Document:

oxbt_ex104.htm

EXHIBIT 10.4

 

WARRANT EXCHANGE AGREEMENT

 

This WARRANT EXCHANGE AGREEMENT (this “Agreement”), is dated as of February 21, 2013, by and between Oxygen Biotherapeutics, Inc., a Delaware corporation (the “Company”), and [____________] (the “Holder”).

WHEREAS, the Company issued those certain Warrants to Purchase Common Stock (the “Warrants”) to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), issued by the Company on December 9, 2011 and June 15, 2012;

 

 

WHEREAS, as of the date hereof, the Holder owns Warrants to purchase an aggregate of 675,677 shares of Common Stock (the “Warrant Shares”);

 

 

WHEREAS, in order to improve the capital structure of the Company, the Company and the Holder desire to enter into this Agreement, pursuant to which, among other things, the Company and the Holder shall exchange the Warrants for an aggregate of 200,000 shares of Common Stock (the “Exchange Shares”) and $190,000 in cash (the “Cash Payment”);

 

 

WHEREAS, the Holder understands and agrees that the Company will enter into a Warrant Exchange Agreement, in substantially the same form and on substantially the same terms as this Agreement, with each other holder (each an “Other Holder”) of a Warrant to Purchase Common Stock of the Company issued pursuant to that certain Securities Purchase Agreement by and among the Company and certain investors, dated as of December 8, 2011, and subsequently amended;

WHEREAS, following the Exchange (as defined below), the Warrants shall be automatically cancelled and terminated and the Holder shall have no further rights pursuant to the Warrants; and

 

 

WHEREAS, the Exchange is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”).

NOW, THEREFORE, in consideration of the premises and mutual covenants herein below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

	
1.  

	
The Exchange. At the Closing (as defined below), the Company and the Holder shall, pursuant to Section 3(a)(9) of the Securities Act, exchange the Warrants and the Exchange Shares, as follows (the “Exchange”):

	
(a)  

	
Closing. The Exchange shall occur remotely via exchange of signatures on the date hereof (or such later date as is mutually agreed to by the Company and the Holder) (the “Closing”).

	
(b)  

	
Consideration. At the Closing, the Exchange Shares and Cash Payment shall be issued to the Holder in exchange for the Warrants without the payment of any other consideration by the Holder that would not be consistent with the application of Section 3(a)(9) of the Securities Act to the issuance of the Exchange Shares. The Holder hereby agrees that, upon and subject to the Closing, the Warrants shall be automatically terminated and cancelled in full without any further action required, and that this Section 1 shall constitute an instrument of termination and cancellation of such Warrants.

	
(c)  

	
Delivery. In the Exchange, the Company shall, at the Closing:

	
i.  

	
Issue and deliver, or cause to be delivered, to the Holder a certificate or certificates for the Exchange Shares. The Holder shall deliver or cause to be delivered to the Company (or its designee), within five (5) business days after the Closing, the original Warrants. For the avoidance of doubt, as of the Closing and the receipt by the Holder of the Exchange Shares, the Warrants shall be extinguished.  The Holder agrees to the imprinting of a legend on the Exchange Shares in the following form:

“THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED DURING THE PERIOD COMMENCING ON THE DATE HEREOF AND ENDING ON AND INCLUDING MAY 21, 2013.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

  

1

  

 

	
ii.  

	
Deliver, via wire transfer of immediately available funds, an amount equal to the Cash Payment.

	
(d)  

	
Other Documents. The Company and the Holder shall execute and/or deliver such other documents and agreements as are reasonably necessary to effectuate the Exchange pursuant to the terms of this Agreement.

	
2.  

	
Representations and Warranties.

	
(a)  

	
Holder Representations and Warranties. The Holder hereby represents and warrants to the Company:

	
i.  

	
The Holder is an entity validly existing and in good standing under the laws of the jurisdiction of its organization.

	
ii.  

	
This Agreement has been duly authorized, validly executed and delivered by the Holder and is a valid and binding agreement and obligation of the Holder enforceable against the Holder in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the Holder has full power and authority to execute and deliver this Agreement and the other agreements and documents referred to in Section 1(d) and to perform its obligations hereunder and thereunder.

	
iii.  

