Document:

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Exhibit 10.2

PLEDGE AGREEMENT

     This PLEDGE AGREEMENT dated as of February 22, 2006 (as amended, supplemented, amended and
restated or otherwise modified from time to time, this “Pledge Agreement”), is made by and
among HIGH RIVER GOLD MINES (INTERNATIONAL) LTD., a corporation formed under the laws of the Cayman
Islands (“High River International”), HIGH RIVER GOLD MINES (WEST AFRICA) LTD., a
corporation formed under the laws of the Cayman Islands (“High River Africa”; High River
Africa and High River International are sometimes referred to herein individually as a
“Grantor” and collectively as the “Grantors”), and ROYAL GOLD, INC., a corporation
formed under the laws of Delaware, USA (“Royal Gold”).

Recitals

     A. Société des Mines de Taparko, also known as SOMITA, SA, a société anonyme formed under the
laws of the Republic of Burkina Faso (“Somita”), and Royal Gold entered into a Funding
Agreement dated as of December 1, 2005 (the “Original Funding Agreement”), as amended by
First Amendment to Funding Agreement dated as of February 8, 2006 (the “First Amendment”),
and as further amended and restated by Amended and Restated Funding Agreement dated as of February
22, 2006 (as so amended and restated, the “Funding Agreement”). Pursuant to the Funding
Agreement, Royal Gold agreed to provide funding to Somita in the amount of U.S. $35,000,000 to be
used in the development of the Taparko — Bouroum Project (defined below) in the Republic of
Burkina Faso.

     B. High River International is the indirect owner of 90% of the issued and outstanding shares
of Somita, through its wholly-owned subsidiary High River Africa. The Government of the Republic
of Burkina Faso is the owner of the remaining 10% of the issued and outstanding shares of Somita.

     C. Prior to the date of this Pledge Agreement, Royal Gold has provided Somita the amount of
$9,414,000 under the First Tranche pursuant to the terms and conditions of the Original Funding
Agreement, as amended by the First Amendment.

     D. It is a condition precedent to Royal Gold’s obligation to disburse the Second Tranche under
the Funding Agreement that each of High River International and High River Africa shall execute and
deliver to Royal Gold a pledge of stock by each of High River International and High River Africa
to assure completion of the Taparko — Bouroum Project, and such other matters as are set forth
herein.

     E. The board of directors of High River International has determined that (i) High River
International will derive substantial direct and indirect benefit from the transactions
contemplated by the Funding Agreement and the documents related thereto, (ii) Somita’s ability to
continue to obtain the funding from Royal Gold under the Funding Agreement is important to the
financial success of Somita and High River International, (iii) High River International will
derive economic benefit from the financial success of Somita, and (iv) it is in the best interests
of High River International, and necessary and convenient to the conduct, promotion and attainment
of the business of High River International, for High River International to pledge the stock of

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High River Africa until Project Completion to support the obligations of Somita under the Funding
Agreement and the documents related thereto.

     F. The board of directors of High River Africa has determined that (i) High River Africa will
derive substantial direct and indirect benefit from the transactions contemplated by the Funding
Agreement and the documents related thereto, (ii) Somita’s ability to continue to obtain the
funding from Royal Gold under the Funding Agreement is important to the financial success of Somita
and High River Africa, (iii) High River Africa will derive economic benefit from the financial
success of Somita, and (iv) it is in the best interests of High River Africa, and necessary and
convenient to the conduct, promotion and attainment of the business of High River Africa, for High
River Africa to pledge the stock of Somita until Project Completion to support the obligations of
Somita under the Funding Agreement and the documents related thereto.

     G. This Pledge Agreement is executed and delivered to Royal Gold by each of High River
International and High River Africa to induce Royal Gold to disburse the Second Tranche and each
subsequent Tranche to Somita under the Funding Agreement and in satisfaction of a condition
precedent to Royal Gold providing such funding. Each of High River and High River Africa
acknowledges and agrees that Royal Gold would not provide the funding to Somita under the Funding
Agreement unless each of High River International and High River Africa executed and delivered this
Pledge Agreement.

     H. This Pledge Agreement is the document referred to as “Pledge II” in the Funding Agreement.

Agreement

     THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Grantor and Somita agrees, for the benefit of Royal Gold, as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1. Certain Terms. Reference is hereby made to the Funding Agreement for all
purposes. All terms used in this Pledge Agreement that are defined in the Funding Agreement and
not otherwise defined herein shall have the same meanings when used herein. As used herein, terms
defined above in the introductory paragraph and the recitals shall have the meanings indicated
above, and the following terms shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

     “Bouroum Lands” means all of the land included in the Bouroum Permit, being
approximately 11.7 square kilometers.

     “Collateral” is defined in Section 2.1.

     “Contribution Agreement” means the Contribution Agreement in Support of Somita Funding
Agreement dated as of February 22, 2006, from High River to and for the benefit of Royal Gold.

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     “Distributions” means all non-cash dividends paid on capital securities, liquidating
dividends paid on capital securities, shares of capital securities resulting from (or in connection
with the exercise of) stock splits, reclassifications, warrants, options, non-cash dividends,
mergers, consolidations, and all other distributions (whether similar or dissimilar to the
foregoing) on or with respect to any capital securities constituting Collateral, but excluding
Dividends.

     “Dividends” means cash dividends and cash distributions with respect to any capital
securities constituting Collateral that are not a liquidating dividend.

     “Foreign Pledge Agreement” means any supplemental pledge agreement governed by the
laws of a jurisdiction other than the United States or a State thereof executed and delivered by a
Grantor or any of its subsidiaries pursuant to the terms of this Pledge Agreement, in form and
substance reasonably satisfactory to Royal Gold, as shall be necessary under the laws of
organization or incorporation of a Foreign Subsidiary to further protect or perfect a lien on and
security interest in any Collateral.

     “Foreign Subsidiary” means any subsidiary of a Grantor that is not organized under the
laws of the United States or any state thereof, including, without limitation, High River Africa
and Somita.

     “High River” means High River Gold Mines Ltd., a corporation formed under the federal
laws of Canada.

     “ICC” has the meaning set forth in Section 7.8.

     “Parties” means Royal Gold and the Grantors.

     “Request for Arbitration” has the meaning set forth in Section 7.8.

     “Rules” has the meaning set forth in Section 7.8.

     “Secretariat” has the meaning set forth in Section 7.8.

     “Secured Obligations” means, as of any date of measurement, (a) all amounts then
disbursed by Royal Gold to Somita, in Tranches or any other manner, pursuant to the Funding
Agreement, and (b) the HRG Fundings (as defined in the Contribution Agreement).

     “Specified Event” means the occurrence and continuance of any Event of Default under
the Funding Agreement, the Contribution Agreement or the Guaranty and Agreement in Support of
Somita Funding Agreement, dated as of February 22, 2006, from High River to and for the benefit of
Royal Gold.

     “Taparko — Bouroum Project” means development and exploitation of the Taparko Lands
and the Bouroum Lands for production of gold and associated precious metals, including construction
of a mine, support facilities and the Taparko Processing Facility.

     “Taparko Lands” means that portion of the land included in the Taparko Permit, being
approximately 34.7 square kilometers out of the total 666.5 square kilometers included in such
permit, which land is more particularly described in Exhibit A attached hereto.

