Exhibit 10.4

ENVIRONMENTAL INDEMNITY AGREEMENT

THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this “Agreement”), dated as of June 17,
2008 is made by STERLING MINING COMPANY, an Idaho corporation (“Borrower”) to
and for the benefit of those individuals/entities listed on the attached Exhibit
“A,” and their successors and assigns (“Lender”).

R E C I T A L S:

A. WHEREAS, Lender has extended to Borrower a loan in the principal amount of
Two MILLION FOUR HUNDRED THOUSAND DOLLARS AND No/100 ($2,400,000.00) (“Loan”).

B. WHEREAS, The Loan is evidenced by a Promissory Note of even date herewith (as
amended from time to time, “Note”), executed by Borrower and payable to the
order of Lender, and is secured by a Mortgage, Assignment of Leases and Rents,
Security Agreement, and Fixture Filing of even date herewith (as amended from
time to time, “Mortgage”), from Borrower in favor of Lender encumbering real
property located in Shoshone County, Idaho, as described on Exhibit “B” attached
hereto, together with the other collateral as described in the Mortgage (the
real property and other collateral being collectively referred to as “Property”)
(capitalized terms used and not specifically defined herein shall bear the same
meaning as in the Mortgage).

C. WHEREAS, As a condition precedent to making the Loan, Lender has required
that Indemnitors (as defined below) indemnify Lender with respect to
environmental conditions and operations at the Property as set forth below.

NOW, THEREFORE, to induce Lender to extend the Loan to Borrower and in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
Indemnitors hereby covenant and agree for the benefit of Lender and the other
Indemnified Parties (as defined below), as follows:

1. Environmental Matters.

(a) Definitions. For purposes of this Agreement the following terms have the
following meanings:

“Environmental Laws” means any and all federal, state and local laws (whether
under common law, statute, rule, regulation or otherwise), requirements under
permits or other authorizations issued with respect thereto, and other orders,
decrees, judgments, directives or other requirements of any governmental
authority relating to or imposing liability or standards of conduct (including
disclosure or notification) concerning protection of human health or the
environment or Hazardous Substances or any activity involving Hazardous
Substances, all as previously and in the future to be amended.

“Hazardous Substance” means, but is not limited to any and all substances
(whether solid, liquid or gas) defined, listed, or otherwise classified as
pollutants, hazardous wastes, hazardous substances, hazardous materials,
extremely hazardous wastes, or words of similar meaning or regulatory effect
under any present or future

 

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Environmental Laws or that may have a negative impact on human health or the
environment, including but not limited to petroleum and petroleum products,
asbestos and asbestos-containing materials, polychlorinated biphenyls, lead,
radon, radioactive materials, flammables and explosives, but excluding
substances of kinds and in amounts ordinarily and customarily present used or
stored in similar properties, and otherwise in compliance with all Environmental
Laws.

“Indemnified Parties” means and includes Lender, their parent, subsidiaries, and
affiliated companies, assignees of any of Lender’s interest in the Loan or the
Loan Documents, any servicer or originator of the Loan, and the officers,
directors, employees, agents and contractors of any of the foregoing parties.

“Indemnitors” means Borrower, its parent, subsidiaries, and affiliated
companies.

“Loan Documents” means the Note, the Mortgage, this Agreement and any other
document given by any Indemnitor to evidence or secure the Loan, as amended from
time to time.

“Release” means any release, deposit discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposing or other movement of Hazardous Substances.

(b) Environmental Representations and Warranties. Indemnitors hereby represent
and warrant to Indemnified Parties that, as of the date hereof:

(i) neither the Property nor any operations of Borrower are in violation of any
Environmental Laws or any permit or other authorization issued pursuant thereto;

(ii) no Hazardous Substances are, or to Indemnitors’ knowledge and belief, have
been handled, generated, stored, processed or otherwise managed on or at the
Property except for those substances used by Borrower at the Property in the
ordinary course of their businesses and in compliance with all Environmental
Laws;

(iii) there are not, to Indemnitors’ knowledge, any past or present Releases of
Hazardous Substances in, on, under or from the Property;

