Document:

ex10-24.htm

    Exhibit
10.24

     

    CREDIT
AGREEMENT

     

    This
Credit Agreement (this “Agreement”) is dated
as of October 2, 2009, and is by and between THE LACLEDE GROUP, INC., a
Missouri corporation (“Borrower”), and UMB BANK, N.A. (“Lender”).

     

    SECTION
1.    DEFINITIONS.

     

              
1.01     Definitions.  In
addition to the terms defined elsewhere in this Agreement or in any Exhibit or
Schedule hereto, when used in this Agreement, the following terms shall have the
following meanings (such meanings shall be equally applicable to the singular
and plural forms of the terms used, as the context requires):

     

    Acquisition shall
mean any transaction or series of related transactions, consummated on or after
the date of this Agreement, by which Borrower or any Subsidiary directly or
indirectly (a) acquires all or substantially all of the assets comprising one or
more business units of any other Person at a purchase price of $5,000,000 or
more, whether through purchase of assets, merger or otherwise or (b) acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least (i) a majority (in number of votes) of the stock and/or
other securities of a corporation having ordinary voting power for the election
of directors (other than stock and/or other securities having such power only by
reason of the happening of a contingency), (ii) a majority (by percentage of
voting power) of the outstanding partnership interests of a partnership, (iii) a
majority (by percentage of voting power) of the outstanding membership interests
of a limited liability company or (iv) a majority of the ownership interests in
any organization or entity other than a corporation, partnership or limited
liability company.

     

    Adjusted Base Rate
shall mean the Base Rate plus the Applicable
Base Margin.  The Adjusted Base Rate shall be adjusted automatically
on and as of the effective date of any change in the Base Rate and/or the
Applicable Base Margin.

     

    Applicable Commitment Fee
Rate shall mean an annual rate equal to 25/100 Percent
(0.25%).

     

    Applicable LIBOR
Margin shall mean an annual rate equal to One and One-Half Percent
(1.50%).

     

    Applicable Base
Margin shall mean an annual rate equal to One and One-Half Percent
(1.50%).

     

    Bank of America
Agreement shall mean the Credit Agreement by and between Borrower and
Bank of America, N.A., executed on the date hereof or within thirty (30) days
following the date hereof, as amended, modified or restated from time to
time.

     

    Base Rate shall mean
the BBA LIBOR Daily Floating Rate.  The Base Rate shall be adjusted
automatically on and as of the effective date of any change in the BBA LIBOR
Daily Floating Rate.

     

    Base Rate Loan shall
mean any portion of a Loan bearing interest based on the Adjusted Base
Rate.

     

    BBA LIBOR shall mean
the British Bankers Association LIBOR Rate, as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as selected by
Lender from time to time).

     

    
      
         

      

      
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    BBA LIBOR Daily Floating
Rate shall mean a fluctuating rate of interest which can change on each
Business Day.  The rate will be adjusted on each Business Day to equal
the BBA LIBOR for U.S. Dollar deposits for delivery on the date in question for
a one month term beginning on that date.  The Bank will use the BBA
LIBOR as determined at approximately 11:00 a.m. London time two (2) London
Banking Days prior to the date in question, as adjusted from time to time in
Lender’s sole discretion for reserve requirements, deposit insurance assessment
rates and other regulatory costs.  If such rate is not available at
such time for any reason, then the rate will be determined by such alternate
method as reasonably selected by Lender.

     

    Borrower’s
Obligations shall mean any and all present and future indebtedness
(principal, interest, fees, collection costs and expenses, attorneys’ fees and
other amounts), liabilities and obligations (including, without limitation,
indemnity obligations) of Borrower to Lender evidenced by or arising under or in
respect of this Agreement, the Note and/or any of the other Transaction
Documents, including, without limitation, any reimbursement obligations of the
Borrower in respect of Letters of Credit, all obligations of Borrower which are
owed to Lender or any affiliate of Lender under any Swap
Contract, and all other liabilities and obligations owed by Borrower to Lender
from time to time, howsoever created, arising or evidenced, whether direct or
indirect, joint or several, absolute or contingent, now or hereafter existing,
or due or to become due, together with any and all renewals, extensions,
restatements or replacements of any of the foregoing.

     

    Business Day shall
mean any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close, or are in fact closed, in the state where
Lender’s lending office is located, and, if such day relates to amounts bearing
interest at an offshore rate (if any), means any such day on which dealings in
dollar deposits are conducted among banks in the offshore dollar interbank
market.

     

    Charter Documents
shall mean: the articles or certificate of incorporation and bylaws of a
corporation; the certificate of limited partnership and partnership agreement of
a limited partnership; the partnership agreement of a general partnership; the
articles of organization and operating agreement of a limited liability company;
or the indenture of a trust.

     

    Consolidated
Capitalization shall mean, as of the date of any determination thereof,
the sum of Consolidated Debt as of such date, plus Consolidated Net
Worth as of such date, all determined on a consolidated basis and in accordance
with GAAP.

     

    Consolidated Capitalization
Ratio shall mean, as of the date of any determination thereof, the ratio
(expressed as a percentage) of Consolidated Debt as of such date to Consolidated
Capitalization as of such date, all determined on a consolidated basis and in
accordance with GAAP.

     

    Consolidated Debt
shall mean, as of the date of any determination thereof, all Debt of Borrower
and its Subsidiaries as of such date, determined on a consolidated basis and in
accordance with GAAP.

     

    Consolidated Net
Worth shall mean, as of the date of any determination thereof, the amount
of the capital stock accounts (net of treasury stock, at cost) of Borrower and
its Subsidiaries as of such date plus (or minus in the case of a deficit) the
surplus and retained earnings of Borrower and its Subsidiaries as of such date,
all determined on a consolidated basis and in accordance with GAAP.

     

    
      
         

      

      
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    Contingent
Liabilities of a Person shall mean any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, or contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes
liable upon the obligation or liability of any other Person, or agrees to
maintain the net worth or working capital or the financial condition of any
other Person; but does not include (A) the endorsement by a Person of
instruments for deposit or collection in the ordinary course of business, (B)
the liability of a general partner of a partnership for obligations of such
partnership, (C) the Debt hereunder and the Debt under the Bank of America
Agreement, and (D) guaranties of purchases by Laclede Energy of natural gas in
the ordinary course of Laclede Energy’s business.

     

    Debt shall mean, as
of the date of determination thereof, the sum of (a) all indebtedness,
liabilities and/or obligations of Borrower or any of its Subsidiaries for
borrowed money or that have been incurred in connection with the purchase or
other acquisition of property (other than unsecured trade accounts payable
incurred in the ordinary course of business), plus (b) all leases
of property, whether real and/or personal, by Borrower or any of its
Subsidiaries as lessee(s), that in accordance with GAAP are required to be
capitalized on the balance sheet of such entity, plus (c) the
aggregate undrawn face amount of all letters of credit and/or surety bonds
issued for the account and/or upon the application of Borrower or any of its
Subsidiaries together with all unreimbursed drawings with respect thereto, plus (d) all
guarantees by Borrower or any of its Subsidiaries of Debt of other Persons (but
not including any guarantees of Debt of Borrower or any of its
Subsidiaries).

     

    Default shall mean
any event or condition the occurrence of that would, with the lapse of time or
the giving of notice or both, become an Event of Default.

     

    Event of Default
shall have the meaning ascribed thereto in Section 6.

     

    GAAP shall mean, at
any time, generally accepted accounting principles at such time in the United
States.

     

    Guarantor shall mean
Laclede Energy.

     

    Guaranty shall mean
the Guaranty dated as of the date hereof, executed by Laclede Energy in favor of
Lender.

     

    Indemnified
Liabilities shall have the meaning ascribed thereto in
Section 7.04.

     

    Interest Period shall
mean with respect to each LIBOR Loan: (a) initially, the period commencing and
ending on the dates selected by Borrower in the applicable Interest Rate
Selection Notice pursuant to and in accordance with Section 2.04; and (b)
thereafter, each period commencing on the last day of the immediately preceding
Interest Period applicable to such LIBOR Loan and ending on the date elected by
Borrower in the applicable Interest Rate Selection Notice for such period
pursuant to and in accordance with Section 2.04.

     

    Interest Rate Selection
Notice shall have the meaning ascribed thereto in
Section 2.04(e).

     

    Investment shall mean
any investment (including, without limitation, any loan or advance) of Borrower
or any Subsidiary in or to any Person, whether payment therefor is made in cash
or capital stock or other equity interests of Borrower or any Subsidiary, and
whether such investment is by acquisition of stock or other equity interests or
Debt, or by loan, advance, transfer of property out of the ordinary course of
business, capital contribution, equity or profit sharing interest, extension of
credit on terms other than those normal in the ordinary course of business or
otherwise.

     

    
      
         

      

      
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    Laclede Energy shall
mean Laclede Energy Resources, Inc., a Missouri corporation, and a Subsidiary of
Borrower.

     

    Lender’s Revolving Credit
Commitment shall mean the sum of Ten Million Dollars
($10,000,000).

     

    Letter of Credit and
Letters of
Credit shall have the meanings ascribed to these terms in
Section 2.18(a).

     

    Letter of Credit
Application shall mean Lender’s standard form of application and
agreement for irrevocable standby letter of credit, or Lender’s standard form of
application and agreement for irrevocable commercial letter of credit, as the
case may be, in either case executed by Borrower, or a Subsidiary of Borrower,
as applicant and account party, and delivered to Lender pursuant to
Section 2.18(a), as the same may from time to time be amended, modified,
extended, renewed or restated.

     

    LGC shall mean
Laclede Gas Company, a Missouri corporation, and a Subsidiary of
Borrower.

     

    LIBOR Banking Day
shall mean a day other than a Saturday or a Sunday on which banks are open for
business in New York and London and dealing in offshore dollars.

     

    LIBOR Loan shall mean
any portion of the Loan bearing interest based on the LIBOR Rate.

     

    LIBOR Rate shall mean
the interest rate determined by the following formula (all amounts in the
calculation will be determined by Lender as of the first day of the Interest
Period):

     

    LIBOR
Rate = London
Inter-Bank Offered Rate  +  Applicable LIBOR
Margin

    (1.00
- Reserve Percentage)

     

    The
LIBOR Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Percentage and/or the Applicable LIBOR
Margin.

     

    Loan and Loans shall have the
meaning ascribed thereto in Section 2.01(a).

     

    Loan Party shall mean
each of Borrower and each Subsidiary (including, without limitation, Laclede
Energy) but excluding LGC.

     

    London Banking Day
shall mean a day on which banks in London are open for business and dealing in
offshore dollars.

     

    London Inter-Bank Offered
Rate shall mean, for any applicable Interest Period, the rate per annum
equal to BBA LIBOR at approximately 11:00 a.m. London time two (2) London
Banking Days before the commencement of the Interest Period, for U.S. Dollar
deposits (for delivery on the first day of such Interest Period) with a term
equivalent to such Interest Period.  If such rate is not available at
such time for any reason, then the rate for that Interest Period will be
determined by such alternate method as reasonably selected by
Lender.

     

    
      
         

      

      
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    Material Adverse
Effect shall mean (a) a material adverse effect on the properties,
assets, liabilities, business, operations, income or condition (financial or
otherwise) of Borrower and its Subsidiaries taken as a whole, (b) material
impairment of Borrower’s ability to perform any of its obligations under this
Agreement, the Note or any of the other Transaction Documents, or (c) material
impairment of the enforceability of the rights of, or benefits available to,
Lender under this Agreement, the Note or any of the other Transaction
Documents.

     

    Note shall have the
meaning ascribed thereto in Section 2.03(a).

     

    Notice of Borrowing
shall have the meaning ascribed thereto in Section 2.02(a).

     

    Other Taxes shall
have the meaning ascribed thereto in Section 2.19(b).

     

    Permitted Investment
shall mean any Investment or Acquisition, or any expenditure or any incurrence
of any liability to make any expenditure for an Investment or Acquisition, other
than (a) any Investment or Acquisition the result of which would be to change
substantially the nature of the business engaged in by Borrower and its
Subsidiaries, (b) any Investment that is in the nature of a hostile or contested
Acquisition, and (c) any Investment that would result in a Default or Event of
Default; provided, that it is expressly agreed that all Investments under
Borrower’s or Subsidiaries’ commodity risk management programs are Permitted
Investments.

     

    Person shall mean any
individual, sole proprietorship, partnership, joint venture, limited liability
company, trust, unincorporated organization, association, corporation,
institution, entity or government (whether national, Federal, state, county,
city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

     

    Regulation D shall
mean Regulation D of the Board of Governors of the Federal Reserve System, as
amended.

     

     

    Regulatory Change
shall have the meaning ascribed thereto in Section 2.12.

     

    Reserve Percentage
shall mean the total of the maximum reserve percentages for determining the
reserves to be maintained by member banks of the Federal Reserve System for
Eurocurrency Liabilities, as defined in Federal Reserve Board Regulation D,
rounded upward to the nearest 1/100 of one percent.  The percentage
will be expressed as a decimal, and will include, but not be limited to,
marginal, emergency, supplemental, special, and other reserve
percentages.

     

    Revolving Credit
Period shall mean the period commencing on the date of this Agreement and
ending October 1, 2010; provided, however, that the Revolving Credit Period
shall end on the date the Lender’s Revolving Credit Commitment is terminated
pursuant to Section 6 or otherwise.

     

    Subsidiary shall mean
any corporation or other entity of which more than Fifty Percent (50%) of the
issued and outstanding capital stock or other equity interests entitled to vote
for the election of directors or persons performing similar functions (other
than by reason of default in the payment of dividends or other distributions) is
at the time owned directly or indirectly by Borrower or any
Subsidiary.

     

    Swap Contract shall
mean any interest rate, credit, commodity or equity swap, cap, floor, collar,
forward foreign exchange transaction, currency swap, cross currency rate swap,
currency option, securities puts, calls, collars, options or forwards or any
combination of, or option with respect to, these or similar transactions now or
hereafter entered into between Borrower and Lender or an affiliate
thereof.

     

    
      
         

      

      
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    Taxes shall have the
meaning ascribed thereto in Section 2.19(a).

     

    Total Revolving Credit
Outstandings shall mean, as of any date, the sum of (a) the aggregate
principal amount of all Loans outstanding as of such date, plus (b) the
aggregate undrawn face amount of all Letters of Credit outstanding as of such
date plus (c)
all unreimbursed drawings with respect to all Letters of Credit.

     

    Transaction Documents
shall mean this Agreement, the Note and any and all other agreements, documents
and instruments heretofore, now or hereafter delivered to Lender with respect to
or in connection with or pursuant to this Agreement, any Loans made hereunder or
any of the other Borrower’s Obligations, and executed by or on behalf of
Borrower, all as the same may from time to time be amended, modified, extended,
renewed or restated.

     

    SECTION
2.    LOANS.

     

              
2.01      Loans.

     

              (a)   Subject
to the terms and conditions set forth in this Agreement and so long as no
Default or Event of Default has occurred and is continuing, during the Revolving
Credit Period, Lender agrees to make such loans to Borrower (individually, a
“Loan” and
collectively, the “Loans”) as Borrower
may from time to time request pursuant to Section 2.02.  Each
Loan under this Section 2.01(a) which is a Base Rate Loan shall be for an
aggregate principal amount of at least $50,000.00 or any larger multiple of
$10,000.00.  Each Loan under this Section 2.01(a) which is a
LIBOR Loan shall be for an aggregate principal amount of at least $500,000.00 or
any larger multiple of $250,000.00; provided, that Borrower may not have
outstanding and Lender shall not be obligated to make more than six (6) LIBOR Loans at any one
time.  The aggregate principal amount of Loans that Lender shall be
required to have outstanding under this Agreement as of any date shall not
exceed the amount of Lender’s Revolving Credit Commitment as of such
date.  Within the foregoing limits, Borrower may borrow under this
Section 2.01(a), repay according to Section 2.09, prepay under
Section 2.08 and reborrow at any time during the Revolving Credit Period
under this Section 2.01(a).  All Loans not paid prior to the last
day of the Revolving Credit Period, together with all accrued and unpaid
interest thereon and all fees and other amounts owing by Borrower to Lender with
respect thereto, shall be due and payable on the last day of the Revolving
Credit Period.

     

              (b)   If
the amount of Lender’s Revolving Credit Commitment on any date is less than the
Total Revolving Credit Outstandings on such date, whether as a result of
Borrower’s election to decrease the amount of Lender’s Revolving Credit
Commitment pursuant to Section 2.01(c) or otherwise, Borrower shall be
automatically required (without demand or notice of any kind by Lender, all of
which are hereby expressly waived by Borrower) to immediately repay the Loans in
an amount sufficient to reduce the amount of the Total Revolving Credit
Outstandings to an amount equal to or less than the amount of Lender’s Revolving
Credit Commitment.

     

              (c)   Borrower
may, upon five (5) Business Days’ prior written notice to Lender, terminate
entirely at any time, or reduce from time to time by an aggregate amount of
$1,000,000 or any larger multiple of $1,000,000 the unused portions of Lender’s
Revolving Credit Commitment; provided, however, that (i) at no time shall the
amount of Lender’s Revolving Credit Commitment be reduced to a figure less than
the Total Revolving Credit Outstanding, (ii) at no time shall the amount of
Lender’s Revolving Credit Commitment be reduced to a figure greater than zero
(0) but less than $5,000,000 and (iii) any such termination or reduction shall
be permanent and Borrower shall have no right to thereafter reinstate or
increase, as the case may be, Lender’s Revolving Credit Commitment.

     

    
      
         

      

      
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    2.02  Method of
Borrowing.

     

              (a)   Borrower
shall give Lender oral or written notice (a “Notice of Borrowing”)
by 10:00 a.m. (St. Louis time) on the Business Day of each Base Rate Loan
to be made to Borrower, and by 10:00 a.m. (St. Louis time) at least three
(3) LIBOR Banking Days before each LIBOR Loan to be made to Borrower,
specifying: (i) the date of such Loan, which shall be a Business Day during the
Revolving Credit Period in the case of a Base Rate Loan and a LIBOR Banking Day
during the Revolving Credit Period in the case of a LIBOR Loan, (ii) the
aggregate principal amount of such Loan, (iii) whether such Loan is to be a Base
Rate Loan or a LIBOR Loan, and (iv) in the case of a LIBOR Loan, the duration of
the initial Interest Period applicable thereto, subject to the provisions of
Section 2.04.

     

              (b)   A
Notice of Borrowing shall not be revocable by Borrower.

     

              (c)   Subject
to the terms and conditions of this Agreement, provided that Lender has received
the Notice of Borrowing, Lender shall (unless Lender determines that any
applicable condition specified in Section 3 has not been satisfied) make the
applicable Loan to Borrower by crediting the amount of such Loan to a demand
deposit account of Borrower at Lender specified by Borrower (or such other
account mutually agreed upon in writing between Lender and Borrower) not later
than 2:30 p.m. (St. Louis time) on the Business Day specified in said
Notice of Borrowing.

     

              (d)   If
Lender makes a new Loan under this Agreement on a day on which Borrower is
required to or has elected to repay all or any part of an outstanding Loan,
Lender shall apply the proceeds of its new Loan to make such repayment and only
an amount equal to the difference (if any) between the amount being borrowed and
the amount being repaid shall be made available by Lender to
Borrower.

     

              (e)    Borrower
hereby irrevocably authorizes Lender to rely on telephonic, facsimile, or
written instructions of any individual identifying himself or herself as one of
the individuals listed on Schedule 2.02
attached hereto (or any other individual from time to time authorized to act on
behalf of Borrower pursuant to a document signed by the Chairman of the Board of
Borrower and certified by the Secretary of Borrower and delivered to Lender)
with respect to any request to make a Loan or a repayment under this Agreement,
and on any signature that Lender reasonably believes to be genuine, and Borrower
shall be bound thereby in the same manner as if such individual were actually
authorized or such signature were genuine.  Borrower also hereby
agrees to defend and indemnify Lender and hold Lender harmless from and against
any and all claims, demands, damages, liabilities, losses and reasonable costs
and expenses (including, without limitation, reasonable attorneys’ fees and
expenses) relating to or arising out of or in connection with the acceptance of
instructions for making Loans or repayments under this Agreement.

     

              
2.03  
Note.

     

              (a)   The
Loans of Lender to Borrower shall be evidenced by the Revolving Note of Borrower
payable to the order of Lender in a principal amount equal to the maximum amount
of Lender’s Revolving Credit Commitment, which Revolving Note shall be in
substantially the form of Exhibit A attached
hereto and incorporated herein by reference (with appropriate insertions) (as
the same may from time to time be amended, modified, extended, renewed or
restated, the “Note”).

     

    
      
         

      

      
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    (b)   Lender
shall record in its books and records the date, amount, type and Interest Period
(if any) of each Loan made by it to Borrower and the date and amount of each
payment of principal and/or interest made by Borrower with respect thereto;
provided, however, that the obligation of Borrower to repay each Loan made by
Lender to Borrower under this Agreement shall be absolute and unconditional,
notwithstanding any failure of Lender to make any such recordation or any
mistake by Lender in connection with any such recordation.  The books
and records of Lender showing the account between Lender and Borrower shall be
conclusive in the absence of manifest error.

             

    2.04  Duration of Interest Periods
and Selection of Interest Rates.

     

              (a)   The
Interest Period during which the LIBOR Rate will be in effect for a LIBOR Loan
will be one week or one, two, three, or six months.

     

              (b)   The
first day of the Interest Period must be a LIBOR Banking Day.  The
last day of the Interest Period and the actual number of days during the
Interest Period will be determined by Lender using the practices of the London
inter-bank market.

     

              (c)   No
Interest Period shall extend beyond a date on which Borrower is required to make
a scheduled payment of principal on the Loan unless the sum of (A) the aggregate
principal amount of outstanding Base Rate Loans plus (B) the aggregate principal
amount of outstanding LIBOR Loans with Interest Periods expiring on or before
the date such scheduled principal payment is due equals or exceeds the aggregate
principal amount to be paid on the Loan on such principal payment
date.

     

              (d)   No
Interest Period may extend beyond the Revolving Credit Period.

