Document:

Exhibit

EXHIBIT D
Lease Option Agreement

This Lease Option Agreement (this “Agreement”) is made on ______ , 2019, (the “Effective Date”) between COMSTOCK MINING INC., a Nevada corporation (the “Optionor”) and Tonogold Resources, Inc., a Delaware corporation (“Tonogold”), on behalf of Comstock Mining LLC, a Nevada limited liability company, and/or its affiliates or assignees (the “Optionee”).

WHEREAS, Optionor is the fee owner of certain real property being, lying and situated in Storey County, Nevada, and personal property and fixtures located thereon (the “Property”).

WHEREAS, the Optionor desires to grant the Optionee an option to lease the Property, subject to the terms and conditions set forth herein, pursuant to the terms set forth in an agreement to lease the American Flat property, plant, and equipment, in the Lease Option Addendum Exhibit attached hereto (the “American Flat Net Lease Agreement”).

NOW, THEREFORE, for and in consideration of the covenants and obligations contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Optionor hereby grants to Optionee an exclusive option to lease the aforementioned “Property.”

The parties hereto hereby agree as follows:

1.  OPTION TERM. The right to lease the Property commences on the Effective Date and expires at 5:00 p.m. Pacific time on the sixth (6th) anniversary of the date of this Agreement (the “Expiration Time”); provided, that the Optionor’s obligation to maintain ownership of the Property, as described in section 6.2 of this Agreement, shall terminate on the third (3rd) anniversary of the date of this Agreement (the “Optionor Obligation Termination Date”).

2. NOTICE REQUIRED TO EXERCISE OPTION. To exercise the right to lease the Property, the Optionee must deliver to the Optionor written notice of Optionee’s intent to lease the Property on or prior to the Expiration Time. Upon receipt of such notice, the Optionor and the Optionee shall be obligated to immediately execute and deliver the American Flat Net Lease Agreement in the form attached hereto save for the date, which shall be the date of execution.

3. OPTION CONSIDERATION. As consideration for this Agreement, the Optionee shall reimburse all of the Optionor’s costs and expenses to maintain and hold the Property in its current condition, including, without limitation, all Carrying Costs, as defined in Section 4 (the “Net Lease Maintenance Costs”). All payments of the Net Lease Maintenance Costs shall be nonrefundable.

No later than thirty (30) days after the Effective Date, Optionee shall conduct an inspection of the Property and propose a maintenance plan (the "Maintenance Plan") in cooperation with Optionor in order to hold the Property in its current condition. The Maintenance Plan, as may be supplemented or amended from time to time by Optionee, shall be implemented by Optionor under the direction of Optionee. Optionee shall reimburse all of the Optionor’s costs and expenses to maintain and hold the Property in accordance with the Maintenance Plan, including, without limitation, all Carrying Costs, as defined in Section 4. Optionor shall be liable for any non-routine damage to the Property caused by Optionor.

All payments made by Optionee to Optionor shall be paid by wire transfer of immediately available funds to an account designated by Optionor. The Optionee’s failure to pay all Net Lease Maintenance Costs within thirty (30) days’ from the date that the Optionor delivers notice of such failure to the Optionee shall automatically terminate this Agreement and all rights hereunder. 

4. OPTIONOR OBLIGATIONS. Unless this Agreement shall terminate earlier in accordance with Section 3 of this Agreement, from the date hereof, 
(i) Optionor will maintain the Property in its current condition, normal wear and tear excepted; 
(ii) Optionor will obtain and maintain commercially available insurance coverage on the Property; 
(iii) Optionor will work with Optionee to maintain the existing permits relating to the Property, and will cooperate with Optionee in working with county, state, and federal regulators to obtain any permit modifications or new permits reasonably necessary for the Optionee’s processing plans; 
(iv) Optionor will have the right to use the Property for any purpose which does not conflict with Optionee’s processing plans, including but not limited to, testing, removing, and/or selling previously stacked and leached material or any another material on or near the Property, or any other activity that does not increase the reclamation liability; and 
(v) Optionor will pay all costs associated with ownership and maintenance of the Property, and all costs associated with permits, as detailed in Exhibit D3 of the American Flat Net Lease Agreement (the “Carrying Costs”). Optionee shall reimburse the Optionor for all the Net Lease Maintenance Costs in accordance with Section 3 above.  Optionee will pay statutory fees for any of the permits held in Optionee’s name directly to the appropriate Federal, State, and County agencies.
(vi) Optionor will make its professional staff available to assist Optionee at reasonable times and upon reasonable notice, subject to prior commitments.  Optionor will invoice this time to Optionee at cost, without profit mark ups, but with actual employee benefit burden included in the cost.

5. EXCLUSIVITY OF OPTION. This Agreement is exclusive and non-assignable and exists solely for the benefit of the named parties above. Should Optionee attempt to assign, convey, delegate, or transfer this option to lease without the Optionor’s express written permission, any such attempt shall be deemed null and void.

6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS

6.1 The parties are executing this Agreement voluntarily and without any duress or undue influence. The parties have carefully read this Agreement and have asked any questions needed to understand its terms, consequences, and binding effect and fully understand them. The parties have sought the advice of an attorney of their respective choice if so desired prior to signing this Agreement.

6.2 Optionor and Optionee agree that Optionor can continue to use the American Flat Property for any lawful purpose from the Effective Date until this Option is exercised, so long as the current facilities remain available for Optionee’s use under this Agreement. In the event that Optionor continues to use the Property after the Effective Date, Optionor shall be liable for any non-routine damage to the Property caused by Optionor.

6.3 Optionor and Optionee agree that, subsequent to the Effective Date, they will work together, in consultation with the regulatory agencies, to timely bifurcate any permits, such as the Reclamation Permit, Air Quality permit, and any others that include aspects relating to both the American Flat Property subject to this Agreement and the Lucerne Properties covered by the Membership Interest Purchase Agreement, or to leave the permits as-is, so long as Optionee can operate according to its plans on the Lucerne Properties, and Optionor can operate as it sees fit on the American Flat property, until such time as this Option is exercised.

6.4 In the event that the Option is exercised, the parties agree they will work together to allocate the current reclamation bond, covering the existing reclamation liability between the Lucerne Properties and the American Flat Property.

6.5 Optionor agrees that if an event occurs with respect to the American Flat Property that results in an insurance claim (an “Insurance Event”), funds received from such claim will be applied towards restoring the American Flat Property as it was prior to the Insurance Event. Optionor shall continue to maintain insurance coverage against loss on the Property that Optionor determines to be commercially reasonable. Optionor shall be solely responsible for any insurance deductible expense and any and all damage which exceeds the scope of insurance coverage.

6.6 Optionor agrees for a period of three years from the Effective Date, it shall not to sell or otherwise dispose of any or all of the American Flat property, facilities, or equipment.

6.7 Optionor agrees, beginning from the Effective Date, it shall not pledge, directly or indirectly, the American Flat Property assets as surety for any obligation.

6.8 Optionor agrees that, after three years from the Effective Date, unless the Option has been exercised, if it were to receive a genuine, bon-fide, unconditional cash offer to acquire some or all of the process facility assets from a third-party that it is prepared to accept, it shall immediately advise Optionee in writing (enclosing a copy of the offer), giving Optionee at least 90 days in which to match that offer (a right of first refusal). During such 90 day right of first refusal period, Optionee may elect to exercise the Option. In the event that Optionee elects not to exercise its right of first refusal or the Option, subject to the terms of this Agreement, Optionor shall be entitled to accept the third-party offer. For the avoidance of any doubt, any contemplated sale of all the process facility assets to a third-party shall include provisions that require the third-party to recognize and honor the terms of this Agreement in its entirety, and agree to execute an agreement or deed of assignment with Optionee to ensure the terms of the Agreement shall be enforceable.

6.9 Optionor and Optionee agree that Optionor is the exclusive owner of any residual leached materials, mine dumps and tailings currently on the Property, along with the reclamation liability for those materials. Optionor may, at any time, reprocess, remove, or reclaim these materials to and thereby reduce its reclamation liability, with no compensation to Optionee.

6.10 Optionor makes no representation or warranty, express or implied, to any matter whatsoever relating to the Property or any other matter, including as to (i) merchantability or fitness for any particular use or purpose, (ii) any proposed processing or other business or operations, (iii) the adequacy of the existing permits for the operations planned by Optionee; (iv) the likelihood of governmental authority or regulatory approval of any proposed mining, processing or other business or operations or (v) the probable success or profitability of any proposed mining,  processing or other business or operations;
 
6.11 Optionee represents that it has sufficient experience in the mining of ores and processing methods similar to its planned use for the Property, and agrees that: (i) in making its decision to enter into this Agreement, Optionor has relied solely on its own investigation and the express representations of Optionor made in this Agreement; (ii) it has examined the data from previous operations of the facility by Optionor; (iii) it has reviewed the permits held by Optionor relating to the Property; and (iv) it has inspected the American Flat Property and is satisfied with its current condition.

7. GOVERNING LAW AND VENUE. This Agreement shall be governed, construed and interpreted by, through and under the Laws of the State of Nevada. The parties further agree that the venue for any and all disputes related to this Agreement shall be Storey County, Nevada.

8. ENTIRE AGREEMENT. This document and the American Flat Net Lease Agreement set forth the entire agreement and understanding between the parties relating to the subject matter herein and supersedes all prior discussions between the parties. This agreement may only be amended by an instrument in writing signed by both Parties. No waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be charged. 

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[Signatures on following page.]

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

COMSTOCK MINING INC. 

By: ______________________
Name: Corrado DeGasperis
Title: Executive Chairman, President and CEO

TONOGOLD RESOURCES, INC. 

