Eco Oro Enters Into a US$6 Million Credit Facility - Seite 2

Under the terms of the Promissory Notes and CVRs, the Claim Proceeds (net of any amounts paid to the Lender pursuant to the Credit Agreement) shall be distributed or retained in the following order of priority:

• first, to the holders of the Promissory Notes and CVRs, an amount equal to the unpaid default interest, fees, expenses or indemnity obligations payable to the holders of the Promissory Notes and CVRs;
  
• second, to the holders of its US$24,672,727 principal amount of Promissory Notes bearing interest at a rate of 0.025% per annum, an amount equal to the aggregate amount of interest and indebtedness owed by the Company to the holders of the Promissory Notes (of which approximately US$24.7 million is outstanding as of the date hereof);
  
• third, to the holders of its CVRs and participants in the Company’s management incentive program, an amount equal to the lesser of (i) US$460 million and (ii) 95% of the Claim Proceeds;
  
• fourth, US$30 million to the Company;
  
• fifth, to the holders of the CVRs and participants in the Company’s management incentive program until the aggregate amount distributed to the holders of CVRs and participants in the Company’s management incentive program equals 95% of the Claim Proceeds; and
  
• sixth, to the Company.
  

Accordingly, the Company will not be entitled to retain any portion of the Claim Proceeds pursuant to step four of the distribution waterfall described above unless the Claim Proceeds (net of any amounts payable to the Lender pursuant to the Credit Agreement) exceeds amounts payable to the holders of the Promissory Notes and CVRs in the first, second and third steps of the distribution waterfall described above.

Board Approval

The controlling shareholder of the Lender is Courtenay Wolfe, a director of the Company. While the transaction would ordinarily be subject to the “minority approval requirements” set forth in Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”), the Board of Directors, including its independent members, have determined that the Company is eligible to rely on the exemption from minority approval requirements provided by Subsection 5.7(f) [Loan to Issuer, No Equity or Voting Component] of MI 61-101.