Exhibit 10.31

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

This Assignment and Assumption Agreement (this “Assignment Agreement”) is made
on February 13, 2018 (the “Effective Date”), by and among DMRJ GROUP I, LLC, a
Delaware limited liability company (“DMRJ”), PLATINUM PARTNERS VALUE ARBITRAGE
FUND L.P., a Delaware limited partnership (“PPVA”), PLATINUM PARTNERS CREDIT
OPPORTUNITIES MASTER FUND, LP, a Delaware limited partnership (“PPCO” and,
collectively with DMRJ and PPVA, “Assignor”), and DESERT HAWK GOLD CORP., a
Nevada corporation (the “Company” or “Assignee”). Reference is made to (i) that
certain Investment Agreement, dated as of July 14, 2010, by and between the
Company and DMRJ (as amended, restated, supplemented or otherwise modified to
date, the “Investment Agreement”), (ii) those certain Participation Agreements
by and between DMRJ and the other parties thereto, in each case participating
indebtedness incurred under the Investment Agreement (as amended, restated,
supplemented or otherwise modified to date, the “Participation Agreements”) and
(iii) those certain promissory notes issued by the Company and those certain
share certificates evidencing shares of the Company’s capital stock, in each
case issued pursuant to the Investment Agreement (the “Notes and Shares”).
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to them in the Investment Agreement.

 

Assignor and Assignee hereby agree as follows:

 

1. Assigned Documents and Assigned Interests. At and upon the Closing (defined
below) Assignor shall sell and assign to Assignee, and Assignee shall purchase,
accept and assume from Assignor, all of Assignor’s rights and obligations (the
“Assigned Interests”) under (i) the Investment Agreement, (ii) the other
Transaction Documents (as defined in the Investment Agreement), (iii) the
Participation Agreements, (iv) the Notes (including all principal and accrued
and unpaid interest) and Shares (including all equity securities issued by
Assignee to Assignor) and (v) each other agreement, amendment, certificate or
other document related to the foregoing to which any Assignor is a party (the
foregoing collectively, the “Assigned Documents”), in each case as of the
Effective Date, as further described on the schedule attached hereto (the
“Schedule”), and including, without limitation, (a) all rights, remedies, title
and interest of Assignor under the Assigned Documents, (b) the Term Loan
Advances and Obligations, and all accrued and unpaid interest, fees, charges and
other obligations of the Company related thereto, (c) any and all reimbursement
claims of Assignor against the Company for accrued unpaid expenses, (d) all
claims, suits, causes of action and any other right of the Assignor against any
Person, whether known or unknown, arising under or in connection with the
Assigned Documents or the transactions governed thereby, (e) all funding and
other contractual obligations of Assignor under the Assigned Documents and (f)
all of Assignor’s right, title and interest to the Collateral and any other
security in respect of the foregoing, and all liens and encumbrances of Assignor
on the Assigned Interests and on the Collateral pursuant to the Assigned
Documents. Such purchase and sale is made without recourse, representation or
warranty except as expressly set forth herein.

 

2. Assignment and Assumption at Closing. At and upon the Closing (a) Assignee
shall automatically be substituted as, and shall become a party to the Assigned
Documents as, the Investor thereunder, and shall have all of the rights and
obligations of the Investor thereunder with respect to the Assigned Interests
and (b) Assignor shall relinquish all of its rights under the Assigned Documents
with respect to the Assigned Interests (other than any surviving indemnification
rights), and Assignee shall assume all of Assignor’s obligations under the
Assigned Documents. The assignment and assumption of the Assigned Interests
pursuant to this Assignment Agreement shall not create or enlarge any rights of
any third parties.

 

 

 

 

3. Closing; Purchase Price. The closing of the purchase, sale, assignment and
assumption of the Assigned Documents and the Assigned Interests thereunder (the
“Closing”) will take place remotely by electronic exchange of counterpart
signature pages and by Assignee’s payment to Assignor by wire transfer of
immediately available funds in the amount of Six Hundred Twenty-Five Thousand
U.S. Dollars ($625,000.00).(the “Purchase Price”), within three (3) days of the
satisfaction or waiver of the conditions to Closing set forth below, unless
another date or place is agreed to in writing by the parties hereto. The date of
the Closing is referred to herein as the “Closing Date”. The obligation of
Assignee and Assignor to consummate and close the transaction hereunder will be
subject only to (i) Assignee’s obtaining of firm commitments of capital in the
aggregate amount of at least the Purchase Price amount; (ii) approval of the
terms of this Assignment Agreement by PPVA’s investment committee and necessary
court approvals and (iii) delivery to Assignee or Assignee’s counsel of all
original stock certificates in Assignor’s possession representing the Shares.