By: ______________________
Name: Mark Ashley
Title: Chief Executive Officer

LEASE OPTION ADDENDUM EXHIBIT

American Flat Net Lease Agreement
 
This American Flat Net Lease Agreement (this “Agreement”) is made and entered into by and between Comstock Mining Inc., a Nevada corporation, and Comstock Mining LLC, a Nevada limited liability company.

RECITALS
 
	
		
	A.
	Comstock Mining Inc. (“Comstock”) is the owner of and in possession of certain real estate, residual materials including ores, heap leaching pads, crushing and stacking equipment, and Merrill-Crowe processing facilities located in Storey County, Nevada and described in Exhibits D1 and D2, and shown in Figure D1 (the “Property”) attached to and by this reference incorporated in this Agreement.

 
	
		
	B.
	Comstock, Comstock Mining LLC (the “Company”), and Tonogold Resources Inc (“Tonogold”) entered into a Membership Interest Purchase Agreement (the “Purchase Agreement”), dated January 24, 2019 whereby Comstock sold its membership interest in the Company to Tonogold.

	C.
	Comstock desires to lease the Property to the Company and the Company desires to lease the Property from Comstock, subject to the terms and conditions set forth herein.

  
NOW THEREFORE, in consideration of their mutual promises, the parties agree as follows:
 
ARTICLE 1
NET LEASE 

		
	1.1
	Definitions. The following defined terms, wherever used in this agreement, shall have the meanings described below:

		
	(a)
	“Lease Date” shall mean _________, 2019.

		
	(b)
	“Lessor” shall mean Comstock Mining Inc.

		
	(c)
	“Lessee” shall mean Comstock Mining LLC.

		
	(d)
	“Carrying Costs” shall mean the total direct and indirect costs and expenses incurred by Lessor that are associated with owning and maintaining the Property for eventual use by Lessee, as described in Exhibit D3 of this Agreement. 

		
	(e)
	“Lucerne Properties” shall have the same meaning as defined in the Purchase Agreement.

		
	(f)
	“Ore” shall mean materials produced from the Property, the nature and composition of which, in the sole judgment of Lessee justifies either (i) mining or removing from place and shipping and selling the same, or delivering the same to a processing plant for physical or chemical treatment; or (ii) leaching in place.

		
	(g)
	“Product” shall mean: (i) all Ore shipped and sold prior to treatment; and (ii) all metals, minerals, concentrates, and precipitates produced by Lessee from Ore.

		
	(h)
	"Ton" shall mean a unit of weight equal to 2,000 pounds avoirdupois (907.19kg).

1.2 Lease.  The Lessor grants to the Lessee an exclusive Agreement to lease the Property for processing Ore. The Agreement has two distinct phases: Production, and Reclamation.  Subject to the terms and conditions of this Agreement, so long as all conditions of the Agreement are met, and to the extent permitted by applicable federal, state and local laws regulations and ordinances, Lessor agrees to lease the Property to Lessee for the purposes of producing valuable metal and other mineral substances and products from ore-bearing materials and rocks of every kind.

1.3 Uses.  Lessee is granted the right, insofar as Lessor may lawfully grant the right, to use the Property, including but without being, limited to, the full right, authority and privilege of constructing, erecting, maintaining, and using all buildings, structures, plants, roadways, pumps, pipelines, electrical power lines and facilities, stockpiles, waste plies, heap leach pads, tailings ponds and facilities, settling ponds, and all other improvements, property and fixtures for beneficiating, concentrating, smelting, extracting, leaching (in place or otherwise), refining and shipping of Ores, minerals or Product, or for any incidental activities, whether presently contemplated or known to be used in the extraction, production or processing of minerals.

1.4 Term.  The Agreement is effective commencing on the Lease Date, and expiring (if not terminated previously) on the 20th anniversary of the Lease Date. Once the Production phase begins, the lease will continue in effect past the expiration date, until the Reclamation phase is complete.  However terminated, Lessee’s obligation for reclamation relating to its activities on the American Flat property will continue until all reclamation is complete to the satisfaction of the applicable County, State, and Federal regulators.

(a)The Production phase begins on the Lease Date.  On the Lease Date, Lessee shall have delivered notice to Lessor that it intends to exercise the Lease Option, and the first quarterly Fixed Rate Payment (as defined below) to Lessor. Following the receipt of the first quarterly Fixed Rate Payment, the parties will work together, with the objective of Lessor providing Lessee with knowledge of the operating procedures and protocols for operating the facility. During the Production phase:

(i) Lessee will assume full operation control of the Property, and will maintain and operate the facility using industry best practices; 
(ii) Lessee will pay Lessor a lease payment of $1,000,000 per year, payable quarterly in advance (the “Fixed Rate Payment”) subject to adjustment as provided in clause 1.5 (b) of this Agreement, plus $1 per ton for any ore processed, payable quarterly in arrears (the “Variable Rate Payment”) subject to adjustment as provided in clause 1.5(c) of this Agreement, and will continue to pay the Carrying Costs; 
(iii) Lessee will be responsible for all capital costs for any refurbishment, upgrades, and expansions of the processing facility reasonably required, in its sole discretion, to achieve its processing plan; 
(iv) Lessee will operate the facility and will pay all associated operating costs and overhead; and 
(v) Lessor remains liable for the reclamation associated with the American Flat facility as of the Lease Date (the “Current Liability”) and Lessee will assume liability for any modifications to or expansions of the facility and for additional material stacked, stockpiled, or otherwise moved onto the American Flat property (the “Additional Liability”).

For clarity, during the Production phase, Lessor is granting Lessee the exclusive right to construct leach pads, waste dumps, stockpiles, ponds, and other infrastructure anywhere on the Property that Lessee determines is necessary in order to carry out its operations, at its own expense, and in compliance with all applicable County, State, and Federal laws and regulations. Lessee will be responsible for the reclamation of all added construction and infrastructure, and will maintain bonds with the appropriate agencies in an amount adequate to cover the entire cost of such Additional Liability reclamation.

Lessee shall grant Lessor reasonable access to the Property in order for Lessor to be satisfied that Lessee is operating the facilities in a safe and environmentally responsible manner.

For the sake of clarity, the Fixed rate will be payable on a continuous basis, whether or not Lessee has any production during any given quarter.  Subject to clauses 1.5(b) and 1.5(c) of this Agreement, the Fixed Rate and Variable Rate Payments will continue through the end of the quarter in which Lessee ceases operating the plant, after notifying Lessor at least three months in advance of its intent to cease operations (the “Shutdown Notice”).

		
	(b)
	The Reclamation phase begins when Lessee ceases operating the plant after giving the Shutdown Notice, and will continue until all reclamation is complete to the satisfaction of all applicable County, State, and Federal regulators, and Lessee provides evidence, satisfactory to Lessor, that all reclamation due to Lessee’s operations is complete and the applicable bonds have been released. During the Reclamation phase, 

(i) Lessee will continue to pay the Carrying Costs;
(ii) Lessor and Lessee will negotiate what portions of the Plant and Property will be fully reclaimed, and which portions Lessor wishes to leave in place for possible future operations; 
(iii) Lessee will pay all costs for reclamation due to its activities, except for any portions of the infrastructure the parties have agreed to leave in place; and
(iv) Lessor will pay all costs for reclamation due to its previous operations as of the Lease Date, or will defer its share of the reclamation in anticipation of future opportunities, in its sole discretion.

Any additions to the physical plant that are not fixed and are capable of being removed shall be removed by Lessee during the Reclamation phase, unless otherwise agreed by the parties. After reclamation is complete, any remaining infrastructure becomes the property of Lessor, with no compensation due to Lessee. Any stockpiled or leached or otherwise processed material remaining on the property also becomes the property of Lessor.

1.5 Payments.  Lessee shall make the following payments to Lessor.

(a)Carrying Costs.  During all phases of the Agreement, the Carrying Costs paid by Lessor will be invoiced to the Lessee monthly, and shall be due upon receipt.
 
(b)Fixed Rate.  The Fixed Rate Payment lease payment shall be paid at the rate of $250,000 quarterly, in advance, beginning on the Lease Date and continuing through the end of the quarter in which the Shutdown Notice is given, or the end of the quarter during which the aggregate cumulative amount of the Fixed Rate Payments plus Variable Rate Payments received by Lessor from Lessee equals $25,000,000, whichever comes first. 

(c)Variable Rate.  As provided in Section 1.4(a) of this Agreement, the initial Variable Rate Payment shall be $1 per ton, payable quarterly in arrears.  Commencing on the date that the aggregate cumulative amount of the Fixed Rate Payments plus Variable Rate Payments received by Lessor from Lessee equals $15,000,000 and thereafter, the Variable Rate Payments shall be reduced to $0.50 per ton (the "Adjusted Variable Rate Payment"). Commencing on the date that the aggregate cumulative amount of the Fixed Rate Payments plus all Variable Rate Payments received by Lessor from Lessee equals $25,000,000 and thereafter, the Variable Rate Payment shall be reduced to $0.25 per ton, but not less than $100,000 per quarter (the "Subsequent Variable Rate Payment").  

(d)Method of Payment.  All payments made by Lessee to Lessor shall be paid by wire transfer of immediately available funds to an account designated by Lessor.

(e)Audit.  Lessor or its authorized agents shall have the right to audit and inspect Lessee’s accounts and records used in calculating the Variable Rate Payments, which right may be exercised as to each payment at any reasonable time during a period of ninety (90) days from the date on which the payment was made by Lessee. If no such audit is performed during such period, such accounts, records and payments shall be conclusively deemed to be true, accurate and correct. If it is determined that an overpayment or underpayment was made, neither Lessor nor Lessee will be required to make an additional payment or a refund, as applicable, but the overpayment or underpayment shall be corrected with the next quarterly payment.

