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Exhibit 10.1

MEMBERSHIP INTEREST PURCHASE AGREEMENT

This Membership Interest Purchase Agreement ("Agreement") is made as of April
____, 2010 (the "Effective Date"), by Fronteer Development (USA) Inc. a Delaware
corporation ("Buyer") and Gryphon Gold Corporation, a Nevada corporation
("Seller").

RECITALS

A. Seller owns 100% of the membership interests (the "Interests") of Nevada
Eagle Resources LLC, a Nevada limited liability company (the "Company");

B. Seller acquired the Interests pursuant to a Membership Interest Purchase
Agreement by and among Seller, the Company, and Gerald W. Baughman and Fabiola
Baughman (the "Baughmans") dated July 4, 2007 (the "Baughman Agreement");

C. Seller issued the Baughmans, under the terms of the Baughman Agreement, a 5%
Convertible Note dated August 21, 2007 (Certificate No. CN2007-001) and amended
pursuant to an Option Agreement dated August 5, 2008 and an Option Consideration
Agreement dated February 5, 2010, with a principal balance on the Effective Date
of Two Million Five Hundred Thousand Dollars (US$2,500,000), due March 30, 2012
(the "Baughman Note");

D. Seller desires to sell, and Buyer desires to purchase, the Interests, and the
Seller and Buyer entered into an Letter of Intent dated March 12, 2010 related
to the purchase and sale of the Interests (the "LOI"); and E. Seller agrees to
sell, and Buyer agrees to purchase, the Interests for the consideration and on
the terms set forth in this Agreement.

AGREEMENT

The parties, intending to be legally bound, agree as follows:

1.

DEFINITIONS

For purposes of this Agreement, the following terms have the meanings specified
or referred to in this Section 1:

"Applicable Contract"--any Contract material to the Company and its business (a)
under which the Company has or may acquire any rights, (b) under which the
Company has or may become subject to any obligation or liability, or (c) by
which the Company or any of the assets owned or used by it is or may become
bound, including without limitation, each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and any other Contracts
affecting the ownership of, leasing of, title to, use of, or any leasehold or
other interest in, any real or personal property.

"Balance Sheet"--as defined in Section 3.4.

"Baughman Note Extinguishment and Release"--the written release and
extinguishment and estoppel, for the benefit of the Seller and the Company, in a
form reasonably satisfactory to the Seller and Buyer, pursuant to which the
Baughmans have released Seller of any and all obligations under the Baughman
Note, including, but not limited to, any guaranty, security interest, obligation
to issue securities, conversion or other undertaking under or related to the
Baughman Note, in the form of Exhibit 2.4(b)(ii).

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"Breach"--a "Breach" of a representation, warranty, covenant, obligation, or
other provision of this Agreement or any instrument delivered pursuant to this
Agreement will be deemed to have occurred if there is or has been (a) any
material inaccuracy in or material breach of, or any material failure to perform
or comply with, such representation, warranty, covenant, obligation, or other
provision, or (b) any material claim (by any Person) or other occurrence or
circumstance that is or was materially inconsistent with such representation,
warranty, covenant, obligation, or other provision, and the term "Breach" means
any material inaccuracy, breach, failure, claim, occurrence, or circumstance.

"Buyer"--as defined in the first paragraph of this Agreement.

"Closing"--as defined in Section 2.3.

"Closing Date"--the date and time as of which the Closing actually takes place.

"Company"--as defined in the Recitals of this Agreement.

"Consent"--any approval, consent, ratification, waiver, or other authorization
(including any Governmental Authorization).

"Contemplated Transactions"--all of the transactions contemplated by this
Agreement, including:

(a) the sale of the Interests by Seller to Buyer;

(b) the execution, delivery, and performance of the Seller's Release,;

(c) the performance by Buyer and Seller of their respective covenants and
obligations under this Agreement; and

(d) Buyer's acquisition and ownership of the Interests and exercise of control
over the Company.

"Contract"--any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally
binding.

"Copper Basin Project"--the property referred to as the Copper Basin Project in
Idaho, as more specifically identified on Schedule 3.6.

"Damages"--as defined in Section 10.2.

"Encumbrance"--any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income, or exercise of any other attribute of ownership not
disclosed to Buyer in this Agreement.

"Environment"--soil, land surface or subsurface strata, surface waters
(including navigable waters, ocean waters, streams, ponds, drainage basins, and
wetlands), groundwaters, drinking water supply, stream sediments, ambient air
(including indoor air), plant and animal life, and any other environmental
medium or natural resource.

"Environmental, Health, and Safety Liabilities"--any cost, damages, expense,
liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to:

(a) any environmental, health, or safety matters or conditions (including
on-site or off-site contamination, occupational safety and health, and
regulation of chemical substances or products);

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(b) fines, penalties, judgments, awards, settlements, legal or administrative
proceedings, damages, losses, claims, demands and response, investigative,
remedial, or inspection costs and expenses arising under Environmental Law or
Occupational Safety and Health Law;

(c) financial responsibility under Environmental Law or Occupational Safety and
Health Law for cleanup costs or corrective action, including any investigation,
cleanup, removal, containment, or other remediation or response actions
("Cleanup") required by applicable Environmental Law or Occupational Safety and
Health Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource damages; or

(d) any other compliance, corrective, investigative, or remedial measures
required under Environmental Law or Occupational Safety and Health Law.

The terms "removal," "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ' 9601 et seq., as amended
("CERCLA").

"Environmental Law"--any Legal Requirement that requires or relates to:

(a) advising appropriate authorities, employees, and the public of intended or
actual releases of pollutants or hazardous substances or materials, violations
of discharge limits, or other prohibitions and of the commencements of
activities, such as resource extraction or construction, that could have
significant impact on the Environment;

(b) preventing or reducing to acceptable levels the release of pollutants or
hazardous substances or materials into the Environment;

(c) reducing the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated;

(d) assuring that products are designed, formulated, packaged, and used so that
they do not present unreasonable risks to human health or the Environment when
used or disposed of;

(e) protecting resources, species, or ecological amenities;

(f) reducing to acceptable levels the risks inherent in the transportation of
hazardous substances, pollutants, oil, or other potentially harmful substances;

(g) cleaning up pollutants that have been released, preventing the threat of
release, or paying the costs of such clean up or prevention; or

(h) making responsible parties pay private parties, or groups of them, for
damages done to their health or the Environment, or permitting self-appointed
representatives of the public interest to recover for injuries done to public
assets.

"Facilities"--any real property, leaseholds, mining claims, or other interests
currently owned or operated by the Company and any buildings, plants,
structures, or equipment (including motor vehicles, tank cars, and rolling
stock) currently owned or operated by the Company..