	
The Holder understands that the Exchange Shares are being offered, sold, issued and delivered to it in reliance upon specific provisions of federal and applicable state securities laws, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein for purposes of qualifying for exemptions from registration under the Securities Act and applicable state securities laws.

	
iv.  

	
The Holder is not acquiring the Exchange Shares as a result of any advertisement, article, notice or other communication regarding the Exchange Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

	
v.  

	
The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Exchange Shares, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in the Exchange Shares and, at the present time, is able to afford a complete loss of such investment.

	
vi.  

	
The Holder acknowledges that the offer, sale, issuance and delivery of the Exchange Shares to it is intended to be exempt from registration under the Securities Act, by virtue of Section 3(a)(9) thereof. The Holder understands that the Exchange Shares may be sold or transferred only in compliance with all federal and applicable state securities laws.

	
vii.  

	
The Holder owns and holds, beneficially and of record, the entire right, title, and interest in and to the Warrants free and clear of all rights and Encumbrances (as defined below). The Holder has full power and authority to transfer and dispose of the Warrants to the Company free and clear of any right or Encumbrance. Other than the transactions contemplated by this Agreement, there is no outstanding vote, plan, pending proposal, or other right of any person to acquire all or any of the Warrants. As used herein, “Encumbrances” shall mean any security or other property interest or right, claim, lien, pledge, option, charge, security interest, contingent or conditional sale, or other title claim or retention agreement, interest or other right or claim of third parties, whether perfected or not perfected, voluntarily incurred or arising by operation of law, and including any agreement (other than this Agreement) to grant or submit to any of the foregoing in the future. The Warrants constitute all of the Warrants to Purchase Common Stock of the Company owned or held of record or beneficially owned or held by the Holder.

	
viii.  

	
The Holder is not, and has not been during the preceding three (3) months, an “affiliate” of the Company as that term is defined in paragraph a(1) of Rule 144, promulgated under the Securities Act.

	
(b)  

	
Company Representations and Warranties. The Company hereby represents and warrants to the Holder:

	
i.  

	
The Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware, with full corporate power and authority to own, lease and operate its properties and to conduct its business as currently conducted, and is duly registered and qualified to conduct its business and is in good standing in each jurisdiction or place where the nature of its properties or the conduct of its business requires such registration or qualification, except where the failure to so register or qualify would not have a Material Adverse Effect. For purposes of this Agreement, “Material Adverse Effect” shall mean any material adverse effect on the business, operations, properties, or financial condition of the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to perform any of its obligations under this Agreement.

  

2

  

 

	
ii.  

	
The Exchange Shares have been duly authorized by all necessary corporate action, and, when issued and delivered in accordance with the terms hereof, the Exchange Shares shall be validly issued and outstanding, fully paid and nonassessable, free and clear of all liens, encumbrances and rights of refusal of any kind, except for the restrictions on transfer contained in Section 3(b).

	
iii.  

	
This Agreement has been duly authorized, validly executed and delivered on behalf of the Company and is a valid and binding agreement and obligation of the Company enforceable against the Company in accordance with its terms, subject to limitations on enforcement by general principles of equity and by bankruptcy or other laws affecting the enforcement of creditors’ rights generally, and the Company has full power and authority to execute and deliver this Agreement and the other agreements and documents contemplated hereby and to perform its obligations hereunder and thereunder.

	
iv.  

	
The Company represents that it has not paid, and shall not pay, any commissions or other remuneration, directly or indirectly, to any third party for the solicitation of the Exchange pursuant to this Agreement. Other than the exchange of the Warrants, the Company has not received and will not receive any consideration from the Holder for the Exchange Shares.

	
v.  

	
No event, liability, development or circumstance has occurred or exists, or is reasonably expected to occur or exist, with respect to the Company, any of its subsidiaries or any of their respective businesses, properties, liabilities, operations (including results thereof) or condition (financial or otherwise) that (i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission (“SEC”) relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced or (ii) would have a Material Adverse Effect.

 

	
vi.  