     

              (e)   The
duration of the initial Interest Period for each LIBOR Loan shall be as
specified in the applicable Notice of Borrowing.  Borrower shall elect
the duration of each subsequent Interest Period applicable to such LIBOR Loan
and the interest rate to be applicable during such subsequent Interest Period
(and Borrower shall have the option (i) in the case of any Base Rate Loan, to
elect that such Loan become a LIBOR Loan and the Interest Period to be
applicable thereto, and (ii) in the case of any LIBOR Loan, to elect that such
Loan become a Base Rate Loan), by giving notice of such election to Lender (an
“Interest Rate
Selection Notice”) by 10:00 a.m. (St. Louis time) on the Business
Day of, in the case of the election of the Adjusted Base Rate, and by 10:00 a.m.
(St. Louis time) at least three (3) LIBOR Banking Days before, in the case
of the election of the LIBOR Rate, the end of the immediately preceding Interest
Period applicable thereto, if any; provided, however, that notwithstanding the
foregoing, in addition to and without limiting the rights and remedies of Lender
under Section 6 of this Agreement, so long as any Default or Event of Default
under this Agreement has occurred and is continuing, Borrower shall not be
permitted to renew any LIBOR Loan as a LIBOR Loan or to convert any Base Rate
Loan into a LIBOR Loan.  If Lender does not receive an Interest Rate
Selection Notice within the applicable time limits specified herein, Borrower
shall be deemed to have elected to pay such Loan in whole pursuant to
Section 2.08 on the last day of the current Interest Period with respect
thereto and to reborrow the principal amount of such Loan on such date as a Base
Rate Loan.

     

              (f)   Borrower
may not have outstanding and Lender shall not be obligated to make more than six
(6) LIBOR Loans at
any one time.

     

    
      
         

      

      
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    2.05  Interest Rates and Interest
Payments.

     

              (a)   So
long as no Event of Default has occurred and is continuing, each Base Rate Loan
shall bear interest on the outstanding principal amount thereof for each day
until paid at an annual rate equal to the Adjusted Base Rate.  So long
as any Event of Default has occurred and is continuing, each Base Rate Loan
shall bear interest on the outstanding principal amount thereof for each until
it is paid, at an annual rate equal to Five Percent (5%) over and above the
Adjusted Base Rate.  Such interest shall be payable monthly in arrears
on the last day of each calendar month commencing October 31, 2009 and at
the maturity of the Note (whether by reason of acceleration or
otherwise).  From and after the maturity of the Note, whether by
reason of acceleration or otherwise, each Base Rate Loan shall bear interest,
payable on demand, for each day until paid at an annual rate equal to Five
Percent (5%) over and above the Adjusted Base Rate.

     

              (b)    So
long as no Event of Default has occurred and is continuing, each LIBOR Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period applicable thereto at an annual rate equal to the LIBOR
Rate.  So long as any Event of Default has occurred and is continuing,
each LIBOR Loan shall bear interest on the outstanding principal amount thereof
for each Interest Period applicable thereto at an annual rate equal to Five
Percent (5%) over and above the LIBOR Rate.  Such interest shall be
payable for each Interest Period on the last day thereof, unless the duration of
such Interest Period exceeds three (3) months, in which case such interest shall
be payable on the last day of each three (3) month period during such Interest
Period and on the last day of such Interest Period, and at the maturity of the
Note (whether by reason of acceleration or otherwise).  From and after
the maturity of the Note, whether by reason of acceleration or otherwise, each
LIBOR Loan shall bear interest, payable on demand, for each day until paid, at
an annual rate equal to Five Percent (5%) over and above the higher of (i) the
LIBOR Rate applicable to such LIBOR Loan for the immediately preceding Interest
Period or (ii) the Adjusted Base Rate.

     

              (c)   Lender
shall determine each interest rate applicable to the Base Rate Loans and LIBOR
Loans hereunder and its determination thereof shall be conclusive in the absence
of manifest error.

     

              
2.06  
Computation of
Interest.  Interest on Base Rate Loans hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last
day).  Interest on LIBOR Loans shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed, calculated as
to each Interest Period from and including the first day thereof to but
excluding the last day thereof.

     

              
2.07  
Fees.

     

              (a)   Contemporaneously
with the execution of this Agreement, Borrower shall pay Lender a nonrefundable
upfront fee in the amount set forth in the fee letter provided by Lender to
Borrower.

     

    
      
         

      

      
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    (b)   Borrower
shall pay to Lender a utilization fee of 37.5/100 Percent (0.375%) per annum
times the Total Revolving Credit Outstandings on each day that the Total
Revolving Credit Outstandings exceed Thirty-Three Percent (33%) of the actual
daily amount of the Lender’s Revolving Credit Commitment then in effect (or, if
terminated, in effect immediately prior to such termination).  The
utilization fee shall be due and payable quarterly in arrears on each
March 31, June 30, September 30 and December 31, commencing
with the first such date to occur after the Closing Date, and on the last day of
the Revolving Credit Period (and, if applicable, thereafter on
demand).  The utilization fee shall be calculated quarterly in
arrears.  The utilization fee shall accrue at all times that the Total
Revolving Credit Outstanding exceeds Thirty-Three Percent (33%) of Lender’s
Revolving Credit Commitment.

     

    (c)   At
all times from and including the date of this Agreement to but excluding the
last day of the Revolving Credit Period, Borrower shall pay a nonrefundable
commitment fee on the unused portion of Lender’s Revolving Credit Commitment
(determined by subtracting the Total Revolving Credit Outstandings from the
amount of Lender’s Revolving Credit Commitment) at a percentage rate equal to
the Applicable Commitment Fee Rate.  Said commitment fee shall be (i)
calculated on a daily basis, (ii) payable quarterly in arrears on each
June 30, September 30, December 31, and March 31 during the
Revolving Credit Period commencing December 31, 2009, and on the last day
of the Revolving Credit Period and (iii) calculated on an actual day, 360-day
year basis.

     

              
2.08    Prepayments.

     

    (a)   Borrower
may, upon notice to Lender specifying that it is paying any Base Rate Loan, pay
without penalty or premium the Base Rate Loan in whole at any time or in part
from time to time, by paying the principal amount to be paid, provided that
partial prepayments shall be in an aggregate amount of at least $1,000,000.00 or
any larger multiple of $500,000.00.

     

    (b)   Borrower
may, upon at least three (3) LIBOR Banking Day’s irrevocable prior written
notice to Lender, prepay all at any time or any portion from time to time of the
unpaid principal balance of any LIBOR Loan prior to maturity provided that: (i)
contemporaneously with each such prepayment, Borrower shall pay (A) all accrued
and unpaid interest on the portion of the LIBOR Loan being prepaid to and
including the date of prepayment and (B) the funding losses and other amounts,
if any, required under Section 2.10; (ii) partial prepayments shall be in
an aggregate amount of at least $2,000,000.00 or any larger multiple of
$1,000,000.00; and (iii) in no event may Borrower make any prepayment on any
LIBOR Loan that results in the remaining LIBOR Loans with respect to which a
given Interest Period applies being greater than $0.00 but less than
$1,000,000.00.

     

              
2.09    General Provisions as to
Payments.  Borrower shall make each payment of principal of,
and interest on, the Loan and of fees and all other amounts payable by Borrower
under this Agreement, not later than 12:00 noon (St. Louis time) on the
date when due and payable in Federal or other funds immediately available in
St. Louis, Missouri, to Lender at its address referred to in
Section 7.05.  All payments received by Lender after 12:00 noon
(St. Louis time) shall be deemed to have been received by Lender on the
next succeeding Business Day.  Whenever any payment of principal of,
or interest on, the Loan or of fees shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day.  If the date for any payment of principal is
extended by operation of law or otherwise, interest thereon, at the then
applicable rate, shall be payable for such extended time.

     

    
      
         

      

      
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    2.10   Funding
Losses.  Notwithstanding any provision contained in this
Agreement to the contrary, if (a) Borrower shall make any payment of principal
with respect to any LIBOR Loan on any day other than the last day of the
Interest Period applicable thereto, whether as a result of a scheduled payment,
a voluntary prepayment, a mandatory prepayment, maturity, acceleration or
otherwise or (b) any LIBOR Loan is converted to a Base Rate Loan pursuant to
Section 2.04, Section 2.11 or Section 2.12 on any day other than
the last day of the Interest Period applicable thereto, then, contemporaneously
with each such payment or conversion, Borrower shall reimburse Lender on demand
for any for any loss, cost or expense incurred by Lender as a result of the
prepayment, including, without limitation, any losses incurred in obtaining,
terminating, liquidating, or employing deposits from third parties, but
excluding any loss of the Applicable LIBOR Margin for the period after any such
prepayment; provided, however, that Lender shall have delivered to Borrower a
certificate as to the amount of such losses and expenses, which certificate
shall be conclusive in the absence of manifest error.  Borrower shall
also pay any customary administrative fees charged by Lender in connection with
the foregoing.  For purposes of this paragraph, Lender shall be deemed
to have funded each LIBOR Loan by a matching deposit or other borrowing in the
applicable interbank market, whether or not such LIBOR Loan was in fact so
funded.

     

              
2.11  
 Basis for Determining
Interest Rate Inadequate or Unfair.  If with respect to any
Interest Period: (a) deposits in U.S. Dollars (in the applicable amounts) are
not being offered to Lender in the relevant market for such Interest Period, or
(b) Lender determines in good faith that the LIBOR Rate as determined pursuant
to the definition thereof will not adequately and fairly reflect the cost to
Lender of maintaining or funding the LIBOR Loans for such Interest Period,
Lender shall forthwith give notice thereof to Borrower whereupon until Lender
notifies Borrower that the circumstances giving rise to such suspension no
longer exist, (i) the LIBOR Rate shall not be available to Borrower as an
interest rate option on any portion of the Loan and (ii) all of the then
outstanding LIBOR Loans shall automatically convert to Base Rate Loans on the
last day of the then current Interest Period applicable to each such LIBOR
Loan.  Interest accrued on each such LIBOR Loan prior to any such
conversion shall be due and payable on the date of such conversion together with
any funding losses and other amounts due under Section 2.10.

     

              
2.12    Illegality.  If,
after the date of this Agreement, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the interpretation or
administration thereof by any governmental or regulatory authority, central bank
or comparable agency charged with the interpretation or administration thereof,
or compliance by Lender with any request or directive (whether or not having the
force of law) of any such governmental or regulatory authority, central bank or
comparable agency (a “Regulatory Change”)
shall make it unlawful or impossible for Lender to make, maintain or fund its
LIBOR Loans to Borrower, Lender shall forthwith give notice thereof to
Borrower.  Upon receipt of such notice, Borrower shall convert all of
its then outstanding LIBOR Loans on either (a) the last day of the then current
Interest Period applicable to such LIBOR Loan if Lender may lawfully continue to
maintain and fund such LIBOR Loan to such day or (b) immediately if Lender may
not lawfully continue to fund and maintain such LIBOR Loan to such day, to a
Base Rate Loan in an equal principal amount.  Interest accrued on each
such LIBOR Loan prior to any such conversion shall be due and payable on the
date of such conversion together with any funding losses and other amounts due
under Section 2.10.

     

    
      
         

      

      
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    2.13   Increased
Cost.

     

    (a)   If
(i) Regulation D or (ii) a Regulatory Change: (A) shall subject Lender to any
tax, duty or other charge with respect to the LIBOR Loans, the Note or its
obligation to make LIBOR Loans, or shall change the basis of taxation of
payments to Lender of the principal of or interest on its LIBOR Loans or any
other amounts due under this Agreement in respect of its LIBOR Loans or its
obligation to make LIBOR Loans (except for taxes on or changes in the rate of
tax on the overall net income of Lender); or (B) shall impose, modify or deem
applicable any reserve (including, without limitation, any reserve imposed by
the Board of Governors of the Federal Reserve System), special deposit, capital
or similar requirement against assets of, deposits with or for the account of,
or credit extended or committed to be extended by, Lender or shall, with respect
to Lender impose, modify or deem applicable any other condition affecting
Lender’s LIBOR Loans, the Note or Lender’s obligation to make LIBOR Loans; and
the result of any of the foregoing is to increase the cost to (or in the case of
Regulation D, to impose a cost on or increase the cost to) Lender of making or
maintaining any LIBOR Loan, or to reduce the amount of any sum received or
receivable by Lender under this Agreement or under its Note with respect
thereto, by an amount deemed by Lender to be material, and if Lender is not
otherwise fully compensated for such increase in cost or reduction in amount
received or receivable by virtue of the inclusion of the reference to “Reserve
Percentage” in the calculation of the LIBOR Rate, then upon notice by Lender to
Borrower, which notice shall set forth Lender’s supporting calculations and the
details of the Regulatory Change, Borrower shall pay Lender, as additional
interest, such additional amount or amounts as will compensate Lender for such
increased cost or reduction.  The determination by Lender under this
Section of the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error.  In determining such
amount or amounts, Lender may use any reasonable averaging and attribution
methods.

     

    (b)   If
Lender demands compensation under Section 2.13(a) above, Borrower may at
any time, upon at least three (3) LIBOR Banking Day’s prior notice to Lender,
convert its then outstanding LIBOR Loans to Base Rate Loans in an equal
principal amount.  Interest accrued on each such LIBOR Loan prior to
any such conversion shall be due and payable on the date of such conversion
together with any funding losses and other amounts due under Section 2.10
and this Section 2.13.

     

              
2.14    Base Rate Loans Substituted
for Affected LIBOR Loans.  If notice has been given by Lender
pursuant to Sections 2.11 or 2.12 requiring LIBOR Loans to be repaid or
converted to Base Rate Loans, then, unless and until Lender notifies Borrower
that the circumstances giving rise to such repayment or conversion no longer
apply, any portion of the Loans that would otherwise be made by Lender to
Borrower as LIBOR Loans shall be made instead as Base Rate
Loans.  Lender shall promptly notify Borrower if and when the
circumstances giving rise to such repayment no longer apply.

     

              
2.15    Capital
Adequacy.  If, after the date of this Agreement, Lender shall
have determined in good faith that a Regulatory Change has occurred which has or
will have the effect of reducing the rate of return on Lender’s capital in
respect of its obligations hereunder to a level below that which Lender could
have achieved but for such adoption, change or compliance (taking into
consideration Lender’s policies with respect to capital adequacy), then from
time to time Borrower shall pay to Lender upon demand such additional amount or
amounts as will compensate Lender for such reduction.  All
determinations made in good faith by Lender of the additional amount or amounts
required to compensate it in respect of the foregoing shall be conclusive in the
absence of manifest error.  In determining such amount or amounts,
Lender may use any reasonable averaging and attribution methods.

     

    
      
         

      

      
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    2.16   Survival of
Indemnities.  All indemnities and all provisions relating to
reimbursement to Lender of amounts sufficient to protect the yield to Lender
with respect to the Loan, including, without limitation, Sections 2.10,
2.13 and 2.15 hereof, shall survive the payment of the Note and the other
Borrower’s Obligations and the expiration or termination of this
Agreement.  Notwithstanding the foregoing, if Lender fails to notify
Borrower of any event that will entitle Lender to compensation pursuant to
Sections 2.10, 2.13 and/or 2.15 within one hundred eighty (180) days after
Lender obtains knowledge of such event, then Lender shall not be entitled to any
compensation from Borrower for any loss, expense, increased cost and/or
reduction of return arising from such event.

     

              
2.17    Discretion of Lender as to
Manner of Funding.  Notwithstanding any provision contained in
this Agreement to the contrary, Lender shall be entitled to fund and maintain
its funding of all or any part of its LIBOR Loans in any manner it elects, it
being understood, however, that for purposes of this Agreement all
determinations hereunder (including, without limitation, the determination of
Lender’s funding losses and expenses under Section 2.10) shall be made as
if Lender had actually funded and maintained each LIBOR Loan through the
purchase of deposits having a maturity corresponding to the maturity of the
applicable Interest Period relating to the applicable LIBOR Loan and bearing an
interest rate equal to the applicable LIBOR Base Rate.

     

              
2.18    Letters of
Credit.

     

    (a)   Subject
to the terms and conditions of this Agreement and so long as no Default or Event
of Default has occurred and is continuing, during the Revolving Credit Period,
Lender agrees to issue irrevocable commercial and/or standby letters of credit
for the account of Borrower and/or any Subsidiary (individually, a “Letter of Credit”,
and collectively, “Letters of Credit”)
in an amount and for the term specifically requested by Borrower by notice in
writing to Lender at least three (3) Business Days prior to the requested
issuance thereof; provided, however, that: (i) Borrower shall have executed and
delivered to Lender a Letter of Credit Application with respect to such Letter
of Credit; (ii) the term of any such Letter of Credit shall not extend beyond
the date one (1) year after the date of issuance thereof; (iii) any Letter of
Credit may only be utilized to guaranty the payment of obligations of Borrower
or a Subsidiary to third parties; (iv) Total Revolving Credit Outstandings shall
not as of any date exceed Lender’s Revolving Credit Commitment; (v) the sum of
the aggregate undrawn face amount of all outstanding Letters of Credit plus all unreimbursed
drawings with respect thereto shall not as of any date exceed Ten Million
Dollars ($10,000,000.00); and (vi) the text of any such Letter of Credit is
provided to Lender no less than three (3) Business Days prior to
the requested issuance date, which text must be acceptable to Lender in its sole
and absolute discretion.

     

    (b)   The
payment of drafts under each Letter of Credit shall be made in accordance with
the terms thereof and, in that connection, Lender shall be entitled to honor any
drafts and accept any documents presented to it by the beneficiary of such
Letter of Credit in accordance with the terms of such Letter of Credit and the
related Letter of Credit Application and believed in good faith by Lender to be
genuine.  Lender shall not have any duty to inquire as to the accuracy
or authenticity of any draft or other drawing document that may be presented to
it other than the duties contemplated by the applicable Letter of Credit
Application.

     

    
      
         

      

      
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    (c)   In
the event of any payment by Lender of a draft presented under a Letter of
Credit, Borrower agrees to pay to Lender in immediately available funds at the
time of such drawing an amount equal to the sum of such drawing plus the negotiation,
processing and other fees related thereto, as may be agreed between Lender and
Borrower from time to time.  Borrower hereby authorizes Lender to
charge or cause to be charged one or more of Borrower’s deposit accounts at
Lender to the extent there are balances of immediately available funds therein,
in an aggregate amount equal to the sum of such drawing plus the negotiation,
processing and other fees related thereto as may be agreed between Lender and
Borrower from time to time, and Borrower agrees to pay the amount of any such
drawing (and/or Lender’s customary negotiation, processing and other fees
related thereto) not so charged prior to the close of business of Lender on the
day of such drawing.  In the event any payment under a Letter of
Credit is made by Lender prior to receipt of payment from Borrower, such payment
by Lender shall constitute a request by Borrower for a Base Rate Loan under
Sections 2.01 and 2.02 above (and Lender will make such Base Rate Loan to
Borrower regardless of whether any Default or Event of Default under this
Agreement has occurred and is continuing and regardless of whether such Base
Rate Loan would otherwise be permitted under the requirements of this Agreement)
and the proceeds of such Base Rate Loan shall be paid directly to Lender and
applied by Lender to the payment of any amounts owed by Borrower to Lender under
this Section 2.18.

     

    (d)   Borrower
hereby further agrees to pay to the order of Lender with respect to each Letter
of Credit: (i) a nonrefundable commitment fee at an annual rate equal to the
Applicable LIBOR Margin (calculated on an actual day, 360-day year basis) on the
face amount (taking into account any scheduled increases or decreases therein
during the period in question) of each Letter of Credit, due and payable
quarterly, in arrears, on the last day of each calendar quarter; and (ii) a
nonrefundable issuance fee, a nonrefundable negotiation fee and such other fees
as may be charged by Lender from time to time in accordance with Lender’s
published schedule of fees in effect from time to time, which fees shall be due
and payable on demand by Lender.

     

    (e)   Notwithstanding
any provision contained in this Agreement to the contrary, if any Letters of
Credit remain outstanding five Business Days prior to the last day of the
Revolving Credit Period, or, at Lender’s option, upon and during the continuance
of an Event of Default, Borrower shall, on or before 12:00 noon (St. Louis
time) on the last day of the Revolving Credit Period or, following an Event of
Default, upon Lender’s demand, (i) surrender the originals of the applicable
Letter(s) of Credit to Lender for cancellation, or (ii) provide Lender with cash
collateral (or other collateral acceptable to Lender in its sole and absolute
discretion) in an amount at least equal to 105% of the aggregate undrawn face
amount of all outstanding Letter(s) of Credit plus all unreimbursed
drawings with respect thereto, and execute and deliver to Lender such agreements
as Lender may require to grant Lender a first priority perfected security
interest in such cash or other collateral.  Any such cash collateral
received by Lender pursuant to this Section 2.18(e) shall be held by Lender
in a separate account at Lender appropriately designated as a cash collateral
account in relation to this Agreement and the Letters of Credit and retained by
Lender as collateral security for the payment of Borrower’s
Obligations.  Cash amounts delivered to Lender pursuant to the
foregoing requirements of this Section 2.18(e) shall be invested, at the
request and for the account of Borrower in investments of a type and nature and
with a term acceptable to Lender.  Such amounts, including in the case
of cash amounts invested in the manner set forth above, may be applied to
reimburse Lender for drawings or payments under or pursuant to such Letters of
Credit which Lender has paid, or if no such reimbursement is required to the
payment of such of the other Borrower’s Obligations as Lender shall
determine.  Any amounts remaining in any cash collateral account
established pursuant to this Section 2.18(e) after the payment in full of
all of the Borrower’s Obligations and the expiration or cancellation of all of
the Letters of Credit shall be returned to Borrower (after deduction of Lender’s
reasonable expenses, if any).

     

    
      
         

      

      
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    (f)   The
issuance of any Letter of Credit and any amendment to a Letter of Credit is
subject to Lender’s written approval and must be in form and content
satisfactory to Lender and must not be in favor of a beneficiary unacceptable to
Lender because of any legal, governmental, regulatory or compliance requirement
or restriction.

