Document:

EXHIBIT 10.13

 

EXCHANGE AGREEMENT

 

This Exchange Agreement (hereinafter, the “Agreement”) is effective as of March 15, 2011, by and among Standard Gold, Inc., Colorado corporation (hereinafter “Standard Gold”); Shea Mining & Milling, LLC, a Nevada limited liability company (“Shea Mining”); and the members of Shea Mining listed on the signature page hereof (each a “Shea Mining Member,” and collectively the “Shea Mining

Members”); Wits Basin Precious Minerals Inc., a Minnesota corporation (solely with respect to Section 3 hereof) (“Wits”); and Alfred A. Rapetti, individually (solely with respect to Section 3(d) hereof) (“Rapetti”).

RECITALS

A.           Shea Mining owns certain assets to be used in the business of toll milling and mining of high value ores and the processing of mine tailings for gold, silver and other valuable metals, and owns certain land, plants, equipment and tailings, among other things, for the operation of this business (the “Business”).

B.           A special committee of the board of directors of Standard Gold and the Shea Mining Members have adopted resolutions approving and adopting the proposed exchange transaction (the “Exchange”) whereby Standard Gold will acquire certain assets of the Business listed on Schedule I attached hereto (the “Shea Assets”) in exchange for, among other things, the issuance of 35,000,000 shares of Common Stock of Standard Gold (“Standard Gold Common

Stock”) which, after issuance, represents 86.697% of all outstanding Standard Gold common stock to the Shea Mining Members, upon the terms and conditions set forth in this Agreement.

B.           Shea Mining desires to sell and transfer to Standard Gold the Shea Assets, and Standard Gold wishes to exchange Standard Gold Common Stock for the Shea Assets, pursuant to the terms and conditions of this Agreement.

E.           The Shea Mining Members will enter into this Agreement for the purpose of evidencing its consent to the consummation of the Exchange and for the purpose of making certain representations, warranties, covenants and agreements.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.           The Exchange.

(a)           Upon the terms and subject to the conditions hereof, at the Closing (as hereinafter defined), Shea Mining will sell, convey, assign, transfer and deliver to Standard Gold the Shea Assets, including, but not limited to, the right, title and interest in the following properties, assets and rights relating to the Business and in existence as of the date hereof:

(i)           All rights of Shea Mining under any warranty or guarantee by any manufacturer, supplier or other transferor of the Shea Assets;

 

(ii)           All rights of Shea Mining under any executory contracts, leases and agreements to which Shea Mining is a party as listed on Schedule 1(a)(ii) (the “Purchased Contracts”), including, but not limited to, the Lease Agreement by and between Father Gregory Ofiesh, Mary Jane Ofiesh and Shea Mining & Milling, LLC, dated April 6, 2010 (the “Amargosa Lease”);

 

  

 

  

 

(iii)         To the extent transferable, all permits, authorizations and licenses held or applied for by Shea Mining for the conduct of the Business, all of which are listed on Schedule 1(a)(iii) hereof (collectively, the “Permits”); and

 

(iv)           Any and all other assets and rights owned by Shea Mining as of the date hereof, necessary or desirable for the operation of the Business, tangible and intangible and related to the Purchased Contracts or Permits, of every kind and description, wherever located.  Notwithstanding anything contained herein to the contrary, the parties hereto understand and agree that the portable crusher built by Shea Mining and currently located in Silver Peak, Nevada, is not part of the Shea Assets for the purposes of this Agreement and will remain the property of Shea Mining after the Closing Date.

 

(b)           At the Closing, Standard Gold will issue to the Shea Mining Members, in exchange for the Shea Assets, an aggregate of 35,000,000 shares of Standard Gold Common Stock which, after issuance, represents 86.697% of all outstanding Standard Gold common stock.

(c)           The closing of the Exchange (the “Closing”) shall take place effective as of the date first set forth above (sometimes referred to hereinafter as the “Closing Date”).

(d)           The shares of Standard Gold Common Stock to be issued to the Shea Mining Members hereunder shall be “restricted securities” as that term is defined in Rule 144 promulgated under the Securities Act of 1933 (the “Securities Act”) and the certificates evidencing such shares shall bear standard restrictive legends.

(e)           For purposes of this Agreement and the exhibits and schedules attached hereto, the following terms shall have the meanings specified or referred to below, unless the context otherwise requires:

“Affiliate” means with respect to a specified person, any other person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the specified person; it being understood and agreed that, for purposes of this definition, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or other ownership interest, by contract or otherwise.

“Liability” means any liability or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), including any liability for taxes.

“Material Adverse Effect” means with respect to any person, any event or events or any change in or effect on such person’s financial condition, business, prospects, operations, customers, suppliers, employee relationships, assets, properties, or results of operations that, when taken as a whole, (i) has materially interfered or is reasonably likely to materially interfere with the ongoing operations of such person’s business or (ii) singly or in the aggregate has resulted in, or is reasonably likely to have, a material adverse effect on the ongoing conduct of the business of such person; provided, however, that any adverse effect arising out of or resulting from (x) an event or series of events or

circumstances affecting the United States economy generally or the economy generally of any other country in which the person operates, or (y) the entering into of this Agreement and the consummation of the transactions contemplated thereby, shall be excluded in determining whether a Material Adverse Effect has occurred.

 

  

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2.           Assumption of Liabilities.

Subject to the terms and conditions of this Agreement, Standard Gold shall assume and agree to pay and perform the obligations of Shea Mining under (i) the Purchased Contracts, exclusively as they relate to the Business and only to the extent that such obligations are to be performed from and after the Closing Date, and (ii) the payments due to the parties listed on Schedule 2(ii) hereof, and (iii) the monthly payment obligations to those vendors listed on Schedule 2(iii) hereof.  Standard Gold shall not assume any other obligation or liability of Shea Mining that relates to or arises out of ownership of the Shea Assets or any of Shea Mining’s operations, including but

not limited to Shea Mining’s operation of the Business prior to the Closing Date, whether absolute or contingent, known or unknown, contractual or otherwise, and specifically including but not limited to any accounts payable, debt, tax liabilities, employee-benefit or pension-plan liabilities, workers’ compensation liabilities, environmental liabilities, other legal liabilities, union or union-related liabilities, or lease obligations relating to executive or sales vehicles.

3.           Other Covenants.

(a)           Right to Transfer Hunter Bates Opportunity.  Standard Gold owns 100% of the outstanding equity of Hunter Bates Mining Corporation, a Minnesota corporation (“Hunter Bates”).  Hunter Bates’ sole assets are prior producing gold mine properties located in Central City, Colorado (the “Bates-Hunter Mine”).  Gregory Gold Producers, Inc., a Colorado corporation (“Gregory Gold”), a wholly-owned subsidiary of Hunter Bates, serves as an oversight management company for the exploration activities conducted at the Bates-Hunter Mine.  The parties to this Agreement acknowledge and agree that Standard Gold will have the right, for a period of ninety (90) days after the Closing Date, to transfer to Wits all of its ownership interests in Hunter Bates, Gregory Gold, and the Bates-Hunter Mine, as well as any and all related agreements, assets, liabilities and obligations thereof, including, but not limited to, the promissory note issued from Hunter Bates to Wits, dated September 29, 2009 in the original principal amount of $2,500,000.00.

(b)           Wits Share Exchange.  Immediately prior to the Closing, Wits owned 21,513,544 shares of Standard Gold Common Stock.  In consideration of Shea Mining entering into this Agreement and consummating the transactions contemplated hereby, Wits hereby agrees to exchange 19,713,544 shares of Standard Gold Common Stock held by it into 10,000,000 shares of Standard Gold’s Series A Preferred Stock (the “Series A Preferred,” and such exchange, the “Wits Share Exchange”).  As soon as
is practicable after the Closing Date, Wits will provide to Standard Gold all stock certificates held by it representing shares of Standard Gold Common Stock in exchange for a stock certificate representing the shares of Series A Preferred.  The parties understand and agree that after the effectiveness of the Wits Share Exchange, Wits will own 1,800,000 shares of Standard Gold Common Stock (the “Wits-Owned Common Stock”) and 10,000,000 shares of Series A Preferred.

(c)           Wits Voting Proxy.  Wits hereby agrees, for a period beginning on the Closing Date and ending on the one-year anniversary thereof, to irrevocably give to the Chief Executive Officer of Standard Gold (who as of the date of this Agreement is Rapetti) the right to vote, on Wits’ behalf, all of the shares of Wits-Owned Common Stock held and eligible to be voted by Wits on the date such vote is to be taken.  The Chief Executive Officer will vote the Wits-Owned Common Stock in accordance with the determination of the Board of Directors of Standard Gold (the “Board”).

 

  

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(d)           Leslie Lucas Partners, LLC Voting Proxy.  Leslie Lucas Partners, LLC, which entity is one of the Shea Mining Members (“Leslie Lucas”), hereby agrees to irrevocably give to Rapetti the right to vote, on Leslie Lucas’ behalf and on the date any such vote is to be taken, all of the shares of Standard Gold Common Stock to be held and eligible to be voted by Leslie Lucas after the Closing Date (the “Leslie Lucas-Owned Common Stock,” and Rapetti’s

right to vote the Leslie Lucas-Owned Common Stock, the “Voting Proxy”).  The Voting Proxy will apply to all shares of Leslie-Lucas-Owned Common Stock held by Leslie Lucas as of the Closing Date or otherwise acquired thereafter, and will continue to apply to any transferee, assignee or purchaser of such shares, until such time as the shares are sold in the public markets in accordance with all applicable Federal and state securities laws, at which time the Voting Proxy will cease to apply solely to those shares of Leslie Lucas-Owned Common Stock sold.  Leslie Lucas and Rapetti agree and acknowledge that this Section 3(d) shall be considered a “appointment form” and a “voting agreement” as such terms are defined in Sections 7-107-203 and 7-107-302, respectively, of the Colorado Business Corporation Act.

