Document:

EX-10.8

 Exhibit 10.8 

OBSEVA SA 

2017 EQUITY INCENTIVE PLAN 

STOCK OPTION GRANT NOTICE 

ObsEva SA (the “Company”), pursuant to its 2017 Equity Incentive Plan (the “Plan”), hereby grants to
Optionholder an option to purchase the number of Common Shares set forth below. This option is subject to all of the terms and conditions as set forth in this notice, in the Option Agreement, including any special terms and conditions for your
country set forth in the appendix attached to the Option Agreement as Exhibit A (the “Appendix”), the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety.
Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this notice and the Plan, the terms
of the Plan will control. 
  

			
	Optionholder:	  	  

	Date of Grant:	  	  

	Vesting Commencement Date:	  	  

	Number of Shares Subject to Option:	  	  

	Exercise Price (Per Share):	  	  

	Total Exercise Price:	  	  

	Expiration Date:	  	  

  

					
	Type of Grant:	 	  ☐ Incentive Stock Option1	  	☐ Nonstatutory Stock Option
			
	Exercise Schedule:	 		  	Same as Vesting Schedule
			
	Vesting Schedule:	 		  	

  

			
	Payment:	 	By one or a combination of the following items (described in the Option Agreement):
		
		 	☐ By cash, check, bank draft or money order payable to the Company or to a Company Designee
		 	☐ Pursuant to a Regulation T Program if the shares are publicly traded
		 	☐ By delivery of already-owned shares if the shares are publicly traded, subject to the Company’s consent at the time of exercise to the extent this option is a Nonstatutory Stock Option
		 	☐ If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement

  

	1 	If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than US $100,000 in value (measured by exercise price) in any calendar year. Any
excess over US $100,000 is a Nonstatutory Stock Option. Incentive Stock Options may only be granted to employees subject to United States taxation. 

  
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 Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and understands and agrees to,
this Stock Option Grant Notice, the Option Agreement (including the Appendix) and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement (including the Appendix) may not be modified, amended or
revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement (including the Appendix), and the Plan set forth the entire understanding between
Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) options previously granted and delivered to Optionholder,
(ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) any written employment or severance arrangement that would provide for vesting acceleration of this option upon the
terms and conditions set forth therein. 
 By accepting this option, Optionholder consents to receive such documents by electronic delivery and to
participate in the Plan through an online or electronic system established and maintained by the Company or to a Company Designee. 
  

									
	OBSEVA SA	 		 	OPTIONHOLDER:
				
	By:	 	  
	 		 	  

		 	Signature	 		 		 	Signature
					
	Title:	 	  
	 		 		 	
					
	Date:	 	  
	 		 	Date:	 	  

 ATTACHMENTS: Option Agreement (including the Appendix), 2017 Equity Incentive Plan
and Notice of Exercise 

  
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 ATTACHMENT I 

OPTION AGREEMENT 

  
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 OBSEVA SA 

2017 EQUITY INCENTIVE PLAN 

OPTION AGREEMENT 

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK
OPTION) 
 Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Option Agreement,
including any special terms and conditions for your country set forth in the appendix attached hereto as Exhibit A (the “Appendix” and, together with the Option Agreement, the “Agreement”),
ObsEva (the “Company”) has granted you an option under its 2017 Equity Incentive Plan (the “Plan”) to purchase the number of Common Shares indicated in your Grant Notice at the exercise price indicated
in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”). If there is any conflict between the terms in this Agreement and the Plan, the terms of
the Plan will control. Capitalized terms not explicitly defined in this Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan. 

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows: 

1. VESTING. Subject to the provisions contained herein, your option will vest as provided in your Grant Notice.
Vesting will cease upon the termination of your Continuous Service, except in the case of your death. If your Continuous Service terminates by reason of your death, vesting of your option will be accelerated and your executor, the administrator of
your estate or your legal heirs may exercise your option in accordance with Section 7 below. 
 2. NUMBER
OF SHARES AND EXERCISE PRICE. The number of Common Shares subject to your option and your exercise price per share in your Grant Notice will be adjusted for
Capitalization Adjustments. 
 3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. If you are an Employee eligible for overtime compensation under the U.S. Fair Labor Standards Act of 1938, as amended (that is, a “Non-Exempt Employee”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date
of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the U.S. Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month
anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your
“retirement” (as defined in the Company’s benefit plans). 
 4. METHOD OF
PAYMENT. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted
by your Grant Notice, which may include one or more of the following: 
 (a) Pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board that, prior to the issuance of Common Shares, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from
the sales proceeds. This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”. 

  
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 (b) Subject to the consent of the Company at the time of exercise, if this option is a
Nonstatutory Stock Option, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Shares that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at
Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such Common
Shares in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Shares if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s
stock. 
 (c) If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a
“net exercise” arrangement pursuant to which the Company will reduce the number of Common Shares issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise
price. You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment. Common Shares will no longer be outstanding under your option and will not be
exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your obligations for Tax-Related Items (as defined in Section 10 below). 
 5. WHOLE
SHARES. You may exercise your option only for whole Common Shares. 
 6. COMPLIANCE. In no
event may you exercise your option unless the Common Shares issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the issuance of the shares would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, including any state, federal and foreign laws, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg.
1.401(k)-1(d)(3), if applicable). 
 7. TERM. You may not exercise your
option before the Date of Grant or after the expiration of the option’s term. The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following: 

(a) immediately upon the date on which the event giving rise to your termination of Continuous Service for Cause occurs (or, if
required by law, the date of termination of Continuous Service for Cause); 

  
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 (b) three (3) months after the termination of your Continuous Service for any reason
other than Cause, your Disability or your death (except as otherwise provided in Section 7(d) below); provided, however, that if during any part of such three (3) month period your option is not exercisable solely
because of the condition set forth in the section above relating to “Compliance,” your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after
the termination of your Continuous Service; provided further, if during any part of such three (3) month period, the sale of any Common Shares received upon exercise of your option would violate the Company’s insider trading policy,
then your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service during which the sale of the Common Shares
received upon exercise of your option would not be in violation of the Company’s insider trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous
Service terminates within six (6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the
later of (A) the date that is seven (7) months after the Date of Grant, and (B) the date that is three (3) months after the termination of your Continuous Service, and (y) the Expiration Date; 

(c) twelve (12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in
Section 7(d)) below; 
 (d) eighteen (18) months after your death if you die either during your Continuous Service or within
three (3) months after your Continuous Service terminates for any reason other than Cause; 
 (e) in certain circumstances upon
the effective date of a Transaction as set forth in the Plan; 
 (f) the Expiration Date indicated in your Grant Notice; or 

(g) the day before the tenth (10th) anniversary of the Date of Grant. 

If your option is an Incentive Stock Option, note that to obtain the U.S. federal income tax advantages associated with an Incentive Stock
Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue
to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate
terminates. 
 For purposes of your option, your Continuous Service will be considered terminated (regardless of the reason of termination,
whether or not later found to be invalid or in breach of employment or other laws or rules in the jurisdiction where you are providing service or the 

  
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terms of your employment or service agreement, if any) effective as of the date that you cease to actively provide services to the Company or any Affiliate and will not be extended by any notice
period (e.g., employment or service would not include any contractual notice or any period of “garden leave” or similar period mandated under employment or other laws in the jurisdiction where you are employed or providing services
or the terms of your employment or service agreement, if any); the Board shall have exclusive discretion to determine when you are no longer actively employed or providing services for purposes of the Plan (including whether you still may be
considered to be providing services while on a leave of absence). 
 8. EXERCISE. 

(a) You may exercise the vested portion of your option during its term by (i) delivering a Notice of Exercise (in a form
designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable Tax-Related Items to the
Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require. 

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into
an arrangement providing for the payment by you to the Company of any Tax-Related Items. 
 (c)
If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the Common Shares issued upon exercise of your
option that occurs within two (2) years after the Date of Grant or within one (1) year after such Common Shares are transferred upon exercise of your option. 

9. TRANSFERABILITY. Except as otherwise provided in this Section 9, your option is not transferable, except by will
or by the laws of descent and distribution, and is exercisable during your life only by you. 
 (a) Certain Trusts. Upon
receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law, or
comparable local law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company. 

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided
that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or
separation instrument as permitted by Treasury Regulation 1.421-1(b)(2), or comparable local law, that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss
the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital
settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer. 

  
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 (c) Beneficiary Designation. Upon receiving written permission from the Board or
its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be
entitled to exercise this option and receive the Common Shares or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate or your legal heirs will be entitled to exercise
this option and receive, on behalf of your estate, the Common Shares or other consideration resulting from such exercise. 
 10.
RESPONSIBILITY FOR TAXES. 
 (a) You acknowledge that,
regardless of any action the Company or, if different, your employer (the “Employer”) takes with respect to any or all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax related
items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), the ultimate liability for all Tax-Related
Items is and remains your responsibility and may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and the Employer (i) make no representations or undertakings regarding the treatment
of any Tax-Related Items in connection with any aspect of your option, including, but not limited to, the grant, vesting or exercise of your option, the subsequent sale of Common Shares acquired pursuant to
such exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of your option to reduce or eliminate your liability for
Tax-Related Items or achieve any particular tax result. You acknowledge and agree that you will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates for Tax-Related Items arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the
Grant Notice is at least equal to the “fair market value” per Common Share on the Date of Grant and there is no other impermissible deferral of compensation associated with the option. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or the Employer may be required to withhold or account for Tax-Related Items in more than
one jurisdiction. 
 (b) Prior to the relevant taxable or tax withholding event, as applicable, you agree to make adequate
arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to
satisfy their withholding obligations with regard to all Tax-Related Items by withholding from: (i) your wages or other cash compensation paid to you by the Company and/or the Employer, (ii) proceeds
of the sale of Common Shares acquired at exercise of your option and sold either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); and/or
(iii) withholding a number of Common Shares that are otherwise deliverable to you upon exercise having a fair market value determined by the Company as of the date of the relevant taxable or tax withholding event, as applicable. 

