Dated January 20, 2016 AMENDED AND RESTATED INDENTURE GRAN COLOMBIA GOLD CORP. EQUITY FINANCIAL TRUST COMPANY

Transcription

1 Dated January 20, 2016 AMENDED AND RESTATED INDENTURE dated as of August 11, 2011 (as amended and restated as of January 20, 2016 between GRAN COLOMBIA GOLD CORP. (as issuer) and EQUITY FINANCIAL TRUST COMPANY (as trustee) relating to the issuance of SENIOR UNSECURED CONVERTIBLE DEBENTURES DUE 2018

2 Contents Section Page Article 1 INTERPRETATION Definitions Exhibits Meaning of outstanding for Certain Purposes Interpretation Not Affected by Headings Extended Meanings Day Not a Business Day Currency Other Currencies Statutes and Agreements Invalidity of Provisions Applicable Law Entire Agreement Article 2 THE DEBENTURES Designation and Issuance of Debentures Description of the Debentures Form of Debenture Certificates Ranking Book Entry Only Debentures Signatures on Debenture Certificates Certification Interest Issue of Substitutional Debenture Certificates Option of Holder as to Place of Payment Record of Payments Surrender for Cancellation Right to Receive Indenture... 23

3 Contents Section Page Article 3 REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF DEBENTURES AND DEBENTURE CERTIFICATES Registers Transfer of Debentures Restrictions on Transfer of Debentures Represented by Global Debenture Certificates Transferee Entitled to Registration Closing of Register; Recording of Certain Transfers Exchange of Debentures Certificates Ownership and Entitlement to Payment Evidence of Ownership No Notice of Trusts Charges for Transfer and Exchange Article 4 ISSUE AND DELIVERY OF DEBENTURES Issuance of Debentures No Debentures to be Issued During Default Article 5 PURCHASE OF DEBENTURES IN OPEN MARKET Purchase of Debentures Cancellation of Debentures Debenture Certificates Repaid in Part Article 6 CHANGE OF CONTROL PURCHASES Change of Control Purchase Change of Control Notice Change of Control Purchase Notice Procedures for Exercising Change of Control Purchase Consummation of Change of Control Purchase Withdrawal of Purchase Notice Notification by Trustee Deposit of Change of Control Purchase Price... 30

4 Contents Section Page 6.9 Debenture Certificates Purchased in Part Article 7 REDEMPTION OF DEBENTURES Applicability of Article Partial Redemption Notice of Redemption Debentures Due on Redemption Dates Deposit of Redemption Monies Failure to Surrender Debentures Called for Redemption Cancellation of Debentures Redeemed Effect of Redemption Notice Article 8 CONVERSION OF DEBENTURES Applicability of Article Conversion Price Notice of Expiry of Conversion Rights Revival of Right to Convert Manner of Exercise of Right to Convert Adjustment of Conversion Price No Requirement to Issue Fractional Common Shares Corporation to Reserve Common Shares Cancellation of Converted Debentures Certificate as to Adjustment Notice of Special Matters Protection of Trustee Article 9 WITHHOLDING TAXES/PREPAYMENT OBLIGATIONS Withholding Taxes Article 10 COVENANTS OF THE CORPORATION Positive Covenants... 41

5 Contents Section Page 10.2 Negative Covenants Maintenance of Offices or Agencies Money for Payments to Be Held in Trust Trustee s Remuneration and Expenses Not to Extend Time for Payment of Interest Examination and Audit No Amalgamation, Merger, Consolidation Trustee May Perform Covenants Certificates Relating to Compliance and Default Financial Statements Debenture Sinking Fund Article 11 DEFAULTS AND REMEDIES Events of Default Notice of Event of Default Acceleration Waiver of Event of Default Enforcement by the Trustee Suits by Debentureholders Application of Money Distribution of Proceeds Remedies Cumulative Judgment Against the Corporation Immunity of Shareholders, Directors and Officers Article 12 CANCELLATION AND DISCHARGE Cancellation and Destruction Payment of Amounts Due on Maturity Repayment of Unclaimed Money... 55

6 Contents Section Page 12.4 Discharge Article 13 MEETINGS OF DEBENTUREHOLDERS Right to Convene Meetings Notices of Meetings Chairman Quorum Power to Adjourn Show of Hands Poll Voting Regulations Corporation and Trustee May Be Represented Powers Exercisable by Debentureholders by Extraordinary Resolution Meaning of Ordinary Resolution Meaning of Extraordinary Resolution Powers Cumulative Minutes Instruments in Writing Binding Effect of Resolutions Record Dates Article 14 NOTICES Notice to the Corporation Notice to Debentureholders Notice to the Trustee When Publication Not Required Waiver of Notice Article 15 CONCERNING THE TRUSTEE... 62