(e)           Kenglo Option Agreement Exchange.  Wits entered into a Private Option Agreement, dated December 19, 2009, with Kenglo One, Ltd., a company incorporated under the laws of Jersey (“Kenglo”), pursuant to which Wits granted to Kenglo an option, expiring on December 19, 2014, to purchase up to 1,299,000 shares of Wits-Owned Common Stock, at an exercise price of $1.00 per share (the “Kenglo Option”).  In consideration of Wits agreeing to the Wits

Share Exchange, Standard Gold hereby acknowledges and agrees that as soon as is practicable after the Closing Date, Standard Gold will enter into an option agreement with Kenglo pursuant to which Standard Gold will grant to Kenglo an option, on substantially the same terms as the Kenglo Option, to purchase shares of Standard Gold Common Stock at an exercise price of $1.00 per share.

(f)           In further consideration of Wits agreeing to the Wits Share Exchange, Standard Gold hereby grants to Wits an option, expiring on December 19, 2014, to purchase up to 630,000 shares of Standard Gold Common Stock, at an exercise price of $0.50 per share (the “Wits Option”).  The purpose of the Wits Option is to provide Wits with shares of Standard Gold Common Stock to issue upon the exercise of stock options to purchase up to 630,000 shares of Wits-Owned Common Stock held by investors that participated in a private placement of Wits’ common stock that took place in the third and fourth quarter of

fiscal 2009 (the “Investor Options”).  The Wits Option has substantially the same terms as the Investor Options.

(g)           Service-Related Payment and Stock Issuance.  For services previously rendered to Standard Gold and in consideration of providing future services to Standard Gold, the parties hereby agree to issue 100,000 shares of Standard Gold Common Stock to Maslon Edelman Borman & Brand, LLP (“Maslon”).  Furthermore, Standard Gold agrees to assume the obligation of Wits to pay to Maslon $80,000.00 of Maslon’s fees previously billed to Wits.  The stock certificate representing the shares of Standard Gold Common Stock to
be issued to Maslon will be delivered to Maslon as soon as is practicable after the Closing Date.

(h)           Cash Payments to Shea Mining.  The parties hereto understand and agree that Standard Gold will pay to Shea Mining a total of up to $700,000.00, payable as follows:

(i)           The parties hereto agree and acknowledge that as of the date hereof, Standard Gold has already paid $200,000.00 either to Shea Mining, or to others on behalf of Shea Mining.

(ii)           $100,000.00 will be paid to Shea Mining as follows: (a) $50,000 will be due and payable on the Closing Date;  and (b) $50,0000 will be due and payable on the one-week anniversary of the Closing Date.

 

  

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(iii)           A total of $400,000 will be paid to Shea Mining, in whole or in part and at any time or from time to time, as Standard Gold shall determine in its sole discretion, prior to the date that is one (1) year from the Closing Date.

(i)           Appointment of Sharon L. Ullman to the Board.  The parties agree and acknowledge that Sharon L. Ullman will be appointed as a member of the Board as soon as is practicable following the Closing Date.

4.           Representations Relating to Shea Mining.  Each of the Shea Mining Members and Shea Mining represents and warrants as follows, which warranties and representations shall also be true as of the Closing except as set forth in the disclosure schedules attached to this Agreement:

 

(a)           Shea Mining has the power to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by a “super majority” of all the unit holders of Shea Mining as defined in Section 5.07(B) of the Shea Mining & Milling Operating Agreement, dated as of March 14, 2011. This Agreement has been duly executed and delivered by Shea Mining and constitutes a legal, valid and binding obligation of Shea Mining, enforceable against Shea Mining in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency or other laws affecting creditor’s rights generally or by
legal principles of general applicability governing the availability of equitable remedies.  This Agreement has been duly and validly executed and delivered by each Shea Mining Member, and constitutes a valid and binding agreement of each Shea Mining Member, enforceable against each Shea Mining Member in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of creditors' rights generally or by general principles of equity.

(b)           Shea Mining is not a party to, or the subject of, any pending litigation, claims, or governmental investigation or proceeding, and to the knowledge after due inquiry of its executive officers and directors (herein “Knowledge”), there are no lawsuits, claims, assessments, investigations, or similar matters, threatened or contemplated against or affecting Shea Mining or the Shea Assets.  Neither Shea Mining nor any of the Shea Assets are subject to any outstanding court order or consent decree.

 

(c)           Shea Mining has been duly organized and is validly existing and in good standing under the laws of the State of Nevada, and has the power to own, lease and operate its property and to carry on its business as now being conducted and is duly qualified to do business and in good standing to do business in any jurisdiction where so required except where the failure to so qualify would have no Material Adverse Effect on Shea Mining.

 

(d)           Shea Mining is the owner of, or has a valid leasehold interest in, the Shea Assets free and clear of all liens and encumbrances.

 

(e)           Shea Mining has no material liability other than that set forth in this Agreement (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due, including any liability for taxes).

 

  

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(f)           Shea Mining has delivered to Standard Gold a true and complete copy of each lease agreement relating to real property under which Shea Mining is the lessee (the “Leases”).  There are no oral lease agreements for real property under which Shea Mining is the lessee.  With respect to each of the Leases:  (i) such Lease is legal, valid, binding, enforceable and in full force and effect; (ii) except as set forth on Schedule 4(f), the transactions contemplated by this Agreement do not require the consent of any other party to such

Lease, will not result in a breach of or default under such Lease, and will not otherwise cause such Lease to cease to be legal, valid, binding, enforceable and in full force and effect on substantially the same terms following the Closing; (iii) Shea Mining’s possession and quiet enjoyment of the leased real property under such Lease has not been disturbed and, to the Knowledge of Shea Mining, there are no disputes with respect to such Lease; (iv) such Lease can be extended for an additional term of at least one (1) year; (v) neither Shea Mining nor, to the Knowledge of Shea Mining, any other party to the Lease is in breach of or default under such Lease; (vi) no security deposit or portion thereof deposited with respect to such Lease has been applied in respect of a breach of or default under such Lease that has not been redeposited in full; (vii) the other party to such Lease is not an affiliate of, and otherwise does not have any economic interest in, Shea Mining; and (viii)

Shea Mining has not subleased, licensed or otherwise granted any person the right to use or occupy any leased real property or any portion thereof.

 

(h)           Except for the Term Loan Agreement, Promissory Note, Deed of Trust and Security Agreement with Assignment of Rents and Fixture Filing, the Assignment of Rents and the Environmental Indemnity, each dated August 21, 2009, and each by and between Shea Mining and NJB Mining, Inc., a Arizona corporation, Schedule 1(a)(ii) lists all the material contracts Shea Mining has entered into as of the Closing Date.  Shea Mining has delivered to Standard Gold a correct and complete copy of each of the Purchased Contracts (as amended to date) listed in Schedule 1(a)(ii). With respect to each such agreement: (A) the
agreement is legal, valid, binding, enforceable, and in full force and effect in all material respects; (B) to the Knowledge of Shea Mining, no party is in material breach or default, and no event has occurred that with notice or lapse of time would constitute a material breach or default, or permit termination, modification, or acceleration, under the agreement; and (C) to the Knowledge of Shea Mining, no party has repudiated any material provision of the agreement.

 

 (i)           The execution of this Agreement does not violate or breach any material agreement or contract to which Shea Mining is a party, and Shea Mining, to the extent required, has (or will have by Closing) obtained all necessary approvals or consents required by any agreement to which Shea Mining is a party. Schedule 1(a)(iii) hereof lists all of the Permits required to operate the Business as currently operated or proposed to be operated.  The execution and performance of this Agreement will not violate or conflict with any provision of the articles of organization or bylaws or other controlling organizational document of Shea Mining.

 

(j)           Shea Mining has not, in the past, been required to register its units under the Securities Act, other applicable securities laws, or any applicable blue sky laws. There are no outstanding, pending or threatened stop orders or other actions or investigations relating thereto involving federal and state securities laws. All issued and outstanding shares of Shea Mining’s capital stock were offered and sold in compliance with federal and state securities laws and constitute duly authorized, validly and legally issued, fully-paid, nonassessable units of Shea Mining, and such units were not offered, sold or issued in violation of any preemptive right, right of first refusal or right of first offer and are not subject to any right of
rescission.

 

 (k)           Shea Mining is and has been in compliance with, and Shea Mining has conducted any business previously owned or operated by it in compliance with, all applicable laws, orders, rules and regulations of all governmental bodies and agencies, including applicable securities laws and regulations and environmental laws and regulations, except where such noncompliance has and will have, in the aggregate, no Material Adverse Effect.

 

(l)           The closing documents and the consummation by Shea Mining of the transactions contemplated hereby do not and will not (i) require the consent, approval or action of, or any filing or notice to, any corporation, firm, person or other entity or any public, governmental or judicial authority (except for such consents, approvals, actions, filing or notices the failure of which to make or obtain will not in the aggregate have a Material Adverse Effect), other than the consent of the members of Shea Mining; (ii) violate any order, writ, injunction, decree, judgment, ruling, law, rule or regulation of any federal, state or foreign court, administrative agency or commission or other governmental authority or instrumentality (a “Governmental Authority”) applicable to Shea Mining, or its business or assets; or (iii) constitute a material breach of any agreement, indenture, mortgage, license or other instrument or document to which Shea Mining is a party or to which it is otherwise subject.