	
The Company is current in its filings of all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended.  To the Company’s actual knowledge, upon issuance, the Exchange Shares are eligible for sale by the Holder to the public, subject to the restrictions on transfer contained in Section 3(b), without registration under the Securities Act.

	
vii.  

	
The Company confirms that neither it nor any other person acting on its behalf has provided the Holder or their agent or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information other than the terms of this Agreement which will be publicly disclosed in accordance with Section 3(a) hereof.   The Company understands and confirms that the Holder will rely on the foregoing representations in effecting transactions in securities of the Company.  Except as disclosed in documents filed by it with the SEC, the Company is not aware of the occurrence of any significant events that would reasonably be likely to have a material negative impact on the Company’s business and operations or the ability of the Holder to sell any of the Exchange Shares.

	
viii.  

	
Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and issuance by the Company of the Exchange Shares is exempt from registration under the Securities Act.  The offer and issuance of the Exchange Shares is exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(9) thereof.  For the purposes of Rule 144 of the Securities Act, to the extent applicable, the Company acknowledges that the holding period of the Exchange Shares may be tacked onto the holding period of the Warrants and the Company agrees not to take a position contrary to this Section 2(b)(viii).

	
3.  

	
Covenants

	
(a)  

	
Disclosure of Transactions and Other Material Information.  The Company shall, on or before 8:30 a.m., New York City Time, on the first business day after the date of this Agreement, issue a press release and/or Current Report on Form 8-K (collectively, the “Press Release”) disclosing all material terms of the transactions contemplated hereby.  From and after the issuance of the Press Release, the Holder shall not be in possession of any material, nonpublic information received from the Company or any of its respective officers, directors, employees or agents, that is not disclosed in the Press Release.  The Company shall not, and shall cause its officers, directors, employees and agents, not to, provide the Holder with any material, nonpublic information regarding the Company from and after the filing of the Press Release without the express written consent of the Holder.  The Company shall not disclose the name of the Holder in any filing, announcement, release or otherwise, unless such disclosure is required by law or regulation.

 

	
(b)  

	
Transfer Restrictions.  Notwithstanding anything contained in this Agreement to the contrary, during the period commencing on the date hereof and ending on and including May 21, 2013, Holder and its affiliates will not sell, offer to sell, contract to sell, pledge or hypothecate any Exchange Shares.  Notwithstanding the foregoing, the Exchange Shares may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Exchange Shares.

 

	
4.  

	
Termination. Notwithstanding anything contained in this Agreement to the contrary, if the Company does not deliver the Exchange Shares and Cash Payment to the Holder in accordance with Section 1(c) hereof, then, at the election of the Holder delivered in writing to the Company at any time after the third (3rd) business day immediately following the date of this Agreement, this Agreement shall be terminated and be null and void ab initio and the Holder’s Warrants shall not be terminated hereunder and shall remain outstanding as if this Agreement never existed.

	
5.  

	
Terms. The Company represents, warrants and covenants that the Company has not entered into, and will not, directly or indirectly, enter into (or provide, grant or enter into any waiver, amendment, termination or the like with respect to), any agreement, understanding, instrument or the like with, or for the benefit of, any Other Holder or any of their respective affiliates with or that results in any terms and/or conditions which are more favorable to any such person than the terms and conditions provided to, or for the benefit of, the Holder. To the extent the Company enters into (or provides, grants or enters into any waiver, amendment, termination or the like with respect to) any, direct or indirect, agreement, understanding, instrument or the like with, or for the benefit of, any Other Holder or any of their respective affiliates that contains or results in any terms and/or conditions which are more favorable to any such person than the terms and/or conditions provided to, or for the benefit of, the Holder, then the Holder, at its option, shall be entitled to the benefit of such more favorable terms and/or conditions (as the case may be) and this Agreement shall be automatically amended to reflect such more favorable terms or conditions (as the case may be). To the extent the Company, directly or indirectly, enters into (or provides, grants or enters into any waiver, amendment, termination or the like with respect to) any agreement, understanding, instrument or the like with, or for the benefit of, any Other Holder or any of their respective affiliates that contains or results in any terms or conditions which are not identical to the terms and conditions provided to, or for the benefit of, the Holder, then the Company shall immediately notify the Holder of, and contemporaneously with such notification publicly disclose, any such terms to the extent such terms constitute material, non-public information.

