Exhibit 10.2
GUARANTEE AGREEMENT
WHEREAS SOCIETE DES MINES DE TAPARKO (the "DEBTOR") may hereafter become
indebted or liable to ROYAL GOLD, INC. (the "CREDITOR") pursuant to certain
discussions of that certain Funding Agreement, dated December 1, 2005 (the
"Funding Agreement") between Debtor and the Creditor;
AND WHEREAS HIGH RIVER GOLD MINES LTD. (the "GUARANTOR") has agreed to guarantee
the Obligations (as hereinafter defined) of the Debtor to the Creditor;
NOW THEREFORE for good and valuable consideration including payment to the
Guarantor of the sum of ten dollars, the receipt and sufficiency of which are
hereby acknowledged, the Guarantor hereby agrees with the Creditor as follows:
GUARANTEE
1. The Guarantor hereby unconditionally guarantees payment and performance to
the Creditor, forthwith on demand by the Creditor, of the reimbursement of
the First Tranche (as defined in the Funding Agreement) and interest
thereon, if same becomes due pursuant to Section 3.4 of the Funding
Agreement (the "Obligations"). This guarantee shall be a continuing
guarantee and shall guarantee the Obligations and any ultimate balance
thereof, notwithstanding that the Debtor may from time to time satisfy the
Obligations in whole or in part and thereafter incur further Obligations.
DEBTOR'S STATUS AND AUTHORITY
2. All monies obtained from the Creditor by the Debtor or by persons
purporting to act on behalf of the Debtor pursuant to the First Tranche
under the Funding Agreement shall be deemed to form part of the
Obligations, notwithstanding any lack or limitation of status, power, or
authorization, any incapacity or disability of the Debtor or its directors,
officers, employees or agents, or that the Debtor may not be a legal entity
or that such borrowing or obtaining of monies, advances, renewals or
credits or the execution and delivery of any agreement or document by or on
behalf of the Debtor is in excess of the powers of the Debtor or any of its
directors, officers, employees or agents or is in any way irregular,
defective, fraudulent or informal. The Creditor has no obligation to
enquire into the powers or authority of the Debtor or any of its directors,
officers, employees or agents acting or purporting to act on its behalf,
and shall be entitled to rely on this provision notwithstanding any actual
or imputed knowledge regarding any of the foregoing matters.
LIABILITY UNAFFECTED BY CERTAIN MATTERS
3. The liability of the Guarantor hereunder shall be absolute and
unconditional irrespective of, and shall not be released, discharged,
limited or otherwise affected by:
2.
(a) the lack of validity or enforceability of the Obligations in whole or
in part for any reason whatsoever, including without limitation by
reason of prescription, by operation of law or as a result of any
applicable statute, law or regulation;
(b) any prohibition or restriction imposed in respect of any rights or
remedies of the Creditor in respect of any Obligations, including
without limitation any court order which purports to prohibit or
suspend the acceleration of the time for payment of any Obligations,
the payment by the Debtor of any Obligations or the rights or remedies
of the Creditor against the Debtor in respect of any Obligations;
(c) the lack of validity or enforceability in whole or in part of:
(i) the Funding Agreement or any other agreement made from time to
time between the Debtor and the Creditor in connection with any
Obligations;
(ii) any security given by the Debtor in favour of the Creditor from
time to time in connection with any Obligations;
(iii) any guarantee given by any person in favour of the Creditor from
time to time in connection with or relating to any Obligations;
or
(iv) any security given by any such guarantor in favour of the
Creditor from time to time in connection with any of its
obligations to the Creditor,
(collectively, the "CREDIT DOCUMENTS");
(d) any change in the corporate existence, structure, ownership or control
of the Debtor (including any of the foregoing arising from any merger,
consolidation, amalgamation, reorganization or similar transaction);
any change in the name, objects, capital stock, constating documents
or by-laws of the Debtor; or the dissolution, winding-up, liquidation
or other distribution of the assets of the Debtor, whether voluntary
or otherwise;
(e) the Debtor's becoming insolvent or bankrupt or subject to any
proceeding under the provisions of the Bankruptcy and Insolvency Act
(Canada), the Companies' Creditors Arrangement Act (Canada), or any
similar law in Burkina Faso, the arrangement provisions of applicable
corporate legislation, any legislation similar to the foregoing in any
other jurisdiction, or any legislation enacted substantially in
replacement of any of the foregoing, or the Creditor's voting in
favour of any proposal, arrangement or compromise in connection with
any of the foregoing;
(f) the failure or neglect of the Creditor to demand payment of
Obligations by the Debtor, any guarantor of Obligations or any other
person;
(g) the valuation by the Creditor of any security held in respect of the
Obligations, which shall not be considered as a purchase of such
security or as payment on account of the Obligations;
3.