  
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 (c) Depending on the withholding method, the Company or the Employer may withhold or
account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case you will receive a refund
of any over-withheld amount in cash and will have no entitlement to the Common Share equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Common Shares, for tax purposes, you are
deemed to have been issued the full number of Common Shares, notwithstanding that a number of the Common Shares is held back solely for the purpose of paying the Tax-Related Items. 

(d) You agree to pay to the Company or the Employer any amount of Tax-Related Items that the
Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. You acknowledge and agree that the Company may refuse to honor the exercise
and refuse to issue or deliver the Common Shares, or the proceeds of the sale of the Common Shares, if you fail to comply with your obligations in connection with the Tax-Related Items. 

11. NATURE OF GRANT. In accepting your option, you
acknowledge, understand and agree that: 
 (a) the Plan is established voluntarily by the Company, it is discretionary in nature, and
may be amended, suspended or terminated by the Company at any time, to the extent permitted under the Plan; 
 (b) the grant of the
option is voluntary and occasional and does not create any contractual or other right to receive future grants of options (whether on the same or different terms), or benefits in lieu of options, even if options have been granted in the past; 

(c) all decisions with respect to future options or other grants, if any, will be at the sole discretion of the Company; 

(d) this option and your participation in the Plan shall not create a right to employment or be interpreted as forming an employment or
service contract with the Company and shall not interfere with the ability of the Employer to terminate your employment or service relationship (if any); 

(e) you are voluntarily participating in the Plan; 

(f) this option and any Common Shares acquired under the Plan, and the income and value of same, are not intended to replace any
pension rights or compensation; 
 (g) this option and any Common Shares acquired under the Plan, and the income and value of same,
are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal,
end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; 

  
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 (h) the future value of the Common Shares underlying the option is unknown,
indeterminable, and cannot be predicted with certainty; 
 (i) if the underlying Common Shares do not increase in value, the option
will have no value; 
 (j) if you exercise the option and acquire Common Shares, the value of such Common Shares may increase or
decrease in value, even below the exercise price; 
 (k) unless otherwise provided in the Plan or by the Company in its discretion,
the option and the benefits evidenced by this Agreement do not create any entitlement to have the option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any
corporate transaction affecting the Common Shares; 
 (l) neither the Company nor any Affiliate shall be liable for any foreign
exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the option or of any amounts due to you pursuant to the exercise of the option or the subsequent sale of any Common Shares acquired upon
exercise; 
 (m) no claim or entitlement to compensation or damages shall arise from forfeiture of this option resulting from the
termination of your Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment or service agreement, if any), and
in consideration of the grant of this option to which you are otherwise not entitled, you irrevocably agree never to institute any claim against the Company or any Affiliate, waive your ability, if any, to bring any such claim, and release the
Company and any Affiliate from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such
claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claim; and 
 (n) this option
and any Common Shares acquired under the Plan, and the income and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of an Affiliate. 

12. NO ADVICE REGARDING GRANT. The Company is
not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Common Shares. You are hereby advised to consult with your own
personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 

  
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 13. DATA PRIVACY. You hereby explicitly
and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement and any other option grant materials by and among, as applicable, Employer, the Company and any other
Affiliate for the exclusive purpose of implementing, administering and managing your participation in the Plan. 
 You
understand that the Company and the Employer may hold certain personal information about you, including, but not limited to, your name, home address and telephone number, date of birth, social insurance number or other identification number, salary,
nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for
the exclusive purpose of implementing, administering and managing the Plan. 
 You understand that Data will be transferred to
such stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. You understand that the recipients of Data may be located in the
United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than your country. You understand that if you reside outside the United States, you may request a list
with the names and addresses of any potential recipients of Data by contacting your local human resources representative. You authorize the Company and any other possible recipients which may assist the Company (presently or in the future) with
implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purposes of implementing, administering and managing your participation in the Plan. You understand that
Data will be held only as long as is necessary to implement, administer and manage your participation in the Plan. You understand that if you reside outside the United States, you may, at any time, view Data, request additional information about the
storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing your local human resources representative. Further, you understand that you are
providing the consents herein on a purely voluntary basis. If you do not consent, or if you later seek to revoke your consent, your employment status or service and career with the Company or any Affiliate will not be adversely affected; the only
consequence of refusing or withdrawing your consent is that the Company would not be able to grant options or other equity awards to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing your consent may
affect your ability to participate in the Plan. For more information on the consequences of your refusal to consent or withdrawal of consent, you understand that you may contact your local human resources representative. 

14. NOTICES. Any notices provided for in your option or the Plan will be given in writing (including electronically) and
will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the
Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this
option, you consent to receive 

  
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such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or a
third party designated by the Company. 
 15. GOVERNING PLAN DOCUMENT. Your option is
subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted
pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control. In addition, your option (and any compensation paid or shares issued under your option) is subject
to recoupment in accordance with The U.S. Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required
by applicable law. 
 16. OTHER DOCUMENTS. You hereby acknowledge receipt of and
the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certain
individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time. 

17. VOTING RIGHTS. You will not have voting or any other rights as a shareholder of
the Company with respect to the shares to be issued pursuant to this option until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a shareholder of the Company. Nothing contained in this option, and
no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person. 

18. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so
declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid. 

19. LANGUAGE. If you have received this Agreement, or any other document related to your
option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. 

20. INSIDER TRADING RESTRICTIONS/MARKET ABUSE
LAWS. You acknowledge that, depending on your country, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell the Common Shares or rights
to the Common Shares under the Plan during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in your country). Any restrictions under these laws or regulations are separate from and
in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor
on this matter. 

  
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 21. APPENDIX. Notwithstanding any provisions in this
Option Agreement, your option shall be subject to the special terms and conditions for your country set forth in the Appendix attached to this Option Agreement as Exhibit A. Moreover, if you relocate to one of the countries included therein,
the terms and conditions for such country will apply to you to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this
Option Agreement. 
 22. IMPOSITION OF OTHER
REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, on any Common Shares purchased under the Plan, to the extent the Company determines it is necessary
or advisable for legal administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 

23. GOVERNING LAW / VENUE. This Agreement is governed by the
laws of the State of Delaware without resort to that state’s conflicts of laws rules. For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement, relating to it, or arising from it, the parties hereby submit to
and consent to the sole and exclusive jurisdiction of the courts within Santa Clara County, State of California, and no other courts, where this grant is made and/or to be performed. 

24. MISCELLANEOUS. 

(a) The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all
covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns. 
 (b)
You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option. 

(c) You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of
counsel prior to executing and accepting your option, and fully understand all provisions of your option. 
 (d) All obligations of
the Company under the Plan and this Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all
of the business and/or assets of the Company. 

*        *        * 

This Agreement will be deemed to be signed by you upon the signing by you or otherwise by your acceptance of the Grant Notice to which it is
attached. 

  
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 EXHIBIT A 

APPENDIX TO OPTION AGREEMENT 

SPECIAL TERMS AND CONDITIONS FOR EMPLOYEES
OUTSIDE THE UNITED STATES 
 Capitalized terms used but not defined in this Appendix have
the meanings set forth in the Plan and/or in the Option Agreement. 
 Terms and Conditions 

This Appendix includes additional terms and conditions that govern the option granted to you under the Plan if you reside and/or work in one of the countries
listed below. If you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently residing and/or working, or if you relocate to another country after the grant of the
option, the Company shall, in its discretion, determine to what extent the special terms and conditions contained herein shall be applicable to you. 

Notifications 
 This Appendix may also include
information regarding exchange controls and certain other issues of which you should be aware with respect to participation in the Plan. The information is based on the securities, exchange control, and other laws in effect in the respective
countries as of [month], [year]. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix as the only source of information relating to the
consequences of your participation in the Plan because the information may be out of date at the time you exercise the option or sell Common Shares acquired under the Plan. 

In addition, the information contained herein is general in nature and may not apply to your particular situation, and the Company is not in a position to
assure you of a particular result. Accordingly, you are advised to seek appropriate professional advice as to how the relevant laws in your country may apply to your situation. 

Finally, if you are a citizen or resident (or are considered as such for local law purposes) of a country other than the country in which you are currently
residing and/or working, or if you relocate to another country after the grant of the option, the notifications contained herein may not be applicable to you in the same manner. 

  
 14 

 SWITZERLAND 

Notifications 
 Securities Law Information.
You acknowledge that the Plan is not intended to be publicly offered in or from Switzerland. Neither the Agreement nor any other materials relating to the option constitutes a prospectus as such term is understood pursuant to article 652a of the
Swiss Code of Obligations, and neither the Agreement nor any other materials relating to the option may be publicly distributed nor otherwise made publicly available in Switzerland. 

  
 15 

 ATTACHMENT II 

2017 EQUITY INCENTIVE PLAN 

  
 16 

 ATTACHMENT III 

NOTICE OF EXERCISE 

  
 17 

 NOTICE OF EXERCISE 

Date of Exercise:                      

This constitutes notice to ObsEva SA (the “Company”) under my stock option that I elect to purchase the below number
of Common Shares of the Company (the ”Shares”) for the price set forth below. 
  