 

  

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 (m)           Each Shea Mining Member acknowledges that none of the shares of Standard Gold Common Stock issued to the Shea Mining Members hereunder will be registered pursuant to the Securities Act or any applicable state securities laws, that the Standard Gold Common Stock issued to the Shea Mining Members hereunder will be characterized as “restricted securities” under federal securities laws, and that under such laws and applicable regulations the Standard Gold Common Stock issued to the Shea Mining Members cannot be sold or otherwise disposed of without registration under the Securities Act or an exemption therefrom.  In this regard, each of the Shea Mining Members is familiar with Rule 144 promulgated under the Securities
Act, as currently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

(n)           Each Shea Mining Member (i) is acquiring the Standard Gold Common Stock solely for his or its own account for investment purposes, and not with a view to the distribution thereof, (ii) is a sophisticated investor with knowledge and experience in business and financial matters, (iii) has received certain information concerning Standard Gold and has had the opportunity to obtain additional information as desired in order to evaluate the merits and the risks inherent in holding the Standard Gold Common Stock, (iv) is able to bear the economic risk of acquiring the Standard Gold Common Stock pursuant to the terms of this Agreement, including a complete loss of his investment in the Standard Gold Common Stock, and (v) is an “Accredited
Investor” as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

(o)           Each Shea Mining Member acknowledges that the certificate(s) representing each Shea Mining Member’s Standard Gold Common Stock shall each conspicuously set forth on the face or back thereof a legend in substantially the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

(p)           To the Knowledge, as of the date hereof, of Shea Mining or the Shea Mining Members, as applicable, no representation or warranty by Shea Mining or the Shea Mining Members contained in this Agreement and no statement contained in any certificate, schedule or other communication furnished pursuant to or in connection with the provisions hereof contains or shall contain any untrue statement of a material fact or omit to state a material fact. To the Knowledge, as of the date hereof, of Shea Mining or the Shea Mining Members, as applicable, there is no current or prior event or condition of any kind or character pertaining to Shea Mining that may reasonably be expected to have a Material Adverse Effect on Shea Mining. Except as specifically
indicated elsewhere in this Agreement, all documents delivered by Shea Mining in connection herewith have been and will be complete originals, or exact copies thereof.

 

5.           Representations of Standard Gold.  Standard Gold hereby represent and warrant as follows, each of which representations and warranties shall also be true as of the Closing except as set forth in the disclosure schedules attached to this Agreement:

 

  

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(a)           As of the Closing, the shares of Standard Gold Common Stock to be issued and delivered to the Shea Mining Members hereunder and in connection herewith will, when so issued and delivered, constitute duly authorized, validly and legally issued, fully-paid, nonassessable shares of Standard Gold capital stock, will not be issued in violation of any preemptive or similar rights and will be issued free and clear of all liens and encumbrances.

(b)           Standard Gold has the corporate power to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the Board, or a special committee thereof, of Standard Gold. This Agreement has been duly executed and delivered by Standard Gold and constitutes a legal, valid and binding obligation of Standard Gold, enforceable against Standard Gold in accordance with its terms except as enforcement may be limited by applicable bankruptcy, insolvency or other laws affecting creditor’s rights generally or by legal principles of general applicability governing the availability of equitable remedies.

(c)           Standard Gold is not a party to, or the subject of, any pending litigation, claims, or governmental investigation or proceeding not reflected in Standard Gold’s audited financial statements dated September 30, 2010 (the “Standard Gold Financial Statements”), and to the Knowledge of Standard Gold, there are no lawsuits, claims, assessments, investigations, or similar matters, threatened or contemplated against or affecting Standard Gold, or the management or properties of Standard Gold.  Standard Gold is not subject to any order, judgment, injunction or decree of any Governmental Authority or arbitrator.

(d)           Standard Gold is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; has the corporate power to own, lease and operate its property and to carry on its business as now being conducted and is duly qualified to do business and in good standing to do business in any jurisdiction where so required except where the failure to so qualify would have no Material Adverse Effect on Standard Gold.

(e)           As of the date of this Agreement, Standard Gold’s authorized capital stock consists of 100,000,000 shares of Standard Gold Common Stock, par value $.001 per share, of which 25,083,572 shares are issued and outstanding, and 50,000,000 shares of preferred stock, $1.00 par value per share, of which 10,000,000 have been designated Series A Preferred Stock (the “Series A Preferred Stock”), all of which are issued and outstanding.  All outstanding shares of capital stock of Standard Gold are, and shall be at Closing, validly issued, fully paid and nonassessable.

(f)           The execution and performance of this Agreement will not violate any provisions of applicable law or any agreement to which Standard Gold is subject.

(g)           Standard Gold has complied in all material respects with all of the provisions relating to the issuance of securities, and for the registration thereof, under the Securities Act, other applicable securities laws, and all applicable blue sky laws in connection with any and all of its stock issuances. There are no outstanding, pending or threatened stop orders or other actions or investigations relating thereto involving federal and state securities laws. All issued and outstanding shares of Standard Gold’s capital stock were offered and sold in compliance with federal and state securities laws and were not offered, sold or issued in violation of any preemptive right, right of first refusal or right of first offer and are not subject to any

right of rescission.

 

  

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(h)           Standard Gold is and has been in compliance with all applicable laws, orders, rules and regulations of all governmental bodies and agencies, including applicable securities laws and regulations (including, without limitation, the Sarbanes Oxley Act of 2002) and environmental laws and regulations, except where such noncompliance has and will have, in the aggregate, no Material Adverse Effect. Standard Gold has not received notice of any noncompliance with the foregoing, nor does it have Knowledge of any claims or threatened claims in connection therewith. Standard Gold has never conducted any operations or engaged in any business transactions whatsoever other than as set forth in the reports Standard Gold

has previously filed with the Securities and Exchange Commission (“SEC”).

(i)           Standard Gold has filed all required documents, reports and schedules with the SEC, the National Association of Securities Dealers, Inc. (“NASD”) and any applicable state or regional securities regulators or authorities (collectively, the “Standard Gold SEC Documents”). As of their respective dates, the Standard Gold SEC Documents complied in all material respects with the requirements of the Securities Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the NASD

rules and regulations and state and regional securities laws and  regulations, as the case may be, and, at the respective times they were filed, none of the Standard Gold SEC Documents contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements (including, in each case, any notes thereto) of Standard Gold included in the Standard Gold SEC Documents complied as to form and substance in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto, were prepared in accordance with generally accepted accounting principles (except as may be indicated therein or in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto) and fairly presented in

all material respects the financial position of Standard Gold as of the respective dates thereof and the results of its operations and its cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein).

(j)           Assuming appropriate filings and mailings are made by Standard Gold under the Securities Act, the Exchange Act, with the NASD, the execution and delivery by Standard Gold of this Agreement and the closing documents and the consummation by Standard Gold of the transactions contemplated hereby do not and will not (i) require the consent, approval or action of, or any filing or notice to, any corporation, firm, person or other entity or any public, governmental or judicial authority (except for such consents, approvals, actions, filing or notices the failure of which to make or obtain will not in the aggregate have a Material Adverse Effect); (ii) violate any order, writ, injunction, decree, judgment, ruling, law, rule or regulation of any
Governmental Authority applicable to Standard Gold, or its business or assets; (iii) constitute a material breach of any agreement, indenture, mortgage, license or other instrument or document to which Standard Gold is a party or to which any of them is otherwise subject; and (iv) violate or conflict with any provision of the Articles of Incorporation or Bylaws of Standard Gold.

(k)           No representation or warranty by Standard Gold contained in this Agreement and no statement contained in any certificate, schedule or other communication furnished pursuant to or in connection with the provisions hereof contains or shall contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. There is no current or prior event or condition of any kind or character pertaining to Standard Gold that may reasonably be expected to have a Material Adverse Effect on Standard Gold or its subsidiaries. Except as specifically indicated elsewhere in this Agreement, all documents delivered by Standard Gold in

connection herewith have been and will be complete originals, or exact copies thereof.

(l)           Standard Gold has exercised due diligence with respect to the acquisition of the Shea Assets as set forth in this Agreement.  It is that due diligence that is solely relied upon by Standard Gold in its acquisition of those assets.

 

  

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6.           Conditions Precedent to the Obligations of Shea Mining and the Shea Mining Members.  All obligations of Shea Mining and the Shea Mining Members under this Agreement are subject to the fulfillment, prior to or as of the Closing, of each of the following conditions:  (a) the representations and warranties by or on behalf of Standard Gold contained in this Agreement or in any certificate or document delivered pursuant to the provisions hereof or in connection herewith shall be true and correct in all respects at and as of the Closing as though such representations and warranties were made at and as of such time; (b) Standard Gold shall have materially performed and

complied with all covenants, agreements, and conditions set forth or otherwise contemplated in, and shall have executed and delivered all documents required by, this Agreement to be performed or complied with or executed and delivered by them prior to or at the Closing; (c) on or before the Closing Date, Standard Gold shall have delivered to Shea Mining certified copies of resolutions of a special committee composed of at least one disinterested director of Standard Gold approving and authorizing the execution, delivery and performance of this Agreement and authorizing all of the necessary and proper action to enable Standard Gold to comply with the terms of this Agreement; (d) no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Exchange shall be in effect; (e) at the Closing, all instruments and documents delivered by Standard Gold
pursuant to the provisions hereof shall be reasonably satisfactory to legal counsel for Shea Mining; and (f) Shea Mining shall have received all necessary and required approvals and consents from the necessary parties.