     

              
2.19    Taxes.

     

    (a)   Any
and all payments by Borrower to or for the account of Lender under any
Transaction Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
assessments, charges or withholdings, and all liabilities with respect thereto,
excluding, in
the case of Lender, taxes imposed on or measured by its net income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which
Lender is organized or any political subdivision thereof (all such non-excluded
taxes, duties, levies, imposts, deductions, assessments, charges, withholdings
and liabilities being hereinafter referred to as “Taxes”).  If
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable under any Transaction Document to Lender, (i) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 2.19(a)) Lender receives an amount equal to the sum it would have
received had no such deduction of Taxes been made, (ii) Borrower shall make such
deductions, (iii) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law and (iv)
Borrower shall furnish to Lender the original or a certified copy of a receipt
evidencing payment thereof.

     

    (b)   In
addition, Borrower agrees to pay any present or future stamp or documentary
taxes and any other excise or property taxes, or charges or similar levies which
arise from any payment made under any of the Transaction Documents or from the
execution or delivery of, or otherwise with respect to, any of the Transaction
Documents (hereinafter referred to as “Other
Taxes”).

     

    (c)   Borrower
agrees to indemnify Lender for the full amount of Taxes or Other Taxes,
respectively (including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 2.19),
paid by Lender and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto.  This indemnification shall
be made within fifteen (15) days from the date Lender makes demand therefor,
accompanied by a certificate of Lender setting forth in reasonable detail its
computation of the amount or amounts to be paid to it hereunder.

     

    (d)   The
provisions of this Section 2.19 shall survive any expiration or termination
of this Agreement and the payment of the Note and the other Borrower’s
Obligations.

     

    SECTION
3.      PRECONDITIONS TO LOANS AND
LETTERS OF CREDIT.

     

              
3.01    Initial
Loan.  Notwithstanding any provision contained in this
Agreement to the contrary, Lender shall have no obligation to make the initial
Loan or issue the initial Letter of Credit under this Agreement unless Lender
shall have first received:

     

    (a)   this
Agreement and the Note, each duly executed by Borrower;

     

    (b)   the
Guaranty, duly executed by Laclede Energy;

     

    
      
         

      

      
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    (c)   a
copy of resolutions (including an incumbency certificate) of the Board of
Directors of Borrower, duly adopted, which authorize the execution, delivery and
performance of this Agreement, the Note and the other Transaction Documents,
certified by the Secretary of Borrower;

     

    (d)   a
copy of resolutions of the Board of Directors (including an incumbency
certificate) of Laclede Energy, duly adopted, which authorize the execution,
delivery and performance of its Guaranty, certified by the Secretary of Laclede
Energy;

     

    (e)   copies
of the Articles of Incorporation of Borrower and Laclede Energy including any
amendments thereto, certified by the Secretary of State of the states of their
respective incorporations;

     

    (f)   copies
of the Bylaws of Borrower and Laclede Energy including any amendments thereto,
certified by the Secretaries of Borrower and Laclede Energy;

     

    (g)   certificates
of corporate good standing of Borrower and Laclede Energy issued by the
Secretary of State of the states of their respective
incorporations;

     

    (h)   an
opinion of the counsel of Borrower and Laclede Energy, in form and substance
satisfactory to Lender and Lender’s counsel;

     

    (i)   UCC
search results from the Missouri Secretary of State for Borrower and Laclede
Energy;

     

    (j)   copies
of all financial statements and other exhibits and schedules required by this
Agreement and the other Transaction Documents;

     

    (k)   a
letter of direction from Borrower with respect to the disbursement of the
proceeds of the initial Loan under this Agreement;

     

    (l)     
payment
of all fees and other amounts due and owing to Lender, including without
limitation payment of all accrued and unpaid expenses incurred by Lender as
required under Section 7.03;

     

    (m)   the
other documents, deliveries, payments described on the Closing Checklist
attached hereto and incorporated herein as Exhibit B;
and

     

    (n)   such
other agreements, documents, instruments and certificates as Lender may
reasonably request.

     

              
3.02  
All Loans and Letters of
Credit.  Notwithstanding any provision contained in this
Agreement to the contrary, Lender shall have no obligation to make any Loan or
issue any Letter of Credit under this Agreement unless:

     

    (a)   Lender
shall have received a Notice of Borrowing for such Loan as required by
Section 2.02(a), or a Letter of Credit Application as required under
Section 2.18(a);

     

    (b)   both
immediately before and immediately after giving effect to such Loan or Letter of
Credit, no Default or Event of Default shall have occurred and be continuing;
and

     

    
      
         

      

      
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    (c)   all
of the representations and warranties made by Borrower in this Agreement and/or
in any other Transaction Document shall be true and correct in all material
respects on and as of the date of such Loan as if made or such Letter of Credit
is issued on and as of the date of such Loan or Letter of Credit (and for
purposes of this Section 3.02(c), the representations and warranties made
by Borrower in Section 4.04 shall be deemed to refer to the most recent
financial statements of Borrower delivered to Lender pursuant to
Section 5.01(a)).

     

    Each
request for a Loan or Letter of Credit by Borrower under this Agreement shall be
deemed to be a representation and warranty by Borrower on the date of such Loan
or Letter of Credit as to the facts specified in clauses (b), and (c) of this
Section 3.02.

     

              
3.03  
Compliance with
Laws.  Lender shall have no obligation to make any advance to
Borrower except in compliance with all applicable laws and regulations and
Borrower shall fully cooperate with Lender in complying with all such applicable
laws and regulations.

     

    SECTION
4.    REPRESENTATIONS AND
WARRANTIES.

     

    When
Borrower signs this Agreement, and until Lender is repaid in full, Borrower
makes the following representations and warranties, which shall be true and
correct at all times while this Agreement remains in effect or any of the
Borrower’s Obligations are outstanding:

     

              
4.01  
Corporate Existence and
Power.  Each Loan Party: (a) is duly incorporated, validly
existing and in good standing under the laws of the state of its organization;
(b) has all requisite corporate powers required to carry on its business as now
conducted; (c) has all requisite governmental and regulatory licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except such licenses, authorizations, consents and approvals the
failure to have could not reasonably be expected to have a Material Adverse
Effect; and (d) is qualified to transact business as a foreign corporation in,
and is in good standing under the laws of, all states in which it is required by
applicable law to maintain such qualification and good standing except for those
states in which the failure to qualify or maintain good standing could not
reasonably be expected to have a Material Adverse Effect.

     

              
4.02  
Corporate
Authorization.  The execution, delivery and performance by each
Loan Party of this Agreement and the Note, and the other Transaction Documents
to which it is a party are within the corporate powers of such Loan Party and
have been duly authorized by all necessary corporate and other action on the
part of such Loan Party.

     

              
4.03  
Binding
Effect.  This Agreement, the Note and the other Transaction
Documents to which a Loan Party is a party have been duly executed and delivered
by such Loan Party, respectively, and constitute the legal, valid and binding
obligations of such Loan Party enforceable against such Loan Party in accordance
with their respective terms, except as such enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting creditors’ rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

     

    
      
         

      

      
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    4.04   Financial
Statements.  Borrower has furnished Lender with the
consolidated balance sheets and statements of income, retained earnings and cash
flows of Borrower and its Subsidiaries as of and for the fiscal year of Borrower
ended September 30, 2008, all certified by Borrower’s independent certified
public accountants, which financial statements have been prepared in accordance
with GAAP consistently applied for all periods ending September 30,
2008.  Borrower further represents and warrants to Lender that (a)
said balance sheets and their accompanying notes (if any) fairly present the
condition of Borrower and its Subsidiaries as of the dates thereof, (b) there
has been no change in the condition or operation, financial or otherwise, of
Borrower and its Subsidiaries taken as a whole since September 30, 2008,
except as disclosed in Borrower’s filings with the Securities and Exchange
Commission since such date, that could reasonably be expected to have a Material
Adverse Effect, and (c) neither Borrower nor any of its Subsidiaries had any
direct or Contingent Liabilities which were not disclosed on said financial
statements or the notes thereto (to the extent such disclosure is required by
GAAP).

     

                4.05   Compliance With Other
Instruments; None Burdensome.  None of the execution and
delivery by any Loan Party of the Transaction Documents to which it is a party,
the performance by a Loan Party of its obligations under the Transaction
Documents to which it is a party, or the borrowing and/or repayment of the Loan
by Borrower under this Agreement will conflict with, or result in a breach of
the terms, conditions or provisions of, or constitute a default under or result
in any violation of, any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on any Loan Party, any of the provisions of
the Charter Documents of any Loan Party or any of the provisions of any
indenture, agreement, document, instrument or undertaking to which any Loan
Party is a party or subject, or by which any Loan Party or any property or
assets of any Loan Party is bound, or result in the creation or imposition of
any security interest, lien or encumbrance on any of the property or assets of
any Loan Party pursuant to the terms of any such indenture, agreement, document,
instrument or undertaking.  No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental, regulatory, administrative or public body,
instrumentality, authority, agency or official, or any subdivision thereof, or
any other Person is required to authorize, or is required in connection with,
(a) the execution, delivery or performance by any Loan Party of, or the
legality, validity, binding effect or enforceability of, any of the Transaction
Documents to which such Loan Party is a party, or (b) the borrowing and/or
repayment of the Loan by Borrower under this Agreement.

     

                4.06   Regulation
U.  Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U of The
Board of Governors of the Federal Reserve System, as amended) and no part of the
proceeds of the Loan will be used, whether directly or indirectly, and whether
immediately, incidentally or ultimately (a) to purchase or carry margin stock or
to extend credit to others for the purpose of purchasing or carrying margin
stock, or to refund or repay indebtedness originally incurred for such purpose
or (b) for any purpose that entails a violation of, or which is inconsistent
with, the provisions of any of the Regulations of The Board of Governors of the
Federal Reserve System, including, without limitation, Regulations U, T or X
thereof, as amended.  If requested by Lender, Borrower shall furnish
to Lender a statement in conformity with the requirements of Federal Reserve
Form U-1 referred to in Regulation U.

     

               
4.07  
Investment Company Act of
1940; Public Utility Holding Company Act of 2005.  Borrower is
not an “investment company” as that term is defined in, and is not otherwise
subject to regulation under, the Investment Company Act of 1940, as
amended.  Borrower is a holding company for which compliance with the
accounting, record retention and reporting sections of the Public Utility
Holding Company Act of 2005 has been waived.

     

    
      
         

      

      
        18

         

      

      
         

      

    

     

    4.08   No
Default.  No Default or Event of Default under this Agreement
has occurred and is continuing.  There is no existing default or event
of default under or with respect to any indenture, contract, agreement, lease or
other instrument to which Borrower is a party or by which any property or assets
of any Loan Party is bound or affected, a default under which could reasonably
be expected to have a Material Adverse Effect.  Each Loan Party has
been and is in full compliance with and in good standing with respect to all
governmental permits, licenses, certificates, consents and franchises necessary
to continue to conduct its business as previously conducted by it and to own or
lease and operate its properties and assets as now owned or leased by it, the
failure to have or noncompliance with which could reasonably be expected to have
a Material Adverse Effect.  No Loan Party is in violation of any
applicable statute, law, rule, regulation or ordinance of the United States of
America, of any state, city, town, municipality, county or of any other
jurisdiction, or of any agency thereof, a violation of which could reasonably be
expected to have a Material Adverse Effect.

     

              
4.09  
Lawsuits.  As
of the date of this Agreement, except as disclosed on Schedule 4.09 hereto,
there is no lawsuit, claim or other dispute pending or threatened against any
Loan Party which, if lost, could reasonably be expected to have a Material
Adverse Effect.

     

              
4.10  
Tax
Matters.  Borrower and any consolidated group to which Borrower
is a party has timely filed all tax returns and reports required by law to have
been filed by it and has paid all Taxes due and payable with respect to such
returns, except any such Taxes which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books, are insured against or bonded
over to the satisfaction of Lender.  There is no controversy or
objection pending, or to the knowledge of Borrower, threatened in respect of any
tax returns of Borrower.  Borrower has made adequate reserves on its
books and records in accordance with GAAP for all Taxes that have accrued but
which are not yet due and payable.

     

              
4.11  
Insurance.  The
Borrower maintains with financially sound and reputable insurance companies
insurance on all of its property in such amounts, subject to such deductibles
and self-insurance retentions, and covering such risks as are consistent with
sound business practice.

     

    SECTION
5.     COVENANTS.

     

              
5.01  
Covenants of
Borrower.  Borrower covenants and agrees that, so long as any
of the Borrower’s Obligations remain unpaid:

     

    (a)   Information.  Borrower
will make available, deliver, or cause to be delivered to Lender the following
financial information and statements, in form and content acceptable to Lender,
and such additional information as reasonably requested by Lender from time to
time.

     

                                      
(i)    within
one hundred twenty (120) days after the end of each fiscal year of Borrower the
consolidated balance sheet of Borrower and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of income, retained
earnings and cash flows for such fiscal year, setting forth in each case, in
comparative form, the figures for the previous fiscal year, all such financial
statements to be prepared in accordance with GAAP consistently applied and
reported on by and accompanied by the unqualified opinion of independent
certified public accountants selected by Borrower and reasonably acceptable to
Lender; provided, however, that delivery to Lender of the Annual Report on Form
10-K of Borrower for such fiscal year filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this
Section 5.01(a)(i);

     

    
      
         

      

      
        19

         

      

      
         

      

    

     

     

                                        
(ii)    within
one hundred twenty (120) days after the end of each fiscal year of Guarantors
the consolidated balance sheets of Guarantors and their Subsidiaries as of the
end of such fiscal year and the related consolidated statements of income,
retained earnings and cash flows for such fiscal year, setting forth in each
case, in comparative form, the figures for the previous fiscal year, all such
financial statements to be prepared internally by Guarantors in accordance with
GAAP consistently applied;

     

                                        
(iii)    within
fifty (50) days after the end of the first three (3) fiscal quarters of each
fiscal year of Borrower, a consolidated balance sheet of Borrower and its
Subsidiaries as of the end of such fiscal quarter and the related consolidated
statements of income, retained earnings and cash flows for such fiscal quarter
and for the portion of Borrower’s fiscal year ended at the end of such fiscal
quarter, setting forth in each case in comparative form, the figures for the
corresponding fiscal quarter and the corresponding portion of Borrower’s
previous fiscal year, all in reasonable detail and satisfactory in form to
Lender and certified (subject to normal year-end adjustments and absence of
footnote disclosures) as to fairness of presentation, consistency and compliance
with GAAP by the chief financial officer of Borrower; provided, however, that
delivery to Lender of copies of the Quarterly Report on Form 10-Q of Borrower
for such fiscal quarter filed with the Securities and Exchange Commission shall
be deemed to satisfy the requirements of this
Section 5.01(a)(iii);

     

                                        
(iv)    within
the time frames outlined in Sections 5.01(a)(i) and 5.01(a)(iii), a
certificate of an authorized officer of Borrower in the form attached hereto as
Exhibit C and
incorporated herein by reference (A) stating whether there exists on the date of
such certificate any Default or Event of Default and, if any Default or Event of
Default then exists, setting forth the details thereof and the action which
Borrower is taking or proposes to take with respect thereto, (B) certifying that
all of the representations and warranties made by Borrower in this Agreement
and/or in any other Transaction Document are true and correct in all material
respects on and as of the date of such certificate as if made on and as of the
date of such certificate, and (C) setting forth the Consolidated Capitalization
Ratio for the relevant reporting period;

     

                                        
(v)    with
reasonable promptness, such further information regarding the business, affairs
and financial condition of Borrower as Lender may from time to time reasonably
request; and

     

                                        
(vi)    upon
the request of Lender, to deliver to Lender a copy of each insurance policy of
Borrower, or, if permitted by Lender, a certificate of insurance listing all
insurance in force with respect to Borrower.

     

    (b)   Corporate
Existence.  Borrower will do all things necessary to (i)
preserve and keep in full force and effect at all times its corporate existence
and all permits, licenses, franchises and other rights material to its business
and (ii) be duly qualified to do business and be in good standing in all
jurisdictions where the nature of its business or its ownership of property or
assets requires such qualification except for those jurisdictions in which the
failure to qualify or be in good standing could not reasonably be expected to
have a Material Adverse Effect.

     

    (c)   Compliance with Laws,
Regulations, Etc.  Borrower will comply with any and all laws,
ordinances and governmental and regulatory rules and regulations to which
Borrower is subject and obtain any and all licenses, permits, franchises and
other governmental and regulatory authorizations necessary to the ownership of
its properties or assets or to the conduct of its business, which violation or
failure to obtain could reasonably be expected to have a Material Adverse
Effect.

     

    
      
         

      

      
        20

      

      
         

      

    

    (d)   Further
Assurances.  Borrower will execute and deliver to Lender, at
any time and from time to time, any and all further agreements, documents and
instruments, and take any and all further actions which may be required under
applicable law, or which Lender may from time to time reasonably request, in
order to effectuate the transactions contemplated by this Agreement and the
other Transaction Documents.

     

    (e)   Consolidation or
Merger.  Borrower will not directly or indirectly merge or
consolidate with or into any other Person.

     

    (f)   Stock and Assets of Borrower
and Subsidiaries.  Unless the prior written consent of Lender
is obtained which such consent shall not be unreasonably withheld (in Lender’s
commercially reasonable judgment) or unreasonably delayed, Borrower will not
create, incur or assume or suffer to be incurred or to exist any security
interest, lien or encumbrance on any assets of Borrower (other than Permitted
Liens on the assets of Borrower), the common stock of LGC, Laclede Energy, or
any other Subsidiary, or on the inventory or accounts receivable of
LGC.  “Permitted Liens”
shall mean:

     

                                      
(i)   Liens
and security interests in favor of Lender.

     

                                        
(ii)   Liens
for taxes not yet due.

     

                                        
(iii)   Liens
outstanding on the date of this Agreement as disclosed in Schedule 5.01(f)(iii)
attached hereto.

     

                                        
(iv)   Additional
purchase money security interests in assets acquired after the date of this
Agreement, if the total principal amount of debts secured by such liens does not
exceed Five Million Dollars ($5,000,000.00) at any one time.

     

    (g)   Sale of
Property.  Borrower will not, and will not cause or permit any
Subsidiary to, (i) sell, assign, lease, transfer, abandon or otherwise dispose
of any of its property (including, without limitation, any shares of capital
stock or other equity interests of a Subsidiary owned by Borrower or another
Subsidiary) or (ii) issue, sell or otherwise dispose of any shares of capital
stock or other equity interests of any Subsidiary; provided, however, that
Borrower and each Subsidiary may sell, assign, lease, transfer, abandon or
otherwise dispose of (A) any of its natural gas inventory or past-due accounts
receivable in the ordinary course of business, (B) any of its property to
Borrower or any Subsidiary, provided that, if at any time more than Ten Percent
(10%) of the consolidated assets of Borrower and all of its Subsidiaries are
transferred to a Subsidiary, such Subsidiary shall then execute a guaranty
agreement with respect to Borrower’s Obligations in a form reasonably acceptable
to Lender, (C) any of its property subject to LGC’s Mortgage and Deed of Trust
dated as of February 1, 1945, as heretofore amended and supplemented, as
may be permitted to be sold, assigned, leased, transferred, abandoned or
otherwise disposed of under said Mortgage and Deed of Trust, (D) any of its
other property (whether in one transaction or a series of transactions) so long
as the value of such property sold, assigned, leased, transferred, abandoned or
otherwise disposed of in any fiscal year under this subsection (D) shall not
exceed Ten Percent (10%) of the consolidated assets of Borrower and all of its
Subsidiaries as determined on a consolidated basis as of the last day of the
immediately preceding fiscal year, and (E) any shares of capital stock sold to
Borrower by a Subsidiary; and provided further, however, that nothing in this
Agreement shall limit or restrict Borrower’s or any Subsidiary’s use of
financial instruments or natural gas contracts under their gas supply risk
management programs.

     

    
      
         

      

      
        21

         

      

      
         

      

    

    (h)   Changes in Nature of
Business.  Borrower will not, and it will not cause or permit
any Subsidiary to, engage in any business if, as a result, the general nature of
the business that would then be engaged in by Borrower and its Subsidiaries,
considered as a whole, would be substantially changed from the general nature of
the business engaged in by Borrower and its Subsidiaries as of the date of this
Agreement.

     

    (i)   Permitted Investments;
Acquisitions.  Borrower will not, and it will not cause or
permit any Subsidiary to, directly or indirectly, make any Investments except
for Permitted Investments.  Borrower will not, and it will not cause
or permit any Subsidiary to, directly or indirectly, make any Acquisition the
result of which would be to change substantially the general nature of the
business engaged in by Borrower and its Subsidiaries.

     

    (j)   Maximum Consolidated
Capitalization Ratio.  Borrower will at all times maintain a
Consolidated Capitalization Ratio of not more than Seventy Percent
(70%).

     

    (k)   Subsidiaries.  If
Borrower creates, forms or acquires any Subsidiary which owns more than Ten
Percent (10%) of the consolidated assets of Borrower and all of its Subsidiaries
on or after the date of this Agreement, Borrower will, contemporaneously with
the creation, formation or acquisition of such Subsidiary, cause such Subsidiary
to execute a guaranty agreement with respect to Borrower’s Obligations in a form
reasonably acceptable to Lender.

     

    (l)   Insurance.  The
Borrower will maintain with financially sound and reputable insurance companies
insurance on all its property in such amounts, subject to such deductibles and
self-insurance retentions, and covering such risks as is consistent with sound
business practice.

     

    (m)   Notices to
Lender.  Borrower will promptly notify Lender in writing
of:

     

                                        
(i)    any
lawsuit against any Loan Party that has or which could reasonably be expected to
have a Material Adverse Effect;

     

                                       
(ii)    any
substantial dispute between any governmental authority and any Loan Party the
outcome which could reasonably be expected to have a Material Adverse
Effect;

     

                                       
(iii)    any
Event of Default under this Agreement, or any event which, with notice or lapse
of time or both, would constitute an Event of Default;

     

                                        (iv)    any
change in any Loan Party’s business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the Loans which could
reasonably be expected to have a Material Adverse Effect;

     

                                        
(v)    any
change in any Loan Party’s name, legal entity type, state of formation, or chief
executive office location.

     

    (n)   Books and
Records.  The Borrower shall keep and maintain in all material
respects proper books of record and account in which entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its business
and activities.