(h) any right or alleged right of set-off, combination of accounts,
counterclaim, appropriation or application or any claim or demand that
the Debtor or the Guarantor may have or may allege to have against the
Creditor; or
(i) any other circumstances which might otherwise constitute a legal or
equitable defence available to, or complete or partial discharge of,
the Debtor in respect of the Obligations or of the Guarantor in
respect of this agreement.
LIABILITY UNAFFECTED BY ACTIONS OF CREDITOR
4. The liability of the Guarantor hereunder shall be absolute and
unconditional irrespective of, and shall not be released, discharged,
limited or otherwise affected by anything done, suffered or permitted by
the Creditor in connection with the Debtor, or any Obligations. For greater
certainty and without limiting the generality of the foregoing, without
releasing, discharging, limiting or otherwise affecting in whole or in part
the liability of the Guarantor under this agreement, and without notice to
or the consent of the Guarantor, the Creditor may from time to time:
(a) make advances and extend credit to the Debtor (including new loans and
credit facilities, whether in addition to or in replacement for other
loans and credit facilities previously established by the Creditor for
the Debtor), convert revolving lines of credit to non-revolving lines
of credit, increase or decrease the amount of credit available to the
Debtor and receive payments in respect of the Obligations;
(b) increase the interest rates, fees and charges applicable to all or any
portion of the Obligations from time to time;
(c) amend, renew, waive, release or terminate any Credit Document or any
provisions thereof in whole or in part from time to time (including,
without limitation, any provisions relating to interest rates, fees,
margin requirements, conditions for the extension of credit and the
determination of the amount of credit available, positive and negative
covenants, payment provisions, the application of payments received by
or on behalf of the Debtor, and events of default);
(d) extend, renew, settle, compromise, waive, release or terminate the
Obligations in whole or in part from time to time;
(e) grant time, renewals, extensions, indulgences, releases and discharges
to the Debtor;
(f) take, refrain from taking or release guarantees from other persons in
respect of Obligations;
(g) accept compromises or arrangements from the Debtor, any guarantor of
Obligations or any other person;
(h) refrain from demanding payment from or exercising any rights or
remedies in respect of the Debtor or any guarantor of Obligations;
4.
(i) apply all monies received from the Debtor, any guarantor of the Debtor
or any other person or from the proceeds of any security to pay such
part of the Obligations as the Creditor may see fit, or change any
such application in whole or in part from time to time,
notwithstanding any direction which may be given regarding application
of such monies by the Debtor, any guarantor of the Debtor or any other
person; and
(j) otherwise deal with the Debtor, any guarantor of Obligations or any
other person and any security held by the Creditor in respect of
Obligations, as the Creditor may see fit in its absolute discretion.