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     “Termination Date” means the Completion Date under and defined in the Funding
Agreement.

     “UCC” means the Uniform Commercial Code as enacted from time to time in the State of
Colorado, or in any jurisdiction the laws of which may be applicable to or in connection with the
creation, perfection or priority of any security interest purported to be created under the Funding
Documents.

     SECTION 1.2. UCC Definitions. Unless otherwise defined herein or in the Funding
Agreement or the context otherwise requires, terms for which meanings are provided in the UCC are
used in this Pledge Agreement (whether or not capitalized herein), including its preamble and
recitals, with such meanings.

ARTICLE II

SECURITY INTEREST

     SECTION 2.1. Grant of Security Interest. Each Grantor hereby pledges, hypothecates,
charges, mortgages, delivers and transfers to Royal Gold, for its benefit and the ratable benefit
of Royal Gold, and hereby grants to Royal Gold, for its benefit and the ratable benefit of Royal
Gold, a continuing security interest in all of the following property of such Grantor, whether
tangible or intangible, whether now or hereafter existing, owned or acquired by such Grantor, and
wherever located (collectively, the “Collateral”):

     (a) (i) all investment property consisting of the capital securities of each issuer of
such capital securities described in Schedule I hereto in which such Grantor has an
interest and (ii) all other capital securities which are interests in limited liability
companies or partnerships consisting of the capital securities of each issuer of such
capital securities described in Schedule I hereto in which such Grantor has an
interest, in each case together with Dividends and Distributions payable in respect of the
Collateral described in the foregoing clauses (a)(i) and (a)(ii);

     (b) all certificates, agreements (including stockholders agreements, partnerships
agreements, operating agreements and limited liability company agreements), books, records,
writings, data bases, information and other property relating to, used or useful in
connection with, evidencing, embodying, incorporating or referring to, any of the foregoing
Collateral; and

     (c) all products, issues, profits, returns, income, supporting obligations and proceeds
of and from any and all of the foregoing Collateral (including, to the extent not otherwise
included, all payments under insurance (whether or not Royal Gold is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral).

     SECTION 2.2. Security for Secured Obligations. This Pledge Agreement and the
Collateral in which Royal Gold for its benefit is granted a security interest hereunder by the
Grantors secures the payment of all Secured Obligations now or hereafter existing.

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     SECTION 2.3. Grantors Remain Liable. Anything herein to the contrary notwithstanding,

     (a) each Grantor will remain liable under any contracts and agreements included in the
Collateral to the extent set forth therein, and will perform all of its duties and
obligations under such contracts and agreements to the same extent as if this Pledge
Agreement had not been executed;

     (b) the exercise by Royal Gold of any of its rights hereunder will not release any
Grantor from any of its duties or obligations under any such contracts or agreements
included in the Collateral; and

     (c) Royal Gold will not have any obligation or liability under any contracts or
agreements included in the Collateral by reason of this Pledge Agreement, nor will Royal
Gold be obligated to perform any of the obligations or duties of any Grantor thereunder or
to take any action to collect or enforce any claim for payment assigned hereunder.

     SECTION 2.4. Security Interest Absolute, etc. This Pledge Agreement shall in all
respects be a continuing grant of security interest, and shall remain in full force and effect
until the Termination Date. All rights of Royal Gold and the security interests granted to Royal
Gold for its benefit hereunder, and all obligations of each Grantor hereunder, shall, in each case,
be absolute, unconditional and irrevocable irrespective of:

     (a) any lack of validity, legality or enforceability of any Funding Document;

     (b) the failure of Royal Gold:

     (i) to assert any claim or demand or to enforce any right or remedy against any
Grantor or any other Person under the provisions of any Funding Document or
otherwise, or

     (ii) to exercise any right or remedy against any other guarantor of, or
collateral securing, any Secured Obligations;

     (c) any amendment to, rescission, waiver, or other modification of, or any consent to
or departure from, any of the terms of any Funding Document;

     (d) any addition, exchange or release of any collateral or of any Person that is (or
will become) a guarantor (including each Grantor hereunder) of the Secured Obligations, or
any surrender or non-perfection of any collateral, or any amendment to or waiver or release
or addition to, or consent to or departure from, any other guaranty held by Royal Gold
securing any of the Secured Obligations; or

     (e) any other circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, a Grantor, any surety or any guarantor, other than, in
each case, payment of the Secured Obligations in full.

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     SECTION 2.5. Postponement of Subrogation. Each Grantor agrees that it will not
exercise any rights which it may acquire by way of rights of subrogation under any Funding Document
to which it is a party. Any amount paid to any Grantor on account of any such subrogation rights
prior to the Termination Date shall be held in trust for the benefit of Royal Gold and shall
immediately be paid and turned over to Royal Gold for the benefit of Royal Gold in the exact form
received by such Grantor (duly endorsed in favor of Royal Gold, if required), to be credited and
applied against the Secured Obligations, whether matured or unmatured, in accordance with
Section 6.1.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

     In order to induce Royal Gold to enter into the Funding Agreement and make credit extensions
thereunder, each Grantor represents and warrants to Royal Gold and Royal Gold as set forth below.

     SECTION 3.1. As to Capital Securities of Subsidiaries. With respect to any subsidiary
(the capital securities of which are or are required to be pledged hereunder) of such Grantor that
is a corporation, business trust, joint stock company, société anonyme or similar Person, all
capital securities issued by such subsidiary are duly authorized and validly issued, fully paid and
non-assessable, and represented by a certificate. The percentage of the issued and outstanding
capital securities of each subsidiary pledged by such Grantor hereunder are as set forth on
Schedule I hereto.

     SECTION 3.2. Ownership, No Liens, etc. Such Grantor owns its Collateral free and
clear of any Lien, except for Liens created by this Pledge Agreement. No effective financing
statement or other filing similar in effect covering any Collateral is on file in any recording
office, except those filed in favor of Royal Gold relating to this Pledge Agreement.

     SECTION 3.3. Validity, etc. This Pledge Agreement creates a valid security interest
in the Collateral securing the payment of the Secured Obligations. Such Grantor has authorized
financing statements suitable for filing in the appropriate offices therefor and has taken all of
the actions necessary to create perfected and first-priority security interests in the applicable
Collateral (other than the filing of such financing statements).

     SECTION 3.4. Authorization, Approval, etc. Except as have been obtained or made (or
will be made by Royal Gold pursuant to the Funding Agreement) and are in full force and effect, no
authorization, approval or other action by, and no notice to or filing with, any governmental
authority is required either:

     (a) for the grant by such Grantor of the security interest granted hereby, the pledge
by such Grantor of any Collateral pursuant hereto or for the execution, delivery and
performance of this Pledge Agreement by such Grantor;

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     (b) for the perfection of (other than the filing of financing statements that have been
authorized by such Grantor in the appropriate offices therefor) or the exercise by Royal
Gold of its rights and remedies hereunder; or

     (c) for the exercise by Royal Gold of the voting or other rights provided for in this
Pledge Agreement, except (i) with respect to any securities issued by a subsidiary of such
Grantor, as may be required in connection with a disposition of such securities by laws
affecting the offering and sale of securities generally, the remedies in respect of the
Collateral pursuant to this Pledge Agreement and (ii) any “change of control” or similar
filings required by state licensing agencies.

