Exhibit 10.1

 

Execution Version

 

AMENDMENT NO. 2 TO

 

FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

THIS AMENDMENT NO. 2 TO FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of January 21, 2013 (the “Amendment”), is by and among ROYAL
GOLD, INC., a corporation organized and existing under the laws of the State of
Delaware, as a borrower (“Royal Gold” or “Borrower”), HIGH DESERT MINERAL
RESOURCES, INC., a corporation organized and existing under the laws of the
State of Delaware and a wholly-owned subsidiary of Royal Gold, as a guarantor
(“High Desert”), RG EXCHANGECO INC., an amalgamated corporation validly existing
under the Canada Business Corporations Act, as a guarantor (“RG Exchangeco”), RG
MEXICO, INC., a corporation organized and existing under the laws of the State
of Delaware, as a guarantor (“RG Mexico”), those additional guarantors
identified as a “Guarantor” on the signature pages hereto as guarantors and such
additional guarantors from time to time party hereto, as guarantors (the
“Additional Guarantors”) (with each of High Desert, RG Exchangeco, RG Mexico and
the Additional Guarantors individually referred to herein as a “Guarantor” and
collectively referred to herein as the “Guarantors”), HSBC BANK USA, NATIONAL
ASSOCIATION, a national banking association organized under the laws of the
United States (“HSBC Bank”), as a lender, THE BANK OF NOVA SCOTIA, a bank
organized and existing under the laws of Canada (“Scotia”), as a lender, GOLDMAN
SACHS BANK USA, as a lender (“Goldman”), and those banks and financial
institutions identified as a “Lender” on the signature pages hereto and such
other banks or financial institutions as may from time to time become parties to
this Agreement, as lenders (the “Additional Lenders”) (with each of HSBC Bank,
Scotia, Goldman and the Additional Lenders individually referred to herein as a
“Lender” and collectively referred to herein as the “Lenders”), HSBC Bank, as
administrative agent for the Lenders hereunder (in such capacity, the
“Administrative Agent”), HSBC SECURITIES (USA) INC., as sole lead arranger and a
joint bookrunner, and SCOTIABANK, as the syndication agent and a joint
bookrunner.

 

Recitals

 

A.                                    The Administrative Agent, the Lenders, the
Borrower and the Guarantors are parties to that certain Fifth Amended and
Restated Revolving Credit Agreement dated as of May 30, 2012, as amended by that
certain Amendment No. 1 to Fifth Amended and Restated Revolving Credit
Agreement, dated as of July 10, 2012 (as otherwise amended, modified,
supplemented and restated from time to time, the “Credit Agreement”).

 

B.                                    The Borrower has requested certain
amendments to the financial covenants contained in Section 6.16 of the Credit
Agreement and to make certain other amendments to the Credit Agreement as set
forth herein.

 

C.                                    The Administrative Agent, the Lenders, the
Borrower and the Guarantors desire hereby to amend the Credit Agreement,
including to revise the financial covenants contained in the Credit Agreement. 
The Administrative Agent, the Lenders, the Borrower and the Guarantors

 

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further desire to ratify and confirm the Credit Agreement (as so amended) and
the other Credit Documents.

 

Agreement

 

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

 

1.                                      Defined Terms.  Capitalized terms used
but not defined in this Amendment shall have the meanings given thereto in the
Credit Agreement.

 

2.                                      Agreements and Amendments to the Credit
Agreement.

 

a.                                      Subject to the terms and conditions set
forth herein, the Credit Agreement is hereby amended to the extent necessary to
give effect to the provisions of this Amendment and to incorporate the
provisions of this Amendment into the Credit Agreement.  The Credit Agreement,
together with this Amendment (upon its effectiveness), shall be read together
and have effect so far as practicable as though the provisions thereof and the
relevant provisions hereof are contained in one document.