LIABILITY UNAFFECTED BY FAILURE OF CREDITOR TO TAKE, HOLD OR ENFORCE SECURITY
5. The Guarantor agrees that the Guarantor has provided this agreement to the
Creditor on the express understanding that the Creditor has no obligation
to obtain any security from the Debtor or from others to secure payment or
performance of any Obligations; and if the Creditor in its absolute
discretion obtains any such security from the Debtor or others, the
Creditor shall have no obligation to continue to hold such security or to
enforce such security. The Guarantor shall not be entitled to rely on or
benefit from, directly or indirectly, any such security which the Creditor
may obtain. In furtherance of the foregoing, the liability of the Guarantor
hereunder shall be absolute and unconditional irrespective of, and shall
not be released, discharged, limited or otherwise affected by:
(a) the loss of or failure by the Creditor to register, perfect or
maintain any security given by the Debtor or by other persons in
respect of Obligations, whether intentionally or through failure,
neglect or otherwise;
(b) the failure or neglect of the Creditor to enforce any security held in
respect of the Debtor or in respect of any guarantor of Obligations;
(c) the Creditor's having released, discharged, compromised or otherwise
dealt with any such security in any manner whatsoever (and for greater
certainty the Creditor shall not be bound to exhaust its recourse
against the Debtor, guarantors of the Debtor or other persons or
enforce any security held in respect of Obligations or take any other
action or legal proceeding before being entitled to payment from the
Guarantor under this agreement, and the Guarantor hereby waives all
benefits of discussion and division); or
(d) the enforcement by the Creditor of any such security in an improvident
or commercially unreasonable manner (including the sale or other
disposition of any assets encumbered by such security at less than the
fair market value thereof) whether as a result of negligence,
recklessness or wilful action or inaction on the part of the Creditor
or otherwise, and regardless of any duty which the Creditor might have
to the Debtor under applicable law (including applicable personal
property security legislation) in respect of the enforcement of any
such security.
WAIVERS
6. No delay on the part of the Creditor in exercising any of its options,
powers, rights or remedies, or any partial or single exercise thereof,
shall constitute a waiver thereof. No
5.
waiver, modification or amendment of this agreement or of any such options,
powers, rights or remedies shall be deemed to have been made unless made in
writing and signed by an authorized officer of the Creditor, and any such
waiver shall apply only with respect to the specific instance involved, and
shall not impair the rights of the Creditor or the liability of the
Guarantor hereunder in any other respect or at any other time.
FOREIGN CURRENCY OBLIGATIONS
7. The Guarantor shall make payment to the Creditor hereunder in the same
currency as is required to be paid by the Debtor to the Creditor in respect
of the Obligations (the "REQUIRED CURRENCY"). If the Guarantor makes
payment to the Creditor hereunder in any other currency (the "PAYMENT
CURRENCY"), such payment shall constitute satisfaction of the said
liability of the Guarantor hereunder only to the extent that the Creditor
is able to purchase Required Currency with the amount of the Payment
Currency received from the Guarantor on the date of receipt, in accordance
with the Creditor's normal practice; and the Guarantor shall remain liable
to the Creditor for any deficiency.
WITHHOLDING TAXES
8. Except as otherwise required by law, each payment by the Guarantor
hereunder shall be made without withholding for or on account of any
present or future tax imposed by or within the jurisdiction in which the
Guarantor is domiciled, any jurisdiction from which the Guarantor makes any
payment or any other jurisdiction, or (in each case) any political
subdivision or taxing authority thereof or therein. If any such withholding
is required by law, the Guarantor shall make the withholding, pay the
amount withheld to the appropriate governmental authority before penalties
attach thereto or interest accrues thereon and forthwith pay to the
Creditor such additional amount as may be necessary to ensure that the net
amount actually received by the Creditor (after payment of such taxes
including any taxes on such additional amount paid) is equivalent to the
amount which the Creditor would have received if no amounts had been
withheld.
REPRESENTATIONS AND WARRANTIES
9. The Guarantor represents and warrants to the Creditor as follows, and
acknowledges that the Creditor is relying on such representations and
warranties as a basis for extending and maintaining the extension of credit
to the Debtor:
(a) the Guarantor is duly incorporated, existing and in good standing
under the laws of its jurisdiction of incorporation; it has full
corporate power, authority and capacity to enter into and perform its
obligations hereunder; all necessary action has been taken by its
directors or shareholders and otherwise to authorize the execution and
delivery of this agreement and the performance of its obligations
hereunder; the Guarantor has, to the extent required by law, disclosed
to its shareholders all information required with respect to the
delivery of this agreement; there is no provision in any unanimous
shareholder agreement which restricts or limits its powers to enter
into or perform its obligations under this agreement; and none of the
execution or delivery of this agreement, or compliance with the
provisions of this agreement conflicts with, or results in a breach of
its charter documents or by-laws; and
6.
