Electric Royalties Ltd.

Electric Royalties Ltd. 14[th] Floor, 1040 West Georgia Street Vancouver, B.C. V6E 4H1 Telephone No. (604) 639-9200/ Fax No. (604) 684-8092

INFORMATION CIRCULAR

as at February 16, 2024 (except as otherwise indicated)

This information circular (“Information Circular”) is furnished in connection with the solicitation of proxies by the management of Electric Royalties Ltd. (the “Company”) for use at the special meeting (the “Meeting”) of holders (“Shareholders”) of common shares (“Common Shares”) of the Company to be held on March 19, 2024 at the time and place and for the purposes set forth in the accompanying Notice of Special Meeting of Shareholders (the “Notice of Meeting”).

In this Information Circular, references to “the Company ”, “ we ” and “ our ” refer to Electric Royalties Ltd. “ Common Shares ” means common shares without par value in the capital of the Company. “ Beneficial Shareholders ” means shareholders who do not hold Common Shares in their own name and “ intermediaries ” refers to brokers, investment firms, clearing houses and similar entities that hold securities on behalf of Beneficial Shareholders.

GENERAL PROXY INFORMATION

SOLICITATION OF PROXIES

The solicitation of proxies will be primarily by mail, but proxies may be solicited personally or by telephone by directors, officers and regular employees of the Company. The Company will bear all costs of this solicitation. We have arranged for intermediaries to forward the proxy materials to beneficial owners of the Common Shares held of record by those intermediaries and we may reimburse the intermediaries for their reasonable fees and disbursements in that regard.

APPOINTMENT OF PROXYHOLDERS

The individuals named in the accompanying form of proxy (the “ Proxy ”) are directors or officers of the Company. If you are a shareholder entitled to vote at the Meeting, you have the right to appoint a person or company other than either of the persons designated in the Proxy, who need not be a shareholder, to attend and act on your behalf at the Meeting. You may do so either by inserting the name of that other person, and that person may be you, in the blank space provided in the Proxy or by completing and delivering another suitable form of proxy. If your Common Shares are actually registered in your name, then you are a “Registered Shareholder”. However, if like most shareholders you keep your Common Shares in a brokerage account, then you are a Beneficial Shareholder and the manner for voting is different than for Registered Shareholders. Please read the instructions below carefully.

VOTING BY PROXYHOLDER

The persons named in the Proxy may vote “For” or “Against” the matters set forth on the ballot in accordance with the instructions therein. If you specify a choice with respect to any matter to be acted upon, your Common Shares will be voted accordingly. The Proxy confers discretionary authority on the persons named therein with respect to:

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(a) each matter or group of matters identified therein for which a choice is not specified,
(b) any amendment to or variation of any matter identified therein, and
(c) any other matter that may properly come before the Meeting.

In respect of a matter for which a choice is not specified in the Proxy, the persons named in the Proxy will vote the Common Shares represented by the Proxy for the approval of such matter.

REGISTERED SHAREHOLDERS

Registered Shareholders may wish to vote by proxy whether or not they are able to attend the Meeting in person. Registered Shareholders electing to submit a proxy may do so by:

(a) completing, dating and signing the enclosed Proxy and returning it to the Company’s transfer agent, TSX Trust Company of Canada (“ TSX Trust ”), by fax at 416-595-9593, or by mail to Suite 301, 100 Adelaide Street West, Toronto, Ontario M5H 4H1 Canada; or
(b) using the internet via the website voting page of TSX Trust at following website address: www.voteproxyonline.com/pxlogin?lang=en. Registered Shareholders must follow the instructions provided at the voting page and refer to the enclosed Proxy for the holder’s control number and the proxy access number.

In all cases a Registered Shareholder must ensure that the completed proxy is received at least 48 hours (excluding Saturdays, Sundays and holidays) before the Meeting or any adjournment or postponement thereof at which the proxy is to be used.

BENEFICIAL SHAREHOLDERS

The following information is of significant importance to shareholders who do not hold Common Shares in their own name. Beneficial Shareholders should note that the only proxies that can be recognized and acted upon at the Meeting are those deposited by Registered Shareholders (those whose names appear on the records of the Company as the registered holders of Common Shares) or as set out in the following disclosure.

If Common Shares are listed in an account statement provided to a shareholder by a broker, then in almost all cases those Common Shares will not be registered in the shareholder’s name on the records of the Company. Such Common Shares will more likely be registered under the names of the shareholder’s broker or an agent of that broker. In Canada, the vast majority of such Common Shares are registered under the name of CDS & Co. (the registration name for The Canadian Depository for Securities Limited, which acts as nominee for many Canadian brokerage firms). In the United States of America (the “ United States ”), the vast majority of such Common Shares are registered under the name of Cede & Co. as nominee for The Depository Trust Company (which acts as depositary for many U.S. brokerage firms and custodian banks).

Intermediaries are required to seek voting instructions from Beneficial Shareholders in advance of shareholders’ meetings. Every intermediary has its own mailing procedures and provides its own return instructions to clients.

There are two kinds of beneficial owners - those who object to their name being made known to the issuers of securities which they own (called “ OBOs ” for Objecting Beneficial Owners) and those who do not object to the issuers of the securities they own knowing who they are (called “ NOBOs ” for Non-Objecting Beneficial Owners).

The Company is taking advantage of provisions of National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer , which allow it to deliver proxy-related materials directly to its NOBOs. As a result NOBOs can expect to receive a scannable voting instruction form (“ VIF ”) from TSX Trust, our transfer agent. VIFs are to be completed and returned to TSX Trust following the instructions using one of the methods detailed on the VIF. TSX Trust tabulates results of VIFs received from NOBOs and provides appropriate instructions at the Meeting concerning Common Shares represented by VIFs they received prior to the Meeting.

Securityholder materials are sent to both registered and non-registered owners of the Company’s securities. If you are a non-registered owner, and the Company or its agent sent these materials directly to you, your name, address and information about your holdings of securities, were obtained in accordance with applicable securities regulatory requirements from the intermediary holding securities on your behalf.

By choosing to send these materials to you directly, the Company (and not the intermediary holding securities on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your VIF as specified in your request for voting instructions.

Management of the Company does not intend to pay for intermediaries to forward proxy-related materials to OBOs. If you are an OBO you will not receive the proxy-related materials unless your intermediary assumes the cost of delivery. If you are an OBO please follow the instructions of your intermediary carefully to ensure your Common Shares are voted at the Meeting.

The form of proxy supplied to you by your broker will be similar to the Proxy provided to Registered Shareholders by the Company. However, its purpose is limited to instructing the intermediary on how to vote on your behalf. Most brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions Inc. (“ Broadridge ”) in Canada and the United States. Broadridge mails a VIF in lieu of a proxy provided by the Company. The VIF will name the same persons as the Company’s Proxy to represent you at the Meeting. You have the right to appoint a person (who need not be a Shareholder of the Company), different from the persons designated in the VIF, to represent your Common Shares at the Meeting, and that person may be you. To exercise this right, insert the name of your desired representative in the blank space provided in the VIF. The completed VIF must then be returned to Broadridge following Broadridge’s instructions using one of the methods detailed on the VIF. Broadridge then tabulates results of all instructions received and provides appropriate instructions concerning voting of Common Shares to be represented at the Meeting. If you receive a VIF from Broadridge, it must be completed and returned to Broadridge, in accordance with Broadridge’s instructions, well in advance of the Meeting in order to: (a) have your Common Shares voted as per your instructions, or (b) to have an alternate representative you have chosen, if any, duly appointed to attend and vote your Common Shares on your behalf at the Meeting.

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

The solicitation of proxies and the transactions contemplated in this Information Circular involve securities of an issuer located in Canada and is being effected in accordance with the corporate laws of the Province of British Columbia, Canada and the securities laws of the provinces of Canada. The proxy solicitation rules under the United States Securities Exchange Act of 1934 , as amended, are not applicable to the Company or this solicitation, and this solicitation has been prepared in accordance with the disclosure requirements of the securities laws of the provinces of Canada. Shareholders should be aware that disclosure requirements under the securities laws of the provinces of Canada differ from the disclosure requirements under United States securities laws.

The enforcement by shareholders of civil liabilities under United States federal securities laws may be affected adversely by the fact that the Company is incorporated under the Business Corporations Act (British Columbia) (“ BCBCA ”), as amended, certain of its directors and its executive officers are residents of Canada and a portion of its assets and the assets of such persons are located outside the United States. Shareholders may not be able to sue a foreign company or its officers or directors in a foreign court for violations of United States federal securities laws. It may be difficult to compel a foreign company and its officers and directors to subject themselves to the jurisdiction of, or a judgment by, a United States court.

REVOCATION OF PROXIES

In addition to revocation in any other manner permitted by law, a Registered Shareholder who has given a proxy may revoke it by:

(a) executing a proxy bearing a later date or by executing a valid notice of revocation, either of the foregoing to be executed by the Registered Shareholder or the Registered Shareholder’s authorized attorney in writing or, if the shareholder is a corporation, by its authorized signatory, and by delivering the proxy bearing a later date to TSX Trust at the address shown on the preceding page or at the address of the registered office of the Company at Suite 2400, 745 Thurlow Street Vancouver BC V6E 0C5 Canada, at any time up to and including the last business day that precedes the day of the Meeting or, if the Meeting is adjourned, the last business day that precedes any reconvening thereof, or to the chairman of the Meeting on the day of the Meeting or any reconvening thereof, or in any other manner provided by law, or
(b) personally attending the Meeting and voting the Registered Shareholder’s Common Shares.

A revocation of a proxy will not affect a matter on which a vote is taken before the revocation.

Beneficial Shareholders who wish to change their vote must, in sufficient time in advance of the Meeting, arrange for their respective intermediaries to change their vote and if necessary, revoke their proxy in accordance with the revocation procedures set out above.

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

Other than Stefan Gleason (who is the principal of Gleason & Sons LLC (“ Gleason ”)), no director or executive officer of the Company, or any person who has held such a position since the beginning of the last completed financial year of the Company, nor any associate or affiliate of the foregoing persons, has any substantial or material interest, direct or indirect, by way of

beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting other than as may be set out herein.

RECORD DATE AND QUORUM

The board of directors of the Company (the “ Board ”) has fixed February 12, 2024, as the record date (the “ Record Date ”) for determination of persons entitled to receive notice of the Meeting. Only Shareholders of record at the close of business on the Record Date who either attend the Meeting personally or complete, sign and deliver a form of proxy in the manner and subject to the provisions described above will be entitled to vote or to have their Common Shares voted at the Meeting.

Under the Articles of the Company, the quorum for the transaction of business at a meeting of Shareholders is one or more Shareholders who are, or who represent by proxy, one or more Shareholders who, in the aggregate, hold at least 10% of the issued Common Shares entitled to be voted at the meeting.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

Certain statements contained in this Circular constitute forward-looking statements. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions.

In particular, this Circular contains forward-looking statements including but not limited to: the receipt of funds from Gleason pursuant to the Amended and Restated Convertible Loan Agreement (defined below), the use of proceeds in respect of such funds and the issuance of Common Shares to Gleason.

By their very nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Company believes the expectations reflected in those forward-looking statements are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this Circular should not be unduly relied upon. These statements speak only as of the date of this Circular.

Some of the risks that could cause results to differ materially from those expressed in the forward-looking statements include: risks related to the Company’s or Gleason’s inability to satisfy certain conditions under the Amended and Restated Convertible Loan Agreement (including the failure to obtain the requisite shareholder approval at the Meeting) and risks related to the Company’s business, the economy and the Company’s industry in general as well as the Company’s and Gleason’s ability to perform their respective obligations under the Amended and Restated Convertible Loan Agreement.

Readers are cautioned that the foregoing lists of factors are not exhaustive. The forward-looking statements contained in this Circular are expressly qualified by this cautionary statement. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements and readers should also carefully consider the matters described

in the section of the Annual Information Form entitled “Risk Factors” for the most recently completed financial period as filed on the System for Electronic Document Analysis and Retrieval Plus (“ SEDAR+ ”).

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

The Company is authorized to issue an unlimited number of Common Shares. The Common Shares are listed for trading on the TSX Venture Exchange (the “ TSXV ”) and are quoted on the OTCQB. As of the Record Date, there were 96,601,509 Common Shares issued and outstanding, each carrying the right to one vote. No group of shareholders has the right to elect a specified number of directors, nor are there cumulative or similar voting rights attached to the Common Shares.

To the knowledge of the directors and executive officers of the Company, no person or corporation beneficially owned, directly or indirectly, or exercised control or direction over, Common Shares carrying more than 10% of the voting rights attached to all outstanding Common Shares as at the Record Date, except for the following:

Shareholder Name	Number of Common Shares Held(1)	Percentage of Issued Common Shares
Globex Mining Enterprises Inc.(1)	11,667,000	12.08%
Stefan Gleason(1)	20,975,668	21.71%

Notes:

(1) The above information was obtained by the Company from insider reports filed at www.sedi.ca.

VOTES NECESSARY TO PASS RESOLUTIONS

A simple majority of affirmative votes cast at the Meeting is required to pass the resolutions described herein, excluding any votes attaching to Common Shares beneficially owned by Stefan Gleason, together with his affiliates and associates, and any other persons whose votes are required to be excluded pursuant to MI 61-101 or the rules and policies of the TSXV.

BUSINESS OF THE MEETING

APPROVAL OF THE AMENDED AND RESTATED STANDBY CONVERTIBLE LOAN AGREEMENT

Background to Transaction and Discussion of Review and Approval Process

On November 10, 2022, the Board convened and considered the proposed terms and conditions of a non-revolving credit facility (the “ Credit Facility ”) provided by Gleason, which could be drawn down from time to time for the purposes of funding royalty acquisitions by the Company, the merits of the Credit Facility and the process of its negotiation. The Board discussed the merits of establishing the Credit Facility, noting that the Credit Facility would provide the Company with temporary funding to continue acquiring royalties while the Company engaged in marketing activities and attempted to secure funding from equity markets, mezzanine debt providers and other non-traditional funders on favourable terms. The Board unanimously determined that the Credit Facility was in the best interests of the Company and approved the Credit Facility.

On January 12, 2023, the Company entered into a standby convertible loan agreement (the “ Original Convertible Loan Agreement ”) with Gleason, pursuant to which Gleason agreed to provide the Company with the Credit Facility, at the time solely for the purpose of funding the acquisition by the Company of royalty interests in producing mineral properties. The initial aggregate principal amount of the Credit Facility was C$2,000,000. Per the terms of the Original Convertible Loan Agreement, the Credit Facility was subject to an interest rate of 15% per annum, accruing monthly, with interest payments capitalized into the principal amount and due and payable to Gleason on the maturity date, being 36 months after the initial advance. Under the Original Convertible Loan Agreement, each advance under the Credit Facility was to be evidenced by a promissory note of the Company delivered to Gleason (a “ Convertible Note ”).

On January 19, 2023, the Company announced that it had elected to draw down C$1,000,000 from the Credit Facility (the “ First Drawdown ”) to fund the acquisition of a 0.75% gross revenue royalty (“ GRR ”) on the producing Penouta tin-tantalum mine (the “ Penouta Project ”) with Strategic Minerals Europe Corp. (the “ Penouta Acquisition ”).

On April 17, 2023, the Board convened and considered an amendment to the Original Convertible Loan Agreement (the “ First Amendment ”) with Gleason to increase the aggregate principal amount of the Credit Facility from C$2,000,000 to C$5,000,000 and to modify certain terms related to the interest rate payable. The Board noted that the Company had been unable to secure alternative funding for the Kenbridge Acquisition (defined below) and the Penouta Acquisition (defined above). As such, the Board unanimously determined that the First Amendment was in the best interests of the Company and approved the Original Convertible Loan Agreement, as amended by the First Amendment (as amended, the “ Amended Convertible Loan Agreement ”).

On April 18, 2023, the Company and Gleason executed the First Amendment.

On April 21, 2023, the Company announced that it had elected to draw down C$500,000 under the Credit Facility (the “ Second Drawdown ”) for the acquisition of a 0.5% GRR on certain mining claims, mining leases and mineral tenures comprising the Kenbridge Nickel Project with Tartisan Nickel Corp (the “ Kenbridge Acquisition ”).

On July 27, 2023, the Company announced that it had elected to draw down C$1,400,000 under the Credit Facility (the “ Third Drawdown ”). The proceeds from the Third Drawdown were used to fund the cash payment to acquire an additional 0.75% GRR on the Penouta Project and certain related transaction costs.

On September 6, 2023, the Board convened and discussed securing additional funding from Gleason to continue with its planned royalty acquisitions. The Board noted that any alternative financing options available to the Company in the market would not be as competitive to those offered by Gleason.

On September 27, 2023, the Company announced that it had elected to draw down C$1,050,000 under the Credit Facility (the “ Fourth Drawdown ”) to fund the cash payment to exercise its option to acquire an additional 0.5% GRR on the Bissett Creek project and certain related transaction costs.

On October 19, 2023 the Board convened and discussed securing additional funding from Gleason. The Board noted that such funding would be necessary to successfully meet the Company’s objectives of acquiring royalties and ensuring the Company has enough working capital for its operations. Having been advised that the Amended and Restated Convertible Loan

Agreement (defined below) constitutes a related party transaction within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“ MI 61-101 ”), the Board unanimously determined that entering into a letter of intent (the “ LOI ”) with Gleason regarding the Amended and Restated Convertible Loan Agreement was in the best interests of the Company and approved the LOI (the “ LOI Approval ”). The LOI Approval was given on the basis that additional terms of the Amended and Restated Convertible Loan Agreement would be negotiated by the Company and Gleason and that the finalized Amended and Restated Convertible Loan Agreement would be presented to the Board for final approval. The LOI was entered into on October 18, 2023.

On November 8, 2023, the Company announced it had elected to draw down C$500,000 under the Credit Facility (the “ Fifth Drawdown ”) for working capital purposes.

On December 11, 2023, the Company held its annual general and special meeting of Shareholders. At this meeting, Shareholders elected Stefan Gleason to the Board and approved the amended and restated shareholder rights plan agreement dated as of December 11, 2023 (the " Amended and Restated Rights Plan ") (amending and restating the shareholder rights plan agreement dated as of August 29, 2022) to increase the threshold in the definition of “Acquiring Person” from 20% to 30%.

On January 25, 2024, the Board convened and considered a draft of the Amended and Restated Convertible Loan Agreement, the material terms of which had been substantially settled by the Company and Gleason. The Board noted that challenging market conditions had continued to hamper the Company’s attempts to secure alternative funding from equity markets, mezzanine debt providers and other non-traditional funders. The Board determined that the Amended and Restated Convertible Loan Agreement is in the best interests of the Company and approved the Amended and Restated Convertible Loan Agreement (Stefan Gleason did not attend the meeting as he is the principal of Gleason). The Board also determined to recommend to the Shareholders that the Shareholders vote in favour of the ratification and approval of the Amended and Restated Convertible Loan Agreement.

On February 16, 2024 the Company entered into an amended and restated standby convertible loan agreement (the “ Amended and Restated Convertible Loan Agreement ”) with Gleason, amending and restating the Amended Convertible Loan Agreement, pursuant to which Gleason and the Company agreed to certain further terms, including, among others, increasing the aggregate principal amount of the Credit Facility from C$5,000,000 to C$10,000,000, subject to certain conditions.

Terms of the Amended and Restated Convertible Loan Agreement

Beginning on February 16, 2024 and ending on January 12, 2028 (the “ Maturity Date ”), the Company has the right at any time, at its sole election, to request advances of money under the Credit Facility (each, a “ Drawdown ”), subject to the following drawdown limitations: (i) until receipt of an acceptance in principle letter from the TSXV of the Amended and Restated Convertible Loan Agreement and the Shareholder Approvals (defined below), the aggregate Drawdowns (including the C$4,450,000 in Drawdowns made prior to the date of the Amended and Restated Convertible Loan Agreement) shall not exceed C$5,000,000 (which amount was the Drawdown limit under the Amended Convertible Loan Agreement); (ii) until the US Security Agreement (defined below) is executed and delivered, in the form substantively agreed to by the parties, and legal and valid first priority security interest in the Zonia Royalty in favour of Gleason is created and perfected in all applicable jurisdictions, the aggregate Drawdowns (including the C$4,450,000 in Drawdowns

made prior to the date of the Amended and Restated Convertible Loan Agreement) shall not exc eed C$8,000,000; and (iii) each Drawdown shall be subject to the approval of the TSXV.

As under the Original Convertible Loan Agreement, each Drawdown under the Amended and Restated Convertible Loan Agreement will be evidenced by a Convertible Note.

Unless the aggregate outstanding principal balance of the Credit Facility (the “ Loan ”), all accrued and unpaid interest and all other amounts due by the Company to Gleason under the Amended and Restated Convertible Loan Agreement and other loan documents (collectively, the “ Indebtedness ”) is converted into Common Shares prior to the Maturity Date, any outstanding Indebtedness will be due and payable on the Maturity Date. Under the Amended and Restated Convertible Loan Agreement, the Company has a right to repay all or any part of the Indebtedness upon at least 15 days’ prior written notice to Gleason (or such shorter period of time that may be acceptable to Gleason).

Interest on the Loan shall be capitalized into the Loan, accrue at the rate per annum equal to the lesser of (a) the secured overnight financing rate, as published by the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate) from time to time, plus 7% per annum, and (b) 12.5% per annum, and shall be calculated daily and compounded annually.

The Amended and Restated Convertible Loan Agreement will be secured by the following:

(i) an amended and restated security agreement (the “ Canadian Security Agreement ”) granted by the Company in favour of Gleason against all of the Company’s present and future rights, titles and interests in and to its 1.5% GRR on the producing Penouta tin-tantalum mine in Spain, 0.5% GRR on the Kenbridge nickel project in Ontario, Canada, its GRRs on the Authier lithium project (for certainty, consisting of a 0.5% Gross Metal Royalty from certain claims located in Preissac, Quebec and a 0.5% Gross Metal Royalty from a claim located LaMotte Township, Quebec), its 1.5% GRR on the Bissett Creek graphite project in Ontario, Canada, its 0.5% GRR on the Zonia copper oxide project in Walnut Grove Mining District, Yavapai County, Arizona, United States of America, its 2.5% GRR on the Graphmada graphite mining complex in Madagascar, Africa and its 2% Gross Metal Royalty on the Battery Hill manganese project in New Brunswick, Canada (collectively, the “ ERL Secured Royalties ”), and all proceeds, books and records relating to, accessions to, and substitutions and replacements for each of the ERL Secured Royalties;
(ii) a security agreement (the “ US Security Agreement ”) granted by Electric Royalties (US) Inc. (“ ERL US ”), a wholly-owned subsidiary of the Company, in favour of Gleason against ERL US’s present and future rights, titles and interests in and to its 0.5% GRR on the Zonia copper-oxide project in Walnut Grove Mining District, Yavapai County, Arizona, United States of America (the “ Zonia Royalty ” and, together with the ERL Secured Royalties, the “ Secured Royalties ”); and
(iii) collateral assignments or other security agreements by the Company or ERL US, as the case may be, of the receivables and proceeds of each of the Secured Royalties.
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Further, under the terms of the Amended and Restated Convertible Loan Agreement and the Canadian Security Agreement, any royalty interests and other personal property acquired subsequently by the Company using proceeds from the Credit Facility or otherwise charged in favour of Gleason will also form part of the collateral and be subject to a first priority security interest in favour of Gleason, with the exception of the LOI Assets (defined below), which are expressly excluded from the collateral.

