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

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

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

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

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

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

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

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

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

Definitions and Interpretation

Definitions

a Subsidiary of that person;

a Holding Company of that person; or

any other Subsidiary of that Holding Company,

the conduct of the business of any member of the Group;

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

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

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

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

the amount of any outstanding Loans; and

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

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

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

any member of the Group or any of its advisers; or

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

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

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

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

purchases by way of assignment or transfer;

enters into any sub-participation in respect of; or

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

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

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

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

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

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

from performing its payment obligations under the Finance Documents; or

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

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

repaying or distributing any dividend or share premium reserve;

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

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

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

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

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

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

the Foreign Account Tax Compliance Act, being

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

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

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

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

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

moneys borrowed;

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

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

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

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

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

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

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

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

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

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

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

[****]% of 0-90 days;

[****]% of 91-180 days;

[****]% of 181-273 days; and

[****]% of 274-365 days.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

the time barring of claims under the Limitation Act;

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

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

the applicable Screen Rate;

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

if:

no Screen Rate is available for dollars; or

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

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

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

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

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

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

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

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

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

of assets in the ordinary course of trading of the disposing entity; or

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

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

finance or capital leases of vehicles, plant, equipment or computers,

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

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

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

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

its Original Jurisdiction;

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

any jurisdiction where it conducts its business; and

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

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

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

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

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

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

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

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

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

the United States government;

the United Nations;

the European Union;

the United Kingdom; or

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

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

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

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

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

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

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

the IFC Performance Standards; and

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

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

in relation to any other applicable Bail-In Legislation:

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

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

Construction

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

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

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

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

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

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

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

the term including shall be construed to mean including without limitation;

an obligation means any duty, obligation or liability of any kind;

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

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

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

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

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

a time of day is a reference to Pacific Time; and

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

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

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

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

Currency symbols and definitions

Third Party Rights

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

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

Calculations

The Facility

The Facility

Amendment to Commitment

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

The Borrower may not deliver an Amendment Request unless:

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

the Repeating Representations are true on the date of the Amendment Request.

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

An amendment to the Commitment will only be effective on:

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

the execution by the Lender of an Amendment Confirmation.

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

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

Reduction in Commitment

Finance Parties' rights and obligations

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

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

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

Obligors' Agent

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

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

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

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

Purpose

Purpose

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

general corporate requirements of the Borrower;

working capital requirements of the Borrower or its Subsidiaries; and

capital investments and expenditures of the Borrower or its Subsidiaries.

Monitoring

Conditions of Utilization

Initial conditions precedent

Further conditions precedent

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

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

Utilization

Delivery of a Utilization Request

Completion of a Utilization Request

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

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

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

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

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

Currency and amount

The currency specified in a Utilization Request must be dollars.

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

Lender’s obligations

Cancellation of Commitment

Repayment

Repayment of Loans

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

Extension option

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

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

the Repeating Representations are true on the date of the Extension Request.

An Extension Request shall be irrevocable.

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

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

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

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

Prepayment and Cancellation

Illegality

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

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

Mandatory prepayment - change of control

If a Change of Control occurs:

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

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

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

control of a person means:

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

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

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

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

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

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

Mandatory prepayment – reduction in Commitment

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

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

Automatic cancellation

Restrictions

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

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

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

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

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

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

Interest

Calculation of interest

Margin;

LIBOR; and

Risk Premium.

Payment of interest

Default interest

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

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

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

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

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

Notification of rates of interest

Interest Periods

Selection of Interest Periods

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

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

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

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

A Loan has one (1) Interest Period only.

Non-Business Days

Changes to the Calculation of Interest

Absence of quotations

Market disruption

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

the Margin; and

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

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

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

In this Agreement Market Disruption Event means:

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

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

Alternative basis of interest or funding

Break Costs

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

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

Fees

Commitment fee

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

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

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

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

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

Establishment fee

Tax Gross Up and Indemnities

Definitions

In this Agreement:

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

Tax gross-up

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

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

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

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

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

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

Tax indemnity

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

Paragraph 0 above shall not apply:

with respect to any Tax assessed on a Finance Party:

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

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

to the extent a loss, liability or cost:

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

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

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

Tax Refund

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

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

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

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

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

Stamp taxes

VAT

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

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

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

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

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

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

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

FATCA Information

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

confirm to that other Party whether it is:

a FATCA Exempt Party; or

not a FATCA Exempt Party;

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

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

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

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

any law or regulation;

any fiduciary duty; or

any duty of confidentiality.