 

b.                                      The Credit Agreement is hereby amended
by deleting the following Definitions from Section 1.1:

 

“Current Ratio”
“Debt Service Coverage Ratio”

“Interest Coverage Ratio”

 

c.                                       The Credit Agreement is hereby amended
by adding the following Definitions to Section 1.1:

 

“Acquired EBITDA” shall mean, with respect to any Acquired Entity or Asset for
any period, the amount of consolidated EBITDA of such Acquired Entity or Asset
for such period, all as determined on a consolidated basis for such Acquired
Entity or Asset in accordance with GAAP.

 

“Acquired Entity or Asset” shall mean any Person, property, asset, Royalty,
Metal Streaming Transaction or business acquired by the Borrower or any
Subsidiary thereof during any relevant period to the extent not subsequently
sold, transferred, abandoned or otherwise disposed by the Borrower or a
Subsidiary thereof.

 

“Consolidated Secured Debt” means, without duplication, the Consolidated Total
Indebtedness of the Borrower and its Subsidiaries that is secured by a Lien on
any assets or property of the Borrower or any of its Subsidiaries as of such
date.

 

“Post-Acquisition Period” shall mean, with respect to any acquisition of any
Acquired Entity or Asset, the period beginning on the date such acquisition is

 

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consummated and ending on the last day of the sixth full consecutive fiscal
quarter immediately following the date on which such acquisition is consummated.

 

“Pro Forma Adjustment” means, for any relevant period of measurement that
includes all or any part of a fiscal quarter included in any Post-Acquisition
Period, with respect to the Acquired EBITDA of the applicable Acquired Entity or
Asset or the Consolidated EBITDA of the Borrower, the pro forma increase or
decrease in such Acquired EBITDA or such Consolidated EBITDA, as the case may
be, projected by the Borrower in good faith as a result of the acquisition of an
Acquired Entity or Asset during the full Post-Acquisition Period; provided, that
any such pro forma increase or decrease to such Acquired EBITDA or such
Consolidated EBITDA, as the case may be, shall be without duplication for
amounts already included in such Acquired EBITDA or such Consolidated EBITDA, as
the case may be, for such relevant period.

 

“Pro Forma Basis” and “Pro Forma Compliance” shall mean, with respect to
compliance with any test or covenant hereunder, that (a) to the extent
applicable, the Pro Forma Adjustment shall have been made, and (b) all Specified
Transactions and the following transactions in connection therewith shall be
deemed to have occurred as of the first day of the applicable period of
measurement in such test or covenant: (i) income statement items (whether
positive or negative) attributable to the assets, property or Person subject to
such Specified Transaction, (A) in the case of a sale, transfer or other
disposition of all or substantially all stock in any Subsidiary shall be
excluded, and (B) in the case of an acquisition described in the definition of
Specified Transaction, shall be included, (ii) any retirement of Indebtedness,
and (iii) any Indebtedness incurred or assumed by the Borrower or any of its
Subsidiaries in connection therewith and if such Indebtedness has a floating or
formula rate, shall have an implied rate of interest for the applicable period
for purposes of this definition determined by utilizing the rate which is or
would be in effect with respect to such Indebtedness as at the relevant date of
determination; provided, that, without limiting the application of the Pro Forma
Adjustment pursuant to (a) above (but without duplication thereof), the
foregoing pro forma adjustments may be applied to any such test or covenant
solely to the extent that such adjustments are consistent with the definition of
Consolidated EBITDA and give effect to events (including operating expense
reductions) that are (w) directly attributable to such transaction, (x) expected
to have a continuing impact on the Borrower and its Subsidiaries, (y) factually
supportable, or (z) otherwise consistent with the definition of Pro Forma
Adjustment.

 

“Pro Forma Certificate” shall mean any certificate of a Responsible Officer of
the Borrower delivered to the Administrative Agent with respect to any
calculation of a Pro Forma Adjustment or to demonstrate Pro Forma Compliance.

 

“Secured Debt Ratio” means, on any date of measurement, the ratio of
(a) Consolidated Secured Debt as of such date to (b) Consolidated EBITDA for the

 

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period of four consecutive fiscal quarters most recently ended on or prior to
such date.