     SECTION 3.5. Best Interests. It is in the best interests of each Grantor to execute
this Pledge Agreement inasmuch as such Grantor will derive substantial direct and indirect benefits
from the disbursement of Tranches to Somita from time to time pursuant to the Funding Agreement,
and each of High River International and High River Africa understands and agrees that Royal Gold
is relying on this representation in agreeing to disburse Tranches to Somita under the Funding
Agreement.

ARTICLE IV

COVENANTS

     Each Grantor covenants and agrees that such Grantor will perform, comply with and be bound by
the obligations set forth below until the Termination Date.

     SECTION 4.1. As to Investment Property, etc.

     SECTION 4.1.1. Capital Securities of Subsidiaries.

     (a) High River International will not allow High River Africa to issue uncertificated
securities.

     (b) High River Africa will not allow Somita to issue uncertificated securities.

     SECTION 4.1.2. Stock Powers, etc. Such Grantor agrees that all certificated
securities delivered by such Grantor pursuant to this Pledge Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of transfer acceptable to
Royal Gold.

     SECTION 4.1.3. Continuous Pledge. Such Grantor will deliver to Royal Gold and at all
times keep pledged to Royal Gold pursuant hereto, on a first-priority, perfected basis all
investment property constituting Collateral, all Dividends and Distributions with respect thereto,
and all proceeds and rights from time to time received by or distributable to such Grantor in
respect of any of the foregoing Collateral.

     SECTION 4.1.4. Voting Rights; Dividends, etc. Such Grantor agrees:

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     (a) promptly upon the occurrence and during the continuance of a Specified Event and
without any request therefor by Royal Gold, so long as such Specified Event shall continue,
to deliver (properly endorsed where required hereby or requested by Royal Gold) to Royal
Gold all Dividends and Distributions with respect to investment property and all proceeds of
the Collateral, in each case thereafter received by such Grantor, all of which shall be held
by Royal Gold as additional Collateral; and

     (b) that, promptly upon the occurrence and during the continuance of a Specified Event,
(i) Royal Gold may exercise (to the exclusion of such Grantor) the voting power and all
other incidental rights of ownership with respect to any Collateral constituting ownership
interests in subsidiaries of such Grantor and such Grantor hereby grants Royal Gold an
irrevocable proxy, exercisable under such circumstances, to vote such investment property;
and (ii) it shall promptly deliver to Royal Gold such additional proxies and other documents
as may be necessary to allow Royal Gold to exercise such voting power.

All Dividends, Distributions, interest, principal, cash payments, payment intangibles and proceeds
which may at any time and from time to time be held by such Grantor but that such Grantor is then
obligated to deliver to Royal Gold, shall, until delivery to Royal Gold, be held by such Grantor
separate and apart from its other property in trust for Royal Gold. Royal Gold agrees that unless
a Specified Event shall have occurred and be continuing, such Grantor will have the exclusive
voting power with respect to any investment property constituting Collateral and Royal Gold will,
upon the written request of such Grantor, promptly deliver such proxies and other documents, if
any, as shall be reasonably requested by such Grantor which are necessary to allow such Grantor to
exercise that voting power; provided that no vote shall be cast, or consent, waiver, or
ratification given, or action taken by such Grantor that would impair any such Collateral (except
as permitted by any Funding Document) or be materially inconsistent with or violate any provision
of any Funding Document.

     SECTION 4.2. Somita Governance. Each of High River International and High River
Africa covenants and agrees that the directeur général of Somita is, and at all times shall be, a
person who is a representative of, and has been appointed by, High River Gold Mines Ltd., High
River International or High River Africa.

     SECTION 4.3. Further Assurances, etc. Each Grantor agrees that, from time to time at
its own expense, it will promptly execute and deliver all further instruments and documents, and
take all further action, that is necessary that is requested by Royal Gold may in order to perfect,
preserve and protect any security interest granted hereby or to enable Royal Gold to exercise and
enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, each Grantor will:

     (a) from time to time upon the request of Royal Gold, promptly deliver to Royal Gold
such stock powers, instruments and similar documents, satisfactory in form and substance to
Royal Gold, with respect to such Collateral as Royal Gold may request and will, from time to
time upon the request of Royal Gold after the occurrence and during the continuance of any
Specified Event promptly transfer any securities constituting Collateral into the name of
any nominee designated by Royal Gold;

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     (b) file (or cause to be filed or authorize to be filed) such financing statements or
continuation statements, or amendments thereto, and such other instruments or notices
(including any assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. § 3726, any successor or amended version thereof or any regulation
promulgated under or pursuant to any version thereof), as is necessary or that Royal Gold
has requested in order to perfect and preserve the security interests and other rights
granted to Royal Gold hereby;

     (c) deliver to Royal Gold and at all times keep pledged to Royal Gold pursuant hereto,
on a first-priority, perfected basis, at the request of Royal Gold, all investment property
constituting Collateral, all Dividends and Distributions with respect thereto, and all
proceeds and rights from time to time received by or distributable to such Grantor in
respect of any of the foregoing Collateral;

     (d) furnish to Royal Gold, from time to time at Royal Gold’s request, statements and
schedules further identifying and describing the Collateral and such other reports in
connection with the Collateral as Royal Gold may reasonably request, all in reasonable
detail; and

     (e) do all things requested by Royal Gold in order to enable Royal Gold to have control
(as such term is defined in Article 8 and Article 9 of any applicable Uniform Commercial
Code relevant to the creation, perfection or priority of Collateral consisting of deposit
accounts, accounts and letter of credit rights) over any Collateral; and

with respect to the foregoing and the grant of the security interest hereunder, each Grantor hereby
authorizes Royal Gold to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral. Each Grantor agrees that a carbon,
photographic or other reproduction of this Pledge Agreement or any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement where permitted by law.

     SECTION 4.4. Prohibition on Amendment to Article of Association. High River Africa
shall not amend or otherwise modify its Articles of Association without the prior written consent
of Royal Gold, which consent shall not be withheld unreasonably.

ARTICLE V

ROYAL GOLD AS ATTORNEY-IN-FACT

     SECTION 5.1. Royal Gold Appointed Attorney-in-Fact. Each Grantor hereby irrevocably
appoints Royal Gold its attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor or otherwise, from time to time in Royal Gold’s discretion,
following the occurrence and during the continuance of a Specified Event, to take any action and to
execute any instrument which Royal Gold may deem necessary or advisable to accomplish the purposes
of this Pledge Agreement, including:

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     (a) to ask, demand, collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the Collateral;
and

     (b) to file any claims or take any action or institute any proceedings which Royal Gold
may deem necessary or desirable for the collection of any of the Collateral or otherwise to
enforce the rights of Royal Gold with respect to any of the Collateral; and

     (c) to perform the affirmative obligations of Grantor hereunder.

Each Grantor hereby acknowledges, consents and agrees that the power of attorney granted pursuant
to this Section is irrevocable and coupled with an interest.

     SECTION 5.2. Royal Gold May Perform. If any Grantor fails to perform any agreement
contained herein, Royal Gold may itself perform, or cause performance of, such agreement, and the
reasonable expenses of Royal Gold incurred in connection therewith shall be payable by such Grantor
pursuant to Section 6.4.