					
	 Type of option (check one):
	 	Incentive ☐	    	Nonstatutory ☐
			
	 Stock option dated:
	 		    	
			
	 Number of Shares as to which option is exercised:
	 		    	
			
	 Certificates to be issued in name of:
	 		    	
			
	 Total exercise price:
	 	US$            	    	US$            
			
	 Cash payment delivered herewith:
	 	US$            	    	US$            
			
	 Value of
                 Shares delivered herewith:
	 	US$            	    	US$            
			
	 Regulation T Program (cashless exercise):
	 	US$            	    	US$            

 By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the
terms of the ObsEva SA 2017 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise
relates to an Incentive Stock Option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of
this option or within one (1) year after such Shares are issued upon exercise of this option. 
  

	
	Very truly yours,
	
	  

	Signature
	
	  

	Print Name

  
 18Exhibit

 

EXECUTION VERSION

COMSTOCK MINING INC.
 
11% Senior Secured Debenture due 2021
 
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR (II) UNLESS PURSUANT TO RULE 144 (OR ANY SUCCESSOR THERETO) UNDER THE SECURITIES ACT.

THIS DEBENTURE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE ISSUE PRICE, AMOUNT OF OID, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE MAY BE OBTAINED BY CONTACTING THE CHIEF EXECUTIVE OFFICER OF COMSTOCK MINING INC. AT P.O. BOX 1118, VIRGINIA CITY, NV 89440, TELEPHONE:  775-848-5310.

           

 
COMSTOCK MINING INC.
 
11% Senior Secured Debenture due 2021
 
Certificate No. A-1
 
COMSTOCK MINING INC., a Nevada corporation, for value received, promises to pay to GF COMSTOCK 2 LP, a Delaware limited partnership, or its registered assigns, the principal sum of Ten Million Seven Hundred Thousand Twenty-Three and no/100 Dollars ($10,723,000), and to pay interest thereon, as provided in this Debenture, until the principal and all accrued and unpaid interest are paid or duly provided for.
 
Additional provisions of this Debenture are set forth on the other side of this Debenture.
 
[Remainder of This Page Intentionally Left Blank; Signature Page Follows]

	
		
	 
	2

 

  
IN WITNESS WHEREOF, Comstock Mining Inc. has caused this instrument to be duly executed as of the date set forth below.

 
	
			
	 
	COMSTOCK MINING INC

	 
	 
	 

	Date: January 13, 2017
	By:
	 /s/ Corrado De Gasperis

	 
	Name:
	Corrado De Gasperis

	 
	Title:
	President and Chief Executive Officer

 

 ACKNOWLEDGED AND AGREED:

	
			
	 
	GF COMSTOCK 2 LP, by GF CAPITAL, LLC, ITS GENERAL PARTNER

	 
	 
	 

	Date: January 13, 2017
	By:
	 /s/ Daniel Freuman

	 
	Name:
	Daniel Freuman

	 
	Title:
	Manager

 
 

[Signature Page to Comstock Senior Secured Debenture (2017)]

	
		
	 
	3

 

 
COMSTOCK MINING INC.
 
11% Senior Secured Debenture due 2021
 
This Debenture (this “Debenture”) is issued by Comstock Mining Inc., a Nevada corporation (the “Company”), to GF Comstock 2 LP, a Delaware limited partnership, and designated as the Company's 11% Senior Secured Debenture due 2021.
 
1. Definitions.
 
“Account” is any “account” as defined in the Uniform Commercial Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to the Company.
 
“Affiliate” means, with respect to any Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person.  The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.  For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.
 
“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act on behalf of such board.
 
“Business Day” means any day other than a Saturday, a Sunday or any day on which commercial banks in New York are authorized or required by law or executive order to close or be closed. 
 
“Capital Stock” of any Person means any and all shares of, interests in, rights to purchase, warrants or options for, participations in, or other equivalents of, in each case however designated, the equity of such Person.
 
“Change of Control” means the occurrence after the date hereof of any of (a) an acquisition by any Person (other than a Person who holds such voting power today or his affiliates or related parties) of a majority of the aggregate voting power of the voting securities of the Company whose holders are generally entitled to vote for the election of directors of the Company, (b) the merger or consolidation of the Company with any other Person where, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction do not own a majority of the aggregate voting power of the voting securities of the successor Person of such transaction whose holders are generally entitled to vote for the election of directors of the successor Person of such transaction, or (c) the sale or transfer of all or substantially all of the Company’s consolidated assets to another Person where, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction do not own a majority of the aggregate voting power of the voting securities of the Person whose holders are generally entitled to vote for the election of directors of the acquiring Person immediately after the transaction.

“Close of Business” means 5:00 p.m., New York City time.
 
“Collateral” has the meaning set forth in the Security Agreement.
 

	
		
	 
	1

           

“Commission” means the U.S. Securities and Exchange Commission.
 
“Default” means any event that is (or, after notice, passage of time or both, would be) an Event of Default.
 
“Default Interest Rate” has the meaning set forth in Section 3(B).

“Environmental Claim” shall mean any written accusation, allegation, notice of violation, claim, demand, order, directive, cost recovery action or other cause of action by, or on behalf of, any Governmental Authority or any other person for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon:  (a) the threat, the existence, or the continuation of the existence of a Release (including sudden or non-sudden, accidental or non-accidental Releases); (b) exposure to any Hazardous Material; (c) the presence, use, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation or alleged violation of any Environmental Law or Environmental Permit.

“Environmental Law” shall mean any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions, judgments, decrees and orders relating to the protection of the environment or health and safety including without limitation, environmental, health and safety laws, regulations, governmental authorizations, ordinances, and rules, and the common law, and contractual obligations relating to the use, refinement, handling, treatment, removal, storage, production, manufacture, transportation, disposal, emissions, discharges, Releases or threatened Releases (defined below) of Hazardous Material (defined below) or otherwise relating to pollution or protection of human health or the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes into the environment (including, without limitation, ambient air, soil, surface water, ground water, wetlands, natural resources, land surface or subsurface strata), or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, chemicals or industrial, toxic or Hazardous Material or wastes, as the same may be amended or modified, and as now existing or hereafter adopted.  Environmental Laws include, without limitation, the Laws listed below:  The Hazardous Materials Transportation Act (49 U.S.C. § § 1801 et seq.); the Federal Solid Waste Act as amended by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § § 6901 et seq.); the Clean Air Act (42 U.S.C. §§  7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. § 1251); the Federal Clean Water Act of 1977 (33 U.S.C. §§  1251, et seq.); the Safe Drinking Water Act (42 U.S.C. §§  300f et seq.); the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. §§  9601 et seq.); the Toxic Substances Control Act (15 U.S.C. §§  2601 et seq.); the Emergency Planning and Community Right to Know Act (42 U.S.C. §§  11001, et seq.); the Occupational Safety and Health Act (26 U.S.C. §§   651 et seq.); the Pollution Prevention Act of 1990 (42 U.S.C. §§  13101 et seq.); the Atomic Energy Act of 1954, 68 Stat. 919; the Energy Reorganization Act of 1974; the Federal Mine Safety and Health Act of 1977, Public Law 91-173, as amended by The Mine Improvement and New Emergency Response (MINER) Act of 2006 (Public Law 109-236, as amended by Public Law 109-280); the Occupational Health and Safety Act of 1970, Pub. Law 91-596, 84 Stat. 1590, 29 USC §§ 652 et seq.); the Federal Land Policy and Management Act, 43 USC §§ 1744 et seq.; Federal Insecticide, Fungicide, and Rodenticide Act; the Federal Pesticide Act of 1978 (7 U.S.C. §§ 136, et seq., and any similar or implementing state or foreign law, and all amendments thereto or regulations promulgated thereunder.

“Event of Default” has the meaning set forth in Section 8(A)(i).

	
		
	 
	2

           

  
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
  
“GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of the accounting profession in the United States, which are applicable to the circumstances as of the date of determination.
 
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government.

“Hazardous Material” shall mean any material meeting the definition of a “hazardous substance” in CERCLA 42 U.S.C. §9601(14) and all explosive or radioactive substances or wastes, toxic substances or wastes, pollutants, solid, liquid or gaseous wastes, including petroleum, petroleum distillates or fractions or residues, asbestos or asbestos containing materials, polychlorinated biphenyls (“PCBs”) or materials or equipment containing PCBs in excess of 50 ppm, radon gas, infectious or medical wastes, heavy metals, mining wastes, tailings and leachates and all other substances or wastes of any nature regulated pursuant to any Environmental Law, or that reasonably could form the basis of an Environmental Claim.
 
The term “including” means “including without limitation.”
  
“Indebtedness” means (A) indebtedness for borrowed money or with respect to deposits or advances of any kind or the deferred price of property or services, such as reimbursement and other obligations for surety bonds and letters of credit (other than trade accounts payable incurred in the ordinary course of business and payable on customary trade terms); (B) obligations evidenced by notes, bonds, debentures or similar instruments; (C) all obligations under conditional sale or other title retention agreements relating to property acquired; (D) capital lease obligations; (E) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; and (F) all guarantees of Indebtedness of others.
 
“Interest Payment Date” means, with respect to this Debenture, on each January 1st and July 1st beginning on July 1, 2017.

“Inventory” means all “inventory” as defined in the Uniform Commercial Code in effect on the Issue Date with such additions to such term as may hereafter be made under the Uniform Commercial Code, and includes all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including such inventory as is temporarily out of any Person’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above.
 
“Lien” shall have the meaning given to it in the Security Agreement. 

“Mandatory Redemption Event” shall mean the consummation of the sale or other disposition of, or earn-ins related to, any assets of the Company or any of its Subsidiaries.

“Make-Whole Amount” means the amount of interest that would accrue on the outstanding principal amount of this Debenture (as of the Redemption Date) from the Redemption Date to the date that is seven 

	
		
	 
	3

           

months after such Redemption Date (whether or not such seven month period extends past the Maturity Date).
 
