Document:

exhibit10-4.htm

Exhibit 10.4

 

NEITHER THIS CONVERTIBLE SUBORDINATED DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE.  THIS CONVERTIBLE SUBORDINATED DEBENTURE HAS BEEN SOLD IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, TRANSFERRED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

BLUEKNIGHT ENERGY PARTNERS, L.P.

 

Convertible Subordinated Debenture

 

	
Issuance Date:   October 25, 2010

	
Original Principal Amount:   $25,000,000

	
No. A-2

	  

    FOR VALUE RECEIVED, BLUEKNIGHT ENERGY PARTNERS, L.P., a Delaware limited partnership (the “Partnership”), hereby promises to pay to the order of CB-Blueknight, LLC, a Delaware limited liability company, or its permitted registered assigns (the “Holder”) the amount set out above as the Original Principal Amount (the “Original Principal Amount” and, such amount as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below), acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and to pay interest (“Interest”) on any outstanding Principal at the Initial Interest Rate (as defined below), the Interest Rate (as defined below) or the Default Rate (as defined below), as applicable, from the date set out above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon the Maturity Date or acceleration, redemption, conversion or otherwise (in each case in accordance with the terms hereof).  This Convertible Subordinated Debenture (this “Debenture”) is issued pursuant to the Global Transaction Agreement (as defined in Section 13 of this Debenture).  Certain capitalized terms used herein are defined in Section 13 of this Debenture.

 

    SECTION 1 GENERAL TERMS

 

       (a) Payment of Principal.  Subject to the terms of this Debenture, including the mandatory conversion provisions set forth in Section 3 of this Debenture and the subordination provisions set forth in Section 4 of this Debenture, the Partnership shall pay to the Holder, in lawful money of the United States of America and in immediately available funds, all outstanding Principal and any accrued and unpaid Interest on December 31, 2011 (the “Maturity Date”).

 

  

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       (b) Interest. Except as otherwise specified in Section 5(b)(i) of this Debenture, the outstanding Principal amount of this Debenture shall bear simple interest on the entire unpaid Principal amount thereof (i) at the per annum rate of ten percent (10.0%) (the “Initial Interest Rate”) from the Issuance Date until the one-year anniversary of the Issuance Date and (ii) at the per annum rate of twelve percent (12.0%) (the “Interest Rate”) from and after the one-year anniversary of the Issuance Date until the entire Principal amount of this Debenture shall have been paid in full.  Interest shall be computed on a daily basis using a year of 365 or 366 days, as the case may be, and assessed for the actual number of days elapsed.  Except as otherwise specified in this Debenture, Interest shall be payable in arrears on the Maturity Date.  Upon any redemption of all or any portion of this Debenture, accrued and unpaid Interest on the Principal amount of this Debenture redeemed shall be due and payable on the date of such redemption.  Upon any conversion of all or any portion of this Debenture into Preferred Units, accrued and unpaid Interest on the Principal amount of this Debenture being converted shall also be converted into Preferred Units in accordance with Section 3 of this Debenture.

 

       (c) Payments Generally.  If any payment on this Debenture becomes due on a day that is not a Business Day, such payment will be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of Interest on such payment date.  Both the Principal of and Interest on this Debenture are payable in lawful money of the United States of America to the Holder.  Any payment to be made hereunder will be made at the direction of the Holder by wire transfer of immediately available funds to an account designated by the Holder.  All payments to be made by the Partnership hereunder shall be non-refundable and be made without condition or deduction for any counterclaim, defense, recoupment or setoff.

 

    SECTION 2 PARTNERSHIP’S REDEMPTION.  Subject to the subordination provisions set forth in Section 4 of this Debenture, at any time or times the Partnership shall have the right to redeem all or any portion of the Principal amount outstanding under this Debenture prior to the Maturity Date.  In order to make a redemption pursuant to this Section 2, the Partnership shall provide written notice to the Holder of its intention to make a redemption (the “Redemption Notice”), setting forth the amount of Principal it desires to redeem and the date of the proposed redemption.  On the redemption date set forth in the Redemption Notice, the Partnership shall pay to the Holder, in lawful money of the United States of America and in immediately available funds, an amount equal to the par value of the Principal amount of this Debenture that is being redeemed (the “Partnership Redemption Amount”), together with any accrued and unpaid Interest on the Partnership Redemption Amount.

 

    SECTION 3 MANDATORY CONVERSION OF DEBENTURE.  This Debenture shall be convertible into Preferred Units (as defined in Section 13 of this Debenture), on the terms and conditions set forth in this Section 3.

 

  

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       (a) Mandatory Conversion.  On the Maturity Date, all outstanding Principal, together with any accrued and unpaid Interest, shall automatically convert into fully paid and nonassessable Preferred Units as set forth in this Section 3(a).  The number of Preferred Units issuable upon conversion pursuant to this Section 3(a) shall be determined by dividing (x) such outstanding Principal and accrued and unpaid Interest at the Maturity Date by (y) the Series A Conversion Price (as defined in the Third Amended and Restated Partnership Agreement) as of the Maturity Date.  The Partnership shall not issue any fraction of a Preferred Unit upon any conversion pursuant to this Section 3(a).  If the issuance would result in the issuance of a fraction of a Preferred Unit, the Partnership shall round such fraction of a Preferred Unit to the nearest whole share.  The Partnership shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Preferred Units upon conversion pursuant to this Section 3(a).  On or before the third (3rd) Business Day following the Maturity Date, the Partnership shall issue and deliver to the address as specified in this Debenture, a certificate, registered in the name of the Holder, for the number of Preferred Units to which the Holder shall be entitled pursuant to this Section 3(a).  The Person or Persons entitled to receive the Preferred Units shall be treated for all purposes as the record holder or holders of such Preferred Units upon the Maturity Date.

 

       (b) Other Provisions.

 

          (i) The Partnership covenants that all Preferred Units that shall be issued pursuant to this Section 3 shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable.

 

          (ii) Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 5 of this Debenture for the Partnership’s failure to deliver certificates representing Preferred Units upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief, in each case without the need to post a bond or provide other security. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section of this Debenture or under applicable law.

 

  

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    SECTION 4 SUBORDINATION.

 

       (a) Reference is made to the Credit Agreement dated as of October 25, 2010 (such agreement, as it may hereafter be amended, modified, restated, refinanced or supplemented from time to time, the “Credit Agreement”), among the Partnership, the banks, financial institutions and other entities from time to time party thereto as lenders (the “Lenders”) and as issuing lenders (the “Issuing Lenders”), JPMorgan Chase Bank, N.A., as administrative agent for the Lenders and Issuing Lenders (in such capacity, and together with its successors and assigns in such capacity, the “Administrative Agent”), and the other agents party thereto.  The Holder hereby agrees for the benefit of the Administrative Agent and the holders of the Senior Debt (as hereinafter defined) (the “Secured Parties”) that all obligations of the Partnership to the Holder now or hereafter existing under this Debenture (including interest accruing after the filing of a petition initiating any bankruptcy proceeding described in the definition of Senior Debt, whether or not such interest accrues after the filing of such petition or is an allowed claim in such proceeding, but excluding any Preferred Units issued upon conversion of this Debenture and any other Equity Interests held by the Holder) (the “Subordinated Debt”) are and shall be subordinate, to the extent and in the manner set forth in this Section 4, in right of payment to the prior payment in full of all Obligations (as defined in the Credit Agreement), whether for principal, interest (including interest payable in respect of any such obligations subsequent to the commencement of any proceeding against or with respect to the Partnership under any chapter of the Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), or any provision of a state bankruptcy law, whether or not such interest is an allowed claim enforceable against the debtor, and whether or not the holder of such obligation would be otherwise entitled to receive dividends or payments with respect to any such interest or any such proceeding), fees, expenses, obligations under guaranties, indemnity payments, reimbursement obligations under letters of credit, or otherwise (all such obligations being the “Senior Debt”).

 

       (b) Notwithstanding the provisions of Section 1(a) above or any provision herein to the contrary, until such time as the Senior Debt shall have been paid in full, the Holder shall not ask, demand, sue for, take or receive from the Partnership, directly or indirectly, in cash or other property or by set-off or in any other manner (including, without limitation, from or by way of collateral), and the Partnership shall not make, payment of all or any of the Subordinated Debt; provided that:

 

          (i) so long as no Default (as defined in the Credit Agreement) exists under the Credit Agreement, the Partnership may pay, and the Holder may take and receive, Interest as provided in Section 1(b) of this Debenture;

 

          (ii) the subordination provisions of this Section 4 shall not prohibit any conversion of all or any portion of this Debenture into Preferred Units (or any subsequent conversion of Preferred Units into Common Units); and

 

  

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          (iii) the subordination provisions of this Section 4 shall not prohibit any redemption of all or any portion of the Principal amount of this Debenture nor the payment of Interest thereon solely with the proceeds of one or more offerings or issuances of Equity Interests by the Partnership.

 

For the purposes of these provisions, the Senior Debt shall not be deemed to have been paid in full until the Secured Parties shall have received payment in full of the Senior Debt in cash and all commitments of the Lenders under the Credit Agreement shall have been terminated.

 

       (c) Upon any distribution of all or any of the assets of the Partnership to creditors of the Partnership upon the dissolution, winding up, liquidation, arrangement, reorganization or composition of the Partnership, whether in any bankruptcy, insolvency, arrangement, reorganization, receivership or similar proceeding or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Partnership or otherwise, any payment or distribution of any kind (whether in cash, property or securities) which otherwise would be payable or deliverable upon or with respect to the Subordinated Debt shall be paid or delivered directly to the Administrative Agent for the benefit of the Secured Parties for application (in the case of cash) to or as collateral (in the case of non-cash property or securities) for the payment or prepayment of the Senior Debt until the Senior Debt shall have been paid in full.

 

       (d) Until such time as the Senior Debt shall have been paid in full, if any proceeding referred to in Section 4(c) of this Debenture is commenced by or against the Partnership, the Administrative Agent is hereby irrevocably authorized and empowered (in its own name, on behalf of the Secured Parties, in the name of the Holder, or otherwise), but shall have no obligation, to demand, sue for, collect and receive every payment or distribution referred to in Section 4(c) of this Debenture and give acquittance therefor and to file claims and proofs of claim and take such other action (including, without limitation, voting the Subordinated Debt or enforcing any security interest or other lien securing payment of the Subordinated Debt) as it may deem necessary or advisable for the exercise or enforcement of any of the rights or interests of the Secured Parties hereunder.

 

       (e) All payments or distributions upon or with respect to the Subordinated Debt which are received by the Holder contrary to the provisions hereof shall be received in trust for the benefit of the Secured Parties, shall be segregated from other funds and property held by the Holder and shall be forthwith paid over to the Administrative Agent for the benefit of the Secured Parties in the same form as so received (with any necessary endorsement) to be applied (in the case of cash) to or held as collateral (in the case of non-cash property or securities) for the payment or prepayment of the Senior Debt in accordance with the terms of the Credit Agreement.

 

       (f) The Administrative Agent is hereby authorized to demand specific performance of these terms of subordination, whether or not the Partnership shall have complied with any of the provisions hereof applicable to it, at any time when the Holder shall have failed to comply with any of such provisions applicable to it.  The Holder hereby irrevocably waives any defense based on the adequacy of a remedy at law which might be asserted as a bar to such remedy of specific performance.

 

  

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       (g) So long as any of the Senior Debt shall remain unpaid, the Holder, in its capacity as such, shall not (i) commence, or join with any creditor other than the Secured Parties in commencing, any proceeding referred to in Section 4(c) of this Debenture, or (ii) declare any default in payment due hereunder or sue for breach of the terms hereof.

 

       (h) No payment or distribution to the Secured Parties pursuant to the above provisions shall entitle the Holder to exercise any rights of subrogation in respect thereof until the Senior Debt shall have been paid in full.

 

       (i) Neither any Administrative Agent, nor any of the Secured Parties, shall have any liability whatsoever to the Holder with respect to, and the Holder waives any claim or defense which the Holder may now or hereafter have against the Administrative Agent or any of the Secured Parties arising from (i) any and all actions which the Administrative Agent or the Secured Parties take or omit to take (including, without limitation, actions with respect to the creation, perfection or continuation of liens in any collateral for the Senior Debt, actions with respect to the occurrence of any default, actions with respect to the foreclosure upon, sale, release of, depreciation of or failure to realize upon any of such collateral, and actions with respect to the collection of any claim for all or any part of the Senior Debt from any account debtor, guarantor or any other Person) with respect to the Senior Debt or the valuation, use, protection or release of any collateral for the Senior Debt now or hereafter securing same; (ii) any right, now or hereafter existing, to require the Administrative Agent or the Secured Parties to proceed against or exhaust any collateral for the Senior Debt or to marshal any assets in favor of the Holder; (iii) any notice of the incurrence or increase of Senior Debt, it being understood that the Secured Parties may make advances now or hereafter relating to the Senior Debt, without notice to or authorization from the Holder, in reliance upon the agreements set forth in this Debenture, (iv) any defense based upon or arising by reason of (A) any disability or other defense of the Partnership or any other Person or entity; or (B) any lack of authority of any agent or any other Person or entity acting or purporting to act on behalf of the Partnership or the Holder; or (C) any failure by the Administrative Agent or the Secured Parties to properly perfect any lien in any asset of any of the Partnership or any other Person; (v) the Administrative Agent’s or any Secured Party’s election, in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code; and/or (vi) any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code.

 

       (j) The holders of the Senior Debt may, at any time and from time to time, without any consent of or notice to the Holder or any other holder of the Subordinated Debt and without impairing or releasing the obligations of the Holder under these terms of subordination:  (i) change the amount, manner, place or terms of payment or change or extend the time of payment of, or renew or alter, the Senior Debt in any manner, or enter into or amend in any manner any other agreement related to the Senior Debt (including any change in the rate under which any of the Senior Debt is outstanding); (ii) sell, exchange, release, not perfect and otherwise deal with any property at any time pledged, assigned or mortgaged to secure the Senior Debt; (iii) release anyone liable in any manner under or in respect of the Senior Debt; (iv) exercise or refrain from exercising any rights against Partnership and others (including the Holder); and (v) apply any sums, by whomsoever paid or however realized, from time to time received to the Senior Debt.

 

  

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       (k) The Holder agrees to execute and deliver such further documents and to do such other acts and things as the Administrative Agent may reasonably request in order fully to effect the purposes of these subordination provisions.  The Holder authorizes and directs the Administrative Agent on its behalf to take such further action as may be necessary to effectuate the subordination as provided herein and irrevocably appoints the Administrative Agent as its attorney-in-fact for any and all such purposes.

 

       (l) These terms of subordination shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Senior Debt is rescinded or must otherwise be returned by the Administrative Agent or any Secured Party upon the insolvency, bankruptcy or reorganization of the Partnership or otherwise, all as though such payment had not been made.