(f)Penalties.  Any amounts not timely paid shall draw interest at the rate of eighteen percent (18%) per annum on the unpaid balance from the due date until paid in full. After 60 days, Lessor may file a lien on the stacked ore, concentrates, precipitates, and dore on the Property.

1.6. Acceptance of Payments.  The lease contemplated by this Agreement shall be deemed and construed to be a “net lease”, and, except as expressly provided to the contrary in this Agreement, all costs, expenses, charges, impositions and other payments of every kind and nature whatsoever relating to the Property, or the use, operation or maintenance thereof, which may arise or become due during or in respect of the lease Term shall be timely paid by Lessee, and Lessee assumes full responsibility for the condition, operation, repair, alteration, improvement, replacement, maintenance and management of the Property.  

1.7 Relationship of the Parties.

(a) No Partnership: This Agreement shall not be deemed to constitute any party, in its capacity as such, the partner, agent or legal representative of any other party, or to create any mining partnership or other partnership or other partnership relationship, or fiduciary relationship between them for any purpose whatsoever.

(b) Competition: Except as expressly provided in this Agreement, each party shall have the free and unrestricted right independently to engage in and receive the full benefits of any and all business endeavors of any sort whatsoever outside the Property or outside the scope of this Agreement, whether or not competitive with the endeavors contemplated herein, without consulting the other or inviting or allowing the other therein. In particular, without limiting the foregoing, neither party to this Agreement shall have any obligation to the other as to any opportunity to acquire any money, property, interest or right offered to it outside the scope of this Agreement.

ARTICLE 2
REPRESENTATIONS, WARRANTIES AND AGREEMENTS

2.1  Lessor and Lessee agree that, subsequent to the Lease Date, they will work timely, in consultation with the regulatory agencies, to bifurcate any permits, such as the Reclamation Permit, Air Quality permit, and any others that include aspects relating to both the Property and the Lucerne Properties covered by the Purchase Agreement, or to leave the permits as-is, so long as the goal is met that Lessee can operate according to its plans on the Lucerne Properties, and Lessor can operate as it sees fit on the Property, until the Lease Date. 

2.2 The parties agree they will work together to allocate the current reclamation bond, covering the existing reclamation liability between the Lucerne Properties and the Property, and to separately bond Lessee’s reclamation liability for its changes to the Property and its operations under this agreement.

2.3 Lessor agrees that if an event occurs with respect to the Property that results in an insurance claim (an “Insurance Event”), funds received from such claim will be applied towards restoring the Property as it was prior to the insurance event. Lessee shall be solely responsible for any insurance deductible expense and any and all damage which exceeds the scope of insurance coverage.

2.4 Lessor agrees not to sell or otherwise dispose of any or all of the Property until the Shutdown Notice is given.

2.5 Lessor agrees not to pledge, directly or indirectly, the Property as surety for any obligation.

2.6 Lessor makes no representation or warranty, express or implied, to any matter whatsoever relating to the Property or any other matter, including as to (i) merchantability or fitness for any particular use or purpose, (ii) any proposed processing or other business or operations, (iii) the adequacy of the existing permits for the operations planned by Lessee; (iv) the likelihood of governmental authority or regulatory approval of any proposed mining, processing or other business or operations or (v) the probable success or profitability of any proposed mining,  processing or other business or operations;

2.7 Lessee represents that it has sufficient experience in the mining of ores and processing methods similar to its planned use for the Property, and agrees that: (i) in making its decision to enter into this Agreement, Lessor has relied solely on its own investigation and the express representations of Lessor made in this Agreement; (ii) it has examined the data from previous operations of the facility by Lessor; (iii) it has reviewed the permits held by Lessor relating to the Property; and (iv) it has inspected the Property and is satisfied with its current condition.

2.8 Lessor and Lessee agree that, once Lessee’s operating plans for the Property are complete, it will notify Lessor of any equipment being replaced as part of an upgrade to the facilities, or otherwise not useful to Lessee for its planned Operations.  Lessor can then move the equipment to a location on the property that will not interfere with Lessee’s planned operations, or remove the un-needed equipment, at Lessor’s expense, for sale or use at another location.

2.9 Lessor and Lessee agree that Lessor is the exclusive owner of any residual leached materials, mine dumps and tailings currently on the Property, along with the reclamation liability for those materials. Lessor may, at any time during any phase of this agreement, reprocess, remove, or reclaim these materials and thereby reduce its reclamation liability, with no compensation to Lessee, provided that during the Production phase, these activities by Lessor shall not unreasonably interfere with Lessee’s operations on the Property.

ARTICLE 3
MISCELLANEOUS

3.1 Compliance with the Law: The exercise by Lessee of any rights, privileges, grants and uses under this Agreement shall conform at all times with the applicable laws and regulations of the state in which the Property is situated and the United States of America. Lessee shall be fully responsible for compliance with all applicable federal, state and local reclamation statutes, regulations and ordinances relating to such work, all at Lessee’s cost, and Lessee shall indemnify and hold harmless Lessor from any and all claims, assessments, fines and actions arising from Lessee’s failure to perform the foregoing obligations. Lessor agrees to cooperate with Lessee in Lessee’s application for governmental licenses, permits and approvals, the costs of which shall be borne by Lessee.

3.2 Operating Practices; Inspection of Data Reports; Insurance:

(a) Operations: Lessee shall conduct operations on the Property in a safe and environmentally responsible manner, in accordance with industry best practice.

(b) Inspection of Data: During the term of this Agreement, Lessor shall have the right to examine reports and data regarding the Property in Lessee’s possession during reasonable business hours and upon prior notice, provided, however, that the rights of Lessor to examine such data shall be exercised in a manner such that inspection does not unreasonably interfere with the operations of Lessee.

(c) Insurance: Lessee shall obtain and maintain all workers’ compensation insurance as required by state law, as well as liability insurance and policies of insurance against risks in amounts customarily obtained in similar mining operations and shall furnish Lessor proof of insurance prior to the commencement of any operations. Lessee shall, at Lessee’s expense, during the term of this Agreement and any extension thereof, obtain and maintain insurance which insures the Property for public liability in amounts not less than those set out by the State of Nevada and amounts reasonably satisfactory to Lessor, naming Lessor as an additional insured and protecting against all claims, demands, actions, suits or causes of action and judgments, settlements or recoveries, for bodily injury, death or property damage arising out of Lessee’s use or occupancy of or operations conducted upon the Property. Lessee agrees to provide Lessor with a certificate of insurance. The companies issuing such policies shall also be required to furnish the Lessor written notice thirty (30) days prior to cancellation, termination, or other change of any such insurance. The Lessor shall periodically review the level of the indemnification insurance and may require the amount of such insurance to be increased or decreased to reflect changes in risk exposure.

3.3 Reclamation and Bonding: The exercise by Lessee of any rights, privileges, grants and uses under this Agreement shall conform at all times with the applicable laws and regulations of the state in which the Property is situated and the United States of America. Lessee shall be fully responsible for compliance with all applicable federal, state and local reclamation statutes, regulations and ordinances relating to such work, all at Lessee’s cost, and Lessee shall indemnify and hold harmless Lessor from any and all claims, assessments, fines and actions arising from Lessee’s failure to perform the foregoing obligations.

Bonding: Lessee is required to carry bonding for the Additional Liability in the amount determined by regulatory authorities for each area to be bonded. Lessee may qualify for self-bonding if the Lessee meets the requirements of C.F.R. Title 30 § 800.23 and any additional requirements in the State or Federal program. Alternatively, Lessee may support its mine reclamation bonding requirements through third-party bonding facilities.

3.4 Production Records: Lessee shall keep accurate records of the sale or shipment of Product from the Property, and these records shall be available for inspection and copying by Lessor at all reasonable times.

3.5 Liens and Notices of Non-Responsibility: Lessor and Lessee agree to keep the Property at all times free and clear of all liens, charges and encumbrances of any and every nature and description done, made or caused by them, and to pay all indebtedness and liabilities incurred by or for them which may or might become a lien, charge or encumbrance against the Property before such indebtedness or liability shall become a lien, charge or encumbrance.

3.6  Real Property Taxes: Lessor shall pay promptly, before delinquency, all taxes and assessments, general, special, ordinary and extraordinary, that may be levied or assessed during the term of the Agreement, and upon the Property then remaining subject to this Agreement. Such tax payments will be invoiced to Lessee as part of the Carrying Costs to be reimbursed.  Neither Lessor nor Lessee shall be responsible for the payment of any such taxes which are based upon revenues income or production from the Property assessed solely to the other party. Lessee always shall have the right to contest, in the courts or otherwise, in its own name or in the name of Lessor, the validity or amount of any such taxes or assessments if it deems the same unlawful, unjust, unequal or excessive, or to take such other steps or proceedings as it may deem necessary to secure a cancellation, reduction, readjustment or equalization thereat before it shall be required to pay the same.

Delivery of Tax Notices: If Lessee receives tax bills or claims which are Lessor’s responsibility, Lessee shall promptly forward them to Lessor for appropriate action. 

3.7 Inspection: Lessor, or Lessor’s duly authorized representatives, shall be permitted to enter on the Property, and the processing facilities thereon at all reasonable times for the purpose of inspection. Lessor shall have the right to take samples of material from the Property for the purpose of assuring proper and accurate determination and payment of the Tonnage Charge, but it shall enter on the Property at its own risk, and in such a manner as not to unreasonably hinder, delay or interfere with the operations of Lessee. Lessor shall indemnify and hold Lessee harmless from any and all damages, claims or demands arising out of injury to Lessor, Lessor’s agents or representatives, or any of them, on the Property or on the approaches thereto.