“Material Adverse Change” means (A) a material adverse change in the business, assets, operations, earnings, properties, condition (financial or otherwise), prospects or results of operations of the Company and its Subsidiaries, taken as a whole; (B) a material impairment of the prospect of repayment of any portion of the amounts due under this Debenture; or (C) a material adverse effect on the Collateral (as defined in the Security Agreement) that is not the result of action or inaction by the Purchaser or the Company in connection with filings made or not made with respect to the Collateral. For the avoidance of doubt, a “going concern” or like qualification or “emphasis of matter” paragraph in an auditor’s opinion will not automatically constitute a Material Adverse Change unless the underlying facts or situation that resulted in such “going concern” or like qualification or “emphasis of matter” paragraph would otherwise constitute a Material Adverse Change.

“Material Agreement” means any contractual arrangement between the Company or any of its Subsidiaries and a Person or Governmental Authority where the value thereof is more than seven hundred fifty thousand dollars ($750,000) in the aggregate.
 
“Maturity Date” means January 13, 2021.

“Net Cash Proceeds” means the proceeds in the form of cash (including (i) payments in respect of deferred payment obligations and (ii) proceeds from the conversion of other consideration received when converted to cash but only when received), net of reasonable related brokerage commissions and other related fees and expenses incurred as a result thereof; provided that with respect to any permitted earn-in arrangement, the Net Cash Proceeds shall exclude (i) any funds required by the terms of such permitted earn-in to be applied within 12 months of the date of receipt of such cash as a direct investment or capital expenditure in the related project and (ii) any funds expended into such project directly by the third party involved.
The term “or” is not exclusive.
 
“Permitted Indebtedness” means:
 
(A) the Company’s Indebtedness to the Purchaser under this Debenture and under the Security Agreement;
 
(B) Indebtedness existing on the date hereof and disclosed on Schedule C attached hereto;  

(C) Indebtedness of the Company to Northern Comstock LLC represented by a promissory note executed by the Company pursuant to Section 6.11(b) of that certain limited liability company operating agreement of Northern Comstock LLC dated as of October 19, 2010, as amended by the First Amendment to the Limited Liability Company Operating Agreement dated as of August 26, 2015 and as further amended by the Second Amendment to the Limited Liability Company Agreement, dated as of September 28, 2015 (the “Northern Comstock Agreement”) (Indebtedness incurred under this clause (C) is hereinafter referred to as “Northern Comstock Debt”);
 
(D) unsecured Indebtedness to trade creditors and in connection with credit cards incurred in the ordinary course of business;
 

	
		
	 
	4

           

(E) Indebtedness consisting of capitalized lease obligations and purchase money Indebtedness, in each case incurred by the Company or any of its Subsidiaries to finance the acquisition, repair, improvement or construction of fixed or capital assets of such Person, provided, that (i) the aggregate outstanding principal amount of all such Indebtedness incurred pursuant to this clause (E) during the term of this Debenture does not exceed one million dollars ($1,000,000), (ii) the principal amount of such Indebtedness does not exceed the lower of the cost or fair market value of the property so acquired or built or of such repairs or improvements financed with such Indebtedness (each measured at the time of such acquisition, repair, improvement or construction is made) and (iii) such Indebtedness is incurred prior to or within sixty (60) days after such acquisition or the completion of such repair, improvement or construction;
 
(F) Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of the Company’s business;

(G) deposits or advances received from customers in the ordinary course of business;
 
(H) Indebtedness consisting of guarantees resulting from endorsement of negotiable instruments for collection by the Company or any of its Subsidiaries in the ordinary course of business; and  

(I) extensions, refinancings, modifications, amendments and restatements of any items of Permitted Indebtedness set forth in clauses (B) and (E) above, provided, that the principal amount thereof is not increased or the terms thereof are not more burdensome in any respect upon the Company, or its Subsidiary, as the case may be, than the Indebtedness being refinanced.

“permitted earn-in arrangement” means a joint venture, lease or other arrangement that is on terms that are fair and reasonable to the Company (in the determination of the Company’s board of directors) whereby a third party undertakes the development of a property (other than the Real Property Collateral, excluding the American Flat Properties, the Lucerne Properties and the Occidental Properties, for which an earn-in otherwise satisfying the definition of permitted earn-in arrangement shall be permitted) and receives a share in the revenues or profits therefrom or pays the Company a royalty or participating rent therefrom that does not materially impair the value of such property or the Company’s financial position.

“Permitted Liens” means (A) Liens existing on the date hereof and disclosed on Schedule D attached hereto; (B) Liens on assets with an aggregate value (determined as the higher of book value and fair market value) not exceeding $150,000 at any one time; (C) Liens in favor of the Purchaser securing this Debenture; (D) Liens securing Indebtedness incurred under clause (C) of the definition of Permitted Indebtedness secured only by the DWC Property (as defined in the Northern Comstock Agreement) and the Leased Property (as defined in the Northern Comstock Agreement) and no other assets of the Company or any of its Subsidiaries; (E) Liens incurred for the benefit of any third party entering into a permitted earn-in arrangement with the Company that secure the assets that are subject to such permitted earn-in arrangement (but no other assets of the Company or any of its Subsidiaries); (F) all purchase money security interests hereinafter incurred by the Company in the ordinary course of business to the extent incurred under clause (C) of the definition of Permitted Indebtedness; (G) liens imposed by law for taxes that are not yet due or are being contested in good faith, or as to which the grace period, if any, related thereto has not expired; (H) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like liens imposed by law, arising in the ordinary course of business; (I) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations; (J) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety, reclamation and appeal bonds, performance bonds or letters of credit, leases or deferred purchase price of equipment, trade credit, endorsement of checks, and completion guarantees and other obligations of a like nature, in 

	
		
	 
	5

           

each case in the ordinary course of business; (K) judgment liens in respect of judgments that do not constitute an Event of Default under Section 8(A)(i)(5); (L) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Company or any of the Subsidiaries; (M) Liens to be released upon the application of the use of proceeds in accordance with Section 4(C) of the Securities Purchase Agreement, so long as such Liens are actually released by no later than twelve (12) Business Days after the Closing Date; and (N) Liens with respect to the Genco/Rule Properties (as defined in the Securities Purchase Agreement), so long as either (1) such Liens are released by no later than eight (8) days after the Closing Date, including without limitation pursuant to real property reconveyance documents entitled "Substitution of Trustee and Deed of Reconveyance", or (2) if the Company does not procure the release of such Liens within eight (8) days after the Closing Date as described in clause (1) above, then the Company uses its reasonable best efforts to (A) commence a quiet title action as to the relevant parcel(s) of the Genco/Rule Properties by no later than eight (8) days after the Closing Date and (B) pursue such quiet title action thereafter. 

“Person” or “person” means any individual, sole proprietorship, partnership, limited liability company, joint venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or Governmental Authority.  

“PIK Debt” has the meaning set forth in Section 3(A).

“Purchaser” means GF Comstock 2 LP, a Delaware limited partnership.
 
“Real Property Collateral” shall have the meaning given to it in the Security Agreement.
 
“Redemption” means the repurchase of this Debenture (or any portion thereof) by the Company pursuant to Section 5.
 
“Redemption Date” means the date fixed for the repurchase of this Debenture (or any portion thereof) by the Company pursuant to a Redemption.
 
“Redemption Notice” has the meaning set forth in Section 5(E).
 
“Redemption Notice Date” means, with respect to a Redemption, the date on which the Company sends the Redemption Notice for such Redemption pursuant to Section 5(E).
 
“Redemption Price” means the cash price payable by the Company to redeem this Debenture (or any portion thereof) upon its Redemption, calculated pursuant to Section 5.
 
“Release” shall have the meaning given such term in CERCLA, 42 U.S.C. §9601(22), including migration.

“Remedial Action” shall mean (a) “remedial action” as such term is defined in CERCLA, 42 U.S.C. § 9601(24), and (b) all other actions, including studies and investigations, required by any Governmental Authority or voluntarily undertaken to:  (i) clean up, remove, treat, abate or in any other way respond to any Hazardous Material in the environment; (ii) prevent the Release or threat of Release, or minimize the further Release, of any Hazardous Material; (iii) restore and reclaim mine lands both at surface and subsurface, or (iv) monitor the presence of Hazardous Material in the environment or the progress of any treatment or abatement program.

	
		
	 
	6

           

“Responsible Officer” of the Company shall mean any executive officer of the Company and any other officer or similar official thereof responsible for the administration of the obligations of such person in respect of this Agreement.

“Securities Act” means the U.S. Securities Act of 1933, as amended.
 
“Securities Purchase Agreement” means the Securities Purchase Agreement, dated as of the date hereof, between the Company and the Purchaser providing for the initial issuance of this Debenture.
 
“Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, between the Company, as pledgor, and the Purchaser as pledgee, and as the same may be amended from time to time.  
 
“Subsidiary” means, with respect to any Person, (A) any corporation, association or other business entity (other than a partnership or limited liability company) of which more than fifty percent (50%) of the total voting power of the Capital Stock entitled (without regard to the occurrence of any contingency, but after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees, as applicable, of such corporation, association or other business entity is owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person; and (B) any partnership or limited liability company where (i) more than fifty percent (50%) of the capital accounts, distribution rights, equity and voting interests, or of the general and limited partnership interests, as applicable, of such partnership or limited liability company are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of such Person, whether in the form of membership, general, special or limited partnership or limited liability company interests or otherwise; and (ii) such Person or any one or more of the other Subsidiaries of such Person is a controlling general partner of, or otherwise controls, such partnership or limited liability company.
 
“Transfer” has the meaning set forth in Section 6(I)(3).
  