     

    
      
         

      

      
        22

         

      

      
         

      

    

    (o)   Inspections.  Borrower
will allow Lender and its agents to inspect Borrower’s properties and make
copies of books and records at any reasonable time upon reasonable prior notice
from Lender to Borrower.  If any of Borrower’s properties, books or
records are in the possession of a third party, Borrower authorizes that third
party to permit Lender or its agents to have access to perform inspections and
to respond to Lender’s requests for information concerning such properties,
books and records.

     

    (p)   Contingent
Liabilities.  Borrower and the Loan Parties shall not at any
time have Contingent Liabilities which, in the aggregate, are in excess of
Fifteen Percent (15%) of Consolidated Net Worth.

     

              
5.02  
Use of
Proceeds.  Borrower covenants and agrees that (a) the proceeds
of the Loan will be used solely for general corporate and working capital
purposes, (b) no part of the proceeds of the Loan will be used in violation of
any applicable law, rule or regulation and (c) no part of the proceeds of the
Loan will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately (i) to purchase or carry margin stock or to extend
credit to others for the purpose of purchasing or carrying margin stock, or to
refund or repay indebtedness originally incurred for such purpose or (ii) for
any purpose which entails a violation of, or which is inconsistent with, the
provisions of any of the Regulations of The Board of Governors of the Federal
Reserve System, including, without limitation, Regulations U, T or X thereof, as
amended.

     

    SECTION
6.    EVENTS OF
DEFAULT.

     

    If
any of the following (each of the following herein sometimes called an “Event of Default”)
shall occur and be continuing:

     

              
6.01  
Borrower
shall fail to pay any of Borrower’s Obligations constituting interest, fees or
other amounts (other than principal due under the Loan) within ten (10) Business
Days after the date the same shall first become due and payable, whether by
reason of demand, maturity, acceleration or otherwise;

     

              
6.02  
Any
representation or warranty made by Borrower in this Agreement, or by any Loan
Party in any other Transaction Document or in any certificate, agreement,
instrument or written statement furnished or made or delivered pursuant hereto
or thereto or in connection herewith or therewith, shall prove to have been
untrue or incorrect in any material respect when made or effected;

     

              
6.03  
Borrower
shall fail to perform or observe any term, covenant or provision contained in
Section 5.01(e), Section 5.01(j) or Section 5.02;

     

              
6.04  
Borrower
shall fail to perform or observe any other term, covenant or provision contained
in this Agreement (other than those specified in Sections 6.01, 6.02 or
6.03 above) and any such failure shall remain unremedied for thirty (30) days
after the earlier of (i) written notice of default is given to Borrower by
Lender or (ii) any officer of Borrower obtaining actual knowledge of such
default;

     

              
6.05  
This
Agreement or any of the other Transaction Documents shall at any time for any
reason (other than termination of this Agreement or such other Transaction
Documents, as the case may be, in accordance with its terms) cease to be in full
force and effect or shall be declared to be null and void by a court of
competent jurisdiction, or if the validity or enforceability thereof shall be
contested or denied by any Loan Party that is a party thereto, or if the
transactions completed hereunder or thereunder shall be contested by any such
Loan Party or if a Loan Party shall deny that it has any further liability or
obligation hereunder or thereunder;

     

    
      
         

      

      
        23

         

      

      
         

      

    

     

    6.06  A
Loan Party or LGC shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code or any other
Federal, state or foreign bankruptcy, insolvency, receivership, liquidation or
similar law, (ii) consent to the institution of, or fail to contravene in a
timely and appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator or similar official of itself or of a substantial part
of its property or assets, (iv) file an answer admitting the material
allegations of a petition filed against itself in any such proceeding, (v) make
a general assignment for the benefit of creditors, (vi) become unable, admit in
writing its inability or fail generally to pay its debts as they become due or
(vii) take any corporate or other action for the purpose of effecting any of the
foregoing;

     

    6.07  An
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect of a
Loan Party or LGC, or of a substantial part of the property or assets of a Loan
Party or LGC, under Title 11 of the United States Code or any other Federal,
state or foreign bankruptcy, insolvency, receivership, liquidation or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator or
similar official of Borrower or of a substantial part of the property or assets
of a Loan Party or LGC or (iii) the winding-up or liquidation of a Loan Party or
LGC, and such proceeding or petition shall continue undismissed for sixty (60)
consecutive days or an order or decree approving or ordering any of the
foregoing shall continue unstayed and in effect for sixty (60) consecutive
days;

     

    6.08  Any
Loan Party or LGC shall be declared by Lender to be in default under or in
respect of (i) any other present or future obligation to Lender, including,
without limitation, any other loan, line of credit, revolving credit, guaranty
or letter of credit reimbursement obligation, or (ii) any other present or
future agreement purporting to convey to Lender a security interest in, or lien
or encumbrance upon, any property or assets of any Loan Party or
LGC;

     

    6.09  Any
default occurs under any other agreement any Loan Party or LGC has with Lender
or any affiliate of Lender, after giving effect to any applicable grace or cure
periods; the occurrence of any default or event of default under or within the
meaning of any agreement, document or instrument evidencing, securing,
guaranteeing the payment of or otherwise relating to any indebtedness of any
Loan Party or LGC for borrowed money (other than Borrower’s Obligations) having
an aggregate outstanding principal balance in excess of $10,000,000.00 that is
not cured or waived in writing within any applicable cure or grace period;
or

     

    6.10  Any
Loan Party shall have a judgment in an amount in excess of $15,000,000.00
entered against it by a court having jurisdiction in the premises and such
judgment shall not be appealed in good faith (and execution of such judgment
stayed during such appeal) or satisfied by such Loan Party within thirty (30)
days after the entry of such judgment;

     

    
      
         

      

      
        24

         

      

      
         

      

    

    THEN,
and in each such event (other than an event described in Sections 6.06 or
6.07), Lender may declare the entire outstanding principal balance of and all
accrued and unpaid interest on the Note and all of the other Borrower’s
Obligations to be forthwith due and payable, whereupon all of the unpaid
principal balance of and all accrued and unpaid interest on the Note and all of
such other Borrower’s Obligations shall become and be immediately due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by Borrower, and Lender may exercise any
and all other rights and remedies which it may have under any of the other
Transaction Documents or under applicable law; provided, however, that upon the
occurrence of any event described in Sections 6.06 or 6.07, the entire
outstanding principal balance of and all accrued and unpaid interest on the Note
and all of the other Borrower’s Obligations shall automatically become
immediately due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by Borrower, and
Lender may exercise any and all other rights and remedies which it may have
under any of the other Transaction Documents or under applicable
law.

     

    SECTION
7.    GENERAL.

     

              
7.01  
No
Waiver.  No failure or delay by Lender in exercising any right,
remedy, power or privilege under this Agreement or under any other Transaction
Document shall operate as a waiver thereof; nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege.  The rights and
remedies provided in this Agreement and in the other Transaction Documents are
cumulative and not exclusive of any remedies provided by law.  Nothing
herein contained shall in any way affect the right of Lender to exercise any
statutory or common law right of banker’s lien or set-off.

     

              
7.02  
Right of
Set-Off.  Upon the occurrence and during the continuance of any
Event of Default, Lender is hereby authorized at any time and from time to time,
without notice to Borrower (any such notice being expressly waived by Borrower)
and to the fullest extent permitted by law, to set-off and apply any and all
deposits (general or special, time or demand, provisional or final, but
specifically excluding any trust or segregated accounts) at any time held by
Lender and any and all other indebtedness at any time owing by Lender to or for
the credit or account of Borrower against any and all of Borrower’s Obligations
irrespective of whether or not Lender shall have made any demand under this
Agreement or under any of the other Transaction Documents and although such
obligations may be contingent or unmatured.  Lender agrees to promptly
notify Borrower after any such set-off and application made by Lender, provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application or result in any liability to
Lender.  The rights of Lender under this Section 7.02 are in addition to any other rights and remedies
(including, without limitation, other rights of set-off) which Lender may
have.  Nothing contained in this Agreement or any other Transaction
Document shall impair the right of Lender to exercise any right of set-off or
counterclaim it may have against Borrower and to apply the amount subject to
such exercise to the payment of indebtedness of Borrower unrelated to this
Agreement or the other Transaction Documents.

     

              
7.03  
Cost and
Expenses.  Borrower agrees, whether or not any Loan is made
under this Agreement, to pay or reimburse Lender upon demand for (a) all
out-of-pocket costs and expenses incurred by Lender in connection with the
preparation, documentation, negotiation and/or execution of this Agreement
and/or any of the other Transaction Documents (subject to any limits on such
reimbursement that have been mutually agreed to in writing), (b) all recording,
filing and search fees and expenses incurred by Lender in connection with this
Agreement and/or any of the other Transaction Documents, (c) all out-of-pocket
costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses) incurred by Lender in connection with the (i) the preparation,
documentation, negotiation and execution of any amendment, modification,
extension, renewal or restatement of this Agreement and/or any of the other
Transaction Documents (subject to any limits on such
reimbursement

    
      
         

      

      
        25

         

      

       

    

    that
have been mutually agreed to in writing) or (ii) the preparation of any waiver
or consent under this Agreement or under any of the other Transaction Documents
and (d) if an Event of Default occurs, all out-of-pocket costs and expenses
(including, without limitation, reasonable attorneys’ fees and expenses)
incurred by Lender in connection with such Event of Default and collection and
other enforcement proceedings resulting therefrom.  Borrower further
agrees to pay or reimburse Lender upon demand for any stamp or other similar
taxes which may be payable with respect to the execution, delivery, recording
and/or filing of this Agreement and/or any of the other Transaction
Documents.  All of the obligations of Borrower under this
Section 7.03 shall survive the satisfaction and payment of Borrower’s
Obligations and the termination of this Agreement.

     

              
7.04  
General
Indemnity.  In addition to the payment of expenses pursuant to
Section 7.03, whether or not the transactions contemplated hereby shall be
consummated, Borrower hereby agrees to defend, indemnify, pay and hold Lender
any holders of the Note, and the officers, directors, employees, agents and
affiliates of Lender and such holders (collectively, the “Indemnitees”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, disbursements, costs and
expenses of any kind or nature whatsoever (including, without limitation, the
reasonable fees and disbursements of counsel for such Indemnitees in connection
with any investigative, administrative or judicial proceeding commenced or
threatened, whether or not such Indemnitees shall be designated a party thereto,
provided that the Indemnitees shall share counsel to defend their interests to
the extent legally practicable), that may be imposed on, incurred by or asserted
against the Indemnitees, in any manner relating to or arising out of this
Agreement, any of the other Transaction Documents or any other agreement,
document or instrument executed and delivered by Borrower in connection herewith
or therewith, the statements contained in any commitment letters delivered by
Lender, the agreement of Lender to make the Loans under this Agreement or the
use or intended use of the proceeds of any Loan under this Agreement
(collectively, the “Indemnified
Liabilities”); provided that (a) the
Indemnitees shall promptly (and in any event within fifteen (15) Business Days
after receiving notice of the existence of any potential Indemnified
Liabilities) notify Borrower in writing of the existence of any potential
Indemnified Liabilities; (b) Borrower shall have the right to assume and
thereafter conduct the defense of any Indemnified Liabilities with counsel of
its choice reasonably satisfactory to the Indemnitees, provided that Borrower
will not consent to the entry of any judgment or enter into any settlement with
respect to any Indemnified Liabilities without the prior written consent of the
Indemnitees (not to be unreasonably withheld) unless the judgment or proposed
settlement fully releases such Indemnitees and involves only the payment of
money damages that are covered in full by this indemnity and does not impose an
injunction or other equitable relief upon any Indemnitee and is subject to
confidentiality provisions acceptable to the Indemnitees (which approval will
not be unreasonably withheld by the Indemnitees); and (c) Borrower shall have no
obligation to an Indemnitee hereunder with respect to Indemnified Liabilities
directly resulting from the gross negligence or willful misconduct of that
Indemnitee as determined by a court of competent jurisdiction in a final,
nonappealable order.  To the extent that the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence may be unenforceable
because it is violative of any law or public policy, Borrower shall contribute
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.  All sums due to Lender under this
Section 7.04 shall be obligations of Borrower, due and payable promptly
following demand, provided, however, during the continuance of an Event of
Default no such demand shall be required.  The provisions of the
undertakings and indemnification set out in this Section 7.04 shall survive
satisfaction and payment of Borrower’s Obligations and the termination of this
Agreement.

     

    
      
         

      

      
        26

         

      

      
         

      

    

     

    7.05  Notices.  Unless
otherwise provided in this Agreement or in another agreement between Lender and
Borrower, all notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, or by overnight courier,
to the addresses on the signature page of this Agreement, or sent by facsimile
to the fax numbers listed on the signature page, or to such other addresses as
Lender and Borrower may specify from time to time in writing.  Notices
and other communications shall be effective (i) if mailed, upon the earlier of
receipt or five (5) days after deposit in the U.S. mail, first class, postage
prepaid, (ii) if faxed, when transmitted, or (iii) if hand-delivered, by courier
or otherwise, when delivered.

     

    7.06  Dispute
Resolution Provision.

     

    This
paragraph, including the subparagraphs below, is referred to as the “Dispute Resolution
Provision.”  This Dispute Resolution Provision is a material
inducement for the parties entering into this agreement.

     

    (a)   This
Dispute Resolution Provision concerns the resolution of any controversies or
claims between the parties, whether arising in contract, tort or by statute,
including but not limited to controversies or claims that arise out of or relate
to: (i) this agreement (including any renewals, extensions or modifications); or
(ii) any document related to this agreement (collectively a “Claim”).  For
the purposes of this Dispute Resolution Provision only, the term “parties” shall
include any parent corporation, subsidiary or affiliate of Lender involved in
the servicing, management or administration of any obligation described or
evidenced by this Agreement.

     

    (b)   At
the request of any party to this agreement, any Claim shall be resolved by
binding arbitration in accordance with the Federal Arbitration Act (Title 9,
U.S. Code) (the “Act”).  The
Act will apply even though this agreement provides that it is governed by the
law of a specified state.

     

    (c)   Arbitration
proceedings will be determined in accordance with the Act, the then-current
rules and procedures for the arbitration of financial services disputes of the
American Arbitration Association or any successor thereof (“AAA”), and the terms
of this Dispute Resolution Provision.  In the event of any
inconsistency, the terms of this Dispute Resolution Provision shall
control.  If AAA is unwilling or unable to (i) serve as the provider
of arbitration or (ii) enforce any provision of this arbitration clause, Lender
may designate another arbitration organization with similar procedures to serve
as the provider of arbitration.

     

    (d)   The
arbitration shall be administered by AAA and conducted, unless otherwise
required by law, in any U.S. state where real or tangible personal property
collateral for this credit is located or if there is no such collateral, in the
state specified in the governing law section of this agreement.  All
Claims shall be determined by one arbitrator; however, if Claims exceed Five
Million Dollars ($5,000,000), upon the request of any party, the Claims shall be
decided by three arbitrators.  All arbitration hearings shall commence
within ninety (90) days of the demand for arbitration and close within ninety
(90) days of commencement and the award of the arbitrator(s) shall be issued
within thirty (30) days of the close of the hearing.  However, the
arbitrator(s), upon a showing of good cause, may extend the commencement of the
hearing for up to an additional sixty (60) days.  The arbitrator(s)
shall provide a concise written statement of reasons for the
award.  The arbitration award may be submitted to any court having
jurisdiction to be confirmed and have judgment entered and
enforced.

     

    
      
         

      

      
        27

         

      

      
         

      

    

    (e)   The
arbitrator(s) will give effect to statutes of limitation in determining any
Claim and may dismiss the arbitration on the basis that the Claim is
barred.  For purposes of the application of any statutes of
limitation, the service on AAA under applicable AAA rules of a notice of Claim
is the equivalent of the filing of a lawsuit.  Any dispute concerning
this arbitration provision or whether a Claim is arbitrable shall be determined
by the arbitrator(s), except as set forth at subparagraph (h) of this Dispute
Resolution Provision.  The arbitrator(s) shall have the power to award
legal fees pursuant to the terms of this agreement.

     

    (f)   This
paragraph does not limit the right of any party to: (i) exercise self-help
remedies, such as but not limited to, setoff; (ii) initiate judicial or
non-judicial foreclosure against any real or personal property collateral; (iii)
exercise any judicial or power of sale rights, or (iv) act in a court of law to
obtain an interim remedy, such as but not limited to, injunctive relief, writ of
possession or appointment of a receiver, or additional or supplementary
remedies.

     

    (g)   The
filing of a court action is not intended to constitute a waiver of the right of
any party, including the suing party, thereafter to require submittal of the
Claim to arbitration.

     

    (h)   Any
arbitration or trial by a judge of any Claim will take place on an individual
basis without resort to any form of class or representative action (the “Class Action
Waiver”).  Regardless of anything else in this Dispute
Resolution Provision, the validity and effect of the Class Action Waiver may be
determined only by a court and not by an arbitrator.  The parties to
this Agreement acknowledge that the Class Action Waiver is material and
essential to the arbitration of any disputes between the parties and is
nonseverable from the agreement to arbitrate Claims.  If the Class
Action Waiver is limited, voided or found unenforceable, then the parties’
agreement to arbitrate shall be null and void with respect to such proceeding,
subject to the right to appeal the limitation or invalidation of the Class
Action Waiver.  The parties acknowledge and agree that under no
circumstances will a class action be arbitrated.

     

    (i)   By
agreeing to binding arbitration, the parties irrevocably and voluntarily waive
any right they may have to a trial by jury in respect of any
Claim.  Furthermore, without intending in any way to limit this
agreement to arbitrate, to the extent any Claim is not arbitrated, the parties
irrevocably and voluntarily waive any right they may have to a trial by jury in
respect of such Claim.  This waiver of jury trial shall remain in
effect even if the Class Action Waiver is limited, voided or found
unenforceable.  WHETHER THE CLAIM IS DECIDED BY ARBITRATION OR BY
TRIAL BY A JUDGE, THE PARTIES AGREE AND UNDERSTAND THAT THE EFFECT OF THIS
AGREEMENT IS THAT THEY ARE GIVING UP THE RIGHT TO TRIAL BY JURY TO THE EXTENT
PERMITTED BY LAW.

     

              
7.07  
Governing
Law.  This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Missouri (without reference
to conflict of law principles).  To the extent that Lender has greater
rights or remedies under federal law, whether as a national bank or otherwise,
this paragraph shall not be deemed to deprive Lender of such rights and remedies
as may be available under federal law.

     

              
7.08  
Amendments and
Waivers.  Any provision of this Agreement, the Note or any of
the other Transaction Documents to which Borrower is a party may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
Borrower and Lender.

     

    
      
         

      

      
        28

         

      

      
         

      

    

     

    7.09  References; Headings for
Convenience.  Unless otherwise specified herein, all references
herein to Section numbers refer to Section numbers of this Agreement, all
references herein to Exhibits “A”, “B” and
“C” refer to annexed Exhibits “A”, “B” and
“C”, respectively, that are hereby incorporated herein by reference and all
references herein to Schedule 2.02 and
Schedule
5.01(f)(iii) refer to annexed Schedule 2.02 and
Schedule
5.01(f)(iii), respectively, each of which is hereby incorporated herein
by reference.  The Section headings are furnished for the convenience
of the parties and are not to be considered in the construction or
interpretation of this Agreement.

     

    7.10  Successors and
Assigns.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrower may not assign or otherwise
transfer any of its rights or delegate any of its obligations or duties under
this Agreement.

     

    7.11  NOTICE REQUIRED BY SECTION
432.047 R.S.Mo.; ENTIRE AGREEMENT This notice is provided pursuant to
Section 432.047 R.S.Mo.  As used herein, “creditor” means Lender and
“this writing” means this Agreement and the other Transaction
Documents.

     

    ORAL
AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT
ARE NOT ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED THAT
IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT.  TO PROTECT YOU
(BORROWER(S)) AND US (CREDITOR) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS WE REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH
IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.

     

    Borrower
acknowledges that there are no other agreements between Lender and Borrower,
oral or written, concerning the subject matter of the Transaction Documents, and
that all prior agreements concerning the same subject matter, including any
proposal or commitment letter, are merged into the Transaction Documents and
thereby extinguished.

     

    7.12  Severability.  In
the event any one or more of the provisions contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

     

    7.13  Counterparts.  This
Agreement may be executed in any number of counterparts (including facsimile
counterparts), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     

    
      
         

      

      
        29

         

      

      
         

      

    

    7.14  Confidentiality.  Any
information received by Lender from Borrower and clearly marked as confidential
shall be treated as confidential by Lender in accordance with its customary
practices and procedures.  Notwithstanding such agreement, nothing
herein contained shall limit or impair the right or obligation of Lender to
disclose such information: (a) to its auditors, attorneys, trustees, employees,
directors, officers, advisors, affiliates or agents; (b) when and as required by
any law, ordinance, subpoena or governmental order, rule or regulation; (c) as
may be required, requested or otherwise appropriate in any report, statement or
testimony submitted to any municipal, state, provincial or federal regulatory
body or any self-regulatory body having or claiming to have jurisdiction over
Lender; (d) which is publicly available or readily ascertainable from public
sources, or which is received by Lender from a third Person which or which is
not known by Lender to be bound to keep the same confidential; (e) in connection
with any proceeding, case or matter pending (or on its face purported to be
pending) before any court, tribunal or any governmental agency, commission,
authority, board or similar entity; (f) in connection with protection of its
interests under this Agreement, the Note or any of the other Transaction
Documents, including, without limitation, the enforcement of the terms and
conditions of this Agreement, the Note and the other Transaction Documents; or
(g) to any entity utilizing such information to rate the creditworthiness of
Lender or to rate or classify the debt or equity securities of Lender or report
to the public concerning the industry of which such Lender is a
part.  It is agreed and understood that Lender shall not be liable to
Borrower or any other Person for failure to comply with the foregoing except in
any case involving Lender’s gross negligence or willful misconduct as determined
by a court of competent jurisdiction in a final, nonappealable
order.

     

    (SIGNATURES
ON FOLLOWING PAGE)

     

    
      
         

      

      
        30

         

      

      
         

      

    

    THIS
AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.

     

    This
Agreement is executed as of the date stated at the top of the first
page.

     

    
      	
              Borrower:

            	 
      
	 
      	 
      
	
              THE
      LACLEDE GROUP, INC.