3.8 Termination by Lessor: In the event of any default or failure by Lessee to comply with any of the covenants, terms or conditions of this Agreement, Lessor shall give Lessee written notice of the default, specifying details of the same. If such default is not remedied within thirty (30) days after receipt of the notice, then this Agreement shall be deemed canceled and terminated effective on the thirtieth (30th) day after the receipt of the notice.

3.9 Termination: Lessee may at any time terminate this Agreement by giving written notice to Lessor. If during the Production phase of the lease, the notice must be given in the form described as the Shutdown Notice. On or promptly after delivery of the notice of termination, Lessee shall execute and deliver to Lessor a written release of this Agreement in proper form for recording. If Lessee terminates this Agreement, Lessee shall still be required to pay any Fixed Rate and Variable Rate charges and Carrying Costs which accrued prior to the termination date, which shall be the date Lessee’s notice is delivered. On expiration, termination or surrender of this Agreement, Lessee shall return the Property, or any part of the Property surrendered, in a state of compliance with applicable laws, regulations and ordinances of any governmental agency or authority having jurisdiction of the Property. If Lessee’s compliance is incomplete at such time, Lessee shall diligently take the actions necessary to complete compliance.

3.10 Removal of Equipment: Lessee shall have six (6) months after termination of this Agreement to remove from the Property all buildings, structures and equipment placed on the property by Lessee, and to restore or diligently act to restore the Property to an environmentally acceptable state as may be required by local, state or federal authorities. Any buildings, structures or equipment, including personal property, remaining on the Property after the time described in this Section shall be deemed to be owned by Lessor with no further action or the part of the parties.

3.11 Data: Upon termination of this Agreement, Lessor shall have the right to request a copy of all reports and data regarding the Property in Lessee’s possession at the time of termination. Lessee agrees that it will, within thirty (30) days after receipt of a written demand by Lessor, deliver to Lessor a copy of all such reports and data. Lessee shall have no liability on account of any such information received or acted on by Lessor or any other party to whom Lessor delivers such information.

3.12 Confidentiality: The data and information, including the terms of this Agreement, coming into the possession of Lessor by virtue of this Agreement, shall be deemed confidential, and shall not be disclosed to outside third parties except as may be required to publicly record or protect title to the Property, or to publicly announce and disclose information under the laws and regulations of the United States, any state or local government or any country, or under the rules and regulations of any stock exchange on which stock of any party, or the parent or affiliates of any party, is listed. Lessor agrees, with respect to any public announcements (other than those exceptions set forth in the preceding sentence), including the announcement of the execution of this Agreement, if any, to inform Lessee of the contents of the announcement or disclosure in advance of its intention to make such announcement in sufficient time to permit Lessee to jointly or simultaneously make a similar public announcement or disclosure if the other party so desires, except that in the event any party anticipates selling or assigning all or a portion of its interest or negotiations to procure loans from third parties are undertaken, such party shall have the right to furnish information to the party to whom such conveyance or assignment is anticipated, or with whom such negotiations or cans are under-taken, upon obtaining from such party art agreement to hold confidential any information so furnished. Nothing in this Agreement shall limit or restrict the right of Lessee to provide, deliver or release to parent companies, companies with a common parent, subsidiary companies, affiliated or related companies and/or coventurers the data and information, including the terms of this Agreement, coming into the possession of Lessee by virtue of this Agreement.

3.13 Notices: All notices shall be in writing to the applicable address set forth below and shall be given by personal delivery or recognized international overnight courier. All notices shall be effective and shall be deemed delivered on the date of delivery if delivered before 5:00 p.m. local destination time on a business day, otherwise on the next business day after delivery. Each party will send a copy of their notice by email, as a courtesy, but the notice will not be valid until delivered in writing. Any notice delivered by email shall only be deemed to be official notice hereunder if the Party receiving such email confirms receipt in writing.  
 
  
	
		
	 
	

Each party may change its address from time to time by notice given in the manner described above

3.14 Binding Effect of Obligations: This Agreement shall be binding upon and inure to the benefit of the respective parties and their heirs, successors and assigns.

3.15 Whole Agreement: The parties agree that the whole agreement between them is written in this Agreement, and in a memorandum of agreement of even date which is intended to be recorded. There are no terms or conditions, express or implied, other than expressly stated in this Agreement. This Agreement may be amended or modified only by an instrument in writing, signed by the parties with the same formality as this Agreement.

3.16 Governing Law: This Agreement shall be construed and enforced in accordance with the laws of the State of Nevada.
 
3.17 Multiple Counterparts: This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall constitute the same Agreement.

3.18 Severability: If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any law of the United States or any state, the validity of the remaining portions or provisions shall not be affected and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular part, term or provision held to be invalid.

3.19 Bankruptcy or Insolvency Proceedings by Lessee: If Lessee be adjudged bankrupt or insolvent, or shall make an assignment for benefit of creditors, this Agreement shall thereupon immediately terminate, and it being further understood and agreed that this Agreement shall not be assignable by any process of law, nor be treated as an asset of Lessee in any bankruptcy or insolvency proceedings; nor shall it pass under the control of any trustee or assignee of Lessee by virtue of any proceedings in bankruptcy or insolvency, or under any assignment by Lessee for the benefit of creditors.

3.20 Assignment: Upon providing written notice to the other party in accordance with the terms of this Agreement, either party may assign its respective rights and obligations under this Agreement, provided that the assignee executes an assumption of all of the assignor’s obligations hereunder and agrees to be bound by all the terms and conditions of this Agreement. No such assignment shall in any way enlarge or diminish the right or obligations of Lessee or Lessor hereunder. Upon the assumption by the assignee of the assignor’s obligations, the assigning party shall be fully released from, and shall not be liable or responsible to the non-assigning party in any way for any duties, costs, payments or other liabilities or obligations that thereafter arise or accrue directly or indirectly under this Agreement. A fully executed memorandum of assignment in recordable form shall be provided to the non-assigning party by the assigning party.
 
  
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Lease Date.
 

	
			
	 
	 
	 

	TONOGOLD RESOURCES, INC.

	 
	 

	By:___________________________________
	 
	 

	Name: Mark Ashley
	 

	Title:   Chief Executive Officer
	 
	 

	

	COMSTOCK MINING LLC

	 
	 

	By:____________________________________
	 
	 

	Name: Corrado DeGasperis
	 

	Title: Executive Chairman, President and CEO
	 
	 

	

	COMSTOCK MINING INC.

	 
	 

	By:_______________________________________
	 
	 

	Name: Corrado DeGasperis
	 

	Title: Executive Chairman, President and CEO
	 
	 

 

Exhibit D1 – “Properties”
(American Flat Net Lease Agreement)

The following patents, fee land, and unpatented mining claims are included in the American Flat Net Lease Agreement, and are shown in Figure D1, below.

	
								
	D1.1: CMI-Owned Properties Included in Lease Option

	 
	 
	 
	 
	 
	 
	 
	 

	Parcel No
	Description
	Current Owner
	TYPE
	Acres
	County
	NSR %
	Royalty Owner

	004-331-08
	Texas
	Comstock Mining LLC
	Fee
	37.5
	Storey
	0%
	None

	004-331-19
	Baltimore Patent Homesite
	Comstock Mining LLC
	Fee
	9.0
	Storey
	0%
	None

	004-331-22
	Salzwimmer 79 Acres
	Comstock Mining Inc.
	Fee
	77.9
	Storey
	0%
	None

	004-331-27
	Salzwimmer House & "Barn"
	Comstock Mining Inc.
	Fee
	11.0
	Storey
	0%
	None

	004-331-28
	Salzwimmer House & "Barn"
	Comstock Mining Inc.
	Fee
	3.5
	Storey
	0%
	None

	004-331-36
	American Flat Process Site
	Plum Mining Co LLC
	Fee
	77.0
	Storey
	0%
	None

	004-331-37
	American Flat Process Site
	Plum Mining Co LLC
	Fee
	4.7
	Storey
	0%
	None

	004-331-40
	Texas
	Comstock Mining LLC
	Fee
	150.0
	Storey
	0%
	None

	016-091-33
	Texas
	Comstock Mining LLC
	Fee
	32.8
	Lyon
	0%
	None

	800-002-06
	Baltimore Patent Pcl 1
	Comstock Mining LLC
	Patent
	9.0
	Storey
	0%
	None

	800-002-10
	Ledge No 2
	Comstock Mining Inc.
	Patent
	14.5
	Storey
	0%
	None

	800-002-14
	Baltimore Patent Pcl C
	Comstock Mining LLC
	Patent
	1.4
	Storey
	0%
	None

	800-002-22
	Baltimore Patent PCl 3
	Comstock Mining Inc.
	Patent
	9.0
	Storey
	0%
	None

	800-002-38
	Baltimore Patent Pcl 2
	Comstock Mining LLC
	Patent
	8.9
	Storey
	0%
	None

	800-002-45
	Baltimore Patent Pcl 4
	Comstock Mining Inc.
	Patent
	7.5
	Storey
	0%
	None

	 
	 
	 
	 
	 
	 
	 
	 

	D1.2: CMI-Owned Unpatented Claims Included in Lease Option

	 
	 
	 
	 
	 
	 
	 
	 

	BLM No
	Description
	Current Owner
	TYPE
	Acres
	County
	Underlying 
NSR %
	Underlying 
Royalty Owner