“Uniform Commercial Code” means the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the State of Nevada; provided, however, that, to the extent that the Uniform Commercial Code is used to define any term herein and such term is defined differently in different Articles or Divisions of the Uniform Commercial Code, the definition of such term contained in Article or Division 9 shall govern; provided, further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, the lien of the Purchaser on any Collateral is governed by the Uniform Commercial Code in effect in a jurisdiction other than the State of Nevada, then the term “Uniform Commercial Code” means the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions relating to such provisions.
  
2. Denominations; Transfers and Exchanges.
 
(A) All Debentures will be in registered form, without coupons. The Purchaser may transfer or exchange this Debenture by presenting it to the Company; provided, however, that (x) the Company may refuse to effect any transfer of this Debenture (other than any transfer to an Affiliate (as defined under Rule 144 under the Securities Act) of the Purchaser) until the Purchaser provides the Company with such certificates or other documentation or evidence as the Company may reasonably require to determine that such transfer complies with the Securities Act and other applicable securities laws and (y) notwithstanding 

	
		
	 
	7

           

anything to the contrary contained herein, the Purchaser may not transfer the right to designate the persons specified herein to serve as a member of the Board of Directors of the Company as provided for in further detail below and such right shall remain with the Purchaser upon any such transfer or exchange.  
 
(B) The Company will not impose any service charge on any Purchaser for any transfer of Debentures, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge that may be imposed in connection with any transfer of this Debenture (or any portion thereof) if the Purchaser requests that this Debenture be issued in a name other than the Purchaser’s name.

(C) The Company will cooperate with the Purchaser upon any requests relating to a transfer of Debentures and will execute and/or deliver any certificates or other documents reasonably requested in connection therewith by the Purchaser or such transferee.
 
3. Interest.
 
(A) Accrual of Interest. This Debenture (including any PIK Debt) will accrue interest at a rate per annum equal to 11% (the “Stated Interest”). Stated Interest on this Debenture (including any PIK Debt) will (i) accrue from, and including, the most recent date to which Stated Interest has been paid (including payment in kind of PIK Debt) or duly provided for (or, if no Stated Interest has theretofore been paid or duly provided for, from the date hereof) to, but excluding, the date of payment of such Stated Interest; (ii) be payable semiannually on each Interest Payment Date; and (iii) be computed on the basis of a three hundred sixty (360) day year and the actual number of days elapsed.  For the first two (2) years following the date hereof (which, for the avoidance of doubt, shall relate to the Interest Payment Dates in calendar years 2017 and 2018 and on January 1, 2019) and so long as no Default or Event of Default has occurred and is continuing, interest on this Debenture (and on any PIK Debt) will be payable, at the option of the Company, either in cash or in the form of additional Debentures (or a combination thereof), to be issued by the Company, (such additional Debentures, “PIK Debt”).  For the third and fourth years after the date hereof (beginning with the Interest Payment Date of July 1, 2019), interest on this Debenture (and on any PIK Debt) will be payable only in cash.  During the first two (2) years following the date hereof, the Company shall notify the Purchaser no less than five (5) Business Days prior to any Interest Payment Date whether it intends to make a cash interest payment or whether it intends to pay all or a portion of such interest payment by delivering PIK Debt (and, if less than all, the amount of such payment to be made in cash and the amount to be made with PIK Debt).  If the Company fails to provide such notice on or prior to such fifth (5th) Business Day, the Company shall be deemed to have elected to pay all of such interest payment in cash.

(B) Default Interest Rate. If a Default has occurred and is continuing and there are amounts still unpaid remaining on this Debenture (and on any PIK Debt), then, to the extent lawful, interest will accrue on such amounts at a rate per annum equal to 13.5% per annum (the “Default Interest Rate”), from, and including, the date of such Default to, but excluding, the date that such Default is cured or waived. 
 
4. Repayment; Method of Payment; When Payment Date is Not a Business Day.
 
(A) Repayment. All outstanding principal, along with interest accrued but unpaid on the outstanding principal balance of this Debenture from time to time outstanding, including PIK Debt, plus the Make-Whole Amount with respect to the principal amount of the Debenture as of the date hereof, shall be due and payable on the Maturity Date. For the avoidance of doubt, the Make-Whole Amount shall not be payable with respect to any PIK Debt.

	
		
	 
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(B) Method of Payment. The Company will pay all cash amounts due under this Debenture by check mailed to the address of the Purchaser (or, if the Purchaser provides the Company, at least five (5) days before the date such amount is due, with written notice of an account of the Purchaser within the United States, by wire transfer of immediately available funds to such account).
 
(C) Delay of Payment when Payment Date is Not a Business Day. If the due date for a payment on this Debenture as provided in this Debenture is not a Business Day, then, notwithstanding anything to the contrary in this Debenture, such payment may be made on the immediately following Business Day and no interest will accrue on such payment as a result of the related delay.

(D) Payments in Kind. With respect to each Interest Payment Date occurring on or prior to January 1, 2019, so long as no Default has occurred and is continuing, the Company in its sole discretion, may pay all or any portion of a payment due on an Interest Payment Date, by: (i) cash; (ii) PIK Debt; or (iii) a combination of the foregoing payment methods.

(E) Allocation of Partial Payments.  All payments made by the Company with respect to this Debenture shall be applied in the following manner: (a) first, against the amount of interest accrued and unpaid as of the date of such payment, (b) second, to the payment of any PIK Debt outstanding as of the date of such payment, and (c) third, against all principal being paid on the date of such payment together with the Make-Whole Amount on such principal.
  
5. Redemption.
 
(A) Mandatory Redemption. Within fifteen (15) days of the occurrence of a Mandatory Redemption Event (which in the case of an earn-in shall include any receipt of cash by the Company or any Subsidiary at any time during the earn-in arrangement), the Company shall offer to redeem, in accordance with and subject to this Section 5(A), the principal amount of this Debenture in amount equal to (x) 70% of the Net Cash Proceeds to the Company of any Mandatory Redemption Event constituting an earn-in arrangement and (y) with respect to all other Mandatory Redemption Events, 100% of the Net Cash Proceeds to the Company of such Mandatory Redemption Event; provided, that the Company shall be permitted to reinvest such Net Cash Proceeds in lieu of redeeming this Debenture if the Purchaser shall provide written authorization therefor in its sole and absolute discretion; provided, further, that no such offer shall be required to be made with respect to any Mandatory Redemption Event the Net Cash Proceeds of which are less than $50,000 until such time as the aggregate Net Cash Proceeds for which no offer has been made exceeds $250,000 during the term of this Debenture, after which the Company (or such Subsidiary) shall be required to offer to redeem, in accordance with and subject to this Section 5(A), the principal amount of this Debenture in an amount equal to the Net Cash Proceeds in excess of $250,000.  Until the Company makes an offer of Redemption or invests the Net Cash Proceeds of a Mandatory Redemption Event in accordance with this Debenture, the Company shall hold such Net Cash Proceeds in a segregated escrow account (on terms reasonably acceptable to Purchaser) until such Net Cash Proceeds have been utilized as permitted hereunder. The Redemption Price for a Redemption pursuant to this Section 5(A) of the Debenture (or any portion thereof) is an amount in cash equal to the sum of (i) the principal amount of this Debenture (or such portion thereof) to be redeemed, plus (ii) accrued and unpaid interest on this Debenture (or such portion thereof) to, but excluding, the Redemption Date for such Redemption, plus (iii) the Make-Whole Amount.  Upon receipt of a Notice of Redemption relating to a Mandatory Redemption Event, the Purchaser shall have the right, at any time prior to the Redemption Date, to inform the Company that it does not wish to have the Debenture redeemed.

	
		
	 
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     (B) Right to Redeem this Debenture. At any time or from time to time, the Company may redeem this Debenture, in whole at any time and in part from time to time, at its option, upon irrevocable prior written notice in accordance with Section 5(C) below at a redemption price equal to 100% of the principal amount of this Debenture to be redeemed, plus accrued and unpaid interest thereon to the date of Redemption, plus the Make-Whole Amount. 
  

(C) Redemption Date. The Redemption Date for any Redemption (other than in respect of a Change of Control) will be a Business Day of the Company’s choosing that is no more than fifteen (15) calendar days after the Redemption Notice Date for such Redemption.  Upon the delivery of a Redemption Notice to the Purchaser the Redemption Price shall be irrevocably due and payable on the Redemption Date set forth therein.
 
(D) Redemption Notice. To call any portion of this Debenture for Redemption, the Company must send a written notice to the Purchaser of such Redemption (a “Redemption Notice”). Such Redemption Notice must state:
 
(i) that this Debenture (or any replacement(s) thereof) have been called for Redemption, briefly describing the Company’s redemption right;
 
(ii) the Redemption Date for such Redemption;
 
(iii) the Redemption Price per $1,000 principal amount of Debentures for such Redemption;
 
(iv) if the Company refinances this Debenture and the Company’s obligations under the this Debenture and the Security Agreement have not been fully discharged before such Redemption Notice Date, an undertaking that such obligations will be fully discharged before, or concurrently with, the Redemption of this Debenture (or any replacement(s) thereof) and that if all Debentures cease to be outstanding before such Redemption, the Company will nonetheless effect such full discharge on the Redemption Date.
 
(E) Payment of the Redemption Price. The Company will cause the Redemption Price for a Debenture subject to Redemption to be paid to the Purchaser on or before the later of (i) the applicable Redemption Date; and (ii) the date this Debenture (or such portion thereof) is delivered to the Company.