     SECTION 5.3. Royal Gold Has No Duty. The powers conferred on Royal Gold hereunder are
solely to protect its interest in the Collateral and shall not impose any duty on it to exercise
any such powers. Except for reasonable care of any Collateral in its possession and the accounting
for moneys actually received by it hereunder, Royal Gold shall have no duty as to any Collateral
(except as required by law) or responsibility for:

     (a) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any investment property, whether or not
Royal Gold has or is deemed to have knowledge of such matters, or

     (b) taking any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral.

ARTICLE VI

REMEDIES

     SECTION 6.1. Certain Remedies. If any Specified Event shall have occurred and be
continuing:

     (a) Royal Gold may exercise in respect of all or any part of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral) and also may:

     (i) require any Grantor to, and each Grantor hereby agrees that it will, at its
expense and upon request of Royal Gold forthwith, assemble all or any part of the
Collateral as directed by Royal Gold and make it available to Royal Gold at

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a place to be designated by Royal Gold which is reasonably convenient to both
parties, and

     (ii) without notice except as specified below, sell the Collateral or any part
thereof in one or more transactions at public or private sale, at Royal Gold’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as Royal Gold may deem reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten days prior notice to
such Grantor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification. Royal Gold
shall not be obligated to make any sale of Collateral regardless of notice of sale
having been given. Royal Gold may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so adjourned.

     (b) All cash proceeds received by Royal Gold in respect of any sale of, collection
from, or other realization upon, all or any part of the Collateral shall be applied by Royal
Gold against, all or any part of the Secured Obligations as Royal Gold shall determine in
its sole discretion.

     (c) Royal Gold may:

     (i) transfer all or any part of the Collateral into the name of Royal Gold or
its nominee, with or without disclosing that such Collateral is subject to the Lien
hereunder,

     (ii) notify the parties obligated on any of the Collateral to make payment to
Royal Gold of any amount due or to become due thereunder,

     (iii) enforce collection of any of the Collateral by suit or otherwise, and
surrender, release or exchange all or any part thereof, or compromise or extend or
renew for any period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,

     (iv) take control of any proceeds of the Collateral, and

     (v) execute (in the name, place and stead of the relevant Grantor)
endorsements, assignments, stock powers and other instruments of conveyance or
transfer with respect to all or any of the Collateral.

     SECTION 6.2. Compliance with Restrictions. Each Grantor agrees that in any sale of
any of the Collateral whenever a Specified Event shall have occurred and be continuing, Royal Gold
is hereby authorized to comply with any limitation or restriction in connection with such sale as
it may be advised by counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict public issuances or sales of securities,
the number of prospective bidders and purchasers, require that such prospective

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bidders and purchasers have certain qualifications, and restrict such prospective bidders and
purchasers to Persons who will represent and agree that they are purchasing for their own account
for investment and not with a view to the distribution or resale of such Collateral), or in order
to obtain any required approval of the sale or of the purchaser by any governmental authority or
official, and each Grantor further agrees that such compliance shall not result in such sale being
considered or deemed not to have been made in a commercially reasonable manner, nor shall Royal
Gold be liable nor accountable to the relevant Grantor for any discount allowed by the reason of
the fact that such Collateral is sold in compliance with any such limitation or restriction.
Notwithstanding anything herein to the contrary, for a period of ninety (90) days following the
occurrence of an Event of Default (as defined in the Contribution Agreement) under the Contribution
Agreement, Royal Gold shall refrain from taking any action with respect to the sale of the
Collateral to which it would otherwise be entitled under this Article VI or otherwise. If High
River has not fully satisfied, or caused the full satisfaction of, its obligations with respect to
all amounts to be funded by High River pursuant to the Contribution Agreement by the end of that
ninety (90) day period, Royal Gold shall be entitled to exercise all remedies provided for herein
and in any of the other Funding Documents immediately thereafter. Royal Gold shall provide High
River notice of the date on which such ninety (90) day period has commenced in accordance with
Section 7.6.

     SECTION 6.3. Protection of Collateral. Royal Gold may from time to time, at its
option, perform any act which any Grantor fails to perform after being requested in writing so to
perform (it being understood that no such request need be given after the occurrence and during the
continuance of a Specified Event) and Royal Gold may from time to time take any other action which
Royal Gold reasonably deems necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.

ARTICLE VII

MISCELLANEOUS PROVISIONS

     SECTION 7.1. Binding on Successors, Transferees and Assigns; Assignment. This Pledge
Agreement shall remain in full force and effect until the Termination Date has occurred, shall be
binding upon High River, High River Africa and Somita, and their respective successors, transferees
and assigns and shall inure to the benefit of and be enforceable by Royal Gold and its successors,
transferees and assigns; provided that no Grantor may (unless otherwise permitted under the
terms of the Funding Agreement) assign any of its obligations hereunder without the prior written
consent of Royal Gold.

     SECTION 7.2. Amendments, etc. Subject to any contrary provision in the Funding
Agreement, no amendment to or waiver of any provision of this Pledge Agreement, nor consent to any
departure by any Grantor from its obligations under this Pledge Agreement, shall in any event be
effective unless the same shall be in writing and signed by Royal Gold and the relevant Grantor and
then such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given.

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12

 

     SECTION 7.3. No Waiver; Remedies. No failure on the part of Royal Gold to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder preclude any other or further exercise thereof or
the exercise of any other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

     SECTION 7.4. Headings. The various headings of this Pledge Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this Pledge Agreement or any
provisions thereof.

     SECTION 7.5. Severability. Any provision of this Pledge Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Pledge Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.

     SECTION 7.6. Governing Law, Notices, Service of Process, Entire Agreement, etc.

          (a) THIS PLEDGE AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF COLORADO.

          (b) All notices and other communications provided for hereunder shall be in writing or by
facsimile and addressed, delivered or transmitted to the appropriate party in accordance with
Section 8.2 of the Funding Agreement. The addresses for High River International and High River
Africa are as listed in Section 7.6(c).

          (c) Service of process in any matter shall be made to High River International and High River
Africa (as applicable) at the following addresses:

High River International:

High River Gold Mines (International) Ltd.

c/o High River Gold Mines Ltd.

155 University Avenue

Suite 1700

Toronto, Ontario M5H 3B7

Attention: President

Facsimile: (416) 360-0010

High River Africa:

High River Gold Mines (West Africa) Ltd.

c/o High River Gold Mines Ltd.

155 University Avenue

Suite 1700

Toronto, Ontario M5H 3B7

EXECUTION
VERSION

13

 

Attention: President

Facsimile: (416) 360-0010

          Each of High River International and High River Africa agrees that service of process, writ,
judgment, or other notice of legal process at the address above shall be (i) deemed and held in
every respect to be effective personal service upon it, and (ii) deemed sufficiently given or
furnished if delivered by personal delivery, by facsimile or other electronic transmission, or by
delivery service with proof of delivery. Each of High River International and High River Africa
shall maintain a presence at the address above (unless changed by similar notice in writing given
by the particular Person whose address is to be changed) continuously at all times while any of
High River International or High River Africa is obligated under this Agreement or any of the other
Funding Documents. Nothing herein shall affect Royal Gold’s right to serve process in any other
manner permitted by applicable law.

          (d) This Pledge Agreement and the other Funding Documents constitute the entire understanding
among the parties hereto with respect to the subject matter hereof and thereof and supersede any
prior agreements, written or oral, with respect thereto.

     SECTION 7.7. Consent to Jurisdiction; Waiver of Jury Trial, etc..

