Document:

Unassociated Document

EXHIBIT 10.1

 

 

AMENDMENT NO. 3 TO

 

OPTION AGREEMENT AMENDMENT TO MINING LEASE

 

 

This Amendment No. 3 (“Amendment No. 3”) to the Option Agreement Amendment to Mining Lease (the “Option Agreement”), as amended, is entered into effective as of August17, 2010 (the “Effective Date”), by and among Gryphon Gold Corporation, a Nevada corporation (“Gryphon Gold”), its wholly owned subsidiary, Borealis Mining Company, a Nevada corporation (“Borealis Mining”, and together with Gryphon Gold and its successors, “Gryphon”), Richard J. Cavell TTTEE F/T Richard J. Cavell Trust dated 02/23/1994 (the “Cavell Trust”), Hardrock Mining Company, a Nevada corporation (“Hardrock”), and John W. Whitney, an individual (“Whitney”, and together with the Cavell Trust and Hardrock, the “Lessors”, and each individually, a “Lessor”).

 

Recitals

 

	
  

	
A.  Gryphon and the Lessors (the “Parties”) entered into the Option Agreement, dated August 22, 2008 (the “Option Agreement Effective Date”), pursuant to which Borealis Mining received the option (the “Option”) to pay a five percent (5%) reduced royalty payment to the Lessors under the mining lease, dated January 24, 1997, as amended on February 24, 1997; and

 

	
  

	
B.  Pursuant to Section 3 of the Option Agreement, the Option was exercisable for a period of twelve (12) months (the “Option Term”) following the Option Agreement Effective Date; and

 

	
  

	
C.  Section 3 of the Option Agreement provided for the extension of the Option Term for an additional six (6) month period beyond the initial twelve (12) month period upon payment by Borealis Mining to Lessors of cash in the amount of US$125,000; and

 

	
  

	
D.  The Parties entered into Amendment No. 1 to the Option Agreement, effective as of August 7, 2009 (“Amendment No. 1”), to provide for the extension of the Option Term through payment in shares of common stock of Gryphon Gold (“Common Stock”), in lieu of the cash payment contemplated in Section 3 of the Option Agreement; and

 

	
 

	
E.   Pursuant to Section 3 of the Option Agreement, as amended under Amendment No. 1, Gryphon extended the Option Term from August 22, 2009 to February 22, 2010 following payment by Borealis Mining to the Lessors of US$125,000, comprised of cash and Common Stock; and

 

	
  

	
F.  The Parties entered into Amendment No. 2 to the Option Agreement, effective as of February 12, 2010 (“Amendment No. 2”), to provide for the extension of the Option Term from February 22, 2010 to August 22, 2010 in consideration for 

 

 

 

  

  

  

 

	
  

	
payment by Borealis Mining to the Lessors of US$150,000, comprised of cash and Common Stock, as set forth in Amendment No. 2; and

 

	
  

	
G.  Borealis Mining has not exercised the Option; and

 

	
  

	
H.  Gryphon now desires to amend Section 3 of the Option Agreement to provide for a further extension of the Option Term from August 22, 2010 to February 22, 2011 in consideration for payment by Borealis Mining to the Lessors of cash in the amount of US$150,000, as set forth in this Amendment No. 3; and

 

	
 

	
I.   Pursuant to Section 18 of the Option Agreement, the Option Agreement may be amended through a written amendment signed by the Parties.

 

Agreement

 

NOW, THEREFORE, for and in consideration of the covenants set forth in the Option Agreement, Amendment No. 1, Amendment No. 2, and this Amendment No. 3, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

	
  

	
1.

	
Section 3 of the Option Agreement, as amended, shall be amended and restated in its entirety to read:

 

	
  

	
“Borealis Mining may exercise the Option by providing written notice of exercise to Lessors at the address set forth below (an “Exercise Notice”) at any time  prior to February 22, 2011 (the “Option Term”). If Borealis Mining does not exercise the Option within the time set forth in this Section 3, the Option Agreement Amendment to Mining Lease and the Option granted therein shall terminate and neither Gryphon nor Lessors shall have any further rights or obligations under the Option Agreement Amendment to Mining Lease.”

 

	
  

	
2.

	
In consideration for the extension of the Option Term to February 22, 2011, Borealis Mining shall pay to the Lessors a non-refundable, non-deductible cash payment in the amount of US$150,000 on the Effective Date.

 

	
  

	
3.

	
All cash payable pursuant to this Amendment No. 3 shall be paid by check payable to each individual Lessor, in accordance with their pro rata interest as set forth on Schedule 4(d)(iii) of the Option Agreement, attached hereto as Exhibit A, at their address set forth in Paragraph 10 of the Option Agreement or such other address as each Lessor directs in writing to Gryphon Gold.

 

	
  

	
4.

	
Capitalized terms not defined herein have the meaning ascribed to them in the Option Agreement.

 

	
  

	
5.

	
All other provisions of the Option Agreement, as amended by Amendment No. 1 and Amendment No. 2, shall remain in full force and effect.

 

 

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6.

	
This Amendment No. 3 may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

 

 

 

 

 

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IN WITNESS WHEREOF, Gryphon and the Lessors have executed this Amendment No. 3 as of the Effective Date.