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

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

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

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

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

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

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

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

FATCA Deduction

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

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

Increased Costs

Increased costs

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

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

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

is a Basel III Increased Cost.

In this Agreement:

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

an additional or increased cost; or

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

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

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

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

Increased cost claims

Exceptions

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

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

attributable to a FATCA Deduction required to be made by a Party;

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

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

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

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

Other Indemnities

Currency indemnity

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

making or filing a claim or proof against that Obligor; or

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

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

Other indemnities

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

the occurrence of any Event of Default;

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

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

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

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

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

Indemnity to the Lender

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

investigating any event which it reasonably believes is a Default;

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

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

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

Mitigation by the Lender

Mitigation

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

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

Limitation of liability

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

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

Costs and Expenses

Transaction expenses

Amendment costs

Enforcement costs

Guarantee and Indemnity

Guarantee and indemnity

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

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

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

Continuing guarantee

Reinstatement

Waiver of defences

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

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

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

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

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

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

any insolvency or similar proceedings.

Guarantor intent

Immediate recourse

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

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

Appropriations

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

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

Deferral of Guarantors' rights

to be indemnified by an Obligor;

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

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

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

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

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

Additional security

Further assurance

Representations

Status

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

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

It and each of its Subsidiaries has the power to:

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

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

Binding obligations

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

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

Non-conflict with other obligations

any Applicable Law;

its or any of its Subsidiaries' charter documents; or

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

Power and authority

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

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

Validity and admissibility in evidence

All Authorizations required or desirable:

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

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

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

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

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

Governing law and enforcement

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

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

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

Insolvency

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

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

Deduction of Tax

No filing or stamp taxes

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

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

No default

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

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

No misleading information

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

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

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

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

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

Financial statements

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

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

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

have been prepared in accordance with Accounting Principles; and

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

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

Pari passu ranking

No proceedings pending or threatened

No breach of laws

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

It is in compliance with all Authorizations in all material respects.

Environmental compliance

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

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

Taxation

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

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

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

Anti-corruption law

Sanctions

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

is a Restricted Party; or

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

Security and Financial Indebtedness

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

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

Transaction Security

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

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

Legal and beneficial ownership

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

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

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

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

Intellectual Property

Group Structure Chart

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

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

Accounting Reference Date

No amendment

Ownership of Obligors

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

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

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

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

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

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

Insurances

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

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

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

Material Adverse Effect

No adverse consequences

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

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

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

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

No immunity

[Intentionally Deleted]

Repetition

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

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

Information Undertakings

Financial statements

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

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

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

Compliance Certificate

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

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

Requirements as to financial statements

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

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

Annual Budget and Base Case Model

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

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

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

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

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

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

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

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

Report undertakings

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

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

Environmental matters

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

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

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

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

Reserves and resources

The Borrower shall ensure that it maintains

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

[****].

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

Information: miscellaneous

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

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

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

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

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

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

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

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

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

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

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

Amendment of charter documents

Notification of default

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

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

[Intentionally deleted]

Know your customer checks

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

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

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

Financial Covenants

Financial definitions

Borrower Current Assets on the Test Date; to

Borrower Current Liabilities on the Test Date.

Borrower Total Debt on the Test Date; to

Borrower Adjusted EBITDA for that Relevant Period.

Interpretation

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

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

the Lender’s Spot Rate of Exchange; or

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

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

Financial condition

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

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

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

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

Financial testing

Annual Budget undertaking

General Undertakings

Authorizations

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

upon request, supply certified copies to the Lender of,

any Authorization required under any law or regulation of a Relevant Jurisdiction to:

enable it to perform its obligations under the Finance Documents;

ensure, subject to Legal Reservations, the legality, validity, enforceability or admissibility in evidence of any Finance Document; and

carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect; and

any Material Licence.

Default

Compliance with laws

The Borrower shall (and shall ensure that each of its Subsidiaries will) comply in all material respects with all Applicable Laws.

The Borrower shall (and shall ensure that each of its Subsidiaries will) comply in all respects with all Applicable Laws and all agreements which are binding and enforceable against it, in each case to the extent they relate to the provision and funding of pension schemes.