	NMC1105470
	CMI Mill Site 1
	Comstock Mining LLC
	Mill
	0.38
	Storey
	0
	None

	NMC1108961
	MS 38 B
	Comstock Mining LLC
	Lode
	1.82
	Storey
	0
	None

	NMC1108962
	MS 38 C
	Comstock Mining LLC
	Lode
	6.3
	Storey
	0
	None

	NMC1108963
	MS 38 D
	Comstock Mining LLC
	Lode
	3.67
	Storey
	0
	None

	NMC1108964
	MS 38 E
	Comstock Mining LLC
	Lode
	9.83
	Storey
	0
	None

	NMC871506
	Comstock 129
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC871507
	Comstock 130
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC871508
	Comstock 131
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC871509
	Comstock 132
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC871510
	Comstock 133
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC871511
	Comstock 134
	Comstock Mining LLC
	Lode
	20.67
	Lyon,Storey
	0
	None

	NMC871512
	Comstock 135
	Comstock Mining LLC
	Lode
	20.67
	Lyon,Storey
	0
	None

	NMC871513
	Comstock 136
	Comstock Mining LLC
	Lode
	20.67
	Storey,Lyon
	0
	None

	NMC871514
	Comstock 137
	Comstock Mining LLC
	Lode
	20.67
	Storey,Lyon
	0
	None

	NMC871515
	Comstock 138
	Comstock Mining LLC
	Lode
	20.67
	Storey,Lyon
	0
	None

	NMC871516
	Comstock 139
	Comstock Mining LLC
	Lode
	14.36
	Storey
	0
	None

	NMC871517
	Comstock 140
	Comstock Mining LLC
	Lode
	18.33
	Storey
	0
	None

	NMC871518
	Comstock 141
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC871519
	Comstock 142
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC983374
	Comstock Lode 121
	Comstock Mining LLC
	Lode
	2.72
	Storey
	0
	None

	NMC983375
	Comstock Lode 122
	Comstock Mining LLC
	Lode
	17.93
	Storey
	0
	None

	NMC983376
	Comstock Lode 123
	Comstock Mining LLC
	Lode
	1.76
	Storey
	0
	None

	NMC983377
	Comstock Lode 124
	Comstock Mining LLC
	Lode
	20.66
	Storey
	0
	None

	NMC983379
	Comstock Lode 126
	Comstock Mining LLC
	Lode
	20.69
	Storey
	0
	None

	NMC983380
	Comstock Lode 127
	Comstock Mining LLC
	Lode
	14.49
	Storey
	0
	None

	NMC983381
	Comstock Lode 128
	Comstock Mining LLC
	Lode
	9.95
	Storey
	0
	None

	NMC983382
	Comstock Lode 129
	Comstock Mining LLC
	Lode
	2.42
	Storey
	0
	None

	NMC983383
	Comstock Lode 130
	Comstock Mining LLC
	Lode
	0.76
	Storey
	0
	None

	NMC983384
	Comstock Lode 131
	Comstock Mining LLC
	Lode
	1.65
	Storey
	0
	None

	NMC983385
	Comstock Lode 132
	Comstock Mining LLC
	Lode
	6.91
	Storey
	0
	None

	NMC983386
	Comstock Lode 133
	Comstock Mining LLC
	Lode
	15.84
	Storey
	0
	None

	NMC983387
	Comstock Lode 134
	Comstock Mining LLC
	Lode
	14.92
	Storey
	0
	None

	NMC983388
	Comstock Lode 135
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC983389
	Comstock Lode 136
	Comstock Mining LLC
	Lode
	18.57
	Storey
	0
	None

	NMC983390
	Comstock Lode 137
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC983391
	Comstock Lode 138
	Comstock Mining LLC
	Lode
	9.1
	Storey
	0
	None

	NMC983392
	Comstock Lode 139
	Comstock Mining LLC
	Lode
	20.67
	Storey
	0
	None

	NMC983393
	Comstock Lode 140
	Comstock Mining LLC
	Lode
	6.86
	Storey
	0
	None

Figure D1 "American Flat Properties
Exhibit D2 – "American Flat Plant and Equipment" 
(American Flat Net Lease Agreement)

Draft for discussion purposes.

	
				
	Asset Category
	Description 1
	Description 2
	Description 3

	 
	 
	 
	 

	Building
	 
	Office Buildings - 1200 A,D-F
	 

	Building
	1200 B
	3-wide modular
	 

	Building
	1200 B
	modular installation
	Priceless construction

	Building
	1200 B
	modular skirting
	Groves Manufactured Homes

	Building
	1200 C
	Shop Facility
	 

	Building
	 
	Waste Storage Building
	Added to back side of shop

	Building
	 
	Warehouse
	Upgrades to shop?

	Building
	 
	Salzwimmer Building Improvement
	 

	Building
	 
	Plant Lighting
	 

	Building
	 
	Security Gates and Signs
	process+office campus?

	Building
	 
	Heating system
	Merrill Crowe?

	Building
	 
	Water Well
	Blain, RL, Rain

	 
	 
	 
	 

	F&F
	 
	CCD Security Camera System
	plant+office

	F&F
	 
	Other
	 

	F&F
	 
	Satellite
	unclear

	F&F
	 
	Communication system
	 

	F&F
	 
	Monitor Pro - by EHS
	 

	 
	 
	 
	 

	Water
	Permit 76650
	 
	14.33 AF

	Water
	Permit 77679
	 
	6.00 AF

	Water
	Permit 82209
	Gash Well-Now WS-4
	4.00 AF

	Water
	Permit 82970
	Gash Replacement Well WS-4
	100.00 AF

	Water
	Storey County
	Storey County Water Agreement
	150.00 AF

	 
	 
	 
	 

	Processing
	Crush & Stack
	Crusher
	 

	Processing
	 
	Crushing System
	 

	Processing
	 
	Crusher capacity improvements
	 

	Processing
	 
	Crusher HP Suspended Electromagnet
	 

	Processing
	 
	Crusher Feeder
	 

	Processing
	 
	Apron Feeder
	Direct Force

	Processing
	 
	Conveyor/Stacker
	88

	Processing
	 
	Conveyer Belt
	Goodfellow

	Processing
	 
	Grid Power @ Crusher & Process
	 

	Processing
	 
	20 FT Control Van
	 

	Processing
	 
	2007 Goodfellow Stat Conveyor
	 

	Processing
	 
	40 FT Gear Control Van
	 

	Processing
	Leach Pads
	Leach Pad
	Coons and Mach 4

	Processing
	 
	heap capacity improvements
	 

	Processing
	 
	Cells 6&7
	 

	Processing
	 
	Cells 8A
	 

	Processing
	 
	Cells 9
	 

	Processing
	 
	Cell 10
	design only - engineering fees

	Processing
	 
	Cells 11/12
	design only - engineering fees

	Processing
	Ponds & Pumps
	Ponds
	Mach 4

	Processing
	 
	Fresh Water Pond
	 

	Processing
	 
	Event Pond
	 

	Processing
	 
	Pond Liner
	Comanco Environmental Corporation

	Processing
	 
	93,000 Gallon Water Tank-Process Site
	Water Well - Oct. 2012

	Processing
	 
	8,000 Gallon Water Tank on Ophir Grade
	Water Well

	Processing
	 
	Bird Disks
	Phoenix Plastics Inc

	Processing
	 
	Bird Disks
	Phoenix Plastics Inc

	Processing
	 
	Barren Pump
	 

	Processing
	 
	Barren Pump
	 

	Processing
	 
	Polecat Evaporator
	SMI Super Polecat 480V 25HP fan motor

	Processing
	 
	Polecat Evaporator
	SMI Super Polecat 480V 25HP fan motor

	Processing
	 
	Polecat Evaporator
	SMI Super Polecat 480V 25HP fan motor

	Processing
	 
	Polecat Evaporator
	SMI Super Polecat 480V 25HP fan motor

	Processing
	 
	Polecat Evaporator
	SMI Super Polecat 480V 25HP fan motor

	Processing
	 
	Polecat Evaporator
	SMI Super Polecat 480V 25HP fan motor

	Processing
	M-C
	Merrill Crowe
	 

	Processing
	 
	Merrill Crowe Building
	Expansion?

	Processing
	 
	Merrill Crowe Capacity Upgrade
	 

	Processing
	 
	Merrill Crowe Clarifiers
	 

	Processing
	 
	Merrill Crowe DO Tower
	 

	Processing
	 
	Clarifiers
	 

	Processing
	 
	Processing Equipment
	 

	Processing
	 
	Filter Leaves
	Scotia

	Processing
	Refinery
	Furnace
	Scotia

	 
	 
	 
	 

	Vehicle
	MT02
	Fuel and Lube Truck
	1998 KENWORTH T800

	Vehicle
	WT801
	1992 GMC Water Truck
	 

	Vehicle
	 
	Water Truck
	Western Star

	Vehicle
	 
	2001 John Deere 310G 4X4 Loader/Backhoe
	Richie Bros.

	Vehicle
	P14
	Ford F350 Service Pickup w/ Utility Bed and tools
	RocTech

	Vehicle
	 
	RT740B Grove crane
	Cashman

	Vehicle
	 
	Cat TH460B Telehandler
	 

	Vehicle
	 
	Forklift
	Hertz

	Vehicle
	 
	2 Magnum Light Towers
	Hertz

	Vehicle
	 
	10,000 gal self erecting water tower
	T.E. Bertagnolli

	Vehicle
	 
	Kline Water Tank
	 

	Vehicle
	P11
	2000 Ford F250 4WD
	Hertz

	Vehicle
	P13
	1998 Chevy 4 X 4
	 

	Vehicle
	P01
	2004 Ford F-150 Pick-up - Blue
	 

	Vehicle
	 
	29' Conex Trailer
	at pit?