7.           Conditions Precedent to the Obligations of Standard Gold. All obligations of Standard Gold under this Agreement are subject to the fulfillment, prior to or at the Closing, of each of the following conditions:  (a) the representations and warranties by Shea Mining and the Shea Mining Members contained in this Agreement or in any certificate or document delivered pursuant to the provisions hereof shall be true and correct in all material respects at and as of the Closing as though such representations and warranties were made at and as of such times; (b) Shea Mining and the Shea Mining Members shall have materially performed and complied with, in all material respects, all

covenants, agreements, and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing; (c) no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Exchange shall be in effect; (d) Shea Mining will have delivered certified copies of the unanimous written consent of all of the equity holders of Shea Mining approving and authorizing the transactions contemplated by this Agreement and authorizing all of the necessary and proper action to enable Shea Mining to comply with the terms of this Agreement; (e) Standard Gold will have received the written consents required to assign to Standard Gold the Purchased Contracts (the “Contract Assignments”) or any Permits; and (f) the following actions shall have been completed

prior to or simultaneous with the Closing of the Exchange.

8.           Survival and Indemnification.

(a)           All representations, warranties, covenants and agreements contained in this Agreement, or in any schedule, certificate, document or statement delivered pursuant hereto, shall survive (and not be affected in any respect by) the Closing, any investigation conducted by any party hereto and any information which any party may receive. Notwithstanding the foregoing, the representations and warranties contained in or made pursuant to this Agreement shall terminate on, and no claim or action with respect thereto may be brought after, the date that Standard Gold’s annual report on Form 10-K for the year ended December 31, 2011 is filed with the SEC, except that breaches of representations, warranties and covenants arising out of or related to the

fraud or willful misconduct of any of the parties shall survive indefinitely.  For purposes of determining damages hereunder, damages shall mean any actual and out-of-pocket liabilities, obligations, losses, damages, judgments, penalties, costs, and expenses (including, without limitation, reasonable attorneys’ fees); provided that, in no event shall damages include any special, incidental, punitive, exemplary or consequential damages or any damages for diminution in value.

 

  

10

  

 

(b)           Standard Gold agrees and acknowledges that it shall indemnify Shea Mining, and hold it harmless from, against and in respect of, any and all costs, losses, claims, liabilities, fines, penalties, damages and expenses (including reasonable fees and disbursements of counsel) resulting from, arising out of or incurred by it in connection with (i) any default judgment or other liability resulting from the failure of Standard Gold to pay any amounts due and owing to NJB Mining, Inc., an Arizona corporation (“NJB”) pursuant to the Note, Security Agreement or Assignment of Rents, as each such term is defined in the Assignment and Assumption of Loan Documents and
Loan Modification Agreement, entered into as of March 15, 2011, by and between Standard Gold, Shea Mining and NJB (the “Loan Agreement”); and (ii) liabilities or claims of any nature arising out of or relating to the Loan Agreement arising on or after the Closing Date.

 

(c)           The parties hereto agree and acknowledge that under no circumstances will the liability of the Shea Mining Members under this Agreement, including any and all damages awarded for the breach of any representation or warranty hereunder, exceed the total value of the shares of Standard Gold Common Stock received by the Shea Mining Members pursuant to this Agreement (valued at the closing price of the Standard Gold Common Stock reported on the Over the Counter Bulletin Board on the Closing Date).

 

9.           Nature of Representations.  All of the parties hereto are executing and carrying out the provisions of this Agreement in reliance solely on the representations, warranties and covenants and agreements contained in this Agreement and the other documents delivered at the Closing and not upon any representation warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein.

10.         Documents at Closing. At the Closing, the following documents shall be delivered or actions taken:

(a)           Shea Mining will deliver, or will cause to be delivered, to Standard Gold the following:  (i) a certificate from the State of Nevada dated within ten business days of the Closing to the effect that Shea Mining is in good standing under the laws of the State of Nevada; (ii) fully executed copies of any Contract Assignments; (iii) documentation showing the assignment of any Required Permits to Standard Gold; (iv) such other instruments, documents and certificates, if any, as are required to be delivered pursuant to the provisions of this Agreement; (v) certified copies of resolutions adopted by all of the equity holders of Shea Mining authorizing the Exchange; and (vi) all other items, the delivery of which is a condition precedent to
the obligations of Standard Gold, as set forth herein.

 

  

11

  

 

(b)           Standard Gold will deliver or cause to be delivered to Shea Mining: (i) a certificate of a duly authorized officer of Standard Gold, respectively, to the effect that all representations and warranties of Standard Gold made under this Agreement are true and correct as of the Closing, the same as though originally given to Shea Mining and the Shea Mining Members on said date; (ii) certified copies of resolutions adopted by the Board authorizing the Exchange and all related matters; (iii) certificates from the jurisdiction of incorporation of Standard Gold dated within ten business days of the Closing Date that each of said corporations is in good standing under the laws of said state; (iv) a fully executed copy of the Wits Exchange Agreement; and

(v) such other instruments and documents as are required to be delivered pursuant to the provisions of this Agreement.

11.          Miscellaneous.

(a)           Severability.  If any provision of this Agreement is declared by any court or other Governmental Body to be null, void, or unenforceable, this Agreement shall be construed so that the provision at issue shall survive to the extent it is not so declared null, void, or unenforceable and all of the other provisions of this Agreement shall remain in full force and effect.

(b)           Entire Agreement. This Agreement, together with all exhibits and schedules hereto attached, constitutes the entire agreement among the parties pertaining to the subject matter hereof and completely supersedes all prior or contemporaneous agreements, understandings, arrangements, commitments, negotiations, and discussions of the parties, whether oral or written, all of which shall have no substantive significance or evidentiary effect.  Each party acknowledges, represents, and warrants that it has not relied on any representation, agreement, understanding, arrangement, or commitment that has not been expressly set forth in
this Agreement.  Each party acknowledges, represents and warrants that this Agreement is fully integrated and parol evidence is not needed to reflect the intentions of the parties.  The parties specifically intend that the literal words of this Agreement shall, alone, conclusively determine all questions concerning the parties’ intent.

(c)           Confidentiality.  Each party will make every reasonable effort to keep confidential any information obtained by them concerning the other party, including its internal organization, finances, procedures, and customers. Neither party will make any public announcement, or release any publicity regarding the other party, other than routine oral communications with analysts, shareholders, and prospective investors without the prior written consent (which shall not be unreasonably withheld or delayed) of the party being named, unless, in the good faith opinion of counsel to the party contemplating such disclosure, such
disclosure is required by law and time does not permit the party to obtain such consent, or such disclosure may otherwise be necessary in connection with the filing of tax returns, or claims for refunds, or in conducting a tax audit or other proceedings.  This Section shall survive the termination of this Agreement.

(d)           Notices. Unless otherwise expressly provided herein, all notices, requests, demands, instructions, documents, and other communications to be given hereunder by either party to the other shall be in writing, shall be sent to the address/fax number set forth below (provided that any party may at any time change its address for notice or other such information by giving written notice thereof in accordance with this Section), and shall be deemed to be duly given upon the earliest of (a) hand delivery, or (b) the first business day after sending by reputable overnight delivery service for next-day delivery (with confirmation of

delivery).

 

  

12

  

 

If to Standard Gold:

Standard Gold, Inc.

Attention:  Alfred Rapetti

900 IDS Center

80 South Eighth Street

Minneapolis, MN  55402

If to Shea Mining:

Shea Mining & Milling, LLC

Attention:  Chris Boll

216 Starlight Lane

Royse City TX, 75189

(e)          Amendments; Waivers.  This Agreement may not be amended or modified unless such amendment or modification is in writing and signed by all of the parties to this Agreement.  The terms, covenants, representations, warranties, or conditions of this Agreement may only be waived in writing.  Any waiver of any condition, or of the breach of any provision, term, covenant, representation, or warranty contained in this Agreement, in any one or more instances, shall not be deemed to be or construed as a further or continuing waiver of any condition, or of the breach of any other provision, term, covenant, representation, or warranty of this Agreement.

(f)          Successors and Assigns.  The rights and obligations under this Agreement may not be assigned or delegated unless in writing executed by the parties hereto, and any attempted assignment or delegation without such prior written consent shall be void and of no force or effect.  This Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties to this Agreement.

(g)          Governing Law; Submission to Jurisdiction.  This Agreement and all transactions contemplated hereby shall be governed by, and construed and enforced in accordance with, the laws of the State of Minnesota, and shall be treated in all respects as a State of  Minnesota contract, without regard to any state’s laws related to choice or conflict of laws.  The parties irrevocably agree and consent to the jurisdiction of the courts of the State of Minnesota and the federal courts of the United States sitting in such state for the adjudication of any matters arising under, or in connection with, this
Agreement.

(h)          WAIVER OF JURY TRIAL.  THE PARTIES HEREBY IRREVOCABILITY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, ARISING OUT OF, OR RELATING TO, THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(i)          Counterparts. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement.

 

[Signature page follows]

 

  

13

  

 

IN WITNESS WHEREOF, the parties have executed this Exchange Agreement as of March 15, 2011, but to be effective as of the date first above written.

	
STANDARD GOLD, INC.