(iv) the Property is not subject to any private or governmental lien or judicial
or administrative notice or action relating to Hazardous Substances;

(v) there are no existing or closed underground storage tanks or other
underground storage receptacles for Hazardous Substances on the Property;

(vi) Borrower has received no notice of, and to Borrower’s knowledge, there
exists no current investigation, action, proceeding or claim by any agency,
authority or unit of government or by any third party which could result in any
liability, penalty, sanction or judgment under any Environmental Laws with
respect to any condition, use or operation of the Property or any of Borrower’s
operations, nor does Borrower know of any basis for such a claim;

 

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(vii) there has been no claim by any party that any use, operation or condition
of the Property or any of Borrower’s operations has caused any nuisance or any
other liability or adverse condition on any other property nor does Borrower
know of any basis for such a claim: and

(viii) there are no agreements, consent orders, decrees, judgments, license or
permit conditions or other orders or directives of any federal, state or local
court, governmental agency or authority or agreements, whether settlement
agreements or otherwise, with any third parties relating to the ownership, use,
operation, sale, transfer or conveyance of the Property that require any change
in the present condition of the Property or any work, repairs, construction,
containment, clean up, investigations, studies, removal or other remedial action
or capital expenditures with respect to the Property.

(ix) the Property is subject to regulation by federal and state authorities as
part of an ongoing mining and milling operation (the “Operations”). The
Operations are conducted pursuant to federal and state Environmental Laws.
Borrower holds all necessary and required permits as required by applicable
Environmental Laws.

(c) Environmental Covenants. Borrower covenants and agrees that Borrower:
(i) shall keep or cause the Property to be kept free from Hazardous Substances
(except those substances used by Borrower at the Property in the ordinary course
of its businesses and in compliance with all Environmental Laws); (ii) shall not
install or use any underground storage tanks, shall not itself engage in the
use, generation, handling, storage, production, processing or management of
Hazardous Substances, except in the ordinary course of their businesses and in
compliance with all Environmental Laws; (iii) shall not itself cause or allow
and shall expressly prohibit the Release of Hazardous Substances at, on, under,
or from the Property; shall itself comply and shall expressly require any other
persons who may come upon the Property to comply with all Environmental Laws;
(iv) shall keep the Property free and clear of all liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission of
Borrower or any other person or entity (“Environmental Liens”); (v) shall comply
and cause all occupants of the Property to comply with the reasonable
recommendations of any qualified environmental engineer or other expert that
apply or pertain to the environmental condition of the Property; and,
(vi) without limiting the generality of the foregoing, during the term of this
Agreement, shall not use any construction materials which contain asbestos nor
install in the Improvements on the Property or permit to be installed in the
Improvements on the Property, any materials which contain asbestos.

(d) Notice and Access. Indemnitors shall promptly notify Indemnified Parties in
writing if Indemnitors knows, suspects or believes there is or are (i) any
Hazardous Substances, other than those used by Borrower at the Property in the
ordinary course of their businesses and in compliance with all Environmental
Laws, present on the Property; (ii) any Release of Hazardous Substances in, on,
under, from or migrating towards the Property; (iii) any non-compliance with
Environmental Laws related in any way to the Property; (iv) any actual or
potential Environmental Liens; (v) any

 

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investigation or action or claim, whether threatened or pending, by any
governmental agency or third party pertaining to the Release of Hazardous
Substances in, on, under, from, or migrating towards the Property; and (vi) any
installation of wells, piping, or other equipment at the Property to
investigate, remediate or otherwise address any Release of Hazardous Substances
at, on, in or in the vicinity of the Property. Indemnitors shall promptly, at
Indemnitors’ sole cost and expense, take all reasonable actions with respect to
any Hazardous Substances or other environmental condition at, on or under the
Property or other affected property, including all investigative, monitoring,
removal, containment and remedial actions in accordance with all applicable
Environmental Laws, including the payment, at no expense to Indemnified Parties,
of all clean-up, administrative and enforcement costs of applicable governmental
agencies which may be asserted against the Property in all instances as
necessary to (A) comply with all applicable Environmental Laws; (B) protect
human health or the environment; (C) allow continued use, occupation, or
operation of the Property; and (D) maintain fair market value of the Property
(collectively, “Completion of the Clean-up”). In the event Indemnitors fail to
do so, Indemnified Parties may, but shall not be obligated or have any duty to,
cause the Completion of the Clean-up of the Property. Indemnitors hereby grant
to Indemnified Parties and their agents and employees access to the Property as
provided in Section l(f) below, and a license to remove any items reasonably
deemed by Indemnified Parties to be Hazardous Substances and to take all
reasonable steps Indemnified Parties shall deem necessary to cause the
Completion of the Clean-up of the Property.