	 
	 
	 
	 

	Other
	 
	HPDE Pipe Welder
	P&F Distributors 2

	Other
	 
	RAM 28 BUTT Fusion Machine
	HDPE Supply

	Other
	 
	Generator - 3516 Genset (Model 3516)
	Cashman 77

	Other
	 
	Metallurgical Lab
	 

	Other
	 
	Met Lab
	 

	Other
	 
	Lab Equipment
	 

	Other
	 
	Lab Equipment
	 

	Other
	 
	Lab Oven
	 

	Other
	 
	Self Contained Shower unit
	Quick Space 76

	Other
	 
	Security System
	plant, office, both?

	Other
	 
	Weather Station
	 

	Other
	 
	Mine Communications Upgrade
	 

	Other
	 
	Environmental Monitoring System
	TSI x

Exhibit D3 – “Estimated Costs”
(American Flat Net Lease Agreement)

The following estimated costs will be the responsibility of Lessee from the Effective Date of the Lease Option Agreement. The costs will be paid by Lessor, and will be invoiced to Lessee monthly.  These costs are estimates only, for planning purposes.  Lessee will pay the actual expenses incurred.

	
				
	 
	 
	Annual $
	Notes

	Property Tax
	 
	 
	 

	Real
	3,489
	 
	Storey

	Personal
	168,529
	 
	Storey

	Total Property Tax
	 
	172,017
	 

	Claim Fees
	 
	 
	 

	BLM
	5,890
	 
	 

	Storey Co
	496
	 
	 

	Lyon County
	100
	 
	 

	Total Claim Fees
	 
	6,486
	 

	Insurance
	 
	154,710
	LP Insurance, estimated at 80% of total annual costs.  Largest cost is environmental.

	Reclamation Bond
	 
	129,080
	Smith-Manus, estimated at 90% of total annual costs

	Utilities
	 
	95,187
	Propane, power, water

	Consulting
	 
	21,500
	Air Quality and Reclamation Bond work

	Other
	 
	102,153
	Maintenance and other

	Total Estimated Costs
	 
	681,134
	 

	 
	 
	 
	 

	Storey County Water Annual Minimum
	 
	57,545
	 

	Less Consulting
	 
	(21,500)
	 

	 
	 
	 
	 

	Net Re-Occurring
	 
	717,179
	 

	 
	 
	 
	 

	Payroll (Excludes third-party technical/consultive support and payroll taxes/benefits)

	Environmental & Safety Manager
	138,000
	 

	Maintenance
	 
	100,000
	 

	External Relations
	 
	110,000
	 

	Professional Staff Assistance
	 
	As-needed
	Invoiced at burdened payroll cost

	 
	 
	 
	 

	Total Estimated Costs
	 
	1,065,179
	 

	
	
	1Exhibit

Exhibit 10.1

CHANGE OF CONTROL AGREEMENT
THIS CHANGE OF CONTROL AGREEMENT (this "Change of Control Agreement"), is entered into as of November 14, 2019 (the "Effective Date"), by and between First Commonwealth Financial Corporation, a Pennsylvania corporation (the “Company”), and Norman J. Montgomery (“Executive”).
W I T N E S S E T H:
WHEREAS, the Compensation & Human Resources Committee ("Compensation Committee") of the Company’s Board of Directors (the “Board”) has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a “Change of Control” (as defined below) of the Company;
WHEREAS, the Compensation Committee believes that it is important to diminish the inevitable distraction of the Executive that would result from the personal uncertainties and risks created by a pending or threatened Change of Control and to encourage the Executive to continue to devote Executive’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Executive with compensation and benefit arrangements upon the termination of Executive’s employment following a Change of Control;
WHEREAS, the Company and the Executive entered into a change of control agreement entered into as of March 1, 2013 (the "Original Change of Control Agreement");
WHEREAS, the Compensation Committee has authorized the Company to enter into this new Change of Control Agreement with the Executive; and
WHEREAS, the Company and the Executive wish to enter into this Change of Control Agreement in order to accomplish these objectives.

NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, and other good and valuable consideration, the Company and the Executive do hereby agree as follows:

ARTICLE 1
CERTAIN DEFINITIONS
1.1“Cause” for termination will be deemed to exist if:
(a)the Executive is convicted of, or pleads guilty or nolo contendere to, any crime which constitutes a felony under the laws of the United States of America or of any state or territory thereof, and the commission of that felony resulted in, or was intended to result in, a loss (monetary or otherwise) to the Employer Entities, or any of their respective clients, customers, directors, officers or employees; 
(b)the Executive fails or refuses to perform the Executive’s duties to any of the Employer Entities (other than during such time as the Executive is incapacitated due to an accident or illness or during the Executive’s regularly scheduled vacation periods) with the degree of skill and care reasonably expected of a professional of his experience and stature for a period of thirty (30) consecutive days following the receipt by the Executive of a notice from the Company sent by certified mail, return receipt requested, setting forth in detail the facts upon which the Company 

1

Exhibit 10.1

relies in concluding that the Executive has failed or refused to perform the Executive’s duties and indicating with specificity the duties that the Company demands that the Executive perform without delay;
(c)the Executive engages in an act or acts of dishonesty which result or are intended to result in material damage to the business or reputation of any of the Employer Entities; or
(d)the Executive fails or refuses to comply with any material provision of this Change of Control Agreement or any policy or procedure of any Employer Entity, which violations are demonstrably willful and deliberate on the Executive's part and which result or are intended to result in material damage to the business or reputation of any of the Employer Entities and as to which failure or refusal to comply the Company has notified the Executive in writing.
1.2“Change of Control” will mean:
(a)The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%) or more of the then outstanding shares of common stock of the Company; 
(b)Individuals who, as of November 14, 2019, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to November 14, 2019, whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board; or
(c)Consummation of a reorganization, merger, consolidation, sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, with respect to which all or substantially all of the individuals and entities who were the beneficial owners of shares outstanding shares of the Company’s common stock immediately prior to such Business Combination do not, following such Business Combination, beneficially own, directly or indirectly, more than fifty-percent (50%) of the then outstanding shares of common stock of the corporation resulting from such a Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries).
Notwithstanding any other provision of this Change of Control Agreement to the contrary, (i) the placement of any of the Employer Entities into receivership or conservatorship by the Federal Deposit Insurance Corporation ("FDIC") or a state or federal banking regulatory agency with jurisdiction over any of the Employer Entities, (ii) the acquisition of fifty-percent (50%) or more of any of the Employer Entities' assets or assumption of fifty-percent (50%) or more of the Employer Entities' deposit liabilities in an FDIC-assisted transaction, and (iii) a change in any Employer Entity's board of directors at the direction of a state or federal banking regulatory authority having jurisdiction over any of the Employer Entities, will not constitute a Change of Control.
1.3 “Client” means any client or prospective client of the Company to whom the Executive provided services, or for whom the Executive transacted business, or whose identity became known to the Executive in connection with the Executive’s relationship with or employment by the Company.
1.4“Code” means the Internal Revenue Code of 1986, as amended.
1.5 “Employer Entity” means the Company and each of its subsidiaries and affiliates, including without limitation, FCB.

2

Exhibit 10.1

1.6“Exchange Act” means the Securities Exchange Act of 1934, as amended.
1.7“Good Reason” means:
(a)the assignment to the Executive of any duties inconsistent in any respect with the Executive’s title, position, authority, duties or responsibilities immediately prior to the Change of Control or any other action by the Company which results in a diminution of such position, authority, duties or responsibilities, other than an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after the receipt of notice thereof given by the Executive;
(b)any requirement of the Company that the Executive (i) be based anywhere more than fifty (50) miles from the office where the Executive is located immediately prior to the Change of Control or (ii) travel on Company business to an extent substantially greater than the travel obligations of the Executive immediately prior to the Change of Control; or
(c)(i) a reduction by the Company in the Executive’s rate of annual base salary as in effect immediately prior to the Change of Control or (ii) the failure of the Company to continue in effect any employee benefit plan, compensation plan, welfare benefit plan or material fringe benefit plan in which the Executive is participating or entitled to participate immediately prior to the Change of Control, unless the Executive is permitted to participate in other plans providing the Executive with substantially equivalent benefits in the aggregate (at substantially equivalent cost with respect to welfare benefit plans).
1.8 “Protected Period” means the period of time beginning with the date of a Change of Control and ending two (2) years following such Change of Control.  
1.9“Qualifying Termination” means a termination of the Executive’s employment (i) by the Company other than for Cause, disability or death, or (ii) by the Executive for Good Reason, provided that such termination of employment constitutes a Separation from Service.  
1.10 “Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.
1.11“Section 409A Change of Control” means a "Change of Control Event" as defined in Section 409A.  
1.12“Section 409A Deferred Compensation” means an amount payable or benefit to be provided under a "nonqualified deferred compensation plan" as defined in Section 409A.
1.13“Separation from Service” has the meaning set forth in Section 409A.

ARTICLE 2
TERM
2.1The term of this Change of Control Agreement will begin on the Effective Date and will continue for thirty-six (36) full calendar months thereafter (the "Initial Term").  This term of this Change of Control Agreement will automatically renew for twenty-four (24) full calendar months thereafter on the third anniversary of the Effective Date and on each second anniversary thereafter (each, a "Renewal Term") unless either party hereto gives notice in writing to the other party at least twelve (12) months prior to the end of the Initial Term or any Renewal Term of the party's intent not to renew such term.  Notwithstanding the foregoing, if a Change of Control occurs prior to the end of the Initial Term or Renewal Term, as the case may be, then the term of this Change of Control Agreement will continue until 

3

Exhibit 10.1

the later of (a) the end of the Protected Period, or (b) if a Qualifying Termination occurs during the Protected Period, the end of the Severance Period.
2.2Notwithstanding anything in this Section to the contrary, this Change of Control Agreement will terminate if the Executive or the Company terminates the Executive's employment for any reason prior to a Change in Control.

