

  
	
   

  	
   

  	
   

  	
   

  	
  Country of Syndication

  
	
   

  	
   

  	
   

  	
   

  	
  Facility Rating (Loss given default)

  
	
   

  	
   

  	
   

  	
   

  	
  S&P Bank Loan

  
	
   

  	
   

  	
   

  	
   

  	
  Moody’s Bank Loan

  
	
   

  	
   

  	
   

  	
   

  	
  Fitch Bank Loan

  
	
   

  	
   

  	
   

  	
   

  	
  DBRS

  
	
   

  	
   

  	
   

  	
   

  	
  Other Ratings

  

 

* These items would be considered useful to
capture from an analytical perspective

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00120-of-00352.parquet"}]]