7 Contents Section Page 15.1 Corporate Trustee Required Eligibility Certain Duties and Responsibilities of Trustee No Conflict of Interest Conditions Precedent to Trustee s Obligation to Act Resignation and Removal; Appointment of Successor Acceptance of Appointment by Successor Trustee May Deal in Debentures No Person Dealing with Trustee Need Inquire Investment of Money Held by Trustee Trustee Not Required to Give Security Trustee Not Required to Possess Debenture Certificates Evidence of Compliance Form of Evidence Certain Rights of Trustee Merger, Conversion, Consolidation or Succession to Business Action by Trustee to Protect Interests Protection of Trustee Trustee Not Liable in Respect of Depository Global Debenture Certificates Trustee Appointed Attorney Acceptance of Trusts No Liability for Certain Deposited Monies Third Party Interests Trustee Not Bound to Act Privacy Laws Article 16 GUARANTEES Material Subsidiary Guarantees... 71

8 Contents Section Page 16.2 Additional Guarantees Release of Guarantees Article 17 SUPPLEMENTAL INDENTURES Supplemental Indentures Effect of Supplemental Indentures Execution of Supplemental Indentures Article 18 EVIDENCE OF RIGHTS OF DEBENTUREHOLDERS Evidence of Rights of Debentureholders Article 19 EXECUTION AND FORMAL DATE Counterpart Execution Formal Date Exhibit A - Form of Debenture Certificate Exhibit B Form of Guarantee Exhibit C Permitted Liens Exhibit D Amount of Indebtedness

9 DEBENTURE INDENTURE THIS AMENDED AND RESTATED INDENTURE, dated as of August 11, 2011, as amended and restated as of January 20, 2016 (and as may be further amended or amended and restated from time to time), BETWEEN: RECITALS GRAN COLOMBIA GOLD CORP., a corporation existing under the laws of the Province of British Columbia (the Corporation ) -and- EQUITY FINANCIAL TRUST COMPANY, a trust company formed under the laws of Canada under the Trust and Loan Companies Act (the Trustee ) (A) (B) (C) (D) The Corporation created and issued U.S. $80,000,000 aggregate face amount 5.0% Senior Unsecured Silver-Linked Notes (the Notes ) pursuant to an indenture dated as of August 11, 2011 among the parties hereto (the Original Indenture ). The Corporation has duly authorized the creation and issuance of Debentures (as hereinafter defined). Pursuant to an arrangement under Section 291 of the Business Corporations Act (British Columbia), the holders of the Notes approved the exchange of the Notes for Debentures. The parties are entering into this Indenture to amend and restate the Original Indenture to provide for the Debentures, all on the terms set forth herein. NOW THEREFORE THIS DEBENTURE INDENTURE WITNESSES the Corporation and the Trustee agree that the Original Indenture is amended and restated so that it reads as follows for the benefit of each other and for the equal and ratable benefit of the Holders. 1.1 Definitions Article 1 INTERPRETATION In this Indenture and in the Debenture Certificates, unless there is something in the subject matter or context inconsistent therewith, the following expressions have the following meanings: Affiliate means, in relation to any Person, an affiliate of such Person within the meaning of National Instrument Prospectus and Registration Exemptions. 1

10 Applicable Law means, at any time, with respect to any Person, property, transaction, event or other matter, as applicable, all laws, rules, statutes, regulations, treaties, orders, judgments and decrees, and all official requests, directives, rules, guidelines, orders, policies, practices and other requirements of any Governmental Authority relating or applicable at such time to such Person, property, transaction, event or other matter, and also includes any interpretation thereof by any Person having jurisdiction over it or charged with its administration or interpretation. Applicable Period means any period announced by the Board as a period of time for which a cash dividend or distribution will be declared and paid by the Corporation to the holders of all or substantially all of the outstanding Common Shares. Authorized Investments means direct obligations of the Government of Canada or a Province of Canada, or obligations guaranteed or insured by the Government of Canada or a Province of Canada, provided that such obligations mature within one year from the date of acquisition thereof. Balance has the meaning ascribed to such term in Section Bank of Canada Noon Exchange Rate means the noon rate of exchange based on Canadian interbank transactions published or quoted by the Bank of Canada for the day in question. Bankruptcy Law means Title 11, U.S. Code, the Bankruptcy and Insolvency Act (Canada), the Companies Creditors Arrangement Act (Canada), in each case, as amended, or any similar federal, Canadian, provincial, state or foreign law for the relief of debtors. BEO Participants means institutions that participate directly or indirectly in the Depository s book entry only registration system for Debentures. Bid Expiry Date has the meaning ascribed to such term in Section 8.6(f). Bid Expiry Time has the meaning ascribed to such term in Section 8.6(f). Board means the board of directors of the Corporation. Book Entry Only Debentures means Debentures that are to be held only by or on behalf of the Depository. Business Day means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day when banking institutions in Toronto, Ontario or Bogota, Colombia are authorized or obligated by law or regulation to close. Canadian Securities Legislation means all applicable securities laws in each of the provinces and territories of Canada, including, without limitation, the Province of Ontario, and the respective regulations and rules under such laws together with applicable published rules, policy statements, blanket orders, instruments, rulings and notices of the regulatory authorities in such provinces or territories. Capital Lease means, with respect to a Person, a lease or other arrangement in respect of real or personal property that is required to be classified and accounted for as a capital lease on a balance sheet of the Person in accordance with IFRS. Capital Lease Obligation means, with respect to a Person, the obligation of the Person to pay rent or other amounts under a Capital Lease. CDS means the Canadian Depository for Securities Limited and its successors. Cash Portion has the meaning ascribed to such term in Section