	  	
SHEA MINING & MILLING,  LLC

	  	  	  	  	  
	
By:

	
/s/ Alfred A. Rapetti

	  	
By:

	
/s/ Chris Boll

	  	
Alfred A. Rapetti, Chief Executive Officer

	  	  	  
	  	  	  	
Its:

	
Managing Member

	  	  	  	  	  
	
SHEA MINING MEMBERS:

	  	
Solely with respect to Section 3 hereof:

	  	  	  
	
AFIGNIS, LLC

	  	
WITS BASIN PRECIOUS MINERALS INC.

	  	  	  	  	  
	
By:

	
/s/ Sharon Lullman

	  	
By:

	
/s/ Stephen D. King

	  	  	  	  	
Stephen D. King, Chief Executive Officer

	
Its:

	
Managing Member

	  	  	  
	  	  	  	  	  
	
LESLIE LUCAS PARTNERS, LLC

	  	
Solely with respect to Section 3(d) hereof:

	  	  	  	  	  
	
By:

	
/s/ Frank Dasaro

	  	
/s/ Alfred A. Rapetti

	
Its:

	
Managing Member

	  	
Alfred A. Rapetti, Individually

Signature Page to Exchange Agreement

 

  

 

  

 

Schedule I

 

Shea Assets

 

(1)           Any and all property, whether tangible or intangible, including equipment, fixtures, tooling, or other property, including additions and improvements, located on the property leased by Shea Mining pursuant to the Amargosa Lease.

 

(2)           Mine dumps at Manhattan, Nevada, located on Calais Resources property

 

(3)           Purchased Contracts

 

(4)           Permits.

 

  

 

  

 

SCHEDULE 1(a)(ii)

Purchased Contracts

	
  

	
(1)

	
Lease Agreement by and between Father Gregory Ofiesh, Mary Jane Ofiesh and Shea Mining & Milling, LLC, dated April 6, 2010

	
  

	
(2)

	
Toll Milling Agreement for Oxide Ore Processing by and between Shea Mining & Milling, LLC and Darwin Silver LLC, dated July 30, 2010.

	
  

	
(3)

	
Toll Milling Agreement for Ore Processing by and between Shea Mining & Milling, LLC and Darwin Silver LLC, dated July 30, 2010.

	
  

	
(4)

	
Agreement for Processing Ore by and between Shea Mining & Milling, LLC and Ruggeri-Stocks LLC, dated October 18, 2010.

	
  

	
(5)

	
Lease Agreement dated as of April 12, 2010, by and between Shea Mining & Milling, LLC and Liberty Processing LLC.

	
  

	
(6)

	
Agreement, dated as of November 17, 2009, by and between Shea Mining & Milling, LLC and Galvin Metals Company, LLC.

 

  

 

  

 

SCHEDULE 1(a)(iii)

Permits

Benefit of Liberty Processing operating the Amargosa Lab facilities under Water Pollution Control Permit # NEV2010101 from NDEP.

 

  

 

  

 

SCHEDULE 2(ii)

Payment Obligations

	
Cozen O’Connor

	
Closing firm

	 	$	37,000	 
	  	  	 	 	 	 
	
Law office of James Lisa—

	
Tax opinion

	 	$	30,000	 
	  	  	 	 	 	 
	
Law office of James Lisa

	
Independent appraisal for IRS

	 	$	15,000	 
	  	  	 	 	 	 
	
Law office of Elena V. Giordano

	
Title work

	 	$	2,000	 
	  	  	 	 	 	 
	
Nevada Div of forestry

	
Mill Labor

	 	$	5,137	 

 

  

 

  

 

SCHEDULE 2(iii)

Vendor Obligations

	
R&S Fabrication Inc*

	  	
Steve Rogers

	  	
TBD by Alfred A. Rapetti in his sole discretion

	  	  	  	  	  
	
Williamson General Contractors*

	  	
labor Millers

	  	
TBD by Alfred A. Rapetti in his sole discretion.

* A complete file will be supplied to Standard Gold Inc.

** Please see attached file (Shea Milling and Mining LLC Vendor Monthly Recurring as of 03/03/11)

For More vendors

 

  

 

  

 

SCHEDULE 4(f)

Required Lease Consents

See Schedule 1(a)(ii)(1) hereof.APN: 06-111-08

	 	
EXHIBIT 10.14

	 	 	        
	
The undersigned hereby affirm that this document, including any exhibits, submitted for recording does not contain the social security number of any person or persons. (Per NRS 239B.030) 

 

PREPARED BY,

RECORDING REQUESTED BY,

AND WHEN RECORDED MAIL TO:

  

Mark Hawkins

Fennemore Craig, P.C.

300 South Fourth Street, Suite 1400

Las Vegas, Nevada 89101

	 	  

Space for County Recorder’s Use

ASSIGNMENT AND ASSUMPTION OF LOAN DOCUMENTS

AND

LOAN MODIFICATION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION OF LOAN DOCUMENTS AND LOAN MODIFICATION AGREEMENT (this “Agreement”) is executed on March 15, 2011 (the “Effective Date”), by and among SHEA MINING & MILLING, LLC, a Nevada limited liability company (“Assignor”), STANDARD GOLD, INC., a Colorado corporation, having an address at 900 IDS Center, 90 South Eighth Street, Minneapolis, Minnesota  55402 (“Assignee”), and NJB MINING, INC., an Arizona corporation (“Lender”), having an address at 10751 North Frank Lloyd Wright Blvd., Suite 101, Scottsdale, Arizona 85259.

RECITALS:

A.           Assignor is the current owner of that certain improved property located in Esmeralda County, Nevada and more particularly described on Exhibit “A” attached hereto (the “Property”).  Assignor acquired title to the Property from Lender pursuant to that certain Asset Purchase and Sale Agreement dated August 18, 2009 (the “Asset Agreement”).  In connection with the Asset Agreement, Lender made a loan (the “Loan”) to Assignor in the original principal amount of $2,500,000 as part of the purchase price under the Asset Agreement.

B.           In connection with the Loan, Assignor executed and delivered to Lender that certain Term Loan Agreement dated August 21, 2009 (the “Loan Agreement”), which was further evidenced by that certain Promissory Note, dated August 21, 2009 (the “Note”), payable to the order of Lender in the original principal amount of $2,500,000, bearing interest and being payable as therein provided.

C.           Payment of the Loan is secured by, among other instruments, (i) that certain Deed of Trust and Security Agreement with Assignment of Rents and Fixture Filing, dated as of August 21, 2009 (the “Security Instrument”), executed by Assignor, as original trustor, for the benefit of  Lender, as beneficiary, encumbering, among other property, the Property, which Security Instrument was recorded as Document No. 0174988 of the Official Records of Esmeralda County, Nevada (the “Records”), and (ii) that certain Assignment of Leases and Rents, dated as of August 21, 2009 (the “Assignment of Rents”), executed by Assignor to Lender, recorded as Document No. 0174989 in the Records.

  

  

 

D.           In connection with the Loan, Assignor executed that certain Environmental Indemnity (the “Environmental Indemnity”), dated as of August 21, 2009, in favor of Lender.

E.           The Note, the Security Instrument, the Assignment of Rents, the Environmental Indemnity, and all other instruments and documents executed in connection with the Loan may be referred to, collectively, as the “Loan Documents”.

F.           Lender is the current owner and holder of the Loan.

G.           Assignor now desires to transfer title to the Property to Assignee in connection with the sale of Assignor’s assets to Assignee, which transfer shall occur concurrently with the execution and delivery of this Agreement.  In connection therewith, Assignor desires to assign and Assignee desires to assume the duties and obligations of the Loan pursuant to the terms and conditions set forth in the Loan Documents, as modified herein.

H.           Assignor and Assignee are sometimes referred to herein, collectively, as the “Borrower Parties”.  The Borrower Parties and Lender are sometimes referred to herein, collectively, as the “Loan Parties”.  Unless otherwise defined herein, initially capitalized terms shall have the definitions ascribed to them in the Security Instrument.

I.           Assignor failed to repay the Loan in full on the Maturity Date (i.e., August 21, 2010), which failure constitutes an Event of Default (the “Existing Default”).  The Existing Default remains uncured and the Loan is fully due and payable.

J.           The Borrower Parties have requested, and Lender has agreed, subject to the terms of this Agreement, to modify certain terms and provisions of the Loan Documents as more specifically provided in this Agreement.

NOW THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Loan Parties hereby agree as follows:

AGREEMENTS:

1.           Assignment and Assumption of Loan Documents.

 

(a)           Assignor does hereby grant, bargain, sell, convey, assign, transfer, set over and deliver unto Assignee, its successors and assigns, all of Assignor’s right, title, interest, obligations, duties and liabilities in, to and under the Loan Documents.  Nothing herein is meant, nor should it be construed, to release Assignor from any of its obligations under the Loan Documents.

 

  

  

 

(b)           As a direct and primary obligation, Assignee hereby agrees to observe and perform all duties, agreements, covenants, liabilities and obligations under the Loan Documents, including without limitation, payment of the indebtedness in accordance with the terms of the Loan Documents, as modified herein.  By virtue of this Agreement, all references in the Loan Documents to Grantor, Borrower, Maker, or similarly, shall be and mean Assignee.  Assignee hereby confirms that it grants Lender a security interest in all the collateral described in the Security Instrument, including without limitation, the fixtures and personal property collateral described therein, and shall execute and record
concurrently herewith this Agreement in the Records.  Except as limited hereunder, Assignee  and Assignor acknowledge and agree that the obligations under the Loan Documents are joint and several.