 

       (m) The provisions of these terms of subordination constitute a continuing agreement and shall (i) remain in full force and effect until the payment in full of the Senior Debt, (ii) be binding upon the Holder and the Partnership and their respective successors, transferees and assignees and (iii) inure to the benefit of, and be enforceable by, the Administrative Agent.  Without limiting the generality of the foregoing clause (iii), the Administrative Agent and any Secured Party may assign or otherwise transfer all or any portion of its rights and obligations under all or any of the Loan Documents (as defined in the Credit Agreement) to any other Person (to the extent permitted by the Loan Documents), and such other Person shall thereupon become vested with all the rights in respect granted to the Administrative Agent or such Secured Party herein or otherwise.

 

       (n) The foregoing provisions regarding subordination are for the benefit of the holders of the Senior Debt and shall be enforceable by them directly against the holders of any Subordinated Debt, and no holder of the Senior Debt shall be prejudiced in its right to enforce subordination of any of the Subordinated Debt by any act or failure to act by Partnership or anyone in custody of its assets or property.

 

    SECTION 5 EVENTS OF DEFAULT.

 

       (a) An “Event of Default”, wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

          (i) the Partnership fails to pay when due any amount payable under this Debenture and such non-payment continues for a period of five (5) Business Days;

 

          (ii) the Partnership fails to cure a Conversion Failure by delivery of the required number of Preferred Units within five (5) Business Days after the Maturity Date;

 

          (iii) any representation or warranty made by or on behalf of the Partnership in or in connection with this Debenture or any amendment or modification hereof or waiver hereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Debenture or any amendment or modification hereof or waiver hereunder, shall prove to have been incorrect or misleading in any material respect when made or deemed made;

 

  

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          (iv) the Partnership fails to observe or perform any covenant, condition or agreement contained in, or otherwise commit any breach or default of any provision of, this Debenture (other than non-payment and Conversion Failures, which are covered by subclauses (i) and (ii) above), and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (A) notice thereof from the Holder to the Partnership and (B) an officer of the Partnership otherwise becoming aware of such default;

 

          (v) the Partnership fails to make any payment (whether of principal or interest and regardless of amount) in respect of any indebtedness for borrowed money with an aggregate outstanding principal amount in excess of $10,000,000, when and as the same shall become due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) beyond the end of any grace period therefor set forth in the documentation governing such indebtedness;

 

          (vi) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (A) liquidation, reorganization or other relief in respect of the Partnership or any Significant Subsidiary of the Partnership or its debts, or of a substantial part of its assets, under any  Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, administrator, trustee, custodian, sequestrator, conservator or similar official for the Partnership or any Significant Subsidiary of the Partnership or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

          (vii) the Partnership or any Significant Subsidiary of the Partnership shall (A) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (B) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 5(a)(vi) of this Debenture, (C) apply for or consent to the appointment of a receiver, administrator, trustee, custodian, sequestrator, conservator or similar official for the Partnership or any Significant Subsidiary of the Partnership or for a substantial part of its assets, (D) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (E) make a general assignment for the benefit of creditors or (F) take any action for the purpose of effecting any of the foregoing; or

 

          (viii) this Debenture shall for any reason cease to be enforceable or in full force and effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any provision of this Debenture, or the Partnership shall deny that it has any further liability under any provision of this Debenture, or shall give notice to such effect.

 

       (b) Consequences of Events of Default. Upon the occurrence and during the continuance of an Event of Default:

 

  

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          (i) the outstanding Principal amount of this Debenture and all past due Interest, if any, owed hereunder shall bear interest at the lesser of (i) the per annum rate of fourteen percent (14.0%) and (ii) the Highest Lawful Rate (as hereinafter defined) (the “Default Rate”), in each case from and after the date of such Event of Default until the entire Principal amount of this Debenture and all Interest accrued thereon (including Interest on such past due Interest) shall have been paid in full, which Interest accruing at the Default Rate shall be payable on demand;

 

          (ii) the Holder may, at its option, by notice in writing to the Partnership, declare the entire Principal amount outstanding under this Debenture (plus all accrued but unpaid Interest on the amounts outstanding under this Debenture) to be, and such Principal amount of this Debenture shall thereupon be and become, immediately due and payable (together with all accrued but unpaid Interest thereon) without presentment, demand, protest or notice of any kind (including, without limitation, notice of acceleration and notice of intent to accelerate), all of which are hereby waived by the Partnership, or other action of any kind by the Holder; provided, that, if an Event of Default under Section 5(a)(vi) or Section 5(a)(vii) of this Debenture has occurred, such acceleration shall be automatic and no notice to the Partnership shall be required hereunder;

 

          (iii) the Holder shall have the right (but not the obligation) to convert this Debenture into Preferred Units in the manner set forth in Section 3(a); provided that, for purposes of this Section 5(a)(iii), any reference in Section 3(a) to the Maturity Date shall mean and be the date that the Holder elects to so convert this Debenture into Preferred Units; and

 

          (iv) subject to Section 4 of this Debenture, the Holder may, at its option, exercise all of its rights and remedies under applicable law and under this Debenture.

 

The rights and remedies of the Holder under this Debenture shall be cumulative, and not exclusive.

    SECTION 6 REISSUANCE OF THIS DEBENTURE.

 

       (a) Transfer.  If this Debenture is to be transferred, the Holder shall surrender this Debenture to the Partnership, whereupon the Partnership will, forthwith issue and deliver upon the order of the Holder a new Debenture (in accordance with Section 6(d) of this Debenture), registered in the name of the registered transferee or assignee, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a new Debenture (in accordance with Section 6(d) of this Debenture) to the Holder representing the outstanding Principal not being transferred.

 

       (b) Lost, Stolen or Mutilated Debenture.  Upon receipt by the Partnership of evidence reasonably satisfactory to the Partnership of the loss, theft, destruction or mutilation of this Debenture, and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Partnership in customary form and, in the case of mutilation, upon surrender and cancellation of this Debenture, the Partnership shall execute and deliver to the Holder a new Debenture (in accordance with Section 6(d) of this Debenture) representing the outstanding Principal.

 

  

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       (c) Debenture Exchangeable for Different Denominations.  This Debenture is exchangeable, upon the surrender hereof by the Holder at the principal office of the Partnership, for a new Debenture or Debentures (in accordance with Section 6(d) of this Debenture) representing in the aggregate the outstanding Principal of this Debenture, and each such new Debenture will represent such portion of such outstanding Principal as is designated by the Holder at the time of such surrender.

 

       (d) Issuance of New Debentures.  Whenever the Partnership is required to issue a new Debenture pursuant to the terms of this Debenture, such new Debenture (i) shall be of like tenor with this Debenture, (ii) shall represent, as indicated on the face of such new Debenture, the Principal remaining outstanding (or in the case of a new Debenture being issued pursuant to Section 6(a) or Section 6(c) of this Debenture, the Principal designated by the Holder which, when added to the Principal represented by the other new Debentures issued in connection with such issuance, does not exceed the Principal remaining outstanding under this Debenture immediately prior to such issuance of new Debentures), (iii) shall have an issuance date, as indicated on the face of such new Debenture, which is the same as the Issuance Date of this Debenture, (iv) shall have the same rights and conditions as this Debenture and (v) shall represent accrued and unpaid Interest from the Issuance Date.

 

    SECTION 7 NOTICES.   Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally, (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.  The addresses and facsimile numbers for such communications shall be:

 

If to the Partnership:

 

Blueknight Energy Partners, L.P.

Two Warren Place

6120 South Yale Avenue, Suite 500

Tulsa, Oklahoma 74136

Fax: (918) 237-4001

Attn: Alex Stallings

 

With copies to (which shall not constitute notice):

 

Baker Botts L.L.P.

2001 Ross Avenue, Suite 600

Dallas, Texas 75201

Fax: (214) 661-4634

Attn: Doug Rayburn

 

  

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and

 

Prickett, Jones & Elliott, P.A.

1319 King Street

P. O. Box 1328

Wilmington, Delaware 19899

Fax: (302) 658-8111

Attn: John Small

 

If to the Holder:

 

CB-Blueknight, LLC

c/o Charlesbank Capital Partners

200 Clarendon Street, 54th Floor

Boston, Massachusetts 02116

Fax: (617) 619-5402

Email: jbiotti@charlesbank.com

Attn: Mr. Jon M. Biotti

With copies to (which shall not constitute notice)

 

Charlesbank Capital Partners

200 Clarendon Street, 54th Floor

Boston, Massachusetts 02116

Fax: (617) 619-5402

Email: tnason@charlesbank.com

Attn: Tami E. Nason

and

Gardere Wynne Sewell LLP

1601 Elm Street, Suite 3000

Dallas, Texas 75201

Fax: (214) 999-3245

Email: rsarfatis@gardere.com

Attn: Robert Sarfatis

or at such other address and/or facsimile number and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3) Business Days prior to the effectiveness of such change.  Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (iii) provided by a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

  

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    SECTION 8 NO RIGHTS AS UNITHOLDER.  This Debenture shall not entitle the Holder to any of the rights of a unitholder of the Partnership, including without limitation, the right to vote, to receive dividends and other distributions, or to receive any notice of, or to attend, meetings of unitholders or any other proceedings of the Partnership, unless and to the extent converted into Preferred Units in accordance with the terms hereof.

 

    SECTION 9 EXPENSES.  If the Partnership fails to strictly comply with the terms of this Debenture, then the Partnership shall reimburse the Holder promptly for all out-of-pocket costs and expenses, including, without limitation, reasonable attorneys’ fees and expenses incurred by the Holder in any action in connection with this Debenture, including, without limitation, those incurred: (i) during any workout, attempted workout, and/or in connection with the rendering of legal advice as to the Holder’s rights, remedies and obligations hereunder, (ii) collecting any sums which become due to the Holder hereunder, (iii) defending or prosecuting any proceeding or any counterclaim to any proceeding or appeal related to this Debenture or (iv) the protection, preservation or enforcement of any rights or remedies of the Holder hereunder.

 

    SECTION 10 AMENDMENTS AND WAIVERS.  The provisions of this Debenture may not be amended or waived without the prior written consent of the Holder.  Any waiver by the Holder of a breach of any provision of this Debenture shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture.  The failure of the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture.  Any waiver must be in writing.

 

    SECTION 11 INTEREST RATE LIMITATION.  Notwithstanding anything to the contrary contained in this Debenture, the Interest paid or agreed to be paid under this Debenture shall not exceed the Highest Lawful Rate (as defined below).  If the Holder shall receive Interest on this Debenture in an amount that exceeds the Highest Lawful Rate, the excess Interest shall be applied to the Principal of this Debenture or, if it exceeds such unpaid Principal, refunded to the Partnership.  In determining whether the Interest contracted for, charged, or received by the Holder exceeds the Highest Lawful Rate, the Holder may, to the extent permitted by applicable law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of Interest throughout the contemplated term of this Debenture.  For purposes of this Debenture, “Highest Lawful Rate” means at the particular time in question the maximum rate of interest which, under applicable law, the Holder is then permitted to charge on this Debenture.  If the maximum rate of interest which, under applicable law, the Holder is permitted to charge on this Debenture shall change after the date hereof, the Highest Lawful Rate shall be automatically increased or decreased, as the case may be, from time to time as of the effective time of each change in the Highest Lawful Rate without notice to the Partnership.

 

  

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    SECTION 12 SEVERABILITY; WAIVER OF NOTICE; ASSIGNMENT. Whenever possible, each provision of this Debenture will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Debenture is held to be prohibited by or invalid under applicable law in any jurisdiction, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating any other provision of this Debenture.  To the extent permitted by law, the Partnership, for itself and its successors and assigns, hereby waives presentment, demand, notice of protest, notice of acceleration, notice of intent to accelerate and all other demands and notices, in connection with the delivery, acceptance, performance, default or enforcement of this Debenture.  This Debenture shall not be assignable by the Partnership, and any purported transfer or assignment of the Partnership’s obligations hereunder shall be null and void.  This Debenture shall inure to the benefit of the Holder and its successors and assigns.

 

    SECTION 13 CERTAIN DEFINITIONS.  For purposes of this Debenture, the following terms shall have the following meanings:

 

       (a) “Business Day” means each day of the week except Saturdays, Sundays and days on which banking institutions are authorized or required to close in the State of New York.

 

       (b) “Capital Stock” means:

 

          (i) in the case of a corporation, corporate stock;

 

          (ii) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

 

          (iii) in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

 

          (iv) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

       (c) “Conversion Failure” means the Partnership’s failure to issue and deliver a certificate to the Holder for the number of Preferred Units to which the Holder is entitled upon the conversion of this Debenture pursuant to Section 3(a) by the third (3rd) Business Day after the Maturity Date.

 

       (d) “Common Units” means a common unit representing a limited partner interest in the Partnership.

 

       (e) “Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

 

  

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       (f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

       (g) “General Partner” means Blueknight Energy Partners G.P., L.L.C., a Delaware limited liability company.

 

       (h) “Global Transaction Agreement” means the Global Transaction Agreement dated as of October 25, 2010, by and among the Partnership, the General Partner and the purchasers party thereto, as amended, restated, supplemented and otherwise modified from time to time.

 

       (i) “Person” means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.

 

       (j) “Preferred Units” means the Partnership’s Series A Preferred Units (as defined in the Third Amended and Restated Partnership Agreement) with the terms set forth in the Third Amended and Restated Partnership Agreement; provided that, from and after the date that all of the Partnership’s issued and outstanding Series A Preferred Units are converted into Common Units pursuant to Section 5.12(c) of the Third Amended and Restated Partnership Agreement, all references herein to Preferred Units shall mean Common Units.

 

       (k) “Significant Subsidiary” means any subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Debenture.

 

       (l) “Third Amended and Restated Partnership Agreement” means the Third Amended and Restated Agreement of Limited Partnership of the Partnership dated as of October 25, 2010, as amended, restated, supplemented and otherwise modified from time to time.

 

    SECTION 14 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND UNITHOLDERS.  Neither the General Partner nor any past, present or future director, officer, partner, employee, incorporator, manager or unitholder or other owner of Equity Interests of the Partnership or the General Partner, as such, shall have any liability for any obligations of the Partnership under this Debenture, or for any claim based on, in respect of, or by reason of, such obligations or their creation.  The Holder by accepting this Debenture waives and releases all such liability.  The waiver and release are part of the consideration for issuance of this Debenture.

 

  

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    SECTION 15 GOVERNING LAW; WAIVER OF JURY TRIAL.

 

       (a) THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK.

 

       (b) THE PARTNERSHIP HEREBY IRREVOCABLY WAIVES, AND BY ACCEPTANCE OF THIS DEBENTURE THE HOLDER HEREBY IRREVOCABLY WAIVES, ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS DEBENTURE OR ANY MATTER ARISING HEREUNDER.

 

    SECTION 16 NOTICE OF FINAL AGREEMENT.  THIS WRITTEN DEBENTURE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

  

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IN WITNESS WHEREOF, the Partnership has caused this Debenture to be duly executed by a duly authorized officer as of the date set forth above.