"Governmental Authorization"--any approval, consent, license, permit, waiver, or
other authorization issued, granted, given, or otherwise made available by or
under the authority of any Governmental Body or pursuant to any Legal
Requirement.

"Governmental Body"--any:

(a) nation, state, county, city, town, governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and
any court or other tribunal);

(b) multi-national organization or body; or

(c) body exercising, or entitled to exercise, any administrative, executive,
judicial, legislative, police, regulatory, or taxing authority or power of any
nature.

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"Hazardous Activity"--the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment, or use (including any withdrawal or other
use of groundwater) of Hazardous Materials in, on, under, about, or from the
Facilities or any part thereof into the Environment, and any other act,
business, operation, or thing that increases the danger, or risk of danger, or
poses an unreasonable risk of harm to persons or property on or off the
Facilities, or that may materially affect the value of the Facilities or the
Company.

"Hazardous Materials"--any waste or other substance that is listed, defined,
designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, including any admixture or solution thereof, and specifically
including petroleum and all derivatives thereof or synthetic substitutes
therefor and asbestos or asbestos-containing materials.

"Interests"--as defined in the Recitals of this Agreement.

"Interim Balance Sheet"--as defined in Section 3.4.

"IRC"--the Internal Revenue Code of 1986 or any successor law, and regulations
issued by the IRS pursuant to the Internal Revenue Code or any successor law.

"IRS"--the United States Internal Revenue Service or any successor agency, and,
to the extent relevant, the United States Department of the Treasury.

"knowledge" of Seller and the Company means the actual knowledge or awareness of
John Key and Bill Wilson.

"Material Adverse Change"--any change (or any condition, event or development
involving a prospective change) in the business, operations, results of
operations, assets, capitalization, financial condition, licenses, permits,
concessions, rights, liabilities, prospects or privileges, whether contractual
or otherwise, of the Company which has a Material Adverse Effect on the Company;

"Material Adverse Effect"--any effect that is, or would reasonably be expected
to be, material and adverse to the business, operations, results of operations,
assets, prospects, capitalization or financial condition of the Company; but
“Material Adverse Effect” shall not include an effect resulting from (i) an
action taken by the Company to which the Buyer consented in writing; (ii)
conditions affecting the mineral exploration industry generally in the
jurisdictions in which the Company holds its assets, taken as a whole including,
without limitation, changes in commodity prices or Taxes; or (iii) general
economic, financial, currency exchange, securities or commodity market
conditions;

"NER Operating Agreement"--the limited liability company operating agreement for
the Company.

"Order"--any award, decision, injunction, judgment, order, ruling, subpoena, or
verdict entered, issued, made, or rendered by any court, administrative agency,
or other Governmental Body or by any arbitrator.

"Ordinary Course of Business"--an action taken by a Person will be deemed to
have been taken in the "Ordinary Course of Business" only if:

(a) such action is consistent with the past practices of such Person and is
taken in the ordinary course of the normal day-to-day operations of such Person;

(b) such action is not required to be authorized by the board of directors of
such Person (or by any Person or group of Persons exercising similar authority)
and is not required to be specifically authorized by the parent company (if any)
of such Person; and

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(c) such action is similar in nature and magnitude to actions customarily taken,
without any authorization by the board of directors (or by any Person or group
of Persons exercising similar authority), in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business as
such Person.

"Person"--any individual, corporation (including any non-profit corporation),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization, labor union, or other entity or
Governmental Body.

"Proceeding"--any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.

"Related Person" -- With respect to a specified Person:

(a) any Person that directly or indirectly controls, is directly or indirectly
controlled by, or is directly or indirectly under common control with such
specified Person;

(b) any Person that holds a Material Interest in such specified Person;

(c) each Person that serves as a director, officer, partner, executor, or
trustee of such specified Person (or in a similar capacity);

(d) any Person in which such specified Person holds a Material Interest;

(e) any Person with respect to which such specified Person serves as a general
partner or a trustee (or in a similar capacity); and

(f) any Related Person of any individual described in clause (b) or (c).

For purposes of this definition, (a) the "Family" of an individual includes (i)
the individual, (ii) the individual's spouse and former spouses, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of voting securities or other voting interests representing at least 50% of the
outstanding voting power of a Person or equity securities or other equity
interests representing at least 50% of the outstanding equity securities or
equity interests in a Person.

"Release"--any spilling, leaking, emitting, discharging, depositing, escaping,
leaching, dumping, or other releasing into the Environment, whether intentional
or unintentional.

"Representative"--with respect to a particular Person, any director, officer,
employee, agent, consultant, advisor, or other representative of such Person,
including legal counsel, accountants, and financial advisors.

"Securities Act"--the Securities Act of 1933 or any successor law, and
regulations and rules issued pursuant to that Act or any successor law.

"Seller"--as defined in the first paragraph of this Agreement.

"Seller's Release"--as defined in Section 2.4.

"Subsidiary"--with respect to any Person (the "Owner"), any corporation or other
Person of which securities or other interests having the power to elect a
majority of that corporation's or other Person's board of directors or similar
governing body, or otherwise having the power to direct the business and
policies of that corporation or other Person (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by the Owner or one or more of its Subsidiaries; when
used without reference to a particular Person, "Subsidiary" means a Subsidiary
of the Company.

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"Tax Return"--any return (including any information return), report, statement,
schedule, notice, form, or other document or information filed with or submitted
to, or required to be filed with or submitted to, any Governmental Body in
connection with the determination, assessment, collection, or payment of any Tax
or in connection with the administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.

"Threat of Release"--a substantial likelihood of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.

"Threatened"--a claim, Proceeding, dispute, action, or other matter will be
deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be asserted, commenced, taken, or otherwise
pursued in the future.

2.

SALE AND TRANSFER OF INTERESTS; CLOSING

2.1. INTERESTS

Subject to the terms and conditions of this Agreement, at the Closing, Seller
will sell and transfer the Interests to Buyer, and Buyer will purchase the
Interests from Seller. Buyer’s purchase of the Interests shall include all of
the assets of the Company, including but not limited to all data and databases
pertaining to the mining claims, leases and other mineral assets of the Company
and those assets listed in Schedule 3.6 attached hereto.

2.2. PURCHASE PRICE

The purchase price (the "Purchase Price") for the Interests shall be a total of
Four Million Seven Hundred Fifty Thousand Dollars (US$4,750,000). The Purchase
Price will be paid at Closing and shall consist of (a) Two Million Two Hundred
Fifty Thousand Dollars (US$2,250,000) in a cash payment and (b) Two Million Five
Hundred Fifty Thousand Dollars (US$2,500,000) by the assumption and release of
Seller’s obligations under the Baughman Note and the delivery of the Baughman
Note Extinguishment and Release.