(e) Indemnification. Indemnitors covenant and agree, at Indemnitors’ sole cost
and expense, to indemnify, defend (at trial and appellate levels, and with
attorneys, consultants and experts acceptable to Indemnified Parties), and hold
Indemnified Parties harmless from and against any and all liens, damages
(including, without limitation, consequential damages), losses, liabilities,
obligations, settlement payments, penalties, claims, judgments, suits,
proceedings, costs, disbursements or expenses of any kind or of any nature
whatsoever (including reasonable attorneys’, consultants’ and experts’ fees and
disbursements actually incurred in investigating, defending, settling or
prosecuting any claim, litigation or proceeding) which may at any time be
imposed upon, incurred by or asserted against Indemnified Parties or the
Property, and arising directly or indirectly from or out of:

(i) the past, present or future presence, Release or threat of Release of any
Hazardous Substances on, in, under or affecting all or any portion of the
Property or any surrounding areas, regardless of whether or not caused by or
within the control of any Indemnitor;

(ii) the past, present or future violation of any Environmental Laws, relating
to or affecting the Property or Borrower’s operations, whether or not caused by
or within the control of Indemnitor;

(iii) the failure by Indemnitors to comply fully with the terms and conditions
of this Section 1;

 

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(iv) any misrepresentation or inaccuracy in or the breach of any representation
or warranty contained in this Section 1; or

(v) the enforcement of this Section 1, including any liabilities that arise as a
result of the actions taken or caused to be taken by Indemnified Parties under
this Section 1, the cost of assessment, containment and/or removal of any and
all Hazardous Substances from all or any portion of the Property or any
surrounding areas, the cost of any actions taken in response to the presence.
Release or threat of Release of any Hazardous Substances on, in, under or
affecting any portion of the Property or any surrounding areas to prevent or
minimize such Release or threat of Release so that it does not migrate or
otherwise cause or threaten danger to present or future public health, safety,
welfare or the environment, and costs incurred to comply with the Environmental
Laws in connection with all or any portion of the Property or any surrounding
areas. Indemnified Parties’ rights under this Section 1 shall survive payment in
full of Borrower’s obligations under the Loan Documents and shall be in addition
to all other rights of Indemnified Parties under the Mortgage, the Note and the
other Loan Documents. The foregoing notwithstanding, Indemnitors’ obligations
under this Section 1 with regard to any Post Transfer Indemnification
Responsibilities (as hereinafter defined) shall be limited to such obligations
directly or indirectly arising out of or resulting from any Hazardous Substances
that were present or released in, on, or around any part of the Property, or in
the soil, groundwater or soil vapor on or under the Property at any time before
or while Borrower held title to or was in possession or control of the Property
(“Indemnitors’ Continuing Responsibility”); provided, however, that any Post
Transfer Indemnification Responsibilities incurred or suffered by Indemnified
Parties shall be presumed, unless shown by a preponderance of the evidence to
the contrary, to be Indemnitors’ Continuing Responsibility, “Post Transfer
Indemnification Responsibilities” shall mean any obligations hereunder to
indemnify, defend, and hold Indemnified Parties harmless arising after
Indemnified Parties cease to hold a security interest in the Property or acquire
title to the Property as a result of foreclosure, deed in lieu of foreclosure,
or other transfer of the Property.