 

	
BLUEKNIGHT ENERGY PARTNERS, L.P.

	  	  
	
By:

	
BLUEKNIGHT ENERGY PARTNERS

	  	
G.P., L.L.C., its general partner,

	  	  
	  	  
	
By:

	
/s/ Alex G. Stallings

	  	
Alex G. Stallings

	  	
Chief Financial Officer and Secretary

 

[Signature Page to Debenture - Charlesbank]exhibit1024.htm - Generated by SEC Publisher for SEC Filing

 

 

	
SHARE EXCHANGE AGREEMENT

	
SHARE EXCHANGE AGREEMENT, dated as of October 22, 2010 (this "Agreement) by and among STANDARD GOLD CORP., a Nevada corporation (' Standard Gold ), PHYTOMEDICAL TECHNOLOGIES, INC., a Nevada corporation (the "Company") and the persons listed on Exhibit A annexed hereto, representing the holders of all of the issued and outstanding securities of Standard Gold (the "Standard Gold Stockholders").

WHEREAS, on October 22, 2010, the Board of Directors of the Company adopted resolutions approving the Company's acquisition of shares of Standard Gold by means of a share exchange with the Standard Gold Stockholders, upon the terms and conditions hereinafter set forth in this Agreement; and

WHEREAS, the aggregate number of shares of Standard Gold common stock, par value $0.0001 per share (the "Standard Gold Common Stock") owned by the Standard Gold Stockholders set forth on Exhibit A constitute 100% of the issued and outstanding securities of Standard Gold, on a fully diluted basis (collectively, the "Standard Gold Shares'"), and the Standard Gold Stockholders desire to sell and transfer their Standard Gold Shares in exchange for newly-issued shares (the "Company Shares'') of the Company's common stock, par value $0.00001 per share (the "Company Common Stock") pursuant to the terms and conditions of this Agreement (the "Share Exchange") so that prior to the consummation of the Financing and the Loan Conversion (each as hereinafter defined), the Company Shares issued to the Standard Gold Stockholders shall constitute approximately 72% of the issued and outstanding shares of Common Stock of the Company immediately after the closing of the transactions contemplated herein, without giving effect to the consummation of the Financing and the Loan Conversion (as defined below); and

WHEREAS, it is the intention of the parties that: (i) the Share Exchange shall qualify as a tax-free reorganization under Section 368(a) (1) (B) of the Internal Revenue Code of 1986, as amended (the "Code"); and (ii) the Share Exchange shall qualify as a transaction in securities exempt from registration or qualification under the Securities Act of 1933, as amended and in effect on the date of this Agreement (the "Securities Act"); and

WHEREAS, as soon as practicable following the consummation of the Share Exchange, and as a condition to its consummation, the Company shall have received minimum subscriptions of an aggregate of $2,000,000.00 of its securities pursuant to a self directed public offering of its securities pursuant to the terms and conditions of a prospectus contained in its registration statement (SEC No. 333-165883) (the "Registration Statement") as the same may be amended from time to time (the "Financing").

NOW, THEREFORE, in consideration of the mutual terms, conditions and other agreements set forth herein, the parties hereto agree as follows:

 

 

 

 

	
ARTICLE I

	
EXCHANGE OF STANDARD GOLD SHARES FOR COMPANY SHARES

Section 1.1                   The Share Exchange. On the Closing Date (as hereinafter

defined) and upon the terms and subject to the conditions set forth in this Agreement, each Standard Gold Stockholder shall (i) assign, transfer, convey and deliver to the Company share certificates representing the Standard Gold Shares owned by such Standard Gold Stockholder, resulting in the transfer of all 28,205,199 Standard Gold Shares held by the Standard Gold Stockholders immediately prior to the consummation of the Share Exchange, and which shall constitute 100% of the issued and outstanding Standard Gold Shares. Each such certificate so delivered shall be accompanied by a properly executed and authenticated stock power. In consideration and exchange for the Standard Gold Shares, the Company shall issue, transfer, convey and deliver to the Standard Gold Stockholders an aggregate of 607,539,940 Company Shares, to be allocated among the Standard Gold Stockholders as provided on Exhibit B (the "Company Shares"), annexed hereto.

Section 1.2                   Closing and Actions at Closing. The closing of the Share

Exchange (the "Closing") shall take place at 10:00 a.m. New York time on the day the conditions to closing set forth in Articles V and VI herein have been satisfied or waived, or at such other time and date as the parties hereto shall agree in writing (the "Closing Date"), at the offices of Sierchio & Company, LLP, 430 Park Avenue, Suite 702, New York, New York 10022, or at such other place as the parties hereto may agree to in writing.

Section 1.3                   Taking of Necessary Action; Further Action. If, at any time

after the Closing, any further action is necessary or desirable to carry out the purposes of this Agreement, the Standard Gold Stockholders, Standard Gold and the Company (as applicable) will take all such lawful and necessary action.

Section 1.4                   Officers of the Company at Closing Date. On the Closing

Date, Mr. Amit S. Dang, the Company's sole officer, shall resign from his positions as President and Chief Executive Officer and Chief Financial Officer, and Daniel Bleak shall be appointed as the Company's President and Chief Executive Officer and Chief Financial Officer.

	
ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents, warrants and agrees that all of the statements in the following subsections of this Article II are true and complete as of the date hereof. The disclosure schedule attached hereto as Schedules 2.2 through 2.19 (the "Company Disclosure Schedules'") are divided into sections that correspond to the sections of this Article II. The Company Disclosure Schedules comprise lists of all exceptions to the truth and accuracy in all material respects of, and of all disclosures or descriptions required by, the representations and warranties set forth in this Article II.

	
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Section 2.1                    Corporate Organization.

a.                                            The Company is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite corporate power and authority to own its properties and assets and governmental licenses, authorizations, consents and approvals to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a Material Adverse Effect on the activities, business, operations, properties, assets, condition or results of operation of the Company. "Material Adverse Effect" means, when used with respect to the Company, any event, occurrence, fact, condition, change or effect, which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or operating results of the Company, or materially impair the ability of the Company to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, or (ii) changes in the United States securities markets generally.

b.                                           Copies of the certificate of incorporation and by-laws of the Company with all amendments thereto, as of the date hereof (the "Company Charter Documents"), have been furnished to Standard Gold, and such copies are accurate and complete as of the date hereof. The minute books of the Company contain the minutes of all meetings of the Company's Board and stockholders of the Company from its date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by the Company's Board and stockholders of the Company. The Company is not in violation of any of the provisions of the Company's Charter Documents.

Section 2.2                    Capitalization of the Company.

a.                      The authorized capital stock of the Company consists of

2,001,000,000 shares: 2,000,000,000 shares are authorized as Common Stock, of which 241,487,995 shares are, and will be, issued and outstanding immediately prior to the Share Exchange, the Financing and the Loan Conversion, and 1,000,000 shares are authorized as preferred stock, of which no shares are issued and outstanding.

b.                     All of the issued and outstanding shares of Common Stock of the

Company immediately prior to the Share Exchange are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with all applicable federal and state securities laws and state corporate laws, and have been issued free of preemptive rights of any security holder. Except with respect to securities to be issued in connection with the Financing, the Loan Conversion and to the Standard Gold Stockholders pursuant to the terms hereof, or as otherwise described in Schedule 2.2(b) of the Company Disclosure Schedules, as of the date of this Agreement there are no outstanding or authorized options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe

	
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for, purchase or otherwise acquire or receive any shares of the Company's capital stock, nor are there or will there be any outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights, pre-emptive rights or rights of first refusal with respect to the Company or any Company Common Stock, or any voting trusts, proxies or other agreements, understandings or restrictions with respect to the voting of the Company's capital stock.

Section 2.3                    Subsidiaries and Equity Investments. Except as described in

Schedule 2.3 of the Company Disclosure Schedules, the Company does not directly or indirectly own any capital stock or other securities of, or any beneficial ownership interest in, or hold any equity or similar interest, or have any investment in any corporation, limited liability company, partnership, limited partnership, joint venture or other company, person or other entity (each a "Person").

Section 2.4                   Authorization, Validity and Enforceability of Agreements.

The Company has all corporate power and authority to execute and deliver this Agreement and all agreements, instruments and other documents to be executed and delivered in connection with the transactions contemplated by this Agreement (collectively, the "Transaction Documents''), to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and each of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of the Company, and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or the Transaction Documents or to consummate the transactions contemplated hereby and thereby. Each of this Agreement and the Transaction Documents constitutes the valid and legally binding obligation of the Company and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors' rights generally. The Company does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any Governmental Authority (defined hereafter) or other Person in order for it to consummate the transactions contemplated by this Agreement, other than filings that may be required or permitted under states securities laws, the Securities Act and/or the Securities Exchange Act of 1934, as amended (the "Exchange Act") resulting from the issuance of the Company Shares or securities in connection with the Financing and the Loan Conversion.

Section 2.5                   No Conflict or Violation. Neither the execution and delivery

of this Agreement or the Transaction Documents by the Company, nor the consummation by the Company of the transactions contemplated hereby or thereby will: (i) contravene, conflict with, or violate any provision of the Company Charter Documents; (ii) violate any constitution, statute, regulation, rule, Order (defined hereafter), ruling, charge or other restriction of any court or other federal or national, state or provincial, municipal or local government, governmental authority, regulatory or administrative agency, governmental commission, department, board, bureau, agency or instrumentality, political subdivision, commission, court, tribunal, official, arbitrator or arbitral body ("Governmental Authority") to which the Company was subject, (iii) conflict with, result in a breach of, constitute a

	
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default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which the Company is a party or by which it is bound, or to which any of its assets or properties are subject; or (iv) result in or require the creation or imposition of any lien, mortgage, pledge, deed of trust, hypothecation, security interest or other encumbrance of any nature (each a "Lien") upon or with respect to any of the Company's assets, including without limitation the Company Shares. For the purposes of this Agreement "Order" shall mean any written order, writ, judgment, injunction, subpoena, indictment, demand, decree, stipulation, determination or award entered by or with any Governmental Authority.

Section 2.6                   Litigation. Except as described in Schedule 2.6 of the

Company Disclosure Schedules, there is no action, suit, proceeding or investigation ("Action") pending or, to the knowledge of the Company, currently threatened against the Company or any of its affiliates, that may affect the validity of this Agreement or the Transaction Documents or the right of the Company to enter into this Agreement and the Transaction Documents or to consummate the transactions contemplated hereby or thereby. There is no Action pending or, to the knowledge of the Company, currently threatened against the Company or any of its affiliates, before any court or by or before any Governmental Authority, nor is there any Order of any court or other Governmental Authority against the Company or any of its affiliates. Neither the Company nor any of its affiliates is a party or subject to the provisions of any Order of any court or Governmental Authority. There is no Action by the Company or any of its affiliates relating to the Company currently pending or which the Company or any of its affiliates intends to initiate.

Section 2.7                    Compliance with Laws. The Company has been and is in

compliance with, and has not received any notice of any violation of any, applicable law, Order, ordinance, regulation or rule of any kind whatsoever, including without limitation the Securities Act, the Exchange Act, the applicable rules and regulations of the Securities and Exchange Commission ("SEC") or the applicable securities laws and rules and regulations of any state.

Section 2.8                   Financial Statements; SEC Reports.

a.                      The Company's financial statements (the "Company Financial

Statements'') contained in its periodic reports filed with the SEC (the "SEC Reports'') have been prepared in accordance with generally accepted accounting principles applicable in the United States of America ("U.S. GAAP') applied on a consistent basis throughout the periods indicated, except that those Company Financial Statements that are not audited do not contain all footnotes required by U.S. GAAP. The Company Financial Statements fairly present the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. Except as set forth in the Company Financial Statements or as disclosed in Schedule 2.8(a) of the Company Disclosure Schedules, the Company has no material liabilities (contingent or otherwise). The Company is not a guarantor or indemnitor of any indebtedness of any other Person. The Company

	
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maintains a standard system of accounting established and administered in accordance with U.S. GAAP.

	
b.                     Except as disclosed in Schedule 2.8(b) of the Company Disclosure

Schedules, since December 31, 2008, the Company has timely filed all of its SEC Reports. Each of the SEC Reports, as the same may have been amended, has complied in all material respects with the applicable provisions of the Securities Act and the Exchange Act and/or regulations promulgated thereunder.

Section 2.9                   Books and Records. The books and records of the Company

are true, accurate and complete in all material respects.

Section 2.10                  Employee Benefit Plans. Except as described in Schedule

2.10 of the Company Disclosure Schedules, the Company does not have any "Employee Benefit Plan" as defined in the U.S. Employee Retirement Income Security Act of 1974 or similar plans under any applicable laws.

Section 2.11                  Tax Returns, Payments and Elections. Except as described in

Schedule 2.11 of the Company Disclosure Schedules, the Company has filed all Tax (as defined below) returns, statements, reports, declarations and other forms and documents (including, without limitation, estimated tax returns and reports and material information returns and reports) ("Tax Returns") required pursuant to applicable law to be filed with any Tax Authority (as defined below). All such Tax Returns are accurate, complete and correct in all material respects, and the Company has timely paid all Taxes due and adequate provisions have been and are reflected in the Company's Financial Statements for all current taxes and other charges to which the Company is subject and which are not currently due and payable. None of the Company's federal income tax returns have been audited by the Internal Revenue Service. The Company has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal or state) of any nature whatsoever, whether pending or threatened against the Company for any period, nor of any basis for any such assessment, adjustment or contingency. The Company has withheld or collected from each payment made to each of its employees, if applicable, the amount of all Taxes (including, without limitation, federal income taxes, state and local income taxes and any applicable foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority. For purposes of this Agreement, the following terms have the following meanings: "Tax" (and, with correlative meaning, "Taxes" and "Taxable") means any and all taxes including, without limitation, (x) any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, value added, net worth, license, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, environmental or windfall profit tax, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or any penalty, addition to tax or additional amount imposed by any United States, state, local or foreign Governmental Authority or regulatory body responsible for the imposition of any such tax (domestic or foreign) (a "Tax Authority"), (y) any liability for the payment of any amounts of the type described in (x) as a result of being a member of an affiliated, consolidated, combined or unitary group for any taxable period or as the result of being a transferee or

	
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successor thereof, and (z) any liability for the payment of any amounts of the type described

in (x) or (y) as a result of any express or implied obligation to indemnify any other Person.

Section 2.12                  No Liabilities or Obligations. Except as described in

Schedule 2.12 of the Company Disclosure Schedules, upon the Closing Date, the Company

will have no debt, liabilities or obligations of any kind whatsoever other than (i) liabilities and

obligations reflected in the Company Financial Statements; (ii) accounts payable incurred in

the ordinary course of business since the date of the last balance sheet reflected in the

Company Financial Statements, none of which are material in nature or exceed $10,000, in

the aggregate; and (iii) liabilities and obligations with respect to the transactions contemplated

hereby and pursuant to the Financing.