2.3. CLOSING

The purchase and sale (the "Closing") provided for in this Agreement will take
place by 5:00 p.m. (local time at the offices of Buyer’s counsel) on the
Effective Date, or at such later time and place as the parties may agree.

2.4. CLOSING OBLIGATIONS

At the Closing:

(a) Seller will deliver to Buyer:

(i) an assignment of the Interests in form and substance satisfactory to Buyer;
and

(ii) A release in the form of Exhibit 2.4(a)(ii) executed by Seller (the
"Seller's Release").

(b) Buyer will deliver to Seller:

(i) by bank cashier's or certified check payable to the order of Seller or by
wire transfer to accounts specified by Seller the amount of Two Million Two
Hundred Fifty Thousand Dollars (US$2,250,000); and

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(ii) the Baughman Note Extinguishment and Release (in the form of Exhibit
2.4(b)(ii)) .

3.

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller represents and warrants to Buyer as follows:

3.1. ORGANIZATION AND GOOD STANDING

(a) The Company is a limited liability company duly organized, validly existing,
and in good standing under the laws of the State of Nevada, with full limited
liability company power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under Applicable Contracts. The Company
is duly qualified to do business as a foreign limited liability company and is
in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.

(b) Seller has delivered to Buyer copies of the articles of organization and the
NER Operating Agreement, as currently in effect.

3.2. AUTHORITY; NO CONFLICT

(a) This Agreement constitutes the legal, valid, and binding obligation of
Seller, enforceable against Seller in accordance with its terms. Upon the
execution and delivery by Seller of the Seller's Release and the assignment
referenced to in Section 2.4(a)(i) (collectively, the "Seller's Closing
Documents"), the Seller's Closing Documents will constitute the legal, valid,
and binding obligations of Seller, enforceable against Seller in accordance with
their respective terms. Seller has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and the Seller's
Closing Documents and to perform its obligations under this Agreement and the
Seller's Closing Documents.

(b) Neither the execution and delivery of this Agreement nor the consummation or
performance of any of the Contemplated Transactions will, directly or indirectly
(with or without notice or lapse of time):

(i) contravene, conflict with, or result in a violation of (A) any provision of
the articles of organization of the Company, the NER Operating Agreement or the
articles of incorporation or bylaws of Seller or (B) any resolution adopted by
the Company or the board of directors or stockholders of the Seller;

(ii) contravene, conflict with, or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which the Company or the Seller, or any of the
assets owned or used by the Company, may be subject;

(iii) contravene, conflict with, or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate, or modify, any Governmental Authorization that is
held by the Company or that otherwise relates to the business of, or any of the
assets owned or used by, the Company;

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(iv) cause the Company to become subject to, or to become liable for the payment
of, any Tax;

(v) cause any of the assets owned by the Company to be reassessed or revalued by
any taxing authority or other Governmental Body;

(vi) contravene, conflict with, or result in a violation or breach of any
provision of, or give any Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Applicable Contract; or

(vii) result in the imposition or creation of any Encumbrance upon or with
respect to any of the assets owned or used by the Company.

Except as set forth in Schedule 3.2, neither Seller nor the Company is or will
be required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.

3.3. CAPITALIZATION

Seller is and will be on the Closing Date the record and beneficial owner and
holder of the Interests, free and clear of all Encumbrances. The Interests are
not evidenced or represented by certificates. The Interests have been duly
authorized and validly issued and are fully paid and nonassessable. Except for
this Agreement, there are no Contracts relating to the issuance, sale, or
transfer of any membership interests or other securities of the Company. The
Interests were not issued in violation of the Securities Act or any other Legal
Requirement. The Company owns no shares, interests or securities in any other
Person except for the shares and warrants described on Schedule 3.3 attached
hereto, which shares, interests or securities will be transferred by the Company
to the Seller prior to the Closing Date.

3.4. FINANCIAL STATEMENTS

Seller has delivered to Buyer an unaudited balance sheet of the Company as at
December 31, 2009 and the related unaudited statement of income for the period
April 1, 2009 through December 31, 2009 (the "Balance Sheet"), and shall, three
(3) days prior to the Closing Date, deliver an updated balance sheet through the
date of such delivery (the “Interim Balance Sheet”). Such financial statements
fairly present or shall present the financial condition and the results of
operations, changes in members' equity, and cash flow of the Company as at the
respective dates of and for the periods referred to in such financial
statements, all in accordance with normal accounting principles as historically
prepare by the Company.

3.5. BOOKS AND RECORDS

The books of account, minute books, membership interest record books, and other
records of the Company, all of which have been made available to Buyer, are
complete and correct and have been maintained in accordance with sound business
practices. The minute books of the Company contain accurate and complete records
of all meetings held of, and limited liability company action taken by, the
members, managers or managing member(s) of the Company, and no meeting of any
such members, managers or managing member(s) has been held for which minutes
have not been prepared and are not contained in such minute books. At the
Closing, all of those books and records will be in the possession of the
Company.

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3.6. TITLE TO PROPERTIES; ENCUMBRANCES

Schedule 3.6 attached hereto contains a complete and accurate list of all real
property, leaseholds, surface rights, mineral rights, mineral claims, mining
leases, easements, rights-of-way, or other interests therein owned by the
Company. Seller has delivered or made available to Buyer copies of the deeds and
other instruments (as recorded) by which the Company acquired such real property
and interests, and copies of all title insurance policies, opinions, abstracts,
and surveys in the possession of Seller or the Company and relating to such
property or interests. The Company owns (with good and marketable title in the
case of real property, subject only to the matters permitted by the following
sentence) all the properties and assets (whether real, personal, or mixed and
whether tangible or intangible) that it purports to own located in the
facilities owned or operated by the Company or reflected as owned in the books
and records of the Company, including all of the properties and assets reflected
in the Balance Sheet. All material properties and assets reflected in the
Balance Sheet are free and clear of all Encumbrances. Notwithstanding the
foregoing, the parties acknowledge that prior to the Closing Date the Company
shall transfer to Seller the Copper Basin Project and such transfer shall be
made without representation or warranty or other continuing liability of any
nature on the part of the Company. In addition, Seller shall receive all cash in
the Company bank accounts as of Closing, net of payment of all liabilities
(including a pro rata portion of accrued liabilities not yet due or owing, such
as Taxes and filing fees) through the Closing Date.