(b) none of the execution or delivery of this agreement, or compliance by
the Guarantor with the provisions of this agreement conflicts with or
results in a breach of any agreement or instrument to which the
Guarantor is a party or by which the Guarantor or any of the
Guarantor's assets are bound or affected, or requires the consent of
any other person (other than any consents which have been obtained).
REVIVAL OF INDEBTEDNESS AND LIABILITY
10. If at any time all or any part of any payment previously applied by the
Creditor to any portion of the Obligations is rescinded or returned by the
Creditor for any reason whatsoever, whether voluntarily or involuntarily
(including, without limitation, as a result of or in connection with the
insolvency, bankruptcy or reorganization of the Debtor or the Guarantor, or
any allegation that the Creditor received a payment in the nature of a
preference), then to the extent that such payment is rescinded or returned,
such portion of the Obligations shall be deemed to have continued in
existence notwithstanding such initial application, and this agreement
shall continue to be effective or be reinstated, as the case may be, as to
such portion of the Obligations as though such payment had not been made.
RESTRICTIONS ON RIGHT OF SUBROGATION
11. The Guarantor agrees not to exercise or enforce any right of indemnity,
exoneration, contribution, reimbursement, recourse or subrogation against
the Debtor or any other guarantor of Obligations, or as to any security
therefor, unless and until all Obligations have been paid and satisfied in
full and the Creditor has no further obligation to extend credit to the
Debtor. The Guarantor shall have no right to be subrogated hereunder
unless:
(a) the Guarantor has paid to the Creditor an amount equivalent to all
Obligations together with all interest, expenses and other amounts due
hereunder;
(b) any other person having a potential right of subrogation has waived
such right and consented to the assignment by the Creditor to the
Guarantor of the Obligations and any security held by the Creditor;
(c) the Creditor has received from the Debtor a release of all claims
which the Debtor may have against the Creditor, including any
obligation to grant additional credit to the Debtor;
(d) the Guarantor has executed and delivered to the Creditor a release of
any claims which the Guarantor may have against the Creditor in
respect of the Obligations or this agreement; and
(e) if required by the Creditor, three months shall have elapsed from the
time of the last payment made by the Debtor to the Creditor and the
last payment made by the Guarantor to the Creditor hereunder.
The Guarantor shall cause all such documents to be in form and substance
satisfactory to the Creditor. Any such assignment of loans and security by
the Creditor to the Guarantor
7.
shall be on an "AS IS, WHERE IS" basis without representations, warranties
or conditions, and without recourse to the Creditor.
EXPENSES
12. The Guarantor agrees to pay to the Creditor, forthwith on demand by the
Creditor, all expenses (including legal fees on a solicitor and his own
client basis) incurred by the Creditor in connection with the preservation
or enforcement of any of the Creditor's rights and remedies hereunder.
NOTICE
13. Without prejudice to any other method of giving notice, all communications
provided for or permitted hereunder shall be in writing and delivered in
the same manner as provided for notices under the Funding Agreement.
SEVERABILITY
14. If any provision of this agreement shall be invalid or unenforceable, all
other provisions hereof shall remain in full force and effect and all
changes rendered necessary by the context shall be deemed to have been
made.
INTERPRETATION
15. This agreement shall be construed as if all changes in grammar, number and
gender rendered necessary by the context have been made. As used in this
agreement, "PERSON" includes an individual, corporation, partnership, joint
venture, trust, unincorporated association or any government, crown
corporation or governmental agency or authority or any combination of the
foregoing.
MERGER OF DEBTOR
16. In this agreement, "MERGER" in respect of two or more corporations means an
amalgamation of such corporations, the transfer of the assets of one
corporation to another in connection the dissolution of the first-mentioned
corporation, the transfer of substantially all of the businesses and assets
of one corporation to another pursuant to plan of arrangement or court
order, or any other corporate reorganization or transaction with similar
effect to any of the foregoing; the corporations involved in a Merger are
herein referred to as the "MERGING ENTITIES"; and the corporation resulting
from a Merger is herein referred to as the "MERGED ENTITY". If the Debtor
effects a Merger with any other corporation or corporations, the Guarantor
agrees that the Obligations shall include:
(a) all obligations of each Merging Entity to the Creditor in existence at
the time of such Merger; and
(b) all obligations of the Merged Entity to the Creditor at the time of
such merger or incurred or arising from time to time after such
Merger.