(F) Change in Control.  Upon the occurrence of a Change of Control, the Company shall be required to redeem this Debenture on or prior to the Business Day on which such Change of Control occurs for an amount in cash equal to the sum of (i) the principal amount of this Debenture (or such portion thereof) to be redeemed, plus (ii) accrued and unpaid interest on this Debenture (or such portion thereof) to, but excluding, the Redemption Date for such Redemption, plus (iii) the Make-Whole Amount.  If not so redeemed immediately following such Change of Control, all amounts set forth in this clause (F) shall be immediately due and payable.
 
6. Covenants.

(A) Delivery of Lien Documentation. The Company grants as security for the payment of the Debentures and will execute and file or record documents perfecting a first priority lien in (i) the Real Property Collateral, (ii) the Article 9 Collateral, as defined in and provided under the Security Agreement, (iii) the 

	
		
	 
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Pledged Equity, as defined in and provided under the Security Agreement, and (iv) subject to the conditions set forth therein, Liens provided for under Section 6(O) hereunder, in each case, in favor of Purchaser, including the Security Agreement and Deeds of Trust.

(B) Delivery of Financial Statements and Other Reports. The Company will furnish to the Purchaser: 

(1)  Annual Financial Statements. Within 90 days after the end of each fiscal year, all annual financial and other information with respect to the Company and its Subsidiaries that would be required to be contained in a filing with the Commission on Form 10-K if the Company were required to file such Form, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and a report on the annual financial statements by Deloitte & Touche LLP or other certified independent public accountants meeting the requirements of the Public Company Accounting Oversight Board and other legally required professional standards.

(2)  Quarterly Financial Statements. Within 45 days after the end of each of the first three (3) fiscal quarters of each fiscal year, all quarterly financial and other information with respect to the Company and its Subsidiaries that would be required to be contained in a filing with the Commission on Form 10-Q if the Company were required to file such Form, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

(3)  Publicly Filed Materials.  Within the time period that the same is required to be filed with the Commission, copies of any proxy statement and periodic and other report that the Company is required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act (after giving effect to any grace periods provided under the Exchange Act). 

(4)  Deemed Delivery. Any document or report that the Company files with the Commission through the Commission’s EDGAR system (or any successor thereto) will be deemed to be delivered to the Purchaser for purposes of this Section 6(B) at the time such document or report is filed through the EDGAR system (or such successor), it being understood that notwithstanding anything to the contrary in this Section 6(B), in no event will this Section 6(B) require the Company to deliver or otherwise provide any information for which it is seeking (or has received) confidential treatment from the Commission.

(4) Monthly Financial Statements and Operating Reports.  Within thirty (30) days following the end of each month, the Company and its Subsidiaries shall deliver to the Purchaser: internally prepared, unaudited monthly financial statements of the Company and its Subsidiaries, and an operating report describing the status of the operations for each mine of the Company and its Subsidiaries.

(C) Compliance Certificate.  The Company will, concurrently with any delivery of financial statements under Section 6(B)(1) or Section 6(B)(2) above, a certificate of an officer of the Company certifying that no Event of Default or Default has occurred (or, if an Event of Default or Default has occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto).

(D) Notices of Default, Litigation and Other Proceedings.  Promptly after any Responsible Officer of the Company obtains actual knowledge thereof, the Company will furnish to the Purchaser written notice of: (1) any Default or Event of Default, specifying the nature and extent thereof and the corrective action (if any) proposed to be taken with respect thereto; (2) the filing or commencement of, or any written threat or notice of intention of any person to file or commence, any action, suit or proceeding, whether at law or in 

	
		
	 
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equity or by or before any Governmental Authority, against the Company or one of the Subsidiaries in respect of which there is a reasonable possibility of an adverse determination and which, if adversely determined, could reasonably be expected to result in a Material Adverse Change; and (3) any other development that has resulted in, or could reasonably be expected to result in, a Material Adverse Change.

(E) Compliance with Laws (including Environmental Laws) and Maintenance of Permits and Licenses.  The Company will (1) comply in all material respects with all applicable laws, rules, regulations and orders of any Governmental Authority, whether now in effect or hereafter enacted and (2) (a) comply with all Environmental Laws and Environmental Permits applicable to its operations and Properties; obtain and renew all Environmental Permits necessary for its operations and the Real Property Collateral (except for the Company’s current mercury permit which shall not be renewed until necessary) and (b) conduct any Remedial Action in accordance with Environmental Laws, except, in each case with respect to this clause (2), to the extent the failure to do so, individually or in the aggregate, could not reasonably be expected to have a result in Material Adverse Change.

(F) Taxes.  The Company will pay and discharge promptly when due all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default, as well as all lawful claims for labor, materials and supplies or otherwise that (if unpaid) might give rise to a Lien upon its properties or any part thereof; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and the Company (or affected Subsidiary, as applicable) shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP.

(G) Insurance.  The Company will (1) keep its insurable properties insured by financially sound and reputable insurers in such amounts as shall be customary for similar businesses, (2) maintain such other insurance (including, to the extent consistent with past practices, self-insurance), of such types, to such extent and against such risks, as is customary with companies in the same or similar businesses, (3) with respect to each Real Property Collateral, carry and maintain comprehensive general liability insurance and coverage on an occurrence basis against claims made for personal injury (including bodily injury, death and property damage) and umbrella liability insurance against any and all claims, in no event for a combined single limit of less than seven hundred fifty thousand dollars ($750,000), (4) deliver original or certified copies of all such policies (or certificates in respect thereof satisfactory to the Purchaser) to the Purchaser and (5) take all other actions with respect to insurance that are required by any Deed of Trust.

(H) Inspections of Assets and Operations.  The Company will (1) maintain all financial records in accordance with GAAP and (2) permit any persons designated by the Purchaser to (a) visit and inspect the financial records and the properties of the Company at reasonable times, upon reasonable prior notice to the Company, and as often as reasonably requested, (b) make extracts from and copies of such financial records and (c) discuss the Company's affairs, finances and condition with the officers thereof and independent accountants therefor (in each case, subject to reasonable requirements of confidentiality, including requirements imposed by law or by contract); provided, however, that if a Default or Event of Default has occurred and is continuing, the foregoing limitation with respect to reasonable times and notice shall not apply.

(I) Maintenance.  The Company and its Subsidiaries shall at all times keep their properties and assets in good repair, working order and condition, except for reasonable wear and use.  With regard to the Owned Unpatented Claims and Leased Unpatented Claims as those terms are defined in the Securities Purchase 

	
		
	 
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Agreement, the Company will cause all claim maintenance fees payable to the Bureau of Land Management to have been paid in the manner required by Law in order to maintain such claims in good standing, properly and timely record and file evidence of such payment as required by Law, and furnish evidence of such payment to Purchaser not later than August 1 of each year.

(J) Business Activities.  Without the prior written consent of the Purchaser, which consent may be given or denied in the Purchaser’s sole discretion, neither the Company nor any of its Subsidiaries will engage directly or indirectly (whether through subsidiaries or otherwise) in any type of business other than the business presently or currently planned to be conducted by them and in related lines of business.

(K) Mineral Reports; Land Title Confirmation.  On or prior to April 30, 2017, the Company shall cause to be delivered to the Purchaser, in form and substance either agreed to by the Purchaser prior to the date hereof or is otherwise reasonably satisfactory to the Purchaser, a chain of mineral title and such other reports and opinions, prepared and certified by a licensed Nevada lawyer or a landman that is a member in good standing of the Nevada Landmen’s Association and is reasonably acceptable to the Purchaser (such lawyer or landman, the “Landman”) and addressed to the Purchaser and its counsel, relating to the status of ownership of the mineral title to the Dayton/Spring Valley Properties (as defined in the Securities Purchase Agreement), the American Flat Properties (as defined in the Securities Purchase Agreement), the Lucerne Properties (as defined in the Securities Purchase Agreement), the Occidental Properties (as defined in the Securities Purchase Agreement), the Genco/Rule Properties (as defined in the Securities Purchase Agreement), and the Amazon/Wonder Properties (as defined in the Securities Purchase Agreement) and shall reimburse the Purchaser for up to $5,000 of legal expenses relating to the review of such reports and opinions.  On or prior to January 31, 2017, the Purchaser shall have received, in form and substance reasonably satisfactory to the Purchaser, updated preliminary title reports and such other reports and opinions, related to the American Flat Properties, the Lucerne Properties, the Occidental Properties, the Genco/Rule Properties and the Amazon/Wonder Properties prepared and certified by a Nevada title insurer or the Landman, as the case may be, relating to the status of ownership of the surface title to all of such real properties. Notwithstanding anything in this paragraph to the contrary, the Company shall, promptly after the same are delivered or otherwise communicated to the Company, deliver copies of each report or opinion (whether preliminary or final and any updates thereto) prepared and delivered by the Landman and inform the Purchaser of any other interim updates or information received from the Landman. The Company shall use commercially reasonable efforts to cure material title defects or other material issues identified within the reports delivered by the Landman or that otherwise become known to the Company. 

(L) Payment of Contractual Obligations. The Company will cause to be paid when due all payments due or that may become due under contractual obligations to third parties, including, without limitation, that certain Amended Agreement for the Sale of Untreated Water dated October 7, 2014 and all lease agreements affecting Real Property Collateral, as that term is defined in the Securities Purchase Agreement.

(M) Release or Partial Release of Property. The Company may not surrender, release, abandon or allow to lapse any Owned Unpatented Claims, or permit to be surrendered, released, abandoned or allowed to lapse any Leased Unpatented Claims, without the prior written consent of Purchaser. If the Company surrenders, releases, abandons or allows to lapse any Owned Unpatented Claims, or permits to be surrendered, released, abandoned or allowed to lapse any Leased Unpatented Claims, and subsequently acquires an interest in the lands formerly constituting all or a portion of such Owned Unpatented Claims or Leased Unpatented Claims, whether through re-staking or otherwise, such subsequently acquired interest shall be included within the Real Property Collateral, as that term is defined in the Securities Purchase Agreement, and the Company will execute all instruments reasonably required to secure the Purchaser’s security interest therein.