3.7. ACCOUNTS RECEIVABLE

Except as set forth in Schedule 3.7, the Company has no accounts receivable.

3.8. NO UNDISCLOSED LIABILITIES

Except as set forth in Schedule 3.8, the Company has no liabilities or
obligations of any nature (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or obligations
reflected or reserved against in the Balance Sheet or the Interim Balance Sheet
and current liabilities incurred in the Ordinary Course of Business since the
respective dates thereof. Immediately prior to the Closing hereunder the Company
shall pay all outstanding accounts payable and other liabilities through the
Closing Date, including, without limitation, any inter-company loans or other
payables.

3.9. TAXES

(a) The Company filed or caused to be filed (on a timely basis since its
inception) all Tax Returns that are or were required to be filed by or with
respect to Company, either separately or as a member of a group of companies,
pursuant to applicable Legal Requirements. Seller has delivered or made
available to Buyer copies of all such Tax Returns filed since the Company’s
inception. The Company has paid, or made provision for the payment of, all Taxes
that have or may have become due pursuant to those Tax Returns or otherwise, or
pursuant to any assessment received by the Company.

(b) There have been no audits of any such Tax Returns.

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(c) The charges, accruals, and reserves with respect to Taxes on the books of
the Company are adequate and are at least equal to the Company's liability for
Taxes. There exists no proposed tax assessment against the Company except as
disclosed in the Balance Sheet. No consent to the application of Section
341(f)(2) of the IRC has been filed with respect to any property or assets held,
acquired, or to be acquired by the Company. All Taxes that the Company is or was
required by Legal Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Governmental
Body or other Person.

(d) All Tax Returns filed by (or that include on a consolidated basis) the
Company are true, correct, and complete. There is no tax sharing agreement that
will require any payment by the Company after the date of this Agreement.

3.10. NO MATERIAL ADVERSE CHANGE

Since the date of the Interim Balance Sheet, there has not been any Material
Adverse Change in the business, operations, properties, prospects, assets, or
condition of the Company, and no event has occurred or circumstance exists that
may result in such a material adverse change.

3.11. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS

(a) Except as set forth in Schedule 3.11(a):

(i) the Company is, and at all times since July 4, 2007, and to the knowledge of
Seller and the Company since December 30, 2003, has been, in full compliance
with each Legal Requirement that is or was applicable to it or to the conduct or
operation of its business or the ownership or use of any of its assets;

(ii) no event has occurred or circumstance exists that (with or without notice
or lapse of time) (A) may constitute or result in a violation by the Company of,
or a failure on the part of the Company to comply with, any Legal Requirement,
or (B) may give rise to any obligation on the part of the Company to undertake,
or to bear all or any portion of the cost of, any remedial action of any nature;
and

(iii) the Company has not received, at any time since July 4, 2007, and to the
knowledge of Seller and the Company since December 30, 2003, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible, or potential violation of,
or failure to comply with, any Legal Requirement, or (B) any actual, alleged,
possible, or potential obligation on the part of the Company to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.

(b) Schedule 3.11(b) contains a complete and accurate list of each Governmental
Authorization that is held by the Company or that otherwise relates to the
business of, or to any of the assets owned or used by, the Company. Each such
Governmental Authorization is valid and in full force and effect.

(i) The Company is, and at all times since July 4, 2007, and to the knowledge of
Seller and the Company since December 30, 2003, has been, in full compliance
with all of the terms and requirements of each such Governmental Authorization;

(ii) No event has occurred or circumstance exists that may (with or without
notice or lapse of time) (A) constitute or result directly or indirectly in a
violation of or a failure to comply with any term or requirement of any such
Governmental Authorization, or (B) result directly or indirectly in the
revocation, withdrawal, suspension, cancellation, or termination of, or any
modification to, any such Governmental Authorization;

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(iii) The Company has not received, at any time since July 4, 2007, and to the
knowledge of Seller and the Company since December 30, 2003, any notice or other
communication (whether oral or written) from any Governmental Body or any other
Person regarding (A) any actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any Governmental
Authorization, or (B) any actual, proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of, or modification to any
Governmental Authorization; and

(iv) All applications required to have been filed for the renewal of all such
Governmental Authorizations have been duly filed on a timely basis with the
appropriate Governmental Bodies, and all other filings required to have been
made with respect to such Governmental Authorizations have been duly made on a
timely basis with the appropriate Governmental Bodies.

(c) Seller has, and has caused the Company to, make all filings required by
Legal Requirements to be made by them in order to consummate the Contemplated
Transactions..

3.12. LEGAL PROCEEDINGS; ORDERS

(a) There is no pending Proceeding:

(i) that has been commenced by or against the Company or that otherwise relates
to or may affect the business of, or any of the assets owned or used by, the
Company; or

(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the Contemplated
Transactions.

(b) To the knowledge of Seller and the Company, (1) no such Proceeding has been
Threatened, and (2) no event has occurred or circumstance exists that may give
rise to or serve as a basis for the commencement of any such Proceeding.

(c) There is no Order:

(i) to which any of the Company, or any of the assets owned or used by the
Company, is subject;

(ii) Seller is not subject to any Order that relates to the business of, or any
of the assets owned or used by the Company; and

(iii) to the knowledge of Seller and the Company, no member, manager, managing
member, agent, or employee of the Company is subject to any Order that prohibits
such member, manager, managing member, agent, or employee from engaging in or
continuing any conduct, activity, or practice relating to the business of the
Company.

3.13. ABSENCE OF CERTAIN CHANGES AND EVENTS

Since the date of the Interim Balance Sheet, the Company has conducted its
businesses only in the Ordinary Course of Business and there has not been any of
the following:

(a) change in the Company's membership interest ownership; grant of any
membership interest option or right to purchase the Company’s membership
interests; issuance of any security convertible into membership interests; grant
of any registration rights; purchase, redemption, retirement, or other
acquisition by the Company of any membership; or declaration or payment of any
distribution or payment in respect of membership interests;

(b) amendment to the articles of organization and the operating agreement of the
Company;

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(c) payment or increase by the Company of any bonuses, salaries, or other
compensation to any member, manager, managing member, officer, or (except in the
Ordinary Course of Business) employee or entry into any employment, severance,
or similar Contract with any member, manager, managing member, officer, or
employee;

(d) damage to or destruction or loss of any asset or property of the Company,
whether or not covered by insurance, materially and adversely affecting the
properties, assets, business, financial condition, or prospects of the Company,
taken as a whole;

(e) entry into, termination of, or receipt of notice of termination of any
Contract;

(f) sale (other than sales of inventory in the Ordinary Course of Business),
lease, or other disposition of any asset or property of the Company or mortgage,
pledge, or imposition of any lien or other encumbrance on any material asset or
property of the Company, including the sale, lease, or other disposition of any
of the Intellectual Property Assets;

(g) cancellation or waiver of any claims or rights;

(h) material change in the accounting methods used by the Company; or

(i) agreement, whether oral or written, by the Company to do any of the
foregoing.