  

3

  

 

	
6.  

	
Miscellaneous.

	
(a)  

	
Entire Agreement. This Agreement constitutes the entire agreement, and supersedes all other prior and contemporaneous agreements and understandings, both oral and written, between the Holder and the Company with respect to the subject matter hereof.

	
(b)  

	
Amendment. This Agreement may only be amended with the written consent of the Holder and the Company.

	
(c)  

	
Successors. All the covenants and provisions of this Agreement by or for the benefit of the Holder or the Company shall bind and inure to the benefit of their respective successors and assigns.

	
(d)  

	
Applicable Law; Consent to Jurisdiction. The validity, interpretation and performance of this Agreement shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. Each of the parties hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. Each party hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

	
(e)  

	
Counterparts. This Agreement may be executed in original or facsimile counterparts, each of such counterparts shall for all purposes be deemed to be an original, and all of such counterparts shall together constitute but one and the same instrument.

	
(f)  

	
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

	
(g)  

	
No Commissions. Neither the Company nor the Holder has paid or given, or will pay or give, to any person, any commission, fee or other remuneration, directly or indirectly, in connection with the transactions contemplated by this Agreement.

 

 

 [Signature Page Follows]

 

  

4

  

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature page to this Warrant Exchange Agreement to be duly executed as of the date first written above.

 

	 	
COMPANY:

	 
	 	OXYGEN BIOTHERAPEUTICS, INC.	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: Michael B. Jebsen	 
	 	 	Title: Interim Chief Executive Officer and Chief Financial Officer	 
	 	 	 	 

 

  

5

  

 

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature page to this Warrant Exchange Agreement to be duly executed as of the date first written above.

 

	 	
BUYER:

	 
	 	
[______________________]

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name: 	 
	 	 	Title: 	 
	 	 	 	 

 

 

 

 

6wmtm_ex101.htm

Exhibit 10.1

LETTER OF INTENT

Several discussions have been held by the parties in regards to the potential sale (the “Transaction”) by Raven Gold Alaska Inc., an Alaska corporation (“Raven”), of Raven’s joint venture interest (“Raven JV Interest”) in the Terra project, located in the southwest Alaska Range, 130 miles west-northwest of Anchorage, Alaska (“Terra Project”), that is the subject of the Terra Gold Project Exploration, Development and Mine Operating Agreement dated September 15, 2010 (the “Terra Gold JV Agreement”) between Raven and Terra Gold Corporation, an Alaska corporation (“Terra Gold”), to Terra Gold.

This letter agreement (“Letter of Intent”) confirms the results of our discussions to date and our mutual intentions with respect to proceeding with the Transaction.

The intent of this Letter of Intent is to set out sufficient details of the proposed Transaction in order that a formal Purchase and Sale Agreement (the “Sale of JV Interest Agreement”) may be prepared and executed by the parties.  While this Letter of Intent may contain substantially all of the elements of the Transaction, this Letter of Intent is not intended to be a binding agreement, except with respect to paragraphs 6, 9, 11, 12, 13, 14 and 15, and a binding agreement with respect to the Transaction will only come into being upon the execution and delivery of the Sale of JV Interest Agreement.

	
1.

	
Purpose of the Transaction.  Terra Gold desires to acquire 100% control of the Terra Project, and Raven is willing to sell Raven’s JV Interest to Terra Gold upon substantially the terms set forth in this Letter of Intent.

	
2.

	
Property Subject to the Joint Venture.  The Terra Project is a mineral exploration prospect located on an Alaska State claim block consisting of 344 Alaska state mining claims (the “Claims”) covering approximately 55,040 acres (as more specifically set out in Schedule “A”).  Terra Gold understands, and Raven confirms to Terra Gold, that:

	
  

	
(a)

	
Raven is the sole registered and legal holder of 339 Claims (“Raven Claims”) and Raven and Terra Gold are the sole beneficial owners of such Claims, which are presently in good standing with respect to:

	
  

	
(i)

	
the doing and filing of assessment work for the assessment year ended September 1, 2012 (subject to the acknowledgement below), and