11 Certified Resolution means a copy of a resolution certified by an officer of the Corporation to have been duly passed by the Directors and to be in full force and effect on the date of such certification. "Change of Control" means: (1) any "person" or "group" of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that such person or group shall be deemed to have "beneficial ownership" of all shares that any such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than 50% of the total voting power of the Voting Shares of the Corporation (or its successor by merger, consolidation, amalgamation, arrangement or purchase of all or substantially all of its assets); or (2) the merger, consolidation, amalgamation or arrangement of the Corporation with or into another Person or the merger, consolidation, amalgamation or arrangement of another Person with or into the Corporation or the merger, consolidation, amalgamation or arrangement of any Person with or into a Corporation Subsidiary, unless the holders of a majority of the aggregate voting power of the Voting Shares of the Corporation, immediately prior to such transaction, hold securities of the surviving or transferee Person that represent, immediately after such transaction, at least a majority of the aggregate voting power of the Voting Shares of the surviving or transferee Person; or (3) the first day on which a majority of the members of the Board are not Continuing Directors or a change of 50% or greater of the nominated slate of directors within six months of the most recently held annual general meeting (except in each case as contemplated in the Corporation's Management Information Circular dated October 27, 2015, the Corporation's Supplemental Management Information Circular dated November 30, 2015 and the Corporation s press release of December 14, 2015); or (4) the sale, assignment, conveyance, transfer, lease or other disposition (other than by way of merger, consolidation, amalgamation or arrangement), in one or a series of related transactions, of 50% or greater of the properties and assets of the Corporation and the Corporation Subsidiaries taken as a whole (based upon the Fair Market Value of the properties and assets of the Corporation and the Corporation Subsidiaries) to any Person; provided however, a "Change of Control" shall be deemed not to have occurred if the "person" or "group" of related persons referred to in (1), the Person resulting from the merger, consolidation, amalgamation or arrangement referred to in (2), the Person nominating the new slate of directors referred to in (3) or the Person purchasing the properties and assets referred to in (4), as the case may be, has obtained a credit rating of at least "B" or the equivalent thereof provided by S&P or "B2" or the equivalent thereof by Moody's or "B" or the equivalent thereof by DBRS Limited (or the equivalent thereof by another nationally recognized rating agency, if each of the three named rating agencies cease publishing ratings of investments) on a pro forma post-acquisition consolidated basis and such Person or group of related persons agrees to guarantee the Obligations of the Corporation under the Indenture. Change of Control Notice has the meaning ascribed to such term in Section 6.2(a). Change of Control Purchase Date has the meaning ascribed to such term in Section 6.1. Change of Control Purchase Notice has the meaning ascribed to such term in Section 6.3. Change of Control Purchase Price has the meaning ascribed to such term in Section 6.1. Common Share Reorganization has the meaning ascribed to such term in Section 8.6(a). 3