Prior to the Maturity Date on at least ten business days prior written notice to the Company, Gleason may, in its sole discretion, elect to convert all or any portion of the Indebtedness into a number of Common Shares determined as follows: (a) for all or any portion of the principal amount of each Drawdown that number of Common Shares equal to the quotient of the principal amount of such portion of the Drawdown and applicable conversion price, being the greater of: (i) $0.50; (ii) a 100% premium above the 30-day volume weighted average trading price of the Common Shares on the TSXV at the time of each Drawdown; and (iii) the minimum price acceptable to the TSXV, per Common Share, subject to adjustment as provided in the Convertible Note (the “ Principal Conversion ”); and (b) for the interest payable on the Loan that number of Common Shares equal to the quotient of the amount of the interest payable on the Loan and the Market Price (as defined under the TSXV’s Policy 1.1) at the time of settlement (the “ Interest Conversion ” and, together with the Principal Conversion, the “ Conversion ”). Notwithstanding the foregoing, Gleason shall have no right to effect the Conversion:

(i) until the Company obtains the Control Person Approval (defined below); or
(ii) if, after giving effect to such Conversion, such Conversion would result in (A) the occurrence of a Flip-in Event (as defined in the Company’s amended and restated shareholder rights plan agreement dated and effective December 11, 2023, as it may be amended and/or restated from time to time (the “ Rights Plan ”)) and/or (B) Gleason becoming an Acquiring Person (as defined in the Rights Plan).

So long as Gleason and its affiliates own beneficially and of record, directly or indirectly, at least 15% or more of the outstanding Common Shares on a partially diluted basis, then Gleason shall be entitled (but not obligated) to nominate one individual to the Board in connection with a meeting of the Company to elect directors.

Under the Amended and Restated Convertible Loan Agreement, the proceeds of the Credit Facility will be used by the Company for the purpose of funding:

(i) acquisitions by the Company of royalty interests (other than the LOI Assets (defined below)) that are subject to a first priority security interest in favour of Gleason;
(ii) acquisitions by the Company of other properties approved, in advance, by Gleason (such approval is subject to the sole discretion of Gleason);
(iii) due diligence costs in connection with such acquisitions of royalty interests (as referenced in (i)) or acquisitions of other properties (as referenced in (ii)), in each case irrespective of whether such acquisitions are completed;
(iv) working capital purposes approved, in advance, by Gleason (such approval is subject to the sole discretion of Gleason);
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(v) acquisitions by the Company of other properties and associated agreements (collectively, the “ LOI Assets ”) contemplated by a letter of intent dated November 3, 2023 between Perry English, Michael Kilbourne, 1544230 Ontario Inc., Gravel Ridge Resources Ltd. and the Company (the “ Gravel Ridge LOI ”) and all other transactions contemplated thereby, in each case, as approved, in advance, by Gleason (such approval not to be unreasonably withheld or delayed); or
(vi) other activities approved, in advance, by Gleason (such approval is subject to the sole discretion of Gleason).

The Company has provided to Gleason the benefit of certain positive and negative covenants, including, among others, that the Company will pay all amounts due to Gleason as required per the agreement, will pay any costs of collecting on the Indebtedness if not repaid when due, will observe and perform all of the Company’s covenants under the Amended and Restated Convertible Loan Agreement and will not make certain other changes that may be materially adverse to Gleason or undergo certain material transactions.

The Amended and Restated Convertible Loan Agreement contains customary events of default for a transaction of this nature. If the Company defaults, Gleason may, at its option, declare that the Indebtedness has become immediately due and payable, whereupon the Company must pay the same to the Gleason forthwith, and Gleason, without notice to or demand upon the Borrower, may proceed to protect, exercise and enforce its rights and remedies under the Amended and Restated Convertible Loan Agreement.

The Company has agreed to reimburse Gleason for all reasonable and documented legal fees, professional fees, disbursements and out of pocket costs (including any applicable taxes thereon) incurred by or for the account of Gleason in connection with the negotiation of the Amended and Restated Convertible Loan Agreement, any other loan documents, and the transactions contemplated thereby, up to a maximum amount of C$100,000. The Company may elect to defer the reimbursement until the earlier of (i) July 1, 2024 and (ii) the closing of the first equity financing transaction of the Company subsequent to the date of the Amended and Restated Convertible Loan Agreement. The Company may (subject to the maximum aggregate principal amount of the Loan not being exceeded and receipt of the Shareholder Approvals) request an Advance for the amount of such fees and may use such Advance to pay such fees (notwithstanding the Loan Purpose). The Company has further agreed to reimburse Gleason for all reasonable and documented costs and expenses incurred by Gleason, including the reasonable and documented fees, charges and disbursements of any legal counsel for Gleason in connection with the preservation, interpretation, enforcement or protection of its rights under or in connection with the loan documents, and the transactions contemplated by the loan documents, including all such costs and expenses incurred in connection with any restructuring, workout or negotiations in respect of the loan documents or the Credit Facility.

Under certain circumstances, Gleason may assign the Amended and Restated Convertible Loan Agreement and loan documents to a third party (although in certain circumstances, such assignment requires consent of the Company).

The Amended and Restated Convertible Loan Agreement contains customary representations and warranties on the part of each of the Company and Gleason.

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The reference to the terms above are a summary only, and readers are encouraged to read the Amended and Restated Convertible Loan Agreement in its entirety, which is attached hereto as Schedule “A”.

Sample Calculations

The number of Common Shares issuable to Gleason if Gleason elects to convert the Loan is not yet determinable at this time. However, to illustrate the number of Common Shares that could potentially be issued to Gleason upon Gleason’s election to convert the Loan, the Company has prepared the following sample calculations for the Principal Conversion and the Interest Conversion[1] .

Principal Conversion

For the purposes of this sample calculation, we have used the 30-day VWAP of the Common Shares on the TSXV (for the 30-day period ending January 31, 2024), being $0.29 (the “ Sample VWAP ”).

Assuming that (i) Gleason elects to proceed with the Principal Conversion on the Maturity Date, (ii) the principal amount owed under the Credit Facility at the Maturity Date is $10,000,000 and (iii) the Conversion Price for all future drawdowns under the Credit Facility is a 100% premium above the Sample VWAP, being $0.58[2] , the Company would be required to issue an aggregate total of 17,091,323 Common Shares of the Company to Gleason (such that Gleason would hold approximately 33.48% of the issued and outstanding shares of the Company).

Interest Conversion

Assuming that (i) Gleason elects to proceed with the Interest Conversion on the Maturity Date, (ii) the total interest payable at the Maturity Date is $6,290,794 (based on interest accruing at a rate of 12.5% per annum, from and after February 1, 2024, and all remaining undrawn Principal Balance of the Credit Facility being advanced on March 20, 2024)) and (iii) the Conversion Price is the Market Price (as defined under the TSXV’s Policy 1.1) as of January 31, 2024, being $0.28[3] , the Company would be required to issue an aggregate total of 22,467,121 Common Shares of the Company to Gleason in respect of the interest payable on the Loan (such that following the Principal Conversion and the Interest Conversion Gleason would hold approximately 44.45% of the issued and outstanding shares of the Company).

Information Concerning Stefan Gleason

1 The above sample calculation is for illustrative purposes only and does not consider the implications of the Company’s the Amended and Restated Rights Plan or the 30% threshold in the definition of “Acquiring Person”.

2 The conversion price for each of the previous drawdowns made under the Credit Facility are as follows: $0.71 for the First Drawdown, $0.78 for the Second Drawdown, $0.59 for the Third Drawdown, $0.50 for the Fourth Drawdown and $0.50 for the Fifth Drawdown. The conversion price for all future drawdowns are currently unknown, but we have assumed Sample VWAP (and therefore a conversion price of $0.58, being a 100% premium over Sample VWAP) for all future drawdowns for convenience.

3 The actual conversion price for the interest payable will be determined using the Market Price (as defined under TSXV Policy 1.1 (defined below)) at the time of settlement.

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Stefan Gleason is a Charlotte-based entrepreneur who owns and leads several privately held businesses in the United States and is the principal of Gleason.

By virtue of the facts that (i) Stefan Gleason is a director of the Company and (ii) Stefan Gleason and his affiliates own directly or beneficially greater than 10% of the issued and outstanding Common Shares (being the only outstanding voting securities of the Company), Gleason is deemed to be a “related party” of the Company pursuant to MI 61-101.

As of the date of this Circular, Stefan Gleason beneficially owns or has control or direction over approximately 20,975,668 Common Shares representing approximately 21.71% of the outstanding Common Shares (based on 96,601,509 Common Shares being issued and outstanding as of the date of this Circular).

Shareholder Approval

The Company is asking Shareholders to consider, and if thought advisable, with or without variation, to pass:

(i) a resolution of the majority of disinterested Shareholders approving the Amended and Restated Convertible Loan Agreement as a “related party transaction” in accordance with MI 61-101 (the “ 61-101 Approval ”); and
(ii) a resolution of the majority of disinterested Shareholders approving the Amended and Restated Convertible Loan Agreement and the potential issuance of Common Shares upon the upon the conversion of any principal amount outstanding and accrued and unpaid interest pursuant to the Amended and Restated Convertible Loan Agreement, on the basis that the transaction is the first private placement with Stefan Gleason since he became a “Control Person” of the Company, in accordance with the applicable policies of the TSXV (the “ Control Person Approval ” and, together with the 61-101 Approval, the “ Shareholder Approvals ”).

With respect to the 61-101 Approval and the Control Person Approval, the approval of a majority of Shareholders is required, excluding any votes attached to the Common Shares held by Stefan Gleason (and any related parties of Stefan Gleason and any persons acting jointly or in concert with Stefan Gleason or related parties of Stefan Gleason). To the knowledge of the Company, after reasonable inquiry, no Shareholders are required to be excluded from voting in respect of the 61-101 Resolution and the Control Person Resolution (each defined below) other than Stefan Gleason and related parties of Stefan Gleason (on the basis that Mr. Gleason is a director and Control Person of the Company and principal of Gleason). It is therefore anticipated that an aggregate of 20,975,668 Common Shares will be excluded from voting in respect of the 61-101 Approval and the Control Person Approval.

Related Party Transaction Approval

As explained under the heading “Information Concerning Gleason & Sons LLC”, Gleason is deemed to be a “related party” of the Company pursuant to MI 61-101. As such, entering into the Amended and Restated Convertible Loan Agreement is considered to be a related party transaction under MI 61-101.

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Pursuant to the requirements under MI 61-101, the Company is seeking disinterested shareholder approval of the Amended and Restated Convertible Loan Agreement. The aggregate Drawdowns by the Company is limited to $5,000,000 until the Company obtains the 61-101 Approval. As a result, the disinterested shareholders of the Company will be asked to consider and, if deemed advisable, to approve at the Meeting, the following ordinary resolution (the “ 61-101 Resolution ”):

“ BE IT RESOLVED , as an ordinary resolution of the shareholders of Electric Royalties Ltd. (the “ Company ”), but excluding the votes of the shares held by Gleason and related parties of Gleason as is required pursuant to section 8.1 of MI 61-101, that:

the amended and restated convertible loan agreement dated February 16, 2024 between the Company and Gleason & Sons LLC, as more particularly described in the Company’s management information circular dated February 20, 2024, is hereby approved;
any one director or officer of the Company, for and on behalf of the Company is hereby authorized to execute, deliver and file, or cause to be filed, all documents, instruments and certificates and take all such other actions as any such director or officer, in his or her discretion, may deem necessary, advisable or appropriate to implement this resolution and the matters authorized hereby, such determination to be conclusively evidenced by the execution and delivery of any such documents and instruments and the taking of any such actions; and
notwithstanding the foregoing approvals, the board of directors of the Company be and are hereby authorized, by resolution at any time in its absolute discretion, to determine whether or not to proceed with the transactions contemplated by these resolutions at any time prior to giving effect thereto without further approval, ratification or confirmation by the shareholders of the Company.”

The Amended and Restated Convertible Loan Agreement is exempt from the requirements to obtain a formal valuation under MI 61-101 pursuant to section 5.5(b) as the Company’s shares are only listed on the TSXV.

Control Person Approval

Pursuant to the TSXV’s Policy 4.1 – Private Placements (“ TSXV Policy 4.1 ”) , shareholder approval is required if a private placement by a listed issuer will result, or could result following the conversion of convertible securities, in the creation of a new “Control Person”. Under Policy 1.1 – Interpretation of the TSXV (“ TSXV Policy 1.1 ”), a Control Person is any person that will hold more than 20% of the outstanding voting shares of a listed issuer on completion of a private placement (including any voting shares issuable upon the exercise of convertible securities issued pursuant to such private placement) (a “ Control Person ”).

Mr. Gleason has elected to acquire additional Common Shares and increased his ownership to over 20% relying on the “Normal Course Purchase Exemption” in National Instrument 62-104 – Take-Over Bids and Issuer Bids , which permits additional acquisitions of up to 5% of the outstanding securities of class of securities of a company during any 12-month period without triggering a takeover bid requirement. Stefan Gleason currently owns over 20% of the issued and outstanding shares of the Company. As such, Mr. Gleason is considered to be a Control Person.

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While Mr. Gleason has already become a Control Person of the Company, the TSXV is requiring the Company to seek disinterested shareholder approval of the Amended and Restated Convertible Loan Agreement and the potential issuance of Common Shares upon the conversion of any principal amount outstanding and accrued and unpaid interest pursuant to the Amended and Restated Convertible Loan Agreement, on the basis that this transaction is the first private placement with Stefan Gleason since he became a “Control Person” of the Company, in accordance with the applicable policies of the TSXV. As a result, the disinterested Shareholders of the Company will be asked to consider and, if deemed advisable, to approve at the Meeting, the following ordinary resolution (the “ Control Person Resolution ”):

“ BE IT RESOLVED , as an ordinary resolution of the disinterested Shareholders of Electric Royalties Ltd. (the “ Company ”) that:

the amended and restated convertible loan agreement dated February 16, 2024 between the Company and Gleason & Sons LLC (the “ Amended and Restated Convertible Loan Agreement ”) and the potential issuance of common shares of the Company upon the conversion of any principal amount outstanding and accrued and unpaid interest pursuant to the Amended and Restated Convertible Loan Agreement, as more particularly described in the Company’s management information circular dated February 20, 2024 (the “ Circular ”), is hereby approved;
any one director or officer of the Company, for and on behalf of the Company is hereby authorized to execute, deliver and file, or cause to be filed, all documents, instruments and certificates and take all such other actions as any such director or officer, in his or her discretion, may deem necessary, advisable or appropriate to implement this resolution and the matters authorized hereby, such determination to be conclusively evidenced by the execution and delivery of any such documents and instruments and the taking of any such actions; and
notwithstanding the foregoing approvals, the board of directors of the Company be and are hereby authorized, by resolution at any time in its absolute discretion, to determine whether or not to proceed with the transactions contemplated by these resolutions at any time prior to giving effect thereto without further approval, ratification or confirmation by the shareholders of the Company.”

Board Approval of the Offering

The approval of the Amended and Restated Convertible Loan Agreement followed an extensive search and evaluation of potential sources of capital undertaken by management and the Board during 2023. The terms and conditions presented to the Company by Gleason pursuant to the Amended and Restated Convertible Loan Agreement have been determined by the Board to be reasonable in the circumstances of the Company. In the opinion of management and the Board, the Amended and Restated Convertible Loan Agreement represents the best financing option available to the Company at this time.

After consideration of all relevant circumstances, the Board (with Stefan Gleason absent from the meeting) has approved the Amended and Restated Convertible Loan Agreement and has determined that the Amended and Restated Convertible Loan Agreement is in the best interests of the Company.

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Management and the Board identified and considered a number of potential risk factors relating to the Amended and Restated Convertible Loan Agreement in its deliberations. Management and the Board believed that any possible adverse effects or risks were more than outweighed by the potential benefits of the Amended and Restated Convertible Loan Agreement.

There is no guarantee that Company will obtain approval of the 61-101 Resolution or the Control Person Resolution. In such circumstances, the principal aggregate amount available to the Company under the Credit Facility (including the C$4,450,000 in Drawdowns made prior to the date of the Amended and Restated Convertible Loan Agreement) will remain as C$5,000,000, pursuant to the terms of the Amended and Restated Convertible Loan Agreement. The Company cannot provide assurances that it will be able to find an alternative source of debt or equity financing to finance expansion and development of its business.

Prior Valuations / Prior Offers

To the knowledge of the Company and each director and senior officer of the Company, there have been no prior valuations of the Company (as contemplated under MI 61-101) in the 24month period prior to the date of this Circular that relate to the subject matter of or that are otherwise relevant to the Amended and Restated Convertible Loan Agreement.

There have been no bona fide offers received by the Company in the 24-month period prior to the entering into of the Amended and Restated Convertible Loan Agreement that relate to the subject matter of or that are otherwise relevant to the Amended and Restated Convertible Loan Agreement.

Additional Disclosures

Pursuant to MI 61-101, the Company is required to include in this Circular certain disclosures prescribed by Form 62-104F2 – Issuer Bid Circular of National Instrument 62-104 – Take-Over Bids and Issuer Bids, to the extent applicable to the Amended and Restated Convertible Loan Agreement (and with necessary modifications). To the extent not already incorporated in this Circular, this disclosure is provided in Schedule B (Additional Disclosures) attached to this Circular.

BOARD RECOMMENDATION

The Board has unanimously approved the terms of the Amended and Restated Convertible Loan Agreement (with Stefan Gleason absent from the meeting).

For the reasons indicated herein, the Board and management of the Company believe that the Amended and Restated Convertible Loan Agreement is in the best interests of the Company and, accordingly, recommend that disinterested Shareholders vote FOR the 61101 Resolution and the Control Person Resolution.

Unless a Shareholder directs that his, her or its Common Shares be voted against the 61101 Resolution and the Control Person Resolution, the persons named in the enclosed form of proxy will vote FOR the 61-101 Resolution and the Control Person Resolution.

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INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

No directors, executive officers or their respective associates or affiliates, or other management of the Company were indebted to the Company as of the end of the most recently completed financial year or as at the date hereof.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

To the knowledge of management of the Company, other than Stefan Gleason, no informed person (a director, officer or holder of 10% or more of the Common Shares) or any associate or affiliate of any informed person had any interest in any transaction which has materially affected or could materially affect the Company or any of its subsidiaries during the fiscal year ended December 31, 2023, or has any interest in any material transaction in the current year other than as set out herein.

ADDITIONAL INFORMATION

Additional information relating to the Company is included in the Company’s audited financial statements for the years ended December 31, 2023 and 2022, Report of Independent Accounting Firm, and related Management Discussion and Analysis filed under the Company’s profile on SEDAR+ at www.sedarplus.ca. Copies of the Company’s most recent interim financial statements and related management discussion and analysis, and additional information, may also be obtained from SEDAR+ and upon request from the Company at telephone no. (604) 639-9200 or Fax no. (604) 684-8092.

OTHER MATTERS

The Board is not aware of any other matters which it anticipates will come before the Meeting as of the date of this Circular.

The contents of this Circular and its distribution to Shareholders have been approved by the Board.

DATED at Vancouver, British Columbia, February 20, 2024.

BY ORDER OF THE BOARD OF DIRECTORS

“Brendan Yurik”

Brendan Yurik Chief Executive Officer

SCHEDULE A AMENDED AND RESTATED STANDBY CONVERTIBLE LOAN AGREEMENT

See attached.

Execution Version

AMENDED AND RESTATED STANDBY CONVERTIBLE LOAN AGREEMENT

This Agreement made effective February 16, 2024

BETWEEN:

ELECTRIC ROYALTIES LTD. , a corporation incorporated under the laws of Province of British Columbia having an office at 14[th] Floor, 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1

(the “ Borrower ”)

AND:

GLEASON & SONS LLC , a limited liability company incorporated under the laws of North Carolina, having an office at 15720 Brixham Hill Avenue, #205, Charlotte, NC 28277

(the “ Lender ”)

WHEREAS:

A. The Borrower, as borrower, and the Lender, as lender, entered into a standby convertible loan agreement dated January 12, 2023, as amended by an amendment to standby convertible loan agreement dated April 18, 2023 (collectively, the “ Original Loan Agreement ”) pursuant to which the Lender agreed to provide, and have provided, to the Borrower a credit facility (the “ Credit Facility ”) which can be drawn down from time to time on the terms and conditions set out therein for the purpose of funding (i) acquisitions by the Borrower of royalty interests that are subject to a first priority security interest in favour of the Lender; (ii) acquisitions by the Borrower of other properties approved, in advance, by the Lender (such approval is subject to the sole discretion of the Lender); (iii) due diligence costs in connection with such acquisitions of royalty interests (as referenced in (i)) or acquisitions of other properties (as referenced in (ii)), in each case irrespective of whether such acquisitions are completed; (iv) working capital purposes approved, in advance, by the Lender (such approval is subject to the sole discretion of the Lender); (v) acquisitions by the Borrower of properties and associated agreements contemplated by the LOI and all other transactions contemplated thereby, in each case, as approved, in advance, by the Lender (such approval not to be unreasonably withheld or delayed); or (vi) other activities approved, in advance, by the Lender (such approval is subject to the sole discretion of the Lender) (the “ Loan Purpose ”);

B. The Borrower has requested and the Lender has agreed to make certain amendments to the terms of the Original Loan Agreement (including, without limitation, increasing the aggregate principal amount of the Credit Facility to $10,000,000 in Canadian Dollars) and have agreed to do so by way of an amendment and restatement of the Original Loan Agreement reflecting such amendments.