ARTICLE 3
PAYMENTS
3.1Qualifying Termination.   If during the Protected Period the employment of the Executive is terminated pursuant to a Qualifying Termination, subject to Article 7 hereof, then the Employer Entities will pay to the Executive (or the Executive’s beneficiary as provided in Article 5 hereof) the accrued obligations, severance pay and severance benefits in accordance with Sections 3.2, 3.3 and 3.4 hereof.  If the Executive's employment with the Employer Entities is terminated (i) for any reason prior to or after the Protected Period or (ii) other than pursuant to a Qualifying Termination during the Protected Period, then the Executive will not be entitled to the payment of any severance or provision of any benefits under this Change of Control Agreement.
3.2Accrued Benefits.  In the event of a Qualifying Termination described in Section 3.1 hereof, the Employer Entities will pay to the Executive any accrued and unpaid base salary and paid time-off, within thirty (30) days following the date of Qualifying Termination or such earlier date as is required by law.
3.3Severance Pay.  Subject to Article 7 hereof, in the event of a Qualifying Termination described in Section 3.1 hereof, the Employer Entities will pay to the Executive an amount equal to two (2) times:  (i) the Executive’s annual base salary immediately prior to the Change of Control; (ii) the average of the aggregate annual amount of all bonuses paid to the Executive during the thirty-six (36) month period (or the Executive's period of employment with the Employer Entities, if less) preceding the Change of Control; (iii) the aggregate amount of all contributions by the Company for the account of the Executive under the First Commonwealth Financial Corporation 401(k) Savings and Investment Plan during the twelve (12) month period preceding the Change of Control; and (iv) the aggregate of all contributions by the Company for the account of the Executive to the Company’s Non-Qualified Deferred Compensation Plan during the twelve (12) month period preceding the Change of Control.  Subject to Article 7 hereof, such sum will be paid in equal periodic installments payable in accordance with the Employer Entity's normal payroll practices during the twenty-four (24) month period immediately following such Qualifying Termination (the "Severance Period").
3.4  Continued Health Insurance Benefits. In addition to the severance payable pursuant to Section 3.3 hereof, in the event of a Qualifying Termination described in Section 3.1 hereof, the Employer Entities will offer continuation coverage to the Executive, as required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"), under the Company's group health plan on the terms and conditions mandated by COBRA and the Company will pay the full cost of the COBRA premiums on behalf of the Executive and his covered family members during the eighteen (18) month period immediately following such Qualifying Termination.
3.5Other Compensation and Benefits. 
(a)    Except as expressly provided for in Article 3 hereof, the Executive will not be entitled to severance pay or benefits under any plan, program, policy, practice or other arrangement of any Employer Entity in connection with any Qualifying Termination, including 

4

Exhibit 10.1

without limitation this Change of Control Agreement or any severance policy of any Employer Entity.
(b)    During the Severance Period, the Executive will not be eligible to participate in any Employer Entity equity-based incentive, other incentive, 401(k) savings, employee stock ownership, deferred compensation, supplemental retirement, supplemental savings, life insurance, short or long term disability, employee welfare benefit, fringe benefit, perquisite, vacation, paid time-off or other employee benefit plan, program, policy, practice or other arrangement of any Employer Entity.  
(c)     Unless otherwise determined by the Board or applicable committee thereof, any outstanding options or other equity based awards held by the Executive to purchase or acquire Employer stock under any equity-based plan of any Employer Entity will be subject to the exercisability, vesting and forfeiture provisions of the respective plan.  Any benefits the Executive has earned with respect to his employment for periods on or prior to the Qualifying Termination under any annual incentive, deferred compensation, supplement retirement or savings, 401(k), employer stock ownership or similar plan of any Employer Entity will be paid in accordance with the terms of such plan.
3.6Release.  The Company’s obligation to make any payment to the Executive as described in this Article 3 is contingent upon the Executive’s execution and non-revocation of a release within sixty (60) days following the Executive's Separation from Service, in form and substance reasonably satisfactory to the Company, that, in the opinion of the Company’s counsel, is effective to release the Company from all claims relating to the Executive’s employment or the termination thereof (other than under the terms of this Change of Control Agreement), and the Company will have no obligation to make any payment unless and until such a release has become effective.
3.7Business Expenses.  The Employer Entities will reimburse the Executive for any unreimbursed, reasonable business expenses incurred by the Executive on or before the Qualifying Termination, pursuant to Employer's reimbursement policies, provided that Executive present all expense reports to Employer in accordance with such policies.  All such expense reports must be submitted within thirty (30) days following the date of the Qualifying Termination.
3.8Withholding Taxes and Other Deductions.  The Employer Entities may withhold from any payments made to the Executive any applicable federal, state, local and other taxes (such as employment taxes), and such other deductions as are prescribed by law.  This includes withholding amounts from payments made pursuant to this Article 3 in order to satisfy any withholding obligations.

ARTICLE 4
LIMITATION ON PAYMENT OF BENEFITS
Notwithstanding anything to the contrary in this Change of Control Agreement, if the payments and benefits pursuant to Article 3 hereof, either alone or together with other payments and benefits which the Executive has the right to receive from the Company or any of its subsidiaries, would constitute a “parachute payment” under Section 280G of the Code, the payments and benefits pursuant to Article 3 hereof will be reduced, in the manner determined by independent tax counsel selected as provided below, by the amount, if any, which is the minimum necessary to result in no portion of the payments and benefits under Article 3 hereof being non-deductible to the Company or such subsidiary pursuant to Section 280G of the Code and subject to the excise tax imposed under Section 4999 of the Code; provided, however, that if such procedure for determining the reduction of payments and benefits is 

5

Exhibit 10.1

determined by the Company to result in a violation of Section 409A, such reduction will be made on a pro rata basis. The determination of whether any reduction in the payments and benefits is to be made pursuant to Article 3 hereof will be based upon the written advice of independent tax counsel selected by the Company and reasonably acceptable to the Executive. The fees and expenses of the tax counsel will be paid by the Company. The Company will use its best efforts to cause such counsel to prepare the foregoing opinion as promptly as practicable, and in any event, within thirty (30) days after the Change of Control or date of Qualifying Termination, if earlier. The Company and the Executive agree to be bound by the determination of such tax counsel and to make appropriate payments to each other to give effect to the intent and purpose of this Article 4.  

ARTICLE 5
BENEFICIARIES
If the Executive dies after the occurrence of a Qualifying Termination, but prior to the payment of all of the monthly severance payments required by Article 3 hereof, then all remaining severance payments will be paid to the beneficiary designated in writing by the Executive at the same time, and in the same amount, as would have been payable to the Executive. The designation of a beneficiary for purposes of this Article 5 will be revocable during the lifetime of the Executive. If the Executive does not designate a beneficiary under this Change of Control Agreement, the beneficiary will be deemed to be the same person that the Executive designated with respect to the Executive’s group life insurance program maintained by the Company.

ARTICLE 6
EXECUTIVE COVENANTS
6.1Non-Disparagement.  The Executive agrees that he will not, in writing or orally, or through conduct, disparage, deprecate, discredit, vilify or otherwise say anything negative about the Employer Entities.  The Executive agrees never to disparage the services, products, customers, or employees of any Employer Entity.  These prohibitions include, without limitation, any such statements made through use of social media sites, such as Facebook or Twitter.  
6.2Non-Disclosure of Confidential Information.  The Executive recognizes and acknowledges that:  (a) in the course of the Executive’s employment by the Employer Entities, it will be necessary for the Executive to acquire information which could include, in whole or in part, information concerning the Employer Entities’ business, sales volume, sales methods, sales proposals, financial statements and reports, customers and prospective customers, identity of customers and prospective customers, identity of key purchasing personnel in the employ of customers and prospective customers, amount or kind of customers’ purchases from the Employer Entities, the Employer Entities' sources of supply, the Employer Entities' computer programs, system documentation, special hardware, product hardware, related software development, the Employer Entities' manuals, formulae, processes, methods, machines, compositions, ideas, improvements, inventions, or other confidential or proprietary information belonging to the Employer Entities or relating to the Employer Entities' affairs (collectively referred to herein as the “Confidential Information”); (b) the Confidential Information is the property of the Employer Entities; (c) the use, misappropriation or disclosure of the Confidential Information would constitute a breach of trust and could cause irreparable injury to the Employer Entities; and (d) it is essential to the protection of the Employer Entities' good will and to the maintenance of the Employer Entities' competitive position 