 

“Specified Transaction” shall mean, with respect to any period, (i) any event,
action or transaction that by the terms of this Agreement requires “Pro Forma
Compliance” with a test or covenant hereunder or requires such test or covenant
to be calculated on a “Pro Forma Basis”, (ii) any investment, acquisition, sale,
transfer or other disposition of assets (including Royalties and Metal Streaming
Transactions), and (iii) incurrence or repayment of Indebtedness or dividend.

 

d.                                      The Credit Agreement is hereby amended
by adding the following proviso at the end of the definition “Consolidated
EBITDA”:

 

provided, that there shall be included in determining Consolidated EBITDA for
any period (to the extent not included in Consolidated Net Income), without
duplication, (a) the Acquired EBITDA of any Acquired Entity or Asset (but not
the Acquired EBITDA of any related Person, property, business or assets to the
extent not so acquired), based on the actual Acquired EBITDA of such Acquired
Entity or Asset for such period (including the portion thereof occurring prior
to such acquisition), and (b) an adjustment in respect of each Acquired Entity
or Asset equal to the amount of the Pro Forma Adjustment with respect to such
Acquired Entity or Asset for such period (including the portion thereof
occurring prior to such acquisition) as specified in a Pro Forma Certificate and
delivered to the Administrative Agent.

 

e.                                       The Credit Agreement is hereby amended
by deleting the defined term “Applicable Percentage” and substituting the
following therefor:

 

“Applicable Percentage” shall be determined from time to time by reference to
the Leverage Ratio, shall be effective as of the calculation date of such
Leverage Ratio and shall be equal to the following:

 

 

 

Leverage
Ratio

 

Applicable
Percentage

 

Level I

 

< 1.0 to 1.0

 

1.75

%

Level II

 

< 2.0 to 1.0

 

1.875

%

Level III

 

< 3.0 to 1.0

 

2.25

%

Level IV

 

< 4.0 to 1.0

 

2.50

%

Level V

 

> 4.0 to 1.0

 

3.00

%

 

f.                                        The Credit Agreement is hereby amended
by deleting the defined term “Commitment Fee Percentage” therefrom and
substituting the following therefor:

 

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“Commitment Fee Percentage” shall be determined from time to time by reference
to the Leverage Ratio, effective as of the last date and shall be equal to the
following:

 

 

 

Leverage
Ratio

 

Commitment
Fee Percentage

 

Level I

 

< 1.0 to 1.0

 

0.375

%

Level II

 

< 2.0 to 1.0

 

0.50

%

Level III

 

< 3.0 to 1.0

 

0.50

%

Level IV

 

< 4.0 to 1.0

 

0.50

%

Level V

 

> 4.0 to 1.0

 

0.50

%

 

g.                                       The Credit Agreement is hereby amended
by deleting the defined term “Leverage Ratio” therefrom and substituting the
following therefor:

 

“Leverage Ratio” means, on any date of measurement, the ratio of: (a) the sum of
(i) Consolidated Total Indebtedness as of such date, minus (ii) the aggregate
cash and cash equivalents included in the cash accounts listed on the
consolidated balance sheet of the Borrower and its Subsidiaries as at such date
to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters
most recently ended on or prior to such date.

 

h.                                      The Credit Agreement is hereby amended
by deleting Section 6.1(d) and substituting the following therefor:

 

(d)                                 Officer’s Certificate.  At the time of
delivery of the financial statements provided for in Sections 6.1(a) and 6.1(b),
(i) a certificate of a Responsible Officer of the Borrower, substantially in the
form of Exhibit J, (A) demonstrating compliance with the financial covenants
contained in Section 6.16 by calculation thereof as of the end of each such
fiscal period, including on a Pro Forma Basis to the extent applicable, and
(B) stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof and what
action the Credit Parties propose to take with respect thereto, and (ii) during
any Post-Acquisition Period to the extent there is any Pro Forma Adjustment, a
Pro Forma Certificate.