NOW, THEREFORE , in consideration of the premises and the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows:

PART 1 DEFINITIONS AND INTERPRETATION

Definitions

1.1 Where used in this Agreement, and any amendment or supplement hereto, unless there is something in the subject matter or context necessarily inconsistent therewith:

(a) “ 61-101 Approval ” has the meaning set out in §7.1(b);

(b) “ Advance ” means any advance of money made by the Lender under the Credit Facility and evidenced by a Convertible Note;

(d) “ Agreement ” means this amended and restated standby convertible loan agreement and any schedules hereto, as amended or supplemented from time to time;

(e) “ Applicable Law ” means, in relation to any Person, property, transaction or event, all applicable provisions of: (a) statutes, laws (including, without limitation, the common law), rules, regulations, decrees, ordinances, codes, proclamations, treaties, declarations or orders of any Governmental Authority (including, without limitation, Applicable Securities Laws); (b) any consents or approvals of any Governmental Authority; and (c) any orders, decisions, advisory or interpretative opinions, injunctions, judgments, awards, decrees of, or agreements with, any Governmental Authority, in each case applicable to or binding upon such Person, property, transaction or event;

(f) “ Applicable Securities Laws ” means, collectively, and as the context may require, the securities legislation having application, the rules, policies, order and directives of any stock exchange having application, and the rules, policies, instruments, notices and orders issued by securities regulatory authorities or stock exchanges having application in the circumstances;

(g) “ Business Day ” means any day which is not a Saturday, Sunday or statutory holiday in British Columbia, Canada and North Carolina, United States;

(h) “ Canadian Dollars ” means the lawful money of Canada;
(i) “ Closing ” means closing of the Transaction;
(j) “ Common Shares ” means the common shares in the capital of the Borrower;
(k) “ Conversion ” has the meaning set out in §7.1;

(l) “ Convertible Note ” means a promissory note of the Borrower delivered to the Lender evidencing the outstanding Advances in the form of Schedule “A”;

(m) “ Control Person ” has the meaning set out in the Exchange’s Corporate Finance Manual in Policy 1.1 (Interpretation);

(n) “ Control Person Approval ” has the meaning set out in §7.1(a)(i);

(o) “ Conversion Price ” means the greater of: (a) $0.50; (b) a 100% premium above the 30-day VWAP of the Common Shares on the Exchange at the time of each Advance; and (c) the minimum price acceptable to the Exchange, per Common Share, subject to adjustment as provided in the Convertible Note;

(p) “ Credit Facility ” has the meaning set out in the recitals;
(q) “ deemed year ” has the meaning set out in §5.2(a);
(r) “ Disclosure Record ” has the meaning set out in §3.1(g);
(s) “ Event of Default ” means those events described in §10.1;
(t) “ Exchange ” means the TSX Venture Exchange;

(u) “ Governmental Authority ” means: (i) any federal, provincial, state, county, municipal or local government or governmental body, including any department, agency, commission, securities regulatory authority, board or other authority thereof, exercising any statutory, regulatory, expropriation or taxing authority; (ii) any quasi-governmental body or other body acting under the valid authority of any of the foregoing (including any stock exchange); and (iii) any domestic, foreign or international judicial, quasi-judicial or administrative court, tribunal, commission, board, panel or arbitrator having competent jurisdiction over the Lender or the Borrower;

(v) “ Indebtedness ” means the principal amount, all accrued and unpaid interest and all other amounts due by the Borrower to the Lender pursuant to the Loan Documents from time to time;

(w) “ Initial Advance Date ” means January 18, 2023;
(x) “ Interest ” means the interest payable on the Loan as contemplated in §5.1;
(y) “ Interest Conversion ” has the meaning set out in §7.1;
(z) “ Interest Rate ” has the meaning set out in §5.1;

(aa) “ Lien ” means (i) any right of set-off intended to secure the payment or performance of an obligation, (ii) any interest in property created by way of mortgage, pledge, charge, lien, assignment by way of security, hypothecation, security interest, hire purchase

agreement, conditional sale agreement, repurchase agreement, reverse repurchase agreement, deposit arrangement, title retention, capital lease, sale-lease-back transaction or discount, factoring or securitization arrangement on recourse terms, (iii) any statutory deemed trust or lien, (iv) any preference, priority, adverse claim, levy, execution, seizure, attachment, garnishment or other encumbrance which binds property and (v) any agreement to grant any of the foregoing rights or interests described in Clauses (i) to (iv) of this definition.

(bb) “ Loan ” means the aggregate outstanding principal balance of the Credit Facility from time to time and evidenced by the Convertible Notes;

(cc) “ Loan Documents ” means, collectively, this Agreement, the Transaction Documents and all other agreements, documents, certificates and instruments executed and delivered by the Borrower in favour of the Lender in connection therewith;

(dd) “ Loan Purpose ” has the meaning set out in the recitals;

(ee) “ LOI ” means a letter of intent dated November 3 2023 between Perry English, Michael Kilbourne, 1544230 Ontario Inc., Gravel Ridge Resources Ltd. and the Borrower, as amended or supplemented from time to time;

(ff) “ LOI Assets ” means all of the Borrower’s present and after-acquired right, title and interest in and to any personal property, real property or other property, assets and undertaking acquired pursuant to the transactions contemplated by the LOI (including, without limitation, any such mineral claims, option agreements, other agreements and rights related to any of the foregoing);

(gg) “ Material Adverse Effect ” means any matter, event or circumstance that, individually or in the aggregate, would have a material adverse effect on: (i) the business, assets, properties, liabilities, operations, or financial condition of the Borrower; (ii) the validity or enforceability of this Agreement or any other Loan Documents; (iii) the perfection or priority of any Lien granted by the Borrower pursuant to the Security Agreements; (iv) the rights or remedies of the Lender under this Agreement or any other Loan Documents; or (v) the ability of the Borrower to perform any of its material payment obligations under this Agreement or any other Loan Documents, provided that “Material Adverse Effect” shall not include any event, occurrence, fact, condition or change, directly or indirectly, arising out of or attributable to: (A) general economic or political conditions; (B) conditions generally affecting the industries in which the Borrower operates; (C) any changes in financial or securities markets in general; (D) any changes in Applicable Law or accounting rules; (E) any action required or permitted by this Agreement or any other Loan Document; or (F) the public announcement, pendency or completion of the transactions contemplated by this Agreement and/or any other Loan Document, provided further that, in the case of the foregoing clauses (A) through (D), if such matter, event or circumstance materially and disproportionally impacts the Borrower as compared to other persons that operate in the industries in which the Borrower operates, then the material and disproportionate aspect shall be taken into account in determining whether a Material Adverse Effect has occurred;

(hh) “ Material Transaction ” means (A) the acquisition by any person or group of persons “acting jointly or in concert” (as interpreted under National Instrument 62-104 - Take-Over Bids and Issuer Bids ) (other than the Lender) of (i) direct or indirect beneficial ownership of securities of the Borrower having attributed to it a majority of the outstanding votes attached to all of the issued and outstanding securities of the Borrower or (ii) the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the board of directors of the Borrower; or (B) the sale, disposal or other transfer or encumbrance of the majority of the assets of the Borrower (based on net present value as determined as of or about the date of such sale, disposal or other transfer or encumbrance) that are not collateral under the Security Agreements;

(ii) “ Maturity Date ” means January 12, 2028;
(jj) “ Original Loan Agreement ” has the meaning set out in the recitals;

(kk) “ Person ” means any individual, partnership, corporation, trust, limited liability company or other entity;

(ll) “ PPSA ” means the Personal Property Security Act (British Columbia) and its regulations;

(mm) “ Principal Conversion ” has the meaning set out in §7.1;

(nn) “ Regulation D ” means Regulation D under the U.S. Securities Act;
(oo) “ Regulation S ” means Regulation S under the U.S. Securities Act;
(pp) “ Rights Plan ” has the meaning set out in §3.1(f);
(qq) “ Secured Royalty ” has the meaning set out in §8.1;
(rr) “ Security Agreements ” has the meaning set out in §8.1;

(ss) “ Shareholder Approvals ” means the Control Person Approval and the 61-101 Approval;

(tt) “ SOFR ” means, for any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on the website of the Federal Reserve Bank of New York, currently at http://www.newyorkfed.org (or any successor source for the secured overnight financing rate identified as such by the administrator of the secured overnight financing rate from time to time);

(uu) “ SOFR Administrator ” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate);

(vv) “ Transaction ” means the transactions contemplated by this Agreement;

(ww) “ Transaction Documents ” has the meaning set out in §6.1;

(xx) “ U.S. Person ” means a U.S. Person as defined in Regulation S (the definition of which includes, but is not limited to, (i) any natural person resident in the United States, (ii) any partnership or corporation organized or incorporated under the laws of the United States, (iii) any partnership or corporation organized outside of the United States by a U.S. Person principally for the purpose of investing in securities not registered under the U.S. Securities Act, unless it is organized, or incorporated, and owned, by accredited investors who are not natural persons, estates or trusts, and (iv) any estate or trust of which any executor or administrator or trustee is a U.S. Person);

(yy) “ U.S. Purchaser ” is (a) any “U.S. Person” as defined in Regulation S, (b) any person purchasing the securities on behalf of any “U.S. Person” or any person in the United States, (c) any person who receives or received an offer of the securities while in the United States, or (d) any person who is or was in the United States at the time the person’s buy order was made or this Agreement was executed or delivered;

(zz) “ U.S. Securities Act ” means the Securities Act of 1933 , as amended, of the United States of America;

(aaa) “ United States ” means the United States of America, its territories, any State of the United States and the District of Columbia;

(bbb) “ VWAP ” means volume weighted average trading price; and

(ccc) “ Zonia Security Conditions ” has the meaning set out in §4.4.

Interpretation

1.2 For the purposes of this Agreement and any other Loan Documents:

(a) the word “person” includes in its meaning any firm and any body corporate or politic;

(b) “herein”, “hereunder”, and similar terms refer to this Agreement as a whole and not to any specific, section, clause or provision thereof;

(d) any reference in this Agreement to a statute will include any amendment or successor statute and any regulations thereunder in force from time to time;

(e) the headings appearing in this Agreement have been inserted for convenience of reference only and in no way define, limit, or enlarge the scope of meaning of the provisions of this Agreement;

(f) a reference to a Part is to a Part of this Agreement; and

(g) all references to any party, whether a party to this Agreement or not, will be read with such changes in number or gender as the context or reference requires.

1.3 Except where otherwise indicated or provided for all statements of or references to monetary amounts in this Agreement mean lawful currency of Canada.

Schedules

1.4 The following schedule attached hereto are incorporated in and deemed to be an integral part of this Agreement:

(a) Schedule “A” – Form of Convertible Note
(b) Schedule “B” – [Intentionally Deleted]
(c) Schedule “C” – U.S. Purchaser Certificate
(d) Schedule “D” – Form of Drawdown Notice
(e) Schedule “E-1” – Form of Security Agreement (Canada)
(f) Schedule “E-2” – Form of Security Agreement (US)
(g) Schedule “F” – Wire Transfer Instructions

Amendments and Restatement

1.5 This Agreement amends and restates the Original Loan Agreement and is not a novation of the Original Loan Agreement, and:

(a) all references to the “Agreement” or similar references to the Original Loan Agreement in any of the other Loan Documents shall be deemed to refer to this Agreement, as it may be amended, restated, supplemented or replaced from time to time, without any requirement to amend such Loan Documents;

(b) all indebtedness, liabilities and obligations of the Borrower under the Original Loan Agreement shall continue as Indebtedness under this Agreement, and this Agreement shall not evidence, or result in, a novation of such indebtedness, liabilities or obligations. Without limiting the foregoing, all amounts outstanding under, or otherwise in connection with, “Loan” under the Original Loan Agreement as of the date of this Agreement shall be deemed to be outstanding as the Loan under, and subject to the terms of, this Agreement; and

(c) the Borrower hereby represents, warrants and confirms to the Lender that, as of the date hereof and notwithstanding this Agreement and the amendments given effect by this Agreement:

(i) any Security Agreements granted in favour of the Lender and the security interests granted therein continue in full force and effect as security for the

Indebtedness, including without limitation all indebtedness, liabilities and obligations of the Borrower arising under, or in connection with, this Agreement, and such documents and interests are hereby ratified and confirmed; and

(ii) all indemnities and guarantees contained in the Loan Documents continue in full force and effect in accordance with their terms, extend to the indebtedness, liability and obligations of the Borrower under this Agreement, and are hereby ratified and confirmed.

PART 2 CONSIDERATION

No Consideration Payable

2.1 No upfront fees, including an origination fee or a non-utilization or stand-by fee shall be payable by the Borrower to the Lender in connection with the Credit Facility.

PART 3 REPRESENTATIONS AND WARRANTIES

Representations and Warranties of Borrower

3.1 The Borrower represents and warrants to the Lender as follows:

(a) the Borrower is a valid and subsisting company, duly incorporated and in good standing under the Business Corporations Act (British Columbia) and has all requisite corporate power, capacity and authority to carry on its business as now conducted, to own, lease and operate its properties and assets and to carry out the provisions hereof;

(b) the Borrower is a “reporting issuer” in the provinces of Canada other than Quebec and, to the best of the knowledge of the Borrower, the Borrower is not in default of any requirements of Applicable Securities Laws;

(c) no order ceasing or suspending trading in the securities of the Borrower nor prohibiting the sale of such securities has been issued to the Borrower or any of its directors or officers and, to the best of the knowledge of the Borrower, no investigations or proceedings for such purposes are pending or threatened and, to the knowledge of the Borrower, no circumstances exist which would reasonably be expected to give rise to any such investigation, proceeding or order;

(d) the authorized capital of the Borrower consists solely of an unlimited number of Common Shares;

(e) The Common Shares are listed and posted for trading on the Exchange and the OTCQB and any Common Shares issued pursuant to this Agreement will be listed and posted for trading on the Exchange and the OTCQB upon the Borrower complying with the usual conditions imposed by such stock exchanges with respect thereto; the Borrower has received an acceptance in principle letter from the Exchange with respect to this Agreement and, at the time of each Advance, shall have received conditional approval of the Exchange for the issuance of the applicable Convertible Note and the issuance of the Common Shares upon conversion of the principal amount of the Loan under the applicable Convertible Note (subject to the approvals referred to in §7.1);

(f) (i) any Common Shares issued pursuant to this Agreement (including upon conversion of the Convertible Note(s)) in accordance with the terms of this Agreement will be duly and validly issued as fully paid and non-assessable common shares in the capital of the Borrower; (ii) the issuance of such Common Shares will not be subject to any preemptive or other similar rights of any security holder of the Borrower (except for any rights under the Borrower’s amended and restated shareholder rights plan agreement dated and effective December 11, 2023, as it may be amended and/or restated from time to time (the “ Rights Plan ”)); (iii) any securities issued pursuant to this Agreement (assuming the accuracy of the representations and warranties given herein by the Lender) will be issued in compliance with all Applicable Securities Laws and, other than (x) the (final) approval of the Exchange (in respect of the issuance of the Convertible Note and the issuance of Common Shares upon the conversion of the principal amount under the Loan), (y) the approval of the Exchange in respect of the issuance of the Common Shares in satisfaction of any amount of the Interest payable, and (z) the approvals set out in §7.1, no such issuance requires the consent or approval of the shareholders of the Borrower or any other person;

(g) there are no undisclosed material liabilities (contingent, accruing or otherwise) of the Borrower which are not disclosed or reflected in documents filed with the applicable Canadian securities regulatory authorities including the Exchange including, without limitation, any annual information form, financial statements, material change reports or any other information filed with the applicable Canadian securities regulatory authorities and the Exchange in compliance with, or intended compliance with, Applicable Securities Laws (collectively, the “ Disclosure Record ”); to the best of the Borrower’s knowledge, such Disclosure Record does not otherwise contain any “misrepresentation” (as such term is defined pursuant to Applicable Securities Laws); all of the Borrower’s public disclosure documents filed by it under Applicable Securities Laws are available on SEDAR+ at www.sedarplus.ca; and the Borrower has not filed any confidential material change report with any securities regulatory authority that, as at the date hereof, remains confidential;

(h) the execution and delivery of this Agreement and all ancillary instruments or documents issued, executed and delivered hereunder by the Borrower (or any affiliate of the Borrower, as applicable) has been duly and validly authorized by all necessary action of the Borrower (or any affiliate of the Borrower, as applicable) and each constitutes or will constitute a legal, valid and binding obligation of the Borrower (or any affiliate of the Borrower, as applicable), enforceable against the Borrower (or any affiliate of the Borrower, as applicable) in accordance with their terms, subject to applicable bankruptcy,

insolvency, reorganization, moratorium and other similar laws affecting the rights and remedies of creditors and to the general principles of equity;

(i) the Borrower holds and is possessed of all licences and permits and has effected all registrations required for the conduct of its business and the uses for which its property is used, such licences, permits, and registrations are in good standing, and such conduct and uses are in compliance with the terms of such licences and permits and with all laws, bylaws, rules, regulations, and ordinances applicable to the Borrower or any of its property;

(j) neither the execution and delivery of any Loan Document or any documents or instruments ancillary to any Loan Document nor the observance and performance of the obligations of the Borrower (or any affiliate of the Borrower, as applicable) hereunder and thereunder will (i) result in any violation of the constating documents of the Borrower (or any affiliate of the Borrower, as applicable) or any deed, indenture, debenture, mortgage, agreement, instrument, judgement, decree, order, statute, rule, or regulation applicable to the Borrower (or any affiliate of the Borrower, as applicable) or (ii) result in the acceleration of the time for payment of any moneys payable or for performance of any obligation to be performed by the Borrower (or any affiliate of the Borrower, as applicable). Without limiting the foregoing, nothing in any Secured Royalty (or the agreement pursuant to which such Secured Royalty is payable) prohibits the grant of security to the Lender in accordance with the Security Agreements. The Borrower (or any affiliate of the Borrower, as applicable) is not restricted from transferring any of its interest in any Secured Royalty, other than: (x) pursuant to the right of first refusal in favour of the payor of the Zonia Royalty; (y) any notice requirements in favour of the payor of a Secured Royalty (which requirements, for certainty, do not include any consent or approval requirements); and (z) any requirement that a transferee of any interest in a Secured Royalty agree to be bound by the terms of the Secured Royalty (or the agreement pursuant to which such Secured Royalty is payable) or otherwise assume the obligations of the Borrower (or any affiliate of the Borrower, as applicable) thereunder; and

(k) no development or event has occurred that has had or would reasonably be expected to have a Material Adverse Effect.

Representations and Warranties of the Lender

3.2 The Lender represents and warrants to the Borrower as follows, with the intent that the Borrower will rely thereon in entering into this Agreement and in concluding the transactions contemplated hereby:

(a) the Lender has the necessary power, capacity, right and authority to enter into and deliver this Agreement and to perform its obligations hereunder;

(b) the Lender (1) will be acquiring any Convertible Note for investment purposes only and not with a view to resale or distribution in violation of applicable Canadian securities laws, (2) will be acquiring any Convertible Note as principal for the Lender’s own account and not for the account or benefit of anyone other than the Lender, and (3) is not a resident in Canada.

(i) the Lender is a discretionary or similar account (other than an estate or trust) that is excluded from the definition of “U.S. Person” pursuant to Rule 902(k)(2)(i) of Regulation S under the U.S. Securities Act and is held on behalf of a person that is not a U.S. Person by a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States; or

(ii) the Lender is, or is acting for the account or benefit of, a U.S. Person or a person located in the United States and is an “accredited investor” as defined in Regulation D of the U.S. Securities Act (a “ U.S. Accredited Investor ”), and is acquiring the Convertible Note, when issued, for its own account or for the account or benefit of a U.S. Accredited Investor as to which it exercises sole investment discretion, to be held for investment only and not with a view to any resale, distribution or other disposition of the Convertible Note in violation of United States securities laws or applicable state securities laws; and

IN EITHER CASE, the Lender has properly completed and duly executed a U.S. Purchaser Certificate attached to this Agreement as Schedule C, and confirms the truth and accuracy of all statements made by the Lender in such certificate.

(d) the Lender (either itself or together with its affiliates) is a Control Person of the Borrower. The Lender and its affiliates do not intend on “acting jointly or in concert” (as such term is interpreted under National Instrument 62-104 – Take-Over Bids and Issuer Bids ) with any other person in connection with any acquisition of, or offer to acquire, securities of the Borrower;

(e) no person has made to the Lender or any beneficial purchaser for whom it is acting as trustee or agent any written or oral representations:

(i) that any person will resell or repurchase the Securities;
(ii) that any person will refund the purchase price of the Securities; or
(iii) as to the future price or value of any of the Securities.

(f) this Agreement has been duly executed and delivered by the Lender and constitutes a legal, valid and binding agreement of the Lender enforceable against the Lender in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights and remedies of creditors and to the general principles of equity;

(g) the Lender has been independently advised as to the applicable hold period imposed in respect of the Securities by securities legislation in the jurisdiction in which the Lender resides and confirms that no representation has been made respecting the applicable hold periods for the Securities and is aware of the risks and other characteristics of the Securities and of the fact that the Lender may not be able to resell the Securities except in accordance with the Applicable Securities Laws;

(h) the Lender is resident in the jurisdiction set out on the first page of this Agreement;

(i) the Lender is capable of assessing the proposed investment as a result of the Lender’s financial experience and acknowledges that the Convertible Note is a speculative investment and involve a substantial degree of risk and Lender is able to bear the economic risk of loss of the investment; and

(j) if required by Applicable Law, policy or order or by any securities commission or other regulatory authority, the Lender will, on a timely basis, execute, deliver, file and otherwise assist in filing, such reports, undertakings and other documents with respect to the issue of any Convertible Note as may be required.

PART 4 THE CREDIT FACILITY

Credit Facility

4.1 Subject to the terms and conditions contained herein, the Lender agrees to make Advances to the Borrower from time to time commencing from the Closing, as requested by the Borrower in an aggregate (non-revolving) principal amount not to exceed $10,000,000 in Canadian Dollars (the “ Loan Principal Amount ”) until the Maturity Date in the manner more fully set forth in §4.2.

Delivery of Advances

4.2 For a period commencing on the Closing and ending on the Maturity Date, unless an Event of Default has occurred and is continuing subject to §4.3, the Borrower has the right to request for an Advance or Advances from the Credit Facility (the “ Drawdown ”), at any time, at its sole election. Such Drawdown shall be made in writing in the form provided in Schedule “D” attached hereto and be provided by the Borrower to the Lender at least five (5) days prior to the Advance Date. The Lender shall deliver its Advance to the Borrower’s bank account provided in Schedule “F”.

Drawdown Limitations

4.3 Until the Shareholder Approvals have been successfully obtained by the Borrower, the aggregate Drawdowns by the Borrower shall not exceed $5,000,000 in Canadian Dollars.

4.4 Until (a) a Security Agreement (as defined below) (in substantially the form attached to this Agreement as Schedule “E-2”) has been executed and delivered to and in favour of the Lender; and (b) a legal and valid first priority security interest in the Zonia Royalty (as defined below) in favour of the Lender is created and perfected in all applicable jurisdictions, in form and substance acceptable to the Lender, in its sole discretion (together, (a) and (b) are the “ Zonia Security Conditions ”), the Loan Principal Amount shall be capped at $8,000,000 in Canadian Dollars.

PART 5 INTEREST AND PAYMENT

Interest and Indebtedness

5.1 Interest shall accrue on the Loan at the rate per annum equal to the lesser of: (a) the SOFR, as published by the SOFR Administrator from time to time, plus seven percent (7%) per annum; and (b) 12.5% per annum (the “ Interest Rate ”), and shall be calculated daily, and compounded annually on the last day of each calendar year, on the basis of the actual days elapsed in the period for which such interest is to accrue and on the basis of a year of 360 days for each calendar year. Interest shall be capitalized into the Loan, and the outstanding Indebtedness shall be due and payable to the Lender on the Maturity Date in accordance with the terms of the applicable Convertible Note or Convertible Notes.