	
  

	
(ii)

	
payment of applicable claim rental fees for the rental year ending September 1, 2013; and

	
  

	
(b)

	
Ben Porterfield is the sole registered and legal holder of 5 Claims (“Porterfield Claims”), Raven is the legal owner of a leasehold interest therein and Raven and Terra Gold are the sole beneficial owners of such leasehold interest in such Claims, which are presently in good standing with respect to:

	
  

	
(i)

	
the doing and filing of assessment work for the assessment year ended September 1, 2012 (subject to the acknowledgement below), and

	
  

	
(ii)

	
payment of applicable claim rental fees for the rental year ending September 1, 2013.

  

  

  

Terra Gold acknowledges that the assessment work filings for the assessment year ended September 1, 2012 were prepared and filed by Terra Gold with respect to work carried out on the Claims by Terra Gold (or its affiliates or contractors), and Raven makes no confirmation, representation or warranty with respect to the validity of such filings or of the work reported therein for assessment work purposes.

	
3.

	
Sale of JV Interest Agreement.  Raven and Terra agree to proceed in mutual good faith to jointly negotiate, prepare and execute the Sale of JV Interest Agreement by April 1, 2013 (the “Effective Date”) with the aim of structuring the Transaction in a tax efficient manner as may be agreed by the parties.  Terra Gold and its counsel will have primary drafting responsibility for the Sale of JV Interest Agreement and will provide the initial draft for Raven and its counsel for review.  The Sale of JV Interest Agreement will incorporate the terms of this Letter of Intent together with the representations, warranties, covenants, conditions, indemnifications and agreements customary for transactions of this nature as agreed by the parties.  It is the mutual intention of the parties that the closing of the Transaction pursuant to the Sale of Joint Venture Interest Agreement (“Closing”) will occur no later than April 15, 2013, and if Closing does not occur on or before such date then, unless a new date for Closing is mutually agreed by the parties, either party may choose to terminate the Sale of JV Interest Agreement.

	
4.

	
Sale of JV Interest Schedule and Terms.  The following are the terms of the Transaction to be incorporated into the Sale of JV Interest Agreement:

	
  

	
(a)

	
Raven will sell the Raven JV Interest to Terra, with the exception of the royalty presently reserved to Raven (as modified as set out below), which royalty will be calculated and paid in accordance with the provisions of Exhibit “E” to the Terra Gold JV Agreement (“Raven Royalty”) and which Raven Royalty will continue to run with and bind the Terra Project;

	
  

	
(b)

	
The Raven Royalty will be amended to reduce the precious metal portion of the Raven Royalty from a maximum of 5% to 3% but to increase the base metal portion of the Raven Royalty from 1% to 2%:

Proposed Raven Royalty (for precious metals)-

 

$1,500 and greater     3%

 

$1,000 - $1,500           2%

 

$450 - $1,000              1%

 

<$450                          0.5%

 

Proposed Raven Royalty (for base metals) – 2%

 

	
  

	
(c)

	
The Raven Royalty will not be increased by an additional 1% as a consequence of Raven Gold’s JV Interest falling below 10% due to the sale thereof to Terra Gold;

	
  

	
(d)

	
Terra Gold will be entitled to retain all products produced from the Terra Project in 2012, subject to Raven’s right to receive the Raven Royalty (3% of net smelter returns on all gold and silver) thereon;

	
  

	
(e)

	
The purchase price payable by Terra Gold for the Raven JV Interest will be the sum of USD 6,000,000, plus the delivery by Terra Gold to Raven of 750,000 common shares (“WMTN Shares”) in the capital stock of WestMountain Index Adviser, Inc. (“WMTN”), to be paid/delivered as follows:

	
  

	
(i)

	
Upon Closing, Terra Gold will:

	
  

	
(A)

	
Pay to Raven the sum of USD 3,000,000, and

	
  

	
(B)

	
Deliver to Raven a certificate representing the WMTN Shares.  Raven will agree not to sell or otherwise dispose of the WMTN Shares for a period of two (2) years after Closing;

	
  

	
(ii)

	
On or before the day which is ninety (90) days after Closing, Terra Gold will pay to Raven the additional sum of USD 2,000,000; and