 

Assignee acknowledges and agrees that any performance or non-performance of the Loan Agreement, the Security Instrument, the Note or other Loan Documents prior to the date hereof does not affect or diminish in any way the requirement of compliance therewith.  The foregoing assumption by Assignee is absolute and unconditional, is not subject to any defenses, waivers, claims or offsets, nor may it be affected or impaired by any agreement, condition, statement or representation of Assignor or any failure to perform the same and Assignee hereby relinquishes, waives and releases any and all such defenses, claims, offsets, and causes of action.  Assignee hereby represents that it has read and approved of and will comply with, and be bound by, all of the terms conditions, and provisions contained in

the Loan Agreement, the Note, the Security Instrument, the Assignment of Leases and all other Loan Documents.

(c)           Lender hereby consents to the assignment by Assignor and assumption by Assignor of Assignor’s right, responsibilities duties and obligations under the Loan Documents.

 

2.           Extension of Maturity Date.  Subject to the terms and conditions of this Agreement, the Maturity Date (as defined in the Note) is amended to be sixty (60) days following the Effective Date hereof, and all references in the Loan Documents to the Maturity Date will be and mean a reference to such date (the “Modified Maturity Date”; the period of time beginning on the Effective Date and ending on the Modified Maturity Date is referred to as the “Extension Term”).  During the Extension Term, payments under the Note will continue to be due and payable as set forth in the Note and other Loan Documents, as amended by this Agreement.

 

3.           Accrued Debt Service; Default Interest.  As a condition precedent to the effectiveness of this Agreement, on or before the Effective Date, Assignee shall pay to Lender any portions of monthly payments of principal and interest under the Loan Documents which have accrued but remain unpaid after giving effect to the extension of the Maturity Date provided in this Agreement, which amount totals $362,847,47 (the “Accrued Debt Service”), a portion of which in the amount of $190,104.17 Lender acknowledges receipt hereof.  The Loan
Parties acknowledge and agree that (i) from and after the Existing Default interest on the entire outstanding principal balance of the Loan has accrued at the Default Rate since such default date through the Effective Date (the “Accrued Default Interest”), and (ii) a portion of the Accrued Debt Service includes the Accrued Default Interest.

 

4.           Notices.  The address for “Borrower” under the Security Instrument, the Note and other Loan Documents is hereby amended to add the following addresses:

 

Standard Gold, Inc.

900 IDS Center, 80 South Eighth Street

Minneapolis, MN  55402

Attn:  Alfred Rapetti, Chief Executive Officer

 

  

  

 

 

	 	
And 

	
Maslon Edelman Borman & Brand, LLP

3300 Wells Fargo Center

90 South Seventh Street

Minneapolis, MN 55402-4140

Attn:  Mr. David Polgreen

5.           Amendments to Other Loan Documents.  All Loan Documents shall be and hereby are amended to the extent necessary to make the recitations and contents thereof consistent with the terms of this Agreement.

 

6.           Lender Expenses.  In connection with this Agreement, and as a material inducement to enter into this Agreement, on or before the Effective Date, the Borrower Parties agree to pay to Lender an amount equal to $9,950, representing the following costs and expenses (collectively, the “Lender Expenses”):  (i) Lender’s actual legal fees and costs payable to outside counsel incurred in connection with Lender’s exercise of remedies resulting from the Existing Default and this Agreement; (ii) the cost of endorsements to Lender’s mortgagee policy of title
insurance as required by Lender; and (iii) all other actual costs and expenses incident to the preparation, execution and recordation hereof and the consummation of the transaction contemplated hereby, including, but not limited to, any interest on advances funded by or on behalf of Lender, recording fees, filing fees, rating agency confirmation fees, all third party fees, search fees, transfer fees, inspection fees, and charges of the title company and escrow agent.  The payment of Lender Expenses is a condition precedent to the effectiveness of this Agreement and must occur on or before the Effective Date in accordance with the terms of this Agreement.   In addition, the payment of Lender Expenses on or before the Effective Date is also a covenant of the Borrower Parties under the Loan Documents and the failure to pay the Lender Expenses in full will constitute an immediate Event of Default.

 

7.           Lack of Defenses.  Except for the limitations and exculpation provisions specifically provided for in the Loan Documents, the Borrower Parties acknowledge and agree that, as of the Effective Date, they have no defenses, counterclaims, offsets, cross-complaints or demands of any kind or nature whatsoever that can be asserted to reduce or eliminate all or any part of their liability to repay any indebtedness to Lender or seek affirmative relief for damages of any kind or nature from Lender, which claims arise out of or are related to the Loan Documents or the Borrower Parties’ relationship with Lender.  To the extent that the Borrower Parties allege that
they hold any such claims, the Borrower Parties acknowledge and agree that they fully, forever and irrevocably release any such claims pursuant to Section 11 of this Agreement.

 

8.           Indemnification.  If, after receipt of any payment from the Borrower Parties for any indebtedness owed by the Borrower Parties, Lender is compelled to surrender such payment to any person or entity for any reason (including, without limitation, a determination that such payment is void or voidable as a preference or fraudulent conveyance, an impermissible setoff, or a diversion of trust funds), then the Borrower Parties shall be liable for, and shall indemnify, defend and hold harmless Lender with respect to the full amount so surrendered relating to the Borrower Parties, including any fees or costs incurred by Lender in connection therewith.  The provisions of

this Section shall survive the termination of this Agreement and the other Loan Documents and shall remain effective notwithstanding the payment the Loan obligations, the cancellation of any Loan Document, the release of any lien, security interest or other encumbrance securing such Loan obligations or any other action which Lender may have taken in reliance upon the receipt of such payment.  Any cancellation of the Note, release of the Security Instrument or any other encumbrance or other such action shall be deemed to have been conditioned upon any payment having become final and irrevocable.

 

  

  

 

 

9.           Survival of Representations and Warranties.  All representations and warranties of the Borrower Parties contained in this Agreement and in all other documents and instruments in connection with this Agreement shall survive the execution of this Agreement and are material and have been or will be relied upon by Lender, notwithstanding any investigation made by any person, entity or organization on behalf of Lender.

 

10.         Representations and Warranties.  The Borrower Parties do hereby make the following representations and warranties to Lender as of the Effective Date of this Agreement in order to induce Lender to enter into this Agreement, it being hereby acknowledged by the Borrower Parties that Lender is relying upon such representations and warranties as a material inducement to Lender’s execution hereof:

 

(a)           Excluding the Existing Default, no default exits under the Loan Documents, and no event or circumstance exists, which with the passage of time or giving of notice, or both, would constitute and Event of Default under the Loan Documents;

 

(b)           The Borrower Parties have no set-offs, counterclaims, defenses or other causes of action against Lender arising out of the Loan, the Loan Documents, any other indebtedness of the Borrower Parties to Lender, or otherwise, and to the extent any such set-offs, counterclaims, defenses or other causes of action may exist, whether known or unknown, said items are hereby waived by the Borrower Parties;

 

(c)           Lender has duly performed all its obligations under the Loan Documents;

 

(d)           Assignee is, or will be, the sole legal and beneficial owner of the Property;

 

(e)           This Agreement constitutes the legal, valid and binding obligations of the Borrower Parties enforceable in accordance with its terms, and the execution and delivery of this Agreement does not contravene, result in a breach of, or constitute a default under any security instrument, loan agreement, indenture or other contract or agreement to which the Borrower Parties are bound, nor would such execution and delivery constitute a default with the passage of time or the giving of notice, or both;

 

(f)           The lien of the Security Instrument is valid and subsisting and shall remain an enforceable and valid first lien against the Property;

 

(g)           The Borrower Parties have thoroughly read and reviewed the terms and provisions of this Agreement and are familiar with the same, and the Borrower Parties have entered into this Agreement voluntarily, without duress or undue influence of any kind, and with the advice and representation of legal counsel selected by the Borrower Parties;

 

(h)           Neither Lender, nor any of its officers, agents, employees, representatives, or attorneys of or for Lender, have made any statement or representation to the Borrower Parties regarding any fact relied upon in entering into this Agreement and the Borrower Parties acknowledge and agree that they have not relied upon any statement, representation or promise of any other party or of any officer, agent, employee, representative or attorney for Lender or its loan servicers, in executing this Agreement, or in making the agreements, amendments and releases contained herein;

 

  

  

 

(i)           In entering into this Agreement and the agreements and releases provided for herein, the Borrower Parties hereby assume the risk of any mistake of fact or law.  If the Borrower Parties subsequently discover that any fact relied upon by it in entering into this Agreement was untrue, or that their understanding of the facts or of the law was incorrect, the Borrower Parties shall not be entitled to any relief in connection therewith, including, without limitation the generality of the foregoing, any alleged right or claim to set aside or rescind this Agreement or the waivers or releases contained or referenced in this Agreement or the transactions contemplated by this Agreement.

 

(j)           Neither Assignor nor Assignee has made any general assignment for the benefit of its creditors.  No proceeding seeking (i) relief for Assignor or Assignee under any bankruptcy or insolvency law, (ii) the rearrangement or readjustment of debt of Assignor or Assignee, (iii) the appointment of a receiver, custodian, liquidator or trustee to take possession of substantially all of the assets of Assignor or Assignee, or (iv) the liquidation of Assignor, Assignee or any of its members, has been commenced or, to the actual knowledge of the Borrower Parties’, is threatened.