5.2 For the purposes of the Interest Act (Canada) and disclosure under such Act:

(a) wherever interest to be paid under this Agreement is to be calculated on the basis of any period of time that is less than a calendar year (a “ deemed year ”), such rate of interest shall be expressed as a yearly rate by multiplying such rate of interest for the deemed year by the actual number of days in the calendar year in which the rate is to be ascertained and dividing it by the number of days in the deemed year;

(b) the Borrower confirms that it fully understands and is able to calculate the rate of interest applicable to the Loan based on the methodology for calculating per annum rates provided for in this Agreement. The Lender agrees that, if requested in writing by the Borrower, it shall calculate the nominal and effective per annum rate of interest on the Loan outstanding at any time and provide such information to the Borrower promptly following such request; provided that any error in any such calculation, or any failure to provide such information on request, shall not relieve the Borrower of any of its obligations under this Agreement or any other Loan Documents, nor result in any liability of the Lender. The Borrower hereby irrevocably agrees not to plead or assert, whether by way of defence or otherwise, in any proceeding relating to the Loan Documents, that the interest payable under the Loan Documents and the calculation thereof has not been adequately disclosed to the Borrower, whether pursuant to section 4 of the Interest Act (Canada) or any other Applicable Law or legal principle.

5.3 Each determination by the Lender of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest mathematical error in calculating such amount.

5.4 In the event that any provision of this Agreement or any other Loan Document would oblige the Borrower to make any payment of interest or any other payment which is construed by a court of competent jurisdiction to be interest in an amount or calculated at a rate which would be prohibited by Applicable Law or would result in a receipt by the Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then notwithstanding such provision, such amount or rate shall be deemed to have been adjusted nunc pro tunc to the maximum amount or rate of interest, as the case may be, as would not be so

prohibited by Applicable Law or so result in a receipt by the Lender of interest at a criminal rate, such adjustment to be effected, to the extent necessary as follows:

(a) first, by reducing the amount or rate of interest required to be paid under this Agreement; and

(b) thereafter, by reducing any fees, commissions, premiums or other amounts required to be paid to the Lender which would constitute interest for the purposes of section 347 of the Criminal Code (Canada).

If, notwithstanding the provisions of this §5.4 and after giving effect to all adjustments contemplated thereby, the Lender shall have received an amount in excess of the maximum permitted by Applicable Law, then such excess shall be applied by the Lender to the reduction of the Loan and not to the payment of interest, or if such excessive interest exceeds such principal balance, such excess shall be refunded to the Borrower.

Manner of Payment

5.5 All payments to be made to the Lender hereunder will be made:
(a) without set-off or counterclaim, and
(b) free and clear of and without deduction for or on account of any taxes.

PART 6 CONVERTIBLE NOTE

Convertible Note

6.1 The Borrower’s obligations to repay the Indebtedness hereunder shall be evidenced by one or more Convertible Note(s), each in substantially the form set forth in Schedule “A”. The Borrower will execute and deliver to the Lender;

(a) the Convertible Note(s) applicable from time to time;
(b) the Security Agreements; and

(c) such other documents or instruments (including, without limitation, on a commercially reasonable efforts basis, applicable third party consents) that are required by Applicable Law to create, preserve, protect and perfect a first priority security interest in the Secured Royalties and any other collateral under the Security Agreements.

(collectively, the “ Transaction Documents ”).

PART 7 CONVERSION, SHAREHOLDER APPROVAL AND EARLY REPAYMENT

Lender’s Conversion Right & Shareholder Approval

7.1

(a) Prior to the Maturity Date on at least ten Business Days prior written notice to the Borrower, the Lender may, in its sole discretion, elect to convert all or any portion of the Indebtedness into a number of Common Shares determined as follows: (a) for all or any portion of the principal amount of each Drawdown that number of Common Shares equal to the quotient of the principal amount of such portion of the Drawdown and the applicable Conversion Price (the “ Principal Conversion ”); and (b) for the Interest that number of Common Shares equal to the quotient of the amount of the Interest payable and the Market Price (as defined under Exchange policy 1.1) at the time of settlement (the “ Interest Conversion ” and, together with the Principal Conversion, the “ Conversion ”). Any such conversion shall be subject to Exchange approval. Notwithstanding the foregoing, the Lender shall have no right to effect the Conversion:

(i) until the Borrower obtains a resolution of the disinterested shareholders of the Borrower approving this Agreement and the terms of the Conversion in accordance with the Exchange’s requirements, on the basis that the transaction is the first private placement with Stefan Gleason since he became a “Control Person” of the Company (the “ Control Person Approval ”), or

(ii) if, after giving effect to such Conversion, such Conversion would result in (A) the occurrence of a Flip-in Event (as defined in the Rights Plan) and/or (B) the Lender becoming an Acquiring Person (as defined in the Rights Plan).

(b) The Borrower shall convene and conduct a special meeting of its shareholders as soon as reasonably practicable (and in any event, no later than April 1, 2024), to consider the Control Person Approval and any “minority approval” required in connection with this Agreement pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“ 61-101 Approval ”) and the Borrower shall recommend to its shareholders that they approve such resolutions. The Lender and its advisors shall be given a reasonable opportunity to review and comment on the management information circular prepared by the Borrower in connection with such meeting and the Borrower shall incorporate all reasonable comments of the Lender and its advisors therein.

7.2 All Common Shares so acquired on Conversion shall be issued within five Business Days of the effective date of the Conversion and shall bear applicable resale legends restricting the transfer of said Common Shares, including for a period of four months and one day from the applicable Advance Date under Canadian securities rules and for a period of six months under US securities rules. No fractional Common Shares will be issued.

Early Repayment

7.3 Unless an Event of Default has occurred and is continuing, from time to time the Borrower shall have the right to repay, in whole or in part, any Indebtedness, being any then outstanding Principal Amount (as defined in such Convertible Note) of any Convertible Note together with any accrued and unpaid Interest thereon, upon at least fifteen (15) days (or such shorter time as is acceptable to the Lender in its sole discretion) prior written notice by the Borrower to the Lender. Such notice shall include the proposed prepayment date and the amount of the Indebtedness, being the amount of the Principal Amount (as defined in such Convertible Note) and Interest, to be paid on such prepayment date. Such prepayment will be paid by wire transfer of immediately available funds to the account designated by the Lender.

PART 8 SECURITY

8.1 The Indebtedness will be secured by the following, each in form and substance reasonably acceptable to the Lender (collectively, the “ Security Agreements ”): (a) an amended and restated security agreement by the Borrower (or an affiliate of the Borrower, as applicable) in favour of the Lender, in substantially the form attached to this Agreement as Schedule “E-1” (or a security agreement subject to applicable laws in the United States of America or other applicable jurisdictions, in substantially the form attached to this Agreement as Schedule “E-2”), granting a first priority security interest in favour of the Lender in all of the present and future rights, titles and interests of the Borrower (or an affiliate of the Borrower, as applicable) in, to and under:

(i) that certain 1.5% Gross Revenue Royalty on the producing Penouta tintantalum mine in Spain, 0.5% Gross Revenue Royalty on the Kenbridge nickel project in Ontario, Canada, the Gross Metal Royalties on the Authier lithium project (for certainty, consisting of a 0.5% Gross Metal Royalty from certain claims located in Preissac, Quebec and a 0.5% Gross Metal Royalty from a claim located LaMotte Township, Quebec), the 1.5% Gross Revenue Royalty on the Bissett Creek graphite project in Ontario, Canada, the 0.5% Gross Revenue Royalty on the Zonia copper-oxide project in Walnut Grove Mining District, Yavapai County, Arizona, United States of America (the “ Zonia Royalty ”), the 2.5% Gross Revenue Royalty on the Graphmada graphite mining complex in Madagascar, Africa and the 2% Gross Metal Royalty on the Battery Hill manganese project in New Brunswick, Canada (the “ Battery Hill Royalty ”)

(all as more particularly set out in Schedule “A” to Schedule “E-1” hereto or Schedule “A” to Schedule “E-2” hereto, as applicable) (collectively, the “ Secured Royalties ”);

(ii) all interest, money and other payments of any kind received or receivable in connection with the Secured Royalties; and

(iii) all proceeds of the foregoing, all books and records relating to the foregoing, and all accessions to, substitutions and replacements for each of the

foregoing, and any and all proceeds of any insurance payable to the Borrower (or an affiliate of the Borrower, as applicable) from time to time with respect to any of the foregoing; and

(b) first priority collateral assignments or other first priority security agreements by the Borrower (or an affiliate of the Borrower, as applicable) charging, all interest, money and other payments of any kind received or receivable in connection with, and proceeds of, each Secured Royalty in favour of the Lender, in each case, governed by the laws of the applicable jurisdiction governing such Secured Royalty.

Each of the term “Goods”, “Chattel Paper”, “Investment Property”, “Document of Title”, “Instrument”, “Money” and “Intangible” has the meaning given to it in the PPSA.

8.2 Notwithstanding the inclusion of the Battery Hill Royalty as a Secured Royalty (the security interest in favour of the Lender thereon, the “ Battery Hill Security ”), the Borrower may, with the prior written consent of the Lender under this §8.2 (such consent not to be unreasonably withheld or delayed), sell up to one half of the Battery Hill Royalty to a third party purchaser for value free of the Battery Hill Security thereon.

8.3 Notwithstanding anything to the contrary herein or in any other Loan Document, the security interest granted pursuant to the Security Agreements shall not extend to, and the collateral thereunder shall not include, any LOI Assets.

PART 9 BORROWER’S COVENANTS

Positive Covenants

9.1 At all times during the currency of this Agreement, the Borrower will:

(a) pay any costs of collection of the Indebtedness if it is not repaid when due;
(b) duly and punctually pay or cause to be paid to the Lender all payments in respect of principal or interest and other amounts due under this Agreement on the dates, at the places, and in the manner set forth herein;

(c) duly and punctually observe and perform all of the covenants, agreements, terms, and conditions on its part to be observed or performed under the Loan Documents;

(d) maintain and preserve its existence in good standing;
(e) conduct its business in a proper and businesslike manner and diligently preserve all of its licences, permits, registrations, rights, powers, privileges, and goodwill;
(f) use the amounts advanced under the Credit Facility solely for the Loan Purpose;

(g) permit the Lender to inspect executed final definitive agreements for royalties securing the Indebtedness at any time until the Indebtedness is paid in full; and

(h) provide to the Lender copies of quarterly and annual financial reporting materials filed with the Canadian securities regulators under NI 51-102 in compliance with, or intended compliance with applicable securities legislation as part of the Borrower’s Disclosure Record.

9.2 The Borrower will use its commercially reasonable efforts to ensure the Zonia Security Conditions are satisfied on or before December 31, 2024.

Negative Covenants

9.3 During the currency of this Agreement the Borrower will not, without the prior written consent of the Lender:

(a) alter its constating instruments in any respect materially adverse to the interests of the Lender;

(b) make loans to or investments in, or provide guarantees or indemnities or otherwise give financial assistance to, any Person, other than in the ordinary course of business;

(c) materially change the nature of its business or operations in any respect materially adverse to the interests of the Lender; or

(d) undergo a Material Transaction.

PART 10 EVENTS OF DEFAULT AND REMEDIES

Events of Default

10.1 Any one of the following events will constitute an Event of Default under this Agreement (whether such event is voluntary or involuntary or is effected by operation of law or pursuant to or in compliance with any judgement, decree, or order of any court or any order, rule, or regulation of any administrative or governmental body):

(a) if the Borrower defaults in payment of any principal due hereunder or under any Convertible Note;

(b) if the Borrower defaults in observing or performing any covenant, agreement, or condition hereunder or under any Loan Documents (other than as provided in (a) of this §10.1) on its part to be observed or performed and such default, if curable, is not cured within 21 days after notice of default is given by the Lender;

(c) if the Borrower becomes bankrupt or insolvent or makes an assignment for the benefit of, a proposal to, or an arrangement with its creditors or an action is taken or a

proceeding is instituted by the Borrower or any other Person whereby the Borrower may be dissolved, wound up, reorganized, or declared bankrupt or insolvent;

(d) if the Borrower dissolves;
(e) if any warranty or representation made by or on behalf of the Borrower hereunder or in any Loan Document proves at any time to be materially incorrect as of the date made;
(f) if the Borrower ceases to carry on its business;

(g) if a receiver or receiver-manager of the property of the Borrower or any material part thereof is appointed;

(h) if:

(i) any material provision of any Loan Document ceases for any reason to be valid, binding and in full force and effect, other than as expressly permitted by the Lender in writing or as a result of the acts or omissions by the Lender;

(ii) the Borrower contests in any manner the validity or enforceability of any provision of any Loan Document; or

(iii) the Borrower denies that it has any or further liability or obligation under any provision of any Loan Document or purports to revoke, terminate or rescind any provision of any Loan Document (in each case, other than as a result of payment in full of the Indebtedness and termination of the Credit Facility);

(i) if an order or ruling suspending the sale or ceasing the trading in any securities of the Borrower or prohibiting the sale of such securities has been issued by any securities regulatory authority to or against the Borrower and has not been vacated within five Business Days, if the Common Shares are delisted from trading from the Exchange, or the Exchange suspends trading of the Common Shares (other than routine halts requested by the Borrower or any suspensions lasting fewer than five Business Days);

(j) if any Material Transaction occurs without the prior written consent of the Lender; or

(k) if a Material Adverse Effect occurs.

Remedies

10.2 Upon the happening of any Event of Default, the Lender may at its option declare that the Indebtedness has become immediately due and payable, whereupon the Borrower will pay the same to the Lender forthwith, without presentment, demand, protest, or other notice of any kind, all of which are hereby expressly waived, and the Lender, without notice to or demand upon the Borrower (which is expressly waived by the Borrower), may proceed to protect, exercise and enforce its rights and remedies under this Agreement and any other Loan Documents including making demand for payment of all money secured thereby, and such other rights and remedies as

are provided by law or by equity or by statutes. Upon the happening of an Event of Default the Lender shall not be obligated to release or discharge the Loan unless and until the Indebtedness is paid in full.

Waiver

10.3 The Lender may in its sole discretion waive any Event of Default or any breach of any of the provisions contained herein. No waiver or consent by the Lender will extend to or be taken to affect any subsequent breach or default or the rights resulting therefrom, and no waiver or consent by the Lender will bind the Lender unless it is in writing.

Performance by the Lender

10.4 If the Borrower fails to observe or perform any of the covenants or obligations on its part to be observed or performed hereunder, then whether or not specifically provided for herein the Lender upon five (5) days prior written notice to the Borrower, may, but will not be bound to, pay such moneys, take such action, and do such things as the Lender may consider necessary to remedy or to partially remedy such failure, all of which the Borrower hereby authorizes the Lender to do in its name and on its behalf, and in such event:

(a) the Lender will be subrogated to all of the rights and be entitled to all of the securities, if any, of the person so paid; and

(b) the Borrower will indemnify and save harmless the Lender from and against all moneys, costs, charges, and expenses (including, without limitation, legal fees and disbursements on the basis of solicitor and own client costs) which are paid or incurred by the Lender in so remedying such failure.

PART 11 CONDITIONS PRECEDENT TO FUNDING

Loan Advance

11.1 The obligation of the Lender to fund the Loan or make any additional Advance under the Credit Facility is conditional upon fulfilment by the Borrower of the following conditions:

(a) delivery to the Lender of a certified copy of a directors’ resolution authorizing the borrowing under the Credit Facility and the execution and delivery of this Agreement and all other agreements, documents and instruments referred to herein, together with an officer’s certificate, certifying certain factual matters regarding the representations, warranties and covenants contained herein; and

(b) except as otherwise agreed by the Lender, the Lender will have received the receipt of the approval of the Exchange of the relevant Advance (and the Principal Conversion related thereto) and the Shareholder Approvals, in form and substance

satisfactory to the Lender, and all such approvals shall remain in good standing and in full force and effect.

Benefit

11.2 The conditions set forth in §11.1 are for the sole and exclusive benefit of the Lender and may be waived by the Lender in writing in whole or in any part on or before the date for the fulfilment thereof.

PART 12 LENDER REPRESENTATION

Board of Directors

12.1 The Borrower shall appoint one individual named by the Lender (the “ Lender Appointee ”) to the board of directors of the Borrower (the “ Board ”). The Lender hereby names Stefan Gleason as the initial Lender Appointee. Should the Borrower wish to nominate the Lender Appointee in connection with the Borrower’s 2023 annual general meeting of shareholders, the Borrower shall provide the Lender with reasonable advanced notice in order that the Lender may provide to the Borrower such information in respect of the Lender Nominee as may be required by Applicable Law in a management information circular.

Thereafter, for so long as the Lender and its affiliates own beneficially and of record, directly or indirectly, at least 15% or more of the outstanding Common Shares of the Borrower on a partially diluted basis (the “ Nominating Threshold ”), then the Lender shall be entitled (but not obligated) to nominate the Lender Appointee for election, from time to time, to the Board. The Lender Appointee shall be nominated to the Board at the Lender’s discretion. The Borrower will, subject to compliance with any applicable policies or requirements of the Exchange (including any requirement that any Personal Information Form be pre-cleared and/or a background check be completed), cause the Lender Appointee to be nominated for election in accordance with Applicable Law and the Borrower’s constating documents, provided that, the written notice from the Lender identifying the individual it intends to nominate as its Lender Appointee (if different than the initial Lender Appointee) is received by the Borrower at least 10 Business Days prior to the date a management proxy circular must be finalized in order that it is delivered to shareholders in connection with a meeting to elect directors pursuant to the time periods set out in Applicable Law and the constating documents of the Borrower (the “ Nominating Deadline ”). For so long as the Lender is entitled to nominate a Lender Appointee under §12.1 (and provided the written notice, if applicable, is received prior to the Nominating Deadline), the Borrower shall include the Lender Appointee on management’s form of proxy and the Borrower shall present and recommend that its shareholders elect the Lender Appointee to the Board on all proxies solicited by management, and in all proxy solicitation materials and any other meeting related materials, in respect any meeting at which directors are to be elected. For certainty, at any time a Lender Appointee is a member of the Board and the Lender meets or exceeds the Nominating Threshold, the Borrower shall include such Lender Nominee as a nominee for director in any management

information circular in connection with which directors are to be elected, and no notice from the Lender shall be required in connection therewith.

Disqualification

12.2 In the event that the Board reasonably determines, based solely on background checks or applicable Exchange policies, that the Lender Appointee is unsuitable, or in the event of the resignation, death or disability of the Lender Appointee (or any successor thereto) or if the Lender Appointee is not elected to serve as director at a meeting to elect directors, then the Board shall, consistent with its fiduciary duty and standard of care, appoint another individual approved by the Lender to serve as a director in lieu or replacement thereof.

Fees and Indemnity

12.3 The Lender Appointee shall be entitled to receive director fees or other additional compensation consistent with the non-executive directors of the Borrower and shall be reimbursed for all reasonable out of pocket invoiced expenses incurred in connection with attending any meeting of the Board or a committee thereof including travel, subsistence and accommodation expenses.

12.4 Concurrent with the appointment of the Lender Appointee, the Borrower agrees that it shall enter into a customary form of director indemnity agreement with the Lender Appointee to indemnify the Lender Appointee in his or her capacity of director to the fullest extent permitted pursuant to Applicable Law. The Borrower covenants and agrees that during the period the Lender Appointee is a member of the Board, the Borrower will maintain, in full force and effect, its current directors and officers insurance policy (or, if replaced, such replacement policy shall contain terms no less favourable than those in the current policy).

Survival

12.5 The covenants and agreements in this Part 12 shall survive repayment or satisfaction of the obligations hereunder (including, for certainty, repayment or satisfaction of any Convertible Note). PART 13 GENERAL PROVISIONS

Expenses

13.1 The Borrower shall promptly on demand by the Lender pay or reimburse

(a) all reasonable and documented legal fees, professional fees, disbursements and out of pocket costs (including any applicable taxes thereon) incurred by or for the account of the Lender in connection with the negotiation of this Agreement, any other Loan Documents, and the transactions contemplated hereby and thereby, up to a maximum amount of $100,000; provided that, notwithstanding the introductory language to §13.1,

the fees referenced in this subsection (a) shall not be due and payable by the Borrower to the Lender until the earlier of (i) July 1, 2024 and (ii) the closing of the first equity financing transaction of the Borrower subsequent to the date hereof. The Borrower may (subject to the maximum aggregate principal amount of the Loan not being exceeded, and subject to Section 4.3) request an Advance for the amount of such fees and may use such Advance to pay such fees (notwithstanding the Loan Purpose); and

(b) all reasonable and documented costs and expenses incurred by the Lender, including the reasonable and documented fees, charges and disbursements of any legal counsel for the Lender in connection with the preservation, interpretation, enforcement or protection of its rights under or in connection with the Loan Documents, and the transactions contemplated by the Loan Documents, including all such costs and expenses incurred in connection with any restructuring, workout or negotiations in respect of the Loan Documents or the Credit Facility.

Time of Essence

13.2 Time will be of the essence of this Agreement.

Governing Law

13.3 This Agreement will be construed in accordance with and governed by the laws of the Province of British Columbia and the laws of Canada applicable therein.

Further Assurances

13.4 Whether before or after the occurrence of an Event of Default, the Borrower shall at its own expense do, make, execute or deliver, or cause to be done, made, executed and/or delivered, all such further deeds, instruments, documents, acts and things in connection with the Credit Facility and the Loan Documents as the Lender and its solicitors may reasonably require from time to time for the purpose of giving effect to the Loan Documents, all promptly upon reasonable request of the Lender. Without limiting the foregoing, the Borrower shall, forthwith and from time to time on request from the Lender, execute and deliver or cause to be executed and delivered, all such deeds, instruments and other documents, in form and substance satisfactory to the Lender and its solicitors, and do or cause to be done, all such other acts and things, in each case which in the reasonable opinion of the Lender and its solicitors are necessary or of advantage to give the Lender the Liens and the priority intended to be created by the Security Agreements or to facilitate realization under such Liens, under all applicable laws and in all applicable jurisdictions.

Severability

13.5 If any provision contained in this Agreement is for any reason held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect, then at the option of the Lender such invalid, illegal, or unenforceable provision will be severable from and will not affect any other provision of this Agreement and this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

Survival

13.6 All representations, warranties, covenants, and agreements made in this Agreement or in any declaration, certificate, or other instrument delivered in connection herewith are material and will conclusively be deemed to have been relied upon by the Lender notwithstanding any prior or subsequent investigation by the Lender, will survive advances on account of the Credit Facility and the fulfilment of all transactions and deliveries contemplated hereunder, and will continue in full force and effect so long as any of the Indebtedness remains outstanding.