(f) Site Visits, Observation and Testing. Indemnified Parties and their agents
and representatives shall have the right at any reasonable time to enter and
visit the Property for the purposes of observing the Property, taking and
removing soil or groundwater samples, and conducting tests on any part of the
Property. Indemnified Parties have no duty, however, to visit or observe the
Property or to conduct tests, and no site visit observation or testing by any
Indemnified Party shall impose any liability on any Indemnified Party. In no
event shall any site visit, observation or testing by any Indemnified Party be a
representation that Hazardous Substances are or are not present in, on or under
the Property, or that there has been or shall be compliance with any law,
regulation or ordinance pertaining to Hazardous Substances or any other
applicable governmental law. Neither Indemnitors nor any other parties are
entitled to rely on any site visit, observation or testing by any Indemnified
Party. Indemnified Parties owe no duty of care to protect Indemnitors or any
other party against any Hazardous Substances or any other adverse condition
affecting the Property. Indemnified Parties shall disclose to Indemnitors or any
other party any report or findings made as a result of, or in connection with,
any site visit, observation or testing by Indemnified Parties in the event

 

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any Hazardous Substances are found as a result of such site visit observation or
testing. Indemnitors understand and agree that Indemnified Parties make no
representation or warranty to Indemnitors or any other party regarding the
truth, accuracy or completeness of any such report or findings that may be
disclosed. Indemnitors also understand that, depending on the results of any
site visit, observation or testing by any Indemnified Party which are disclosed
to Indemnitors, Indemnitors may have a legal obligation to notify one or more
environmental agencies of the results and that such reporting requirements are
site-specific and are to be evaluated by Indemnitors without advice or
assistance from Indemnified Parties. Any Indemnified Party shall give Borrower
reasonable notice before entering the Property. Such Indemnified Party shall
make reasonable efforts to avoid interfering with Borrower’s use of the Property
in exercising any rights provided in this Section 1.

2. Reinstatement of Obligations. If at any time all or any part of any payment
made by Borrower or received by Indemnified Parties from Borrower under or with
respect to this Agreement is or must be rescinded or returned for any reason
whatsoever (including the insolvency, bankruptcy or reorganization of any
Indemnitor under any Debtor Relief Law (as defined below)), then the obligations
of Indemnitors hereunder shall, to the extent of the payment rescinded or
returned, be deemed to have continued in existence, notwithstanding such
previous payment made by Indemnitors, or receipt of payment by an Indemnified
Party, and the obligations of Indemnitors hereunder shall continue to be
effective or be reinstated, as the case may be, as to such payment, all as
though such previous payment by Indemnitors had never been made.

3. Waivers. To the extent permitted by law, each Indemnitor, for itself and its
successors, hereby waives and agrees not to assert or take advantage of:

(a) Any right to require Indemnified Parties to proceed against any other person
or to proceed against or exhaust any security held by Indemnified Parties at any
time or to pursue any other remedy in Indemnified Parties’ power or under any
other agreement before proceeding against Borrower hereunder;

(b) The defense of the statute of limitations in any action hereunder;

(c) Any defense that may arise by reason of the incapacity, lack of authority,
death or disability of any other person or persons or the failure of Indemnified
Parties to file or enforce a claim against the estate (in administration,
bankruptcy or any other proceedings) of any other person or person;

(d) Demand, presentment for payment, notice of nonpayment, protest, notice of
protest and all other notices of any kind, or the lack of any thereof,
including, without limiting the generality of the foregoing, notice of the
existence, creation or incurring of any new or additional indebtedness or
obligation or of any action or non-action on the part of the Indemnified
Parties, any endorser or creditor of either Indemnitor or any other person
whomsoever under this or any other instrument in connection with any obligation
or evidence of indebtedness held by Indemnified Parties;

 

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(e) Any principle or provision of law, statutory or otherwise, which is or might
be in conflict with the terms and provisions of this Agreement; and,

(f) Any duty on the part of Indemnified Parties to disclose to Indemnitors any
facts Indemnified Parties may now or hereafter know about the Property,
regardless of whether Indemnified Parties have reason to believe that any such
facts materially increase the risk beyond that which Indemnitors intend to
assume or have reason to believe that such facts are unknown to Indemnitors or
have a reasonable opportunity to communicate such facts to Indemnitors, it being
understood and agreed that Indemnitors are fully responsible for being and
keeping informed of the condition of the Property and of any and all
circumstances bearing on the risk that liability may be incurred hereunder.