 

4. Assignee Covenants. (a) Assignee shall use commercially reasonable best
efforts to obtain firm commitments of capital in the aggregate amount of no less
than $400,000.00 within thirty (30) days of the execution of this Assignment
Agreement (the “Milestone Date”), as evidenced by commitment letters or other
evidence reasonably satisfactory to Assignor. If Assignee shall not provide such
commitments to Assignor by the Milestone Date, Assignor shall have the option to
terminate its obligations under this Assignment Agreement upon written notice of
termination to Assignee (“Early Termination”).

 

(b) The business and operations of the Company shall be conducted in the usual
and ordinary course of business in accordance with good business practices
between the date of this Assignment Agreement and the earlier of the Closing
Date and the date of earlier termination of this Assignment Agreement in
accordance with its terms.

 

5. Assignor Representations and Warranties. Each Assignor, individually and not
jointly and severally: (a) represents and warrants that as of the Effective Date
and the Closing Date (i) it is the sole legal and beneficial owner of, and has
good title to, the Assigned Documents and the Assigned Interests thereunder,
(ii) the Assigned Documents and the Assigned Interests thereunder are free and
clear of any lien, encumbrance or other adverse claim (other than the liens
being conveyed to Assignee pursuant hereto), (iii) it is legally authorized to
enter into and perform this Assignment Agreement and (iv) neither Assignor nor
any Person acting on its behalf has or will become obligated to pay any fee or
commission to any broker, finder or intermediary for or on account of the
transactions contemplated by this Assignment Agreement; and (b) (i) makes no
other representation or warranty and assumes no responsibility with respect to
any statement, warranty or representation made in or in connection with the
Assigned Documents and Assigned Interests or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of such documents and
interests and (ii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or the
performance or observance by the Company of its obligations under the Assigned
Documents.

 

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6. Assignee Representations and Warranties. Assignee: (a) represents and
warrants that as of the Effective Date and the Closing Date (i) it is legally
authorized to enter into and perform this Assignment Agreement, (ii) neither
Assignee nor any Person acting on its behalf has or will become obligated to pay
any fee or commission to any broker, finder or intermediary for or on account of
the transactions contemplated by this Assignment Agreement and (iii) no notice
to, registration with, consent or approval of or any other action by any Person
is or will be required for Assignee to execute, deliver, and perform its
obligations hereunder; (b) (i) confirms that it has conducted its own
independent investigation, review and analysis of the Assigned Documents and the
Assigned Interests thereunder, and acknowledges that it has been provided
adequate access to such other documents and information as Assignee has deemed
appropriate to make its own analysis and decision to enter into this Assignment
Agreement and (ii) acknowledges and agrees that in making its decision to enter
into this Assignment Agreement and to consummate the transactions contemplated
hereby, Assignee has relied solely upon its own investigation and the express
representations and warranties of Assignor set forth in this Assignment
Agreement (including the Schedule hereto) and has not relied and shall not rely
on any other oral or written statements or representations by Assignor or any of
their respective affiliates, directors, officers, employees, agents or
representatives other than those representations expressly set forth herein; and
(c) agrees that it will, independently and without reliance upon Assignor and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Assigned Documents.

 

7. Financing Statement Termination; Fees and Expenses. (a) Upon the consummation
of the Closing and the payment of the Purchase Price, Assignor agrees to and
shall promptly file a UCC-3 termination of financing statement (or, at
Assignee’s option, Assignee may, in the name and on behalf of Assignor, file
such termination of financing statement).

 

(b) Assignor, on the one hand, and Assignee, on the other hand, will each pay
their respective fees and expenses (including the fees and expenses of legal
counsel, accountants, investment bankers, brokers, or other representatives or
consultants) incurred in connection with the transactions contemplated hereby.