     (a) EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON EXCLUSIVE JURISDICTION OF, AT THE ELECTION
OF ROYAL GOLD, ANY UNITED STATES FEDERAL OR COLORADO STATE COURT SITTING IN DENVER, COLORADO
IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY 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 PLEDGE AGREEMENT SHALL AFFECT ANY RIGHT THAT ROYAL GOLD MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT AGAINST ANY GRANTOR
OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY
AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT IN ANY COURT REFERRED TO IN
THIS SECTION 7.7(a). EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED

EXECUTION
VERSION

14

 

BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

     (b) EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE SERVICE OF
PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURTS BY THE MAILING THEREOF IN
ACCORDANCE WITH SECTION 7.6(c) OF THIS PLEDGE AGREEMENT. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ROYAL GOLD TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

     (c) EACH OF THE GRANTORS AGREES THAT SERVICE OF ALL WRITS, PROCESS AND SUMMONSES
RELATING TO SUCH GRANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF
COLORADO MAY BE MADE UPON HIGH RIVER GOLD MINES LTD. (“HIGH RIVER”), LOCATED AT 155
UNIVERSITY AVENUE, SUITE 1700, TORONTO, ONTARIO M5H 3B7, AND EACH OF THE GRANTORS HEREBY
DULY AND IRREVOCABLY APPOINTS HIGH RIVER AS ITS AGENT AND TRUE AND LAWFUL ATTORNEY-IN-FACT
IN ITS NAME, PLACE AND STEAD TO ACCEPT SUCH SERVICE OF ANY AND ALL SUCH WRITS, PROCESS AND
SUMMONSES, AND AGREES THAT THE FAILURE OF HIGH RIVER TO GIVE ANY NOTICE OF ANY SUCH SERVICE
OF PROCESS TO THE APPLICABLE GRANTOR SHALL NOT IMPAIR OR AFFECT THE VALIDITY OF SUCH SERVICE
OR OF ANY JUDGMENT BASED THEREON. HIGH RIVER HEREBY IRREVOCABLY ACCEPTS SUCH APPOINTMENT
AND AGREES TO IMMEDIATELY FORWARD ANY SUCH SERVICE TO THE APPLICABLE GRANTOR.

     (d) Any provision of this Pledge Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.

     (e) EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS PLEDGE AGREEMENT HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS PLEDGE AGREEMENT OR ANY OTHER DOCUMENTS OR
TRANSACTIONS RELATING THERETO.

     (f) Each Grantor represents and warrants that it has consulted with its legal counsel
regarding all waivers under this Pledge Agreement..

       SECTION 7.8. Counterparts. This Pledge Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original and all of which
shall constitute together but one and the same agreement.

       SECTION 7.9. Foreign Pledge Agreements. Without limiting any of the rights, remedies,
privileges or benefits provided hereunder to Royal Gold for its benefit and the ratable

EXECUTION
VERSION

15

 

benefit of Royal Gold, each Grantor and Royal Gold hereby agree that the terms and provisions
of this Pledge Agreement in respect of any Collateral subject to the pledge or other Lien of a
Foreign Pledge Agreement are, and shall be deemed to be, supplemental and in addition to the
rights, remedies, privileges and benefits provided to Royal Gold and Royal Gold under such Foreign
Pledge Agreement and under applicable law to the extent consistent with applicable law;
provided, that, in the event that the terms of this Pledge Agreement conflict or are
inconsistent with the applicable Foreign Pledge Agreement or applicable law governing such Foreign
Pledge Agreement, (i) to the extent that the provisions of such Foreign Pledge Agreement or
applicable foreign law are, under applicable foreign law, necessary for the creation, perfection or
priority of the security interests in the Collateral subject to such Foreign Pledge Agreement, the
terms of such Foreign Pledge Agreement or such applicable law shall be controlling and (ii)
otherwise, the terms hereof shall be controlling.

     SECTION 7.10. Disposition of Assets by High River Africa. Notwithstanding anything
contained herein to the contrary, High River Africa shall have the right to dispose of any assets
owned by it, other than the Collateral or other assets relating to the Taparko-Bouroum Project,
without the consent of Royal Gold.

[Remainder of page intentionally left blank]

EXECUTION
VERSION

16

 

     Each of the parties hereto has caused this Pledge Agreement to be duly executed and delivered
by its authorized officer as of the date first above written.

	 	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD MINES	 	 
	 	 	     (INTERNATIONAL) LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD MINES (WEST AFRICA) LTD.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 	 	ROYAL GOLD, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 

COUNTERPART SIGNATURE PAGE TO PLEDGE AGREEMENT

 

 

[INSERT APPROPRIATE NOTARY BLOCKS]

NOTARY SIGNATURE PAGE TO PLEDGE AGREEMENT

 

 

SCHEDULE I

to Pledge Agreement

PLEDGOR

High River International:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Common Stock	 	 
	 	 	 	 	 	 	 	 	 	 	Authorized	 	Outstanding	 	 
	Issuer (corporate)	 	Cert. #	 	# of Shares	 	Shares	 	Shares	 	% of Shares Pledged
	High River Gold
Mines (West Africa)
Ltd.*

	 	 	2	 	 	 	2,500,000	 	 	 	100,000,000	 	 	 	12,270,000	 	 	 	100	%
	High River Gold
Mines (West Africa)
Ltd.*

	 	 	3	 	 	 	5,010,000	 	 	 	100,000,000	 	 	 	12,270,000	 	 	 	100	%
	High River Gold
Mines (West Africa)
Ltd.*

	 	 	4	 	 	 	4,760,000	 	 	 	100,000,000	 	 	 	12,270,000	 	 	 	100	%

 

			
	*	 	High River International owns 12,270,000 shares of the outstanding capital stock of High River
Africa, which shares are represented by Certificate No. 2 (2,500,000 shares), Certificate No. 3
(5,010,000 shares) and Certificate No. 4 (4,760,000 shares). High River has delivered such
certificates to Royal Gold pursuant to the Pledge Agreement. Copies of such stock certificates,
together with accompanying stock powers, are attached to this Schedule I. High River International
is pledging 100% of its ownership interest in High River Africa pursuant to the Pledge Agreement,
which represents 100% of the issued and outstanding shares of High River Africa.

PLEDGOR

High River Africa:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Stock	 	 
	 	 	 	 	 	 	 	 	 	 	Authorized	 	Outstanding	 	 
	Issuer (corporate)	 	Cert. #	 	# of Shares	 	Shares	 	Shares	 	% of Shares Pledged
	Société des Mines de Taparko *

	 	 	1	 	 	 	900	 	 	 	1,000	 	 	 	1,000	 	 	 	90	%

 

			
	*	 	High River Africa owns 900 shares of the outstanding capital stock of Somita, which shares are
represented by Certificate No. 1 (900 shares). High River Africa has delivered such certificate to
Royal Gold pursuant to the Pledge Agreement. Copies of such stock certificate, together with
accompanying stock power, are attached to this Schedule I. High River Africa is pledging 100% of
its ownership interest in Somita pursuant to the Pledge Agreement, which represents 90% of the
issued and outstanding shares of Somita.exv10w3

 

Exhibit 10.3

GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (this “Agreement”) dated as of February 22, 2006, is by High River
Gold Mines Ltd., a corporation formed under the federal laws of Canada (the “Guarantor”), in favour
of ROYAL GOLD, INC., a Delaware corporation (the “Creditor”).