Section 2.13                  No Broker Fees. Except as described in Schedule 2.13 of the

Company Disclosure Schedules, no brokers, finders or financial advisory fees or commissions

will be payable by or to the Company or any of its affiliates with respect to the transactions

contemplated by this Agreement.

Section 2.14                  Duly Authorized. The issuance of the Company Shares has

been duly authorized and, upon delivery to the Standard Gold Stockholders of certificates

therefor in accordance with the terms of this Agreement, the Company Shares will be validly

issued in compliance with all applicable federal and state securities and corporate laws, fully

paid, and nonassessable, will have the rights, preferences and privileges specified, will be free

of preemptive rights, and will be free and clear of all liens and restrictions, other than liens

created by the Standard Gold Stockholders and restrictions on transfer imposed by this

Agreement and any applicable securities laws and the regulations and rules promulgated

	
thereunder.

Section 2.15                  Employees.

a.                                           The Company does not have any employees.

b.                                           Other than Amit S. Dang and Jeet S. Sidhu, the Company does not have

	
any officers or directors. No director or officer of the Company is a party to, or is otherwise bound by, any contract (including any confidentiality, non-competition or proprietary rights agreement) with any other person that in any way adversely affects or will materially affect (i) the performance of his duties as a director or officer of the Company, (ii) the ability of the Company to conduct its business, or (iii) the ability of the Company to consummate the transactions contemplated by this Agreement.

Section 2.16                  Interested Party Transactions.

Except as described in Schedule 2.16 of the Company Disclosure Schedules, no officer, director or principal stockholder of the Company or any affiliate or "associate" (as such term is defined in Rule 405 as promulgated by the SEC under the Securities Act) of any such Person, has or has had, either directly or indirectly, (1) an interest in any Person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by the Company, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish the

	
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Company any goods or services; or (2) a beneficial interest in any contract or agreement to

which the Company is a party or by which it may be bound or affected.

Section 2.17                  Intellectual Property. Schedule 2.17 of the Company

Disclosure Schedules sets forth a description of all of the Intellectual Property, which the

Company owns, uses or licenses in its activities as presently conducted. For the purposes of

this Agreement, "Intellectual Property" means all industrial and intellectual property,

including, without limitation, all U.S. and non-U.S. patents, patent applications, patent rights,

trademarks, trademark applications, common law trademarks, Internet domain names, trade

names, service marks, service mark applications, common law service marks, and the

goodwill associated therewith, copyrights, in both published and unpublished works, whether

registered or unregistered, copyright applications, franchises, licenses, know-how, trade

secrets, technical data, designs, customer lists, confidential and proprietary information,

processes and formulae, all computer software programs or applications, layouts, inventions,

development tools and all documentation and media constituting, describing or relating to the

above, including manuals, memoranda, and records, whether such intellectual property has

been created, applied for or obtained anywhere throughout the world.

Section 2.18                  Shell Company. The Company is a "shell company" as defined

in Rule 405 as promulgated pursuant to the Securities Act ("Rule 405").

Section 2.19                  Scheduled Liabilities. Schedule 2.19 of the Company

Disclosure Schedules, sets forth a list and the estimated amount of all liabilities of the

Company to be paid or discharged at Closing.

Section 2.20                  Disclosure. This Agreement, the schedules hereto and any

certificate attached hereto or delivered in accordance with the terms hereof by or on behalf of

the Company in connection with the transactions contemplated by this Agreement, when

taken together, do not contain any untrue statement of a material fact or omit to state any

material fact necessary in order to make the statements contained herein and/or therein not

misleading.

	
ARTICLE III

REPRESENTATIONS AND WARRANTIES OF STANDARD GOLD

Standard Gold represents, warrants and agrees that all of the statements in the

following subsections of this Article III are true and complete as of the date hereof. The

disclosure schedules attached hereto as Schedules 3.2 through 3.19 (the "Standard Gold

Disclosure Schedules") are divided into sections that correspond to the sections of this

Article III. The Standard Gold Disclosure Schedules comprise lists of all exceptions to the

truth and accuracy in all material respects of, and of all disclosures or descriptions required

by, the representations and warranties set forth in this Article III.

	
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Section 3.1

	
Corporate Organization.

	
a.                                             Standard Gold is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has all requisite corporate power and authority to own its properties and assets and governmental licenses, authorizations, consents and approvals to conduct its business as now conducted and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of its activities makes such qualification and being in good standing necessary, except where the failure to be so qualified and in good standing will not have a Material Adverse Effect on the activities, business, operations, properties, assets, condition or results of operation of Standard Gold. "Material Adverse Effect" means, when used with respect to Standard Gold, any event, occurrence, fact, condition, change or effect, which, individually or in the aggregate, would reasonably be expected to be materially adverse to the business, operations, properties, assets, condition (financial or otherwise), or operating results of Standard Gold, or materially impair the ability of Standard Gold to perform its obligations under this Agreement, excluding any change, effect or circumstance resulting from (i) the announcement, pendency or consummation of the transactions contemplated by this Agreement, or (ii) changes in the United States securities markets generally.

b.                                           Copies of the certificate of incorporation and by-laws of Standard Gold with all amendments thereto, as of the date hereof (the "Standard Gold Charter Documents"), have been furnished to the Company, and such copies are accurate and complete as of the date hereof. The minute books of Standard Gold are current as required by law, contain the minutes of all meetings of Standard Gold's Board and stockholders of Standard Gold from its date of incorporation to the date of this Agreement, and adequately reflect all material actions taken by Standard Gold's Board and stockholders of Standard Gold. Standard Gold is not in violation of any of the provisions of the Standard Gold Charter Documents.

Section 3.2                    Capitalization.

a.                                           The authorized capital stock of Standard Gold consists of 500,000,000 shares, $0.0001 par value per share, of which 28,205,199 shares are, and will be, issued and outstanding immediately prior to the Share Exchange.

b.                                           All of the issued and outstanding shares of Standard Gold Common Stock immediately prior to the Share Exchange are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance with all applicable federal and state securities laws and state corporate laws, and have been issued free of preemptive rights of any security holder. Except as otherwise described in Schedule 3.2(b) of the Standard Gold Disclosure Schedules, as of the date of this Agreement there are no outstanding or authorized options, warrants, agreements, commitments, conversion rights, preemptive rights or other rights to subscribe for, purchase or otherwise acquire or receive any shares of Standard Gold's capital stock, nor are there or will there be any outstanding or authorized stock appreciation, phantom stock, profit participation or similar rights, pre-emptive rights or rights of first refusal with respect to Standard Gold or any Standard Gold Common Stock, or any

	
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voting trusts, proxies or other agreements, understandings or restrictions with respect to the voting of Standard Gold's capital stock.

Section 3.3                    Subsidiaries and Equity Investments. Standard Gold does

not, directly or indirectly, own any capital stock or other securities of, or any beneficial ownership interest in, or hold any equity or similar interest, or have any investment in any Person.

Section 3.4                   Authorization, Validity and Enforceability of Agreements.

Standard Gold has all corporate power and authority to execute and deliver this Agreement and the Transaction Documents, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. Each of this Agreement and the Transaction Documents constitutes the valid and legally binding obligation of Standard Gold and is enforceable in accordance with its terms, except as such enforcement may be limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally. Standard Gold does not need to give any notice to, make any filings with, or obtain any authorization, consent or approval of any Governmental Authority or other Person in order for it to consummate the transactions contemplated by this Agreement and the Transaction Documents, other than filings that may be required under state securities laws, the Securities Act and/or the Exchange Act resulting from the transfer and exchange of the Standard Gold Shares. The execution and delivery of this Agreement and the Transaction Documents by Standard Gold and the consummation by Standard Gold of the transactions contemplated hereby and thereby, have been duly authorized by all necessary corporate action of Standard Gold, and no other corporate proceedings on the part of Standard Gold are necessary to authorize this Agreement and the Transaction Documents or to consummate the transactions contemplated hereby or thereby.

Section 3.5                   No Conflict or Violation. Neither the execution and delivery of

this Agreement or the Transaction Documents by Standard Gold, nor the consummation by Standard Gold of the transactions contemplated hereby or thereby will: (i) contravene, conflict with or violate any provision of the Standard Gold Charter Documents, (ii) violate any constitution, statute, regulation, rule, Order, ruling, charge or other restriction of any Governmental Authority to which Standard Gold is subject, (iii) conflict with, result in a breach of, constitute a default (or an event or condition which, with or without notice or lapse of time or both, would constitute a default), under, result in the acceleration of, create in any party the right to accelerate, terminate, modify or cancel, or require any notice under any agreement, contract, lease, license, instrument or other arrangement to which Standard Gold is a party or by which it is bound, or to which any of its assets is subject; or (iv) result in or require the creation or imposition of any Lien of any nature upon or with respect to any of Standard Gold's assets.

Section 3.6                    Compliance with Laws and Other Instruments. Except as

would not have a Material Adverse Effect on Standard Gold and except as set forth in Schedule 3.6 of the Standard Gold Disclosure Schedules, the business and operations of Standard Gold have been and are being conducted in accordance with all applicable federal, state and local laws, rules and regulations and all applicable Orders, determinations and awards of all courts and other Governmental Authorities. Except as would not have a Material Adverse Effect on Standard Gold, Standard Gold is not, and is not alleged to be, in violation of, or (with or without

	
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notice or lapse of time or both) in default under, or in breach of, any term or provision of the Standard Gold Charter Documents or of any indenture, loan or credit agreement, note, deed of trust, mortgage, security agreement or other material agreement, lease, license or other instrument, commitment, obligation or arrangement to which it is a party or by which any of its properties, assets or rights are bound or affected. To the knowledge of Standard Gold, no other party to any material contract, agreement, lease, license, commitment, instrument or other obligation to which Standard Gold is a party is (with or without notice or lapse of time or both) in default thereunder or in breach of any term thereof. Standard Gold is not subject to any obligation or restriction of any kind or character, nor is there, to the knowledge of Standard Gold, any event or circumstance relating to Standard Gold that materially and adversely affects in any way its business, properties, assets or prospects or that would prevent or make burdensome their performance of or compliance with all or any part of this Agreement or the Transaction Documents, or the consummation of the transactions contemplated hereby or thereby.

Section 3.7                   Brokers' Fees. Except as described in Schedule 3.7 of the

Standard Gold Disclosure Schedules, no brokers, finders or financial advisory fees or commissions will be payable by or to Standard Gold or any of its affiliates with respect to the transactions contemplated by this Agreement.

Section 3.8                    Title to and Condition of Properties. Except as set forth in

Schedule 3.8 of the Standard Gold Disclosure Schedules, Standard Gold owns or holds under valid leases or other rights to use all real property, plants, machinery and equipment necessary for the conduct of its business as presently conducted, except where the failure to own or hold such property, plants, machinery and equipment would not have a Material Adverse Effect. To the knowledge of Standard Gold, the material buildings, plants, machinery and equipment necessary for the conduct of Standard Gold's business as presently conducted are structurally sound, are in good operating condition and repair and are adequate for the uses to which they are being put, in each case, taken as a whole, and none of such buildings, plants, machinery or equipment are in need of maintenance or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or cost. Standard Gold further represents and warrants that the closing of the transactions contemplated by the Agreement of Conveyance, transfer and Assignment of Assents and Assumption of Obligations dated as of January 30, 2010 by and among Bullfrog Holdings, Inc, NPX Metals, inc. and Standard Gold (the "Assignment and Assumption Agreement") has occurred and that Standard Gold has satisfied in full its payment obligations thereunder, including, but not limited to Section 1.2 thereof and that there have been and there are no defaults by Standard Gold thereunder. Schedule 3.8 of the Standard Gold Disclosure Schedules sets forth a complete list of all of the obligations assumed by Standard Gold under the terms of the Assignment and Assumption Agreement.

Section 3.9                   Absence of Undisclosed Liabilities. Except as set forth in

Schedule 3.9 of the Standard Gold Disclosure Schedules, Standard Gold has no debt, obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due) arising out of any transaction entered into at or prior to the Closing Date or any act or omission at or prior to the Closing Date, except to the extent set forth on or reserved against on the Unaudited Standard Gold Financial Statements (as hereinafter defined). Standard Gold

	
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has not incurred any liabilities or obligations under agreements entered into, except in the usual

and ordinary course of business, since August 31, 2010.

Section 3.10                  Changes.

Standard Gold has not, since August 31, 2010:

a.                                            Ordinary Course of Business. Entered into any transaction with third

parties other than in the usual and ordinary course of business, except for this Agreement and

the other documents to be entered into in connection with the transactions contemplated by

this Agreement;

b.                                           Adverse Changes. Suffered or experienced any change in, or

affecting, its condition (financial or otherwise), properties, assets, liabilities, business,

operations or results of operations other than changes, events or conditions in the usual and

ordinary course of their business, none of which would have a Material Adverse Effect;

c.                                           Loans. Made any loans or advances or extended credit to any Person

other than travel advances and reimbursement of expenses made to employees, officers and

directors in the ordinary course of business;

d.                                           Liens. Created or permitted to exist any material Lien on any property

or asset of Standard Gold, other than (a) Liens for taxes not yet payable or in respect of which

the validity thereof is being contested in good faith by appropriate proceedings and for the

payment of which the relevant party has made adequate reserves; (b) Liens in respect of

pledges or deposits under workmen's compensation laws or similar legislation, carriers,

warehousemen, mechanics, laborers and materialmen and similar Liens, if the obligations

secured by such Liens are not then delinquent or are being contested in good faith by

appropriate proceedings conducted and for the payment of which the relevant party has made

adequate reserves; (c) statutory Liens incidental to the conduct of Standard Gold's business

which were not incurred in connection with the borrowing of money or the obtaining of

advances or credits and that do not in the aggregate materially detract from the value of its

property or materially impair the use thereof in the operation of its business; and (d) Liens

that would not have a Material Adverse Effect;

e.                                            Capital Stock. Issued, sold, disposed of or encumbered, or authorized

the issuance, sale, disposition or encumbrance of, or granted or issued any option to acquire

any shares of its capital stock or any other of their securities or any equity security of any

class of Standard Gold, or altered the term of any of its outstanding securities or made any

change in its outstanding shares of capital stock or its capitalization, whether by reason of

reclassification, recapitalization, stock split, combination, exchange or readjustment of shares,

stock dividend or otherwise;

f.                                            Dividends. Declared, set aside, made or paid any dividend or other

distribution to any of its stockholders;

	
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g.                                           Material Standard Gold Contracts. Terminated or modified any or

all agreements, contracts, arrangements, leases, commitments or otherwise, of Standard Gold,

of the type and nature that is required to be filed with the SEC (each a "Material Standard

Gold Contract"), except for termination upon expiration in accordance with the terms thereof

or as set forth in Schedule 3.10(g) of the Standard Gold Disclosure Schedules;

h.                                           Claims. Released, waived or cancelled any claims or rights relating to

or affecting Standard Gold in excess of $10,000 in the aggregate or instituted or settled any

Action involving in excess of $10,000 in the aggregate;

i.                                            Discharged Liabilities. Except as set forth in Schedule 3.10(i) of the

Standard Gold Disclosure Schedules, paid, discharged or satisfied any claim, obligation or

liability in excess of $10,000 in the aggregate, except for liabilities incurred prior to the date

of this Agreement in the ordinary course of business;

j.                       Indebtedness. Except as set forth in Schedule 3.10(j) of the Standard

Gold Disclosure Schedules, created, incurred, assumed or otherwise become liable for any

indebtedness in excess of $10,000 in the aggregate, other than professional fees;

k.                     Guarantees. Guaranteed or endorsed any obligation or net worth of

any Person;

l.                      Acquisitions. Acquired the capital stock or other securities or any

ownership interest in, or substantially all of the assets of, any other Person;

m.                    Accounting. Changed its method of accounting or the accounting

principles or practices utilized in the preparation of the Unaudited Standard Gold Financial

Statements; or

n.                     Agreements. Except as set forth in Schedule 3.10(n) of the Standard

Gold Disclosure Schedules, entered into any agreement, or otherwise obligating Standard

Gold to do any of the foregoing.