12 Common Shares means common shares in the capital of the Corporation, as such common shares are constituted on the date of execution and delivery of this Indenture; provided that in the event of a change or a subdivision, revision, reduction, combination or consolidation thereof, any reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance or liquidation, dissolution or winding-up, or such successive changes, subdivisions, redivisions, reductions, combinations or consolidations, reclassifications, capital reorganizations, consolidations, amalgamations, arrangements, mergers, sales or conveyances or liquidations, dissolutions or windings-up, then, subject to adjustments, if any, having been made in accordance with the provisions of Section 8.6, Common Shares shall thereafter mean the shares or other securities or property resulting from such change, subdivision, redivision, reduction, combination or consolidation, reclassification, capital reorganization, consolidation, amalgamation, arrangement, merger, sale or conveyance or liquidation, dissolution or winding-up. Consolidated EBITDA for any period means, with respect to any Person, the Consolidated Net Income of such Person for such period: (1) increased (without duplication) by the following items to the extent deducted in calculating such Consolidated Net Income: (a) (b) (c) (d) (e) (f) Consolidated Interest Expense; plus Consolidated Income Taxes; plus consolidated amortization, depletion and depreciation expense; plus consolidated impairment charges; plus other non-cash charges reducing Consolidated Net Income (other than depreciation, amortization or depletion expense), including any write-offs or write downs (excluding any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was capitalized at the time of payment) and non-cash compensation expense recorded from grants of stock appreciation or similar rights, stock options, restricted stock or other rights to officers, directors or employees; plus accretion of asset retirement obligations, net of cash payments for such asset retirement obligations; (2) decreased (without duplication) by non-cash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the reversal of any accrual of, or reserve for, anticipated cash charges that reduced Consolidated EBITDA in any prior period); and (3) increased or decreased (without duplication) to eliminate the following items to the extent reflected in Consolidated Net Income: (a) (b) any net gain or loss resulting in such period from currency translation gains or losses; and effects of adjustments (including the effects of such adjustments pushed down to the Corporation and the Corporation Subsidiaries) in any line item in such Person s consolidated financial statements resulting from the application of purchase accounting in relation to any completed acquisition. Notwithstanding the foregoing, clauses (1)(b) through (f) above relating to amounts of a Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated EBITDA of such Person only 4

13 to the extent (and in the same proportion) that the net income (loss) of such Subsidiary was included in calculating the Consolidated Net Income of such Person and, to the extent the amounts set forth in clauses (1)(b) through (f) above are in excess of those necessary to offset a net loss of such Subsidiary or if such Subsidiary has net income for such period included in Consolidated Net Income, only if a corresponding amount would be permitted at the date of determination to be dividended to such Person by such Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its shareholders. Consolidated Income Taxes means, with respect to any Person for any period, taxes imposed upon such Person, or other payments required to be made by such Person, by any Governmental Authority which taxes or other payments are calculated by reference to the income or profits or capital of such Person or such Person and its Corporation Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), including, without limitation, federal, provincial, state, franchise and similar taxes and foreign withholding taxes regardless of whether such taxes or payments are required to be remitted to any Governmental Authority. Consolidated Interest Expense means, with respect to any Person, for any period, the total interest expense of such Person and its consolidated Corporation Subsidiaries, net of any interest income received by such Person and its consolidated Corporation Subsidiaries, whether paid or accrued, plus, to the extent not included in such interest expense: (1) interest expense attributable to Capital Lease Obligations; (2) amortization of debt discount (including the amortization of original issue discount resulting from the issuance of Indebtedness at less than par) and debt issuance cost; provided, however, that any amortization of bond premium will be credited to reduce Consolidated Interest Expense unless such amortization of bond premium has otherwise reduced Consolidated Interest Expense; (3) non-cash interest expense, but any non-cash interest income or expense attributable to the movement in the mark-to-market valuation of Hedging Obligations or other derivative instruments shall be excluded from the calculation of Consolidated Interest Expense; (4) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing; (5) the interest expense on Indebtedness of another Person that is guaranteed by such Person or one of its Subsidiaries or secured by a Lien on assets of such Person or one of its Subsidiaries; (6) costs associated with entering into Hedging Obligations (including amortization of fees) related to Indebtedness; (7) interest expense of such Person and its Subsidiaries that was capitalized during such period; and (8) the cash contributions to any employee stock ownership plan or similar trust to the extent such contributions are intended to be used by such plan or trust to pay interest or fees to any Person (other than the Corporation and its Subsidiaries) in connection with Indebtedness Incurred by such plan or trust. Consolidated Net Income means, for any period, the net income (loss) of the Corporation and its consolidated Corporation Subsidiaries for such period determined on a consolidated basis in accordance with IFRS; provided, however, that there will not be included in such Consolidated Net Income: 5