Notice

13.7 Notwithstanding anything herein contained and whether or not expressly stipulated herein, every notice or other communication contemplated hereby or otherwise relating hereto shall be in writing. Every notice required or permitted to be communicated hereunder, may be delivered personally by leaving it with the party to whom it is to be communicated or sent by email.

Such notice shall be deemed to have been validly communicated to and received by the party to whom it was addressed on the date on which it was delivered. The address of any party may be changed by written notice as contemplated by this §12.6, and the respective addresses of the parties hereto for the communication of notice shall be as follows:

(a) as to the Lender:

Gleason & Sons LLC 15720 Brixham Hill Avenue, #205 Charlotte, NC 28277

Attention: Stefan Gleason Email: [redacted]

(b) as to the Borrower:

Electric Royalties Ltd. 1040 West Georgia Street, Suite 1400 Vancouver, BC V6E 4H1

Attention: Brendan Yurik Email: [redacted]

Independent Legal Advice

13.8 The Lender acknowledges that the Borrower has recommended that the Lender obtain independent legal advice with respect to this Agreement, and that the Lender has had a reasonable opportunity to do so prior to executing this Agreement.

Entire Agreement

13.9 This Agreement merges and supersedes all prior negotiations, representations, and agreements (including, without limitation, the commitment letter among the parties hereto dated October 18, 2023), and expresses the entire agreement of the parties hereto with respect to the subject matter hereof.

Amendments

13.10 This Agreement may not be amended except by an instrument executed by both of the parties. No term or covenant of this Agreement may be waived, discharged, or terminated except by an instrument executed by the party affected thereby.

Counterparts

13.11 This Agreement may be signed in as many counterparts as may be necessary, each of which so signed will be deemed to be an original (and each signed copy sent by electronic facsimile transmission will be deemed to be an original), and such counterparts together will constitute one and the same instrument and notwithstanding the date of execution will be deemed to bear the date first above written.

Assigns

13.12

(a) The Borrower may not assign this Agreement, the other Loan Documents, or any its rights, interests or obligations thereunder to any third party without the prior written consent of Lender and any such assignment by the Borrower without such prior written consent shall be null and void. All covenants and agreements of the Borrower contained herein shall bind the Borrower and its successors and assigns, and shall inure to the benefit of Lender, its successors and assigns.

(b) Lender may:

(i) assign (subject to the prior written consent of the Borrower, not to be unreasonably withheld or delayed, unless an Event of Default has occurred and is continuing, in which case no such consent of the Borrower shall be required), in whole or in part, the Indebtedness and the Loan Documents to any third party; provided that the Lender may collaterally assign, in whole or in part, the Indebtedness and the Loan Documents, without any consent of the Borrower, to any bona fide lender of the Lender in connection with any financing or refinancing of the Loan and such bona fide lender may take any lawful action on such assigned Indebtedness and Loan Documents in the event of enforcement of the same (including, without limitation, any further assignment of the same to any third party), without any notice to, or any consent of, the Borrower;

(ii) subject to Applicable Securities Laws, assign, in whole or in part, the Indebtedness (including, for certainty, by assigning any one or more Convertible

Note) to any third party who agrees to immediately exercise the rights of Conversion such that the applicable portion of the Indebtedness will be repaid in connection with such assignment; provided that upon such Conversion such third party shall cease to have any rights under this Agreement; or

(iii) with the prior written consent of the Borrower, which consent will not be unreasonably withheld or delayed, otherwise assign or collaterally assign, in whole or in part, the Indebtedness and any Loan Documents, other than as contemplated in (i) or (ii) (each of (i), (ii) and (iii), an “ Assignment ”).

(c) The Borrower consents to the Assignment and any power of attorney granted or to be granted by Lender to any assignee or attorney in connection with the Assignment, and acknowledges that pursuant to this Agreement upon the occurrence and during the continuation of an Event of Default, such assignee or attorney has the power and authority to (a) perform any act, execute any documents, or otherwise to take any action with respect to the Loan Documents (if subject to such Assignment), and (b) demand, receive, and enforce all of Lender’s rights, powers, and remedies with respect to this Assignment, including, without limitation, its right to receive directly or indirectly (or as it otherwise directs) any and all payments to be made to Lender (if applicable). Any prospective assignee will execute such documentation as the Borrower may reasonably request for the purpose of ensuring that the assignee is bound by the terms of this Agreement.

Enurement

13.13 This Agreement shall be binding upon, and enure to the benefit of the parties hereto and their respective successors, and permitted assigns.

This Agreement to Govern

13.14 If there is any inconsistency between the provisions of this Agreement and the provisions of any other Loan Document to which the Borrower is party, the provisions hereof shall govern and apply to the extent of the inconsistency.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.

ELECTRIC ROYALTIES LTD. GLEASON & SONS LLC

" Brendan Yurik "

Per: Authorized Signatory

Per: "Stefan Gleason" Authorized Signatory

SCHEDULE “A”

FORM OF CONVERTIBLE NOTE

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT DATE THAT IS FOUR MONTHS AND ONE DAY FROM ISSUANCE DATE HEREOF].

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE BORROWER THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE BORROWER; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF CLAUSE (C) OR (D), THE SELLER FURNISHES TO THE BORROWER AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE BORROWER TO SUCH EFFECT.

THESE CONVERTIBLE NOTES MAY NOT BE EXERCISED BY OR ON BEHALF OF A U.S. PERSON OR A PERSON IN THE UNITED STATES UNLESS THE SHARES ISSUABLE UPON CONVERSION OF THESE CONVERTIBLE NOTES HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

CONVERTIBLE NOTE

Date: [●], 202_

ARTICLE 1 PRINCIPAL AND INTEREST

1.1 Promise to Pay

FOR VALUE RECEIVED, the undersigned, ELECTRIC ROYALTIES LTD. , (the “ Borrower ”) hereby acknowledges itself indebted to and promises to pay to the order of GLEASON & SONS LLC , and its successors and assigns (the “ Holder ” or “ Lender ”) on the earlier of (i) January 12, 2028 and (ii) such earlier date as the Principal Amount (as hereinafter defined) together with accrued Interest (as hereinafter defined) may become payable (the “ Maturity Date ”) in accordance with the provisions of this convertible note (this “ Note ”), the principal amount of $ [●] in lawful money of Canada (the “ Principal Amount ”) plus interest (“ Interest ”) accruing on the Principal Amount outstanding from time to time at the Interest Rate until the Principal Amount of the Note is repaid in full in accordance with its terms.

The Borrower shall pay Interest in accordance with Article 3. Any obligations arising out of this Note, including without limitation the Principal Amount and the Interest, shall be referred to herein as the “ Obligations ”. The Holder acknowledges that this Note is issued by the Borrower to the Holder under the terms of the Amended and Restated Standby Convertible Loan Agreement dated February 16, 2024 between the Lender, as lender, and Borrower, as borrower (as amended, restated, supplemented or otherwise modified from time to time, the “ Convertible Loan Agreement ”).

ARTICLE 2 INTERPRETATION AND GENERAL PROVISIONS

2.1 Interpretation

Capitalized terms used herein without definition shall have the meaning ascribed thereto in the Convertible Loan Agreement.

2.2 Plurality and Gender

Words importing the singular number only shall include the plural and vice versa and words importing the masculine gender shall include the feminine gender and words importing Persons shall include firms and corporations and vice versa .

2.3 Headings, etc.

The division of this Note into Articles, Sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Note.

2.4 Day Not a Business Day

In the event that any day on or before which any action is required to be taken hereunder is not a Business Day, then such action shall be required to be taken at or before the requisite time on the next succeeding day that is a Business Day.

2.5 Currency

Any reference in this Note to “ Dollars ”, “ dollars ” or the sign “ $ ” shall be deemed to be a reference to lawful money of Canada.

ARTICLE 3 PAYMENT OF PRINCIPAL AND INTEREST

3.1 The Obligations shall be due and payable without deduction or withholding for taxes of any kind or nature immediately on the earlier of:
(a) the Maturity Date; and
(b) the occurrence and continuance of an Event of Default (defined below).
3.2 Interest shall accrue, be calculated and be payable at the interest rates and at the times provided in the Convertible Loan Agreement.

For purposes of this Note,

(a) “ Conversion Price ” means the greater of: (a) $0.50; (b) a 100% premium above the 30day VWAP of the Common Shares on the Exchange at the time of each Advance; and (c) the minimum price acceptable to the Exchange, per Share;

(b) “ Shares ” means common shares in the capital of the Borrower.

ARTICLE 4 CONVERSION

4.1 Conversion Right

Prior to the Maturity Date on at least ten Business Days prior written notice to the Borrower, the Lender may, in its sole discretion, elect to convert all or any portion of the Indebtedness into a number of Common Shares determined as follows: (a) for the principal amount of the Loan that number of Common Shares equal to the quotient of the principal amount of the Loan and the Conversion Price; and (b) subject to prior Exchange approval, for the Interest that number of Common Shares equal to the quotient of the amount of the Interest payable and the Market Price (as defined under Exchange policy 1.1) at the time of settlement (the “Conversion”). Notwithstanding the foregoing, the Lender shall have no right to effect the Conversion (i) until the Borrower obtains Shareholder Approvals, and (ii) if, after giving effect to such Conversion, such Conversion would result in (A) the occurrence of a Flip-in Event (as defined in the Rights Plan) and/or (B) the Lender becoming an Acquiring Person (as defined in the Rights Plan). The Borrower shall convene and conduct a special meeting of its shareholders as soon as reasonably practicable to consider all resolutions necessary or desirable in connection with the foregoing and the Borrower shall recommend to its shareholders that they approve such resolutions. The Lender and its advisors shall be given a reasonable opportunity to review and comment on the management information circular prepared by the Borrower in connection with such meeting and the Borrower shall incorporate all reasonable comments of the Lender and its advisors therein.

All Common Shares so acquired on Conversion shall be issued within five Business Days of the effective date of the Conversion and shall bear applicable resale legends restricting the transfer of said Common Shares, including for a period of four months and one day from the Advance Date under Canadian securities rules and for a period of six months under US securities rules. No fractional Common Shares will be issued.

4.2 Exercise of Conversion Right

The Conversion Right may be exercised by the Lender by completing and signing the notice of conversion (the “ Conversion Notice ”) and delivering the Conversion Notice and this Note to the Borrower. The Conversion Notice shall provide that the Conversion Right is being exercised, shall specify the amount being converted, and shall set out the date (the “ Issue Date ”) on which Shares are to be issued upon the exercise of the Conversion Right (such date to be no earlier than five (5) Business Days and no later than fifteen (15) Business Days after the day on which the Conversion Notice is issued). The Conversion shall be deemed to have been effected immediately prior to the close of business on the Issue Date and the Shares issuable upon conversion shall be issued as fully paid and non-assessable shares at such time. Within five (5) Business Days after the Issue Date, a certificate for the required number of Shares shall be issued to the Lender. If less than all of the Principal Amount of this Note is the subject of the Conversion Right, then within five (5) Business Days after the Issue Date, the Borrower shall deliver to the Lender a replacement Note in the form hereof in the principal amount of the unconverted principal balance hereof, plus the unconverted portion of any accrued and unpaid Interest, and this Note shall be cancelled. If the Conversion Right is being exercised in respect of the entire Principal Amount of this Note (and, if applicable, all accrued and unpaid Interest and fees), this Note shall be cancelled.

4.3 Adjustment of Conversion Price

Subject to any applicable Exchange approval, the Conversion Price at which any Conversion Amount is convertible and the number of Common Shares deliverable upon the conversion of any Conversion Amount shall be subject to adjustment in the events and in the manner following:

(a) If and whenever at any time prior to the Maturity Date, the Borrower shall:
(i) subdivide or redivide the outstanding Common Shares into a greater number of Common Shares;
(ii) reduce, combine or consolidate the outstanding Common Shares into a smaller number of shares; or
(iii) fix a record date for the issue of Common Shares (or securities exchangeable for or convertible into Common Shares) to the holders of all or substantially all the outstanding Common Shares by way of a stock dividend,

(any of such events being called a “ Common Share Reorganization ”) the Conversion Price in effect immediately after the record or effective dates of such Common Share Reorganization shall be adjusted by multiplying the Conversion Price in effect on the day preceding such record or effective date by a fraction, the numerator of which shall be the total number of Common Shares outstanding before such Common Share Reorganization and the denominator of which shall be the total number of Common Shares outstanding immediately after such Common Share Reorganization, including in the case where securities exchangeable for or convertible into Common Shares are distributed, the number of Common Shares that would have been outstanding had such securities been exchanged for or converted into Common Shares on such record or effective date. Such adjustment shall be made successively whenever any event referred to in this clause (a) shall occur. Any such issue of Common Shares by way of a stock dividend shall be deemed to have been made on the record date for the stock dividend for the purpose of calculating the number of outstanding Common Shares under clauses (b) and (c) of this Section 4.3.

(b) If and whenever the Borrower shall fix a record date for the issuance of rights, options or warrants to all or substantially all the holders of its outstanding Common Shares entitling them, for a period expiring not more than 45 days after such record date, to subscribe for or purchase Common Shares (or securities convertible into or exchangeable for Common Shares) at a price per share (or having a conversion or exchange price per share) less than the Market Price per share for the Common Shares for the period ending on the third trading day prior to such record date, the Conversion Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Conversion Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date plus a number of Common Shares equal to the number arrived at by dividing the aggregate purchase price of the total number of additional Common Shares subscribed for or purchased (or the aggregate conversion or exchange price of the convertible securities subscribed for or purchased) by the Market Price per Common Share for the period ending on the third trading day prior to such record date, and of which the denominator shall be the total number of Common Shares outstanding on such record date plus the total number of additional Common Shares subscribed for or purchased (or into which the convertible securities so subscribed for or purchased are convertible or exchangeable). Such adjustment shall be made successively whenever such a record date is fixed. To the extent that any such rights, options or warrants

are not so issued or any such rights, options or warrants are not exercised prior to the expiration thereof, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect if such record date had not been fixed or, effective as at the date of such expiration, to the Conversion Price which would then be in effect based upon the number of Common Shares (or securities convertible into Common Shares) actually issued upon the exercise of such rights, options or warrants, as the case may be.

(c) If and whenever at any time the Borrower shall fix a record date for the making of a distribution to all or substantially all of the holders of its outstanding Common Shares of:
(i) shares of any class other than Common Shares and other than shares distributed to holders of Common Shares pursuant to their exercise of options to receive dividends in the form of such shares in lieu of dividends paid in the ordinary course on the Common Shares; or
(ii) rights, options or warrants (excluding those referred to in clause (b) of this Section 4.3); or
(iii) evidences of its indebtedness; or
(iv) assets (excluding dividends paid in the ordinary course);

then, in each such case, each Conversion Price shall be adjusted immediately after such record date so that it shall equal the price determined by multiplying the Conversion Price in effect on such record date by a fraction, of which the numerator shall be the total number of Common Shares outstanding on such record date multiplied by the per share figure equal to the Market Price per Common Share for the period ending on the third trading day prior to such record date, less the fair market value on a per share basis (as determined by the Board, acting reasonably, which determination shall be conclusive, but subject to Exchange approval) of such shares or rights, options or warrants or evidences of indebtedness or assets so distributed, and of which the denominator shall be the total number of Common Shares outstanding on such record date multiplied by such Market Price per Common Share for the period ending on the third trading day prior to such record date. Any Common Shares owned by or held for the account of the Borrower shall be deemed not to be outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed. To the extent that such distribution is not so made, the Conversion Price shall be readjusted to the Conversion Price which would then be in effect if such record date had not been fixed or to the Conversion Price which would then be in effect based upon such shares or rights, options or warrants or evidences of indebtedness or assets actually distributed, as the case may be. In paragraph (iv) of this clause (c) the term “dividends paid in the ordinary course” shall include the value of any securities or other property or assets distributed in lieu of cash dividends paid in the ordinary course at the option of shareholders.

(d) In the case of any reclassification of, or other change in, the outstanding Common Shares, including, without limitation, as a result of a merger, amalgamation, business combination, arrangement or other reorganization, other than a subdivision, re-division, reduction, combination or consolidation, the Lender shall be entitled to receive upon conversion of any Conversion Amount and shall accept in lieu of the number of Common Shares to which it was theretofore entitled upon such conversion, the kind and amount of shares and other securities or property which the Lender would have been entitled to receive as a result of such reclassification or other change if, on the effective date thereof, the Lender had been the registered holder of the number of Common Shares to which it was theretofore entitled upon conversion. If necessary, appropriate adjustments shall be made in the application of

the provisions set forth in this Section 4.3 with respect to the rights and interests thereafter of the Lender to the end that the provisions set forth in this Section 4.3 shall thereafter correspondingly be made applicable as nearly as may be possible in relation to any shares or other securities or property thereafter deliverable upon the conversion of any Conversion Amount. Any such adjustments shall be made by and set forth in a supplemental promissory note approved by the directors of the Borrower and the Lender and shall for all purposes be conclusively deemed to be an appropriate adjustment.

(e) In any case in which this Section 4.3 shall require that an adjustment shall become effective immediately after a date for an event referred to herein, the Borrower may, defer, until the occurrence of such event, issuing to the Lender converting after such record date and before the occurrence of such event the additional Common Shares issuable upon such conversion by reason of the adjustment required by such event before giving effect to such adjustment; provided, however, that the Borrower shall deliver to the Lender an appropriate instrument evidencing the Lender’s right to receive such additional Common Shares upon the occurrence of the event requiring such adjustment and the right to receive any distributions made on such additional Common Shares declared in favour of holders of record of Common Shares on and after the Conversion Date or such later date as the Lender would, but for the provisions of this clause (e) have become the holder of record of such additional Common Shares.
(f) The adjustments provided for in this Section 4.3 are cumulative and shall apply to successive subdivisions, redivisions, reductions, combinations, consolidations, distributions, issues or other events resulting in any adjustment under the provisions of this Section 4.3, provided that, notwithstanding any other provision of this Section 4.3, no adjustment shall be made which would result in an increase in the Conversion Price (except on a combination or consolidation of the outstanding Common Shares or any reclassification of or other transaction involving the outstanding Common Shares contemplated in clause (d) above) and no adjustment of the Conversion Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Conversion Price then in effect; provided, however, that any adjustments which by reason of this clause (f) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.
(g) Unless otherwise specifically set out in this Section 4.3, in the event of any question arising with respect to the adjustments provided in this Section 4.3, such question shall be conclusively determined by the auditors of the Borrower, acting reasonably and in good faith, whereby such auditors shall have access to all necessary records of the Borrower and such determination shall be binding upon the Borrower and the Lender. Not withstanding the foregoing, any such determination shall be subject to Exchange approval.
(h) While the Lender has conversion rights hereunder, the Borrower covenants that it shall: (i) give prior notice of its intention to set a record date at least 15 days before such record date in respect of any subdivision, redivision, reduction, combination, consolidation or stock dividend pursuant to 4.3(a), any issue of rights, options or warrants pursuant to 4.3(b) or any distribution pursuant to 4.3(c), or any reclassification of, or other change in, the outstanding Common Shares pursuant to 4.3(d); (ii) specify in any such notice the particulars of such event (provided that the Borrower shall only be required to specify in the notice such particulars of the event as shall have been fixed and determined on the date on which such notice is given); and (iii) not during the period of such notice close the

transfer books for its Common Shares so as to prevent conversion or fix a record date for voting so as to prevent the Common Shares resulting from the conversion to be voted.

(i) If any of the events referred to in clause (a), (b), (c) or (d) of this Section 4.3 occur, the Borrower shall promptly deliver to the Lender a certificate signed by two officers of the Borrower, setting forth in reasonable detail the facts, the consequent adjustment required to be made by the provisions of this Loan with respect to conversion of the Loan and the supporting calculations. If the Borrower and the Lender cannot agree on the consequent adjustments required, then the Conversion Price shall be adjusted in such manner, if any, as determined by the auditors of the Borrower, as they may reasonably determine to be equitable in the circumstances, but subject in all cases to any necessary regulatory approval.
(j) The Borrower shall not be required to issue fractional Common Shares upon the conversion of a Conversion Amount. In lieu of the Borrower issuing a fractional Common Share, the Borrower shall round such fractional Common Share down to the next whole Common Share.

4.4 Legend

Upon a Conversion prior to the expiry of any relevant hold periods under applicable securities laws, as also described and provided by the Convertible Loan Agreement, any certificate(s) issued to Holder as to the Common Shares will bear the following legends:

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT DATE THAT IS FOUR MONTHS AND ONE DAY FROM THE ADVANCE DATE].

and if applicable,

UNDER THE U.S. SECURITIES ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE OR EXEMPTIONS FROM SUCH REGISTRATION REQUIREMENTS ARE AVAILABLE. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE U.S. SECURITIES ACT.

ARTICLE 5 EARLY REPAYMENT

5.1 Early Repayment

Unless and Event of Default has occurred and is continuing, from time to time the Borrower shall have the right to repay, in whole or in part, the then outstanding Principal Amount of this Note together with any accrued and unpaid Interest thereon in accordance with the Convertible Loan Agreement.

ARTICLE 6 EVENTS OF DEFAULT

6.1 Remedies

At any time an Event of Default exists or has occurred and is continuing, the Holder shall have all rights and remedies provided in this Note, in the Convertible Loan Agreement and other Loan Documents, and under Applicable Law, all of which rights and remedies may be exercised without notice to or consent by the Borrower, except as such notice or consent is expressly provided for hereunder or required by Applicable Law.

At any time an Event of Default exists or has occurred and is continuing, the Holder may, in its discretion, provide written notice to the Borrower declaring all or a portion of the outstanding balance of unpaid Principal Amount and Interest owed to the Holder under this Note immediately due and payable.

Upon the occurrence of an Event of Default, the Holder may, without notice, take all actions available to it as lender under the Convertible Loan Agreement, including, but not limited to, declaring the Loan and all Interest thereon and other amounts payable under the Convertible Loan Agreement, immediately due and payable.

ARTICLE 7 COVENANTS

7.1 Covenants of the Borrower

So long as any Obligations remain unpaid, the Borrower shall perform and observe the covenants and actions as set forth in, and in accordance with, the Convertible Loan Agreement.

ARTICLE 8 GENERAL MATTERS

8.1 Entire Agreement

This Note together with the Convertible Loan Agreement and the other Loan Documents constitute the entire agreement between the parties and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties. There are no other agreements between the parties in connection with the subject matter hereof except as specifically set forth or referred to herein or therein.

8.2 Performance by Holder

If the Borrower fails to perform any of its obligations hereunder, the Holder may, after notice to the Borrower, but shall not be obligated to, perform any or all such obligations, and all reasonable costs, charges, expenses, fees, outlays and premiums incurred by the Holder in connection therewith shall be payable by the Borrower forthwith upon demand by the Holder and shall bear interest from the date incurred by the Holder at the Interest Rate then in effect and shall form part of the Obligations. Any such performance by the Holder shall not constitute a waiver by the Holder of any right, power, or privilege under this Note.