Section 3.11                  Material Standard Gold Contracts.

Standard Gold has made available to the Company, prior to the date of this Agreement, true,

correct and complete copies of each Material Standard Gold Contract.

a.                      No Defaults. Each Material Standard Gold Contract is a valid and

binding agreement of Standard Gold and is in full force and effect. Except as would not have

a Material Adverse Effect, Standard Gold is not in breach or default of any Material Standard

Gold Contract to which it is a party and, to the knowledge of Standard Gold, no other party to

any Material Standard Gold Contract is in breach or default thereof. Except as would not

have a Material Adverse Effect, no event has occurred or circumstance exists that (with or

without notice or lapse of time) would (a) contravene, conflict with or result in a violation or

breach of, or become a default or event of default under, any provision of any Material

Standard Gold Contract or (b) permit Standard Gold or any other Person the right to declare a

default or exercise any remedy under, or to accelerate the maturity or performance of, or to

	
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cancel, terminate or modify any Material Standard Gold Contract. Standard Gold has not received written notice of the pending or threatened cancellation, revocation or termination of any Material Standard Gold Contract to which it is a party. There are no renegotiations of, or attempts to renegotiate, or outstanding rights to renegotiate any material terms of any Material Standard Gold Contract.

Section 3.12                  Material Assets. The Unaudited Standard Gold Financial

Statements reflect the material properties and assets (real and personal) owned or leased by Standard Gold.

Section 3.13                  Litigation; Orders. There are no Actions pending or, to the

knowledge of Standard Gold, currently threatened against Standard Gold or any of its affiliates, that may affect the validity of this Agreement or the Transaction Documents or the right of Standard Gold to enter into this Agreement and the Transaction Documents or to consummate the transactions contemplated hereby or thereby. There are no Actions (whether federal, state, local or foreign) pending or, to the knowledge of Standard Gold, threatened against or affecting Standard Gold's properties, assets, business or employees. To the knowledge of Standard Gold, there are no facts that might result in or form the basis for any such Action. Standard Gold is not subject to any Orders.

Section 3.14                  Licenses; Permits. Except as would not have a Material

Adverse Effect and except as set forth in Schedule 3.14 of the Standard Gold Disclosure Schedules, Standard Gold possesses from the appropriate Governmental Authority, all licenses, permits, authorizations, approvals, franchises and rights that are necessary for Standard Gold to engage in its business as currently conducted and to permit it to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets and as it contemplates owning and using such properties and assets (collectively, "Standard Gold Permits"). Standard Gold has not received written notice from any Governmental Authority or other Person that it is lacking any license, permit, authorization, approval, franchise or right necessary for it to engage in its business as currently conducted and to permit Standard Gold to own and use its properties and assets in the manner in which it currently owns and uses such properties and assets. Except as otherwise would not have a Material Adverse Effect, the Standard Gold Permits are valid and in full force and effect. Except as would not have a Material Adverse Effect, no event has occurred or circumstance exists that may (with or without notice or lapse of time): (a) constitute or result, directly or indirectly, in a violation of or a failure to comply with any Standard Gold Permit; or (b) result, directly or indirectly, in the revocation, withdrawal, suspension, cancellation or termination of, or any modification to, any Standard Gold Permit. Standard Gold has not received written notice from any Governmental Authority or any other Person regarding: (a) any actual, alleged, possible or potential contravention of any Standard Gold Permit; or (b) any actual, proposed, possible or potential revocation, withdrawal, suspension, cancellation, termination of, or modification to, any Standard Gold Permit. All applications required to have been filed for the renewal of the Standard Gold Permits have been duly filed on a timely basis with the appropriate Persons, and all other filings required to have been made with respect to the Standard Gold Permits have been duly made on a timely basis with the appropriate Persons, except as would not have a Material Adverse Effect. All Standard Gold Permits are renewable by their terms or in the ordinary course of business without the need to comply

	
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with any special qualification procedures or to pay any amounts other than routine fees or similar charges, all of which have, to the extent due, been duly paid.

Section 3.15                  Interested Party Transactions. Except as disclosed in

Schedule 3.15 of the Standard Gold Disclosure Schedules, no officer, director or stockholder of Standard Gold or any affiliate or "associate" (as such term is defined in Rule 405 promulgated by the SEC under the Securities Act) of any such Person, have or have had, either directly or indirectly, (1) an interest in any Person which (a) furnishes or sells services or products which are furnished or sold or are proposed to be furnished or sold by Standard Gold, or (b) purchases from or sells or furnishes to, or proposes to purchase from, sell to or furnish Standard Gold any goods or services; or (2) a beneficial interest in any contract or agreement to which Standard Gold is a party or by which it may be bound or affected.

Section 3.16                  Governmental Inquiries. Standard Gold has provided to the

Company a copy of each material written inspection report, questionnaire, inquiry, demand or request for information received by Standard Gold from any Governmental Authority, and Standard Gold's response thereto, and each material written statement, report or other document filed by Standard Gold with any Governmental Authority.

Section 3.17                  Intellectual Property. Except as set forth in Schedule 3.17 of the

Standard Gold Disclosure Schedules, Standard Gold does not own, use or license any Intellectual Property in its business as presently conducted. No Intellectual Property of Standard Gold has been or is now involved in any dispute, opposition, invalidation or cancellation proceeding, and no such action has been threatened. No Intellectual Property, wherever situated or registered, of Standard Gold, to the knowledge of Standard Gold, is infringed, or has been challenged or, to the knowledge of Standard Gold, threatened in any way, and no Intellectual Property of Standard Gold, to the knowledge of Standard Gold, interferes with the Intellectual Property of any other Person, and no Intellectual Property of Standard Gold is alleged to infringe or interfere with the Intellectual Property of any other Person. Except as would not have a Material Adverse Effect, Standard Gold has not taken any action that would result in the voiding or invalidation of any of its Intellectual Property.

Section 3.18                  Stock Option Plans; Employee Benefits.

a.                                            Standard Gold does not have any stock option plans providing for the grant by Standard Gold of stock options to directors, officers or employees.

b.                                           Standard Gold does not have any employee benefit plans or arrangements covering its present and former employees or providing benefits to such persons in respect of services provided to Standard Gold.

c.                                           Neither the consummation of the transactions contemplated hereby alone, nor in combination with another event, with respect to each director, officer, employee and consultant of Standard Gold, will result in (a) any payment (including, without limitation, severance, unemployment compensation or bonus payments) becoming due from Standard Gold (b) any increase in the amount of compensation or benefits payable to any such individual or (c) any acceleration of the vesting or timing of payment of compensation

	
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payable to any such individual. No agreement, arrangement or other contract of Standard Gold provides benefits or payments contingent upon, triggered by, or increased as a result of a change in the ownership or effective control of Standard Gold.

Section 3.19                  Environmental and Safety Matters. Except as set forth in

Schedule 3.19 of the Standard Gold Disclosure Schedules and except as would not have a Material Adverse Effect:

a.                                            Standard Gold has at all times been and is in compliance with all Environmental Laws (as defined below) applicable to Standard Gold. There are no Actions pending or threatened against Standard Gold alleging the violation of any Environmental Law or environmental permit applicable to Standard Gold or alleging that Standard Gold is potentially responsible for any environmental site contamination. None of Standard Gold, its directors, officers, or employees or Affiliates has received any written notice, or to their knowledge unwritten notice, regarding any actual or alleged violation of Environmental Law, or any liabilities or potential liabilities (whether accrued, absolute, contingent, unliquidated or otherwise), including any investigatory, remedial or corrective obligations, relating to any of them or its facilities arising under any Environmental Law.

b.                                           Neither this Agreement nor the consummation of the transactions contemplated by this Agreement shall impose any obligations to notify or obtain the consent of any Governmental Authority or third Persons under any law or other requirement relating to the environment, natural resources, or public or employee health and safety or relating to the storage, generation, use, handling, manufacture, processing, transportation, import, export, treatment, release or disposal of any Hazardous Materials ("Environmental Laws") applicable to Standard Gold. "Hazardous Materials" means any pollutant, contaminant, including asbestos and asbestos-containing materials, hazardous waste, hazardous materials, hazardous substances, petroleum, radioactive materials and polychlorinated biphenyls, all as defined and regulated under any Environmental Law.

Section 3.20                  Financial Statements. Standard Gold has previously

provided the Company with Standard Gold's unaudited financial statements for the period from inception to August 31, 2010, including, in each case, the notes thereto (the "Unaudited Standard Gold Financial Statements").The Unaudited Standard Gold Financial Statements (a) are in accordance with the books and records of Standard Gold ; (b) present fairly the financial condition and the results of operations, changes in stockholder's equity and cash flow of Standard Gold for the periods therein specified; and (c) have been prepared in accordance with U.S. GAAP applied on a consistent basis during the periods concerned.

Section 3.21                  Tax Returns, Payments and Elections. Standard Gold has filed

all Tax Returns, required pursuant to applicable law to be filed with any Tax Authority. All such Tax Returns are accurate, complete and correct in all material respects, and Standard Gold has timely paid all Taxes due and adequate provisions have been and are reflected in the Unaudited Standard Gold Financial Statements for all current taxes and other charges to which Standard Gold is subject and which are not currently due and payable. None of Standard Gold's federal income tax returns have been audited by the Internal Revenue Service. Standard Gold has no knowledge of any additional assessments, adjustments or contingent tax liability (whether federal

	
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or state) of any nature whatsoever, whether pending or threatened against Standard Gold for any period, nor of any basis for any such assessment, adjustment or contingency. Standard Gold has withheld or collected from each payment made to each of its employees, if applicable, the amount of all Taxes (including, without limitation, federal income taxes, state and local income taxes and any applicable foreign taxes) required to be withheld or collected therefrom, and has paid the same to the proper Tax Authority.

Section 3.22                  Disclosure. This Agreement, the schedules hereto and any

certificate attached hereto or delivered in accordance with the terms hereof by or on behalf of Standard Gold or the Standard Gold Stockholders in connection with the transactions contemplated by this Agreement, when taken together, do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements contained herein and/or therein not misleading.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE STANDARD GOLD

STOCKHOLDERS

The Standard Gold Stockholders hereby represent and warrant, severally and not jointly, as of the date hereof and with respect only to the Standard Gold Shares owned by such Standard Gold Stockholder, to and for the benefit of the Company as follows:

Section 4.1                   Authority. Such Standard Gold Stockholder has the right,

power, authority and capacity to execute and deliver this Agreement and each of the Transaction Documents to which such Standard Gold Stockholder is a party, to consummate the transactions contemplated by this Agreement and each of the Transaction Documents to which such Standard Gold Stockholder is a party, and to perform such Standard Gold Stockholder's obligations under this Agreement and each of the Transaction Documents to which such Standard Gold Stockholder is a party. This Agreement has been, and each of the Transaction Documents to which such Standard Gold Stockholder is a party will be, duly and validly authorized and approved, executed and delivered by such Standard Gold Stockholder. Assuming this Agreement and the Transaction Documents have been duly and validly authorized, executed and delivered by the parties thereto other than such Standard Gold Stockholder, this Agreement and each of the Transaction Documents to which such Standard Gold Stockholder is a party constitutes the legal, valid and binding obligation of such Standard Gold Stockholder, enforceable against such Standard Gold Stockholder in accordance with their respective terms, except as such enforcement is limited by general equitable principles, or by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors rights generally.

Section 4.2                   No Conflict. Neither the execution or delivery by such Standard

Gold Stockholder of this Agreement or any Transaction Document to which such Standard Gold Stockholder is a party, nor the consummation or performance by such Standard Gold Stockholder of the transactions contemplated hereby or thereby will, directly or indirectly, (a) contravene, conflict with, or result in a violation of any provision of the certificate of

	
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incorporation, by-laws or other organizational documents of such Standard Gold Stockholder (if such Standard Gold Stockholder is not a natural person); (b) contravene, conflict with, constitute a default (or an event or condition which, with notice or lapse of time or both, would constitute a default) under, or result in the termination or acceleration of, any agreement or instrument to which such Standard Gold Stockholder is a party or by which the properties or assets of the such Standard Gold Stockholder are bound; or (c) contravene, conflict with, or result in a violation of, any law or Order to which such Standard Gold Stockholder, or any of the properties or assets of such Standard Gold Stockholder, may be subject.

Section 4.3                   Litigation. There is no pending Action against such Standard

Gold Stockholder that involves the Standard Gold Shares or that challenges, or may have the effect of preventing, delaying or making illegal, or otherwise interfering with, any of the transactions contemplated by this Agreement and, to the knowledge of such Standard Gold Stockholder, no such Action has been threatened, and no event or circumstance exists that is reasonably likely to give rise to or serve as a basis for the commencement of any such Action.

Section 4.4                   Acknowledgment of Transfer Restrictions; Shell Company.

Such Standard Gold Stockholder understands and agrees that the Company Shares to be issued pursuant to this Agreement have not been registered under the Securities Act or the securities laws of any state and that the issuance of the Company Shares is being effected in reliance upon an exemption from registration afforded either under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering or Regulation D promulgated thereunder. Moreover, each Standard Gold Stockholder acknowledges that the Company is a "shell company" as that term is defined in Rule 405 and that as a consequence thereof, such Standard Gold Stockholder may be precluded from selling or otherwise transferring his Company Shares in reliance upon Rule 144 as promulgated pursuant to the Securities Act under certain circumstances.

a.                   Status. By its execution of this Agreement, such Standard Gold Stockholder represents and warrants to the Company as indicated on Exhibit C hereto, that it is (i) an "accredited investor," as defined in Regulation D promulgated under the Securities Act or (ii) is not a "U.S. person," as defined in Regulation D promulgated under the Securities Act; and, such Standard Gold Stockholder understands that the Company Shares are being offered and sold to such Standard Gold Stockholder in reliance upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of such Standard Gold Stockholder set forth in this Agreement, in order that the Company may determine the applicability and availability of the exemptions from registration of the Company Shares on which the Company is relying.

b.                  Additional Representations and Warranties. Each Standard Gold Stockholder further makes the representations and warranties to the Company set forth on Exhibit D.