 

i.                                          The Credit Agreement is hereby
amended by deleting Section 6.16 therefrom and substituting the following
therefor:

 

Section 6.16 Financial Covenants.  The Credit Parties shall at all times
maintain and comply with the following financial covenants (including, as
applicable during any Post-Acquisition Period, calculated, if applicable, on a
Pro Forma Basis):

 

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(a)                                 Leverage Ratio.  The Leverage Ratio shall
(i) through December 31, 2013, be less than or equal to 4.75 to 1.0, (ii) after
December 31, 2013 through September 30, 2014, be less than or equal to 4.0 to
1.0, and (iii) after September 30, 2014, be less than or equal to 3.5 to 1.0.

 

(b)                                 Consolidated Net Worth.  A Consolidated Net
Worth of not less than an amount equal to (i) 80% multiplied by (ii) the sum of
(A) $1,600,000,000,  plus (B) 50% of the cumulative positive quarterly net
income for the period beginning July 1, 2012 and ending with the most recently
completed fiscal quarter for which financial statements have been provided
pursuant to Section 6.1(b).

 

(c)                                  Secured Debt Ratio.  The Secured Debt Ratio
shall not be greater than 1.5 to 1.0.

 

j.                                         The Credit Agreement is hereby
amended by deleting the introductory clause of Section 7.1 and substituting the
following therefor:

 

Section 7.1 Indebtedness.  Each of the Credit Parties will not, nor will it
permit any Subsidiary to, contract, create, incur, assume or permit to exist any
Indebtedness, except for the following, but only to the extent that none of the
following, either individually or in the aggregate, would create or result in a
breach of the Leverage Ratio covenant set forth in Section 6.16(a), including on
a Pro Forma Basis assuming the incurrence of such Indebtedness:

 

k.                                      The Credit Agreement is hereby amended
by deleting Section 7.1(g) therefrom and substituting the following therefor:

 

(g)                                  Unsecured Indebtedness of any Credit Party
or any Subsidiary; provided, that the Credit Parties shall have delivered to the
Administrative Agent a Pro Forma Certificate signed by a Responsible Officer, at
least five (5) Business Days prior to the incurrence of such unsecured
Indebtedness providing a calculation of the Leverage Ratio on a Pro Forma Basis
assuming the incurrence of such Indebtedness and stating that the Credit Parties
have determined in good faith after reasonable investigation that the incurrence
of the proposed Indebtedness pursuant to this clause (g) shall not cause or
result in a violation of the Leverage Ratio covenant set forth in
Section 6.16(a);

 

l.                                          The Credit Agreement is hereby
amended by deleting Section 7.1(h) therefrom and substituting the following
therefor:

 

(h)                                 [Reserved];

 

m.                                  The Credit Agreement is hereby amended by
deleting Section 7.1(i) therefrom and substituting the following therefor:

 

(i)                                     [Reserved]; and

 

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n.                                      The Credit Agreement is hereby amended
by replacing the clause “Each of the Credit Parties” appearing in the first line
of Section 7.10 thereof with the clause “Except as set forth on Schedule 7.10,
each of the Credit Parties”

 

o.                                      The Credit Agreement is hereby amended
by deleting Section 7.15 therefrom and substituting the following therefor:

 