	
  

	
(iii)

	
On or before the day which is one (1) year after Closing, Terra Gold will pay to Raven the additional sum of USD 1,000,000;

  

  

  

	
  

	
(f)

	
The payments due to Raven under paragraphs 4(e)(ii) and 4(e)(iii) above will be secured by the grant, on Closing, to Raven by Terra Gold of a first mortgage, lien and charge over all of the assets and undertaking of Terra Gold, including, without limitation, the interest of Terra Gold in and to the Terra Project, ranking in priority over any other mortgages, liens or charges and registered in all applicable registries; and

	
  

	
(g)

	
On Closing, Terra Gold will pay and deliver, or cause to be paid and delivered, to International Tower Hill Mines Ltd. (“ITH”):

	
  

	
(i)

	
the sum of USD 150,000; and

	
  

	
(ii)

	
a certificate representing 250,000 common shares in the capital stock of WMTN,

and reflecting the payment owing and shares required to be delivered upon Terra Gold increasing its interest in the JV under the Terra Gold JV Agreement.

	
5.

	
Effect of Sale of JV Interest Agreement.  The Sale of JV Interest Agreement will provide that upon the Closing of the Transaction, the Terra Gold JV Agreement will terminate and be of no further force and effect.  Notwithstanding any provision of the Terra Gold JV Agreement, the Sale of JV Interest Agreement will provide that, upon the closing of the Transaction pursuant to the Sale of JV Interest Agreement, Terra Gold will, subject to the payment to Raven of the Raven Royalty, own 100% of the Terra Project, and Raven will have a right to payment of the monies to be paid after Closing, secured as set forth in paragraph 4(f).

	
6.

	
Deposit.  Upon execution of this Letter of Intent, Terra Gold will pay to Raven a deposit of USD 50,000.  Such amount will:

	
  

	
(a)

	
Upon Closing, be applied against the USD 3,000,000 payable to Raven on Closing;

	
  

	
(b)

	
If, for any reason outside of the control of Raven, the Transaction does not close, be retained by Raven as liquidated damages, and not as a penalty; or

	
  

	
(c)

	
If the Transaction fails to close due to circumstances within the exclusive control of Raven, if this Letter of Intent is terminated by Raven for the reason set forth in paragraph 12(a) hereof, or if this Letter of Intent is terminated by Terra Gold for the reason set forth in paragraph 12(a) or (b)(ii) hereof, be returned to Terra Gold.

	
7.

	
Due Diligence Review.  Promptly following the execution of this Letter of Intent, Terra Gold will be entitled to commence due diligence in respect of the Terra Project.  Raven will provide Terra Gold all information that it has reasonable access to or in its possession in regards to the Terra Project, including but not limited to all working knowledge, previous contracts, previous ownership history, liens or claims of interest, geological reports and maps, previous samples surveys and assay results, business and operation plans and any historical or pro forma third party financials related to the operation of the property, provided that Raven will not be required to disclose its own internal projections or pro forma calculations with respect to the operation of the Terra Project.  Terra Gold will have a maximum period of forty-five (45) days to complete its due diligence.  If required in order to be provided with such information, Terra Gold will enter into a confidentiality agreement with either Raven or any third party in a form acceptable to Raven, acting reasonably, or such third party.

	
8.

	
Porterfield Royalty Payments.  Pursuant to the lease agreement dated March 22, 2005 between Ben Porterfield (“Porterfield”) and AngloGold Ashanti (USA) Exploration Inc. (“AngloGold”), as assigned by AngloGold to Talon Gold Alaska, Inc. (“Talon Gold”) and further assigned by Talon Gold to Raven, and as amended by an agreement dated January 7, 2011 (“Porterfield Lease”), Porterfield has leased the Porterfield Claims to Raven and maintain certain rights therein, including the right to receive a net smelter return royalty on certain production from the Terra Project as set forth in the Porterfield Lease.  Raven has the right to purchase a portion of such royalty as set forth in the Porterfield Lease.  Raven’s rights in the Porterfield Lease will be transferred to Terra Gold as part of the Transaction.

  

  

  

	
9.