3.14. CONTRACTS; NO DEFAULTS

(a) Schedule 3.14 contains a complete and accurate list and Seller has delivered
to Buyer true and complete copies of each Applicable Contract.

(b) Seller (and no Related Person of Seller) does not or shall not acquire any
rights under, and Seller does not or shall not become subject to any obligation
or liability under, any Contract that relates to the business of, or any of the
assets owned or used by, the Company.

(c) Each Applicable Contract is in full force and effect and is valid and
enforceable in accordance with its terms.

(d) The Company is, and at all times since July 4, 2007, and to the knowledge of
Seller and the Company since December 30, 2003, has been, in full compliance
with all applicable terms and requirements of each Applicable Contract.

(e) No event has occurred or circumstance exists that (with or without notice or
lapse of time) may contravene, conflict with, or result in a violation or breach
of, or give the Company or other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
to cancel, terminate, or modify, any Applicable Contract.

(f) The Company has not given to or received from any other Person, at any time
since July 4, 2007, and to the knowledge of Seller and the Company since
December 30, 2003, any notice or other communication (whether oral or written)
regarding any actual, alleged, possible, or potential violation or breach of, or
default under, any Contract, which could reasonably be expected to have a
Material Adverse Effect.

(g) Except as otherwise disclosed in Schedule 3.14, there are no renegotiations
of, attempts to renegotiate, or outstanding rights to renegotiate any material
amounts paid or payable to the Company or material terms under current or
completed Applicable Contracts with any Person and no such Person has made
written demand for such renegotiation, which could reasonably be expected to
have a Material Adverse Effect.

3.15. INSURANCE

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(a) Seller has delivered to Buyer true and complete copies of all policies of
insurance to which the Company is a party or under which the Company, or any
member, manager or managing member of the Company, is or has been covered at any
time since July 4, 2007.

(b) All policies to which the Company is a party or that provide coverage to
Seller, the Company, or any member, manager or managing member of the Company
are valid, outstanding, and enforceable.

(c) Neither Seller nor the Company has received (A) any refusal of coverage or
any notice that a defense will be afforded with reservation of rights, or (B)
any notice of cancellation or any other indication that any insurance policy is
no longer in full force or effect or will not be renewed or that the issuer of
any policy is not willing or able to perform its obligations thereunder.

(d) The Company has paid all premiums due, and has otherwise performed all of
its obligations, under each policy to which the Company is a party or that
provides coverage to the Company or member, manager or managing member thereof.

(e) The Company has given notice to the insurer of all claims that may be
insured thereby.

3.16. ENVIRONMENTAL MATTERS

(a) The Company is, and at all times has been, in full compliance with, and to
the knowledge of the Seller and the Company, has not been and is not in
violation of or liable under, any Environmental Law. Neither Seller nor the
Company has any basis to expect, nor has any of them or any other Person for
whose conduct they are or may be held to be responsible received, any actual or
Threatened order, notice, or other communication from (i) any Governmental Body
or private citizen acting in the public interest, or (ii) the current or prior
owner or operator of any Facilities, of any actual or potential violation or
failure to comply with any Environmental Law, or of any actual or Threatened
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets (whether real, personal, or mixed) in which Seller or the Company has
had an interest, or with respect to any property or Facility at or to which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used, or processed by Seller, the Company, or any other Person for
whose conduct they are or may be held responsible, or from which Hazardous
Materials have been transported, treated, stored, handled, transferred,
disposed, recycled, or received.

(b) There are no pending or, to the knowledge of Seller and the Company,
Threatened claims, Encumbrances, or other restrictions of any nature, resulting
from any Environmental, Health, and Safety Liabilities or arising under or
pursuant to any Environmental Law, with respect to or affecting any of the
Facilities or any other properties and assets (whether real, personal, or mixed)
in which Seller or the Company has or had an interest.

(c) Neither Seller nor the Company has any basis to expect, nor has any of them
or any other Person for whose conduct they are or may be held responsible,
received, any citation, directive, inquiry, notice, Order, summons, warning, or
other communication that relates to Hazardous Activity, Hazardous Materials, or
any alleged, actual, or potential violation or failure to comply with any
Environmental Law, or of any alleged, actual, or potential obligation to
undertake or bear the cost of any Environmental, Health, and Safety Liabilities
with respect to any of the Facilities or any other properties or assets (whether
real, personal, or mixed) in which the Company had an interest, or with respect
to any property or facility to which Hazardous Materials generated,
manufactured, refined, transferred, imported, used, or processed by the Company,
or any other Person for whose conduct the Company is or may be held responsible,
have been transported, treated, stored, handled, transferred, disposed,
recycled, or received.

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(d) Neither Seller nor the Company, or to the knowledge of the Seller and the
Company any other Person for whose conduct they are or may be held responsible,
has any Environmental, Health, and Safety Liabilities with respect to the
Facilities or with respect to any other properties and assets (whether real,
personal, or mixed) in which the Company (or any predecessor), has or had an
interest, or at any property geologically or hydrologically adjoining the
Facilities or any such other property or assets.

(e) To the knowledge of the Seller and the Company, there are no Hazardous
Materials present on or in the Environment at the Facilities or at any
geologically or hydrologically adjoining property, including any Hazardous
Materials contained in barrels, above or underground storage tanks, landfills,
land deposits, dumps, equipment (whether moveable or fixed) or other containers,
either temporary or permanent, and deposited or located in land, water, sumps,
or any other part of the Facilities or such adjoining property, or incorporated
into any structure therein or thereon. To the knowledge of the Seller and the
Company, neither Seller, the Company, any other Person for whose conduct they
are or may be held responsible, or any other Person, has permitted or conducted,
or is aware of, any Hazardous Activity conducted with respect to the Facilities
or any other properties or assets (whether real, personal, or mixed) in which
Seller or the Company has or had an interest except in full compliance with all
applicable Environmental Laws.

(f) To the knowledge of the Seller and the Company, there has been no Release or
Threat of Release of any Hazardous Materials at or from the Facilities or at any
other locations where any Hazardous Materials were generated, manufactured,
refined, transferred, produced, imported, used, or processed from or by the
Facilities, or from or by any other properties and assets (whether real,
personal, or mixed) in which Seller or the Company has or had an interest, or
any geologically or hydrologically adjoining property, whether by Seller, the
Company, or any other Person.