8.
After such Merger, all references herein to the "DEBTOR" shall mean the
Merged Entity, and all other provisions of this agreement shall be deemed
to have been amended to the extent required by the context in order to
reflect such Merger.
FURTHER ASSURANCES
17. The Guarantor agrees, at the Guarantor's own expense, to promptly execute
and deliver or cause to be executed and delivered to the Creditor, upon the
Creditor's request from time to time, all such other and further documents,
agreements, opinions, certificates and instruments as are required under
this agreement or as may be reasonably requested by the Creditor if
necessary or desirable to more fully record or evidence the obligations
intended to be entered into herein and pursuant to the Pledge of Securities
of even date (the "Pledge") between Creditor and Guarantor.
ENTIRE AGREEMENT; AMENDMENTS; CONCLUSIVE DELIVERY
18. This agreement and the Pledge constitute the entire agreement between the
Guarantor and the Creditor relating to the subject matter hereof, and no
amendment of this agreement shall be effective unless made in writing and
executed by the Guarantor and the Creditor. Possession by the Creditor of
an original executed copy of this agreement shall constitute conclusive
evidence that:
(a) this agreement was executed and delivered by the Guarantor to the
Creditor free of all conditions;
(b) there is no agreement or understanding between the Creditor and the
Guarantor that this agreement was delivered in escrow or is not
intended to be effective until the occurrence of any event or the
satisfaction of any condition;
(c) the Creditor has not made any representation, warranty, statement or
promise to the Guarantor regarding the Debtor, the Creditor's
intention to obtain any security in respect of Obligations or
guarantees from other persons in respect of Obligations, the
circumstances under which the Creditor may enforce this agreement, the
manner in which the Creditor might enforce this agreement or any other
matter which might conflict with any provision expressly set out
herein; and
(d) there is no representation, warranty, statement, promise,
understanding, condition or collateral agreement between the Creditor
and the Guarantor relating to this agreement or the subject matter of
this agreement, other than as expressly set out herein.
GOVERNING LAW
19. This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable therein.
Without prejudice to the right of the Creditor to commence any proceedings
with respect to this agreement in any other proper jurisdiction, the
Guarantor hereby irrevocably attorns and submits to the non-exclusive
jurisdiction of the courts of the Province of Ontario.
9.
SUCCESSORS AND ASSIGNS
20. This agreement shall enure to the benefit of the Creditor and its
successors and assigns, and shall be binding on the Guarantor and its
successors and assigns; "SUCCESSORS" includes any Merged Entity resulting
from the Merger of a corporation with any other corporation. Without
limiting the generality of the foregoing, if the Creditor assigns or
transfers all or any portion of the Obligations and this agreement or any
interest therein to any other person, such person shall thereafter be
entitled to the benefit of this agreement to the extent of the interest so
transferred or assigned, and the Obligations or portion thereof or interest
therein so transferred or assigned shall be and shall remain part of the
"OBLIGATIONS" hereunder.
LEGAL ADVICE
21. The Guarantor acknowledges that the Guarantor has had ample opportunity to
review and consider this agreement, fully understands the provisions hereof
and has received legal advice from the Guarantor's solicitors in connection
with this agreement.
RECEIPT OF COPY OF AGREEMENT
22. The Guarantor hereby acknowledges receipt of a copy of this agreement.
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10.
IN WITNESS WHEREOF this agreement has been executed and delivered by the
Guarantor as of the 1st day of December, 2005.
HIGH RIVER GOLD MINES LTD.
By: /s/ ▇.▇. ▇▇▇▇▇▇
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Name: ▇.▇. ▇▇▇▇▇▇
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Title: Executive Chairman
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By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
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Title: Chief Financial Officer
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Guarantor's Address for Service:
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Fax no. ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
2100 Scotia Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax no. ▇▇▇-▇▇▇-▇▇▇▇
Creditor's Address for Service:
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
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Attention: President
Fax no. ▇▇▇-▇▇▇-▇▇▇▇