Section 7.15  No Prepayment of Permitted Indebtedness.  To the extent that any
Credit Party has incurred Indebtedness permitted in accordance with Sections
7.1(g) or 7.1(j) hereof, such Credit Party shall repay such Indebtedness only in
accordance with the terms thereof and shall not (a) voluntarily prepay any
principal of or interest on any such permitted Indebtedness, (b) use proceeds
from any Loan to make any payment or prepayment of principal of or interest on,
or to create a sinking fund payment in respect of, any such permitted
Indebtedness, or (c) pay, prepay, redeem or purchase or deposit funds or
property for the payment, prepayment, redemption or purchase of permitted
Indebtedness, except, in each case, (i) for regularly scheduled interest
payments on such permitted Indebtedness made in compliance with the terms and
conditions thereof, (ii) with respect to Indebtedness incurred in accordance
with Section 7.1(j), in compliance with the terms and conditions of the
subordination agreement with respect thereto, and (iii) with respect to
Indebtedness permitted in accordance with Sections 7.1(g) or 7.1(j) refinancing,
repayments, prepayments, repurchases or redemptions of such permitted
Indebtedness with the proceeds of Indebtedness that: (A) is permitted by
Section 7.1(g) or Section 7.1(j), (B) does not have a scheduled maturity date
prior to the Maturity Date, and (C) has terms material to the interests of the
Lenders that are not materially less advantageous to the Lenders than those of
such Indebtedness that is being refinanced, repaid, prepaid, repurchased or
redeemed.  No Credit Party will make any payment on any such permitted
Indebtedness if such payment would result in a Default or Event of Default
hereunder, or with respect to Indebtedness incurred in accordance with
Section 7.1(j), if such payment would result in a breach or default of the
subordination agreement with respect thereto.

 

p.                                      The Credit Agreement is hereby amended
by replacing the existing Exhibit J with Exhibit J attached hereto and attaching
to the Credit Agreement as Schedule 7.10 the Schedule 7.10 attached hereto.

 

q.                                      As a condition to the Lender entering
into this Amendment, the Borrower and each other Credit Party irrevocably
confirm and agree that each of the Credit Documents executed by the Borrower
and/or the other Credit Parties, and all guaranties, grants of security,
debentures, mortgages, liens, deeds, pledges and rights thereunder, are hereby
extended, continued, ratified and confirmed, remain in full force and effect and
apply to the Credit Agreement as amended hereby.

 

r.                                         This Amendment and all other
Instruments executed and delivered by the Borrower or any other Credit Party in
connection with this Amendment are and shall be deemed to be “Credit Documents”
for all purposes.

 

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3.                                      Representations and Warranties.

 

a.                                      The Borrower and each other Credit Party
hereby remake and restate each of their representations and warranties in the
Credit Agreement and the other Credit Documents, effective as of the date of
this Amendment, which representations and warranties are incorporated herein by
reference as if fully set forth.

 

b.                                      The Borrower and each other Credit Party
hereby further represent and warrant that (i) this Amendment has been duly
authorized, executed and delivered by each of them, (ii) this Amendment is
binding upon and enforceable against each of them in accordance with its terms,
(iii) no Default or Event of Default has occurred and is continuing or will
occur as a result of the consummation of the transactions contemplated hereby,
and (iv) the Recitals set forth above are true and correct in all respects.

 

4.                                      Conditions Precedent.  This Amendment
shall become effective as of the date hereof upon (and only upon) satisfaction
of the following conditions precedent:

 

a.                                      The Lender has received duly executed
originals of this Amendment from each Credit Party and from the Required
Lenders.

 

b.                                      The Lender shall have received evidence
reasonably satisfactory to the Lender that the Security Documents remain in full
force and effect as valid and perfected Liens on the Collateral, except for
Permitted Liens.

 

c.                                       The Borrower and the other Credit
Parties shall have obtained all necessary approvals and consents of Governmental
Authorities and other Persons, if any, required in connection with the
execution, delivery and performance of this Amendment and the other Instruments
contemplated hereby and the performance of the transactions contemplated
thereby.

 

d.                                      The Administrative Agent shall have
received such other Instruments, certificates, information and opinions as the
Administrative Agent may reasonably request, in each case, in form and substance
reasonably satisfactory to the Administrative Agent.