	
Confidentiality.  The provisions of Article XVIII of the Terra Gold JV Agreement will apply to this Letter of Intent.

	
10.

	
Default.  The Sale of JV Interest Payment will provide that, if Terra Gold fails to pay the amount required by paragraph 4(e)(ii) or 4(e)(iii) within the time provided therein, it will have ten (10) days to cure such default, failing which Raven may either realize upon its security as granted to it under paragraph 4(f) or elect to take appropriate legal action to collect the monies owed.

	
11.

	
Exclusivity. Until April 15, 2013, neither party or its affiliates will enter into any agreement, discussion, or negotiation with, or provide information to, or solicit, encourage, entertain or consider any inquiries or proposals from any other entity or person (including, but not limited to, parties who may participate with Terra Gold in the Transaction who are introduced to Raven or its affiliates by Terra Gold or its affiliates) with respect to:

	
  

	
(a)

	
the possible acquisition or disposition of any interest in the Terra Project; or

	
  

	
(b)

	
any business combination involving the Terra Project, whether by way of merger, consolidation, share exchange, joint venture or other transaction,

	
  

	
without the prior consent of the other party.

	
12.

	
Termination of Letter of Intent.  If Raven and Terra Gold do not settle and execute the Sale of JV Interest Agreement by April 15, 2013, or such other date as Raven and Terra Gold may agree, this Letter of Intent will thereupon automatically terminate and neither party will have any further obligation to continue to negotiate the Sale of JV Interest Agreement.  In addition, this Letter of Intent may be terminated (whereupon neither party will have any further obligation to continue to negotiate the Sale of JV Interest Agreement) prior to the execution of the Sale of JV Interest Agreement:

	
  

	
(a)

	
by either party if such party is unable, despite using its commercially reasonable best efforts, to obtain all requisite regulatory acceptances/approvals; or

	
  

	
(b)

	
by Terra Gold if either:

	
  

	
(i)

	
it does not obtain the requisite approval of its board of directors and shareholders (if applicable), or

	
  

	
(ii)

	
the results of its due diligence investigations pursuant to paragraph 7 are unsatisfactory to Terra Gold, acting reasonably.

	
13.

	
Expenses. Terra Gold and Raven will each pay their own respective expenses incurred in connection with this Letter of Intent and the Transaction, whether or not the Transaction is consummated.

	
14.

	
Notice.  Any notice or other communication required or contemplated under this Letter of Intent to be given by one party to the other shall be personally delivered, faxed or mailed by prepaid registered post to the party to receive same at the undernoted address, namely:

  

  

  

	
  

	
(a)

	
if to Raven Gold Alaska Inc.:

	
Raven Gold Alaska Inc.

c/o Suite 2300 - 1177 West Hasting St.

Vancouver, British Columbia

Canada V6E 2K3

Attention:  Jeffrey Pontius, CEO

Fax Number: 1-604-408-7499

	
  

	
(b)

	
if to Terra Gold Corporation:

	
Terra Gold Corporation

c/o120 E. Lake St, Suite 401

Sandpoint, Idaho 83864

Attention:  Greg Schifrin, President & CEO

Fax Number: 208-906-8621

	
15.

	
Miscellaneous Provisions.

	
  

	
(a)

	
This Letter of Intent will be governed by and interpreted under the laws of the State of Alaska.

	
  

	
(b)

	
All references in this Letter of Intent to dollar amounts are to United States currency.

	
  

	
(c)

	
This Letter of Intent may be executed in any number of counterparts and by facsimile transmission with the same effect as if all parties hereto had signed the same document.  All counterparts will be construed together and constitute one and the same document.

 

The parties agree that any matters outside those outlined in this Letter of Intent that may arise in connection with the Transaction will be negotiated in good faith and in accordance with standards generally practiced in the industry.

Agreed and Accepted,

/s/ Jeff Pontius

Jeff Pontius, CEO

Raven Gold Alaska Inc.

Date: February 18, 2013

Agreed and Accepted,

/s/ Greg Schifrin

Greg Schifrin, President & CEO

Terra Gold Corporation.

Date: February 19, 2013

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00213-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00213-of-00352.parquet"}]]