(g) Seller have delivered to Buyer true and complete copies and results of any
reports, studies, analyses, tests, or monitoring possessed or initiated by
Seller or the Company pertaining to Hazardous Materials or Hazardous Activities
in, on, or under the Facilities, or concerning compliance by Seller, the
Company, or any other Person for whose conduct they are or may be held
responsible, with Environmental Laws.

3.17. CERTAIN PAYMENTS

Since July 4, 2007, and to the knowledge of Seller and the Company since
December 30, 2003, neither the Company nor any member, manager, or managing
member, officer, agent, or employee of the Company, or to Seller's knowledge any
other Person associated with or acting for or on behalf of the Company, has
directly or indirectly (a) made any contribution, gift, bribe, rebate, payoff,
influence payment, kickback, or other payment to any Person, private or public,
regardless of form, whether in money, property, or services (i) to obtain
favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, (iii) to obtain special concessions or for special
concessions already obtained, for or in respect of the Company or any Affiliate
of the Company, or (iv) in violation of any Legal Requirement, (b) established
or maintained any fund or asset that has not been recorded in the books and
records of the Company.

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3.18. DISCLOSURE

(a) No representation or warranty of Seller in this Agreement omits to state a
material fact necessary to make the statements herein or therein, in light of
the circumstances in which they were made, not misleading.

(b) There is no fact known to Seller that has specific application to Seller or
the Company (other than general economic or industry conditions) and that
materially adversely affects or, as far as Seller can reasonably foresee,
materially threatens, the assets, business, prospects, financial condition, or
results of operations of the Company that has not been set forth in this
Agreement.

3.19. BROKERS OR FINDERS

Seller and their agents have incurred no obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.

3.20. COMPANY EMPLOYEES AND BENEFIT PLANS

The Company does not have any employees or any employee pension plans,
retirement plans or any other employee benefit plans (including, without
limitation, any multi-employer contracts or multi-employer pension or other
benefit plans).

4.

REPRESENTATIONS AND WARRANTIES OF BUYER

Buyer represents and warrants to Seller as follows:

4.1. ORGANIZATION AND GOOD STANDING

Buyer is a corporation duly organized, validly existing, and in good standing
under the laws of the State of Delaware.

4.2. AUTHORITY; NO CONFLICT

(a) This Agreement constitutes the legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms. Buyer has the
absolute and unrestricted right, power, and authority to execute and deliver
this Agreement and to perform its obligations under this Agreement.

(b) Neither the execution and delivery of this Agreement by Buyer nor the
consummation or performance of any of the Contemplated Transactions by Buyer
will give any Person the right to prevent, delay, or otherwise interfere with
any of the Contemplated Transactions pursuant to:

(i) any provision of Buyer's articles of incorporation or bylaws;

(ii) any resolution adopted by the board of directors or the stockholders of
Buyer;

(iii) any Legal Requirement or Order to which Buyer may be subject; or

(iv) any Contract to which Buyer is a party or by which Buyer may be bound.

(c) Except as set forth in Schedule 4.2, Buyer is not and will not be required
to obtain any Consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of any of the
Contemplated Transactions.

4.3. INVESTMENT INTENT

Buyer is acquiring the Interests for its own account and not with a view to
their distribution within the meaning of Section 2(11) of the Securities Act.

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4.4. CERTAIN PROCEEDINGS

There is no pending Proceeding that has been commenced against Buyer and that
challenges, or may have the effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the Contemplated Transactions. To Buyer's
knowledge, no such Proceeding has been Threatened.

4.5. BROKERS OR FINDERS

Buyer and its officers and agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement and will indemnify
and hold Seller harmless from any such payment alleged to be due by or through
Buyer as a result of the action of Buyer or its officers or agents.

5.

CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE

Buyer's obligation to purchase the Interests and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):

5.1. ACCURACY OF REPRESENTATIONS

All of Seller's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement, and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.

5.2. SELLER'S PERFORMANCE

(a) All of the covenants and obligations that Seller is required to perform or
to comply with pursuant to the LOI at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been duly performed and complied with in all material
respects.

(b) Each document required to be delivered pursuant to Section 2.4 must have
been delivered.

5.3. CONSENTS

Each of the Consents identified in Schedule 3.2, and each Consent identified in
Schedule 4.2, must have been obtained and must be in full force and effect.

5.4. ADDITIONAL DOCUMENTS

Each of the following documents must have been delivered to Buyer:

(a) an opinion of Seller’s counsel, dated the Closing Date, in the form of
Exhibit 5.4(a); and

(b) such other documents as Buyer may reasonably request for the purpose of (i)
evidencing the accuracy of any of Seller's representations and warranties, (ii)
evidencing the performance by Seller of, or the compliance by Seller with, any
covenant or obligation required to be performed or complied with by Seller,
(iii) evidencing the satisfaction of any condition referred to in this Section
5, or (iv) otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.

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5.5. NO PROCEEDINGS

There must not have been commenced or Threatened against Buyer, or against any
Person affiliated with Buyer, any Proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.

5.6. NO CLAIM REGARDING INTEREST OWNERSHIP OR SALE PROCEEDS

There must not have been made or Threatened by any Person any claim asserting
that such Person (a) is the holder or the beneficial owner of, or has the right
to acquire or to obtain beneficial ownership of, any membership interests of, or
any other voting, equity, or ownership interest in, the Company, or (b) is
entitled to all or any portion of the Purchase Price payable for the Interests.

5.7. NO PROHIBITION

Neither the consummation nor the performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time), materially contravene, or conflict with, or result in a material
violation of, or cause Buyer or any Person affiliated with Buyer to suffer any
material adverse consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been published,
introduced, or otherwise proposed by or before any Governmental Body.

5.8. DUE DILIGENCE

Buyer shall be satisfied, in its sole and absolute discretion, with the results
of its investigation of the Company and the Company’s operations and assets.

5.9. BAUGHMAN NOTE EXTINGUISHMENT AND RELEASE

Buyer shall have reached an agreement with the Baughmans to assume, extinguish
or pay the Baughman Note and the Baughmans shall have delivered the Baughman
Note Extinguishment and Release to the Seller.

6.

CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE

Seller's obligation to sell the Interests and to take the other actions required
to be taken by Seller at the Closing is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be waived
by Seller, in whole or in part):

6.1. ACCURACY OF REPRESENTATIONS

All of Buyer's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), must have been accurate in all material respects as of the date
of this Agreement and must be accurate in all material respects as of the
Closing Date as if made on the Closing Date.