 

5.                                      Miscellaneous Provisions.

 

a.                                      This Amendment is a Credit Document. 
The Credit Agreement as amended by this Amendment is hereby ratified, approved,
confirmed and continued in each and every respect, and the parties hereto agree
that the Credit Agreement remains in full force and effect in accordance with
its terms.  Nothing contained herein shall be construed to release, terminate or
act as a novation of, in whole or in part, any Credit Document or any guaranty,
lien, mortgage, deed, pledge or security interest granted pursuant thereto.  All
references to the Credit Agreement in each of the Credit Documents and in any
other document or instrument shall hereafter be deemed to refer to the Credit
Agreement as amended hereby.  This Amendment shall not be construed as a waiver
or amendment of any other provision of the Credit Agreement or the other Credit
Documents or for any purpose, or a consent to any other, further or future
action on the part of the Borrower or the other Credit Parties that would
require the waiver or consent of the Lender, except, in each case, as expressly
set forth herein.

 

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b.                                      This Amendment shall be governed by and
construed in accordance with the laws of the State of New York, excluding that
body of law relating to conflict of laws.

 

c.                                       This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.  This
Amendment may be validly executed and delivered by facsimile, portable document
format (.pdf) or other electronic transmission, and a signature by facsimile,
portable document format (.pdf) or other electronic transmission shall be as
effective and binding as delivery of a manually executed original signature.

 

d.                                      The execution, delivery and
effectiveness of this Amendment shall not prejudice, limit, or operate, or be
deemed to operate, as a waiver of, any rights, powers or remedies of the
Administrative Agent or the Lenders under the Credit Agreement or any other
Credit Document or constitute a waiver of any provision thereof, except as
expressly set forth herein.

 

e.                                       This Amendment shall be binding upon
and inure to the benefit of the Lenders, the Borrower and the other Credit
Parties, and their respective successors and assigns permitted by the Credit
Agreement.

 

f.                                        The Borrower shall pay all reasonable
costs, fees and expenses paid or incurred by the Administrative Agent incident
to this Amendment and the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and expenses of the
Administrative Agent’s counsel in connection with the negotiation, preparation,
delivery and execution of this Amendment and any related documents and
instruments.

 

*  *  *  *  *  *  *  *

 

remainder of this page intentionally blank

 

*  *  *  *  *  *  *  *

 

9

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the date first above written.

 

 

 

Borrower:

 

 

 

 

 

 

ROYAL GOLD, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/Stefan Wenger

 

 

Name:

Stefan Wenger

 

 

Title:

CFO and Treasurer

 

 

 

 

 

 

 

 

 

 

Guarantors:

 

 

 

 

 

 

HIGH DESERT MINERAL RESOURCES, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/Bruce C. Kirchhoff

 

 

Name:

Bruce C. Kirchhoff

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

RG MEXICO, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/Bruce C. Kirchhoff

 

 

Name:

Bruce C. Kirchhoff

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

RG EXCHANGECO INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/Bruce C. Kirchhoff

 

 

Name:

Bruce C. Kirchhoff

 

 

Title:

Vice President and General Counsel

 

 

[Second Amendment Signature Page]

 

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Administrative Agent and Lender:

 

 

 

 

 

 

HSBC BANK USA, NATIONAL ASSOCIATION

 

 

 

 

 

 

 

 

 

 

By:

/s/Alexandra Barrows

 

 

Name:

Alexandra Barrows

 

 

Title:

Vice President

 

 

 

 

 

 

 

 

 

 

Lender:

 

 

 

 

 

 

THE BANK OF NOVA SCOTIA

 

 

 

 

 

 

 

 

 

 

By:

/s/Ray Clarke

 

 

Name:

Ray Clarke

 

 

Title:

Managing Director

 

 

 

 

 

 

 

 

 

 

By:

/s/Asif Rafiq

 

 

Name:

Asif Rafiq

 

 

Title:

Associate Director

 

 

 

 

 

 

 

 

 

 

Lender:

 

 

 

 

 

 

GOLDMAN SACHS BANK USA

 

 

 

 

 

 

 

 

 

 

By:

/s/Barbara Fabbri

 

 

Name:

Barbara Fabbri

 

 

Title:

Authorized Signatory

 

 

[Second Amendment Signature Page]

 

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EXHIBIT J

 