Section 4.5                    Stock Legends. Each Standard Gold Stockholder hereby

agrees with the Company as follows:

	
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a.                                           Securities Act Legend. The certificates evidencing the Company Shares issued to such Standard Gold Stockholder will bear the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS .

b.                                           Other Legends. The certificates representing such Company Shares, and each certificate issued in transfer thereof, will also bear any other legend required under any applicable law, including, without limitation, any state corporate and/or state securities laws or under the applicable federal and provincial laws of Canada (the "Applicable Canadian Securities Laws").

c.                                            Opinion. Such Standard Gold Stockholder shall not transfer any or all of the Company Shares pursuant to Rule 144, under the Securities Act or absent an effective registration statement under the Securities Act and applicable state securities law covering the disposition of the Company Shares, without first providing the Company with an opinion of counsel (which counsel and opinion are reasonably satisfactory to the Company) to the effect that such transfer will be made in compliance with Rule 144, under the Securities Act or will be exempt from the registration and the prospectus delivery requirements of the Securities Act and the registration or qualification requirements of any applicable state securities laws.

Section 4.6                    Ownership of Shares. Such Standard Gold Stockholder is both

the record and beneficial owner of the applicable Standard Gold Shares. Such Standard Gold Stockholder is not the record or beneficial owner of any other shares of Standard Gold. Such Standard Gold Stockholder has and shall transfer at the Closing, good and marketable title to the Standard Gold Shares, free and clear of all Liens, restrictions on transfer or adverse claims of any nature whatsoever.

Section 4.7                   Pre-emptive Rights. At Closing, such Standard Gold Stockholder

does not have any pre-emptive rights or any other rights to acquire any shares of Standard Gold that have not been waived or exercised.

	
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ARTICLE V

	
CONDITIONS PRECEDENT TO OBLIGATIONS OF STANDARD GOLD AND THE STANDARD GOLD STOCKHOLDERS

The obligations of Standard Gold and the Standard Gold Stockholders to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by Standard Gold and the Standard Gold Stockholders at their sole discretion:

Section 5.1                   Representations and Warranties of the Company. All

representations and warranties made by the Company in this Agreement shall be true and correct in all material respects on and as of the Closing Date, except insofar as the representations and warranties relate expressly and solely to a particular date or period, in which case, subject to the limitations applicable to the particular date or period, they will be true and correct in all material respects on and as of the Closing Date with respect to such date or period.

Section 5.2                   Agreements and Covenants. The Company shall have performed

and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with on or prior to the Closing Date.

Section 5.3                   Consents and Approvals. All consents, waivers, authorizations

and approvals of any Governmental Authority and of any other Person required in connection with the execution, delivery and performance of this Agreement shall have been duly obtained and shall be in full force and effect on the Closing Date.

Section 5.4                   No Violation of Orders. No preliminary or permanent injunction

or other Order issued by any court or Governmental Authority, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any Governmental Authority, which declares this Agreement invalid in any respect or prevents the consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of the Company, taken as a whole, shall be in effect; and no action or proceeding before any court or Governmental Authority shall have been instituted or threatened by any Governmental Authority, or by any other Person which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

Section 5.5                   No Bankruptcy Proceedings. No proceeding in which the

Company shall be a debtor, defendant or party seeking an order for its own relief or reorganization shall have been brought or be pending by or against the Company or under any United States, state or foreign bankruptcy or insolvency law.

Section 5.6                   Applicable Exemption from Registration under the Securities

Act. Standard Gold shall be satisfied that the issuance of the Company Shares to the Standard Gold Stockholders, in connection with the Share Exchange, shall be exempt from registration pursuant to Section 4(2) of the Securities Act, Regulation D promulgated under the Securities Act, or any other applicable exemption therefrom.

	
20

 

 

 

 

	
Section 5.7                   Form 8-K. A final draft of a Current Report on Form 8-K, which

discloses the Company's entering into this Agreement, the consummation of the Share Exchange, and which also includes all information required to be reported with respect to a transaction in which a public "shell company" ceases to be a "shell company" including, without limitation, the information required pursuant to "Sections 2.01 - Completion of Acquisition or Disposition of Assets" regardless of whether or not the Company ceases to be a "shell company" (the "Super 8-K"), shall have been approved by Standard Gold, the Company and their respective legal advisors, to be filed with the SEC within four (4) business days after the Closing Date.

Section 5.8                    Other Closing Documents. Standard Gold shall have received

such certificates, instruments and documents in confirmation of the representations and warranties of the Company, the Company's performance of its obligations hereunder, and/or in furtherance of the transactions contemplated by this Agreement as the Standard Gold Stockholders and/or their respective counsel may reasonably request.

Section 5.9                   Financing. Pursuant to the terms and conditions of the Financing,

the Company shall have received minimum subscriptions for an aggregate of $1,500,000 of its securities (the "Minimum Subscription Amount").

Section 5.10                  Loan Conversion. The outstanding principal balance of and

accrued and unpaid interest on, the Company's promissory note dated March 2, 2010 in the principal amount of 1,067,527.40 (the "Rayat Note"), shall have been converted as of the Closing Date into an aggregate of 40,000,000 shares of the Company's common stock, $0.00001 par value per share (the "Loan Conversion").

Section 5.11                  Shareholder Consent. The Company shall have obtained

and delivered the written consent of its shareholders owning more than 50% of the issued and outstanding shares of the Company's Common Stock (the "Shareholder Consent") to the consummation of the SGC Acquisition and the change of the Company's name to a name to be determined by the Company's Board of Directors (the "Name Change").

Section 5.12                  Documents. The Company shall have caused the following

documents to be delivered to Standard Gold and the Standard Gold Stockholders:

a.                                            share certificates evidencing the Company Shares registered in the name of each Standard Gold Stockholder, as set forth on Exhibit B annexed hereto;

b.                                           a Secretary's Certificate, dated the Closing Date, certifying attached copies of (A) the Company Charter Documents, (B) the resolutions of the Company's Board approving this Agreement, the Transaction Documents and the transactions contemplated hereby and thereby; and (C) the incumbency of each authorized officer of the Company signing this Agreement and the Transaction Documents to which the Company is a party;

	
21

 

 

 

 

	
c.                                            a Certificate of Good Standing of the Company dated not more than five (5) business days prior to the Closing Date;

d.                                           this Agreement and each of the Transaction Documents to which the Company is a party, duly executed;

e.                                           an Officer's Certificate of the Company, dated the Closing Date, certifying as to Sections 5.1, 5.2, 5.3, 5.4 and 5.5; and

f.                                            such other documents as Standard Gold may reasonably request for the purpose of (i) evidencing the accuracy of any representation or warranty of the Company,

(ii)   evidencing the performance by the Company of, or the compliance by the Company with, any covenant or obligation required to be performed or complied with by the Company,

(iii)    evidencing the satisfaction of any condition referred to in this Article V, or (iv) otherwise facilitating the consummation of any of the transactions contemplated by this Agreement and the Transaction Documents.

ARTICLE VI

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY

The obligations of the Company to consummate the transactions contemplated by this Agreement are subject to the fulfillment, at or before the Closing Date, of the following conditions, any one or more of which may be waived by the Company in its sole discretion:

Section 6.1                   Representations and Warranties of Standard Gold and the

Standard Gold Stockholders. All representations and warranties made by Standard Gold and the Standard Gold Stockholders on behalf of themselves individually, in this Agreement shall be true and correct on and as of the Closing Date except insofar as the representation and warranties relate expressly and solely to a particular date or period, in which case, subject to the limitations applicable to the particular date or period, they will be true and correct in all material respects on and as of the Closing Date with respect to such date or period.

Section 6.2                   Agreements and Covenants. Standard Gold and the Standard

Gold Stockholders shall have performed and complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by each of them on or prior to the Closing Date.

Section 6.3                    Consents and Approvals. All consents, waivers, authorizations

and approvals of any Governmental Authority and of any other Person required in connection with the execution, delivery and performance of this Agreement, shall have been duly obtained and shall be in full force and effect on the Closing Date.

Section 6.4                   No Violation of Orders. No preliminary or permanent injunction

or other Order issued by any court or other Governmental Authority, nor any statute, rule, regulation, decree or executive order promulgated or enacted by any Governmental Authority that declares this Agreement invalid or unenforceable in any respect or which prevents the

	
22

 

 

 

 

	
consummation of the transactions contemplated hereby, or which materially and adversely affects the assets, properties, operations, prospects, net income or financial condition of Standard Gold, taken as a whole, shall be in effect; and no action or proceeding before any court or Governmental Authority shall have been instituted or threatened by any Governmental Authority, or by any other Person which seeks to prevent or delay the consummation of the transactions contemplated by this Agreement or which challenges the validity or enforceability of this Agreement.

Section 6.5                   No Bankruptcy Proceedings. No proceeding in which Standard

Gold shall be a debtor, defendant or party seeking an order for its own relief or reorganization shall have been brought or be pending by or against Standard Gold or under any United States, state or foreign bankruptcy or insolvency law.

Section 6.6                   Applicable Exemption from Registration under the Securities

Act. The Company shall be satisfied that the issuance of the Company Shares to the Standard Gold Stockholders, in connection with the Share Exchange, shall be exempt from registration pursuant to Section 4(2) of the Securities Act, Regulation D promulgated under the Securities Act, or any other applicable exemption therefrom.

Section 6.7                   Form 8-K. A final draft of the Super 8-K shall have been

approved by Standard Gold, the Company and their respective legal advisors, to be filed with the SEC within four (4) business days after the Closing Date.

Section 6.8                    Other Closing Documents. The Company shall have received

such certificates, instruments and documents in confirmation of the representations and warranties of Standard Gold and the Standard Gold Stockholders and the performance of Standard Gold's and the Standard Gold Stockholders' respective obligations hereunder and/or in furtherance of the transactions contemplated by this Agreement as the Company or its counsel may reasonably request.

Section 6.9                   Financing. The Minimum Subscription Amount shall have been

received by the Company.

Section 6.10                  Loan Conversion. The Loan Conversion or the Note Payment

shall have been consummated.

Section 6.11                  Scheduled Liabilities. The Scheduled Liabilities shall have been

paid.

Section 6.12                  Audited Financial Statements. Standard Gold shall have

delivered to the Company its audited financial statements for the period from incorporation through August 31, 2010, which audited financial statements shall not reflect any material changes (as determined solely by the Company") from the Unaudited Standard Gold Financial Statements.

	
23

 

 

 

 

	
Section 6.13                  Lock-Up Agreement.                Each of the Standard Gold

Stockholders shall have executed and delivered to the Company the Lock-Up Agreement attached hereto as Exhibit E.

Section 6.14                  Shareholder Consent. The Shareholder Consent shall have

been delivered.

Section 6.15                  Other Documents. Standard Gold and the Standard Gold

Stockholders shall have caused the following documents to be delivered to the Company at the Closing:

a.                                            share certificates evidencing the number of Standard Gold Shares, along with executed share transfer forms transferring such Standard Gold Shares to the Company;

b.                                           a Secretary's Certificate, dated the Closing Date, certifying attached copies of (A) the Standard Gold Charter Documents, (B)the resolutions of Standard Gold's Board approving this Agreement, the Transaction Documents and the transactions contemplated hereby and thereby; and (C) the incumbency of each authorized officer of Standard Gold signing this Agreement and the Transaction Documents to which Standard Gold is a party;

c.                                            a Certificate of Good Standing of Standard Gold dated not more than five (5) business days prior to the Closing Date;

d.                                          this Agreement and each of the Transaction Documents to which Standard Gold and the Standard Gold Stockholders is a party, duly executed;

e.                                           an Officer's Certificate of Standard Gold, dated the Closing Date, certifying as to Sections 6.1, 6.2, 6.3, 6.4 and 6.5; and

f.                                            such other documents as the Company may reasonably request for the purpose of (A) evidencing the accuracy of any of the representations and warranties of the Standard Gold and the Standard Gold Stockholders , (B) evidencing the performance of, or compliance by Standard Gold and the Standard Gold Stockholders with, any covenant or obligation required to be performed or complied with by Standard Gold and the Standard Gold Stockholders, as the case may be, (C) evidencing the satisfaction of any condition referred to in this Article VI, or (D) otherwise facilitating the consummation or performance of any of the transactions contemplated by this Agreement and the other Transaction Documents.

Section 6.16                  No Claim Regarding Stock Ownership or Consideration.

There must not have been made or threatened by any Person, any claim asserting that such Person (a) is the holder of, or has the right to acquire or to obtain beneficial ownership of the Standard Gold Shares, or any other stock, voting, equity, or ownership interest in, Standard Gold, or (b) is entitled to all or any portion of the Company Shares.

	
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ARTICLE VII

	
ADDITIONAL AGREEMENTS

Section 7.1                   Post Effective Amendment. The Company shall file a post

effective amendment to the Registration Statement (the "PEA") no later than October 29, 2010. Standard Gold, and to the extent required, the Standard Gold Stockholders, shall provide the Company with all necessary information regarding Standard Gold's activities, business, properties for inclusion in the PEA, on a timely basis, as requested by the Company.

Section 7.2                   Use of Financing Proceeds. Anything herein to the contrary

notwithstanding, the Company may use a portion of the proceeds from the Financing to pay the Scheduled Liabilities.

Section 7.3                    Termination; Termination Date.

a.                   Termination. This Agreement may be terminated at any time (i) by the mutual written consent of Standard Gold and the Company, (ii) by Standard Gold in the event there is a breach by the Company of its representations, warranties or covenants, which breach if curable, has not been cured within ten (10) days after receipt by the Company of a written notice of such breach from Standard Gold, or (iii) by Company in the event there is a breach by Standard Gold of its representations, warranties or covenants, which breach if curable, has not been cured within ten (10) days after receipt by Standard Gold of a written notice of such breach from the Company; any termination pursuant to this Section 7.3(a) shall be binding on and effective as to all of the Standard Gold Stockholders.

b.                   Termination Date. If the Closing shall not have been consummated on or prior to December 31, 2010 (the "Termination Date"), this Agreement shall terminate and be of no further force or effect.

Section 7.4                   Name Change. At the Closing or as soon thereafter as is

practicable, the Company will file an amendment to its articles of incorporation with the Secretary of State of the State of Nevada effecting the Name Change.

ARTICLE VIII POST-CLOSING AGREEMENTS

Section 8.1                   Filing of the Super 8-K. The Super 8-K shall be filed with the

SEC within four (4) business days after the Closing Date.

Section 8.2                    SEC Documents. From and after the Closing Date, in the event

the SEC notifies the Company of its intent to review any SEC Report filed prior to the Closing Date or the Company receives any oral or written comments from the SEC with respect to any

	
25

 

 

 

 

	
SEC Report filed prior to the Closing Date, the Company shall promptly respond to any such oral or written comments.