            
	 
      	 
      
	
              By:

            	
              /s/
      Lynn D. Rawlings

            
	 
      	 
      
	
              Print

            	 
      
	
              Name:

            	
              Lynn
      D. Rawlings

            
	 
      	 
      
	
              Title:

            	
              Treasurer

            
	 
      	 
      
	
              Address:

            	 
      
	 
      	 
      
	
              720
      Olive Street, Suite 1525

            
	
              St.
      Louis, Missouri 63101

            
	
              Attention:
      Treasurer

            
	
              Facsimile
      No.: (314) 421-1979

            
	 
      	 
      
	
              Lender:

            	 
      
	 
      	 
      
	
              UMB
      BANK, N.A.

            
	 
      	 
      
	
              By:

            	
              /s/ Cecil
      G. Woods

            
	 
      	 
      
	
              Print

            	 
      
	
              Name:

            	
              Cecil
      G. Woods

            
	 
      	 
      
	
              Title:

            	
              Executive Vice
      President

            
	 
      	 
      
	
              Address:

            	 
      
	 
      	 
      
	
              UMB
      BANK, N.A.

            
	
              2
      South Broadway

            
	
              St.
      Louis, MO 63102

            
	
              Attention: Cecil
      G. Woods,

            
	Executive
      Vice President 
	
              Facsimile
      No.: (314) 612-8150

            

    

    
       

    

    Federal
law requires UMB Bank, N.A. (the “Bank”) to provide the
following notice.  The notice is not part of the foregoing
agreement or instrument and may not be altered.  Please read the
notice carefully.

     

    USA
PATRIOT ACT NOTICE

     

    Federal
law requires all financial institutions to obtain, verify and record information
that identifies each person who opens an account or obtains a
loan.  The Bank will ask for Borrower’s legal name, address, tax ID
number or social security number and other identifying
information.  The Bank may also ask for additional information or
documentation or take other actions reasonably necessary to verify the identity
of Borrower, guarantors or other related persons.

    
      
        
          SIGNATURE
PAGE TO CREDIT AGREEMENT

        

         

      

      
        
        

         

      

      
         

      

    

    

    SCHEDULE
2.02

     

    Authorized
Individuals

     

    Douglas
H. Yaeger

     

    Mark
D. Waltermire

     

    Lynn
D. Rawlings

     

    Kent
H. Sturhahn

     

    Delfina
Myers

     

    
      
         

      

      
        32

         

      

      
         

      

    

    

    SCHEDULE
4.09

     

    Pending or threatened
lawsuits, claims and disputes

     

    

     

    The
pending matter listed below is reported in Borrower’s current SEC Form 10-K and
10-Q filings.  Although Borrower does not reasonably expect this
matter, even if lost, would have a Material Adverse Effect on Borrower, it is
possible that it could.

     

    In
the December 31, 2007 filing, the Missouri Public Service Commission (MoPSC)
Staff raised questions regarding whether certain sales and capacity release
transactions subject to the oversight of the Federal Energy Regulatory
Commission (FERC) were consistent with the FERC’s regulations and policies
regarding capacity release.  Borrower commenced an internal review of
the questions raised by the MoPSC Staff and notified the FERC Staff that it took
this action.  Subsequently, as a result of the internal review,
Borrower provided the FERC Staff with a report regarding compliance of sales and
capacity release activities with the FERC’s regulations and
policies.

     

    
      
         

      

      
        33

         

      

      
         

      

    

    SCHEDULE
5.01(f)(iii)

     

    Liens outstanding on the
date of this Agreement

     

    NONE

     

    
      
         

      

      
        34

         

      

      
         

      

    

    EXHIBIT
A

     

    REVOLVING
NOTE

     

    
      	 	 	 
      
	$	10,000,000.00	 	
              St. Louis,
      Missouri

              October 2,
      2009

            
	 	 	 	 
      
	 	 	 	 
      

    

    FOR
VALUE RECEIVED, THE LACLEDE
GROUP, INC., a Missouri corporation (“Borrower”), hereby
promises to pay to the order of UMB BANK, .N.A. (“Lender”), on the last
day of the Revolving Credit Period, the principal sum of Ten Million Dollars
($10,000,000.00), or such lesser sum as may then constitute the aggregate unpaid
principal amount of all Loans made by Lender to Borrower pursuant to the
Agreement (defined below).  Borrower further promises to pay interest
from the date hereof on the balance of said principal from time to time
outstanding at a per annum rate or rates determined pursuant to the Agreement
and at the times required by the Agreement.  The aggregate principal
amount of Revolving Credit Loans that Lender shall be committed to have
outstanding under this Revolving Note (this “Note”) at any one
time shall not exceed Ten Million Dollars ($10,000,000.00), which amount may be
borrowed, paid, reborrowed and repaid, in whole or in part, subject to the terms
and conditions of this Note and of the Agreement.

     

    All
payments received by Lender under this Note shall be allocated among the
principal, interest, collection costs and expenses and other amounts due under
this Note in such order and manner as Lender shall elect.  The amount
of interest accruing under this Note shall be computed on an actual day, 360-day
year basis.

     

    All
payments of principal and interest under this Note shall be made in lawful
currency of the United States in Federal or other immediately available funds at
the office of Lender located at UMB Bank, N.A., 2 South Broadway, St. Louis,
Missouri 63102, or such other place as Lender may from time to time designate in
writing.

     

    This
Note is the “Note” referred to in the Credit Agreement dated as of the date
hereof by and between Borrower and Lender, as the same may from time to time be
amended, modified, extended, renewed or restated (the “Agreement”; all
capitalized terms used and not otherwise defined in this Note shall have the
respective meanings ascribed to them in the Agreement).  The
Agreement, among other things, contains provisions for acceleration of the
maturity of this Note upon the occurrence of certain stated events and also for
prepayments on account of principal of this Note and interest on this Note prior
to the maturity of this Note upon the terms and conditions specified
therein.

     

    If
Borrower shall fail to make any payment of any principal or interest due under
this Note as and when the same shall become due, then the entire outstanding
principal balance of this Note and all accrued and unpaid interest thereon may
be declared to be immediately due and payable in the manner and with the effect
as provided in the Agreement.

     

    
      
        
        

      

      
        35

         

      

      
        
        

      

    

     

    In
the event that any payment of any principal or interest due under this Note is
not paid when due, whether by reason of maturity, acceleration or otherwise, and
this Note is placed in the hands of an attorney or attorneys for collection, or
if this Note is placed in the hands of an attorney or attorneys for
representation of Lender in connection with bankruptcy or insolvency proceedings
relating to or affecting this Note, Borrower hereby promises to pay to the order
of Lender, in addition to all other amounts otherwise due on, under or in
respect of this Note, the costs and expenses of such collection and
representation, including, without limitation, reasonable attorneys’ fees and
expenses (whether or not litigation shall be commenced in aid
thereof).

     

    Borrower
and all other Persons who become parties obligated under this Note, whether as
guarantors, sureties, endorsers or otherwise, waive any right to demand for
payment, any requirement for protest or notice of dishonor, all other rights to
notice or demands with respect to this Note, any defense based on lack of
diligence in the enforcement of this Note, and any defense which such party may
have based on suretyship or impairment of collateral.  Every such
party assents to each and every extension or postponement of the time of
payment, whether at or after demand, or other indulgence, and waives any right
to notice thereof.

     

    No
amendment, modification or waiver of any provision of this Note, or consent to
any departure by Borrower herefrom, will be effective unless the same is in
writing signed by an authorized officer of Lender, and then only in the specific
instance and for the specific purpose for which given.  No failure on
the part of Lender to exercise, and no delay in exercising, any right under this
Note operates as a waiver thereof, and no single or partial exercise by Lender
of any right under this Note precludes any other or further exercise thereof, or
the exercise of any other right.  Each and every right granted to
Lender under this Note or allowed to it at law or in equity is cumulative and
such remedies may be exercised from time to time concurrently or consecutively
at Lender’s option.

     

    All
notices required to be given or which may be given in connection with this Note
shall be given in the manner required for notices under the
Agreement.

     

    This
Note shall be governed by and construed in accordance with the substantive laws
of the State of Missouri (without reference to conflict of law
principles).

     

    

      
        	
                Borrower:

              
	 
      
	
                THE
      LACLEDE GROUP, INC.

              
	 
      	 
      
	
                By:

              	 
      
	 
      	 
      
	
                Print
      Name:

              	 
      
	 
      	 
      
	
                Title:

              	 
      
	 
      	 
      

      

     

     

    

    
      
         

      

      
        36

         

      

      
         

      

    

    EXHIBIT
B

     

    CLOSING
CHECKLIST

     

    
      
         

      

      
        37

         

      

      
         

      

    

    EXHIBIT
C

     

    COMPLIANCE
CERTIFICATE

     

    This
Compliance Certificate  (the “Certificate”) is
delivered pursuant to the Credit Agreement dated as of October 2, 2009 (as
the same may from time to time be amended, modified, extended, renewed or
restated, the “Credit
Agreement”), by and between The Laclede Group, Inc. (“Borrower”) and UMB
Bank, N.A. (“Lender”).  Unless
otherwise defined, terms used herein (including any exhibits hereto) have the
meanings provided in the Credit Agreement.

     

    The
undersigned, being the duly elected, qualified and acting ______________ of the
Borrower, on behalf of the Borrower and solely in his or her capacity as an
officer of the Borrower, hereby certifies and warrants that:

     

    (a)           He
or she is the _____________ of the Borrower and that, as such, he or she is
authorized to execute this Certificate on behalf of the Borrower.

     

    (b)           As
of the date hereof:

     

    (i)           except
as set forth below, all of the representations and warranties made by Borrower
in the Credit Agreement and/or in any of the other Transaction Documents are
true and correct in all material respects on and as of the date of this
Certificate as if made on and as of the date of this Certificate:

     

    Exceptions:                                                                           ;

     

    (ii)           except
as set forth below, no Default or Event of Default under or within the meaning
of the Credit Agreement has occurred and is continuing:

     

                            
Exceptions:                                                                           ;
and

     

    (iii)           the
financial statements of Borrower and its Subsidiaries made available to you are
true, correct and complete in all material respects and have been prepared in
accordance with GAAP (subject, in the case of any interim financial statements,
to normal year-end adjustments and absence of footnote
disclosures).

     

    (iv)           Borrower
had a Consolidated Capitalization Ratio of not more than Seventy Percent
(70%) at all times during the period commencing ____________, 200_, and ending
__________, 200_, calculated as follows:

     

    
      (1)           Consolidated
Debt as of _______,
200__                    
$_________

       

      (2)           Consolidated
Net Worth as of _____,
200__                
$_________

       

      (3)           Consolidated
Capitalization (item
(1) + item (2))           
$_________

       

      (4)           Consolidated
Capitalization Ratio (item
(1) ÷ item (3))     _________%

    

     

     

     

    
      
        
        

      

      
        38

         

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the undersigned has executed and delivered this certificate,
this ______ day of ______________, 20____.

     

    

      
        	
                 

              
	 
      
	
                THE
      LACLEDE GROUP, INC.

              
	 
      	 
      
	
                By:

              	 
      
	
                Print
      Name:

              	 
      
	
                Title:

              	 
      
	 
      	 
      

      

     

     

    

    
      
         

      

      
        39guinnessexh10_1.htm

Exhibit 10.1

 

 

MINERAL CLAIM PURCHASE AND SALE AGREEMENT

 

 

THIS AGREEMENT made as of November 19, 2009

 

BETWEEN:

 

EAGLE TRAIL PROPERTIES INC.

a Saskatchewan company having a registered and records office at

1140 Rose Street, Regina Saskatchewan, S4R 1Z6 Canada

 

(the “Vendor”)

 

AND:

 

GUINNESS EXPLORATION, INC.

a Nevada state company having an office at

1312 North Monroe Street,

Spokane, Washington, 99201, USA

 

(the “Purchaser”)

 

WHEREAS:

 

A.       The Vendor is the legal and beneficial owner of 203 full or fractional mineral claims/leases with a total area of 3,136.43 hectares located in the Mt. Nanson area of the Whitehorse Mining District of the Yukon Territory, Canada, the particulars of which are set out in Schedule “A” hereto
(the “Mineral Claims”).

B.        Pursuant to an Option Agreement dated November 7, 2008 (the “Option”) between the Vendor as optionee and Pricewaterhousecoopers Inc. as optionor, the Vendor has the option to purchase the mineral claim identified as Dome 12:73698 located in the Mt. Nanson area of the Whitehorse
Mining District of the Yukon Territory for the sum of $25,000.00 (the “Dome Claim").

C.        The Vendor wishes to sell and the Purchaser wishes to purchase an undivided 65% interest in the Mineral Claims and in the Option to purchase the Dome Claim (the “Interest”), on the terms and conditions contained herein.

WHEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

	
1.
	
Interpretation

1.1          Definitions. In this Agreement, unless the context otherwise requires:

 

	
  
	
(a)
	
“Agreement” means this agreement, including the recitals and the Schedules, all as amended, supplemented or restated from time to time.

	
  
	
(b)
	
“Approval Date” means the date that all of the conditions set out in section 6.4 are fulfilled or waived.

  

1

  

	
  
	
(c)
	
“Business Day” means a day other than a Saturday, Sunday or statutory holiday in Saskatchewan.

	
  
	
(d)
	
“Closing Date” means the third Business Day following the Approval Date.

	
  
	
(e)
	
“Dome Claim” means the mineral claim identified as Dome 12:73698 located in the Mt. Nanson area of the Whitehorse Mining District of the Yukon Territory

	
  
	
(f)
	
“Encumbrances” means security interests, liens, royalties, charges, mortgages, pledges and encumbrances of any nature or kind whatsoever, whether written or oral, or direct or indirect.

	
  
	
(g)
	
“Government or Regulatory Authority” means any federal, provincial, regional, municipal or other government, governmental department, regulatory authority, commission, board, bureau, agency or instrumentality and that have lawful authority to regulate or administer or govern an business or property or affairs of any person, and for the purposes of
this Agreement also includes any corporation or other entity owned or controlled by any of the foregoing and any stock exchange on which shares of a party are listed for trading.

	
  
	
(h)
	
“Interest” means an undivided 65% interest of the Vendor in the Mineral Claims and the Option but does not include the NSR.

	
  
	
(i)
	
“Mineral Claims” means all of the claims described on Schedule “A” and, when the context so implies, the lands and premises subject thereto.

	
  
	
(j)
	
“Net Smelter Returns” or “NSR” has the meaning set out in Schedule “C” hereto.

	
  
	
(k)
	
“Option” has the meaning set out in Recital B.

 

	
  
	
(l)
	
“Permitted Encumbrances” means:

 

	
  
	
(i)
	
easements, rights of way, servitudes or other similar rights in land including, without limiting the generality of the foregoing, rights of way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electrical light, power, telephone, telegraph or cable television conduits, poles, wires and cables;

	
  
	
(ii)
	
the right reserved to or vested in any government or other public authority by the terms of any or by any statutory provision, to terminate, revoke or forfeit any of the lease or mining claims or to require annual or other periodic payments as a condition of the continuance thereof;

 

	
  
	
(iii)
	
rights reserved to or vested in any municipality or governmental, statutory or public authority to control or regulate in any manner, and all applicable laws, rules and orders of any governmental authority; and

  

2

  

 

	
  
	
(iv)
	
the reservations, limitations, provisos and conditions in any original grants from the Crown or interests therein and statutory exceptions to title.

 

	
  
	
(m)
	
“SEC” means the Securities and Exchange Commission.

 

	
  
	
(n)
	
“Securities Act” means the United States Securities Act of 1933, as amended.

 

	
  
	
(o)
	
“Shares” means 60 million common shares in the capital of the Purchaser allotted and issued to the Vendor at a deemed price of US$0.00103.

 

1.2          Headings.  The division of this Agreement into sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this
Agreement.  The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, section or other portion hereof and includes any variation or amendment hereto from time to time and any agreement supplemental hereto.  Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and sections are to Articles and sections of this Agreement.

1.3          Legislation.  Any reference to a provision in any legislation is a reference to
that provision as now enacted, and as amended, re-enacted or replaced from time to time, and in the event of such amendment, re-enactment or replacement any reference to that provision shall be read as referring to such amended, re-enacted or replaced provision.

1.4          Extended Meanings. In this Agreement words importing the singular number only shall include
the plural and vice versa, words importing the masculine gender shall include the feminine and neuter genders and vice versa and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. All references to mineral claims shall include map designated units.

1.5          Currency. All references to currency herein are to lawful money of Canada, unless otherwise
specified.

1.6          Non-Merger. The provisions contained in this Agreement shall survive the  completion of the transactions contemplated by this Agreement
and shall not merge in any conveyance, transfer, assignment, novation agreement or other document or instrument delivered pursuant hereto or in connection herewith.

1.7          Construction Clause. This Agreement has been negotiated and approved by counsel on behalf
of all parties hereto and, notwithstanding any rule or maxim of construction to the contrary, any ambiguity or uncertainty will not be construed against any party hereto by reason of the authorship of any of the provisions hereof.

1.8          No partnership. Nothing contained in this Agreement shall be construed as creating a
partnership of any kind or as imposing on any party any partnership duty, obligation or liability to any other party.

  

3

  

 

2.           Representations and Warranties

2.1         Representations and Warranties of the Vendor.  The Vendor represents and warrants to the Purchaser that:

	
  
	
(a)
	
it has a business address at the address set forth beside its name on the first page of this Agreement;

 

	
  
	
(b)
	
it is a corporation duly subsisting under the laws of Saskatchewan with the corporate power to own its assets and to carry on its business in Saskatchewan;

 

	
  
	
(c)
	
it has good and sufficient authority to enter into and deliver this Agreement and to transfer its legal and beneficial Interest in the Mineral Claims to the Purchaser, and to assign its Interest in the Option to the purchaser (subject to the consent of the optionor) in accordance with this Agreement;

 

	
  
	
(d)
	
there is no contract, option or any other right of another binding upon the Vendor to option, sell, transfer, assign, pledge, charge, mortgage, explore or in any other way option, dispose of or encumber all or part of the Mineral Claims or the Option or any portion thereof or interest therein;

 

	
  
	
(e)
	
the execution, delivery and performance of this Agreement by the Vendor, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of the Vendor; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of any jurisdiction
in which the Vendor’s business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound;

 

	
  
	
(f)
	
it is the beneficial owner of 100% of the right, title and interest in and to the Mineral Claims and the Option, free and clear of all Encumbrances except for the Permitted Encumbrances, and the Option remains in good standing and no default has occurred thereunder;

 

	
  
	
(g)
	
the Mineral Claims are properly and accurately described in Schedule A” hereto and are all in good standing under the laws of the jurisdiction in which the Mineral Claims are located up to and including at least the expiry dates set forth in Schedule “A”;

 

	
  
	
(h)
	
the terms of the Option are as attached in Schedule “B” hereto and the Option has not been exercised or amended, altered or varied in any way;

 

	
  
	
(i)
	
to the best of its knowledge, the Vendor is in compliance in all material respects with all Environmental Laws (as defined below) in regards to the Mineral Claims, and there are, to the best of its knowledge, no facts which could give rise to a notice of non-compliance with any Environmental Laws. The term “Environmental Laws” means all applicable laws, rules, regulations, orders, policies, guidelines, notices,
approvals and permits relating to environmental or occupational health and safety matters, in effect as at the date hereof, including, without limitation,

  

4

  

 

	
  
	
those pertaining to reporting, licensing, permitting, investigation, remediation and clean-up in connection with any release or threat of release of a Contaminant or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling and the like of a Contaminant. The term “Contaminant” means any substance or material that is prohibited, controlled or regulated
by any governmental authority, including without limitation, any contaminants, pollutants, petroleum, its derivatives, by-products or other hydrocarbons, dangerous substances or goods, asbestos, toxic or hazardous substances or materials, controlled products, wastes involving hazardous wastes and any other materials that are by their nature hazardous, either in fact or as defined in or pursuant to any Environmental Laws;

 

	
  
	
(j)
	
to the best of its knowledge, there are no existing claims, demands, damages, expenses, suits, proceedings, actions, negotiations, or causes of action of any nature whatsoever, whether threatened or pending, arising out of the presence on the Mineral Claims of any Contaminant, or out of any past or present activity conducted on any such property, involving
any Contaminant or any violation of any Environmental Law;

 

	
  
	
(k)
	
it is not a non-resident for the purposes of Section 116 of the Income Tax Act (Canada);

	
  
	
(l)
	
it is in compliance with all applicable laws, statutes, bylaws, decrees, rulings, orders, judgments and regulations of each jurisdiction in which the Mineral Claims are located or in which it conducts its business;

	
  
	
(m)
	
it understands that the entire authorized capital stock of the Purchaser consists of 75,000,000 shares of common stock (“Common Stock”).  As of the date of this Agreement, there are 71,825,000 shares of the Purchaser’s Common Stock issued and outstanding and that, prior to issuance to the Vendor of the Shares component of the purchase price stated in this Agreement, the Purchaser will need
to amend its Articles of Incorporation so as to increase its level of authorized shares to accommodate the issuance of the Shares component of the purchase price stated in this Agreement;

	
  
	
(n)
	
it acknowledges that the Shares issued pursuant to the terms and conditions set forth in this Agreement will have such hold periods as are required under applicable securities laws and as a result may not be sold, transferred or otherwise disposed of, except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act and in each case only in accordance with all applicable securities laws;

	
  
	
(o)
	
it herein authorizes the assignment by the Purchaser of the Interest in full to the Purchaser’s wholly owned Yukon incorporated subsidiary Nantawa Resources Inc., without further approval from the Vendor; and

  

5

  

	
  
	
 (p)
	
this Agreement has been duly authorized, executed and delivered by the Vendor and constitutes a valid and binding obligation of the Vendor enforceable against the Vendor in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles when
equitable remedies are sought.