The Borrower shall ensure that no:

funds or assets of the Borrower or its Subsidiaries that are used to repay the Facility shall constitute property of, or shall be beneficially owned by, any Designated Person or be derived from any transaction that would violate any Sanctions;

proceeds of the Facility shall be used to fund any transaction that would violate any Sanctions; and

Designated Person shall have any direct or indirect interest in the Borrower or its Subsidiaries that would violate any Sanctions.

Defence of claims

Negative pledge

Other than Permitted Security, the Borrower shall not create or permit to subsist any Security over any of its assets.

The Borrower shall not:

sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by the Borrower or any other member of the Group;

sell, transfer or otherwise dispose of any of its receivables on recourse terms;

other than pursuant to Permitted Indebtedness, enter into any arrangement under which money for the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

Paragraphs 0 and 0 above do not apply to any Security or (as the case may be) Quasi- Security, listed below:

any lien arising by operation of law and in the ordinary course of trading on arm’s length terms (including retention of title arrangements) and securing amounts not more than sixty (60) days overdue and not as a result of a default or omission by any member of the Group, and a reserve or other appropriate provision, if any, as shall be required by IFRS shall have been made for such lien;

any Security or Quasi-Security over or affecting any asset acquired by the Borrower after the date of this Agreement if such asset is acquired as a result of a Permitted Acquisition under Permitted Acquisition Debt;

any Security or Quasi-Security arising under the Finance Documents;

(prior to Financial Close) any Security or Quasi-Security which secures Permitted Indebtedness arising under the Gold Purchase Agreement, on its terms as at the date of this Agreement;

(prior to Financial Close) any Security or Quasi-Security which secures Permitted Indebtedness arising under the Shoreline Asset Purchase Agreement and Shoreline Promissory Note, on its terms as at the date of this Agreement;

any Security or Quasi-Security assumed by the Borrower or Klondex Canada in connection with the Shoreline Asset Purchase Agreement;

the Borrower deposits and pledges of cash or securities (only to the extent such deposits or pledges are incurred or otherwise arise in the ordinary course of business and secure obligations not past due) securing (i) the performance of bids, tenders, leases, contracts (other than for the payment of money) or statutory obligations or (ii) obligations on surety or appeal or performance bonds, including those to support or secure reclamation in accordance with Applicable Law, as required by any governmental agency to support or secure reclamation in accordance with Applicable Laws, and, in each case, only to the extent such deposits or pledges are incurred or otherwise arise in the ordinary course of business and secure obligations not past due;

pledges, deposits and liens in connection with workers’ compensation, employment insurance and other similar legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements to the extent required by Applicable Law;

rights of set-off or bankers’ liens upon deposits of cash or broker’s liens upon securities in favour of financial institutions, banks or other depositary institutions to a maximum of $[****];

short term pledge certificates, cash collateral or cash margining posted under the Hedging Agreements contemplated by Section 0, not to exceed the limit set forth in Section Error! Reference source not found.; and

any Security or Quasi-Security granted in respect of any equipment which secures Permitted Indebtedness arising under any Permitted Equipment Financing; and

any Security or Quasi-Security created or permitted to subsist with the prior written consent of the Lender,

Disposals

The Borrower shall not effect a Disposal of any of its assets, undertaking or business.

Paragraph 0 above does not apply to any Permitted Disposal or Disposal:

of assets to another Obligor, provided that if the disposing company has given Transaction Security over those assets, the acquiring company must give equivalent Transaction Security over those assets; or

made with the prior written consent of the Lender.

Arm's length basis

The Borrower shall not enter into any transaction with any person except on arm's length terms and for full market value (except with the prior written consent of the Lender).

Paragraph (a) above does not apply to:

any disposals permitted under clause 0 (Disposals) or guarantees permitted under clause 0 (Financial indebtedness), in each case arising under or made in accordance with an agreement which is in force on (and on its terms as at) the date of this Agreement; or

any loans, disposal or guarantees entered into or made between the Borrower and another Obligor from time to time.

Acquisition of Real Property

As soon as reasonably practicable upon the acquisition of additional real property, including real property in relation to the Properties, (provided however with respect to acquisition of additional real property with a value of less than $[****] only, no later than the end of the fiscal quarter following any such acquisition), the Borrower shall:

notify the Lender; and

execute a supplement (or similar document) amending the appropriate deed of trust or debenture such that it thereafter includes the additional real property.