14 (1) any net income (loss) of any Person if such Person is not a Subsidiary of the Corporation or that is accounted for by the equity method of accounting, except that: (a) (b) subject to the limitations contained in clauses (3) through (7) below, the Corporation s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Corporation or any of its Subsidiaries as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Subsidiary of the Corporation, to the limitations contained in clause (2) below); and the Corporation s equity in a net loss of any such Person for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Corporation or its Subsidiary; (2) any gain or loss (less all fees and expenses relating thereto) realized upon sales or other dispositions of any assets of the Corporation or such Subsidiary, other than in the ordinary course of business; (3) any income or loss from the early extinguishment of Indebtedness or Hedging Obligations or other derivative instruments; (4) any extraordinary or non-recurring gain or loss; (5) any unrealized net gain or loss resulting in such period from Hedging Obligations or other derivative instruments; (6) any net income or loss included in the consolidated statement of operations with respect to non-controlling interests; and (7) the cumulative effect of a change in accounting principles. Contingent Liabilities means, with respect to a Person, any agreement, undertaking or arrangement by which the Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the obligation, debt or other liability of any other Person (other than by endorsements of instruments in the course of collection) or guarantees the payment of dividends or other distributions upon the shares of any Person. The amount of any contingent liability will, subject to any limitation contained therein, be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the obligation, debt or other liability to which the contingent liability is related. Continuing Directors means, as of any date of determination, any member of the Board who: (1) was a member of such Board on the Issue Date; or (2) was nominated for election or elected to the Board with the approval of a majority of the Continuing Directors who were members of the Board at the time of such nomination or election. Conversion Notice has the meaning ascribed to such term in Section 8.5(a). Conversion Price means the dollar amount for which each Common Share may be issued from time to time upon the conversion of the Debentures in accordance with the provisions of Article 8. Corporate Trust Office means any of the principal trust offices of the Trustee at which, at any particular time, its corporate trust business relative to this Indenture is administered. At the date hereof, the Corporate Trust Offices of the Trustee are located at 200 University Ave., Suite 300, Toronto, Ontario M5H 4H1. 6

15 Corporation means Gran Colombia Gold Corp., a corporation existing under the laws of British Colombia, and its permitted successors and assigns. Corporation Counsel means, at any time, legal counsel retained by the Corporation. Corporation Subsidiary means any Subsidiary of the Corporation or any Subsidiary of such Subsidiary and each of their respective successors and permitted assigns; Corporation s Auditors means, at any time, a firm of chartered accountants duly appointed as auditors of the Corporation. Current Market Price means, generally, the volume weighted average trading price of the Common Shares on the Exchange for the 20 consecutive trading days ending five trading days preceding the applicable date. If the Common Shares are no longer listed on the Exchange or if no such prices are available Current Market Price shall be the fair value of a Common Share as reasonably determined by a third party acceptable to the Trustee and the Corporation. Date of Conversion has the meaning ascribed to such term in Section 8.5(b). Debenture Certificate means: (a) (b) a certificate issued in the name of a Debentureholder (other than the Depository) evidencing the number of Debentures held by such Debentureholder, in a principal amount equal to the aggregate of the principal amounts of such Debentures, such certificate being in the form of Exhibit A; and a Global Debenture Certificate. Debenture Guarantee means, individually, any Guarantee of payment of the Debentures and the Corporation s other Obligations under this Indenture by a Corporation Subsidiary pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such Guarantees. Debenture Indebtedness means all present and future debts, liabilities and obligations of the Corporation or a Corporation Subsidiary, as applicable to the Debentureholders under and in connection with this Indenture, any Supplemental Indenture, the Debenture Certificates and the Guarantees, including all principal money owing on the Debentures, the Premium, if any, interest (including interest on overdue principal, the Premium, if any, and interest) and all fees paid and other money from time to time owing pursuant to the terms of this Indenture, the Debenture Certificates and the Guarantees. Debentureholder or Holder means, at a particular time, a Person entered in the Register as a holder of one or more Debentures outstanding at such time. Debentureholders Request means an instrument signed in one or more counterparts by Debentureholders holding not less than 25% of the aggregate outstanding principal amount of the outstanding Debentures requesting or directing the Trustee to take or refrain from taking the action or proceeding specified therein. Debentures means, individually, any debenture authenticated and delivered under this Indenture, and, collectively, all such Debentures. For all purposes of this Indenture, the term Debentures shall also include any debentures to be issued or authenticated upon transfer, replacement or exchange of a Debenture. deemed year has the meaning ascribed to such term in Section