 

8. Termination. This Assignment Agreement, and the obligations of the parties
hereunder, shall terminate upon the earliest to occur of (i) the consummation of
the Closing, (ii) the date of any Early Termination or (iii) the Drop Dead Date
(defined below); provided that the provisions of paragraphs 7(b) and 11 will
survive any termination of this Assignment Agreement. Notwithstanding anything
to the contrary in this Assignment Agreement, the termination of this Assignment
Agreement will not affect any rights any party has with respect to the breach of
this Assignment Agreement by another party prior to termination of this
Assignment Agreement. Assignee shall use commercially reasonable best efforts to
satisfy the conditions set forth in paragraphs 3 and 4(a) hereof, and consummate
the transaction contemplated hereunder, within sixty (60) days of the execution
of this Assignment Agreement (the “Drop Dead Date”). If the Closing shall not
have occurred on or prior to the Drop Dead Date, the obligations of the parties
hereunder (except for those set forth in paragraphs 7(b) and 11) shall terminate
in accordance herewith.

 

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9. Indemnification. Each of Assignor and Assignee (the “Indemnifying Party”)
agrees to indemnify, defend and hold the other party (the “Indemnified Party”)
and the Indemnified Party’s officers, directors, employees, agents, partners and
controlling persons (collectively, the “Indemnitees”) harmless from and against
any and all expenses, losses, claims, damages, suits, proceedings and
liabilities including, without limitation, reasonable attorneys’ fees and
expenses (collectively “Liabilities”) that are incurred by or threatened against
the Indemnitees or any of them, caused by, or in any way resulting from or
relating to the Indemnifying Party’s breach of any of the representations,
warranties, covenants or agreements of the Indemnifying Party set forth in this
Assignment Agreement.

 

10. Further Acts. From and after the Closing, Assignee shall have sole authority
to exercise all voting and other rights and remedies in respect of the Assigned
Interests. Each of the parties to this Assignment Agreement 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 each other party may reasonably request, and at the expense of such
requesting party, for the purpose of further carrying out the intent of this
Assignment Agreement.

 

11. GOVERNING LAW; JURY WAIVER. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PROVISIONS THEREOF. EACH PARTY
HERETO hereby waives trial by jury in any action, proceeding or counterclaim
arising out of or in any way concerned with this ASSIGNMENT Agreement or any of
the agreements, instruments or documents contemplated hereby.

 

12. Counterparts. This Assignment Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Assignment
Agreement. Receipt by facsimile, email or similar electronic transmission of any
executed signature page to this Assignment Agreement shall constitute effective
delivery of such signature page.

 

13. Successors and Assigns; No Third-Party Beneficiary. This Assignment
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of, the successors and permitted assigns of the parties hereto. Nothing
expressed or referred to in this Assignment Agreement will be construed to give
any Person other than the parties to this Assignment Agreement any legal or
equitable right, remedy or claim under or with respect to this Assignment
Agreement.

 

14. Integration. This Assignment Agreement (including the Schedule hereto)
contains the entire understanding and agreement of the parties hereto with
regard to the subject matter contained herein, and supersedes all prior
agreements, inducements, understandings, disclosures, correspondence, offering
memoranda, term sheets or letters of intent between or among any of the parties
hereto, whether expressed or implied, oral or written, regarding the subject
matter of this Assignment Agreement. The Schedule attached hereto is
incorporated into this Assignment Agreement and by this reference made a part
hereof. This Assignment Agreement shall not be amended, modified or supplemented
except by a written instrument signed by an authorized representative of
Assignor and Assignee.

 

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The parties hereto have caused this Assignment Agreement to be executed and
delivered as of the date first written above.

  

  ASSIGNOR:       DMRJ GROUP I, LLC         By: /s/ Chris Kennedy     Name:
Chris Kennedy     Title:   Manager

  

 

PLATINUM PARTNERS VALUE

ARBITRAGE FUND L.P.

        By: /s/ Chris Kennedy     Name: Chris Kennedy     Title:   Manager

  

  PLATINUM PARTNERS CREDIT
OPPORTUNITIES MASTER FUND, LP         By: /s/ Melaine Cyganowski     Name:
Melanie Cyganowski     Title:   Authorized Signatory

 

  ASSIGNEE:       DESERT HAWK GOLD CORP.         By: /s/ Rick Havenstrite    
Name: Rick Havenstrite     Title:   President

  

[Signature Page to Assignment Agreement]

 

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Schedule

to

Assignment Agreement

 

Assigned Documents:

  