	
		
	 
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(N)  Negative Covenants.  The Company will not, and will not permit any of the Subsidiaries to, do any of the following without the Purchaser's prior written consent:  
 
(1) Liens and Encumbrances. Create, incur, allow, or suffer any Lien on any assets of the Company or any of its Subsidiaries (except for Permitted Liens), or permit any Collateral not to be subject to the first priority security interest granted pursuant to the Security Agreement (except for Permitted Liens), or enter into any agreement, document, instrument or other arrangement (except with or in favor of the Purchaser) with any Person that directly or indirectly prohibits or has the effect of prohibiting the Company or any of its Subsidiaries from assigning, mortgaging, pledging, granting a security interest in or upon, or encumbering any of the Company’s or such Subsidiary’s property.  

(2) Restricted Payments. Pay any dividends or make any distribution or payment in respect of or redeem, retire or purchase any Capital Stock (other than repurchases pursuant to the terms of employee stock purchase plans, employee restricted stock agreements, stockholder rights plans, director or consultant stock option plans or similar plans); and (ii) payments related to share withholdings for individual taxes related to the Company's stock options and required under the Company’s equity grants and employment agreements.

(3) Asset Sales. Convey, sell, lease, transfer, assign, dispose, assign or Lien, whether by operation of law or otherwise, of on or affecting any assets of the Company or any Subsidiary, enter into any earn-in arrangement or issue equity interests in any Subsidiary (collectively, “Transfer”), except for Transfers (A) of Inventory in the ordinary course of business, (B) of worn-out or obsolete equipment (as defined in the Uniform Commercial Code, and including all machinery, fixtures, goods, vehicles (including motor vehicles and trailers) and any interest in any of the foregoing) (C) Transfers (i) for fair value (to be determined and evidenced by an officer’s certificate or a resolution of the Board, or a third-party if the Company Transfers such Collateral for more than $1,000,000), (ii) for at least 90% cash consideration and (iii) the Net Cash Proceeds of which are applied in accordance with the Redemption provisions set forth in Section 5 and (D) permitted earn-ins the Net Cash Proceeds of which are applied in accordance with the Redemption provisions set forth in Section 5.  For the sake of clarity, the issuance and sale of its equity interests by the Company is not, and shall not be deemed to be, a sale of an asset of the Company for purposes of this Section (N)(3).

(4) Indebtedness. Create, incur, assume, or be liable for any Indebtedness, other than Permitted Indebtedness.
 
(5) Transactions with Affiliates. Directly or indirectly enter into or permit to exist any transaction with an aggregate value in excess of $50,000 with any Affiliate of the Company or any of its Subsidiaries, except for transactions that are in the ordinary course of the Company’s or such Subsidiary’s business, upon fair and reasonable terms that are no less favorable to the Company or such Subsidiary than would be obtained in an arm’s length transaction with a Person that is not an Affiliate.

(6) Merger, Consolidation, Sale of Substantially All Assets. The Company and its Subsidiaries will not affect any merger or consolidation or Transfer of all or substantially all of its assets except that a Subsidiary may merge or consolidate into or Transfer such assets to another Subsidiary and either Subsidiary may merge or consolidate into or Transfer such assets to the Company so long as the Company is the surviving (or acquiring) entity and the Company and such Subsidiary has taken all necessary action to ensure that the security interest of the Purchaser remains in full force and effect and remains perfected, in each case, after giving effect to such merger, consolidation or Transfer.

	
		
	 
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(O)  After-Acquired Property.  (i) With respect to any property acquired after the date hereof by the Company or any of its Subsidiaries as to which the Purchaser does not have a perfected Lien, the Purchaser or such Subsidiary shall promptly (x) execute and deliver to the Purchaser such amendments to the Security Agreement or such other documents as the Purchaser deems necessary or advisable to grant to the Purchaser a perfected security interest in such property (subject to Permitted Liens) and (y) take all actions necessary or advisable to grant to the Purchaser a perfected first priority security interest in such property (subject to Permitted Liens), including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by law or as may be reasonably requested by the Purchaser.  

(ii) With respect to (a) any fee interest in any real property acquired after the date hereof by the Company or any of its Subsidiaries with a fair market value or purchase price in excess of $200,000 or (b) any unpatented mining claims staked by the Company or any of its Subsidiaries, the Company or such Subsidiary shall promptly (x) execute and deliver a first priority (subject to Permitted Liens) Deed of Trust in favor of the Purchaser covering such real property, (y)  provide the Purchaser with (A) title and extended coverage insurance covering such real property in an amount at least equal to the purchase price of such real property (or such other amount as shall be reasonably specified by the Purchaser) as well as a current survey thereof, together with a surveyor’s certificate and (B) any consents or estoppels reasonably deemed necessary or advisable by the Purchaser in connection with such Deed of Trust, each of the foregoing in form and substance reasonably satisfactory to the Purchaser and (z) if requested by the Purchaser, deliver to the Purchaser legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Purchaser.  

(iii)  With respect to any new Subsidiary created or acquired after the date hereof by the Company or any of its Subsidiaries, the Purchaser or such Subsidiary shall promptly (i) execute and deliver to the Purchaser such amendments to the Security Agreement as the Purchaser deems necessary or advisable to grant to the Purchaser a perfected first priority security interest in the equity interests of such new Subsidiary, (ii) deliver to the Purchaser the certificates representing such equity interests, together with undated stock powers, in blank, executed and delivered by a duly authorized officer of the Company or such Subsidiary, as the case may be, (iii) cause such new Subsidiary to take such actions necessary or advisable to grant to the Purchaser a perfected first priority security interest in the Collateral described in the Security Agreement with respect to such new Subsidiary, including the filing of Uniform Commercial Code financing statements in such jurisdictions as may be required by law or as may be reasonably requested by the Purchaser and (iv) if requested by the Purchaser, deliver to the Purchaser legal opinions relating to the matters described above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to the Purchaser.

7. Security Agreement.
 
The Debenture is secured pursuant to the terms of the Security Agreement and Deeds of Trust.
 
8. Defaults and Remedies.
 
(A) Events of Default.
 
(i) Definition of Events of Default. “Event of Default” means the occurrence of any of the following:  
 
(1) a default in the payment when due (whether at maturity or otherwise) of the principal or Redemption Price of this Debenture (or any portion thereof);

	
		
	 
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(2) a default for three (3) days in the payment when due of interest on this Debenture (or any portion thereof);
 
(3) other than as set forth in clauses (1) and (2) above, a default in any of the Company’s material representations, obligations or agreements under this Debenture (or any replacement(s) thereof), the Security Agreement, any Deed of Trust or the Purchase Agreement; provided, however, that, other than a default under (i) the second sentence Section 6(I) with respect to the payment of claim maintenance fees to the Bureau of Land Management (which shall be an Event of Default on August 2nd of the applicable year) or (ii) failure to deliver mineral title reports pursuant to Section 6(K) (which shall be an Event of Default on (A) May 1, 2017, with respect to reports to be delivered by the Landman pertaining to the Dayton/Spring Valley Properties, the American Flat Properties, the Genco/Rule Properties and the Amazon/Wonder Properties and (B) September 1, 2017, with respect to reports to be delivered by the Landman pertaining to the Lucerne Properties and the Occidental Properties), if such default can be cured, then such default will not be an Event of Default unless the Company has failed to cure such default within thirty (30) days after its occurrence; 
 
(4) either (I) a default under any agreement to which the Company or any of its Subsidiaries is a party governing the Indebtedness of the Company or any Subsidiary in an aggregate principal amount in excess of seven hundred fifty thousand dollars ($750,000) resulting in a right by the holders of such Indebtedness, whether or not exercised, to accelerate the maturity of such Indebtedness; (II) a default under any Northern Comstock Debt or (III) default under a Material Agreement that permits the counterparty thereto to accelerate the payments owed thereunder; provided, that if prior to the exercise of remedies with respect to such acceleration the default under such other Indebtedness has been cured (or acceleration has been reversed) then the default with respect to this Debenture shall be cured as well;

(5) either (I) one or more judgments, orders, or decrees for the payment of money in an amount, individually or in the aggregate, of at least seven hundred fifty thousand dollars ($750,000) (not covered by independent third-party insurance) is rendered against the Company or any of its Subsidiaries and remains unsatisfied, unvacated or unstayed for a period of thirty (30) days after the entry thereof; (II) any judgments, orders or decrees rendered against the Company that could reasonably be expected to result in a Material Adverse Change; or (III) any judgment, order, or decree determined by a court of competent jurisdiction that prevents, enjoins or otherwise materially delays the Company’s exploration, development or mining with respect to the Real Property Collateral;
 
(6) the announcement of a restatement of any of the Company’s financial statements if the result of such restatement would be to require the independent auditor to modify its opinion or the Company to issue a Form 8-K;   

(7) a perfected first priority security interest in favor of the Purchaser with respect to the Collateral ceases to exist for any reason, for a period of fifteen (15) days after the earlier of (x) notice thereof from Purchaser or (y) the Company or any Subsidiary of the Company becoming aware of the existence of such circumstance;
 

	
		
	 
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(8) either (I) the Company or any of its Subsidiaries shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or any Subsidiary or for any substantial part of the property of the Company or any Subsidiary, or make any general assignment for the benefit of creditors; or (II) a court having jurisdiction in the premises shall enter a decree or order for relief in respect of the Company or any Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee or sequestrator (or similar official) of the Company or any Subsidiary or for any substantial part of the property of the Company or any Subsidiary or ordering the winding up or liquidation of the affairs of the Company or any Subsidiary, and such decree or order shall remain unstayed and in effect for a period of sixty (60) consecutive days (for purposes of this clause (10) only, “Subsidiaries” excludes any single Subsidiary or group of Subsidiaries where such Subsidiary’s revenue or such group of Subsidiaries’ revenues (in each case in accordance with GAAP) or assets is less than five percent (5%) of the aggregate (x) revenue or (y) assets of the Company and all its Subsidiaries, in each case measured on a consolidated basis for the Company and all its Subsidiaries); or

(9) the existence of a material title defect or other material issue identified pursuant to the reports and opinions required by Section 6(K) or that otherwise becomes known to the Company or any of its Subsidiaries that prevents, enjoins or otherwise materially delays the Company’s exploration, development or mining with respect to the Real Property Collateral, as reasonably determined by the Purchaser; provided that no Event of Default shall occur under this clause (9) unless the Company has failed to cure such title defect or other material issue by quiet title action or otherwise to the satisfaction of the Purchaser on or prior to the date that is the earlier of (x) four (4) months after the date on which the Company has become aware of such title defect or other material issue and (y) August 31, 2017.