6.2. BUYER'S PERFORMANCE

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(a) All of the covenants and obligations that Buyer is required to perform or to
comply with pursuant to the LOI at or prior to the Closing (considered
collectively), and each of these covenants and obligations (considered
individually), must have been performed and complied with in all material
respects.

(b) Buyer must have delivered each of the documents required to be delivered by
Buyer pursuant to Section 2.4 and must have made the cash payments required to
be made by Buyer pursuant to Sections 2.4(b)(i) .

6.3. BAUGHMAN NOTE EXTINGUISHMENT AND RELEASE

Buyer shall have reached an agreement with the Baughmans to assume, extinguish
or pay the Baughman Note and the Baughmans shall have delivered the Baughman
Note Extinguishment and Release to the Seller.

6.4. CONSENTS

Each of the Consents identified in Schedule 3.2 must have been obtained and must
be in full force and effect.

6.5. NO INJUNCTION

There must not be in effect any Legal Requirement or any injunction or other
Order that (a) prohibits the sale of the Interests by Seller to Buyer, and (b)
has been adopted or issued, or has otherwise become effective, since the date of
this Agreement.

7.

INDEMNIFICATION; REMEDIES

7.1. SURVIVAL; RIGHT TO INDEMNIFICATION NOT AFFECTED BY KNOWLEDGE

All representations, warranties, covenants, and obligations in this Agreement
and any other certificate or document delivered pursuant to this Agreement will
survive the Closing. The right to indemnification, payment of Damages or other
remedy based on such representations, warranties, covenants, and obligations
will not be affected by any investigation conducted with respect to, or any
knowledge acquired (or capable of being acquired) at any time, whether before or
after the execution and delivery of this Agreement or the Closing Date, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.

7.2. INDEMNIFICATION AND PAYMENT OF DAMAGES BY SELLER

Seller will indemnify and hold harmless Buyer, the Company, and their respective
Representatives, stockholders, members, controlling persons, and affiliates
(collectively, the "Indemnified Persons") for, and will pay to the Indemnified
Persons the amount of, any loss, liability, claim, damage (including incidental
and consequential damages), expense (including costs of investigation and
defense and reasonable attorneys' fees, and, with respect to representations and
warranties contained in Section 3.16, costs of cleanup, containment, or other
remediation) or diminution of value, whether or not involving a third-party
claim (collectively, "Damages"), arising, directly or indirectly, from or in
connection with:

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(a) any Breach of any representation or warranty made by Seller in this
Agreement or any other certificate or document delivered by Seller pursuant to
this Agreement;

(b) any Breach of any representation or warranty made by Seller in this
Agreement;

 (c) any Breach by Seller of any covenant or obligation of Seller in this
Agreement; or

(d) any claim by any Person for brokerage or finder's fees or commissions or
similar payments based upon any agreement or understanding alleged to have been
made by any such Person with Seller or the Company (or any Person acting on
their behalf) in connection with any of the Contemplated Transactions.

Buyer will be entitled to control any Cleanup, any related Proceeding, and,
except as provided in the following sentence, any other Proceeding with respect
to which indemnity may be sought in connection with a breach of Section 3.16.
The procedure described in Section 7.4 will apply to any claim solely for
monetary damages relating to a matter covered by Section 3.16.

The remedies provided in this Section 7.2 will not be exclusive of or limit any
other remedies that may be available to Buyer or the other Indemnified Persons.
Notwithstanding the foregoing, Buyer shall be entitled to indemnification under
this Agreement only if the aggregate amount of Damages suffered by Buyer exceeds
US$200,000 (the “Basket”); provided however, that the Seller’s obligation to
indemnify any Indemnified Persons under this Agreement shall not exceed
US$4,750,000 (the “Cap”); provided further, that to the extent that the Company
would be entitled to indemnification from any third party under an Applicable
Contract, Buyer shall be entitled to indemnification hereunder only after Buyer
and the Company shall have made commercially reasonable efforts to preserve and
enforce its rights to such indemnification from such third party (the “Company
Indemnity”).

7.3. INDEMNIFICATION AND PAYMENT OF DAMAGES BY BUYER

Buyer will indemnify and hold harmless Seller, and will pay to Seller and its
Indemnified Persons, the amount of any Damages arising, directly or indirectly,
from or in connection with (a) any Breach of any representation or warranty made
by Buyer in this Agreement or in any certificate delivered by Buyer pursuant to
this Agreement, (b) any Breach by Buyer of any covenant or obligation of Buyer
in this Agreement, or (c) any claim by any Person for brokerage or finder's fees
or commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with Buyer (or any Person acting on its
behalf) in connection with any of the Contemplated Transactions. Notwithstanding
the foregoing, Seller shall be entitled to indemnification hereunder only if the
aggregate amount of Damages suffered by Seller exceeds the Basket; provided
however, that the Buyer’s obligation to indemnify any Indemnified Persons under
this Agreement shall not exceed the Cap; provided further, that to the extent
that the Seller would be entitled to indemnification from any third party under
an Applicable Contract, Seller shall be entitled to indemnification hereunder
only after Seller shall have made commercially reasonable efforts to preserve
and enforce its rights to such indemnification from such third party (the
“Seller Thirty Party Indemnity”).

7.4. PROCEDURE FOR INDEMNIFICATION--THIRD PARTY CLAIMS

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(a) Promptly after receipt by an indemnified party under Section 7.2 (subject to
claims under Company Indemnity) or 7.3 (subject to claims under Third Party
Indemnity) of notice of the commencement of any Proceeding against it, such
indemnified party will, if a claim is to be made against an indemnifying party
under such Section, give notice to the indemnifying party of the commencement of
such claim, but the failure to notify the indemnifying party will not relieve
the indemnifying party of any liability that it may have to any indemnified
party, except to the extent that the indemnifying party demonstrates that the
defense of such action is prejudiced by the indemnifying party's failure to give
such notice.

(b) If any Proceeding referred to in Section 7.4(a) is brought against an
indemnified party and it gives notice to the indemnifying party of the
commencement of such Proceeding, the indemnifying party will, unless the claim
involves Taxes, be entitled to participate in such Proceeding and, to the extent
that it wishes (unless (i) the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate, or (ii) the indemnifying party fails to
provide reasonable assurance to the indemnified party of its financial capacity
to defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 10 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.