    Agreement   Date 1   Investment Agreement between Desert Hawk Gold Corp. and
DMRJ Group I, LLC   July 14, 2010 2   Promissory Note Due July 14, 2012 Issued
by Desert Hawk Gold Corp. to DMRJ Group I, LLC   July 14, 2010 3   Registration
Rights Agreement between Desert Hawk Gold Corp. and DMRJ Group I, LLC   July 14,
2010 4   Security Agreement by Desert Hawk Gold Corp., Blue Fin Capital, Inc.,
in favor of DMRJ Group I, LLC   July 14, 2010 5   Subordination Agreement
between Ibearhouse LLC, West C Street LLC, and DMRJ Group I, LLC consented to by
Desert Hawk Gold Corp.   July 14, 2010 6   Pledge Agreement by and between
Desert Hawk Gold Corp. and DMRJ Group I, LLC   July 14, 2010 7   Amendment to
Investment Agreement dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ
Group I, LLC   November 8, 2010 8   Second Amendment to Investment Agreement
dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC  
February 25, 2011 9   Forbearance Agreement between Desert Hawk Gold Corp. and
DMRJ Group I, LLC   March 6, 2011 10   Third Amendment to Investment Agreement
dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC   March
11, 2011 11   Fourth Amendment to Investment Agreement dated July 14, 2010
between Desert Hawk Gold Corp. and DMRJ Group I, LLC   May 3, 2011 12  
Registration Rights Agreement between Desert Hawk Gold Corp. and DMRJ Group I,
LLC   May 3, 2011 13   Forbearance Agreement between Desert Hawk Gold Corp. and
DMRJ Group I, LLC   June 29, 2012 14   Fifth Amendment to Investment Agreement
dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC  
October 16, 2012 15   Sixth Amendment to Investment Agreement dated July 14,
2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC   January 29, 2013 16
  Seventh Amendment to Investment Agreement dated July 14, 2010 between Desert
Hawk Gold Corp. and DMRJ Group I, LLC   April 30, 2013 17   Eighth Amendment to
Investment Agreement dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ
Group I, LLC   July 24, 2013 18   Ninth Amendment to Investment Agreement dated
July 14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC   October 24,
2013 19   Tenth Amendment to Investment Agreement dated July 14, 2010 between
Desert Hawk Gold Corp. and DMRJ Group I, LLC   February 19, 2014 20   Amended
and Restated Promissory Note Due October 31, 2016 Issued by Desert Hawk Gold
Corp. to DMRJ Group I, LLC   February 19, 2014 21   Addendum to Tenth Amendment
to Investment Agreement dated July 14, 2010 between Desert Hawk Gold Corp. and
DMRJ Group I, LLC   January 15, 2015 22   Eleventh Amendment to Investment
Agreement dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I,
LLC   March 17, 2015 23   Twelfth Amendment to Investment Agreement dated July
14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC   June 5, 2015 24
  Thirteenth Amendment to Investment Agreement dated July 14, 2010 between
Desert Hawk Gold Corp. and DMRJ Group I, LLC   August 31, 2015 25   Waiver
Letter received by Desert Hawk Gold Corp. from DMRJ Group I, LLC   September 4,
2015 26   Subordination Agreement by and among Platinum Partners Credit
Opportunities Master Fund, LP, Desert Hawk Gold Corp., Ibearhouse, LLC, and West
C Street, LLC     October 14, 2016 27   Waiver Letter received by Desert Hawk
Gold Corp. from DMRJ Group I, LLC   October 14, 2016 28   Waiver Letter received
by Desert Hawk Gold Corp. from Platinum Partners Credit Opportunities Master
Fund, LP   October 14, 2016 29   Fourteenth Amendment to Investment Agreement
dated July 14, 2010 between Desert Hawk Gold Corp. and DMRJ Group I, LLC  
December 22, 2016 30   Irrevocable Stock Power Executed by DMRJ Group I, LLC  
December 22, 2016 31   Waiver Letter received by Desert Hawk Gold Corp. from
DMRJ Group I, LLC   August 7, 2017 32   Waiver Letters received by Desert Hawk
Gold Corp. from Platinum Partners Credit Opportunities Master Fund, LP   August
7, 2017 33   Subordination Agreement by and among Platinum Partners Credit
Opportunities Master Fund, LP, Desert Hawk Gold Corp., Ibearhouse, LLC, and West
C Street, LLC   August 7, 2017 34   958,033 shares of Series A Convertible
Preferred Stock of Desert Hawk Gold Corp.     35   180,000 shares of Series A-2
Convertible Preferred Stock of Desert Hawk Gold Corp.     36   444529.69 shares
of Series B Convertible Preferred Stock of Desert Hawk Gold Corp.    

 

[Schedule to Assignment Agreement]

 

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