8.3 Notice to the Borrower and the Holder

Any notice to be given to the Borrower or the Holder shall be in writing and shall be deemed to be validly given if such notice is delivered personally, by facsimile or electronic transmission or sent by prepaid registered mail, addressed as follows:

(a) if to Borrower, at:

Electric Royalties Ltd. 1040 West Georgia Street, Suite 1400 Vancouver, BC V6E 4H1 Attention: Brendan Yurik, CEO E-mail: [redacted]

(b) if to the Holder, at: Gleason & Sons LLC 15720 Brixham Hill Avenue, #205 Charlotte, NC 28277 Attention: Stefan Gleason Email: [redacted]

Notice of change of address shall also be governed by this Section 8.3. Any notice given by personal delivery shall be deemed to have been given when received by either Borrower or the Holder, and by prepaid registered mail shall be deemed to have been received by either Borrower or the Holder on the third (3[rd] ) Business Day after the day of such mailing and any notice so given by facsimile or electronic transmission on a Business Day before 5:00 p.m. (local time of the recipient) shall be deemed to have been received by either Borrower or the Holder on such Business Day and otherwise shall be deemed to be received the next Business Day.

8.4 Replacement of Note

If this Note shall become mutilated or be lost, stolen or destroyed and in the absence of notice that the Note has been acquired by a bona fide purchaser, the Borrower shall issue a new Note upon surrender and cancellation of the mutilated Note, or, in the event that a Note is lost, stolen or destroyed, in lieu of and in substitution for the same, and the substituted Note shall be in the form hereof and the Holder shall be entitled to benefits hereof. In case of loss, theft or destruction, the Holder shall furnish to the Borrower such evidence of such loss, theft or destruction as shall be satisfactory to the Borrower in their discretion acting reasonably together with an indemnity in form and substance mutually acceptable to the Borrower and the Holder, each acting reasonably. The applicant shall pay reasonable expenses incidental to the issuance of any such new Note.

8.5 Successors and Assigns

This Note shall inure to the benefit of the Holder and its successors and its assigns and shall be binding upon the Borrower and each of their successors.

8.6 Assignment

The Borrower may not assign this Note, or any of its rights, interests or obligations thereunder to any third party without the prior written consent of the Holder and any such assignment by the Borrower without such prior written consent shall be null and void. All covenants and agreements of the Borrower contained herein shall bind the Borrower and its successors and assigns, and shall inure to the benefit of the Holder, its successors and assigns. The Holder may assign, or collaterally assign the Note to any third party, without the prior written consent of the Borrower and without prior written notice to the Borrower, including any Person or Persons who may purchase all or part of this Note, subject to compliance with applicable securities laws. The Borrower consents to the assignment and any power of attorney granted or to be granted by Holder to any assignee or attorney in connection with the assignment, and acknowledges that pursuant to this Note upon the occurrence and during the continuation of an Event of Default, such assignee or attorney has the power and authority to (a) perform any act, execute any documents, or otherwise to take any action with respect to the Loan Documents, and (b) demand, receive, and enforce all of Holder’s rights, powers, and remedies with respect to this assignment, including, without limitation, its right to receive directly or indirectly (or as it otherwise directs) any and all payments to be made to Holder.

8.7 Invalidity of Provisions

Each of the provisions contained in this Note is distinct and severable and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof or thereof.

8.8 Governing Law

This Note will be construed in accordance with and governed by the laws of the Province of British Columbia and the laws of Canada applicable therein.

8.9 Time of Essence

Time shall be of the essence of this Note and a forbearance by the Holder of the strict application of this provision shall not operate as a continuing or subsequent forbearance.

8.10 Waiver

The Borrower hereby waives presentment, notice of dishonor, protest and notice of protest. No failure or delay by the Holder in exercising any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right exclude other further exercise thereof or the exercise of any other right.

8.11 The Convertible Loan Agreement to Govern

If there is any inconsistency between the provisions of this Note and the provisions of the Convertible Loan Agreement, the provisions of the Convertible Loan Agreement shall govern and apply to the extent of the inconsistency.

[Signature Page Follows]

IN WITNESS WHEREOF , the Borrower has caused this Note to be executed by its duly authorized officer as of the date first written above.

ELECTRIC ROYALTIES LTD.

Per: Name: Title:

ACCEPTED AND AGREED as of the date first written above by:

GLEASON & SONS LLC

Per: Name: Title:

SCHEDULE “B”

[Intentionally Deleted]

SCHEDULE “C”

U.S. PURCHASER CERTIFICATE

(To be completed by U.S. Purchasers)

A “U.S. Purchaser ” is (a) any “U.S. Person” as defined in Regulation S, (b) any person acquiring the Convertible Note on behalf of any “U.S. Person” or any person in the United States, (c) any person who receives or received an offer of the Convertible Note while in the United States, or (d) any person who is or was in the United States at the time this Agreement was executed or delivered.

Capitalized terms not specifically defined in this certification have the meaning ascribed to them in the Standby Convertible Loan Agreement to which this Schedule C is attached. In the event of a conflict between the terms of this certification and such Standby Convertible Loan Agreement, the terms of this certification shall prevail.

In addition to the covenants, representations and warranties contained in the Standby Convertible Loan Agreement to which this Schedule C is attached, the Lender covenants, represents and warrants to Electric Royalties Ltd. (the “ Issuer ”) that (please place your initials on the appropriate line(s) with respect to (a) or (b)): :
Initials (a) it is a discretionary or similar account (other than an estate or trust) that is _ excluded from the definition of “U.S. Person” pursuant to Rule 902(k)(2)(i) of Regulation S and is held on behalf of a person that is not a U.S. Person by a dealer or other professional fiduciary organized, incorporated, or (if an individual) resident in the United States; OR
Initials (b) it is an “accredited investor” as defined in Rule 501(a) of Regulation D by _ virtue of satisfying one or more of the categories indicated in Section 3 below.
If the Lender has initialled box 1(b) above, the Lender further covenants, represents and warrants to the Issuer that:
a. it understands that the Securities have not been and will not be registered under the U.S. Securities Act or under the securities laws of any state of the United States, that the offer and sale contemplated hereby is being made in reliance on the exemption from registration provided by Rule 506(b) of Regulation D, that as such the Securities will be “restricted securities” within the meaning of Rule 144 under the U.S. Securities Act, and the Lender is familiar with such rule and understands the resale limitations imposed thereby and the U.S. Securities Act;
b. it acknowledges that it has not purchased the Securities as a result of any form of general solicitation or general advertising, including advertisements, articles, notices or other communications published in any newspaper, magazine or similar media or broadcast over radio, television or the Internet, or any seminar or meeting whose attendees have been invited by general solicitation or general advertising;
c. it understands and agrees that there may be material tax consequences to the Lender of an acquisition, disposition or exercise of any of the securities. The Issuer gives no opinion and

makes no representation with respect to the tax consequences to the Lender under United States, state, local or foreign tax law of the undersigned’s acquisition or disposition of such securities. In particular, no determination has been made whether the Issuer will be a “passive foreign investment company” (“ PFIC ”) within the meaning of Section 1297 of the United States Internal Revenue Code ;

d. it understands and agrees that the financial statements of the Issuer have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, which differ in some respects from United States generally accepted accounting principles, and thus may not be comparable to financial statements of United States companies;
e. it understands and acknowledges that upon the issuance thereof, and until such time as the same is no longer required under the applicable requirements of the U.S. Securities Act or applicable state securities laws and regulations, the certificates representing the Convertible Note and any Common Shares issued upon conversion of the Convertible Note, and all certificates issued in exchange therefor or in substitution thereof, will bear a legend in substantially the following form:

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE BORROWER THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE BORROWER; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF CLAUSE (C) OR (D), THE SELLER FURNISHES TO THE BORROWER AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE BORROWER TO SUCH EFFECT.

THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT “GOOD DELIVERY” OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE.”

provided, that if the Common Shares issuable upon conversion of the Convertible Note are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S, the legends set forth above in this Section 2e may be removed by providing a declaration to the registrar and transfer agent of the Issuer, as set forth in Appendix “A” attached hereto (or in such other form as the Issuer may prescribe from time to time); and provided, further, that, if the Common Shares issuable upon conversion of the Convertible Note are being sold otherwise than in accordance with Rule 904 of Regulation S and other than to the Issuer, the legends may be removed by delivery to the registrar and transfer

agent and the Issuer of an opinion of counsel of recognized standing in form and substance satisfactory to the Issuer that such legends are no longer required under applicable requirements of the U.S. Securities Act or state securities laws;

f. it understands and agreed that the certificates representing the Convertible Note, and all certificates issued in exchange therefor or in substitution thereof, shall bear the following legend:

“THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE BORROWER THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE BORROWER; (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF CLAUSE (C) OR (D), THE SELLER FURNISHES TO THE BORROWER AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY TO THE BORROWER TO SUCH EFFECT.

g. it consents to the Issuer making a notation on its records or giving instruction to the registrar and transfer agent of the Issuer in order to implement the restrictions on transfer set forth and described herein;
h. it understands and acknowledges that the Issuer is not obligated to remain a “foreign issuer”;
i. if an individual, it is a resident of the state or other jurisdiction listed in its address on the front page of the Standby Convertible Loan Agreement, or if the Lender is not an individual, the office of the Lender at which the Lender received and accepted acquire the Issuer’s Securities is the address listed on the front page of the Standby Convertible Loan Agreement.
j. it has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the Securities and it is able to bear the economic risk of loss of its entire investment;
k. the Issuer has provided to it the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and it has had access to such information concerning the Issuer as it has considered necessary or appropriate in connection with its investment decision to acquire the Securities;
l. it is acquiring the Securities for its own account, for investment purposes only and not with a view to any resale, distribution or other disposition of the Securities in violation of the United States securities laws;
m. if it decides to offer, sell or otherwise transfer any of the Securities, it will not offer, sell or otherwise transfer any of such Securities directly or indirectly, unless
(i) the sale is to the Issuer;
(ii) the sale is made outside the United States in a transaction meeting the requirements of Rule 904 of Regulation S and in compliance with applicable local laws and regulations;

(iii) the sale is made pursuant to the exemption from the registration requirements under the U.S. Securities Act provided by Rule 144 thereunder, if available, and in accordance with any applicable state securities or “Blue Sky” laws; or

(iv) the Securities are sold in a transaction that does not require registration under the U.S. Securities Act or any applicable state laws and regulations governing the offer and sale of securities;

and, in the case of clauses (iii) or (iv) above, it has prior to such sale furnished to the Issuer an opinion of counsel or other evidence of exemption in form and substance reasonably satisfactory to the Issuer;

n. it understands that the Issuer is not obligated to file and has no present intention of filing with the U.S. Securities and Exchange Commission or with any state securities administrators any registration statement in respect of resales of the Securities in the United States; and
o. the funds representing the Loan which will be advanced by the Lender to the Issuer hereunder will not represent proceeds of crime for the purposes of the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (the “ PATRIOT Act ”), and the Lender acknowledges that the Issuer may in the future be required by law to disclose the Lender’s name and other information relating to the Standby Convertible Loan Agreement, on a confidential basis, pursuant to the PATRIOT Act. No portion of the Loan to be provided by the Lender (i) has been or will be derived from or related to any activity that is deemed criminal under the laws of the United States of America, or any other jurisdiction, or (ii) is being tendered on behalf of a person or entity who has not been identified to or by the Lender, and it shall

promptly notify the Issuer if the Lender discovers that any of such representations ceases to be true and provide the Issuer with appropriate information in connection therewith.

p. If the Lender has initialled box 1(b) above, the Lender further covenants, represents and warrants to the Issuer that (please place your initials on the appropriate line(s) 1 through 8 below):
Initials _ Any bank as defined in Section 3(a)(2) of the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the U.S. Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the U.S. Securities Exchange Act of 1934; any insurance company as defined in Section 2(a)(13) of the U.S. Securities Act; any investment company registered under the U.S. Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the U.S. Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of US$5,000,000; any employee benefit plan within the meaning of the U.S. Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of US$5,000,000, or, if a self-directed plan, with investment decisions made solely by persons that are “accredited investors” (as such term is defined in Rule 501 of Regulation D of the U.S. Securities Act);
Initials _ Any private business development company as defined in Section 202(a)(22) of the U.S. Investment Advisers Act of 1940;
Initials _ Any organization described in Section 501(c)(3) of the U.S. Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US$5,000,000;
Initials _ Any trust with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person (being defined as a person who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment);
Initials _ A natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of purchase, exceeds US$1,000,000 (for the purposes of calculating net worth, (i) the person’s primary residence shall not be included as an asset; (ii) indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of this certification, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of this certification exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and (iii) indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence shall be included as a liability);
Initials _ A natural person who had annual gross income during each of the last two full calendar years in excess of US$200,000 (or together with his or her spouse in excess of US$300,000) and reasonably expects to have annual gross income in excess of US$200,000 (or together with his or her spouse in excess of US$300,000) during the current calendar year, and no reason to believe that his or her annual gross income will not remain in excess of US$200,000 (or that together with his or her spouse will not remain in excess of US$300,000) for the foreseeable future;
Initials _ Any director or executive officer of the Issuer; or
Initials _ Any entity in which all of the equity owners meet the requirements of at least one of the above categories – if this category is selected you must identify each equity owner and provide statements from each demonstrating how they qualify as an accredited investor.

ONLY U.S. PURCHASERS NEED TO COMPLETE AND SIGN

Dated: ________

Signed:

___________ Print the name of Lender

Print official capacity or title, if applicable

___________ Print name of individual whose signature appears above if different than the name of the Lender printed above.

APPENDIX “A” TO U.S. PURCHASER CERTIFICATE Form of Declaration for Removal of Legend

TO: Registrar and transfer agent for the shares of Electric Royalties Ltd. (the “ Issuer ”)

The undersigned (A) acknowledges that the sale of __ common shares of the Issuer to which this declaration relates, represented by certificate number ______, is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), and (B) certifies that (1) the undersigned (a) is not an “affiliate” of the Issuer, as that term is defined in Rule 405 under the U.S. Securities Act, or is an affiliate solely by virtue of being an officer or director of the Issuer, (b) is not a “distributor” as defined in Regulation S, and (c) is not an affiliate of a distributor; (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (b) the transaction was executed on or through the facilities of the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or any other “designated offshore securities market”, and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States; (3) neither the seller nor any affiliate of the seller nor any person acting on their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities; (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as that term is defined in Rule 144(a)(3) under the U. S. Securities Act); (5) the seller does not intend to replace such securities with fungible unrestricted securities; and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the U. S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act.

Dated: ____, 2022

X

Signature of individual (if Seller is an individual)

X

Authorized signatory (if Seller is not an individual)

Name of Seller ( please print ) Name of authorized signatory ( please print ) Official capacity of authorized signatory ( please print )

Affirmation by Seller’s Broker-Dealer (Required for sales pursuant to Section (B)(2)(b) above)

We have read the representation letter of __ (the “ Seller ”) dated __, 20_, pursuant to which the Seller has requested that we sell, for the Seller’s account, ___ common shares of the Issuer represented by certificate number __ (the “ Common Shares ”). We have executed sales of the Common Shares pursuant to Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “ U.S. Securities Act ”), on behalf of the Seller. In that connection, we hereby represent to you as follows:

(1) no offer to sell the Common Shares was made to a person in the United States;
(2) the sale of the Common Shares was executed in, on or through the facilities of the Toronto Stock Exchange, the TSX Venture Exchange, the Canadian Securities Exchange or another “designated offshore securities market” (as defined in Regulation S under the U.S. Securities Act), and, to the best of our knowledge, the sale was not pre-arranged with a buyer in the United States;
(3) no “directed selling efforts” were made in the United States by the undersigned, any affiliate of the undersigned, or any person acting on behalf of the undersigned; and
(4) we have done no more than execute the order or orders to sell the Common Shares as agent for the Seller and will receive no more than the usual and customary broker’s commission that would be received by a person executing such transaction as agent.

For purposes of these representations: “ affiliate ” means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; “ directed selling efforts ” means any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for the Common Shares (including, but not be limited to, the solicitation of offers to purchase the Common Shares from persons in the United States); and “ United States ” means the United States of America, its territories or possessions, any State of the United States, and the District of Columbia.

Legal counsel to the Issuer shall be entitled to rely upon the representations, warranties and covenants contained in this letter to the same extent as if this letter had been addressed to them.

Dated: ____, 2022

Name of Firm

By: Title:

SCHEDULE “D”

FORM OF DRAWDOWN NOTICE

TO: Gleason & Sons LLC (the “ Lender ”)

This Drawdown Notice is delivered pursuant to the Amended and Restated Standby Convertible Loan Agreement dated February 16, 2024 made between Electric Royalties Ltd. (the “ Borrower ”), as borrower, and the Lender, as lender (as amended, restated, supplemented or otherwise modified from time to time, the “ Agreement ”). All terms used herein as defined terms and not otherwise defined shall have the respective meanings given to them in the Agreement.

(i) The Borrower hereby requests an advance under the Credit Facility in the amount of $___ (the “ Drawdown ”), such advance to be made on ___, 20.
(ii) The Borrower hereby certifies that as at the date hereof:
(a) the representations and warranties in §3.1 of the Agreement are true and correct in all material respects;
(b) it has complied with all of its covenants set out in the Agreement in all material respects; and
(c) no Event of Default has occurred and is continuing, nor shall the making of this advance result in the occurrence of any Event of Default.
The Lender shall deliver its Advance to the Borrower in accordance with the terms of the Agreement.

Dated this day of , 20___.

ELECTRIC ROYALTIES LTD.

By: Name: Title:

SCHEDULE “E-1”

FORM OF SECURITY AGREEMENT (CANADA)

AMENDED AND RESTATED SECURITY AGREEMENT

This Agreement is made ____, 2024 (as amended, amended and restated, renewed, extended, supplemented, replaced or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”) between Electric Royalties Ltd., a corporation incorporated under the laws of Province of British Columbia (“Borrower”), and Gleason & Sons LLC, a limited liability company incorporated under the laws of North Carolina (“Lender”).

WHEREAS the Borrower has entered into an Amended and Restated Standby Convertible Loan Agreement dated ____, 2024 between the Borrower, as borrower, and the Lender, as lender (as amended, restated, supplemented or otherwise modified from time to time, the “ Convertible Loan Agreement ”); and

WHEREAS the Borrower has agreed to grant and continue to grant a security interest and assignment, mortgage and charge in the Collateral to the Lender in order to secure the payment and performance of its Outstanding Obligations (as hereinafter defined) pursuant to the terms of this Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

The following words and terms have the meanings set out below:

i. “ Excluded Assets ” means all of the Borrower’s present and after-acquired right, title and interest in and to any personal property, real property or other property, assets and undertaking acquired pursuant to the transactions contemplated by the LOI (including, without limitation, any such mineral claims, option agreements, other agreements and rights related to any of the foregoing);
ii. “ LOI ” means the letter of intent dated November 3 2023 between Perry English, Michael Kilbourne, 1544230 Ontario Inc., Gravel Ridge Resources Ltd. and the Borrower, as amended, restated, supplemented or otherwise modified from time to time;
iii. “ Royalties ” means all royalty interests set out in Schedule A hereto (as such Schedule A may be amended, restated, replaced or supplemented from time to time), and “ Royalty ” means an applicable one of them, as the context requires or so admits;
iv. “ Royalty Agreements ” means all present and future royalty agreements pursuant to which any Royalty is payable, including, without limitation, such royalty agreements set out in Schedule A hereto (as such Schedule A may be amended, restated, replaced or supplemented from time to time), and “ Royalty Agreement ” means an applicable one of them, as the context requires or so admits; and
v. “ Royalty Grantors ” means all grantors of any Royalty or Royalties in favour of the Borrower pursuant to the applicable Royalty Agreement(s), and “ Royalty Grantor ” means an applicable one of them, as the context requires or so admits.
2 -

As general and continuing security for the payment and performance of all Outstanding Obligations, the Borrower hereby grants to the Lender a first priority security interest in, and, as further general and continuing security for the payment and performance of the Outstanding Obligations, the Borrower hereby also assigns to the Lender and mortgages and charges as and by way of a first priority fixed and specific mortgage and charge to the Lender, all rights, titles, claims and interests that the Borrower now has or may hereafter have or acquire, in any manner whatsoever, (including by way of amalgamation) in, to and under, the following property (collectively, the “ Collateral ”)

(a) all present and future royalties and/or royalty interests including, without limitation, the Royalties (collectively, the “ Secured Royalties ”) acquired by the Borrower using funds advanced by the Lender from time to time or otherwise pledged, assigned, liened, charged or otherwise encumbered by the Borrower in favour of the Lender from time to time;
(b) all present and future royalty agreements including, without limitation, the Royalty Agreements, and other documents with respect to any and all of the Secured Royalties (collectively, the “ Secured Royalty Documents ”);
(c) all present and future Goods, Intangibles, Investment Property, Documents of Title, Chattel Paper, Instruments and/or Money (except the Secured Royalties and the Secured Royalty Documents) acquired by the Borrower using funds advanced by the Lender from time to time (other than the Excluded Assets) or otherwise pledged, assigned, liened, charged or otherwise encumbered by the Borrower in favour of the Lender from time to time;
(d) all increases, additions and/or accessions to, substitutions and/or replacements for any of the foregoing;
(e) all proceeds of any of the foregoing;
(f) all books, invoices, agreements, documents and other records in any form evidencing or relating to any of the foregoing; and
(g) all money or other value payable under any policy of insurance as indemnity or compensation for loss of or damage to any of the foregoing;

and all proceeds that are Goods, Intangibles, Investment Property, Documents of Title, Chattel Paper, Instruments or Money.

In this Agreement, words (whether capitalized or otherwise) used shall have the same meanings as their defined meanings where such words are defined in the Personal Property Security Act of British Columbia and its regulations, such Act and its regulations including any amendments thereto, being referred to in this Agreement as the “ PPSA ”. In addition to the defined terms appearing above, capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Convertible Loan Agreement, as the same may be further amended, supplemented, restated, superseded, replaced or otherwise modified from time to time.