(B) Acceleration.
 
(i) Automatic Acceleration in Certain Circumstances. If an Event of Default set forth in Section 8(A)(i)(8) occurs with respect to the Company (and not solely with respect to a Subsidiary of the Company (as defined in such Section)), then the principal amount of, and all accrued and unpaid interest on, all of this Debenture (or any replacement(s) thereof) then outstanding and the Make-Whole Amount that would be payable if a Redemption of the Debenture were to occur on such date will immediately become due and payable without any further action or notice by any Person.
 
(ii) Optional Acceleration. If an Event of Default (other than an Event of Default set forth in Section 8(A)(i)(8) with respect to the Company and not solely with respect to a Subsidiary of the Company (as defined in such Section)) occurs and is continuing, then the Purchaser may, by notice to the Company, declare the principal amount of, and all accrued and unpaid interest on, all of this Debenture (or any replacement(s) thereof) then outstanding and the Make-Whole Amount that would be payable if a Redemption of the Debenture were to occur on such date to become due and payable immediately.  For the avoidance of doubt, whether or not the Purchasers declares such amounts to 

	
		
	 
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be due and payable under this clause (B)(ii), the Default Interest Rate shall apply as set forth in Section 3(B).
 
(C) Rescission of Acceleration. Notwithstanding anything to the contrary in this Debenture (or any replacement(s) thereof), the Purchaser may, by written notice to the Company, rescind any acceleration of this Debenture (or any replacement(s) thereof) and its consequences if (i) such rescission would not conflict with any judgment or decree of a court of competent jurisdiction; (ii) all existing Events of Default (except the non-payment of principal of, or interest on, this Debenture that have become due solely because of such acceleration) have been cured or waived and (iii) the Purchaser has received a sum sufficient to pay its fees and expenses in connection with such Event of Default, including the reasonable expenses, advances, and disbursements of its agents and counsel. No such rescission will affect any subsequent Default or impair any right consequent thereto.
 
(D) Waiver of Past Defaults. If an Event of Default is waived by the Purchaser in accordance with this Debenture, then it will cease to exist. If a Default is so waived, then it will be deemed to be cured and any Event of Default arising therefrom will be deemed not to occur. However, no such waiver will extend to any subsequent or other Default or Event of Default or impair any right arising therefrom.
  
9. Amendments, Supplements and Waivers.
 
(A) No Amendments without Consent. Neither this Debenture nor the Security Agreement nor any Deed of Trust or ancillary document or provision thereof may be waived, amended or modified except, in the case of this Agreement, by an agreement or agreements in writing executed by the Company, the Subsidiaries and the Purchaser or, in the case of any other document, by an agreement or agreements in writing entered into by the parties thereto.
 
(B) Notations and Exchanges. If any amendment, supplement or waiver changes the terms of a Debenture, then the Company may, in its discretion, require the Purchaser to deliver this Debenture (or such portion thereof) to the Company so that the Company may place an appropriate notation on this Debenture (or such portion thereof) and return this Debenture (or such portion thereof) to the Purchaser. Alternatively, at its discretion, the Company may, in exchange for this Debenture (or such portion thereof), issue, execute and deliver a new Debenture that reflects the changed terms. The failure to make any appropriate notation or issue a new Debenture will not impair or affect the validity of such amendment, supplement or waiver.
 
10. Ranking.
 
The Indebtedness of the Company arising under or in connection with this Debenture constitutes a senior obligation of the Company, ranking equally in right of payment with other existing and future senior Indebtedness of the Company and ranking senior in right of payment to any existing or future subordinated debt of the Company.
 
11. Replacement Debentures.
 
If the Purchaser claims that this Debenture (or such portion thereof) has been mutilated, lost, destroyed or wrongfully taken, then the Company will issue, execute and deliver a replacement Debenture upon surrender to the Company of such mutilated Debenture, or upon delivery to the Company of evidence of such loss, destruction or wrongful taking reasonably satisfactory to the Company. In the case of a lost, destroyed or wrongfully taken Debenture, the Company may require the Purchaser to provide such security 

	
		
	 
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or indemnity that is reasonably satisfactory to the Company to protect the Company from any loss that it may suffer if this Debenture (or such portion thereof) is replaced.
 
12. Miscellaneous.

(A) Notices.  Unless otherwise provided herein, all notices, demands, consents, service of process, requests and other communications hereunder shall be in writing and shall be delivered in person or by nationally recognized overnight courier service, or mailed by certified mail, return receipt requested, or sent by facsimile (if provided), addressed as follows (or to such other address as may be given in writing in the future by the Company to the Purchaser or the Purchaser to the Company): 

If to the Company, to:
Comstock Mining Inc.
P.O. Box 1118
Virginia City, NV 89440
Attention:  Corrado DeGasperis
Facsimile: 800-750-5740  
Telephone: 775-848-5310

With a copy (which shall not constitute notice) to:
 
Withers Bergman LLP
1700 East Putnam Avenue, Suite 400
Greenwich, CT 06870-1366
Attention:  Clyde Tinnen, Esq.
Facsimile: 203-302-6619 
Telephone: 203-302-4079

Notices given to the Purchaser hereunder shall be delivered to it c/o GF Comstock 2 LP, 140 East 45th Street, Suite 17c, New York, NY 10017, Attention: Daniel Freuman, Telephone: 212-201-5813.

Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day; (ii) on the next Business Day after timely delivery for overnight service to a nationally recognized overnight courier service; and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid).  
 
(B) Governing Law and Jurisdiction; Waiver of Jury Trial.  All questions concerning the construction, validity, enforcement and interpretation of this Debenture shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof; provided, however, that if the laws of any jurisdiction other than New York shall govern in regard to the validity, perfection or effect of perfection of any Lien or in regard to procedural matters affecting enforcement of any Liens in Collateral, such laws of such other jurisdictions shall continue to apply to that extent.  The Company agrees that any action, suit or proceeding arising out of or relating to this Debenture (whether brought against the Company, the Purchaser or its respective Affiliates, employees or agents) may be commenced in the state courts sitting in New York City, New York, Borough of Manhattan and the United 

	
		
	 
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States District Court of the Southern District of New York, and any appellate court from any thereof.  NOTWITHSTANDING THE FOREGOING, THE PURCHASER SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE COMPANY OR ANY SUBSIDIARY (OR ANY PROPERTY OF SUCH PERSON) IN THE COURT OF ANY OTHER JURISDICTION THE PURCHASER DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS UNDER THIS INDENTURE.  The Company hereby (1) irrevocably waives personal service of process, (2) waives, to the fullest extent permitted by applicable law, (x) any objection that it may now or hereafter have to the laying of venue of any such action, suit or proceeding; and (y) any claim that it may now or hereafter have that any such action, suit or proceeding in such a court has been brought in an inconvenient forum, (3) submits to the nonexclusive jurisdiction of such courts in any such action, suit or proceeding and (4) consents to process being served in any such action, suit or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to the Company at the address in effect for notices to it under this Debenture (and agrees that such service shall constitute good and sufficient service of process and notice thereof).  The Company hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any action, suit or proceeding arising out of or relating to this Debenture or the transactions contemplated hereby.

(C) Cumulative Remedies.  The rights, remedies, powers and privileges of a party hereunder are cumulative and not exclusive of any rights or remedies that such party may otherwise have.

(D) Execution.   In the event that any signature is delivered by facsimile or electronic transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or electronic signature were the original thereof.

(E) Severability.   If any term, provision, covenant or restriction of this Debenture is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the reasonable efforts shall be used to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the Company's intention that it would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. 

(F) Successors and Assigns. This Debenture shall inure to the benefit of and be binding upon the Company's successors and permitted assigns, and references to the Company will be deemed to include its successors and permitted assigns.  Nothing in this Debenture, express or implied, is intended to confer upon any party, other than the Company, the Purchaser or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Debenture, except as expressly provided in this Debenture.  The Company may not assign its rights or obligations under this Debenture without the prior written consent of the other party and any attempt to do so without such consent will be null and void.

(G) Section Headings. The section headings contained in this Debenture are for reference purposes only and shall not control or affect its construction or interpretation in any respect.

(H) No Delay, Waivers, etc.  No delay on the part of the Purchaser in exercising any power or right hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any power or right hereunder preclude other or further exercise thereof or the exercise of any other power or right.  The Purchaser 

	
		
	 
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shall not be deemed to have waived any rights hereunder unless such waiver shall be in writing and signed by the Purchaser.

	
		
	 
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Schedule C
Permitted Indebtedness
See separate schedule

	
		
	 
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Schedule D
Permitted Liens
See separate schedule

	
		
	 
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