16 Deferred Purchase Price Obligation means, with respect to a Person, an obligation issued, incurred or assumed by the Person in connection with the acquisition by the Person of an asset in respect of the deferred purchase price of the asset. Depository means CDS or such other Person as is designated in writing by the Corporation to act as depository in respect of the Debentures. Directors means the directors of the Corporation or, whenever duly empowered by a resolution of the directors of the Corporation in accordance with Applicable Law, a committee of the Board, and reference to action by the Directors means action by the directors of the Corporation or action by any such committee. Distributed Securities has the meaning ascribed to such term in Section 8.6(e). Environmental Laws means all federal, provincial, state, municipal, country, local and other laws, statutes, codes, ordinances, by-laws, rules, regulations, policies, guidelines, certificates, approvals, permits, consents, directions, standards, judgments, orders and other authorizations, as well as common law, civil and other jurisprudence or authority, in each case domestic or foreign, having the force of law at any time relating in whole or in part to any Environmental Matters and any permit, order, direction, certificate, approval, consent, registration, licence or other authorization of any kind held or required to be held in connection with any Environmental Matters. Environmental Matters means: (a) condition or substance, heat, energy, sound, vibration, radiation or odour that may affect any component of the earth and its surrounding atmosphere or affect human health or any plant, animal or other living organism; and (b) any waste, toxic substance, contaminant or dangerous good or the deposit, release or discharge of any thereof into any component of the earth and its surrounding atmosphere. Event of Default has the meaning ascribed to such term in Section Excess Cash Flow means with respect to any fiscal quarter of the Corporation, Consolidated EBITDA for such fiscal quarter minus the sum of the following amounts applicable to such quarter: (a) all scheduled principal payments made or required to have been made by the Corporation on account of Indebtedness and all interest and financing costs (net of finance income and non-cash accretion of financial obligations); (b) the portion of capital, development and exploration expenditures not financed under capitalized leases for financial reporting purposes in accordance with IFRS or with proceeds of other Indebtedness incurred substantially concurrently with such expenditures; (c) consolidated income, capital, equity or wealth tax expenses, or similar instituted by any governmental authority, of the Corporation or any subsidiary to the extent paid in cash; (d) payment of the Corporation s contractual obligations under the Frontino health plan, payments of amounts for environmental discharge fees incurred at Gran Colombia Project and payment of amounts due in respect of the Marmato Project mining titles and contract miners compensation agreements; and (e) changes in non-cash working capital as reported in the Corporation s consolidated financial statements. Exchange means the Toronto Stock Exchange or such other exchange on which the Corporation s securities are then listed or quoted. 8

17 Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. Extraordinary Resolution has the meaning ascribed to such term in Section Fair Market Value means, with respect to any asset or liability, the fair market value of such asset or liability as determined by Senior Management in good faith; provided that if the fair market value exceeds $5.0 million, such determination shall be made by the Board or an authorized committee thereof in good faith (including as to the value of all non-cash assets and liabilities) and if the fair market value exceeds $10.0 million, such determination shall be based upon an opinion or appraisal issued by an Independent Financial Advisor. Independent Financial Advisor means an accounting, appraisal, investment banking firm or consultant to Persons engaged in Similar Businesses of nationally recognized standing that is, in the good faith judgment of the Corporation, qualified to perform the task for which it has been engaged. Financial Instrument Obligations means, with respect to any Person, obligations arising under: (a) (b) (c) interest rate swap agreements, forward rate agreements, floor, cap or collar agreements, futures or options, insurance or other similar agreements or arrangements, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is interest rates or the price, value or amount payable thereunder is dependent or based upon interest rates or fluctuations in interest rates in effect from time to time (but excluding conventional floating rate indebtedness); currency swap agreements, cross-currency agreements, forward agreements, floor, cap or collar agreements, futures or options, insurance or other similar agreements or arrangements, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is currency exchange rates or the price, value or amount payable thereunder is dependent or based upon currency exchange rates or fluctuations in currency exchange rates in effect from time to time; and any agreement for the making or taking of any commodity swap agreement, floor, cap or collar agreement or commodity future or option or other similar agreement or arrangement, or any combination thereof, entered into or guaranteed by the Person where the subject matter thereof is any commodity or the price, value or amount payable thereunder is dependent or based upon the price or fluctuations in the price of any commodity; or any other similar transaction, including any option to enter into any of the foregoing, or any combination of the foregoing, in each case to the extent of the net amount due or accruing due by the Person under the obligations determined by marking the obligations to market in accordance with their terms. Global Debenture Certificate means a certificate issued in the name of the Depository evidencing all or less than all of the Debentures, in a principal amount equal to the aggregate of the principal amounts of such Debentures, such certificate being in the form of Exhibit A. Governmental Authority means, when used with respect to any Person, any government, parliament, legislature, regulatory authority, agency, tribunal, department, commission, board, instrumentality, court, arbitration board or arbitrator or other law, regulation or rule-making entity having or purporting to have jurisdiction on behalf of, or pursuant to the laws of, Canada, Colombia or any other country in which such Person is incorporated, continued, amalgamated, merged or otherwise created or established or in which such Person has an undertaking, contractual obligation, carries on business or holds property, or any province, territory, state, municipality, district or political subdivision of any such country or of any such province, territory or state of such country. 9