6

Exhibit 10.1

that the Confidential Information be kept secret and that the Executive not disclose the Confidential Information to others or use the Confidential Information to the Executive’s own advantage or the advantage of others. Confidential Information will not include information otherwise available in the public domain through no act or omission of the Executive.  The Executive agrees to hold and safeguard the Confidential Information in trust for the Employer Entities, its successors and assigns and agrees that he will not, without the prior written consent of the Employer Entities, misappropriate or disclose or make available to anyone for use outside the Employer Entities' organizations at any time, either during his employment with any Employer Entity or subsequent to the termination of his employment with the Employer Entities for any reason, including without limitation, termination by any Employer Entity, any of the Confidential Information, whether or not developed by the Executive, except as required in the performance of the Executive’s duties to the Employer Entities.
6.3Non-Solicitation of Employees.  The Executive agrees that, during the term of his employment with any Employer Entity and for twenty-four (24) months following termination of the Executive’s employment with the Employer Entities for any reason, including without limitation termination by any Employer Entity for Cause or without Cause, the Executive will not, directly or indirectly, solicit or induce, or attempt to solicit or induce, any employee of any Employer Entity or of any of its subsidiaries or affiliates, to leave any Employer Entity or any of its subsidiaries, or affiliates, for any reason whatsoever, or to hire any such employee
6.4Return of Materials. Upon the termination of the Executive’s employment with the Employer Entities for any reason, the Executive will promptly deliver to the Employer Entities all correspondence, drawings, blueprints, manuals, letters, notes, notebooks, reports, flow-charts, computer equipment, programs, software, databases, proposals, financial statements and reports, and any documents concerning the Employer Entities' customers or concerning products or processes used by the Employer Entities and, without limiting the foregoing, will promptly deliver to the Employer Entities any and all other documents or materials containing or constituting Confidential Information.
6.5Work Made for Hire.  The Executive agrees that in the event of publication by the Executive of written or graphic materials constituting “work made for hire,” as defined and used in the Copyright Act of 1976, 17 USC § 1  et seq., the Employer Entities will retain and own all rights in said materials, including right of copyright.
6.6Jurisdiction and Service of Process.  The Executive and the Company waive any right to a court (including jury) proceeding and instead agree to submit any dispute over the application, interpretation, validity, or any other aspect of this Change of Control Agreement to binding arbitration consistent with the application of the Federal Arbitration Act and the procedural rules of the American Arbitration Association (“AAA”) before an arbitrator who is a member of the National Academy of Arbitrators (“NAA”) out of a nationwide panel of eleven (11) arbitrators to be supplied by the AAA.  The Company will absorb the fee charged and the expenses incurred by the neutral arbitrator selected.
6.7Validity. The terms and provisions of this Article 6 are intended to be separate and divisible provisions and if, for any reason, any one or more of them is held to be invalid or unenforceable, neither the validity nor the enforceability of any other provision of this Change of Control Agreement will thereby be affected. The parties hereto acknowledge that the potential restrictions on the Executive’s future employment imposed by this Article 6 are reasonable in both duration and geographic scope and in all other respects. If for any reason any court of competent jurisdiction will find any provisions of this Article 6 unreasonable in duration or geographic scope or otherwise, the Executive and the Company agree that the restrictions and prohibitions contained herein will be effective to the fullest extent allowed under applicable law in such jurisdiction.

7

Exhibit 10.1

6.8Consideration. The parties acknowledge that this Change of Control Agreement would not have been entered into and the benefits described herein would not have been promised in the absence of the Executive’s promises under this Article 6.
6.9Cease Payments. In the event that the Executive breaches any material provision of this Article 6, the Company’s obligation to make or provide payments or benefits under Article 3 will cease, to the extent not already paid or provided.

ARTICLE 7
SECTION 409A  
7.1This Change of Control Agreement will be administered, interpreted and construed in compliance with Section 409A, including any exemption thereunder.  Each payment hereunder, including each installment payment, will be treated as a separate payment for purposes of Section 409A.  With respect to payments subject to Section 409A (and not exempt therefrom), each such payment will be paid as a result of a permissible distribution event, and at a specified time, consistent with Section 409A.  The Executive has no right to, and there will not be, any acceleration or deferral with respect to payments hereunder.  The Executive acknowledges and agrees that the Company will not be liable for, and nothing provided or contained in this Change of Control Agreement will obligate or cause the Company to be liable for, any tax, interest or penalties imposed on the Executive related to or arising with respect to any violation of Section 409A.  For purposes of this Change of Control Agreement, any reference to "termination of employment", "termination" or similar reference will be construed to be a reference to Separation from Service. 
7.2Notwithstanding any other provision of this Change of Control Agreement to the contrary, to the extent that any amount payable or benefit to be provided under this Change of Control Agreement constitutes Section 409A Deferred Compensation that is not exempt from Section 409A, and such amount or benefit is payable or to be provided as a result of Separation from Service, and the Executive is a "specified employee" (as defined and determined under Section 409A and any relevant procedures that the Company may establish) ("Specified Employee") at the time of his Separation from Service, then such payment or benefit will not be made or provided to the Executive until the day after the date that is six months following the Executive's Separation from Service, at which time all payments or benefits that otherwise would have been paid or provided to the Executive under this Change of Control Agreement during that six-month period, but were not paid or provided because of this Section 7.2, will be paid or provided, with any cash payment to be made in a single lump sum (without any interest with respect to that six-month period).  This six-month delay will cease to be applicable if the Executive's Separation from Service due to death or if the Executive dies before the six-month period has elapsed, in which event any such payments or benefits will be paid or provided to the Executive's estate within thirty (30) days of the date of death.
7.3Notwithstanding any other provision of this Change of Control Agreement to the contrary, to the extent that any amount payable or benefit to be provided under this Change of Control Agreement constitutes Section 409A Deferred Compensation that is not exempt from Section 409A and the Executive is not a Specified Employee at the time of his Separation from Service, then such payment or benefit will not be provided to the Executive until the sixtieth (60th) day following the Executive's Separation from Service, at which time all payments or benefits that otherwise would have been paid or provided to the Executive under this Change of Control Agreement during the sixty (60) days period, but were not paid or provided because of this Section 7.3, will be paid or provided, with any cash payment to be made in a single lump sum (without any interest with respect to that sixty-day period).  

8

Exhibit 10.1

ARTICLE 8
SUCCESSORS; BINDING AGREEMENT
8.1This Change of Control Agreement will inure to the benefit of and be binding upon the Company and its successors and assigns.
8.2The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Change of Control Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Change of Control Agreement, “Company” will mean the Company as defined herein and any successor to its business and/or assets which assumes and agrees to perform this Change of Control Agreement by operation of law or otherwise.
8.3This Change of Control Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the Executive, the Executive’s heirs, personal representatives, executors and administrators.

ARTICLE 9
ATTORNEY’S FEES
Each party will bear all attorney’s fees and related expenses in connection with or relating to the negotiation and enforcement of this Change of Control Agreement; provided, that if the Executive is wholly successful on the merits of any action or proceeding to enforce the Executive’s rights under this Change of Control Agreement, the Company will reimburse all reasonable attorney’s fees and related expenses incurred by the Executive in connection with such action or proceeding.  Any amount payable by the Company in any year pursuant to the prior sentence will not be affected by the amount of any payment made by the Company pursuant to the prior sentence in any other year, and under no circumstances will the Executive by permitted to liquidate or exchange the benefit afforded him in the prior sentence for cash or any other benefit. To the extent any such payment is made via reimbursement to the Executive, no such reimbursement will be made by the Company later than the end of the year following the year in which the underlying expense is incurred.  The reimbursement right set forth in this Article 9 will be limited to fees and expenses incurred during the Executive's employment with the Employer Entities and during the ten (10) year period immediately thereafter. 

ARTICLE 10
EMPLOYMENT WITH EMPLOYER ENTITIES
Employment with the Company for purposes of this Change of Control Agreement will include employment with any Employer Entity.

9

Exhibit 10.1

ARTICLE 11
NO SETOFF
No amounts otherwise due or payable under this Change of Control Agreement will be subject to setoff by the Company, except as otherwise required by law. 

ARTICLE 12
NOT A CONTRACT FOR EMPLOYMENT
This Change of Control Agreement will not in any way constitute an employment agreement between the Company and the Executive and it will not oblige the Executive to continue in the employ of Company, nor will it oblige the Company to continue to employ the Executive.

ARTICLE 13
FDIC EVENTS
If any of the Employer Entities is in default (as defined in Section 3(x)(1) of the Federal Deposit Insurance Act or equivalent provisions relating to a regulator with supervisory authority over any of the Employer Entities), all obligations under this Change of Control Agreement will terminate as of the date of default, but this Article 13 will not affect any vested rights of the parties.  Notwithstanding any other provision of this Change of Control Agreement, the Employer Entities will have no obligation to make any payments to Executive if such payments would be prohibited by applicable federal or state law, including without limitation Part 359 of the regulations of the Federal Deposit Insurance Corporation (12 CFR § 359 et seq.) or any successor provision.

ARTICLE 14
NOTICES
All notices and other communications required to be given hereunder will be in writing and will be deemed to have been delivered or made when mailed, by certified mail, return receipt requested, if to the Executive, to the last address which the Executive will provide to the Employer, in writing, for this purpose, but if the Executive has not then provided such an address, then to the last address of the Executive then on file with the Company; and if to the Company, then to the last address which the Company will provide to the Executive, in writing, for this purpose, but if the Company has not then provided the Executive with such an address, then to:
President and Chief Executive Officer
First Commonwealth Financial Corporation
Old Courthouse Square
601 Philadelphia Street
Indiana, Pennsylvania 15701

10

Exhibit 10.1

ARTICLE 15
GOVERNING LAW AND JURISDICTION
This Change of Control Agreement will be governed by, and construed in accordance with, the laws of the Commonwealth of Pennsylvania, except for the laws governing conflict of laws. In the event that either party will institute suit or other legal proceeding, whether in law or equity, the Courts of the Commonwealth of Pennsylvania will have exclusive jurisdiction with respect thereto.

ARTICLE 16
ENTIRE AGREEMENT
This Change of Control Agreement constitutes the entire understanding between the Company and the Executive concerning the subject matter hereof and supersedes all prior written or oral agreements or understandings between the parties hereto, including without limitation the Original Change of Control Agreement.  No term or provision of this Change of Control Agreement may be changed, waived, amended or terminated except by a written instrument of equal formality to this Change of Control Agreement.  

Signature page follows.

11

Exhibit 10.1

IN WITNESS WHEREOF, the parties have executed this Change of Control Agreement as of the date set forth above.

	
		
	(Corporate Seal)
	FIRST COMMONWEALTH FINANCIAL CORPORATION

	/s/ Justine Holleran
Witness
	By:  /s/ T. Michael Price
Name: T. Michael Price
Title:   President and CEO

EXECUTIVE

	 /s/ Sarah Ramer
Witness
	 /s/ Norman J. Montgomery

12

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