No guarantees or indemnities

The Borrower shall not incur or allow to remain outstanding any guarantee in respect of any obligation of any person.

Paragraph 0 does not apply to a guarantee which is:

permitted under clause 0 (Financial indebtedness); or

granted with the prior written consent of the Lender.

Dividends and share redemption

The Borrower shall not make any Distribution.

Paragraph (a) above does not apply to:

the making of a Distribution to another Obligor with respect to (x) Permitted Indebtedness, (y) management fees or consulting fees to reflect attributable management (or consulting) costs or salaries, or (z) intercompany cash and inventory management, each in the ordinary course of business and Accounting Principles; or

the making of a Distribution, provided that:

payment is made when no Default is continuing or would occur immediately after the making of the payments;

the covenants described in clause 20.3 (Financial condition) have been satisfied as of the most recent Test Date and on a pro-forma basis for the following twelve (12) Months.

the most recent Annual Budget shows that the Borrower is fully funded from cash, forecast cash flows and available liquidity after making such distribution for the following twelve (12) Months.

Financial Indebtedness

Neither the Borrower, nor any of the Obligors, shall:

Incur, be a creditor in respect of or allow to remain outstanding any Financial Indebtedness; or

pay or discharge (including by way of set-off or combination of accounts), or grant any guarantee, indemnity, bond, letter of credit or similar assurance of performance or against financial loss in support of, any obligations (including indebtedness) owed to it or any other person.

Paragraph 0 above does not apply to any Financial Indebtedness:

arising under a Finance Document;

(prior to the first Utilization Date) arising under the Gold Purchase Agreement, on its terms as at the date of this Agreement;

(prior to the first Utilization Date) arising under the Shoreline Promissory Note, on its terms as at the date of this Agreement;

arising under any Permitted Equipment Financing;

arising under intercompany loans to any Obligor;

arising under any unsecured debt,

excluding any marked-to-market trading exposures, not exceeding US$[****] in aggregate;

consisting of marked-to-market trading exposures not exceeding the amounts specified in Section 21.38;

arising under any trade payables in the ordinary course of business or less than ninety (90) days outstanding;

deposits and pledges of cash or securities (only to the extent such deposits or pledges are incurred or otherwise arise in the ordinary course of business and secure obligations not past due) securing (i) the performance of bids, tenders, leases, contracts (other than for the payment of money) or statutory obligations or (ii) obligations on surety or appeal or performance bonds, including those to support or secure reclamation in accordance with applicable law, as required by any governmental agency to support or secure reclamation in accordance with applicable laws, and, in each case, only to the extent such deposits or pledges are incurred or otherwise arise in the ordinary course of business and secure obligations not past due;

unsecured indebtedness owed to any person providing property, casualty, liability, or other insurance to the Borrower or any Obligor, so long as the amount of such indebtedness is not in excess of $[****], and shall be incurred only to defer the cost of such insurance for the year in which such indebtedness is incurred and such indebtedness is outstanding only during such year;

owed by the Borrower to another Obligor; or

incurred or allowed to remain outstanding with the prior written consent of the Lender

Merger

The Borrower’s management survives and the Borrower’s board of directors retain control of the board following the merger or consolidation;

The merger or consolidation counterparty is within the precious metals mining sector in approved jurisdictions (US, Canada, Mexico and other to be agreed in writing with the Lender) and complies with the Lender’s regulatory compliance requirements; and

No breach of the Facility’s terms would result from the merger or consolidation, and the Lender’s position under the documentation or security is not adversely affected.

Change of business

Joint Ventures

The Borrower shall not (except with the prior written consent of the Lender):

enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or

transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).

Paragraph (a) above does not apply to any Joint Venture specifically permitted by clause 21.15(b) below.

Acquisitions

The Borrower shall not (except with the prior written consent of the Lender):

invest in or acquire any share in, or any security issued by, any person (other than an Obligor), or any interest therein or in the capital of any person (other than an Obligor), or make any capital contribution to any person (other than an Obligor) (or make any preliminary or other payments towards or with a view to make such investment;

invest in or acquire any business or going concern, or the whole or substantially the whole of the assets or business of any person, or any assets that constitute a division or operating unit of the business of any person (or make any preliminary or other payments towards or with a view to make such investment); or

enter into any joint venture, consortium, partnership or similar arrangement with any person other than as permitted under clause 0 (Joint ventures).