Recitals

     A. Société des Mines de Taparko, also known as SOMITA, SA, a société anonyme formed under the
laws of the Republic of Burkina Faso (the “Debtor”) is indebted and liable to the Creditor pursuant
to that certain Funding Agreement, dated December 1, 2005, between the Debtor and the Creditor (the
“Original Funding Agreement”) as amended by First Amendment to Funding Agreement dated as of
February 8, 2006, (the “First Amendment”), and as further amended and restated by Amended
and Restated Funding Agreement dated as of February 22, 2006 (as so amended and restated, the
“Funding Agreement”). Pursuant to the Funding Agreement, the Creditor agreed to provide funding to
the Debtor in the amount of U.S.$35,000,000 to be used in the development of the Project (as
defined in the Funding Agreement) in the Republic of Burkina Faso. Except as otherwise
specifically noted, all capitalized terms used but not defined in this Agreement shall have the
meanings given to such terms in the Funding Agreement.

     B. The Guarantor is the indirect owner of 90% of the issued and outstanding shares of the
Debtor, through one of its subsidiaries. The Government of the Republic of Burkina Faso is the
owner of the remaining 10% of the issued and outstanding shares of the Debtor.

     C. In connection with the development of the Project, the Debtor has entered into the
Taparko/Bouroum Project Contract Agreement, dated as of February 3, 2006 (the “Construction
Agreement”), between Debtor and Senet CC, a corporation formed under the laws of the Republic of
South Africa (“Senet”).

     D. Pursuant to Section 4.2 of the Construction Agreement, Senet is obligated to provide
Performance Security (as defined in the Construction Agreement) in an amount equal to 10% of the
Accepted Contract Amount (as defined in the Construction Agreement) reducing to 5% upon the
occurrence of certain events stated therein. The Creditor has required, as a condition precedent
to disbursement of the Second Tranche under the Funding Agreement, that the Guarantor provide
additional performance security for the obligations of Senet under the Construction Agreement that
are the subject of the Performance Security (the “Obligations”), and the Guarantor has agreed to
provide the additional performance security.

     E. The board of directors of the Guarantor has determined that (i) the Guarantor will derive
substantial direct and indirect benefit from the transactions

EXECUTION VERSION

 

2.

contemplated by the Funding Agreement and the documents related thereto, (ii) the Debtor’s
continuing ability to obtain the funding from the Creditor under the Funding Agreement is important
to the financial success of the Debtor and the Guarantor, (iii) the Guarantor will derive economic
benefit from the financial success of the Creditor, and (iv) it is in the best interests of the
Guarantor, and necessary and convenient to the conduct, promotion and attainment of the business of
the Guarantor, for the Guarantor to provide additional performance security for the Obligations as
provided in this Agreement.

     F. This Agreement is executed and delivered to the Creditor by the Guarantor to induce the
Creditor to disburse the Second Tranche to the Debtor under the Funding Agreement and in
satisfaction of a condition precedent to the Creditor providing such funding. The Guarantor
acknowledges and agrees that the Creditor would not provide the funding to the Debtor under the
Funding Agreement unless the Creditor executed and delivered this Agreement.

     G. This Agreement is the document referred to as “Guaranty I” in the Funding Agreement.

Agreement

     For good and valuable consideration, including payment to the Guarantor of the sum of ten
dollars, the receipt and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees
with the Creditor as follows:

     1. Guarantee. The Guarantor hereby unconditionally guarantees performance and payment
of all amounts up to fifteen percent (15%) of the Accepted Contract Amount, forthwith on demand by
the Creditor or any other person, upon the occurrence of any of the events set forth in clauses (a)
through (d) of Section 4.2 of the Construction Agreement. The obligation of Guarantor hereunder
may be offset by the Retention Money (as defined in the Construction Agreement) and amounts paid or
payable by or on behalf of Senet with respect to the Performance Security pursuant to Section 4.2
of the Construction Agreement. This guarantee shall be a continuing guarantee and shall remain in
effect until issuance of the Performance Certificate (as defined in the Construction Agreement)
pursuant to the Construction Agreement.

     2. Liability Unaffected by Certain Matters. The liability of the Guarantor hereunder
shall be absolute and unconditional irrespective of, and shall not be released, discharged, limited
or otherwise affected by:

	 	(a)	 	the lack of validity or enforceability of the Performance Security in whole
or in part for any reason whatsoever, including without limitation by reason of
prescription, by operation of law or as a result of any applicable statute, law or
regulation;

EXECUTION VERSION

 

3.

	 	(b)	 	any prohibition or restriction imposed in respect of any rights or remedies
of any person in respect of the Performance Security, including without limitation any
court order which purports to prohibit or suspend the time for payment of the
Performance Security or the rights or remedies of the Debtor against Senet under the
Construction Agreement or in respect of the Performance Security;
	 
	 	(c)	 	the lack of validity or enforceability in whole or in part of:

	 	(i)	 	the Construction Agreement;
	 
	 	(ii)	 	the Funding Agreement or any other agreement made from time
to time between the Debtor and the Creditor;
	 
	 	(iii)	 	any security given by the Guarantor in favour of the
Creditor from time to time;
	 
	 	(iv)	 	any guarantee given by any person in favour of the Creditor
from time to time in connection with or relating to the Debtor, Senet, the
Obligations, the Construction Agreement or the Performance Security; or
	 
	 	(v)	 	any security given by any such guarantor in favour of the
Creditor from time to time in connection with any of its or the Debtor’s
obligations to the Creditor or the Obligations,

	 	 	 	(collectively, the “Documents”);
	 
	 	(d)	 	any change in the corporate existence, structure, ownership or control of the
Guarantor, the Debtor or Senet (including any of the foregoing arising from any
merger, consolidation, amalgamation, reorganization or similar transaction); any
change in the name, objects, capital stock, constating documents or by-laws of the
Guarantor, the Debtor or Senet; or the dissolution, winding-up, liquidation or other
distribution of the assets of the Guarantor, the Debtor or Senet, whether voluntary or
otherwise;
	 
	 	(e)	 	the Debtor’s, Senet’s or the Guarantor’s becoming insolvent or bankrupt or
subject to any proceeding under the provisions of the Bankruptcy and Insolvency Act
(Canada), the Companies’ Creditors Arrangement Act (Canada), or any similar law in the
Republic of Burkina Faso or the Republic of South Africa, the arrangement provisions
of applicable corporate legislation, any legislation similar to the foregoing in any
other jurisdiction, or any legislation enacted substantially in replacement of any of
the foregoing, or the Creditor’s voting in favour of any proposal, arrangement or
compromise in connection with any of the foregoing;

EXECUTION VERSION

 

4.

	 	(f)	 	the failure or neglect of the Debtor to demand performance of the obligations
of Senet under the Construction Agreement or payment in connection with the
Performance Security by Senet, any guarantor or any other person;
	 
	 	(g)	 	the valuation by the Creditor of any security held in respect of the
obligations of Senet under the Construction Agreement, which shall not be considered
as a purchase of such security or as payment on account of such obligations;
	 
	 	(h)	 	any right or alleged right of set-off, combination of accounts, counterclaim,
appropriation or application or any claim or demand that the Debtor or the Guarantor
may have or may allege to have against the Creditor; or
	 
	 	(i)	 	any other circumstances which might otherwise constitute a legal or equitable
defence available to, or complete or partial discharge of, the Guarantor in respect of
this Agreement.