 

2.2          Representations and Warranties of the Purchaser.  The Purchaser represents and
warrants to the Vendor that:

	
  
	
(a)
	
it has a business address at the address set forth beside its name on the first page of this Agreement;

	
  
	
(b)
	
it is a corporation duly incorporated, organized and subsisting under the laws of the state of Nevada with the corporate power to own its assets and to carry on its business in the state of Nevada;

 

	
  
	
(c)
	
it has all necessary power and authority to own or lease its assets and carry on its business as presently carried on, to carry out its obligations herein and to enter into this Agreement and any agreement or instrument referred to in or contemplated by this Agreement and to do all such acts and things as are required to be done, observed or performed by it, in accordance with the terms of this Agreement and any agreement
or instrument referred to in or contemplated by this Agreement;

 

	
  
	
(d)
	
the execution, delivery and performance of this Agreement by the Purchaser, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of the Purchaser; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of
any jurisdiction in which the Purchaser’s business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound;

	
  
	
(e)
	
it is in compliance with all applicable laws, statutes, bylaws, decrees, rulings, orders, judgments and regulations of each jurisdiction in which it conducts its business;

	
  
	
(f)
	
this Agreement has been duly authorized, executed and delivered by the Purchaser and constitutes a valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles
when equitable remedies are sought;

  

6

  

	
  
	
(g)
	
the entire authorized capital stock of the Purchaser consists of 75,000,000 shares of common stock with a par value of US$0.001 (the “Purchaser’s Common Stock”).  As of the date of this Agreement, there are 71,825,000 shares of the Purchaser’s Common Stock issued and outstanding. All of the issued and outstanding shares of the Purchaser’s Common Stock have been duly authorized,
are validly issued, were not issued in violation of any pre-emptive rights and are fully paid and non-assessable, are not subject to pre-emptive rights and were issued in full compliance with all federal, state, and local laws, rules and regulations. There are no outstanding options, warrants, subscriptions, conversion rights, or other rights, agreements or commitments obligating the Purchaser to issue any additional shares of the Purchaser’s Common Stock, or any other securities convertible into, exchangeable
for, or evidencing the right to subscribe for or acquire from the Purchaser any shares of the Purchaser’s Common Stock.  There are no agreements purporting to restrict the transfer of any of the issued and outstanding shares of the Purchaser, no voting agreements, shareholders’ agreements, voting trusts, or other arrangements restricting or affecting the voting of any of the shares of the Purchaser to which the Purchaser is a party or of which the Purchaser is aware.

 

	
  
	
(h)
	
the corporate records of the Purchaser, as required to be maintained by it pursuant to the laws of the State of Nevada, are accurate, complete and current in all material respects, and the minute books of the Purchaser is, in all material respects, correct and contain all material records required by the laws of the State of Nevada, in regards to all proceedings, consents, actions and meetings of the shareholders
and the board of directors of the Purchaser.

 

	
  
	
(i)
	
the Shares will, upon issuance, have been duly and validly authorized and, when so issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable.

 

	
  
	
(j)
	
except as disclosed in the SEC Documents (hereinafter defined), to the best knowledge of the Purchaser, there is no basis for and there is no claim, charge, arbitration, grievance, action, suit, judgment, demand, investigation or proceeding by or before any court, arbiter, administrative agency or other governmental authority now outstanding or pending or, to the best knowledge the Purchaser threatened against or
affecting the Purchaser which involves any of the business, or the properties or assets of the Purchaser that, if adversely resolved or determined, would have a material adverse effect on the Purchaser.  There is no reasonable basis for any claim or action that, based upon the likelihood of its being asserted and its success if asserted, would have a material adverse effect on the Purchaser.

 

	
  
	
(k)
	
to the best knowledge of the Purchaser:

 

	
  
	
(i)
	
The Purchaser is in compliance with, is not in default or violation in any material respect under, and has not been charged with or received any notice at any time of any material violation of any statute, law, ordinance,

  

7

  

 

	
  
	
regulation, rule, decree or other applicable regulation to the business or operations of the Purchaser.

 

	
  
	
(ii)
	
the Purchaser is not subject to any judgment, order or decree entered in any lawsuit or proceeding applicable to its business and operations that would have a material adverse effect on it.

 

	
  
	
(iii)
	
the Purchaser has duly filed all reports and returns required to be filed by it with governmental authorities and have obtained all governmental permits and other governmental consents, except as may be required after the execution of this Agreement.  All of such permits and consents are in full force and effect, and no proceedings for the suspension or cancellation of any of them, and no investigation
relating to any of them, is pending or to the best knowledge of Purchaser, threatened, and none of them will be affected in a material adverse manner by the consummation of the Transaction.

 

	
  
	
(iv)
	
the Purchaser has operated in material compliance with all laws, rules, statutes, ordinances, orders and regulations applicable to its business.  The Purchaser has not received any notice of any violation thereof, nor is the Purchaser aware of any valid basis therefore.

 

	
  
	
(l)
	
no filing or registration with, no notice to and no permit, authorization, consent, or approval of any public or governmental body or authority or other person is necessary for the consummation by the Purchaser of the transaction contemplated herein to continue to conduct its business after the Closing Date in a manner which is consistent with that in which it is presently conducted.

 

	
  
	
(m)
	
the Purchaser has furnished or made available to the Vendor a true and complete copy of each report, schedule and registration statement filed by the Purchaser with the SEC (collectively, and as such documents have since the time of their filing been amended, the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Securities
Act, and the rules and regulations of the SEC thereunder applicable to such SEC Documents.  The SEC Documents constitute all of the documents and reports that the Purchaser was required to file with the SEC and the rules and regulations promulgated thereunder by the SEC.

 

	
  
	
(n)
	
the Purchaser is currently quoted on the OTC Bulletin Board and has not, in the 12 months preceding the date hereof, received any notice from the OTC Bulletin Board or the FINRA or any trading market on which the Purchaser’s common stock is or has been listed or quoted to the effect that the Purchaser is not in compliance with the quoting, listing or maintenance requirements of the OTC Bulletin Board or such
other trading market. No securities commission or other regulatory authority has issued any order preventing or suspending the trading of the Purchaser’s securities or prohibiting the issuance of the Shares to be

  

8

  

 

	
  
	
delivered hereunder, and, to the Purchaser’s knowledge, no proceedings for such purpose are pending or threatened.

 

	
  
	
(o)
	
Neither the Purchaser nor any of its past or present officers or directors is the subject of any formal or informal inquiry or investigation by the SEC or FINRA.  The Purchaser currently does not have any outstanding comment letters or other correspondences from the SEC or FINRA.

2.3          Reliance and Survival.  The representations, warranties and acknowledgments set
out in this section 2 have been relied on by the parties in entering into this Agreement.  All representations and warranties made herein will survive the delivery of this Agreement to the parties and the completion of the transactions contemplated hereby and notwithstanding such completion, will continue in full force and effect for the benefit of the parties to whom they are provided, as the case may be, indefinitely.

3.           Purchase and Sale

3.1          Purchase and Sale. Based on the representations and warranties contained in this Agreement,
the Vendor agrees to sell, assign and transfer to the Purchaser and the Purchaser agrees to purchase from the Vendor, on the Closing Date, the Interest in the Mineral Claims and in the Option, as of and from the Closing Date, free and clear of all Encumbrances other than Permitted Encumbrances and the NSR, in accordance with and subject to the terms and conditions set forth in this Agreement.

3.2          Purchase Price. The Purchase Price for the Interest in the Mineral Claims and the Option
is $ payable as follows:

	
  
	
(a)
	
the sum of $1,000,000.00 payable in two equal installments as follows

	
  
	
(i)
	
$500,000.00 payable on or before the last day of the sixth month following the Closing Date; and

	
  
	
(ii)
	
$500,000.00 payable on or before one year from the Closing Date; and

	
  
	
(b)
	
the balance by way of the allotment and issuance of the Shares to the Vendor.

3.3          NSR.  The Vendor hereby reserves and the Purchaser hereby grants and agrees to pay to the Vendor an annual royalty of 3% of the Net Smelter
Returns derived from mining operations on the Mineral Claims and the Dome Claim (upon the exercise of the Option) and products, mined, extracted, or derived therefrom or any part thereof, to be calculated and paid in accordance with schedule “C” hereto.

4.           Shares

 

4.1         Issuance. The Vendor acknowledges and agrees that the Shares are being issued pursuant to
an exemption from the prospectus and registration requirements of the Securities

  

9

  

 

Act and applicable Canadian Securities laws.  As required by applicable securities law, the Vendor agrees to abide by all applicable resale restrictions and hold periods imposed by all applicable securities legislation. All certificates representing the Shares issued on Closing will be endorsed with any applicable legends pursuant
to the Securities Act and applicable Canadian securities laws in order to reflect the fact that the Shares will be issued to the Vendor pursuant to an exemption from the registration requirements of the Securities Act.

4.2          Restricted Securities.  The Vendor  acknowledges that the Shares issued
pursuant to the terms and conditions set forth in this Agreement will have such hold periods as are required under applicable securities laws and as a result may not be sold, transferred or otherwise disposed of, except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in each case only in accordance with all applicable securities laws.

4.3          Filing of 8-K.  The Purchaser acknowledges and agrees that it shall use its commercially reasonable efforts to file a “super”
Form 8-K, in accordance with the rules and requirements of the United States Securities and Exchange Commission, containing Form 10 information in regards to the Purchaser’s business and the Mineral Claims.

 

5.           Closing.

5.1          Closing Date.  The closing shall take place on the Closing Date.

5.2          Obligations of Purchaser.  On the Closing Date, or as indicated below, the Purchaser
shall deliver the following to the Vendor’s solicitor:

	
  
	
(a)
	
a Promissory Note for payment of all of monies payable by the Purchaser pursuant to Section 3.2(a);

	
  
	
(b)
	
upon the Purchaser having sufficient authorized shares of common stock to make the issuance, a share certificate representing the Shares issuable pursuant to Section 3.2(b),  and if within 6 months of the Closing Date, the Purchaser is not able to issue the Shares to the Vendor, the Vendor shall be entitled to rescind this Agreement;

 

	
  
	
(c)
	
copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of the Purchaser evidencing approval of this Agreement and the transaction contemplated herein; and

 

	
  
	
(d)
	
a certificate of an officer of the Purchaser, dated as of Closing, certifying that:

 

	
  
	
(i)
	
each covenant and obligation of the Purchaser has been complied with; and

 

	
  
	
(ii)
	
each representation, warranty and covenant of the Purchaser is true and correct at the Closing as if made on and as of the Closing.

 

 

  

10

  

 

5.3          Obligations of the Vendor.  On the Closing Date, the Vendor will deliver the following to the Purchaser’s solicitor:

	
  
	
(a)
	
an executed transfer of the Mineral Claims into the name of the Purchaser registrable with the Saskatchewan Department of Energy and Mines, such that the Purchaser, upon the registration of the transfer, will become the sole recorded, legal and beneficial owner of the Interest in the Mineral Claims, subject to the Permitted Encumbrances and
the NSR. Until such time as the transfer is registered, the Vendor will hold the Interest in the Mineral Claims and all benefits derived therefrom in trust for the Purchaser;

	
  
	
(b)
	

an executed assignment of the Interest in the Option, to the Purchaser, duly executed by the optionor signifying its consent to the assignment, provided that in the event the optionor refuses or neglects to execute and deliver such an assignment within 6 months of the Closing Date, despite the best efforts of the Vendor to obtain such assignment,
the Vendor shall not be required to obtain such an assignment.  Until such assignment is executed and delivered, the Vendor shall hold the Interest in the Option and all benefits derived therefrom in trust for the Purchaser;

 

	
  
	
(c)
	
copies of all resolutions and/or consent actions adopted by or on behalf of the board of directors of the Vendor evidencing approval of this Agreement and the transaction contemplated herein;

 

	
  
	
(d) 
	
a certificate of an officer of the Vendor, dated as of Closing, certifying that:

 

	
  
	
(i)
	
each covenant and obligation of the Vendor has been complied with; and

 

	
  
	
(ii)
	
each representation, warranty and covenant of the Vendor is true and correct at the Closing as if made on and as of the Closing; and

 

	
  
	
(e)
	
the Certificate required by section 6.1(d).

 

 

 

  

11

  

 

6.           Closing Conditions

6. 1         Conditions of the Purchaser. The obligation of the Purchaser to complete the purchase contemplated
by this Agreement is subject to the fulfillment of the following conditions:

	
  
	
(a)
	
The representations and warranties of the Vendor contained in this Agreement being true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made as of the Closing Date (unless otherwise agreed or consented to in writing by the Purchaser); and

	
  
	
(b)
	
All of the covenants and obligations of the Vendor to be performed or observed on or before the Closing Date pursuant to this Agreement having been duly performed or observed (unless otherwise agreed or consented to in writing by the Purchaser);

 

	
  
	
(c)
	
will have received evidence satisfactory to the Purchaser that the Shares issuable in the transaction will be issuable:

 

	
  
	
(i)
	
without registration pursuant to the Securities Act in reliance on a safe harbor from the registration requirements of the Securities Act; and

 

	
  
	
(ii)
	
in reliance upon an exemption from the prospectus and registration requirements of the Canadian securities laws.

 

	
  
	
(d)
	
In order to establish the availability of the safe harbor from the registration requirements of the Securities Act and the prospectus and registration requirements of the Canadian securities laws for the issuance of the Shares, the Vendor will deliver to the Purchaser on Closing and prior to the issuance of the Shares, a Regulation S Certificate, duly executed by the Vendor.

 

The foregoing conditions are for the benefit of the Purchaser only and accordingly the Purchaser will be entitled to waive compliance with any such conditions if it sees fit to do so, without prejudice to its rights and remedies at law and in equity and also without prejudice to any of its rights of termination in the event of non-performance
of any other conditions in whole or in part.

 

 

 

 

  

12

  

 

6.2          Conditions of the Vendor.  The obligation of the Vendor to complete the sale
contemplated by this Agreement is subject to the fulfillment of each of the following conditions:

 

	
  
	
(a)
	
The representations and warranties of the Purchaser contained in this Agreement being true and correct on and as of the Closing Date with the same effect as though such representations and warranties had been made as of the Closing Date; (unless otherwise agreed or consented to in writing by the Vendor); and

 

	
  
	
(b)
	
All of the covenants and obligations of the Purchaser to be performed or observed on or before the Closing Date pursuant to this Agreement having been duly performed or observed (unless otherwise agreed or consented to in writing by the Vendor);

 
The foregoing conditions are for the benefit of the Vendor only and accordingly the Vendor will be entitled to waive compliance with any such conditions if it sees fit to do so, without prejudice to its rights and remedies at law and in equity and also without prejudice to any of its rights of termination in the event of non-performance of any other conditions in whole or in part.

6.3          Mutual Conditions. The obligations of the parties to complete the transactions contemplated
by this Agreement are subject to:

 

	
  
	
(a)
	
Each party having received necessary approvals of the transactions contemplated by this Agreement; and

 

	
  
	
(b)
	
The parties executing and delivering, by the Closing Date, an agreement providing an option to the Purchaser to purchase from the Vendor, the Vendor’s remaining 35% interest in the Mineral Claims and the Option, on terms and conditions agreeable to the parties.

 

The foregoing conditions are for the benefit of the Purchaser and the Vendor and can only be waived by both parties.

 

7.           Notices and Payments

7.1         Notice.  Any demand, notice or other communication (a “Communication”) to be made or given in connection with this Agreement shall
be made or given in writing and may be made or given by personal delivery or facsimile addressed to the recipient at the addresses or facsimile numbers of the parties provided on the first page of this Agreement or such other address or individual as may be designated by notice by any party to the other.  Any Communication made or given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof, and if made or given by facsimile, on the day, other than
a day which is not a Business Day, following the day it was sent.

 

 

 

13

 

 

7.2         Payments and Obligations. Payments hereunder shall be made addressed to the recipient at
the addresses of the recipient parties provided on the first page of this Agreement or such other address or individual as may be designated by notice by the recipient party in accordance with section 7.1.  If any payment or other obligation herein becomes due on a day that is not a Business Day, such payment or obligation shall be made or satisfied on the next succeeding Business Day.

 

8.           General Provisions

 

8.1         Entire Agreement.  This Agreement, including the Schedules hereto, constitutes the entire agreement among the parties party pertaining to the
subject matter hereof and supersedes any and all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements among the parties in connection with the subject matter hereof except as specifically set forth herein and therein. Each party acknowledges that it shall have no right to rely on any amendment, promise, modification, statement or representation made or occurring subsequent to the execution of this
Agreement unless it is in writing and executed by each of the parties.

 

8.2         Assignment of Agreement.  Neither party may assign this Agreement without the prior written consent of the other party, which consent may not
be unreasonably withheld, with the exception that the Purchaser may assign this Agreement to a wholly owned subsidiary without any such consent.

 

8.3         Legal and Other Fees and Expenses. Unless otherwise specifically provided herein, the parties
will pay their respective legal, accounting and other professional fees and expenses incurred by each of them in connection with the negotiation and settlement of this Agreement, the completion of the transactions contemplated by this Agreement and other matters pertaining hereto.

 

8.4         Waiver.  The failure of a party in any one or more instances to insist upon strict performance of any of the terms of this Agreement or to
exercise any right or privilege arising under it shall not preclude it from requiring by reasonable notice that any other party duly perform its obligations or preclude it from exercising such a right or privilege under reasonable circumstances, nor shall waiver in any one instance of a breach be construed as an amendment of this Agreement or waiver of any later breach.

 

8.5         Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

8.6         Further Assurances.  The parties hereto shall from time to time at the request of any of the other parties hereto and without further consideration,
execute and deliver all such other additional assignments, transfers, instruments, notices, releases and other documents and shall do all such other acts and things as may be necessary or desirable to assure more fully the consummation of the transactions contemplated hereby.

8.7         Time.  Time shall be of the essence of this Agreement.

 

14

 

 

8.8         Amendment.  This Agreement may be amended or varied only by agreement in writing signed
by each of the parties.

8.9         Governing Law and Attornment.  This Agreement shall be governed by and interpreted in
accordance with the laws of the Province of Saskatchewan and the federal laws of Canada applicable therein and, the parties hereby irrevocably attorn to the non-exclusive jurisdiction of the Courts of the Province of Saskatchewan sitting in the City of Regina.

8.10         Counterparts.  This Agreement may be executed by facsimile and in as many counterparts as are necessary. All counterparts together shall constitute
one agreement.

THE PARTIES, intending to be contractually bound, have entered into this Agreement as of the date set out on the first page.

 

 

	
GUINNESS EXPLORATION, INC.

By:
	  	  
	 	 	 
	 	 	 
	/s/ Alastair Brown	 	 
	Alastair Brown	 	 
	 	 	 
	 	 	 
	
EAGLE TRAIL PROPERTIES INC.
	 	 
	By:	 	 
	 	 	 
	 	 	 
	/s/ Curtis Sim	 	 
	Curtis Sim	 	 

 

 

 

 

 

 

 

 

 

 

  

15

  

Mineral Claim Purchase and

Sale Agreement -  SCHEDULE “A”

(Same Schedule as used for Schedule A of Mineral Claim Option Agreement)

Schedule A: Claim list for Mount Nansen property and Tawa property.

  

	
Claim
	
Claim Owner
	
Grant Number
	
Expiry Date
	
Area (Ha)
	
Comments

	
ROSE
	
Eagle Trail Properties Inc.
	
04241
	
09/10/2019
	
20.42
	
Lease

	
GOLDEN EAGLE
	
Eagle Trail Properties Inc.
	
04278
	
09/10/2019
	
20.96
	
Lease

	
WAR EAGLE
	
Eagle Trail Properties Inc.
	
04279
	
09/10/2019
	
20.77
	
Lease

	
SHAMROCK
	
Eagle Trail Properties Inc.
	
04354
	
09/10/2019
	
20.73
	
Lease

	
SPOT
	
Eagle Trail Properties Inc.
	
04361
	
09/10/2019
	
19.92
	
Lease

	
ARLEP
	
Eagle Trail Properties Inc.
	
04368
	
09/10/2019
	
14.48
	
Lease

	
PHYLLIS
	
Eagle Trail Properties Inc.
	
04369
	
09/10/2019
	
20.26
	
Lease

	
RUB
	
Eagle Trail Properties Inc.
	
55633
	
09/10/2019
	
1.84
	
Lease

	
PUB
	
Eagle Trail Properties Inc.
	
55663
	
09/10/2019
	
1.93
	
Lease

	
SUN DOG
	
Eagle Trail Properties Inc.
	
55665
	
09/10/2019
	
3.20
	
Lease

	
CUB
	
Eagle Trail Properties Inc.
	
55666
	
09/10/2019
	
1.29
	
Lease

	
JAM
	
Eagle Trail Properties Inc.
	
55890
	
09/10/2019
	
11.64
	
Lease

	
PAM
	
Eagle Trail Properties Inc.
	
55892
	
09/10/2019
	
2.64
	
Lease

	
DOME 1
	
Eagle Trail Properties Inc.
	
73537
	
06/02/2014
	
15.10
	
-

	
DOME 2
	
Eagle Trail Properties Inc.
	
73538
	
06/02/2014
	
15.51
	
-

	
DOME 3
	
Eagle Trail Properties Inc.
	
73539
	
06/02/2014
	
17.29
	
-

	
DOME 4
	
Eagle Trail Properties Inc.
	
73540
	
06/02/2014
	
17.98
	
-

	
DOME 6
	
Eagle Trail Properties Inc.
	
73542
	
06/02/2014
	
17.32
	
-

	
DOME 7
	
Eagle Trail Properties Inc.
	
73543
	
06/02/2014
	
25.34
	
-

	
DOME 8
	
Eagle Trail Properties Inc.
	
73694
	
06/02/2014
	
12.47
	
-

	
DOME 14
	
Eagle Trail Properties Inc.
	
73700
	
06/02/2014
	
21.07
	
-

	
DOME 16
	
Eagle Trail Properties Inc.
	
73702
	
06/02/2014
	
20.61
	
-

	
DOME 17
	
Eagle Trail Properties Inc.
	
73703
	
06/02/2014
	
18.41
	
-

	
DOME 18
	
Eagle Trail Properties Inc.
	
73704
	
06/02/2014
	
18.56
	
-

	
DOME 19
	
Eagle Trail Properties Inc.
	
73705
	
06/02/2014
	
16.73
	
-

	
DOME 20
	
Eagle Trail Properties Inc.
	
73706
	
06/02/2014
	
13.42
	
-

	
JOANNE 1
	
Eagle Trail Properties Inc.
	
74283
	
06/02/2014
	
19.79
	
-

	
JOANNE 2
	
Eagle Trail Properties Inc.
	
74284
	
06/02/2014
	
19.51
	
-

	
JOANNE 3
	
Eagle Trail Properties Inc.
	