18 Gran Colombia Project means the mining rights comprised of one private mining property (RPP 140 Ñemeñeme) and two exploration licenses with a total area of 2,907 ha., located in the municipalities of Segovia and Remedios, Department of Antioquia; Guarantees means the guarantees issued (and amended, if required,) by each Material Subsidiary pursuant to Article 16 guaranteeing the obligations of the Corporation in favour of the Trustee for the benefit of the Debentureholders substantially in the form of the guarantee attached as Exhibit B - Form of Guarantee; Hedging Obligations of any Person means the obligations of such Person pursuant to (1) any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary, (2) any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement as to which such Person is a party or a beneficiary, or (3) any commodity futures contract, commodity swap, commodity option or other similar agreement or arrangement entered into by the Corporation or any of its Corporation Subsidiaries designed to protect the Corporation or any of its Corporation Subsidiaries against fluctuations in the price of commodities actually used in the ordinary course of business of the Corporation and its Corporation Subsidiaries. IFRS means the International Financial Accounting Standards published from time to time by the International Accounting Standards Board. includes or including means includes without limitation or including without limitation, as the case may be. Indebtedness means, with respect to a Person, without duplication: (a) (b) (c) (d) (e) all the Person s present and future indebtedness for borrowed money, borrowings of commodities, obligations with respect to bankers acceptances and contingent reimbursement obligations relating to letters of credit, letters of guarantee and other financial instruments; all Financial Instrument Obligations of the Person; all Deferred Purchase Price Obligations of the Person; all Capital Lease Obligations and Purchase Money Obligations of the Person; and all Contingent Liabilities of the Person with respect to obligations of another Person if such obligations are of the type referred to in paragraphs (a) to (d). Indenture means this Indenture as amended or supplemented from time to time pursuant to the terms of this Indenture. interest with respect to the Debentures means interest with respect thereto. Interest Payment Date has the meaning ascribed to such term in Section 2.8. Interest Rate means 1.00% per annum. Investment means any investment, in cash or by delivery of property, made directly or indirectly in any Person whether by acquisition of securities, indebtedness or other obligations or by loan, advance, capital expenditures, capital contribution, granting of financial assistance or otherwise. 10

19 Issue Date means the date of this Indenture. Lien means any mortgage, charge, security interest, pledge, lien (statutory or otherwise), hypothec, tax lien, statutory lien, trust or deemed trust, adverse claim, construction lien, materialman s lien or charge or encumbrance of any kind whatsoever (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest). Marmato Project means the Corporation s gold-silver project located in the municipality of Marmato, Department of Antioquia, Colombia, approximately 120 km south of the city of Medellín, comprised of three adjacent sets of properties (Zona Alta, Zona Baja and Echandia) comprising a total area of 1,198 hectares. Material Subsidiary means (A) Gran Colombia Gold, S.A., Zandor Capital, S.A., Zandor Capital S.A. Sucursal, Sucursal, Zancudo Gold Corp., Zancudo Gold Sucursal, Mazamorras Gold Corp., Mazamorras Gold Sucursal, Medoro Resources (Yukon) Inc., Colombia Gold Ltd. (UK), Colombia Gold AG, Colombia Gold Ltd. (BC), Colombia Gold S.A., Minera Croesus, S.A., Medoro Resources Colombia Inc., Mineros Nacionales, S.A., Barona Cape Ltd., RNC (Colombia) Ltd. and Minerales Andinos De Occidente, S.A. and (B) any wholly-owned Corporation Subsidiaries coming into existence, or acquired, after the date hereof which (i) directly hold interests in mining properties in Colombia, or (ii) constitute part of the chain of ownership from the Corporation to such Corporation Subsidiaries. Maturity Date means, with respect to a Debenture, the date on which the principal of such Debenture becomes due and payable as therein or herein provided, whether at the Stated Maturity thereof or by declaration of acceleration, call for repayment or otherwise. Moody s means Moody s Investors Service, Inc. and any successor to its rating agency business. Notes has the meaning ascribed to such term in the first recital above. Obligations means, without duplication, with respect to a Person, all items which, in accordance with IFRS, would be included as liabilities on the liability side of the balance sheet of the Person and all Contingent Liabilities of the Person. Officer s Certificate means a certificate of the Corporation signed by one officer of the Corporation in his or her capacity as such officer and not in his or her personal capacity. Ordinary Resolution has the meaning ascribed to such term in Section Original Indenture has the meaning ascribed to such term in the first recital above. Outstanding Balance has the meaning ascribed to such term in Section Paying Agent means a Person authorized by the Corporation to pay the principal amount, Premium, if any, or interest payable in respect of any Debentures on behalf of the Corporation, and may include the Trustee. Permitted Encumbrances means: (a) Liens for taxes, assessments or governmental charges or claims either: (i) not delinquent; or (ii) contested in good faith by appropriate proceedings and as to which the Corporation or any Corporation Subsidiary shall have set aside on its books such reserves as may be required pursuant to IFRS; 11