     3. Liability Unaffected by Actions of Creditor. The liability of the Guarantor
hereunder shall be absolute and unconditional irrespective of, and shall not be released,
discharged, limited or otherwise affected by anything done, suffered or permitted by the Creditor
in connection with the Debtor, the Guarantor or any obligations of Senet under the Construction
Agreement. For greater certainty and without limiting the generality of the foregoing, without
releasing, discharging, limiting or otherwise affecting in whole or in part the liability of the
Guarantor under this Agreement, and without notice to or the consent of the Guarantor, the Creditor
may from time to time:

	 	(a)	 	receive payments in respect of the Obligations and payments of the
Performance Security;
	 
	 	(b)	 	amend, renew, waive, release or terminate any Document or any provisions
thereof in whole or in part from time to;
	 
	 	(c)	 	settle, compromise, waive, release or terminate the obligations of the Debtor
or Senet in whole or in part from time to time;
	 
	 	(d)	 	grant time, releases and discharges to the Guarantor;
	 
	 	(e)	 	take, refrain from taking or release guarantees from other persons in respect
of obligations of the Debtor or Senet;
	 
	 	(f)	 	refrain from demanding payment from or exercising any rights or remedies in
respect of any guarantor of the obligations of the Debtor or Senet;

EXECUTION VERSION

 

5.

	 	(g)	 	apply all monies received from any person or from the proceeds of any
security to pay such part of the obligations of the Debtor or Senet as the Creditor
may see fit, or change any such application in whole or in part from time to time,
notwithstanding any direction which may be given regarding application of such monies
by any person; and
	 
	 	(h)	 	otherwise deal with the Debtor, Senet, any guarantor of the obligations of
the Debtor or Senet or any other person and any security held by the Creditor in
respect of the obligations of the Debtor or Senet, as the Creditor may see fit in its
absolute discretion.

     4. Liability Unaffected by Failure of Creditor to Take, Hold or Enforce Security. The
Guarantor agrees that the Guarantor has provided this Agreement to the Creditor on the express
understanding that the Creditor has no obligation to obtain any security from any other person to
secure payment or performance of any of the Obligations; and if the Creditor in its absolute
discretion obtains any such security from any other person, the Creditor shall have no obligation
to continue to hold such security or to enforce such security. The Guarantor shall not be entitled
to rely on or benefit from, directly or indirectly, any such security which the Creditor may
obtain. In furtherance of the foregoing, the liability of the Guarantor hereunder shall be
absolute and unconditional irrespective of, and shall not be released, discharged, limited or
otherwise affected by:

	 	(a)	 	the loss of or failure by the Creditor to register, perfect or maintain any
security given by the Guarantor or other persons in respect of the Obligations,
whether intentionally or through failure, neglect or otherwise;
	 
	 	(b)	 	the failure or neglect of the Creditor to enforce any security held in
respect of the Guarantor or in respect of any other guarantor of the Obligations;
	 
	 	(c)	 	the Creditor’s having released, discharged, compromised or otherwise dealt
with any such security in any manner whatsoever (and for greater certainty the
Creditor shall not be bound to exhaust its recourse against any other persons or
enforce any security held in respect of the Obligations or take any other action or
legal proceeding before being entitled to payment from the Guarantor under this
Agreement, and the Guarantor hereby waives all benefits of discussion and division);
or
	 
	 	(d)	 	the enforcement by the Creditor of any such security in an improvident or
commercially unreasonable manner (including the sale or other disposition of any
assets encumbered by such security at less than the fair market value thereof) whether
as a result of negligence, recklessness or wilful action or inaction on the part of
the Creditor or otherwise, and regardless of any duty which the Creditor might have to
the Guarantor under applicable law (including applicable personal property security
legislation) in respect of the enforcement of any such security.

EXECUTION VERSION

 

6.

     5. Waivers. No delay on the part of the Creditor in exercising any of its options,
powers, rights or remedies, or any partial or single exercise thereof, shall constitute a waiver
thereof. No waiver, modification or amendment of this Agreement or of any such options, powers,
rights or remedies shall be deemed to have been made unless made in writing and signed by an
authorized officer of the Creditor, and any such waiver shall apply only with respect to the
specific instance involved, and shall not impair the rights of the Creditor or the liability of the
Guarantor hereunder in any other respect or at any other time.

     6. Foreign Currency Obligations. The Guarantor shall make payment hereunder in United
States dollars (the “Required Currency”). If the Guarantor makes payment hereunder in any other
currency (the “Payment Currency”), such payment shall constitute satisfaction of the said liability
of the Guarantor hereunder only to the extent that the recipient of such payment is able to
purchase Required Currency with the amount of the Payment Currency received from the Guarantor on
the date of receipt, in accordance with such recipient’s normal practice; and the Guarantor shall
remain liable hereunder for any deficiency.

     7. Withholding Taxes. Except as otherwise required by law, each payment by the
Guarantor hereunder shall be made without withholding for or on account of any present or future
tax imposed by or within the jurisdiction in which the Guarantor is domiciled, any jurisdiction
from which the Guarantor makes any payment or any other jurisdiction, or (in each case) any
political subdivision or taxing authority thereof or therein. If any such withholding is required
by law, the Guarantor shall make the withholding, pay the amount withheld to the appropriate
governmental authority before penalties attach thereto or interest accrues thereon and forthwith
pay such additional amount as may be necessary to ensure that the net amount actually received
(after payment of such taxes including any taxes on such additional amount paid) is equivalent to
the amount which would have been received if no amounts had been withheld.

     8. Representations and Warranties. The Guarantor represents and warrants to the
Creditor as follows, and acknowledges that the Creditor is relying on such representations and
warranties as a basis for maintaining the extension of credit to the Debtor under the Funding
Agreement:

	 	(a)	 	the Guarantor is duly incorporated, existing and in good standing under the
laws of its jurisdiction of incorporation; it has full corporate power, authority and
capacity to enter into and perform its obligations hereunder; all necessary action has
been taken by its directors or shareholders and otherwise to authorize the execution
and delivery of this Agreement and the performance of its obligations hereunder; the
Guarantor has, to the extent required by law, disclosed to its shareholders all
information required with respect to the delivery of this Agreement; there is no
provision in any shareholder agreement which restricts or limits its powers to enter
into or perform its obligations under this Agreement; and none of the execution or
delivery of this Agreement, or compliance with the

EXECUTION VERSION

 

7.

	 	 	 	provisions of this Agreement conflicts with, or results in a breach of its charter
documents or by-laws; and

	 	(b)	 	none of the execution or delivery of this Agreement, or compliance by the
Guarantor with the provisions of this Agreement conflicts with or results in a breach
of any agreement or instrument to which the Guarantor is a party or by which the
Guarantor or any of the Guarantor’s assets are bound or affected, or requires the
consent of any other person (other than any consents which have been obtained).