FORM OF
COMPLIANCE CERTIFICATE

 

HSBC Bank USA, National Association, as Administrative Agent

[Address]

[Address]

 

Dear Sirs,

 

Reference is made herein to that certain Fifth Amended and Restated Revolving
Credit Agreement, dated as of May 30, 2012, as amended by that certain Amendment
No. 1 to Fifth Amended and Restated Revolving Credit Agreement, dated as of
July 12, 2012, as further amended by that certain Amendment No. 2 to Fifth
Amended and Restated Revolving Credit Agreement, dated as of January 21, 2013
(together with all other amendments, restatements, amendments and restatements,
modifications, revisions, increases, supplements, extensions, continuations,
replacements or refinancings from time to time in accordance with the terms
thereof, the “Credit Agreement”), by and among ROYAL GOLD, INC., a corporation
organized and existing under the laws of the State of Delaware (“Royal Gold” or
“Borrower”), as a borrower, HIGH DESERT MINERAL RESOURCES, INC., a corporation
organized and existing under the laws of the State of Delaware and a
wholly-owned subsidiary of Royal Gold, as a guarantor, RG EXCHANGECO INC., an
amalgamated corporation validly existing under the Canada Business Corporations
Act, as a guarantor, RG MEXICO, INC., a corporation organized and existing under
the laws of the State of Delaware, as a guarantor, those additional guarantors
as identified as “Guarantor” on the signature pages thereto and such additional
guarantors from time to time party thereto, as guarantors, HSBC BANK USA,
NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United States (“HSBC Bank”), as a lender, THE BANK OF NOVA SCOTIA, a bank
organized and existing under the laws of Canada (“Scotia”), as a lender, GOLDMAN
SACHS BANK USA, (“Goldman”), as a lender, those banks and financial institutions
identified as a “Lender” on the signature pages thereto and such other banks or
financial institutions as may from time to time become parties thereto (the
“Additional Lenders”), as lenders (HSBC Bank, Scotia, Goldman and the Additional
Lenders are referred to herein as the “Lenders”), HSBC Bank, as administrative
agent for the Lenders (in such capacity, the “Administrative Agent”), HSBC
SECURITIES (USA) INC., as sole lead arranger and joint bookrunner, and
SCOTIABANK, as syndication agent and joint bookrunner.

 

This Compliance Certificate (the “Certificate”) is delivered to you pursuant to
Section [5.2(f)][6.1(d)] of the Credit Agreement. Unless otherwise defined
herein, capitalized terms used in this Certificate have the meanings assigned to
such terms in the Credit Agreement, as applicable.

 

The Borrower hereby certifies, represents and warrants to the Administrative
Agent that as at the fiscal quarter ending on                         ,
        :

 

J - 1

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1.                                      The Leverage Ratio is
                                             . [through December 31, 2013, less
than or equal to 4.75 to 1.0; after December 31, 2013 through September 30,
2014, less than or equal to 4.0 to 1.0; and after September 30, 2014, less than
or equal to 3.5 to 1.0]

 

2.                                      The Consolidated Net Worth is
$                                            . [not less than an amount equal to
(i) 80% multiplied by (ii) the sum of (A) $1,600,000,000, plus (B) 50% of the
cumulative positive quarterly net income for the period beginning July 1, 2012
and ending with the most recently completed fiscal quarter for which financial
statements have been provided pursuant to Section 6.1(b) of the Credit
Agreement.]

 

3.                                      The Secured Debt Ratio is
                                            . [no greater than 1.5 to 1.0]

 

The Borrower hereby certifies and warrants that, as of the date of this
Certificate, no Default or Event of Default has occurred and is continuing.

 

[remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF the Borrower has caused this Certificate to be executed and
delivered to the Administrative Agent as of this                day of
                                              20    .

 

 

 

ROYAL GOLD, INC.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

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ANNEXURE 1

 

Calculations

 

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Schedule 7.10

 

Permitted Amendments to Material Contracts

 

None.

 

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