Section 8.3                   Public Disclosure. Unless otherwise permitted by this Agreement,

Standard Gold and the Company shall consult with each other before issuing any press release or otherwise making any public statement or making any other public (or non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the transactions contemplated hereby, and neither shall issue any such press release or make any such statement or disclosure without the prior approval of both the Company and Standard Gold (which approval shall not be unreasonably withheld), except as may be required by law or by obligations pursuant to any listing agreement with any national securities exchange, or the Financial Industry Regulatory Authority, as applicable, in which case the Company and/or Standard Gold shall use its commercially reasonable efforts to consult with each other before issuing such press release or making such public statement or disclosure. Anything herein to the contrary notwithstanding, the parties hereto acknowledge that a copy of this Agreement will be attached as an exhibit to the Super 8-K and the PEA.

ARTICLE IX MISCELLANEOUS PROVISIONS

Section 9.1                    Successors and Assigns. This Agreement shall inure to the

benefit of, and be binding upon, the parties hereto and their respective successors and assigns; provided, however, that no party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other parties.

Section 9.2                   Fees and Expenses. Except as otherwise expressly provided in this

Agreement, all legal and other fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such fees, costs or expenses.

Section 9.3                   Notices. All notices and other communications given or made

pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or sent by registered or certified mail (postage prepaid, return receipt requested) or facsimile to the parties at the following addresses:

If to Standard Gold or the Standard Gold Stockholders, to:

Standard Gold Corp.

3266 W Galveston Dr. Suite 107

Apache Junction, AZ 85120

Attention: President

Facsimile: (480) 288-6532

	
26

 

 

 

 

	
with copies, which shall not constitute notice, to:

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, NY 10006

Attention: Harvey Kesner, Esq.

Tel. No.: (212) 930-9700

Fax No.: (212)930-9725

If to the Company, to:

PhytoMedical Technologies, Inc.

100 Overlook Drive, 2nd Floor

Princeton, New Jersey, 08540

Attention: President and Chief Executive Officer

Facsimile: (248) 671-0315

with copies, which shall not constitute notice, to:

Sierchio & Company, LLP

430 Park Avenue, Suite 702

New York, NY 10022

Attention: Joseph Sierchio, Esq.

Tel. No.: (212) 246-3030

Fax No.: (212)246-3039

or to such other persons or at such other addresses as shall be furnished by any party by like

notice to the others, and such notice or communication shall be deemed to have been given or

made as of the date so delivered or mailed. No change in any of such addresses shall be

effective insofar as notices under this Section 9.3 are concerned unless such changed address

shall have been given to such other party hereto as provided in this Section 9.3.

Section 9.4                   Entire Agreement. This Agreement, together with the

exhibits hereto, represents the entire agreement and understanding of the parties with

reference to the transactions set forth herein and no representations or warranties have been

made in connection with this Agreement other than those expressly set forth herein or in the

exhibits, certificates and other documents delivered in accordance herewith. This Agreement

supersedes all prior negotiations, discussions, correspondence, communications,

understandings and agreements between the parties relating to the subject matter of this

Agreement and all prior drafts of this Agreement, all of which are merged into this

Agreement. No prior drafts of this Agreement and no words or phrases from any such prior

drafts shall be admissible into evidence in any action or suit involving this Agreement.

Section 9.5                    Severability. This Agreement shall be deemed severable, and the

invalidity or unenforceability of any term or provision hereof shall not affect the validity or

enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu

	
27

 

 

 

 

	
of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

Section 9.6                   Counterparts. This Agreement may be executed in any number

of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. The exchange of copies of this Agreement or amendments thereto and of signature pages by facsimile transmission or by email transmission in portable digital format, or similar format, shall constitute effective execution and delivery of such instrument(s) as to the parties and may be used in lieu of the original Agreement or amendment for all purposes. Signatures of the parties transmitted by facsimile or by email transmission in portable digital format, or similar format, shall be deemed to be their original signatures for all purposes.

Section 9.7                   Convenience of Forum; Consent to Jurisdiction. The parties to

this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of New York located in County of New York, and/or the United States District Court for the Southern District of New York, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 9.3.

Section 9.8                   Remedies Cumulative; Specific Performance. The rights and

remedies of the parties hereto shall be cumulative and not alternative. The parties agree that, in the event of any breach or threatened breach by any party to this Agreement of any covenant, obligation or other provision set forth in this Agreement for the benefit of any other party to this Agreement, such other party shall be entitled, in addition to any other remedy that may be available to it, to: (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision; and (ii) an injunction restraining such breach or threatened breach. The parties further agree that no Person shall be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this Section 9.8, and the parties irrevocably waive any right they may have to require the obtaining, furnishing or posting of any such bond or similar instrument.

Section 9.9                   Governing Law. This Agreement shall be governed by and

interpreted and enforced in accordance with the laws of the State of New York without giving effect to the choice of law provisions thereof.

Section 9.10                 Amendments and Waivers. Except as otherwise provided herein,

no amendment or waiver of any provision of this Agreement shall be valid unless the same shall be in writing and signed by (i) the Company; (ii) Standard Gold and (iii) a majority of the Standard Gold Stockholders. No waiver by any party of any default, misrepresentation, or breach

	
28

 

 

 

 

	
of warranty or covenant hereunder, whether intentional or not, shall be deemed to extend to any

prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or

affect in any way any rights arising by virtue of any such prior or subsequent occurrence.

Section 9.11                  Construction.

a.                                           For purposes of this Agreement, whenever the context requires: (i) the

singular number shall include the plural, and vice versa; (ii) the masculine gender shall

include the feminine and neuter genders; (iii) the feminine gender shall include the masculine

and neuter genders; and (iv) the neuter gender shall include the masculine and feminine

genders.

b.                                              Each of the parties hereto has been represented by legal counsel

except to the extent that such party has declined legal counsel. Accordingly, the parties hereto

agree that any rule of construction to the effect that ambiguities are to be resolved against the

drafting party shall not be applied in the construction or interpretation of this Agreement.

c.                                           Except as otherwise indicated, all references in this Agreement to

"Sections," "Schedules" and "Exhibits" are intended to refer to Sections of this Agreement

and Schedules and Exhibits to this Agreement.

[SIGNATURE PAGE FOLLOWS]

	
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the

date first above written.

 

	
 

STANDARD GOLD CORP.

By: /s/John D. Bleak 

Name: John D. Bleak

Title: President

PHYTOMEDICAL TECHNOLOGIES, INC.

By: /s/Amit S. Dang 

Name: Amit S. Dang

Title: CEO / President 

[SIGNATURE PAGE FOR STANDARD GOLD STOCKHOLDERS FOLLOWS

ON THE NEXT PAGE]

	
30

 

 

 

	
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the

date first above written.

	
STANDARD GOLD STOCKHOLDERS:

	
Josie Mann

Darren Mann

Ethny Lindsay

Casa Madrid Holdings, Inc.

Joyce Lindsay

Rosalind Lindsay

Denis Corin

Oliver Lindsay

Johnathan Lindsay

Randall Reneau

Stefanus International Inc.

Daniel Bleak

Joshua Bleak

Floyd Bleak

Taylor Housser

Glynn Fisher

Anthony Huston

Sandra Corin

Kian Ehsan

Kristian Andresen

Theresa Grigg

Boucheron Investments

David Sidders

Lindsay Capital

Derrick Townsend

James Taylor

Cat Brokerage AG

Clifton Pinkard

Charna Fuchs

Michael & Jennifer Evans

New Paradigm Capital

Copper Eagle

Berlin Financial Corp.

NPX Metals, Inc.

Alan S. Honig C/F Harrison Honig UTMA/FL

	
31

 

 

 

 

	
Alan S. Honig C/F Cameron Honig UTMA/FL Alan S. Honig C/F Ryan Honig UTMA/FL Alan S. Honig C/F Jacob Honig UTMA/FL Sandor Capital Master Fund, L.P. Barry Honig

 

	
BY: /s/ John Lindsay

 

	
Name: John Lindsay

	
Title: Attorney in Fact for each of the Above named Standard Gold Shareholders

 

	
32

 

 

 

 

	
EXHIBIT A

	
STANDARD GOLD STOCKHOLDERS

Name                                                          Number of Standard

Gold Shares

	
Alan Lindsay

	
1,211,774

	
Josie Mann

	
18,984

	
Darren Mann

	
151,874

	
Ethny Lindsay

	
1,898,426

	
Casa Madrid Holdings, Inc.

	
629,055

	
Joyce Lindsay

	
493,591

	
Rosalind Lindsay

	
75,937

	
Denis Corin

	
227,811

	
Oliver Lindsay

	
395,465

	
Johnathan Lindsay

	
1,378,437

	
Randall Reneau

	
227,811

	
Stefanus International Inc.

	
1,518,740

	
Daniel Bleak

	
1,869,948

	
Joshua Bleak

	
1,015,658

	
Floyd Bleak

	
265,780

	
Taylor Housser

	
113,906

	
Glynn Fisher

	
1,214,993

	
Anthony Huston

	
75,937

	
Sandra Corin

	
75,937

	
Kian Ehsan

	
75,937

	
Kristian Andresen

	
37,969

	
Theresa Grigg

	
45,562

	
Boucheron Investments

	
569,528

	
David Sidders

	
75,937

	
Lindsay Capital Corp.

	
1,404,835

	
Derrick Townsend

	
227,811

	
James Taylor

	
37,969

	
Cat Brokerage AG

	
75,937

	
Clifton Pinkard

	
3,037

	
Charna Fuchs

	
151,874

	
Michael & Jennifer Evans

	
22,781

	
New Paradigm Capital

	
759,370

	
Copper Eagle, Inc.

	
1,750,000

	
Berlin Financial Corp.

	
1,401,387

	
NPX Metals, Inc.

	
3,000,000

	
Isaiah Capital Trust

	
1,750,000

	
Forte Investments Group, Inc.

	
1,000,000

 

 

 

	
Box Capital Corp.   

	
750,000

	
Sandor Capital Master Fund, L.P.    

	
324,976

	
Barry Honig    

	
1,857,010

	
TOTAL   

	
28,181,984

 

 

	
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EXHIBIT B

	
ALLOCATION OF COMPANY SHARES

			
	 
	Name 	Number of 	Number of 
	 	Standard Gold 	Company 
	 	Shares 	Shares 
	Alan Lindsay 	1,211,774 	26,101,612 
	Josie Mann 	18,984 	408,915 
	Darren Mann 	151,874 	3,271,366 
	Ethny Lindsay 	1,898,426 	40,892,096 
	Casa Madrid Holdings, Inc. 	629,055 	13,549,845 
	Joyce Lindsay 	493,591 	10,631,950 
	Rosalind Lindsay 	75,937 	1,635,683 
	Denis Corin 	227,811 	4,907,049 
	Oliver Lindsay 	395,465 	8,518,316 
	Johnathan Lindsay 	1,378,437 	29,691,533 
	Randall Reneau 	227,811 	4,907,049 
	Stefanus International Inc. 	1,518,740 	32,713,660 
	Daniel Bleak 	1,869,948 	40,278,680 
	Joshua Bleak 	1,015,658 	21,877,273 
	Floyd Bleak 	265,780 	5,724,901 
	Taylor Housser 	113,906 	2,453,535 
	Glynn Fisher 	1,214,993 	26,170,949 
	Anthony Huston 	75,937 	1,635,683 
	Sandra Corin 	75,937 	1,635,683 
	Kian Ehsan 	75,937 	1,635,683 
	Kristian Andresen 	37,969 	817,852 
	Theresa Grigg 	45,562 	981,405 
	Boucheron Investments 	569,528 	12,267,633 
	David Sidders 	75,937 	1,635,683 
	Lindsay Capital Corp. 	1,404,835 	30,260,146 
	Derrick Townsend 	227,811 	4,907,049 
	James Taylor 	37,969 	817,852 
	Cat Brokerage AG 	75,937 	1,635,683 
	Clifton Pinkard 	3,037 	65,417 
	Charna Fuchs 	151,874 	3,271,366 
	Michael & Jennifer Evans 	22,781 	490,703 
	New Paradigm Capital 	759,370 	16,356,830 
	Copper Eagle, Inc. 	1,750,000 	37,695,000 
	Berlin Financial Corp. 	1,401,387 	30,185,876 
	NPX Metals, Inc. 	3,000,000 	64,620,000 
	Isaiah Capital Trust 	1,750,000 	37,695,000 

 

 

 

 

 

			
	Forte Investments Group, Inc. 	1,000,000 	21,540,000 
	Box Capital Corp. 	750,000 	16,155,000 
	Sandor Capital Master Fund, L.P. 	324,976 	6,999,983 
	Barry Honig 	1,857,010 	39,999,995 
	TOTAL 	28,181,984 	607,039,935 
	 	 	26,101,612 

 

	
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EXHIBIT A

	
DEFINITION OF "ACCREDITED INVESTOR" AND "U.S. PERSON"

The term "accredited investor" means (PLEASE CHECK ALL APPLICABLE BOXES):

□                    A bank as defined in Section 3(a)(2) of the Securities Act, or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance company as defined in Section 2(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 (the "Investment Company Act") or a business development company as defined in Section 2(a)(48) of the Investment Company Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of US $5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of US $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

□                    A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

□                    An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US $5,000,000.

□                    A director or executive officer of the Company.

□                    A natural person whose individual net worth, or joint net worth with that person's spouse, at the time of his or her purchase exceeds US $1,000,000 (not including the value of their primary residence).

□                     A natural person who had an individual income in excess of US $200,000 in each of the two most recent years or joint income with that person's spouse in excess of US $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

□                    A trust, with total assets in excess of US $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) (i.e., a person who has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the prospective investment).

□                    Any entity in which all of the equity owners are accredited investors.

 

 

 

	
1. The term "U.S. person" means:

	
I.            Any natural person resident in the United States;

II.            Any partnership or corporation organized or incorporated under the laws of

the United States;

III.          Any estate of which any executor or administrator is a U.S. person;

iv.            Any trust of which any trustee is a U.S. person;

v.             Any agency or branch of a foreign entity located in the United States;

vi.            Any non-discretionary account or similar account (other than an estate or

trust) held by a dealer or other fiduciary for the benefit or account of a U.S.

person;

vii.           Any discretionary account or similar account (other than an estate or trust)

held by a dealer or other fiduciary organized, incorporated, or (if an

individual) resident in the United States; and

viii.         Any partnership or corporation if:

A.      Organized or incorporated under the laws of any foreign

jurisdiction; and

B.      Formed by a U.S. person principally for the purpose of investing in

securities not registered under the Act, unless it is organized or

incorporated, and owned, by accredited investors (as defined in Rule

501(a) of Regulation S) who are not natural persons, estates or

trusts.