(g) Any invalidity, irregularity or unenforceability, in whole or in part, of
any one or more of the Loan Documents;

(h) Any deficiencies in the collateral for the Loan or any deficiency in the
ability of Indemnified Parties to collect or to obtain performance from any
person or entities now or hereafter liable for the payment and performance of
any obligation hereby guaranteed;

(i) Any assertion or claim that the automatic stay provided by 11 U.S.C. §362
(arising upon the voluntary or involuntary bankruptcy proceeding of Indemnitors)
or any other stay provided under any other debtor relief law (whether statutory,
common law, case law or otherwise) of any jurisdiction whatsoever, now or
hereafter in effect, which may be or become applicable, shall operate or be
interpreted to stay, interdict, condition, reduce or inhibit the ability of
Indemnified Parties to enforce any of its rights, whether now or hereafter
required, which Indemnified Parties may have against Indemnitors or the
collateral for the Loan; and

(j) Any modifications of the Loan Documents or any obligation of Indemnitors
relating to the Loan by operation of law or by action of any court, whether
pursuant to the Bankruptcy Reform Act of 1978, as amended or recodified
(“Bankruptcy Code”), or under any other present or future state or federal law
regarding bankruptcy, reorganization or other relief to debtors (collectively,
“Debtor Relief Law”), or otherwise.

4. General Provisions.

(a) Full Recourse. All of the terms and provisions of this Agreement are full
recourse obligations of Indemnitors and not restricted by any limitation on
personal liability.

(b) Secured Obligations. Indemnitors hereby acknowledge that the obligations of
Indemnitors under this Agreement are secured by the lien of the Mortgage and the
security interests and other collateral described in the Mortgage and the other
Loan Documents.

(c) Survival. This Agreement shall be deemed to be continuing in nature and
shall remain in full force and effect and shall survive the payment of the
indebtedness evidenced and secured by the Loan Documents and the exercise of any
remedy by Indemnified Parties under the Mortgage or any of the other Loan
Documents, including any foreclosure or deed in lieu thereof, even if, as a part
of such remedy, the Loan is paid or satisfied in full.

 

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(d) No Recourse Against Indemnified Parties. Indemnitors shall not have any
right of recourse against Indemnified Parties by reason of any action
Indemnified Parties may take or omit to take under the provisions of this
Agreement or under the provisions of any of the Loan Documents other than for
Indemnified Parties’ gross negligence or willful misconduct.

(e) Reservation of Rights. Nothing contained in this Agreement shall prevent or
in any way diminish or interfere with any rights or remedies, including the
right to contribution, which Indemnified Parties may have against Indemnitors or
any other party under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (codified at Title 42 U.S.C. §§9601 et seq.), as it may be
amended from time to time, or any other applicable federal, state or local laws,
all such rights being hereby expressly reserved.

(f) Rights Cumulative; Payments. Indemnified Parties’ rights under this
Agreement shall be in addition to all rights of Indemnified Parties under the
Note, the Mortgage and the other Loan Documents. Further, payments made by
Indemnitors under this Agreement shall not reduce in any respect indemnitors’
obligations and liabilities under the Note, the Mortgage and the other Loan
Documents.