(c) Notwithstanding the foregoing, if an indemnified party determines in good
faith that there is a reasonable probability that a Proceeding may adversely
affect it or its affiliates other than as a result of monetary damages for which
it would be entitled to indemnification under this Agreement, the indemnified
party may, by notice to the indemnifying party, assume the exclusive right to
defend, compromise, or settle such Proceeding, but the indemnifying party will
not be bound by any determination of a Proceeding so defended or any compromise
or settlement effected without its consent (which may not be unreasonably
withheld).

(d) If any Proceeding referred to in Section 7.4(a) is brought against Buyer or
any Indemnified Person, Seller hereby consents to the non-exclusive jurisdiction
of any court in which such Proceeding is brought against any Indemnified Person
for purposes of any claim that an Indemnified Person may have under this
Agreement with respect to such Proceeding or the matters alleged therein, and
agrees that process may be served on Seller with respect to such a claim
anywhere in the world.

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7.5 PROCEDURE FOR INDEMNIFICATION--OTHER CLAIMS

A claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought, subject
to claims under the Company Indemnity, the Basket and the Cap, and the Seller
Third Party Indemnity.

8. GENERAL PROVISIONS

8.1. EXPENSES

Except as otherwise expressly provided in this Agreement, each party to this
Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. Seller will cause the Company not to incur any
out-of-pocket expenses in connection with this Agreement. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.

8.2. PUBLIC ANNOUNCEMENTS

Any public announcement or similar publicity with respect to this Agreement or
the Contemplated Transactions will be issued, if at all, at such time and in
such manner as Buyer determines. Unless consented to by Buyer in advance or
required by Legal Requirements, prior to the Closing Seller shall, and shall
cause the Company to, keep this Agreement strictly confidential and may not make
any disclosure of this Agreement to any Person. Seller and Buyer will consult
with each other concerning the means by which Persons having dealings with the
Company will be informed of the Contemplated Transactions, and Buyer will have
the right to be present for any such communication.

8.3. CONFIDENTIALITY

(a) Between the date of this Agreement and the Closing Date, Buyer and Seller
will maintain in confidence, and will cause the directors, officers, members,
managers, managing members, employees, agents, and advisors of Buyer and the
Company to maintain in confidence, and not use to the detriment of another party
or the Company any information furnished by another party or the Company in
connection with this Agreement or the Contemplated Transactions, unless (i) such
information is already known to such party or to others not bound by a duty of
confidentiality or such information becomes publicly available through no fault
of such party, (ii) the use of such information is necessary or appropriate in
making any filing or obtaining any consent or approval required for the
consummation of the Contemplated Transactions, or (iii) the furnishing or use of
such information is required by or necessary or appropriate in connection with
legal proceedings.

(b) If the Contemplated Transactions are not consummated, each party will return
or destroy as much of such written information as the other party may reasonably
request. Whether or not the Closing takes place, Seller waives, and will upon
Buyer's request cause the Company to waive, any cause of action, right, or claim
arising out of the access of Buyer or its representatives to any trade secrets
or other confidential information of the Company except for the intentional
competitive misuse by Buyer of such trade secrets or confidential information.

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8.4. NOTICES

All notices, consents, waivers, and other communications under this Agreement
must be in writing and will be deemed to have been duly given when (a) delivered
by hand (with written confirmation of receipt), (b) sent by telecopier (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a party may designate by
notice to the other parties):

Seller:
Gryphon Gold Corporation
5490 Longley Lane
Reno, NV 89511
Facsimile No.: 775-552-8511
Attention: John Key, Chief Executive Officer

Buyer:
Fronteer Development (USA) Inc.
Suite 1650
1055 West Hastings Street
Vancouver, BC
Canada V6E 2E9
Facsimile No.: 604 632 4678
Attention: John Dorward, Vice President, Business Development

8.5 JURISDICTION; SERVICE OF PROCESS

Any action or proceeding seeking to enforce any provision of, or based on any
right arising out of, this Agreement may be brought against any of the parties
in the courts of the State of Nevada, County of Washoe, or, if it has or can
acquire jurisdiction, in the United States District Court for the District of
Nevada, and each of the parties consents to the jurisdiction of such courts (and
of the appropriate appellate courts) in any such action or proceeding and waives
any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the
world.

8.6 FURTHER ASSURANCES

The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of this Agreement and the
documents referred to in this Agreement.

8.7. WAIVER

The rights and remedies of the parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party in exercising any
right, power, or privilege under this Agreement or the documents referred to in
this Agreement will operate as a waiver of such right, power, or privilege, and
no single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or the
exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
or the documents referred to in this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.

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8.8. ENTIRE AGREEMENT AND MODIFICATION

This Agreement supersedes all prior agreements between the parties with respect
to its subject matter (including the LOI) and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the party to be charged with the amendment.

8.9. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS

Neither party may assign any of its rights under this Agreement without the
prior consent of the other parties, which will not be unreasonably withheld,
except that Buyer may assign any of its rights under this Agreement to any
Subsidiary of Buyer. Subject to the preceding sentence, this Agreement will
apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Agreement will be construed to give any Person other than the parties
to this Agreement any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this Agreement. This Agreement and
all of its provisions and conditions are for the sole and exclusive benefit of
the parties to this Agreement and their successors and assigns.

8.10. SEVERABILITY

If any provision of this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

8.11. SECTION HEADINGS, CONSTRUCTION

The headings of Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All references to "Section"
or "Sections" refer to the corresponding Section or Sections of this Agreement.
All words used in this Agreement will be construed to be of such gender or
number as the circumstances require. Unless otherwise expressly provided, the
word "including" does not limit the preceding words or terms.

8.12. TIME OF ESSENCE

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With regard to all dates and time periods set forth or referred to in this
Agreement, time is of the essence.

8.13. GOVERNING LAW

This Agreement will be governed by the laws of the State of Nevada without
regard to conflicts of laws principles.

8.14. COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

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

Fronteer Development (USA) Inc.

By:     Printed:     Title:                 Gryphon Gold Corporation          
                                                                       John Key,
Chief Executive Officer    

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Schedule 3.2
Seller’s Consents
Company’s Consents

Schedule 3.3
Shares and Warrants

Schedule 3.6
Company’s Assets

Schedule 3.7
Company’s Accounts Receivable

Schedule 3.8
Company’s Liabilities or Obligations

Schedule 3.11(a)
Legal Requirements

Schedule 3.11(b)
Governmental Authorizations

Schedule 3.14
Applicable Contracts

Schedule 4.2
Buyer’s Consents

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Exhibit 2.4(a)(ii)
Seller's Release

Exhibit 2.4(b)(ii)
Baughman Note Extinguishment and Release

Exhibit 5.4(a)
Opinion of Seller’s counsel

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