74285
	
06/02/2014
	
20.36
	
-

	
JOANNE 4
	
Eagle Trail Properties Inc.
	
74286
	
06/02/2014
	
14.78
	
-

	
JOANNE 5
	
Eagle Trail Properties Inc.
	
74287
	
06/02/2014
	
19.83
	
-

	
JOANNE 6
	
Eagle Trail Properties Inc.
	
74288
	
06/02/2014
	
19.69
	
-

	
DOME 25
	
Eagle Trail Properties Inc.
	
77746
	
06/02/2014
	
15.19
	
-

	
DOME 26
	
Eagle Trail Properties Inc.
	
77747
	
06/02/2014
	
22.54
	
-

	
DOME 27
	
Eagle Trail Properties Inc.
	
77748
	
06/02/2014
	
20.32
	
-

	
DOME 28
	
Eagle Trail Properties Inc.
	
77749
	
06/02/2014
	
21.74
	
-

	
DOME 33
	
Eagle Trail Properties Inc.
	
77754
	
06/02/2014
	
25.50
	
-

	
DOME 34
	
Eagle Trail Properties Inc.
	
77755
	
06/02/2014
	
23.29
	
-

 

 

 

16

 

 

 

	
DOME 35
	
Eagle Trail Properties Inc.
	
77756
	
06/02/2014
	
22.39
	
-

	
DOME 36
	
Eagle Trail Properties Inc.
	
77757
	
06/02/2014
	
23.97
	
-

	
DOME 37
	
Eagle Trail Properties Inc.
	
77758
	
06/02/2014
	
14.23
	
-

	
DOME 38
	
Eagle Trail Properties Inc.
	
77759
	
06/02/2014
	
18.48
	
-

	
DOME 39
	
Eagle Trail Properties Inc.
	
77760
	
06/02/2014
	
14.95
	
-

	
DOME 40
	
Eagle Trail Properties Inc.
	
77761
	
06/02/2014
	
20.51
	
-

	
DOME 41
	
Eagle Trail Properties Inc.
	
77762
	
06/02/2014
	
20.76
	
-

	
DOME 42
	
Eagle Trail Properties Inc.
	
77763
	
06/02/2014
	
19.93
	
-

	
DOME 43
	
Eagle Trail Properties Inc.
	
77764
	
06/02/2014
	
20.47
	
-

	
DOME 49
	
Eagle Trail Properties Inc.
	
77770
	
06/02/2014
	
8.18
	
-

	
DOME 50
	
Eagle Trail Properties Inc.
	
77771
	
06/02/2014
	
18.83
	
-

	
DOME 51
	
Eagle Trail Properties Inc.
	
77772
	
06/02/2014
	
19.05
	
-

	
DOME 52
	
Eagle Trail Properties Inc.
	
77773
	
06/02/2014
	
21.85
	
-

	
DOME 53
	
Eagle Trail Properties Inc.
	
77774
	
06/02/2014
	
22.80
	
-

	
DOME 54
	
Eagle Trail Properties Inc.
	
77775
	
06/02/2014
	
14.69
	
-

	
DOME 55
	
Eagle Trail Properties Inc.
	
77776
	
06/02/2014
	
13.09
	
-

	
DOME 56
	
Eagle Trail Properties Inc.
	
77777
	
06/02/2014
	
13.35
	
-

	
DOME 57
	
Eagle Trail Properties Inc.
	
77778
	
06/02/2014
	
20.47
	
-

	
DOME 58
	
Eagle Trail Properties Inc.
	
77779
	
06/02/2014
	
19.41
	
-

	
DOME 60
	
Eagle Trail Properties Inc.
	
77781
	
06/02/2014
	
20.06
	
-

	
DOME 61
	
Eagle Trail Properties Inc.
	
77782
	
06/02/2014
	
18.91
	
-

	
DOME 63
	
Eagle Trail Properties Inc.
	
77784
	
06/02/2014
	
22.51
	
-

	
DOME 64
	
Eagle Trail Properties Inc.
	
77785
	
06/02/2014
	
22.88
	
-

	
DOME 65
	
Eagle Trail Properties Inc.
	
77786
	
06/02/2014
	
20.66
	
-

	
DOME 66
	
Eagle Trail Properties Inc.
	
77787
	
06/02/2014
	
21.18
	
-

	
DOME 78
	
Eagle Trail Properties Inc.
	
81842
	
06/02/2014
	
25.41
	
-

	
DOME 79
	
Eagle Trail Properties Inc.
	
81843
	
06/02/2014
	
24.10
	
-

	
DOME 80
	
Eagle Trail Properties Inc.
	
81844
	
06/02/2014
	
24.20
	
-

	
DOME 81
	
Eagle Trail Properties Inc.
	
81845
	
06/02/2014
	
22.52
	
-

	
DOME 82
	
Eagle Trail Properties Inc.
	
81846
	
06/02/2014
	
23.26
	
-

	
DOME 83
	
Eagle Trail Properties Inc.
	
81847
	
06/02/2014
	
18.72
	
-

	
DOME 84
	
Eagle Trail Properties Inc.
	
81848
	
06/02/2014
	
19.37
	
-

	
DOME 86
	
Eagle Trail Properties Inc.
	
81850
	
06/02/2014
	
20.76
	
-

	
HIW 9
	
Eagle Trail Properties Inc.
	
YA23835
	
06/02/2014
	
19.44
	
-

	
HIW 10
	
Eagle Trail Properties Inc.
	
YA23836
	
06/02/2014
	
20.83
	
Fractions

	
HIW 11
	
Eagle Trail Properties Inc.
	
YA23837
	
06/02/2014
	
21.55
	
Fractions

	
HIW 12
	
Eagle Trail Properties Inc.
	
YA23838
	
06/02/2014
	
19.93
	
Fractions

	
HIW 13
	
Eagle Trail Properties Inc.
	
YA23839
	
06/02/2014
	
20.72
	
-

	
HIW 14
	
Eagle Trail Properties Inc.
	
YA23840
	
06/02/2014
	
19.55
	
-

	
HIW 15
	
Eagle Trail Properties Inc.
	
YA23841
	
06/02/2014
	
20.15
	
-

	
HIW 16
	
Eagle Trail Properties Inc.
	
YA23842
	
06/02/2014
	
19.86
	
-

	
HIW 17
	
Eagle Trail Properties Inc.
	
YA23843
	
06/02/2014
	
19.92
	
-

	
HIW 1
	
Eagle Trail Properties Inc.
	
YA24813
	
06/02/2014
	
4.74
	
Fractions

	
HIW 2
	
Eagle Trail Properties Inc.
	
YA24814
	
06/02/2014
	
5.15
	
Fractions

	
HIW 7
	
Eagle Trail Properties Inc.
	
YA24819
	
06/02/2014
	
3.01
	
Fractions

	
DD 1
	
Eagle Trail Properties Inc.
	
YA59596
	
06/02/2014
	
20.62
	
-

 

 

 

17

 

 

 

	
DD 2
	
Eagle Trail Properties Inc.
	
YA59597
	
06/02/2014
	
22.35
	
-

	
DD 15
	
Eagle Trail Properties Inc.
	
YA59610
	
06/02/2014
	
19.20
	
-

	
DD 16
	
Eagle Trail Properties Inc.
	
YA59611
	
06/02/2014
	
19.21
	
-

	
DD 17
	
Eagle Trail Properties Inc.
	
YA59612
	
06/02/2014
	
19.37
	
-

	
DD 18
	
Eagle Trail Properties Inc.
	
YA59613
	
06/02/2014
	
19.85
	
-

	
DD 19
	
Eagle Trail Properties Inc.
	
YA59614
	
06/02/2014
	
20.17
	
-

	
DD 20
	
Eagle Trail Properties Inc.
	
YA59615
	
06/02/2014
	
19.90
	
-

	
DD 21
	
Eagle Trail Properties Inc.
	
YA59616
	
06/02/2014
	
19.64
	
-

	
DD 22
	
Eagle Trail Properties Inc.
	
YA59617
	
06/02/2014
	
19.17
	
-

	
DD 23
	
Eagle Trail Properties Inc.
	
YA59618
	
06/02/2014
	
18.69
	
-

	
DD 24
	
Eagle Trail Properties Inc.
	
YA59619
	
06/02/2014
	
18.30
	
-

	
DD 25
	
Eagle Trail Properties Inc.
	
YA59620
	
06/02/2014
	
18.18
	
-

	
DD 26
	
Eagle Trail Properties Inc.
	
YA59621
	
06/02/2014
	
17.65
	
-

	
DD 27
	
Eagle Trail Properties Inc.
	
YA59622
	
06/02/2014
	
19.49
	
-

	
DD 28
	
Eagle Trail Properties Inc.
	
YA59623
	
06/02/2014
	
18.71
	
-

	
TBR 1
	
Eagle Trail Properties Inc.
	
YA86690
	
06/02/2014
	
8.92
	
-

	
TBR 2
	
Eagle Trail Properties Inc.
	
YA86691
	
06/02/2014
	
20.16
	
-

	
TBR 3
	
Eagle Trail Properties Inc.
	
YA86692
	
06/02/2014
	
20.03
	
-

	
TBR 4
	
Eagle Trail Properties Inc.
	
YA86693
	
06/02/2014
	
20.84
	
-

	
TBR 5
	
Eagle Trail Properties Inc.
	
YA86694
	
06/02/2014
	
18.34
	
-

	
TBR 6
	
Eagle Trail Properties Inc.
	
YA86695
	
06/02/2014
	
20.92
	
-

	
TBR 7
	
Eagle Trail Properties Inc.
	
YA86696
	
06/02/2014
	
15.96
	
-

	
TBR 8
	
Eagle Trail Properties Inc.
	
YA86697
	
06/02/2014
	
21.79
	
-

	
ONT 38
	
Eagle Trail Properties Inc.
	
YA87204
	
06/02/2014
	
20.26
	
-

	
ONT 40
	
Eagle Trail Properties Inc.
	
YA87206
	
06/02/2014
	
18.34
	
-

	
ONT 42
	
Eagle Trail Properties Inc.
	
YA87208
	
06/02/2014
	
5.73
	
-

	
EEK 1
	
Eagle Trail Properties Inc.
	
YA87210
	
06/02/2014
	
21.07
	
-

	
EEK 2
	
Eagle Trail Properties Inc.
	
YA87211
	
06/02/2014
	
20.08
	
-

	
EEK 3
	
Eagle Trail Properties Inc.
	
YA87212
	
06/02/2014
	
20.70
	
-

	
EEK 4
	
Eagle Trail Properties Inc.
	
YA87213
	
06/02/2014
	
20.68
	
-

	
EEK 5
	
Eagle Trail Properties Inc.
	
YA87214
	
06/02/2014
	
20.80
	
-

	
EEK 6
	
Eagle Trail Properties Inc.
	
YA87215
	
06/02/2014
	
19.58
	
-

	
EEK 7
	
Eagle Trail Properties Inc.
	
YA87216
	
06/02/2014
	
19.97
	
-

	
EEK 8
	
Eagle Trail Properties Inc.
	
YA87217
	
06/02/2014
	
21.91
	
-

	
EEK 9
	
Eagle Trail Properties Inc.
	
YA87218
	
06/02/2014
	
22.64
	
-

	
EEK 14
	
Eagle Trail Properties Inc.
	
YA87223
	
06/02/2014
	
21.36
	
-

	
EEK 15
	
Eagle Trail Properties Inc.
	
YA87224
	
06/02/2014
	
21.22
	
-

	
EEK 16
	
Eagle Trail Properties Inc.
	
YA87225
	
06/02/2014
	
21.76
	
-

	
EEK 17
	
Eagle Trail Properties Inc.
	
YA87226
	
06/02/2014
	
20.01
	
-

	
EEK 18
	
Eagle Trail Properties Inc.
	
YA87227
	
06/02/2014
	
20.74
	
-

	
ONT 44
	
Eagle Trail Properties Inc.
	
YA92655
	
06/02/2014
	
16.80
	
-

	
ONT 45
	
Eagle Trail Properties Inc.
	
YA92656
	
06/02/2014
	
12.91
	
-

	
ONT 46
	
Eagle Trail Properties Inc.
	
YA92657
	
06/02/2014
	
18.48
	
-

	
ONT 47
	
Eagle Trail Properties Inc.
	
YA92658
	
06/02/2014
	
14.41
	
-

	
TAWA 25
	
Eagle Trail Properties Inc.
	
YA95051
	
03/01/2010
	
4.33
	
Fractions

	
TAWA 26
	
Eagle Trail Properties Inc.
	
YA95052
	
03/01/2010
	
5.95
	
Fractions

 

 

 

18

 

 

 

	
TAWA 27
	
Eagle Trail Properties Inc.
	
YA95151
	
03/01/2010
	
17.11
	
-

	
TAWA 28
	
Eagle Trail Properties Inc.
	
YA95152
	
03/01/2010
	
22.34
	
-

	
TAWA 29
	
Eagle Trail Properties Inc.
	
YA95153
	
03/01/2010
	
16.14
	
-

	
TAWA 30
	
Eagle Trail Properties Inc.
	
YA95154
	
03/01/2010
	
20.77
	
-

	
TAWA 31
	
Eagle Trail Properties Inc.
	
YA95155
	
03/01/2010
	
23.90
	
-

	
TAWA 32
	
Eagle Trail Properties Inc.
	
YA95156
	
03/01/2010
	
21.36
	
-

	
TAWA 33
	
Eagle Trail Properties Inc.
	
YA95157
	
03/01/2010
	
12.16
	
-

	
TAWA 34
	
Eagle Trail Properties Inc.
	
YA95158
	
03/01/2010
	
18.45
	
-

	
TAWA 47
	
Eagle Trail Properties Inc.
	
YA95163
	
03/01/2010
	
7.01
	
-

	
TAWA 48
	
Eagle Trail Properties Inc.
	
YA95164
	
03/01/2010
	
8.00
	
-

	
TAWA 49
	
Eagle Trail Properties Inc.
	
YA95165
	
03/01/2010
	
21.93
	
-

	
TAWA 50
	
Eagle Trail Properties Inc.
	
YA95166
	
03/01/2010
	
23.59
	
-

	
TAWA 51
	
Eagle Trail Properties Inc.
	
YA95167
	
03/01/2010
	
23.22
	
-

	
TAWA 52
	
Eagle Trail Properties Inc.
	
YA95168
	
03/01/2010
	
23.93
	
-

	
TAWA 53
	
Eagle Trail Properties Inc.
	
YA95169
	
03/01/2010
	
15.03
	
-

	
TAWA 54
	
Eagle Trail Properties Inc.
	
YA95170
	
03/01/2010
	
22.93
	
-

	
TAWA 55
	
Eagle Trail Properties Inc.
	
YA95171
	
03/01/2010
	
5.90
	
-

	
TAWA 56
	
Eagle Trail Properties Inc.
	
YA95172
	
03/01/2010
	
13.37
	
-

	
TAWA 57
	
Eagle Trail Properties Inc.
	
YA95173
	
03/01/2010
	
14.12
	
-

	
TAWA 58
	
Eagle Trail Properties Inc.
	
YA95174
	
03/01/2010
	
16.15
	
-

	
TAWA 59
	
Eagle Trail Properties Inc.
	
YA95175
	
03/01/2010
	
13.35
	
-

	
TAWA 60
	
Eagle Trail Properties Inc.
	
YA95176
	
03/01/2010
	
16.19
	
-

	
TAWA 61
	
Eagle Trail Properties Inc.
	
YA95177
	
03/01/2010
	
12.44
	
-

	
TAWA 62
	
Eagle Trail Properties Inc.
	
YA95178
	
03/01/2010
	
11.28
	
-

	
TAWA 63
	
Eagle Trail Properties Inc.
	
YA95179
	
03/01/2010
	
8.41
	
-

	
TAWA 64
	
Eagle Trail Properties Inc.
	
YA95301
	
03/01/2010
	
18.96
	
-

	
TAWA 65
	
Eagle Trail Properties Inc.
	
YA95302
	
03/01/2010
	
15.20
	
-

	
TAWA 66
	
Eagle Trail Properties Inc.
	
YA95303
	
03/01/2010
	
21.82
	
-

	
TAWA 67
	
Eagle Trail Properties Inc.
	
YA95304
	
03/01/2010
	
22.03
	
-

	
TAWA 68
	
Eagle Trail Properties Inc.
	
YA95305
	
03/01/2010
	
20.61
	
-

	
TAWA 69
	
Eagle Trail Properties Inc.
	
YA95306
	
03/01/2010
	
19.68
	
-

	
TAWA 70
	
Eagle Trail Properties Inc.
	
YA95307
	
03/01/2010
	
19.61
	
-

	
TAWA 71
	
Eagle Trail Properties Inc.
	
YA95308
	
03/01/2010
	
18.94
	
-

	
TAWA 72
	
Eagle Trail Properties Inc.
	
YB06963
	
03/01/2010
	
19.15
	
-

	
TAWA 73
	
Eagle Trail Properties Inc.
	
YB06964
	
03/01/2010
	
18.69
	
-

	
TAWA 74
	
Eagle Trail Properties Inc.
	
YB06965
	
03/01/2010
	
19.02
	
-

	
TAWA 75
	
Eagle Trail Properties Inc.
	
YB06966
	
03/01/2010
	
18.61
	
-

	
TAWA 83
	
Eagle Trail Properties Inc.
	
YB06971
	
03/01/2010
	
19.28
	
-

	
TAWA 84
	
Eagle Trail Properties Inc.
	
YB06972
	
03/01/2010
	
6.48
	
-

	
TAWA 85
	
Eagle Trail Properties Inc.
	
YB06973
	
03/01/2010
	
20.10
	
-

	
TAWA 86
	
Eagle Trail Properties Inc.
	
YB06974
	
03/01/2010
	
21.08
	
-

	
TAWA 87
	
Eagle Trail Properties Inc.
	
YB06975
	
03/01/2010
	
19.83
	
-

	
TAWA 88
	
Eagle Trail Properties Inc.
	
YB06976
	
03/01/2010
	
20.96
	
-

	
TAWA 89
	
Eagle Trail Properties Inc.
	
YB06977
	
03/01/2010
	
19.91
	
-

	
TAWA 90
	
Eagle Trail Properties Inc.
	
YB06978
	
03/01/2010
	
20.97
	
-

	
Total
	  	  	  	
3136.43
	  

 

 

19

 

 

Mineral Claim Purchase and

Sale Agreement -  SCHEDULE “B”

 

 

MINERAL CLAIM OPTION AGREEMENT

 

 

THIS AGREEMENT made as of November 19, 2009

 

BETWEEN:                            EAGLE TRAIL PROPERTIES INC. 

a Saskatchewan company having a registered and records office at

1140 Rose Street, Regina Saskatchewan, S4R 1Z6  Canada

 

(the “Optionor”)

 

AND:

 

GUINNESS EXPLORATION, INC.

a Nevada state company having an office at

1312 North Monroe Street,

Spokane, Washington, 99201, USA

 

(the “Optionee”)

 

WHEREAS:

 

A.       The Optionor is the legal and beneficial owner of 203 full or fractional mineral claims/leases with a total area of 3,136.43 hectares located in the Mt. Nanson area of the Whitehorse Mining District of the Yukon Territory, Canada, the particulars of which are set out in Schedule “A” hereto
(the “Mineral Claims”).

 

B.       Pursuant to an Option Agreement dated November 7, 2008 (the “Dome Option”) between the Optionor as optionee and Pricewaterhousecoopers Inc. as optionor, the Optionor has the option to purchase the mineral claim identified as Dome 12:73698 located in the Mt. Nanson area of the Whitehorse
Mining District of the Yukon Territory for the sum of $25,000.00 (the “Dome Claim").

 

C.       Pursuant to a Mineral Claims Purchase and Sale Agreement of even date (the “Purchase and Sale Agreement”), the Optionee purchased from the Optionor, a 65% undivided interest in and to the Mineral Claims and the Option, subject to an NSR reserved by the Optionor.

 

20

 

 

D.       The Optionor has agreed to grant to the Optionee an option to purchase the Optionor’s remaining 35% undivided interest in the Mineral Claims and in the Dome Option, on the terms and conditions contained herein.

 

WHEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

1.           Interpretation

 

1.1         Definitions. In this Agreement, unless the context otherwise requires:

 

	
  
	
(a)
	
“Acts” means all legislation, as amended from time to time, of the jurisdiction in which the Mineral Claims and Dome Claim are located, applicable to the claims, including title to, and Mining Operations on, such claims.

	
  
	
(b)
	
“Affiliate” has the meaning set out in the Business Corporations Act (Saskatchewan), as amended from time to time.

	
  
	
(c)
	
“Agreement” means this agreement, including the recitals and the Schedules, all as amended, supplemented or restated from time to time.

	
  
	
(d)
	
“Business Day” means a day other than a Saturday, Sunday or statutory holiday in Saskatchewan.

	
  
	
(e)
	
“Effective Date” means the date of the completion of the Closing of the Purchase and Sale Agreement.

	
  
	
(f)
	
“Encumbrances” means security interests, liens, royalties, charges, mortgages, pledges and encumbrances of any nature or kind whatsoever, whether written or oral, or direct or indirect.

	
  
	
(g)
	
“Expenditures” means all costs, expenses and charges, directly related to the Mining Operations, incurred by the Optionor pursuant to Section 3.3 herein, which costs, expenses and charges shall be determined in accordance with Canadian generally accepted accounting principles in incurred in accordance with the recommendations in the Report.

	
  
	
(h)
	
“Government or Regulatory Authority” means any federal, provincial, regional, municipal or other government, governmental department, regulatory authority, commission, board, bureau, agency or instrumentality and that have lawful authority to regulate or administer or govern an business or property or affairs of any person, and for the purposes of
this Agreement also includes any corporation or other entity owned or controlled by any of the foregoing and any stock exchange on which shares of a party are listed for trading.

 

21

 

 

	
  
	
(i)
	
“Joint Exploration Committee” means the committee formed by the parties hereto to determine the nature and extent of the Mining Operations during the Option Period.