 

 

 

	 	 GRYPHON GOLD CORPORATION
	 	 
	 	 By:   /s/ John L. Key                            
	 	
Name:      John L. Key

Title:        Chief Executive Officer

	 	 
	 	 
	 	 BOREALIS MINING COMPANY
	 	 
	 	  By:   /s/ John L. Key                            
	 	 Name:      John L. Key 
Title:        Chief Executive Officer

	 	 
	 	 
	 	 Richard J. Cavell TTTEE F/T Richard J. Cavell Trust
	 	 
	 	 By:  /s/ Richard J. Cavell                       
	 	
 Name:       Richard J. Cavell

Title:          Trustee

	 	 
	 	 
	 	 HARDROCK MINING COMPANY
	 	 
	 	 By:  /s/ Carolyn J. Lindsey                      
	 	
 Name:       Carolyn J. Lindsey

Title:          President

	 	 
	 	       /s/ John W. Whitney                            
	 	       John W. Whitney

 

 

 

 

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Exhibit A

SCHEDULE 4(d)(iii)

OF OPTION AGREEMENT

AMENDMENT TO MINING LEASE

	
Holder

	
Pro Rata Royalty Interest

	
Richard J. Cavell TTTEE F/T Richard J. Cavell Trust dated 02/23/1994

 

	
51%

	
Hardrock Mining Company

 

	
24.5%

	
John W. Whitney

	
24.5%form8kexh101_081910.htm

EXHIBIT 10.1

 

 

	 	 	 

 

 

 

CHANGE IN TERMS AGREEMENT

 

	
Principal

$3,373,343.69

	
Loan Date

08-16 -2010

	
Maturity

01-10-2011

	
Loan No

1089922418

	
Call / Coll

410 / 4

	
Account

MACC  PE00

	
Officer

755

	
Initials

	  
	
References in the boxes above are for Lender’s use only and do not limit the applicability of this document to any particular loan or item.

Any item above containing “***” has been omitted due to text length limitations.

	
  

 

	
Borrower:

	
MACC PRIVATE EQUITIES INC.

	
Lender:

	
CEDAR RAPIDS BANK AND TRUST COMPANY

	 	
101 2ND ST SE SUITE 800

	
500 1ST AVENUE NE STE 100

	 	
CEDAR RAPIDS, IA 52401-1219

	
CEDAR RAPIDS, IA 52401

	
  

	 

 

 

	 

 

Principal Amount: $3,373,343.69 Date of Agreement: August 16, 2010

 

DESCRIPTION OF EXISTING INDEBTEDNESS.  Promissory Note dated 8/14/2009 in the amount of $4,814,022.34 with an original maturity date of 3/31/2010 and amended on 3/31/2010.

 

DESCRIPTION OF COLLATERAL.  Business Loan Agreement dated August 30, 2007 as amended by an Omnibus Amendment, Consent and Waiver dated April 29, 2008, Second Amendment to Business Loan Agreement and Security Agreements dated August 14, 2009, Third Amendment to Business Loan Agreement dated March 31, 2010, and Fourth Amendment to Business Loan Agreement dated August 16, 2010; Commercial Security Agreement dated August 30, 2007 as amended by an Omnibus Amendment, Consent and Waiver dated April 29, 2008, and Second Amendment to Business Loan Agreement and Security Agreements dated August 14, 2009; Commercial Pledge and Security Agreement dated August 30, 2007 as amended by an Omnibus Amendment, Consent and Waiver dated April 29, 2008, and Second Amendment to Business Loan Agreement and Security Agreements dated August 14, 2009.

 

DESCRIPTION OF CHANGE IN TERMS.  The verbiage under the heading “Collateral” in the Promissory Note and “Description of Collateral” in the Change in Terms Agreement is hereby deleted in its entirety and replaced with the verbiage under the heading “Description of Collateral” above.

 

CONTINUING VALIDITY.  Except as expressly changed by this Agreement, the terms of the original obligation or obligations, including all agreements evidenced or securing the obligation(s), remain unchanged and in full force and effect. Consent by Lender to this Agreement does not waive Lender’s right to strict performance of the obligation(s) as changed, nor obligate Lender to make any future change in terms. Nothing in this Agreement will constitute a satisfaction of the obligation(s). It is the intention of Lender to retain as liable parties all makers and endorsers of the original obligation(s), including accommodation parties, unless a party is expressly released by Lender in writing. Any maker or endorser, including accommodation makers, will not be released by virtue of this Agreement. If any person who signed the original obligation does not sign this Agreement below, then all persons signing below acknowledge that this Agreement is given conditionally, based on the representation to Lender that the non-signing party consents to the changes and provisions of this Agreement or otherwise will not be released by it. This waiver applies not only to any initial extension, modification or release, but also to all such subsequent actions.

 

PURPOSE OF LOAN.  The purpose of this loan is for: consolidate #1089921655 and #1089921654 into one term note.

 

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.

 

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS CHANGE IN TERMS AGREEMENT AND ALL OTHER DOCUMENTS RELATING TO THIS DEBT.

 

CHANGE IN TERMS SIGNERS:

 

	MACC PRIVATE EQUITIES INC.	Company Name	 
	 	 	 	 
	By:	 /s/ Michael W. Dunn	
 

	
By: 

	/s/Derek J. Gaertner	 	 
	 	 Michael W. Dunn, Chairman of the Board of MACC PRIVATE EQUITIES INC.  	 	Derek J. Gaertner, CFO & CCO of MACC PRIVATE EQUITIES INC.	 
	 	 	 	 	 
	 	 	 	 

 

LENDER:

 

	CEDAR RAPIDS BANK AND TRUST COMPANY	 
	 	 	 
	
By: 

	/s/ John Hall	 
	 	John Hall, Asst. Vice President	 
	 	 	 
	 	 	 

 

 

 

 

 

	 

LASER PRO Lending, Ver. 5.52.10.001 Copr. Harland Financial Solutions, Inc. 1997, 2010. All Rights Reserved. - IA W:\CRBT\CFI\LPL\D20C.FC   TR-5224 PR-9

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