(g) No Limitation on Liability. Each Indemnitor hereby consents and agrees that
Indemnified Parties may at any time and from time to time without further
consent from Indemnitors do any of the following events, and the liability of
Indemnitors under this Agreement shall be unconditional and absolute and shall
in no way be impaired or limited by any of the following events, whether
occurring with or without notice to Indemnitors or with or without
consideration: (i) any extensions of time for performance required by any of the
Loan Documents or extension or renewal of the Note; (ii) any sale, assignment or
foreclosure of the Note, the Mortgage or any of the other Loan Documents or any
sale or transfer of the Property; (iii) any change in the composition of any
Indemnitor; (iv) the accuracy or inaccuracy of the representations and
warranties made by Indemnitors herein or in any of the Loan Documents; (v) the
release of any Indemnitor or of any other person or entity from performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Loan Documents by operation of law, Indemnified Parties’ voluntary
act or otherwise; (vi) the release or substitution in whole or in part of any
security for the Loan; (vii) Lender’s failure to record the Mortgage or to file
any financing statement (or Lender’s improper recording or filing thereof) or to
otherwise perfect, protect, secure or insure any lien or security interest given
as security for the Loan; (viii) the modification of the terms of any one or
more of the Loan Documents; or (ix) the taking or failure to take any action of
any type whatsoever. No such action which Indemnified Parties shall take or fail
to take in connection with the Loan Documents or any collateral for the Loan,
nor any course of dealing with Indemnitors or any other person, shall limit,
impair or release Indemnitors’ obligations hereunder, affect this Agreement in
any way or afford Indemnitors any recourse against Indemnified Parties, Nothing
contained in this Paragraph shall be construed to require Indemnified Parties to
take or refrain from taking any action referred to herein. The foregoing shall
not release Indemnified Parties from their gross negligence or willful
misconduct.

(h) Entire Agreement; Amendment; Severability. This Agreement contains the
entire agreement between the parties respecting the matters herein set forth and
supersedes (except as to the Mortgage) all prior agreements, whether written or
oral, between the parties respecting such matters. Any amendments or
modifications hereto, in order to be effective, shall

 

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be in writing and executed by the parties hereto. If any provision or obligation
under this Agreement or any of the other Loan Documents shall be determined by a
court of competent jurisdiction to be invalid, illegal or unenforceable, that
provision shall be deemed severed from the Loan Documents and the validity,
legality and enforceability of the remaining provisions or obligations shall
remain in full force as though the invalid, illegal or unenforceable provision
had never been a part of the Loan Documents.

(i) Governing Law; Binding Effect. This Agreement shall be governed by and
construed in accordance with the laws of the State in which the Property is
located, except to the extent that the applicability of any of such laws may now
or hereafter be preempted by Federal law, in which case such Federal law shall
so govern and be controlling. The terms, covenants and conditions of this
Agreement shall be binding upon and inure to the benefit of the heirs,
successors and assigns of the parties. Indemnified Parties and any successor
may, at any time, sell, transfer, or assign its interest under the Note, the
Mortgage, the other Loan Documents, any or all servicing rights with respect
thereto, and this Agreement or grant participations. Indemnified Parties may
forward to each purchaser, transferee, assignee, servicer, participant or
investor (all of the foregoing entities collectively referred to as an
“Investor”) and each prospective Investor, all documents, financial and other
information which Indemnified Parties now have or may hereafter acquire relating
to (a) the Loan; (b) the Property and its operation (including, without
limitation, copies of all leases, subleases or any other agreements concerning
the use and occupancy of the Property); and/or (c) any party connected with the
Loan (including, without limitation, Borrower, any partner or member of
Borrower, any constituent partner or member of Borrower). The representations,
warranties, obligations, covenants, and indemnity obligations of Indemnitors
under this Agreement shall also benefit and apply with respect to any purchaser,
transferee, assignee, participant, servicer or investor.

(j) Notice. All notices or other communications required or permitted to be
given pursuant hereto shall be given in the manner specified in the Mortgage
directed to the Borrower and Lender at their respective addresses as provided
therein.

(k) No Waiver: Time of Essence; Interpretation; Counting of Days. The Failure of
any party hereto to enforce any right or remedy hereunder, or to promptly
enforce any such right or remedy, shall not constitute a waiver thereof nor give
rise to any estoppel against such party nor excuse any of the parties hereto
from their respective obligations hereunder. Any waiver of such right or remedy
must be in writing and signed by the party to be bound. Whenever used, the
singular number shall include the plural, the plural the singular, and the words
“Indemnified Parties” and “Indemnitors” shall include their respective
successors, assigns, heirs, executors and administrators. The word “include(s)”
means “include(s), without limitation,” and the word “including” means
“including, but not limited to.” This Agreement is subject to enforcement at law
or in equity, including actions for damages or specific performance. Time is of
the essence of each and every term and condition of this Agreement. The term
“days” when used herein shall mean calendar days. If any time period ends on a
Saturday, Sunday or holiday officially recognized by the state within which the
Property is located, the period shall be deemed to end on the next succeeding
business day. The term “business day” as used herein shall mean a weekday,
Monday through Friday, except a legal holiday or a day on which banking
institutions are authorized or required to be closed for the conduct of
commercial banking business.