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The fixed and specific mortgages and charges and the security interest granted under this Agreement secure payment and performance of all obligations, indebtedness and liability of the Borrower to the Lender present or future, direct or indirect, absolute or contingent, matured or not, extended or renewed, and any ultimate unpaid balance thereof and whether the same is from time to time reduced and thereafter increased or entirely extinguished and thereafter incurred again, arising or incurred under or in connection with or by virtue of the Convertible Loan Agreement or any other agreements or documents entered into in connection with or relating to the Convertible Loan Agreement, including but not limited to the Convertible Note evidencing the same and any other Loan Documents, and whether the Borrower be bound alone or with another or others and whether as principal or surety (all such present and future obligations, indebtedness and liability, including, without limitation, all Indebtedness (as defined in the Convertible Loan Agreement) being, collectively herein called the “ Outstanding Obligations ”).
The Borrower acknowledges that value has been given and agrees that the security interest granted hereby attaches upon the execution of this Agreement by the Borrower (or, in the case of any after acquired property, at the time of acquisition by the Borrower of any rights therein).
Notwithstanding anything to the contrary herein or in any other Loan Document, the security interest granted hereby does not and will not extend to, and Collateral will not include, (a) any interest, right and title of the Borrower in and to any agreement, right, franchise, licence or permit relating to or forming part of the Collateral (the “ special rights ”) to which the Borrower is a party or of which the Borrower has the benefit, to the extent that the creation of the security interest herein would constitute a breach of the terms of or permit any person to terminate the special rights, but the Borrower must hold its interest therein in trust for the Lender and will assign such special rights to the Lender forthwith upon obtaining the consent of the other party thereto; and (b) the Excluded Assets. The Borrower will use all commercially reasonable efforts to obtain the consent of each other party to any and all special rights to the security interest granted in, and the assignment of, such special rights to the Lender in accordance with this Agreement. The Borrower will also use all commercially reasonable efforts to ensure that no material agreement forming part of the Collateral entered into on or after the date of this Agreement shall expressly prohibit any grant of security interest in, or any assignment of, the benefits of any special rights as collateral security to the Lender.
The Borrower hereby represents and warrants to the Lender that:
(a) the Borrower shall on execution of this Agreement register or cause to be registered a financing statement in the PPSA or in any other applicable jurisdictions in respect of the first priority security interest granted hereby in the Collateral in favour of the Lender;
(b) all of the Collateral is, or when the Borrower acquires any right, title or interest therein, will be, the sole property of the Borrower free and clear of all security interests, mortgages, charges, hypothecs, liens or other encumbrances except as disclosed by the Borrower to the Lender, and permitted by the Lender, in writing;
(c) the Collateral insofar as it consists of any personal property will be kept at the head office or at such other locations as the Borrower shall specify in writing to the Lender and, subject to the provisions of paragraph 5(h) below, none of the Collateral shall be moved therefrom without the prior written consent of the Lender;

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(d) the Borrower’s head office is located at 14[th] Floor, 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1; and
(e) this Agreement has been properly authorized and constitutes a legally valid and binding obligation of the Borrower in accordance with its terms.
The Borrower hereby agrees that:
(a) the Borrower shall diligently maintain the Collateral and shall carry on and conduct its business in a proper and efficient manner so as to preserve and protect the Collateral and the earnings, incomes, rents, royalties, issues and profits thereof;
(b) the Borrower shall duly observe and conform to, in all material respects, all valid requirements of any governmental authority relative to any of the Collateral and all covenants, terms and conditions upon or under which the Collateral is held;
(c) the Borrower shall keep proper books of account in accordance with sound accounting practice, shall furnish to the Lender such financial information and statements and such information and statements relating to the Collateral as the Lender may from time to time require, and the Borrower shall permit the Lender or their authorized agents at any time at the expense of the Borrower to examine all books of account and other financial records and reports relating to the Collateral and to make copies thereof and take extracts therefrom;
(d) the Borrower shall furnish to the Lender such information with respect to the Collateral as the Lender may from time to time require and shall give written notice to the Lender of all material litigation before any court, administrative board or other tribunal affecting the Borrower or the Collateral;
(e) the Borrower shall defend its interest in the Collateral against all persons and shall keep its interest in the Collateral free and clear of all security interests, mortgages, charges, liens and other encumbrances except for those created by this Agreement and those disclosed to the Lender in writing prior to the execution of this Agreement or hereafter approved in writing by the Lender prior to their creation or assumption;
(f) the Borrower shall, upon request by the Lender, execute and deliver all such financing statements, certificates, further assignments and documents and do all such further acts and things as may be considered by the Lender to be necessary or desirable to give effect to the intent of this Agreement and the Borrower hereby irrevocably constitutes and appoints the Lender, the true and lawful attorney of the Borrower, with full power of substitution, to do any of the foregoing in the name of the Borrower whenever and wherever the Lender may consider it to be necessary or desirable;
(g) the Borrower shall promptly notify the Lender in writing of any event which occurs that would have a material adverse effect upon the Collateral or upon the financial condition of the Borrower; and

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(h) the Borrower will not change its name or the location of its head office or place of business or sell, exchange, transfer, assign or lease or otherwise dispose of the Collateral or any interest therein without the prior written consent of the Lender.
Until an Event of Default occurs, the Borrower may use the Collateral in any lawful manner that is in the ordinary course of Borrower’s business and is not inconsistent with this Agreement, but the Lender shall have the right at any time and from time to time to verify the existence and state of the Collateral in any manner the Lender may consider appropriate and the Borrower agrees to furnish all assistance and information and to perform all such acts as the Lender may reasonably request.
After an Event of Default occurs and is continuing, the Lender may give notice to any Royalty Grantors to make all further payments owing from such Royalty Grantor to the Borrower as directed by the Lender from time to time and any payments or other proceeds of Collateral received by the Borrower from the Royalty Grantors, whether before or after such notice is given by the Lender, shall be held by the Borrower in trust for the Lender and paid over to the Lender, upon request. The Lender may take charge of all proceeds of Collateral and may apply any money taken as Collateral to the satisfaction of the Outstanding Obligations secured hereby. The Lender may hold as additional security any increase or profits, except money, received from any Collateral in the Lender’s possession, and may apply any money received from such Collateral to reduce the Outstanding Obligations secured hereby and may hold any balance as additional security for such part of the Outstanding Obligations as may not yet be due, whether absolute or contingent.
Upon the Borrower’s failure to perform any of its duties hereunder and following any grace period afforded to the Borrower under the Convertible Loan Agreement, the Lender may, but shall not be obliged to, perform any or all of such duties, without waiving any rights to enforce this Agreement, and the Borrower shall pay to the Lender, forthwith upon written demand therefor, an amount equal to the costs, fees and expenses incurred by the Lender in so doing plus interest thereon from the date such costs, fees and expenses are incurred until paid.
The occurrence of any event which constitutes an “Event of Default” as defined in the Convertible Loan Agreement, subject to any cure periods available for such Event of Default under the Convertible Loan Agreement or waiver of default by the Lender, shall constitute an Event of Default under this Agreement.
If an Event of Default occurs and is continuing, the Lender may withhold any future advances and may declare that the Outstanding Obligations shall immediately become due and payable in full, and the Lender may proceed to enforce payment of the Outstanding Obligations and the Borrower and the Lender shall have, in addition to any other rights and remedies provided by law, the rights and remedies of a debtor and a secured party respectively under the PPSA and other applicable legislation and those provided by this Agreement. The Lender may take possession of the Collateral, enter upon any premises of the Borrower, otherwise enforce this Agreement and enforce any rights of the Borrower in respect of the Collateral by any manner permitted by law and may use the Collateral in the manner and to the extent that the Lender may consider appropriate and may hold, insure, protect, preserve, prepare for disposition and dispose of the same. The Lender may appoint, by instrument in writing, or apply to a court of competent jurisdiction for the appointment of, any person or persons (whether an officer or employee of the Lender or not) to be a receiver, manager, interim receiver, or

SECURITY AGREEMENT

receiver and manager (collectively, “ Receiver ”), of the Collateral or any part of the Collateral and remove or replace any person so appointed. Any Receiver so appointed shall have, in addition to any other powers afforded by the law, the same powers and authorities afforded to the Lender under this Agreement.

Where required to do so by the PPSA, or other relevant legislation, the Lender shall give to the Borrower the written notice required by the PPSA or such other relevant legislation of an intended enforcement or disposition of the Collateral by serving such notice as provided under the Convertible Loan Agreement.
Any proceeds of any disposition of any Collateral may be applied by the Lender to the payment of expenses incurred or paid in connection with seizing, repossessing, retaking, holding, insuring, preserving, preparing for disposition and disposing of the Collateral (including, without limitation, reasonable solicitor’s fees and legal expenses and any other reasonable expenses), and any balance of such proceeds may be applied by the Lender towards the payment of the Outstanding Obligations in such order of application as the Lender may from time to time effect. If the disposition of the Collateral fails to satisfy the Outstanding Obligations secured by this Agreement and the expenses incurred by the Lender, the Borrower shall be liable to pay any deficiency to the Lender.
The Borrower and the Lender further agree that:
(a) the Lender may grant extensions of time and other indulgences, take and give up security, accept compositions, grant releases and discharges and otherwise deal with the Borrower, debtors of the Borrower, sureties and others and with the Collateral or other security as the Lender may see fit without prejudice to the liability of the Borrower and the Lender’s rights under this Agreement;
(b) this Agreement shall not be considered as satisfied or discharged by any intermediate payment of all or any part of the Outstanding Obligations but shall constitute and be a continuing security to the Lender to secure a current or running account and shall be in addition to and not in substitution for any other security now or hereafter held by the Lender;
(c) nothing in this Agreement shall obligate the Lender to make accommodation to the Borrower or extend the time for payment or satisfaction of the Outstanding Obligations;
(d) any failure by the Lender to exercise any right set out in this Agreement shall not constitute a waiver thereof; nothing in this Agreement or in the Outstanding Obligations secured by this Agreement shall preclude any other remedy by action or otherwise for the enforcement of this Agreement or the payment in full of the Outstanding Obligations secured by this Agreement;
(e) all rights of the Lender under this Agreement shall be assignable in accordance with the Lender’s right to assign its rights under the Convertible Loan Agreement and in any action brought by an assignee to enforce such rights, the Borrower shall not assert against the assignee any claim or defence which the Borrower now has or may hereafter have against the Lender;

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(f) the Borrower may assign the obligations under this Agreement in accordance with the Borrower’s right to assign its obligations under the Convertible Loan Agreement;
(g) all rights of the Lender under this Agreement shall enure to the benefit of its successors and permitted assigns and all Outstanding Obligations of the Borrower under this Agreement shall bind the Borrower, its successors and permitted assigns; and
(h) this Agreement shall be governed in all respects by the laws of the Province of British Columbia and the parties irrevocably attorn to the non exclusive jurisdiction of any court of the Province of British Columbia for the purpose of any legal or equitable suit, action or proceeding in connection with this Agreement.
This Agreement has been entered into pursuant to the provisions of the Convertible Loan Agreement and is subject to all the terms and conditions thereof, and in the event of any conflict between the provisions of this Agreement and the provisions of the Convertible Loan Agreement, the provisions of the Convertible Loan Agreement shall prevail to the extent of such conflict.
The Lender acknowledges that the Borrower is entering into this Agreement and the directors, officers, or employees of the Borrower hereunder are not personally liable for any obligation hereunder. The provisions of this paragraph shall enure to the benefit of the heirs, successors, assigns and personal representatives of the directors, officers or employees of the Borrower.
The Borrower expressly waives the right to receive a copy of any financing statement or financing change statement which may be registered by the Lender in connection with this Agreement or any verification statement issued with respect thereto where such waiver is not otherwise prohibited by law.
No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by all of the parties. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived.
If any provision of this Agreement is determined by any court of competent jurisdiction to be illegal or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either of the parties.
Any demand, notice or other communication to be given in connection with this Agreement must be given in accordance with the Convertible Loan Agreement.
The Borrower will be entitled to a discharge of this Agreement upon written request by the Borrower and full and irrevocable payment, performance and satisfaction of the Outstanding Obligations and termination of the Credit Facility. No discharge will be effective unless in writing and executed by the Lender.

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This Agreement amends and restates the security agreement dated January 24, 2023 granted by the Borrower in favour of the Lender (the “ Original Security Agreement ”) and is not a novation of the Original Security Agreement, and:
a. all references to the “Agreement” or similar references to the Original Security Agreement in any of the other Loan Documents shall be deemed to refer to this Agreement, as it may be amended, restated, supplemented or replaced from time to time, without any requirement to amend such Loan Documents;
b. all indebtedness, liabilities and obligations of the Borrower under the Original Security Agreement shall continue as indebtedness, liabilities and obligations of the Borrower under this Agreement, and this Agreement shall not evidence, or result in, a novation of such indebtedness, liabilities or obligations. Without limiting the foregoing, all amounts outstanding under, or otherwise in connection with, “Outstanding Obligations” under the Original Security Agreement as of the date of this Agreement shall be deemed to be outstanding and secured as the “Outstanding Obligations” under, and subject to the terms of, this Agreement; and
c. the Borrower hereby represents, warrants and confirms to the Lender that, as of the date hereof and notwithstanding this Agreement and the amendments given effect by this Agreement:
- i. any Liens granted in favour of the Lender under the Original Security Agreement continue in full force and effect as security for the Outstanding Obligations, including without limitation all indebtedness, liabilities and obligations of the Borrower arising under, or in connection with, this Agreement, and such Liens are hereby ratified and confirmed; and
- ii. all indebtedness, liabilities and obligations of the Borrower contained in the Original Security Agreement continue in full force and effect, and are hereby ratified and confirmed.
The Borrower hereby authorizes the Lender to amend, restate, replace or supplement Schedule A hereto from time to time following the acquisition by the Borrower of new Collateral, and in the absence of manifest error, such Schedule A constitutes an integral part of this Agreement.

[ Signature Page Follows ]

SECURITY AGREEMENT

9 - Signed this _ day of ___, 2024. ELECTRIC ROYALTIES LTD. by: _______ Name: Title: GLEASON & SONS LLC by: _________ Name: Title:

SECURITY AGREEMENT

Schedule A

to that certain amended and restated security agreement made _____, 2024 between Electric Royalties Ltd., as borrower, and Gleason & Sons LLC, as lender (such amended and restated security agreement, as further amended, restated, replaced or supplemented from time to time, the “Security Agreement”)

Royalties

the 0.50% gross revenue royalty granted and reserved to the Borrower pursuant to the Kenbridge Royalty Agreement (as defined below) (the “ Kenbridge Royalty ”)
the 1.50% gross revenue royalty granted and reserved to the Borrower pursuant to the SMS Royalty Agreement (as defined below) (the “ SMS Royalty ”)
the 1.5% gross revenue royalty granted and reserved to the Borrower pursuant to the Northern Graphite Royalty Agreement (as defined below) (the “ Northern Graphite Royalty ”)
the 0.5% gross metal royalty assigned to the Borrower pursuant to the Globex (Sayona) Royalty Assignment Agreement (as defined below) (the “ Globex (Sayona) Royalty ”)
the 0.5% gross metal royalty assigned to the Borrower pursuant to the Globex (Rousseau) Royalty Assignment Agreement (as defined below) (the “ Globex (Rousseau) Royalty ”)
the 2% gross metal royalty assigned to the Borrower pursuant to the Globex (Battery Hill) Royalty Assignment Agreement (as defined below) (the “ Battery Hill Royalty ”)
the 0.5% gross revenue royalty granted and reserved to Electric Royalties (USA) Inc., a subsidiary of the Borrower, pursuant to the Zonia Royalty Agreement (as defined below) (the “ Zonia Royalty ”)
the 2.5% gross revenue royalty assigned to the Borrower pursuant to the Graphmada Royalty Assignment Agreement (as defined below) (the “ Graphmada Royalty ”)

Royalty Agreements

the gross revenue royalty agreement dated April 26, 2023 between Kenbridge Nickel Mines Limited (“ Kenbridge ”), as royalty grantor, and the Borrower, as royalty owner of the Kenbridge Royalty, relating to the Kenbridge nickel project in Ontario, Canada, pursuant to which Kenbridge granted the Kenbridge Royalty to the Borrower, as may be amended from time to time (the “ Kenbridge Royalty Agreement ”)
the amended and restated gross revenue royalty agreement dated January 24, 2023 between Strategic Minerals Spain, S.L.U. (“ Strategic ”), as royalty grantor, and the Borrower, as royalty owner of the SMS Royalty, relating to the Penouta tin-tantalum mine located in Spain, pursuant to which Strategic granted the SMS Royalty to the Borrower, as may be amended from time to time (the “ SMS Royalty Agreement ”)
the amended and restated royalty agreement dated September 27, 2023 between Northern Graphite Corporation (“ Northern ”), as royalty grantor, and the Borrower, as royalty owner of the
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Northern Graphite Royalty, relating to the Bissett Creek project in Ontario, Canada, pursuant to which Northern granted the Northern Graphite Royalty to the Borrower, as may be amended from time to time (the “ Northern Graphite Royalty Agreement ”)

the assignment of royalty agreement dated July 6, 2020 between Globex Mining Enterprises Inc. (“ Globex ”), as royalty assignor, and the Borrower, as royalty assignee, relating to a portion of the royalty granted to Globex pursuant to an agreement dated July 31, 2018 among Globex, Sayona Quebec Inc. and Sayona Mining Limited, as such assignment may be amended from time to time (the “ Globex (Sayona) Royalty Assignment Agreement ”)
the assignment of royalty agreement dated July 6, 2020 between Globex, as royalty assignor, and the Borrower, as royalty assignee, relating to a portion of the royalty granted to Globex pursuant to an agreement dated December 17, 2009 between Globex and 9087-1400 Quebec Inc., as such assignment may be amended from time to time (the “ Globex (Rousseau) Royalty Assignment Agreement ”)
the gross revenue royalty agreement dated September 2, 2022 between Cardero Copper (USA) Ltd. (“ Cardero ”), as royalty grantor, and Electric Royalties (USA) Inc., a subsidiary of the Borrower, as royalty owner of the Zonia Royalty, relating to the Zonia Project in Walnut Grove Mining District, Yavapai County, Arizona, United States of America, pursuant to which Cardero granted the Zonia Royalty to the Borrower, as may be amended from time to time (the “ Zonia Royalty Agreement ”)
the assignment of royalty agreement dated July 6, 2020 between Globex, as royalty assignor, and the Borrower, as royalty assignee, relating to a portion of the royalty granted to Globex pursuant to an agreement dated April 22, 2016 between Globex and Sunset Cove Mining Inc. (now operating as Manganese X Energy Corp.), as such assignment may be amended from time to time (the “ Globex (Battery Hill) Royalty Assignment Agreement ”)
the royalty portfolio sale and purchase agreement dated June 30, 2021 between (among others) SilverStream SEZC (“ Silverstream ”) as royalty assignor, and the Borrower, as royalty assignee, relating to the Graphmada graphite mining complex in Madagascar, Africa, pursuant to which Silverstream assigned the Graphmada Royalty to the Borrower, as such assignment may be amended from time to time (the “ Graphmada Royalty Assignment Agreement ”).

The Borrower hereby confirms that all of the foregoing constitutes part of the Collateral (as defined in the Security Agreement).

ELECTRIC ROYALTIES LTD.

by:

Name:

Title:

SECURITY AGREEMENT

SCHEDULE “E-2”

FORM OF SECURITY AGREEMENT (US)

See attached.

SECURITY AGREEMENT

This Agreement is made ____, 2024 (as amended, amended and restated, renewed, extended, supplemented, replaced or otherwise modified from time to time in accordance with the provisions hereof, this “Agreement”) between Electric Royalties (USA) Inc., a corporation organized under the laws of the State of Delaware (the “Grantor”), and Gleason & Sons LLC, a limited liability company incorporated under the laws of North Carolina (the “Lender”).

WHEREAS the Grantor is a wholly-owned subsidiary of Electric Royalties Ltd., a corporation incorporated under the laws of the Province of British Columbia (the “ Borrower ”);

WHEREAS the Borrower has entered into an Amended and Restated Standby Convertible Loan Agreement dated February 16, 2024 between the Borrower, as borrower, and the Lender, as lender (as amended, restated, supplemented or otherwise modified from time to time, the “ Convertible Loan Agreement ”; capitalized terms used herein and not defined herein shall have the meanings ascribed thereto in the Convertible Loan Agreement) and Lender has made certain loans to the Borrower;

WHEREAS the Grantor will derive substantial benefit from the entry by the Borrower into the Convertible Loan Agreement, and the provision of the Credit Facility by the Lender to the Borrower will advance the corporate purposes and interests of the Grantor; and

WHEREAS the Grantor has agreed to grant a security interest and assignment, mortgage and charge in the Collateral to the Lender in order to secure the payment and performance of the Outstanding Obligations (as hereinafter defined) pursuant to the terms of this Agreement.

NOW THEREFORE in consideration of the Lender agreeing to make the Credit Facility available to the Borrower from time to time, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

The following words and terms have the meanings set out below:

i. “ Excluded Property ” means all assets of the Grantor other than the Collateral and all proceeds, substitutions or replacements of Excluded Property;
ii. “ Royalty ” means the 0.5% gross revenue royalty granted and reserved to the Grantor pursuant to the Royalty Agreement;
iii. “ Royalty Agreement ” means the Gross Revenue Royalty Agreement dated September 2, 2022 between Royalty Grantor, as royalty grantor, and the Grantor, as royalty owner, relating to the Zonia project in Walnut Grove Mining District, Yavapai County, Arizona, United States of America, pursuant to which Royalty Grantor granted the Royalty to the Grantor, as the same may be amended from time to time;
iv. “ Royalty Grantor ” means Cardero Copper (USA) Ltd., a company incorporated under the laws of the State of Delaware; and
v. “ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of Arizona.

SECURITY AGREEMENT

As security for the payment and performance of all Outstanding Obligations, the Grantor hereby grants, assigns, transfers, sets over, mortgages, charges and pledges to the Lender, and hereby creates a continuing first priority security interest in favor of the Lender in and to all rights, titles, claims and interests that the Grantor now has or may hereafter have or acquire, in any manner whatsoever, in, to and under, the Royalty and the Royalty Agreement, and all proceeds thereof, and all rights, remedies, security and liens, in, to and in respect of the Royalty and the Royalty Agreement, all books, invoices, agreements, documents and other records in any form evidencing or relating to any of the foregoing, all money or other value payable under any policy of insurance as indemnity or compensation for loss or damage to any of the foregoing, in any form now owned or hereafter acquired or arising (all of the same being hereinafter called, the “ Collateral ”). For the avoidance of doubt and for purposes hereof, Collateral shall not include Excluded Property.