Paragraph (a) above does not apply to any acquisition of:

assets or formations of Joint Ventures that are within the precious metals mining sector within approved jurisdictions (US, Canada, Mexico and other to be agreed upon in writing with the Lender, acting reasonably), provided that:

the cash acquisition costs or the Borrower’s funding commitments can be funded from currently available funds (including treasury, available debt under this Facility and proceeds of related equity issue) or Permitted Acquisition Debt;

any security over the acquired assets or Joint Ventures is on a limited recourse financing with no direct recourse post-acquisition to any Obligor for repayment;

the Borrower is able to demonstrate pro-forma compliance with financial ratios described in clause 20.3 (Financial condition) following the acquisition as such covenant is recomputed as at the last day of the most recently ended Test Date under such Section as if such acquisition had occurred on the first day of such Test Date;

if the acquisition materially increases the actual or contingent environmental, social and/or Tax liabilities of the Borrower, the Borrower shall show that such liabilities can be adequately funded or mitigated post-acquisition, to the extent that such liabilities are not otherwise reflected in the compliance with the financial ratios described in clause 20.3 (Financial condition);

if the acquisition requires any member of the Group to comply with either IFC Performance Standards or World Bank Standards, compliance with such standards; and

such acquisition shall result in the Security Agent, for the benefit of the Finance Parties, being granted a security interest (second ranking to the extent secured under Permitted Acquisition Debt) in any equity interests or any assets so acquired,

Finance Documents

The Borrower shall not amend, vary, novate, supplement, supersede, waive or terminate any term of a Finance Document or any other document delivered to the Lender pursuant to clause 0 (Initial conditions precedent) except in writing:

in accordance with clause 0 (Amendments and Waivers) or as otherwise permitted pursuant to this Agreement;

to the extent that that amendment, variation, novation, supplement, superseding, waiver or termination is permitted by the Intercreditor Agreement; or

prior to or on Financial Close, with the prior written consent of the Lender.

The Borrower shall promptly supply to the Lender a copy of any document relating to any of the matters referred to in paragraph (a) above.

Environmental compliance

The Borrower shall:

comply in all respects with all Environmental Law;

obtain, maintain and ensure compliance with all requisite Environmental Permits;

take all reasonable steps in anticipation of known or expected future changes or obligations under Environmental Law; and

implement procedures and management systems to adequately monitor compliance with and to mitigate liability under any Environmental Law.

Preservation of assets

Access to the site

Principal place of business

Accounting systems

Accounting Reference Date

Auditors

Construction, operation and maintenance

Amendment of charter documents

Anti-corruption law

The Borrower shall (and shall ensure that no Subsidiary will) directly or indirectly use the proceeds of the Facility for any purpose which would breach the Canada Corruption of Foreign Public Officials Act, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

The Borrower shall (and shall ensure that its Subsidiaries will):

conduct its businesses in compliance with applicable anti-corruption laws; and

maintain policies and procedures designed to promote and achieve compliance with such laws.

Sanctions

involving or for the benefit of any Restricted Party; or

in any other manner that would reasonably be expected to result in the Borrower or the Lender being in breach of any Sanctions (if and to the extent applicable to either of them) or becoming a Restricted Party.

Taxation

The Borrower shall (and shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

such payment is being contested in good faith; and

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Lender under clause 0 (Financial statements); and

such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect; or

the amount of such unpaid Taxes is not material, the non-payment results from an administrative oversight or error by a member of the Group and such payment is made promptly (and in any event within three (3) Business Days) after a member of the Group becoming aware of such non-payment.

No member of the Group may change its residence for Tax purposes.

Critical assets

Intellectual Property

Insurance

The Borrower shall effect and maintain or cause to be effected and maintained in full force and effect the following Insurances with reputable independent insurance companies or underwriters:

property damage insurance covering all risks of physical loss, destruction, or damage to all insurable assets of the Properties;

insurance of all risks of direct physical loss or damage on a “warehouse to warehouse” basis arising from the transport or temporary storage of Product or equipment;

liability insurance on an occurrence basis against claims filed anywhere in the world and occurring anywhere in the world for an Obligor’s liability arising out of claims for personal injury (including bodily injury and death) and property damage;

employers’ liability insurance in accordance with statutory requirements;

directors’ and officers’ liability insurance; and