 

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(l) Headings. The headings of the sections and paragraphs of this Agreement are
for convenience of reference only and shall not be construed in interpreting the
provisions hereof.

(m) Attorneys’ Fees. Indemnitors agree to pay all of Indemnified Parties’ costs
and expenses, including reasonable attorneys’ fees, which may be incurred in
enforcing or protecting Indemnified Parties’ rights or interests under this
Agreement. From the time(s) incurred until paid in full to Indemnified Parties,
all such sums shall bear interest at the Default Rate.

(n) Successive Actions. A separate right of action hereunder shall arise each
time Indemnified Parties acquires knowledge of any matter indemnified by
Indemnitors under this Agreement. Separate and successive actions may be brought
hereunder to enforce any of the provisions hereof at any time and from time to
time. No action hereunder shall preclude any subsequent action, and Indemnitors
hereby waive and covenant not to assert any defense in the nature of splitting
of causes of action or merger of judgments.

(o) Joint and Several Liability. If more than one person or entity is signing
this Agreement as Indemnitors, their obligations under this Agreement will be
joint and several. As to any Indemnitors that is a partnership, the obligations
of such Indemnitor under this Agreement are the joint and several obligation of
each general partner thereof. Any married person signing this Agreement agrees
that recourse may be had against community property assets and against his or
her separate property for the satisfaction of all obligations contained herein.

(p) Reliance. Indemnified Parties would not make the Loan to Borrower without
this Agreement. Accordingly, Indemnitors intentionally and unconditionally enter
into the covenants and agreements herein and understands that, in reliance upon
and in consideration of such covenants and agreements, the Loan shall be made
and, as part and parcel thereof, specific monetary and other obligations have
been, are being and shall be entered into which would not be made or entered
into but for such reliance.

(q) Counterparts. This Agreement may be executed in any number of counterparts,
all of which shall be taken to be one and the same instrument, for the same
effect as if all parties hereto had signed the same signature page.

(r) WAIVER OF TRIAL BY JURY. INDEMNITORS AND LENDER (BY ACCEPTANCE OF THIS
AGREEMENT), HAVING BEEN REPRESENTED BY COUNSEL, EACH KNOWINGLY AND VOLUNTARILY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND ANY RIGHTS (a) UNDER THIS AGREEMENT OR ANY RELATED AGREEMENT OR UNDER ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR (b) ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY. INDEMNITORS AGREE THAT THEY WILL NOT ASSERT ANY CLAIM AGAINST LENDER ON
ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR
PUNITIVE DAMAGES.

 

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(s) Waiver of Bankruptcy Stay. Indemnitors covenant and agree that upon the
commencement of a voluntary or involuntary bankruptcy proceeding by or against
any Indemnitor, such Indemnitor shall not seek a supplemental stay or otherwise
pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Code or any
other Debtor Relief Law, to stay, interdict, condition, reduce or inhibit the
ability of Indemnified Parties to enforce any rights of Indemnified Parties
against such Indemnitor by virtue of this Agreement or otherwise.

IN WITNESS WHEREOF, Indemnitors have executed this Agreement as of the date
first above written.

 

BORROWER:    

STERLING MINING COMPANY,

an Idaho corporation

    Signature:  

/s/ J. Kenney Berscht

    Signature:  

/s/ James N. Meek

By:   J. Kenney Berscht     By:   James N. Meek Its:   President     Its :  
Chief Financial Officer EIN #: 601 - 066 822     Business Phone #: (403) 830 -
7566     Email Address: borscht@aol.com     Office Address:     2201 Government
Way, Suite E,     Coeur d’Alene, Idaho 83814    

 

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