     9. Revival of Indebtedness and Liability. If at any time all or any part of any
payment previously applied to any portion of the Obligations is rescinded or returned for any
reason whatsoever, whether voluntarily or involuntarily (including, without limitation, as a result
of or in connection with the insolvency, bankruptcy or reorganization of the Debtor or the
Guarantor, or any allegation that any person received a payment in the nature of a preference),
then to the extent that such payment is rescinded or returned, such portion of the Obligations
shall be deemed to have continued in existence notwithstanding such initial application, and this
Agreement shall continue to be effective or be reinstated, as the case may be, as to such portion
of the Obligations as though such payment had not been made.

     10. Restrictions of Right of Subrogation. The Guarantor agrees not to exercise or
enforce any right of indemnity, exoneration, contribution, reimbursement, recourse or subrogation
against Senet, the Debtor or any other guarantor of the Obligations, or as to any security
therefor, unless and until all of the Obligations have been paid and satisfied in full, and all
obligation of the Guarantor hereunder have been extinguished.

     11. Expenses. The Guarantor agrees to pay to the Creditor, forthwith on demand by the
Creditor, all expenses (including legal fees on a solicitor and his own client basis) incurred by
the Creditor in connection with the preservation or enforcement of any of the Creditor’s rights and
remedies hereunder.

     12. Notices. Without prejudice to any other method of giving notice, all
communications provided for or permitted hereunder shall be in writing and delivered in the same
manner as provided for notices under the Funding Agreement to the addresses set forth below the
signature blocks in this Agreement.

     13. Severability. If any provision of this Agreement shall be invalid or
unenforceable, all other provisions hereof shall remain in full force and effect and all changes
rendered necessary by the context shall be deemed to have been made.

     14. Interpretation. This Agreement shall be construed as if all changes in grammar,
number and gender rendered necessary by the context have been made. As used in this Agreement,
“person” includes an individual, corporation, partnership, joint

EXECUTION VERSION

 

8.

venture, trust, unincorporated association or any government, crown corporation or
governmental agency or authority or any combination of the foregoing.

     15. Further Assurances. The Guarantor agrees, at the Guarantor’s own expense, to
promptly execute and deliver or cause to be executed and delivered to the Creditor, upon the
Creditor’s request from time to time, all such other and further documents, agreements, opinions,
certificates and instruments as are required under this Agreement or as may be reasonably requested
by the Creditor if necessary or desirable to more fully record or evidence the obligations intended
to be entered into herein and pursuant to the Pledge of Securities of even date (the
“Pledge”) between Creditor and Guarantor.

     16. Entire Agreement; Amendments; Conclusive Delivery. This Agreement and the Pledge
constitute the entire agreement between the Guarantor and the Creditor relating to the subject
matter hereof, and no amendment of this Agreement shall be effective unless made in writing and
executed by the Guarantor and the Creditor. Possession by the Creditor of an original executed
copy of this Agreement shall constitute conclusive evidence that:

	 	(a)	 	this Agreement was negotiated, executed and delivered in Denver, Colorado,
and executed and delivered by the Guarantor to the Creditor free of all conditions;
	 
	 	(b)	 	there is no agreement or understanding between the Creditor and the Guarantor
that this Agreement was delivered in escrow or is not intended to be effective until
the occurrence of any event or the satisfaction of any condition;
	 
	 	(c)	 	the Creditor has not made any representation, warranty, statement or promise
to the Guarantor regarding the Creditor’s intention to obtain any security in respect
of the Obligations or guarantees from other persons in respect of the Obligations, the
circumstances under which the Creditor may enforce this Agreement, the manner in which
the Creditor might enforce this Agreement or any other matter which might conflict
with any provision expressly set out herein; and
	 
	 	(d)	 	there is no representation, warranty, statement, promise, understanding,
condition or collateral agreement between the Creditor and the Guarantor relating to
this Agreement or the subject matter of this Agreement, other than as expressly set
out herein.

     17.     Governing Law.

	 	(a)	 	This Agreement shall be construed in accordance with and governed by the laws
of the Province of Ontario. Notwithstanding the foregoing, for

EXECUTION VERSION

 

9.

	 	 	 	the purpose of legal proceedings, this Agreement has been negotiated, executed and
delivered in Denver, Colorado.

	 	(b)	 	EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NON EXCLUSIVE JURISDICTION OF, AT THE
ELECTION OF CREDITOR, ANY UNITED STATES FEDERAL OR COLORADO STATE COURT SITTING IN
DENVER, COLORADO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY 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 SHALL
AFFECT ANY RIGHT THAT CREDITOR MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AGAINST GUARANTOR OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN THIS SECTION 17(b).
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
	 
	 	(c)	 	GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO THE SERVICE OF
PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURTS BY THE MAILING THEREOF IN
ACCORDANCE WITH SECTION 13 OF THIS AGREEMENT. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ROYAL GOLD TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

EXECUTION VERSION

 

10.

	 	(d)	 	Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
	 
	 	(e)	 	EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY A JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR
INDIRECTLY ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
DOCUMENTS OR TRANSACTIONS RELATING THERETO.

     18. Successors and Assigns. This Agreement shall enure to the benefit of the Creditor
and its successors and assigns, and shall be binding on the Guarantor and its successors and
assigns; “successors” includes any entity resulting from the merger of an entity with any other
entity. Without limiting the generality of the foregoing, if the Creditor assigns or transfers all
or any portion of the Obligations and this Agreement or any interest therein to any other person,
such person shall thereafter be entitled to the benefit of this Agreement to the extent of the
interest so transferred or assigned, and the Obligations or portion thereof or interest therein so
transferred or assigned shall be and shall remain part of the “Obligations” hereunder.

     19. Legal Advice. The Guarantor acknowledges that the Guarantor has had ample
opportunity to review and consider this Agreement, fully understands the provisions hereof and has
received legal advice from the Guarantor’s solicitors in connection with this Agreement. The
Guarantor represents and warrants that it has consulted with its legal counsel regarding all
waivers under this Agreement.

     20. Receipt of Copy of Agreement. The Guarantor hereby acknowledges receipt of a copy
of this Agreement.

Execution Page Follows

EXECUTION VERSION

 

 

     This Agreement has been executed and delivered by the Guarantor as of the dated first written
above.

	 	 	 	 	 	 	 
	 	 	HIGH RIVER GOLD MINES LTD.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	Guarantor’s Address for Notices and Service:
	 
	 	 	 	 	 	 
	 	 	 	 	1200 — 155 University Avenue
	 	 	 	 	Toronto, Ontario
	 	 	 	 	M5H 3B7
	 
	 	 	 	 	 	 
	 	 	 	 	Fax no. 416-360-0010
	 
	 	 	 	 	 	 
	 	 	 	 	with a copy to:
	 
	 	 	 	 	 	 
	 	 	 	 	Cassels Brock & Blackwell LLP
	 	 	 	 	2100 Scotia Plaza, 40 King Street W.
	 	 	 	 	Toronto, Ontario M5H 3C2
	 	 	 	 	Attention: David Poynton
	 	 	 	 	Fax no. 416-644-9348
	 
	 	 	 	 	 	 
	 	 	 	 	Creditor’s Address for Notices and Service:
	 
	 	 	 	 	 	 
	 	 	 	 	1600 Wynkoop Street
	 	 	 	 	Suite 1000
	 	 	 	 	Denver, Colorado
	 	 	 	 	USA 80202-1132
	 	 	 	 	Attention: President
	 	 	 	 	Fax no. 303-595-9385

[EXECUTION PAGE TO GUARANTEE AGREEMENT]

EXECUTION
VERSION

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