The Collateral secures the payment and performance of all obligations, indebtedness and liability of the Borrower to the Lender present or future, direct or indirect, absolute or contingent, matured or not, extended or renewed, and any ultimate unpaid balance thereof and whether the same is from time to time reduced and thereafter increased or entirely extinguished and thereafter incurred again, arising or incurred under or in connection with or by virtue of the Convertible Loan Agreement or any other agreements or documents entered into in connection with or relating to the Convertible Loan Agreement, including but not limited to the Convertible Note evidencing the same and any other Loan Documents, and whether the Grantor be bound alone or with another or others and whether as principal or surety (all such present and future obligations, indebtedness and liability, including, without limitation, all Indebtedness (as defined in the Convertible Loan Agreement) being, collectively herein called the “ Outstanding Obligations ”).
The Grantor acknowledges that value has been given and agrees that the first priority security interest granted hereby attaches upon the execution of this Agreement by the Grantor.
The Grantor hereby represents and warrants to the Lender that:
(a) the Grantor shall on execution of this Agreement authorize the Lender at any time and from time to time to file or record financing statements, amendments thereto, and other filing or recording documents or instruments with respect to any Collateral in such form and in such offices as the Lender reasonably determines necessary to perfect the security interests of the Lender under this Agreement;
(b) all of the Collateral is the sole property of the Grantor free and clear of all security interests, mortgages, charges, hypothecs, liens or other encumbrances except as disclosed by the Grantor to the Lender, and permitted by the Lender, in writing;
(c) the Collateral insofar as it consists of any personal property will be kept at the Borrower’s head office or at such other locations as the Grantor shall specify in writing to the Lender and, subject to the provisions of paragraph 5(h) below, none of the Collateral shall be moved therefrom without the prior written consent of the Lender;
(d) the Borrower’s head office is located at 14[th] Floor, 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1;

SECURITY AGREEMENT

(e) the Grantor has full corporate power, capacity, authority and legal right to grant a security interest in the Collateral, execute and deliver this Agreement and perform its obligations under this Agreement;
(f) no authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for the pledge by the Grantor of the Collateral under this Agreement or for the execution and delivery of this Agreement by the Grantor or the performance by the Grantor of its obligations hereunder; and
(g) this Agreement has been properly authorized and constitutes a legally valid and binding obligation of the Grantor in accordance with its terms subject to applicable bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting creditors’ rights generally and subject to equitable principles (regardless of whether enforcement is sought in equity or in law).
The Grantor hereby agrees that:
(a) the Grantor shall diligently maintain the Collateral and shall carry on and conduct its business in a proper and efficient manner so as to preserve and protect the Collateral and the earnings, incomes, rents, royalties, issues and profits thereof;
(b) the Grantor shall duly observe and conform to, in all material respects, all valid requirements of any governmental authority relative to any of the Collateral and all covenants, terms and conditions upon or under which the Collateral is held;
(c) the Grantor shall keep proper books of account in accordance with sound accounting practice, shall furnish to the Lender such financial information and statements and such information and statements relating to the Collateral as the Lender may from time to time require, and the Grantor shall permit the Lender or their authorized agents at any time at the expense of the Grantor to examine all books of account and other financial records and reports relating to the Collateral and to make copies thereof and take extracts therefrom;
(d) the Grantor shall furnish to the Lender such information with respect to the Collateral as the Lender may from time to time require and shall give written notice to the Lender of all material litigation before any court, administrative board or other tribunal affecting the Grantor or the Collateral;
(e) the Grantor shall defend its interest in the Collateral against all persons and shall keep its interest in the Collateral free and clear of all security interests, mortgages, charges, liens and other encumbrances except for those created by this Agreement and those disclosed to the Lender in writing prior to the execution of this Agreement or hereafter approved in writing by the Lender prior to their creation or assumption;
(f) the Grantor shall, upon request by the Lender, execute and deliver all such financing statements, certificates, further assignments and documents and do all such further acts and things as may be considered by the Lender to be necessary or desirable to give effect to the intent of this Agreement and the Grantor hereby irrevocably constitutes and

SECURITY AGREEMENT

appoints the Lender, the true and lawful attorney of the Grantor, with full power of substitution, to do any of the foregoing in the name of the Grantor whenever and wherever the Lender may consider it to be necessary or desirable;

(g) the Grantor shall promptly notify the Lender in writing of any event which occurs that would have a material adverse effect upon the Collateral; and
(h) the Grantor will not change its name or the location of its head office or place of business or sell, exchange, transfer, assign or lease or otherwise dispose of the Collateral or any interest therein without the prior written consent of the Lender.
Until an Event of Default occurs, the Grantor may use the Collateral in any lawful manner that is in the ordinary course of Grantor’s business and is not inconsistent with this Agreement, but the Lender shall have the right at any time and from time to time to verify the existence and state of the Collateral in any manner the Lender may consider appropriate and the Grantor agrees to furnish all assistance and information and to perform all such acts as the Lender may reasonably request.
After an Event of Default occurs and is continuing, the Lender may give notice to the Royalty Grantor to make all further payments owing from such Royalty Grantor to the Grantor as directed by the Lender from time to time and any payments or other proceeds of Collateral received by the Grantor from the Royalty Grantor, whether before or after such notice is given by the Lender, shall be held by the Grantor in trust for the Lender and paid over to the Lender, upon request. The Lender may take charge of all proceeds of Collateral and may apply any money taken as Collateral to the satisfaction of the Outstanding Obligations secured hereby. The Lender may hold as additional security any increase or profits, except money, received from any Collateral in the Lender’s possession, and may apply any money received from such Collateral to reduce the Outstanding Obligations secured hereby and may hold any balance as additional security for such part of the Outstanding Obligations as may not yet be due, whether absolute or contingent.
Upon the Grantor’s failure to perform any of its duties hereunder and following any grace period afforded to the Borrower under the Convertible Loan Agreement, the Lender may, but shall not be obliged to, perform any or all of such duties, without waiving any rights to enforce this Agreement, and the Grantor shall pay to the Lender, forthwith upon written demand therefor, an amount equal to the costs, fees and expenses incurred by the Lender in so doing plus interest thereon from the date such costs, fees and expenses are incurred until paid.
The occurrence of any event which constitutes an “Event of Default” as defined in the Convertible Loan Agreement, subject to any cure periods available for such Event of Default under the Convertible Loan Agreement or waiver of default by the Lender, shall constitute an Event of Default under this Agreement.
If an Event of Default occurs and is continuing, the Lender may exercise, without any other notice to or demand upon the Grantor, in addition to the other rights and remedies provided herein or in the Convertible Note or in any other Loan Document or otherwise available to it, the following rights and remedies (which rights and remedies may be exercised independently or in combination): (i) the Lender may take such steps as it considers desirable to maintain, preserve or protect the Collateral or

SECURITY AGREEMENT

its value; (ii) the Lender may exercise and enforce all rights and remedies of the Grantor with respect to the Collateral including those of a secured party under the UCC; the Lender may sell, lease, license or otherwise dispose of all or any part of the Collateral by private sale or public sale or otherwise, and upon such other terms and conditions as the Lender may deem commercially reasonable; (iv) the Lender may appoint, by instrument in writing, any person or persons (whether an officer or employee of the Lender or not) to be a receiver, manager, interim receiver or receiver and manager (collectively, “ Receiver ”), of the Collateral or any part of the Collateral and remove or replace any person so appointed (any receiver so appointed shall have, in addition to any other powers afforded by the law, the same powers and authorities afforded to the Lender under this paragraph 10); and (v) the Lender may apply to a court of competent jurisdiction for the appointment of a Receiver of the Collateral or any part of the Collateral.

Where required to do so by the UCC, or other relevant legislation, the Lender shall give to the Grantor written notice required by the UCC or such other relevant legislation of an intended enforcement or disposition of the Collateral by serving such notice to the Grantor at the address set forth in paragraph 4(d) in the manner as provided under the Convertible Loan Agreement.
Any proceeds of any disposition of any Collateral may be applied by the Lender to the payment of expenses incurred or paid in connection with seizing, repossessing, retaking, holding, insuring, preserving, preparing for disposition and disposing of the Collateral (including, without limitation, reasonable attorney’s fees and legal expenses and any other reasonable expenses), and any balance of such proceeds may be applied by the Lender towards the payment of the Outstanding Obligations in such order of application as the Lender may from time to time effect. If the disposition of the Collateral fails to satisfy the Outstanding Obligations secured by this Agreement and the expenses incurred by the Lender, the Borrower shall be liable to pay any deficiency to the Lender.
The Grantor and the Lender further agree that:
(a) the Lender may grant extensions of time and other indulgences, take and give up security, accept compositions, grant releases and discharges and otherwise deal with the Borrower, the Grantor, debtors of the Grantor, sureties and others and with the Collateral or other security as the Lender may see fit without prejudice to the liability of the Grantor and the Lender’s rights under this Agreement;
(b) this Agreement shall not be considered as satisfied or discharged by any intermediate payment of any part of the Outstanding Obligations by Borrower but shall constitute and be a continuing security to the Lender to secure a current or running account and shall be in addition to and not in substitution for any other security now or hereafter held by the Lender;
(c) nothing in this Agreement shall obligate the Lender to make accommodation to the Borrower or extend the time for payment or satisfaction of the Outstanding Obligations;
(d) any failure by the Lender to exercise any right set out in this Agreement shall not constitute a waiver thereof; nothing in this Agreement or in the Outstanding Obligations secured by this Agreement shall preclude any other remedy by action or otherwise for

SECURITY AGREEMENT

the enforcement of this Agreement or the payment in full of the Outstanding Obligations secured by this Agreement;

(e) all rights of the Lender under this Agreement shall be assignable in accordance with the Lender’s right to assign its rights under the Convertible Loan Agreement;
(f) the Grantor may not assign its obligations under this Agreement without the prior written consent of the Lender;
(g) all rights of the Lender under this Agreement shall enure to the benefit of its successors, transferees and permitted assigns; and
(h) this Agreement shall be governed by, and construed in accordance with the laws of the State of Arizona, including but not limited to the UCC, without regard to choice-of-law rule in any jurisdiction. The parties hereby submit to the exclusive jurisdiction of the courts of Arizona.
This Agreement has been entered into pursuant to the provisions of the Convertible Loan Agreement and is subject to all the terms and conditions thereof, and in the event of any conflict between the provisions of this Agreement and the provisions of the Convertible Loan Agreement, the provisions of the Convertible Loan Agreement shall prevail to the extent of such conflict.
The Lender acknowledges that the Grantor is entering into this Agreement and the directors, officers, or employees of the Grantor hereunder are not personally liable for any obligation hereunder. The provisions of this paragraph shall enure to the benefit of the heirs, successors, assigns and personal representatives of the directors, officers or employees of the Grantor.
No amendment to this Agreement will be valid or binding unless set forth in writing and duly executed by all of the parties. No waiver of any breach of any provision of this Agreement will be effective or binding unless made in writing and signed by the party purporting to give the same and, unless otherwise provided, will be limited to the specific breach waived.
If any provision of this Agreement is determined by any court of competent jurisdiction to be illegal or unenforceable, that provision will be severed from this Agreement and the remaining provisions will continue in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either of the parties.
Any demand, notice or other communication to be given in connection with this Agreement must be given in the manner set forth in the Convertible Loan Agreement.
On the date on which all Outstanding Obligations have been paid and performed in full and all commitments to make advances and loans have been terminated, this Agreement and the security interest granted herein shall automatically be terminated and the Lender will, at the request and sole expense of the Grantor, (a) duly assign, transfer and deliver to or at the direction of the Grantor (without recourse and without any representation or warranty) such of the Collateral as may then remain in the possession of the Lender, together with any monies at the time held by the Lender hereunder, and (b) execute and deliver to the Grantor a proper instrument or instruments

SECURITY AGREEMENT

acknowledging the satisfaction and termination of this Agreement and release of all Liens in respect of the Collateral.

[ Signature Page Follows ]

SECURITY AGREEMENT

Signed this _ day of ___, 2024. ELECTRIC ROYALTIES (USA) INC. by: _______ Name: Title: GLEASON & SONS LLC by: _________ Name: Title:

SECURITY AGREEMENT

SCHEDULE “F”

WIRE TRANSFER INSTRUCTIONS

For all incoming wires:

Beneficiary Name: Beneficiary Address:

Beneficiary Bank:

Bank No. Transit No. Account No. Swift Code: Contact:

[redacted]Electri[redacted]c Royalties Lt d. 1400-1040 West Georgia Street Vancouver, BC V6E 4H1 CIBC Commerce Place 400 Burrard Street Vancouver, BC V6C 3AG 010 00010 84-87715 CIBCCATT Luqman Khan

SCHEDULE B ADDITIONAL DISCLOSURE

Pursuant to MI 61-101, in connection with the Amended and Restated Convertible Loan Agreement, the Company is required to include in this Circular certain additional disclosure prescribed by Form 62-104F2 – Issuer Bid Circular to the extent applicable to the Amended and Restated Convertible Loan Agreement (and with necessary modifications). This additional disclosure, as required pursuant to MI 61-101, is set out below.

Trading Data

The Common Shares trade on the TSXV under the trading symbol “ELEC.V”. The closing price of the Common Shares on the TSXV on February 15, 2024, the last trading day prior to the announcement of the entering into of the Amended and Restated Convertible Loan Agreement, was $0.25. The closing price of the Common Shares on the TSXV on October 18, 2023, the last trading day prior to the announcement of the entering into of the LOI, was $0.20.

The following table sets forth the price range and trading volume of the Common Shares on the TSXV, on a monthly basis, during the six-month period prior to the announcement of the Amended and Restated Convertible Loan Agreement.

Month	High($)	Low($)	Volume
February 1-15, 2024	0.31	0.25	316,479
January 2024	0.33	0.24	981,464
December 2023	0.28	0.17	1,137,933
November 2023	0.26	0.17	867,947
October 2023	0.26	0.18	826,330
September 2023	0.27	0.19	783,032
August 2023	0.32	0.25	185,452

Ownership of Securities of the Company

To the knowledge of the Company, the following table sets forth, as of the date of this Circular, the number and percentage of securities of the Company beneficially owned or over which control is exercised:

(a) by each director and officer of the Company; and
(b) after reasonable inquiry, by
(i) each associate or affiliate of an insider of the Company;
(ii) each associate or affiliate of the Company;
(iii) an insider of the Company, other than a director or officer of the Company; and

(iv) each person acting jointly or in concert with the Company.

Name	Position Held with Company	Number and Percentage of Common Shares	Number of Stock Options
Brendan Yurik	CEO	3,380,000 3.5%	1,600,000
Marchand Snyman	Chairman and Director	325,100 0.34%	1,000,000
Craig Lindsay	Director	679,000 0.70%	600,000
Robert Schafer	Director	850,000 0.88%	450,000
Luqman Khan	CFO	300,000 0.31%	600,000
Manuela Balaj-Coroiu	Corporate Secretary	75,000 0.08%	150,000
Stefan Gleason (1)	Director	20,975,668 21.71%	0
Globex Mining Enterprises Inc (2)	Insider	11,667,000 12.08%	0

(1) Figure includes securities held by associates and affiliates.

(2) Globex Mining Enterprises Inc. also owns 5,500,000 common share purchase warrants.

Other than persons whose votes are required to be excluded pursuant to MI 61-101, the directors and officers of the Company intend to vote in favour of the 61-101 Resolution and the Control Person Resolution.

Commitments to Acquire Securities of the Company

Other than the Amended and Restated Convertible Loan Agreement, there are no agreements, commitments or understandings made by the Company or, to the knowledge of the Company, by any person referred to in the table above under the heading “Ownership of Securities of the Company” to acquire securities of the Company. The terms and conditions of the Amended and Restated Convertible Loan Agreement are described in the body of this circular under the heading “ Terms of the Amended and Restated Convertible Loan Agreement ”.

Material Changes in the Affairs of the Company

As at the date of this Circular, except in respect of the Amended and Restated Convertible Loan Agreement and the Gravel Ridge LOI, the Company does not have any plans or proposals for material changes in the affairs of the Company, including, for example, any material contract or agreement under negotiation, any proposal to liquidate the issuer, to sell, lease or exchange all or a substantial part of its assets, to amalgamate it or to make any material changes in its business, corporate structure (debt or equity), management or personnel.

With the exception of Stefan Gleason, none of the persons referred to in the table above under the heading “Ownership of Securities of the Company” will derive any direct or indirect benefits by approving or rejecting the Amended and Restated Convertible Loan Agreement, except those that may arise from their ownership of Common Shares where such persons will receive no extra or special benefit or advantage not shared by all Shareholders.

Previous Purchases and Sales of Securities

Except as otherwise disclosed in this Circular, during the 12 months preceding the date of the Amended and Restated Convertible Loan Agreement (defined below), no securities of the Company were purchased or sold by the Company.

Date of Issuance	Purpose	Description of Securities Issued	Number of Securities	Price per Security
January 24, 2023	Issuance of shares as consideration for royalty acquisition	Common Shares	500,000	$0.35
April 26, 2023	Issuance of shares as consideration for royalty acquisition	Common Shares	2,500,000	$0.34

Note that the above disclosure excludes securities purchased or sold pursuant to the exercise of employee stock options, warrants and conversion rights.

The most recent interim financial statements will be sent by the Company without charge to any security holder requesting them.

Previous Distributions

Except as set forth in the table below, there have been no Common Shares distributed by the Company during the five (5) years preceding the date of this Circular.

Date	Description	Number of Securities	Price per Security ($)	Aggregate Proceeds ($)
April 26, 2023	Issued as consideration for royalty acquisition	Issuance of 2,500,000 common shares	Weighted average price of $0.34 per common share	$850,000

January 24, 2023	Issued as consideration for royalty acquisition	Issuance of 500,000 common shares	Weighted average price of $ 0.35 per commonshare	$175,000
September 2, 2022	Issued as consideration for royalty acquisition	Issuance of 2,000,000 common shares	Weighted average price of $0.24 per commonshare	$480,000
May 26, 2022	Issued as consideration for royalty acquisition	Issuance of 1,000,000 common shares	Weighted average price of $0.26 per common share	$260,000
May 12, 2022	Unit Private Placement	Issuance of 11,500,000 common shares	Weighted average price of $0.30 per common share	$3,450,000
January 26, 2022	Issued as consideration for royalty acquisition	Issuance of 2,000,000 common shares	Weighted average price of $0.38 per common share	$760,000
October 14, 2022	Issued as consideration for royalty acquisition	Issuance of 3,000,000 common shares	Weighted average price of $0.40 per commonshare	$1,200,000
September 30, 2021	Exercise of Options	Issuance of 226,000 common shares	Weighted average price of $0.29 per commonshare	$65,540
September 22, 2021	Exercise of Options	Issuance of 200,000 common shares	Weighted average price of $0.29 per common share	$58,000
August 13, 2021	Issued as consideration for royalty acquisition	Issuance of 7,270,408 common shares	Weighted average price of $0.40 per common share	$2,908,163
August 11, 2021	Issued as consideration for royalty acquisition	Issuance of 8,820,000 common shares	Weighted average price of $0.40 per common share	$3,280,000
July 7, 2021	Unit Private Placement	Issuance of 5,000,000 common shares	Weighted average price of $0.40 per commonshare	$2,000,000
March 3, 2021	Issued as consideration for royalty acquisition	Issuance of 3,000,000 common shares	Weighted average price of $0.34 per commonshare	$1,020,000

January 29, 2021	Issued as consideration for royalty acquisition	Issuance of 1,150,000 common shares	Weighted average price of $0.28 per commonshare	$322,000
July 15, 2020	Issued as consideration for royalty acquisition	Issuance of 2,000,000 common shares	Weighted average price of $0.25 per commonshare	$500,000
July 10, 2020	Issued as consideration for royalty acquisition	Issuance of 3,000,000 common shares	Weighted average price of $0.25 per common share	$750,000
June 24, 2020	Deemed issuance of common shares pursuant to the Qualifying Transaction	Issuance of 2,330,001 common shares	Weighted average price of $0.25 per common share	$582,500
June 24, 2020	Exchange of Shares pursuant to the RTO	Issuance of 9,275,000 common shares	Weighted average price of $0.01 per common share	$92,750
June 24, 202	Conversion of Subscription Receipts issued under the initial listing	Issuance of 20,925,000 common shares	Weighted average price of $0.25 per commonshare	$5,231,250
June 24, 2020	Exchange of Shares pursuant to the RTO	Issuance of 10,725,100 common shares	Weighted average price of $0.01 per commonshare	$107,251

Dividends

The Company has not declared or paid any dividends or distributions on its Common Shares or other securities in the two (2) years preceding the date of this Circular and it is not contemplated that any dividends will be paid in the immediate or foreseeable future. Currently, the Company anticipates that it will retain any funds to finance expansion and development of its business. Any future determination to pay dividends or distributions will be at the discretion of the Board and will depend upon the results of operations, financial condition, current and anticipated cash needs, contractual restrictions, restrictions imposed by applicable law and other factors that the directors of the Company deem relevant.

Expenses Relating to the Amended and Restated Convertible Loan Agreement

It is estimated that the expenses incurred by the Company in connection with the Amended and Restated Convertible Loan Agreement will be approximately $200,000.

AI assistant

Electric Royalties Ltd. — Proxy Solicitation & Information Statement 2024

47460_rns_2024-02-22_2afdda26-e4b8-45aa-8c53-21dbe4272c54.pdf

Electric Royalties Ltd. 14[th] Floor, 1040 West Georgia Street Vancouver, B.C. V6E 4H1 Telephone No. (604) 639-9200/ Fax No. (604) 684-8092

INFORMATION CIRCULAR

GENERAL PROXY INFORMATION

SOLICITATION OF PROXIES

APPOINTMENT OF PROXYHOLDERS

VOTING BY PROXYHOLDER

REGISTERED SHAREHOLDERS

BENEFICIAL SHAREHOLDERS

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

REVOCATION OF PROXIES

INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON

RECORD DATE AND QUORUM

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

VOTES NECESSARY TO PASS RESOLUTIONS

BUSINESS OF THE MEETING

APPROVAL OF THE AMENDED AND RESTATED STANDBY CONVERTIBLE LOAN AGREEMENT

Background to Transaction and Discussion of Review and Approval Process

Terms of the Amended and Restated Convertible Loan Agreement

Sample Calculations

Principal Conversion

Interest Conversion

Information Concerning Stefan Gleason

Shareholder Approval

Related Party Transaction Approval

Control Person Approval

Board Approval of the Offering

Prior Valuations / Prior Offers

Additional Disclosures

BOARD RECOMMENDATION

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

ADDITIONAL INFORMATION

OTHER MATTERS

BY ORDER OF THE BOARD OF DIRECTORS

SCHEDULE A AMENDED AND RESTATED STANDBY CONVERTIBLE LOAN AGREEMENT

AMENDED AND RESTATED STANDBY CONVERTIBLE LOAN AGREEMENT

BETWEEN:

AND:

WHEREAS:

PART 1

DEFINITIONS AND INTERPRETATION

Definitions

Interpretation

Schedules

Amendments and Restatement

PART 2

CONSIDERATION

No Consideration Payable

PART 3

REPRESENTATIONS AND WARRANTIES

Representations and Warranties of Borrower

Representations and Warranties of the Lender

PART 4

THE CREDIT FACILITY

Credit Facility

Delivery of Advances

Drawdown Limitations

PART 5 INTEREST AND PAYMENT

Interest and Indebtedness

Manner of Payment

PART 6 CONVERTIBLE NOTE

Convertible Note

PART 7

CONVERSION, SHAREHOLDER APPROVAL AND EARLY REPAYMENT

Lender’s Conversion Right & Shareholder Approval

Early Repayment

PART 8

SECURITY

PART 9

BORROWER’S COVENANTS

Positive Covenants

Negative Covenants

PART 10

EVENTS OF DEFAULT AND REMEDIES

Events of Default

Remedies

Electric Royalties Ltd. Proxy Solicitation & Information Statement 2024