20 (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) any interest or title of a lessor under any Capital Lease Obligations of the Corporation or of any Corporation Subsidiary; provided, however, that such Liens do not extend to any property or asset which is not leased property subject to such Capital Lease Obligation; Liens securing the Permitted Indebtedness referred to in paragraphs (b), (c) and (d) of that definition; Liens in respect to Purchase Money Obligations of the Corporation; Liens over cash deposits or similar cash equivalent Investments securing Indebtedness which is Permitted Indebtedness in accordance with paragraph (i) of the definition of Permitted Indebtedness; Risk Management Liens; any Lien or deposit under workers compensation, social security or similar legislation or in connection with bids, tenders, leases, contracts or expropriation proceedings or to secure public or statutory obligations, surety and appeal bonds or costs of litigation where required by law; any Lien or privilege imposed by law such as builders, mechanics, material-man s, carriers, warehousemen s and landlords liens and privileges or any security interest or privilege arising out of judgments or awards with respect to which, at the time an appeal or proceedings for review is being prosecuted and with respect to which it has secured a stay of execution pending such appeal or proceedings for review or collateral has been deposited; or any undetermined or inchoate security interest or privilege incidental to current operations that has not been filed pursuant to law against the Corporation or a Corporation Subsidiary or that relates to obligations not due or delinquent; or the deposit of cash or securities in connection with any security interest or privilege referred to in this paragraph (h); any right reserved to or vested in any municipality or governmental or other public authority by the terms of any lease, licence, franchise, grant or permit held or acquired by the Corporation or a Corporation Subsidiary, or by any statutory provision, to terminate the lease, licence, franchise, grant or permit or to purchase assets used in connection therewith or to require annual or other periodic payments as a condition of the continuance thereof; any Lien or right of distress reserved in or exercisable under any lease for rent to which the Corporation or any Corporation Subsidiary is a party and for compliance with the terms of the lease; any Lien created or assumed by the Corporation or a Corporation Subsidiary in favour of a Governmental Authority when required by the utility, municipality or other authority in connection with the operations of the Corporation or such Corporation Subsidiary; any reservations, limitations, provisos and conditions expressed in original or subsequent grants from any Governmental Authority; any minor encumbrance, such as easements, rights-of-way, servitudes or other similar rights in land granted to or reserved by other Persons, rights-of-way for sewers, electric lines, telegraph and telephone lines, oil and natural gas pipelines and other similar purposes, or zoning, restrictive covenants, by-laws or other restrictions applicable to the Corporation s or a Corporation Subsidiary s use of real property, that do not in the 12

21 aggregate materially detract from the value of the property or materially impair its use in the operation of the business of the Corporation or such Corporation Subsidiary; and (n) Liens listed on Exhibit C Permitted Liens. Permitted Excess Cash Flow Investments means securities issued or directly and fully guaranteed or insured by the Canadian or U.S. government or any agency or instrumentality of Canada or the United States (provided that the full faith and credit of the government of Canada or the United States is pledged in support thereof), having maturities of not more than one hundred and eighty two days from the date of acquisition. Permitted Indebtedness means, without duplication: (a) (b) (c) (d) (e) (f) (g) (h) (i) the Debenture Indebtedness; Indebtedness of the Corporation and the Corporation Subsidiaries not otherwise provided for herein which shall not exceed U.S.$40,000,000 in aggregate at any time and, including for purposes of this provision, the Indebtedness of the Corporation and the Corporation Subsidiaries listed on Exhibit D - Amount of Indebtedness; Indebtedness of the Corporation or any Corporation Subsidiary incurred to finance the development and construction of the Marmato Project; Indebtedness of the Corporation or any Corporation Subsidiary incurred to finance the expansion of, or capital expenditures on, other site specific projects of the Corporation or any Corporation Subsidiary, including, but not limited to, the Gran Colombia Project; all Capital Lease Obligations and Purchase Money Obligations of the Corporation and the Corporation Subsidiaries which, excluding Capital Lease Obligations and Purchase Money Obligations relating to mining operations of the Corporation, shall not exceed U.S.$10,000,000 in aggregate at any time; Obligations in respect of performance and surety bonds and completion guarantees provided by the Corporation or any Corporation Subsidiary in the ordinary course of business; Obligations of the Corporation or any Corporation Subsidiary in respect of off-take or long-term purchase agreements with third parties in respect of commodities on reasonable commercial terms as if negotiated by Persons dealing at arm s length (within the meaning of the Income Tax Act (Canada)); Financial Instrument Obligations of the Corporation or a Corporation Subsidiary of the Corporation where the aggregate net amount, if any, which (as of the date of any determination of the amount thereof) would be payable by the Corporation and such Corporation Subsidiary under all agreements evidencing such Financial Instrument Obligations in settlement of obligations arising thereunder as a result of an early termination of all such Financial Instrument Obligations (determined by marking the obligations to market in accordance with their terms), together with all interest, fees and other amounts payable thereon or in connection therewith, does not exceed at any time the principal amount of the Indebtedness to which the Financial Instrument Obligations relates; any back-to-back loans, being Indebtedness of the Corporation or any Corporation Subsidiary to a financial institution incurred after the Issue Date which is fully offset by an 13