 

(k)           Except as expressly set forth on Exhibit “B” attached hereto (the “Litigation Schedule”), there are no judgments, orders, suits, actions, garnishments, attachments or proceedings by or before any court, commission, board or other governmental body pending, or to the knowledge of Assignor or Assignee threatened, which involve or affect, or will involve or affect, the Property or the validity or enforceability of this Agreement, the Loan Documents or involve any risk of any lien, judgment or liability being imposed upon Assignor or the Property, or which could materially adversely affect the financial condition of Assignor or Assignee or the ability of
Assignor or Assignee to observe or perform fully their respective agreements and obligations under this Agreement or under the Loan Documents.

 

11.         Release of Claims.

 

(a)           THE BORROWER PARTIES, ON BEHALF OF THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS (THE “BORROWER RELEASE PARTIES”), HEREBY FULLY, FINALLY AND COMPLETELY RELEASE AND FOREVER DISCHARGE LENDER, AND ITS RESPECTIVE SUCCESSORS, ASSIGNS, AFFILIATES, SUBSIDIARIES, PARENTS, OFFICERS, SHAREHOLDERS, DIRECTORS, EMPLOYEES, LOAN SERVICERS, ATTORNEYS, AGENTS AND PROPERTIES, PAST, PRESENT AND FUTURE, AND THEIR RESPECTIVE HEIRS, SUCCESSORS AND ASSIGNS (COLLECTIVELY AND INDIVIDUALLY, THE “LENDER RELEASE PARTIES”), OF AND FROM ANY AND ALL CLAIMS, CONTROVERSIES, DISPUTES, LIABILITIES, OBLIGATIONS, DEMANDS, DAMAGES, DEBTS, LIENS, ACTIONS AND CAUSES OF ACTION OF ANY AND EVERY NATURE WHATSOEVER, KNOWN OR UNKNOWN, WHETHER AT LAW, BY
STATUTE OR IN EQUITY, IN CONTRACT OR IN TORT, UNDER STATE OR FEDERAL JURISDICTION, AND WHETHER OR NOT THE ECONOMIC EFFECTS OF SUCH ALLEGED MATTERS ARISE OR ARE DISCOVERED IN THE FUTURE, WHICH THE BORROWER RELEASE PARTIES HAVE AS OF THE EFFECTIVE DATE OR MAY CLAIM TO HAVE AGAINST THE LENDER RELEASE PARTIES ARISING OUT OF OR WITH RESPECT TO ANY AND ALL TRANSACTIONS RELATING TO THE LOAN OR THE LOAN DOCUMENTS OCCURRING ON OR BEFORE THE EFFECTIVE DATE, INCLUDING ANY LOSS, COST OR DAMAGE OF ANY KIND OR CHARACTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH OR IN ANY WAY RESULTING FROM THE ACTS, ACTIONS OR OMISSIONS OF THE LENDER RELEASE PARTIES OCCURRING ON OR BEFORE THE EFFECTIVE DATE.  THE FOREGOING RELEASE IS INTENDED TO BE, AND IS, A FULL, COMPLETE AND GENERAL RELEASE IN FAVOR OF THE LENDER RELEASE PARTIES WITH RESPECT TO ALL CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION AND OTHER MATTERS DESCRIBED THEREIN, INCLUDING SPECIFICALLY, WITHOUT LIMITATION, ANY CLAIMS, DEMANDS OR CAUSES
OF ACTION BASED UPON ALLEGATIONS OF BREACH OF FIDUCIARY DUTY, BREACH OF ANY ALLEGED DUTY OF FAIR DEALING IN GOOD FAITH, ECONOMIC COERCION, USURY, OR ANY OTHER THEORY, CAUSE OF ACTION, OCCURRENCE, MATTER OR THING WHICH MIGHT RESULT IN LIABILITY UPON THE LENDER RELEASE PARTIES ARISING OR OCCURRING ON OR BEFORE THE EFFECTIVE DATE.  THE BORROWER RELEASE PARTIES UNDERSTAND AND AGREE THAT THE FOREGOING GENERAL RELEASE IS IN CONSIDERATION FOR THE AGREEMENTS OF LENDER CONTAINED HEREIN AND THAT THEY WILL RECEIVE NO FURTHER CONSIDERATION FOR SUCH RELEASE.

 

  

  

 

 

(b)           THE BORROWER RELEASE PARTIES WARRANT AND REPRESENT TO LENDER THAT THE BORROWER RELEASED PARTIES HAVE NOT SOLD, ASSIGNED, TRANSFERRED, CONVEYED OR OTHERWISE DISPOSED OF ANY CLAIMS WHICH ARE THE SUBJECT OF THIS SECTION.  THE INCLUSION OF THIS PROVISION SHALL NOT BE DEEMED TO BE AN ADMISSION BY LENDER THAT ANY SUCH CLAIMS EXIST.

 

12.          Ratification and Confirmation.

 

(a)           The Borrower Parties and Lender hereby expressly ratify, and confirm (i) each of the Loan Documents, as may be applicable, and (ii) all rights, assignments, liens, pledges, security interests, and obligations thereunder, including, without limitation, the assignments, liens, pledges and security interests of the Loan Documents, as if the acceleration of the Loan had not occurred.  Notwithstanding the foregoing or any other provision hereof to the contrary, nothing in this Agreement is intended to be, and shall not be deemed or construed to be, a novation of the Note or the Loan Documents.

 

(b)           The Borrower Parties expressly acknowledge and agree that the Loan remains outstanding and that Assignor remains, and Assignee is hereby, fully bound by all of the terms and conditions of the Loan Documents as set forth herein and therein.  Except as otherwise expressly set forth herein, nothing contained in this Agreement shall be deemed to be or effect (a) any waiver or release of any of the terms and conditions of the Note or any of the other Loan Documents or of any existing or future defaults or events of default thereunder, (b) an extension of time for the payment or performance of any obligation to be performed on the part of the Borrower Parties or any other obligor thereunder, or (c) any waiver or release of Lender’s
rights to exercise any and all remedies with respect thereto, or the effectiveness of any notices of intention to accelerate, notices of acceleration, or acceleration given subsequent to the execution of this Agreement.

 

13.           Further Assurances.  The Borrower Parties agree to execute any instruments which, in the opinion of Lender, are necessary or desirable to perfect such mortgages, deeds of trust, liens, security interests, assignments and encumbrances.

 

14.           Lift of Bankruptcy Stay.  Notwithstanding any provision in the Loan Documents to the contrary, in the event that any of the Borrower Parties shall make application for or seek relief or protection under any of the sections or chapters of the United States Bankruptcy Code (the “Code”), or in the event that any involuntary petition is filed against any of the Borrower Parties under any section of the Code, Lender shall thereupon be entitled to immediate relief from any automatic stay imposed by Sec. 362 of the Code, or otherwise, on or against the exercise of the rights and remedies otherwise available to Lender pursuant to the Loan Documents and as otherwise
provided by law.

 

  

  

 

15.         Conditions Precedent.

 

(a)          In addition to those conditions described elsewhere in this Agreement, the following shall be conditions precedent to the effectiveness of this Agreement:

 

(i)           Prior to or simultaneously with the execution of this Agreement, the Borrower Parties shall have executed, or caused to be executed, and delivered to Lender all documents required by Lender in connection with the assignment, assumption and modification of the Loan contemplated hereby.

 

(ii)           Prior to or simultaneously with the execution of this Agreement, the Borrower Parties shall furnish, or cause to be furnished, to Lender, at the Borrower Parties’ expense, an endorsement (the “Endorsement”) to that certain ALTA Loan Policy of Title Insurance No. 1764167 dated August 25, 2009 issued by Stewart Title Guaranty Company in connection with the Loan, under which Lender is currently the named insured (the “Title Policy”), which Endorsement must amend the effective date of the Title Policy to be the Effective Date and must show that the Title Policy is still in effect as to the Property and the lien of the Security Instrument is unimpaired by this Agreement, which will be recorded in the Records on the
Effective Date.

 

(b)          If any of the foregoing conditions precedent (or any other condition precedent set forth in this Agreement) fails to occur within the time period specified, all provisions of this Agreement, except for the release of the Lender Release Parties by the Borrower Release Parties contained in Section 11 of this Agreement, shall terminate and be of no further force or effect and the Loan shall remain payable as if this Agreement had never been executed.  The foregoing conditions precedent are for the sole benefit of Lender and may be waived only by Lender by written agreement executed by Lender.

 

16.         OFAC.  The Borrower Parties hereby represents and warrants to Lender that the Borrower Parties will not permit the transfer of any interest in the Borrower Parties to any person or entity (or any beneficial owner of such entity) who is listed on the specifically Designated Nationals and Blocked Persons List maintained by the Office of Foreign Asset Control, Department of the Treasury pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or terrorist organizations maintained pursuant to any of the rules and regulations of Office of Foreign Asset Control, Department of the Treasury or pursuant to any other applicable Executive
Orders (such lists are collectively referred to as the “OFAC Lists”).  The Borrower Parties will not knowingly enter into a lease with any party who is listed on the OFAC Lists.  The Borrower Parties shall immediately notify Lender if the Borrower Parties have knowledge that any member or beneficial owner of any of the Borrower Parties are listed on the OFAC Lists or (A) is indicted on or (B) arraigned and held over on charges involving money laundering or predicate crimes to money laundering.  The Borrower Parties shall immediately notify Lender if any of the Borrower Parties knows that any tenant is listed on the OFAC Lists or (A) is convicted on, (B) pleads nolo contendere to, (C) is indicted on or (D) is arraigned and held over on charges involving money laundering or predicate crimes to money laundering.  The Borrower Parties further represent and warrant to Lender that none of the Borrower Parties are currently on the OFAC
List.  None of the Borrower Parties, any subsidiary of the Borrower Parties or any affiliate of the Borrower Parties are (i) named on the list of Specially Designated Nationals or Blocked Persons maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control available at http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or (ii) (A) an agency of the government of a country, (B) an organization controlled by a country, or (C) a person residing in a country that is subject to a sanctions program identified on the list maintained by the U.S. Department of the Treasury’s Office of Foreign Assets Control and available at http://www.treas.pox/offices/eotffc/ofac/sanctions/index.html, or as otherwise published from time to time, as such program may be applicable to such agency, organization or person.  If the foregoing representation and warranty shall at any time be or become untrue or incorrect during the term of the Loan, an Event

of Default shall be deemed to have occurred.