2. The following are not "U.S. persons":

i. Any discretionary account or similar account (other than an estate or trust)

held for the benefit or account of a non-U.S. person by a dealer or other

professional fiduciary organized, incorporated, or (if an individual) resident

in the United States;

II.            Any estate of which any professional fiduciary acting as executor or

administrator is a U.S. person if:

A.      An executor or administrator of the estate who is not a U.S. person

has sole or shared investment discretion with respect to the assets of

the estate; and

B.      The estate is governed by foreign law;

III.          Any trust of which any professional fiduciary acting as trustee is a U.S.

person, if a trustee who is not a U.S. person has sole or shared investment

	
38

 

 

 

 

	
discretion with respect to the trust assets, and no beneficiary of the trust (and no settlor if the trust is revocable) is a U.S. person;

	
iv.            An employee benefit plan established and administered in accordance with

the law of a country other than the United States and customary practices

and documentation of such country;

v.             Any agency or branch of a U.S. person located outside the United States if:

	
A. The agency or branch operates for valid business reasons; and

	
B. The agency or branch is engaged in the business of insurance or banking and is subject to substantive insurance or banking regulation, respectively, in the jurisdiction where located; and

	
vi. The International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, the United Nations, and their agencies, affiliates and pension plans, and any other similar international organizations, their agencies, affiliates and pension plans.

	
b. United States. "United States" means the United States of America, its territories and

possessions, any State of the United States, and the District of Columbia.

STANDARD GOLD STOCKHOLDER:

By: /s/ John Lindsay

 

	
Name: John Lindsay

	
Title: Attorney in Fact

	
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EXHIBIT A

	
ADDITIONAL STANDARD GOLD STOCKHOLDER REPRESENTATIONS

[______________________________ j1 further represents and warrants to the Company

as follows:

1.                  Such person or entity qualifies as an Accredited Investor on the basis set forth on Exhibit C to this Agreement.

2.                  If such person is not a "US Person" such person represents and acknowledges that the Company Shares have not been offered to it in the United States and the individuals making the decision to purchase the Company Shares and executing and delivering this Agreement on its behalf of were not in the United States when the decision was made and this Agreement was executed and delivered; all offers and sales of the Company Shares shall be made in compliance with all applicable laws of any applicable jurisdiction and, particularly, in accordance with Rules 903 and 904, as applicable, of Regulation S or pursuant to registration of the Company Shares under the Securities Act or pursuant to an exemption from registration; it will not engage in any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States for any of the Company Shares and, neither such person or entity nor any of its affiliates will directly or indirectly maintain any short position, purchase or sell put or call options or otherwise engage in any hedging activities in any of the Company Shares or any other securities of the Company until after the end of the Distribution Compliance Period (as defined in Regulation S), and acknowledges that such activities are prohibited by Regulation S.

3.                  If such Standard Gold Stockholder is a resident of the provinces of Alberta, British Columbia, or Ontario, such person or entity understands that it is purchasing the Company Shares pursuant to certain exemptions from the registration and prospectus requirements of applicable securities legislation in Canada afforded by, without limitation, prospectus delivery requirements of the Applicable Canadian Securities Laws afforded by Section 2.13 of the "National Instrument 45-106 Prospectus and Registration Exemptions" and, as a consequence, (A) certain rights, remedies and protections under securities legislation will not be available to Standard Gold in connection with the acquisition of the Company Shares; (B) Standard Gold may not receive information that would otherwise be required to be provided to it under Applicable Canadian Securities Laws; (C) Company is relieved from certain obligations that would otherwise apply under securities legislation; and (D) resale of the Company Shares may be further restricted pursuant to Applicable Canadian Securities Laws.

	
1 Insert Name of Standard Gold Stockholder

 

 

 

 

	
4.                  Such person or entity has sufficient knowledge and experience in finance, securities, investments and other business matters to be able to protect such shareholder's interests in connection with the transactions contemplated by this Agreement.

5.                   Such person or entity has consulted, to the extent that it has deemed necessary, with its tax, legal, accounting and financial advisors concerning its investment in Company Shares.

6.                   Such person or entity understands the various risks of an investment in Company Shares and can afford to bear such risks for an indefinite period of time, including, without limitation, the risk of losing its entire investment in Company Shares.

7.                   Such person or entity has had access to the Company's SEC Reports.

8.                  Such person or entity has been furnished during the course of the transactions contemplated by this Agreement with all other public information regarding the Company that such person or entity has requested and all such public information is sufficient for such person or entity to evaluate the risks of investing in Company Shares.

9.                  Such person or entity has been afforded the opportunity to ask questions of and receive answers concerning the Company and the terms and conditions of the issuance of Company Shares.

10.               Such person or entity is not relying on any representations and warranties concerning the Company made by the Company or any officer, employee or agent of the Company, other than those contained in the Agreement.

11.               Such person or entity is acquiring Company Shares for such person's or entity's, as the case may be, own account, for investment and not for distribution or resale to others.

12.               Such person or entity will not sell or otherwise transfer Company Shares, unless either (a) the transfer of such securities is registered under the Securities Act or (b) an exemption from registration of such securities is available, or otherwise than pursuant to all applicable laws, including, Applicable Canadian Securities Laws.

13.               Such person or entity understands and acknowledges that the Company is under no obligation, or intention, to register Company Shares for sale under the Securities Act.

14.               Such person or entity consents to the placement of a legend on any certificate or other document evidencing Company Shares substantially in the form set forth in Section 4.5(a) hereof and as otherwise required by applicable laws.

	
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15.               Such person or entity represents that the address of such person set forth in Exhibit A to this Agreement is the principal residence if he is an individual or its principal business address if it is a corporation or other entity.

16.               Such person or entity understands and acknowledges that Company Shares have not been recommended by any federal or state securities commission or regulatory authority, that the foregoing authorities have not confirmed the accuracy or determined the adequacy of any information concerning the Company that has been supplied to such person or entity and that any representation to the contrary is a criminal offense.

17.               Such person or entity acknowledges that the representations, warranties and agreements made by such person or entity herein shall survive the execution and delivery of this Agreement and the purchase of Company Shares.

STANDARD GOLD STOCKHOLDER:

 

 

	
By: /s/ John Lindsay

Name: John Lindsay

	
Title: Attorney in Fact

	
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Exhibit E

	
LOCK-UP AGREEMENT

	
THIS LOCK-UP AGREEMENT (the "Agreement") is made and entered into as of <>, 2010 by and among PhytoMedical Technologies, Inc. a Nevada corporation (the "Company") and each of the other signatories hereto (individually a "Holder" and collectively, the "Holder").

Capitalized terms used and not defined herein shall have the meanings ascribed to them in that certain Share Exchange Agreement (defined below).

RECITALS

WHEREAS, the Holders collectively own all of the issued and outstanding shares of Standard Gold Corp., a Nevada corporation (the "SGC");

WHEREAS, the Holders, the Company and SGC are parties to a Share Exchange Agreement dated as of October 22, 2010 (the "Share Exchange Agreement") pursuant to which the Company is acquiring 100% of the outstanding shares of the capital stock of SGC in exchange for shares of the Company's common stock, par value $0.0001 per share ("Company Common Stock"), and certain other parties named therein;

WHEREAS, upon consummation of the transactions contemplated by the Share Exchange Agreement, each of the Holders is to receive the number of shares (the "Exchange Shares") of the Company Common Stock set forth on Exhibit B to the Share Exchange Agreement; and

WHEREAS, as a material inducement for the parties to enter into the Share Exchange Agreement and as a condition to the parties' respective obligations to close under the Share Exchange Agreement, each of the Holders and the Company have agreed to execute and deliver to the Company this Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Representations and Warranties. Each of the parties hereto, by their respective execution and delivery of this Agreement, hereby represents and warrants to the others and to all third party beneficiaries of this Agreement that (a) such party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such party and is the binding and enforceable obligation of such party, enforceable against such party in accordance with the terms of this Agreement and (c) the execution, delivery and performance of such party's obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding to which such party is a party or to which the assets or securities of such party are bound.

 

 

 

 

	
Each of the Holders has independently evaluated the merits of its decision to enter into and deliver this Agreement, and each such Holder confirms that it has not relied on the advice of the Company or any other person.

2.               Beneficial Ownership. Holder hereby represents and warrants that upon consummation of the transactions contemplated by the Share Exchange Agreement and the issuance to such holder of the number of Exchange Shares set forth opposite such Holder's name on Exhibit B to the Share Exchange Agreement, such holder will be the beneficially owner (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder) only to the Holder's Shares (as defined below) and does not possess any economic or derivative interest in any other securities of the Company. For purposes of this Agreement the shares of Company Common Stock beneficially owned by the Holder or which the Holder has the contractual right to acquire after the date hereof are collectively referred to as the "Holder's Shares," which term also shall include any shares of Company Common Stock or securities convertible into or exchangeable for Common Stock acquired by the Holder after the date hereof (i) upon any stock split, recapitalization or reorganization and (ii) in any non-public transaction from another holder of Company Common Stock as of the date of this Agreement.

3.              Lock-Up

(a)   Except as otherwise expressly provided herein, and subject to any other restrictions prohibiting the offer, sale or transfer of the Holder's Shares under applicable United States federal or state securities laws, rules and regulations (collectively, the "Regulations"), each Holder irrevocably agrees that:

(i)   For a period of one year commencing on the Closing Date (the "Lock-Up Period "), the Holder will not offer, pledge, encumber, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, or announce the offering of, any of the Shares (including any securities convertible into, or exchangeable for, or representing the rights to receive, Common Stock) or engage in any Short Sales (as defined below) with respect to any security of the Company (collectively, the "Lock-Up Restrictions"); and

(ii)    Upon the expiration of the Lock-Up Period, all of the Lock-Up Restrictions shall expire in their entirety, subject to the Regulations.

(b)       Each Holder agrees and acknowledges that the Company may (i) imprint an appropriate legend describing the terms of this Agreement on each stock certificate representing the Holder's Shares, (ii) place a stop order with the Company's transfer agent on all Holder's Shares, including those which are covered by a registration statement filed under the Securities Act and (iii) notify its transfer agent in writing of the stop order and the restrictions on the Holder's Shares and direct the transfer agent not to process any attempts by the Holder to resell or transfer any Holder's Shares except in compliance with this Agreement.

	
2

 

 

 

	
(c) The resale restrictions set forth in this Agreement shall be in addition to all other restrictions on transfer imposed by applicable United States and state securities laws, rules and regulations.

4.               Certain Permitted Transfers. Notwithstanding anything contained in this Agreement, the Holder may transfer its Shares to its affiliates, spouse and lineal descendants for estate planning purposes, at such value as determined by the Holder to be appropriate, or, subject to compliance with all applicable securities laws and pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, in each case as evidenced by an opinion of counsel acceptable to the Company, and the prior written consent of the Company, to an unaffiliated third party (individually, a "Transferee") provided that the Transferee (or the legal representative of the Transferee) executes an agreement to be bound by all of the terms and conditions of this Agreement in connection with the resale of any Shares, in form and substance reasonably satisfactory to and to be executed by the Company. Further, Holder shall be permitted to pledge, encumber, or create a security interest in any or all of the hares to secure the payment or performance of indebtedness and other obligations of the Company to bona fide commercial lending institutions.

5.                Termination of Agreement upon Certain Events. In the event of: (a) a completed tender offer to purchase all or substantially all of the Company's issued and outstanding securities or (b) a merger, consolidation or other reorganization of the Company with or into an unaffiliated entity that results in a subsequent change in control of the Company, then this Agreement shall terminate as of the closing of such event and the Shares restricted pursuant hereto shall be released from such restrictions.

6.               Rights of Holder. Except to the extent provided in this Agreement or any other agreements between the parties hereto, the Holder shall be entitled to exercise its beneficial rights of ownership over the Shares, including the right to vote the Holder's Shares for any and all purposes.

7.                  No Registration Rights. Each Holder acknowledges that the Company has not and will not register any or all of the Exchange Shares prior to the expiration of the Lock-Up Period.

8.               Remedies. The Company shall have the right to specifically enforce all of the obligations of the Holder under this Agreement (without posting a bond or other security), in addition to recovering damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Holder recognizes that if it fails to perform, observe, or discharge any of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to the Company. Therefore, the Holder agrees that the Company shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security. If the Company prevails in an action to enforce this Agreement, it shall be entitled to receive from the Holder reimbursement for all fees and expenses incurred in connection therewith, including reasonable fees of counsel.

	
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9.               Further Assurances. Each of the Holders and the Company shall take all such actions reasonably necessary to effectuate the terms and conditions of this Agreement.

10.                Third-Party Beneficiaries. The Holder and the Company acknowledge and agree that this Agreement is entered into for the benefit of and is enforceable by the Company and each holder of the Company's securities and their successors and assigns.

11.               No Additional Fees/Payment. Other than the consideration specifically referenced herein, the parties hereto agree that no fee, payment or additional consideration in any form has been or will be paid to the Holder in connection with this Agreement.

12.           Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been given or made if in writing and delivered personally or sent by registered or certified mail (postage prepaid, return receipt requested) or facsimile to the parties at the following addresses:

If to a Holder, to the address set forth on the Signature Page hereof for such Holder.

C/o Standard Gold Corp. Standard Gold Corp. 3266 W Galveston Dr. Suite 107 Apache Junction, AZ 85120 Attention: President Facsimile: (480) 288-6532

If to the Company, to:

PhytoMedical Technologies, Inc.

100 Overlook Drive, 2nd Floor

Princeton, New Jersey, 08540

Attention: President and Chief Executive Officer

Facsimile: (248) 671-0315

or to such other persons or at such other addresses as shall be furnished by any party by like notice to the others, and such notice or communication shall be deemed to have been given or made as of the date so delivered or mailed. No change in any of such addresses shall be effective insofar as notices under this Section 12 are concerned unless such changed address shall have been given to such other party hereto as provided in this Section 12.

13.           Entire Agreement. This Agreement and the Share Exchange Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof, and may not be amended except by a written instrument executed by the parties hereto.

14.           Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective

	
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when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf' signature page were an original thereof.

15.           Severability This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible so as to be valid and enforceable.

16.            Governing Law. This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the State of New York without giving effect to the choice of law provisions thereof. The parties to this Agreement, acting for themselves and for their respective successors and assigns, without regard to domicile, citizenship or residence, hereby expressly and irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement, and consent and subject themselves to the jurisdiction of, the courts of the State of New York located in County of New York, and/or the United States District Court for the Southern District of New York, in respect of any matter arising under this Agreement. Service of process, notices and demands of such courts may be made upon any party to this Agreement by personal service at any place where it may be found or giving notice to such party as provided in Section 16.

	
[SIGNATURE PAGEFOLLOWS]

	
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as of the day and year first above written.

	
PHYTOMEDICAL TECHNOLOGIES, INC.

By: 

Name:  

Title: 

HOLDER:

By: 

Name: 

 

	
Title: 

Address For Notices Pursuant to Section 12 of this Agreement:

_____________________________________________________

_____________________________________________________

_____________________________________________________

 

	
Facsimile:

Email Address: __

 

 

	
6

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