 

  

  

 

 

17.           No Waiver.  Except as expressly provided herein, the execution of this Agreement by Lender does not and shall not constitute a waiver of any rights or remedies to which Lender is entitled pursuant to the Loan Documents, nor shall the same constitute a waiver of any Event of Default which may have heretofore occurred or which may hereafter occur with respect to the Loan Documents.

 

18.           Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document.  All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof it shall only be necessary to produce one such counterpart.

 

19.           Governing Law.  THE TERMS AND CONDITIONS OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAW OF THE STATE OF NEVADA WITHOUT GIVING EFFECT TO RULES REGARDING CONFLICTS OF LAWS.

 

20.           Interpretation.  Within this Agreement, words of any gender shall be held and construed to include any other gender, and words in the singular number shall be held and construed to include the plural, unless the context otherwise requires.  The section headings used herein are intended for reference purposes only and shall not be considered in the interpretation of the terms and conditions hereof.  The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement or any exhibits or amendments hereto.

 

21.           Amendment.  The terms and conditions hereof may not be modified, altered or otherwise amended except by an instrument in writing executed by all of the Loan Parties.

 

22.           Entire Agreement.  THIS AGREEMENT CONTAINS THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE MODIFICATION OF THE LOAN AND FULLY SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDING BETWEEN THE PARTIES PERTAINING TO SUCH SUBJECT MATTER.

 

23.           Successors and Assigns.  The terms and conditions of this Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their successors and permitted assigns.

 

24.           WAIVER OF JURY TRIAL.  EACH PARTY TO THIS AGREEMENT AGREES THAT ANY SUIT, ACTION, OR PROCEEDING BROUGHT OR INSTITUTED BY ANY PARTY HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY PARTY ON OR WITH RESPECT TO THIS AGREEMENT, ANY OF THE OTHER DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT, ANY OF THE LOAN DOCUMENTS OR WHICH IN ANY WAY RELATES DIRECTLY OR INDIRECTLY TO THE OBLIGATIONS UNDER THIS AGREEMENT, THE OTHER DOCUMENTS EXECUTED IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS OR ANY EVENT, TRANSACTION OR OCCURRENCE ARISING OUT OF OR IN ANY WAY CONNECTED THEREWITH, OR THE DEALINGS OF THE PARTIES WITH RESPECT THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT

A JURY. EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING. THE BORROWER PARTIES ACKNOWLEDGE AND AGREE THAT THIS PROVISION IS A SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT BETWEEN THE PARTIES HERETO AND THAT LENDER WOULD NOT AGREE TO THE AGREEMENTS SET FORTH HEREIN IF THIS WAIVER OF JURY TRIAL PROVISION WERE NOT A PART OF THIS AGREEMENT.

 

  

  

 

 

25.           Relationship of Parties.  Nothing contained in this Agreement or the Loan Documents constitutes or shall be construed as the formation of a partnership, joint venture, tenancy-in-common, or any other form of co-ownership, between Lender and the Borrower Parties or any other person or entity or the creation of any confidential or fiduciary relationship of any kind between the Lender and the Borrower Parties or any other person or entity. The Borrower Parties acknowledge and agree that Lender has at all times acted and shall at all times continue to be acting only as a lender to the Borrower Parties within the normal and usual scope of activities of a lender.

 

26.           Severability.  If any clause or provision of this Agreement is determined to be illegal, invalid or unenforceable under any present or future law by the final judgment of a court of competent jurisdiction, the remainder of this Agreement will not be affected thereby. It is the intention of the parties that if any such provision is held to be illegal, invalid or unenforceable, there will be added in lieu thereof by a court of competent jurisdiction a provision as similar in terms to such provision as is possible and be legal, valid and enforceable.

 

27.           Recitals.  The “Recitals” set forth at the beginning of this Agreement are hereby acknowledged to be true and correct by the parties and are incorporated into this Agreement.

 

28.           Conflicts.  Except as expressly modified pursuant to this Agreement, all of the terms, covenants and provisions of the Loan Documents shall continue in full force and effect.  In the event of any conflicts or ambiguity between the terms, covenants and provisions of this Agreement and those of the Loan Documents, the terms, covenants and provisions of this Agreement shall prevail.

 

29.           Limited Liability.  Notwithstanding anything to the contrary contained in this Agreement, or the Loan Documents, Assignee shall have no personal liability for the liabilities and obligations under the Loan Documents, except for the obligations arising after the Effective Date under the Environmental Indemnity and except to the extent necessary and for the sole purpose of subjecting Assignor’s interest in the Property to the lien of the Security Interest.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

  

  

 

IN WITNESS WHEREOF, the Loan Parties have executed and delivered this Agreement as of the Effective Date.

	
LENDER:

	 	
ASSIGNOR:

	  	 	  
	
NJB MINING, INC.,

	 	
SHEA MINING & MILLING, LLC,

	
an Arizona corporation

	 	
a Nevada limited liability company

	  	 	  
	
By:

	
/s/ Norman Bellamare

	 	
By:

	
/s/ Chris Boll

	  	
Norman Bellamare, its President

	 	Name: Chris Boll
	  	  	 	Its: Managing Member
	  	  	 	  	  
	  	  	 	
ASSIGNEE:

	  	  	 	  	  
	  	  	 	
STANDARD GOLD, INC.,

	  	  	 	
a Colorado corporation

	  	  	 	  	  
	  	  	 	
By:

	
/s/ Alfred A. Rapetti

	  	  	 	Name: Alfred A. Rapetti
	  	  	 	Its: Chief Executive Officer

LENDER ACKNOWLEDGMENT

	
State of Arizona

	
}

	  
	  	
}  ss

	  
	
County of Maricopa

	
}

	  

This instrument was acknowledged before me on February ___, 2011 by Norman Bellemare, as President of NJB Mining, Inc., an Arizona corporation.

	  	  	
    

	  	  	
(Signature of notarial officer)

	  	  	  
	
(Seal, if any)

	  	  

[Acknowledgments Continue on Next Page]

  

  

 

ASSIGNOR ACKNOWLEDGMENT

   

	
STATE OF ______________

	
}

	  	
}  ss

	
COUNTY OF ___________

	
}

This instrument was acknowledged before me on February ____, 2011, by _______________________________, as Managing Member of Shea Mining & Milling, LLC, a Nevada limited liability company.

	  	  	
  

	  	  	
(Signature of notarial officer)

	  	  	  
	
(Seal, if any)

	  	  

 

ASSIGNEE ACKNOWLEDGMENT

	
STATE OF ______________

	
}

	  	
}  ss

	
COUNTY OF ___________

	
}

This instrument was acknowledged before me on February ____, 2011, by _______________________________, as ______________________________ of Standard Gold, Inc., a Colorado corporation.

	  	  	
  

	  	  	
(Signature of notarial officer)

	  	  	  
	
(Seal, if any)

	  	  

  

  

 

EXHIBIT A

PROPERTY

All that certain real property situate in the County of Esmeralda, State of Nevada, more particularly described as follows:

Township 3 North, Range 40 East, M.D.B.&M.

Section   2: SW 1⁄4 of NW 1⁄4; W 1⁄2 of SW 1⁄4

Section   3: S 1⁄2 of NE 1⁄4; SE 1⁄4; SE 1⁄4 of NW 1⁄4; E 1⁄2 of SW 1⁄4

Section 10: NE 1⁄4; SE 1⁄4; E 1⁄2 of NW 1⁄4; E 1⁄2 of SW 1⁄4

Section 11: W 1⁄2 of W 1⁄2; SE 1⁄4 of NW 1⁄4

Section 14: NW 1⁄4 of NW 1⁄4

Excepting therefrom that portion of the W 1⁄2 of the W 1⁄2 of said Section 11, heretofore deeded to Southern California Edison Company, by a deed recorded November 7, 1967 in Book 3-X of Deeds, page 164 as File No. 35538 Esmeralda County, Nevada records and described as follows:

Beginning at a found lava rock 9 inches by 14 inches by 15 inches high set for the Southwest corner of said Section 11, said Southwest corner of Section 11, bears North 85°43'34" East along the South line of Section 10, Township 3 North, Range 40 East, M.D.B. & M., from a lava rock mound set for the Southwest corner of said Section 10, thence North 11°16'34" East 2512.91 feet to the true point of beginning of this description; Thence North 83°30'00" East 300.00 feet; Thence North 06°30'00" West 197.50 feet to a point hereinafter referred to as Point "A"; Thence continuing North 06°30'00" West 252.50 feet; Thence South 83°30'00" West 300 feet; Thence South 06°30'00" East 450 feet to the true point of beginning.

ASSESSOR’S PARCEL NUMBER:  06-111-08

  

  

 

EXHIBIT B

LITIGATION SCHEDULE

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