	
  
	
(j)
	
“Mining Operations” means every kind of work done on or in respect of the Mineral Claims and the Dome Claim or the minerals, derived from the Mineral Claims or the Dome Claim during the Option Period by or under the direction of the Optionee pursuant to Section 3.2 of this Agreement, including, without limiting the generality of the foregoing, the
work of assessment, geophysical, geochemical and geological surveys, studies and mapping, investigating, drilling, designing, examining, equipping, improving, surveying, shaft-sinking, raising, cross-cutting and drifting, searching for, digging, trucking, sampling, working and procuring minerals, ores and metals, surveying and bringing any mining claims to lease or patent, reclaiming and all other work usually considered to be prospecting, exploration, development, mining and reclamation work; in paying wages
and salaries of workers engaged in the work and in supplying food, lodging, transportation and other reasonable needs of the workers; in paying assessments or premiums for workers' compensation insurance, contributions for unemployment insurance or other pay allowances or benefits customarily paid in the district to those workers; in paying rentals, licence renewal fees, taxes and other governmental charges required to keep the Mineral Claims and the Dome Claim in good standing; in purchasing or renting plant,
buildings, machinery, tools, appliances, equipment or supplies and in installing, erecting, detaching and removing them; mining, milling, concentrating rehabilitation, reclamation, and environmental protections and in the management of any work which may be done on the Mineral Claims or the Dome Claim or in any other respect necessary for the due carrying out of the prospecting, exploration and development work.

	
  
	
(k)
	
“NSR” has the meaning set out in the Purchase and Sale Agreement.

	
  
	
(l)
	
“Option” has the meaning set out in Section 3.1 of this Agreement.

	
  
	
(m)
	
“Optioned Interest” means the Vendor’s undivided 35% legal and beneficial interest in the Mineral Claims and the Dome Option, subject to the NSR and the Permitted Encumbrances.

	
  
	
(n)
	
“Option Period” means the period commencing on the Effective Date and ending on November 30, 2011 unless terminated earlier by the exercise of the Option by the Optionee or the lapse or termination of the Option.

	
  
	
(o)
	
“Permitted Encumbrances” means

 

 

 

22

 

 

	
  
	
(i)
	
easements, rights of way, servitudes or other similar rights in land including, without limiting the generality of the foregoing, rights of way and servitudes for railways, sewers, drains, gas and oil pipelines, gas and water mains, electrical light, power, telephone, telegraph or cable television conduits, poles, wires and cables;

 

	
  
	
(ii)
	
the right reserved to or vested in any government or other public authority by the terms of any or by any statutory provision, to terminate, revoke or forfeit any of the lease or mining claims or to require annual or other periodic payments as a condition of the continuance thereof;

 

	
  
	
(iii)
	
rights reserved to or vested in any municipality or governmental, statutory or public authority to control or regulate in any manner, and all applicable laws, rules and orders of any governmental authority; and

 

	
  
	
(iv)
	
the reservations, limitations, provisos and conditions in any original grants from the Crown or interests therein and statutory exceptions to title.

 

	
  
	
(p)
	
“Property” means the Mineral Claims and the Dome Option to purchase the Dome Claim.

 

	
  
	
(q)
	
“Purchase and Sale Agreement” has the meaning set out in the recitals section of this Agreement.

 

	
  
	
(r)
	
“Report” means the National Instrument 43-101 Report on the Mount Nansen Property and the Tawa Property prepared by Robert S. Middleton, P.Eng and dated September 21, 2009.

 

1.2          Headings.  The division of this Agreement into sections and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”, “hereunder” and similar expressions refer to this Agreement and not to any particular Article, section or other portion hereof and includes any variation or amendment hereto from time to time and any agreement supplemental hereto.  Unless something in the subject matter or context is inconsistent therewith, references herein to Articles and Sections are
to Articles and Sections of this Agreement.

 

1.3          Legislation.  Any reference to a provision in any legislation is a reference
to that provision as now enacted, and as amended, re-enacted or replaced from time to time, and in the event of such amendment, re-enactment or replacement any reference to that provision shall be read as referring to such amended, re-enacted or replaced provision.

 

 

23

 

 

1.4          Extended Meanings.  In this Agreement words importing the singular number only shall include the plural and vice
versa, words importing the masculine gender shall include the feminine and neuter genders and vice versa and words importing persons shall include individuals, partnerships, associations, trusts, unincorporated organizations and corporations. All references to mineral claims shall include map designated units.

 

1.5          Currency.  All references to currency herein are to lawful money of Canada,
unless otherwise specified.

 

1.6          Non-Merger. The provisions contained in this Agreement shall survive the Effective Date and the completion of the transactions contemplated by
this Agreement and shall not merge in any conveyance, transfer, assignment, novation agreement or other document or instrument delivered pursuant hereto or in connection herewith.

 

1.7          Construction Clause. This Agreement has been negotiated and approved by counsel on behalf
of all parties hereto and, notwithstanding any rule or maxim of construction to the contrary, any ambiguity or uncertainty will not be construed against any party hereto by reason of the authorship of any of the provisions hereof.

 

1.8          No partnership. Nothing contained in this Agreement shall be construed as creating
a partnership of any kind or as imposing on any party any partnership duty, obligation or liability to any other party.

 

2.           Representations and Warranties

 

2.1         Representations and Warranties of the Optionor.  The Optionor represents and warrants to the Optionee that:

 

	
  
	
(a)
	
it has a business address at the address set forth beside its name on the first page of this Agreement;

 

	
  
	
(b)
	
it is a corporation duly subsisting under the laws of Saskatchewan with the corporate power to own its assets and to carry on its business in the jurisdiction in which the Property is located;

 

	
  
	
(c)
	
it has good and sufficient authority to enter into and deliver this Agreement and to transfer the legal and beneficial title in the Optioned Interest to the Optionee in accordance with this Agreement (subject to the consent of the optionor under the Dome of Option);

 

	
  
	
(d)
	
there is no contract, option or any other right of another binding upon the Optionor to option, sell, transfer, assign, pledge, charge, mortgage, explore or in any other way option, dispose of or encumber all or part of the Property or any portion thereof or interest therein other than pursuant to the provisions of the Purchase and Sale Agreement
and this Agreement;

 

 

24

 

 

	
  
	
(e)
	
the execution, delivery and performance of this Agreement by the Optionor, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of the Optionor; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of any
jurisdiction in which the Optionor’s business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound;

 

	
  
	
(f)
	
it is the legal and beneficial owner of an undivided 35% of the right, title and interest in and to the Property, free and clear of all Encumbrances except for the NSR;

 

	
  
	
(g)
	
the Mineral Claims are properly and accurately described in Schedule A” hereto and are in good standing under the laws of the jurisdiction in which they are located up to and including at least the expiry dates set forth in Schedule “A”;

 

	
  
	
(h)
	
the terms of the Dome Option are attached as Schedule “D” hereto and has not been exercised or amended, altered or varied in any way;

 

	
  
	
(i)
	
to the best of its knowledge, the Mineral Claims and the Dome Claim are in compliance in all material respects with all Environmental Laws (as defined below), and there are, to the best of its knowledge, no facts which could give rise to a notice of non-compliance with any Environmental Laws. The term “Environmental Laws” means all applicable laws, rules, regulations, orders, policies, guidelines, notices,
approvals and permits relating to environmental or occupational health and safety matters, in effect as at the date hereof, including, without limitation, those pertaining to reporting, licensing, permitting, investigation, remediation and clean-up in connection with any release or threat of release of a Contaminant or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling and the like of a Contaminant. The term “Contaminant” means any substance
or material that is prohibited, controlled or regulated by any governmental authority, including without limitation, any contaminants, pollutants, petroleum, its derivatives, by-products or other hydrocarbons, dangerous substances or goods, asbestos, toxic or hazardous substances or materials, controlled products, wastes involving hazardous wastes and any other materials that are by their nature hazardous, either in fact or as defined in or pursuant to any Environmental Laws;

 

	
  
	
(k)
	
to the best of its knowledge, there are no existing claims, demands, damages, expenses, suits, proceedings, actions, negotiations, or causes of action of any nature whatsoever, whether threatened or pending, arising out of the presence on the Mineral Claims or the Dome Claim of any Contaminant, or out of any past or present activity conducted on any such
property, involving any Contaminant or any violation of any Environmental Law;

 

	
  
	
(l)
	
it is not a non-resident for the purposes of Section 116 of the Income Tax Act (Canada);

 

 

25

 

 

	
  
	
(m)
	
it is in compliance with all applicable laws, statutes, bylaws, decrees, rulings, orders, judgments and regulations of each jurisdiction in which the Mineral Claims and the Dome Claim are located or in which it conducts its business; and

 

	
  
	
(n)
	
this Agreement has been duly authorized, executed and delivered by the Optionor and constitutes a valid and binding obligation of the Optionor enforceable against the Optionor in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles
when equitable remedies are sought.

 

2.2          Representations and Warranties of the Optionee.  The Optionee represents and warrants to the Optionor that:

 

	
  
	
(a)
	
it has a business address at the address set forth beside its name on the first page of this Agreement.

 

	
  
	
(b)
	
it is a corporation duly incorporated, organized and subsisting under the laws of the state of Nevada with the corporate power to own its assets and to carry on its business in the jurisdiction in which the Mineral Claims and the Dome Claim are located;

 

	
  
	
(c)
	
it has all necessary power and authority to own or lease its assets and carry on its business as presently carried on, to carry out its obligations herein and to enter into this Agreement and any agreement or instrument referred to in or contemplated by this Agreement and to do all such acts and things as are required to be done, observed or performed by it, in accordance with the terms of this Agreement and any agreement
or instrument referred to in or contemplated by this Agreement;

 

	
  
	
(d)
	
the execution, delivery and performance of this Agreement by the Optionee, and the consummation of the transactions herein contemplated will not (i) violate or conflict with any term or provision of any of the articles, by-laws or other constating documents of the Optionee; (ii) violate or conflict with any term or provision of any order of any court, Government or Regulatory Authority or any law or regulation of any
jurisdiction in which the Optionee’s business is carried on; or (iii) conflict with, accelerate the performance required by or result in the breach of any agreement to which it is a party or by which it is currently bound; and

 

	
  
	
(e)
	
this Agreement has been duly authorized, executed and delivered by the Optionee and constitutes a valid and binding obligation of the Optionee enforceable against the Optionee in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and except as limited by the application of equitable principles
when equitable remedies are sought.

 

26

 

 

2.3          Reliance and Survival.  The representations, warranties and acknowledgements
set out in this Section 2 have been relied on by the parties in entering into this Agreement.  All representations and warranties made herein will survive the delivery of this Agreement to the parties and the completion of the transactions contemplated hereby and, notwithstanding such completion, will continue in full force and effect for the benefit of the parties to whom they are provided, as the case may be, indefinitely.

 

3.           Grant of Option

 

3.1         Grant of Option. The Optionor grants to the Optionee an exclusive option (the “Option”) with respect to the Property, for the period commencing
on the Effective Date and expiring on October 31, 2011, to earn the Optioned Interest.  This right may be exercised in the manner referred to in Section 5.1.

 

3.2         Working Right.   During the Option Period, the parties shall form the Joint Exploration Committee by each appointing two persons.  Subject
to the decisions of the  Joint Exploration Committee,  the Optionee shall have the sole and exclusive working right to enter on and conduct the Mining Operations on the Mineral Claims and the Dome Claim as the Joint Exploration Committee in its sole discretion may decide with full power and authority to the Optionee, its servants, agents, workers or contractors, to carry on Mining Operations in searching for minerals in such manner as the Joint Exploration Committee in its discretion may determine,
including the right to erect, bring and install on the Mineral Claims and Dome Claim all buildings, plant, machinery, equipment, tools, appliances or supplies as the Joint Exploration Committee shall deem necessary and proper and the right to remove therefrom reasonable quantities of rocks, ores and minerals and to transport them for the purposes of sampling, metallurgical testing and assaying. The Optionee shall conduct all Mining Operations in a careful and miner-like manner and in compliance in all material
respects with all Acts, regulations, by-laws, orders and judgments and all applicable directives, rules, consents, permits, orders guidelines and policies of any Government or Regulatory Authority with jurisdiction over the Mineral Claims and the Dome Claim.

 

3.3         Maintenance of Option.  In order to maintain in force the Option granted to it, and to exercise the Option, the Optionee shall:

 

	
  
	
(a)
	
within 60 days of  the Effective Date, pay to the Optionor the sum of $1,000.00 by way of certified cheque or bank draft;

 

	
  
	
(b)
	
unless this Agreement is terminated in accordance with Section 6.3, incur the following Expenditures:

 

	
  
	
(i)
	
Expenditures of at least $1,000,000 on or before October 31, 2010; and

 

	
  
	
(ii)
	
Expenditures of at least $1,000,000 on or before October 31, 2011; and

  

27

  

 

	
  
	
(c)
	
from and after the Effective Date, keep the Mineral Claims and the Dome Claim in good standing by paying all taxes, assessments and other charges and by doing all other acts and things that may be necessary in that regard. The Optionee shall transmit promptly to the Optionor any notices pertaining to the taxes, assessments and other charges.

 

3.4         Mandatory Expenditures. Unless this Agreement is terminated in accordance with Section 6.3, the Optionee shall incur the Expenditures described in
Section 3.3(b) and (c) of this Agreement.

 

4.           Agency

 

4.1         Agency.  Subject to and in accordance with this Agreement the Optionor hereby irrevocably appoints the Optionee to conduct the Mining Operations
contemplated by this Agreement as agent for the Optionor.

 

5.           Exercise of Option

 

5.1         Exercise of Option.  If the Optionee has, on or before October 31, 2011, made the payments, incurred the Expenditures and otherwise complied with the provisions of Section 3.3, the Optionee shall
have the right, by giving written notice to the Optionor on or before November 30, 2011, to become the owner of the Optioned Interest provided that if the Optionor is unable, despite its best efforts, to obtain the consent of the optionor to the assignment under the Dome Option, the Optionor shall not be required to assign the Optioned Interest in the Dome Option to the Optionee but rather shall hold the Optioned Interest in the Dome Option and all benefits derived therefrom, in trust for the Optionee until title
in the Dome Option can be registered in the name of the Optionee.

 

6.           Termination

 

6.1         Termination. The Optionor may terminate the Option effective upon giving notice of such termination if the Optionee is in default in any material respect of Section 3.3 or 3.4 and either fails to cure such
default within 30 days of receiving notice from the Optionor specifying the particulars of such default or, where curing the default may take more than 30 days, fails to take diligent action to cure such default as expeditiously as possible.

 

6.2         Surrender of Rights.  The Optionee may during the Option Period give the Optionor written notice of its intention to surrender all of its rights hereunder, whereupon the Option shall terminate
and working right herein shall lapse and all Expenditures paid by the Optionee shall be forfeited.

 

 

28

 

 

7.           Force Majeure

 

7.1         Force Majeure.  Notwithstanding anything contained in this Agreement to the contrary, if any party is prevented from or delayed in performing
any obligation under this Agreement and failure is occasioned by any cause beyond its reasonable control, excluding only lack of finances then, subject to Section 7.2, the time for the observance of the condition or performance of the obligation in question shall be extended for a period equivalent to the total period the cause of the prevention or delay persists or remains in effect regardless of the length of the total period.

 

7.2         Notice.   Any party claiming suspension of its obligations shall promptly notify the other party to that effect and shall take all reasonable steps to remove or remedy the cause and effect
of the force majeure described in the notice in so far as it is reasonably able so to do and as soon as possible; provided, that the terms of settlement of any labour disturbance or dispute, strike or lock-out shall be wholly in the discretion of the party claiming suspension of its obligations by reason thereof; and that party shall not be required to accede to the demands of its opponents in any labour disturbance or dispute, strike or lock-out solely
to remedy or remove the force majeure thereby constituted.

 

8.           Notices and Payments

 

8.1         Notice.  Any demand, notice or other communication (a “Communication”) to be made or given in connection with this Agreement
shall be made or given in writing and may be made or given by personal delivery or facsimile addressed to the recipient at the addresses or facsimile numbers of the parties provided on the first page of this Agreement or such other address or individual as may be designated by notice by any party to the other.  Any Communication made or given by personal delivery shall be conclusively deemed to have been given on the day of actual delivery thereof, and if made or given by facsimile, on the day, other
than a day which is not a Business Day, following the day it was sent.

 

8.2         Payments.  Payments hereunder shall be made addressed to the recipient at the addresses of the recipient parties provided on the first page of this Agreement or such other address or individual
as may be designated by notice by the recipient party in accordance with Section 8.1.  If any payment herein becomes due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day.

 

 

 

 

29

 

 

9.           Public Announcements

 

9.1         Public Announcements.  The Optionee  shall not, without the prior consent of the Optionor, make any disclosure regarding (i)
the existence, purpose, scope, content, terms or conditions of this Agreement or other agreements relating thereto or (ii) the Property, any Mining Operations, the results of or plan for Mining Operations,  except to the extent such disclosure comprises information substantially already publicly available or unless it is necessary for any party to make such disclosure in order to comply with a statutory obligation, the requirements of a competent government or statutory agency, or the requirements of
any stock exchange; provided that, where practicable, a copy of any proposed announcement or statement shall be furnished by the Optionee to the Optionor in advance of the proposed date of publication, and the Optionee shall make every reasonable effort to incorporate the reasonable comments of the other parties prior to dissemination.

 

10.           General Provisions

 

10.1         Entire Agreement.  This Agreement, including all the Schedules hereto and the Purchase and Sale Agreement constitutes the entire agreement between the parties pertaining to the subject matter
hereof and supersedes any and all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties and there are no warranties, representations or other agreements among the parties in connection with the subject matter hereof except as specifically set forth herein and therein. Each party acknowledges that it shall have no right to rely on any amendment, promise, modification, statement or representation made or occurring subsequent to the execution of this Agreement unless
it is in writing and executed by each of the parties.

 

10.2         Assignment of interest. The Optionee shall not, except as set out in this Section, sell, transfer nor assign this Agreement or the Optioned Interest without the consent of the Optionor, which shall not
be unreasonably withheld.  The Optionee shall be permitted to assign this Agreement to an Affiliate of the assigning party providing a guarantee, in form satisfactory to the other party, of the obligations of that Affiliate under this Agreement.  Any assignment during the Option Period by the Assignee shall be subject to the assignee entering into an agreement, in form and substance satisfactory to counsel for the other party, to be bound by this Agreement, and no such assignment shall be
effective until such agreement has been entered into.

 

10.3          Encumbrances. During the Option Period, neither the Optionor nor the Optionee shall grant an Encumbrance, other than a Permitted Encumbrance,
in their respective interest in the Property or right under this Agreement.

 

10.4          Arbitration.  If there is a dispute between the parties with respect to this Agreement, or the interpretation of this Agreement, the
dispute shall be referred to a single arbitrator appointed pursuant to the laws of Saskatchewan, the arbitration shall be conducted in Saskatchewan, and the decision of the arbitrator shall be final and binding upon the parties.

 

 

30

 

 

10.5         Confidentiality of Information. All information and data concerning or derived from the Mining Operations shall be kept confidential and, except
to the extent required by law, regulation or policy of any securities commission or stock exchange, or in connection with the filing of an annual information form or a prospectus by any party or any of its Affiliates, shall not be disclosed to any person other than an Affiliate without the prior consent of all the other party, which consent shall not unreasonably be withheld. Each party shall, where practicable, use reasonable commercial efforts to cause the text of any news releases or other public statements
which a party desires to make with respect to the Property to be made available to the other party prior to publication and the other party shall have the right to make suggestions for changes therein.

 

10.6          Waiver.  The failure of a party in any one or more instances to insist upon strict performance of any of the terms of this Agreement
or to exercise any right or privilege arising under it shall not preclude it from requiring by reasonable notice that any other party duly perform its obligations or preclude it from exercising such a right or privilege under reasonable circumstances, nor shall waiver in any one instance of a breach be construed as an amendment of this Agreement or waiver of any later breach.

 

10.7          Enurement. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns.

 

10.8          Further Assurances.  The parties hereto shall from time to time at the request of any of the other parties hereto and without further
consideration, execute and deliver all such other additional assignments, transfers, instruments, notices, releases and other documents and shall do all such other acts and things as may be necessary or desirable to assure more fully the consummation of the transactions contemplated hereby.

 

10.9          Time.  Time shall be of the essence of this Agreement.

 

10.10         Expenses. Each party shall be responsible for its own expense in connection with negotiating and settling this Agreement.

 

10.11.        Amendment.  This Agreement may be amended or varied only by agreement in writing signed by each of the parties.

 

10.12         Governing Law and Attornment.  This Agreement shall be governed by and interpreted in accordance with the laws of the Province of Saskatchewan
and the federal laws of Canada applicable therein and, without restricting the generality of Section 10.4, the parties hereby irrevocably attorn to the non-exclusive jurisdiction of the Courts of the Province of Saskatchewan sitting in the City of Regina.

 

10.13         Counterparts.  This Agreement may be executed by facsimile and in as many counterparts as are necessary. All counterparts together shall constitute one agreement.

 

 

31

 

 

THE PARTIES, intending to be contractually bound, have entered into this Agreement as of the date set out on the first page.

 

 

	
GUINNESS EXPLORATION, INC.

By:
	  	  
	 	 	 
	 	 	 
	/s/ Alastair Brown	 	 
	Alastair Brown, President and CEO	 	 
	 	 	 
	 	 	 
	
EAGLE TRAIL PROPERTIES INC.
	 	 
	By:	 	 
	 	 	 
	 	 	 
	/s/ Curtis Sim	 	 
	
Curtis Sim
	  	  

 

 

 

 

 

 

 

 

 

 

  

32

  

 

Mineral Claim Option Agreement -  SCHEDULE “A”

(Same Schedule as used for Schedule A of Mineral Claim Purchase and Sale Agreement)

Schedule A: Claim list for Mount Nansen property and Tawa property.

 

	
Claim
	
Claim Owner
	
Grant Number
	
Expiry Date
	
Area (Ha)
	
Comments

	
ROSE
	
Eagle Trail Properties Inc.
	
04241
	
09/10/2019
	
20.42
	
Lease

	
GOLDEN EAGLE
	
Eagle Trail Properties Inc.
	
04278
	
09/10/2019
	
20.96
	
Lease

	
WAR EAGLE
	
Eagle Trail Properties Inc.
	
04279
	
09/10/2019
	
20.77
	
Lease

	
SHAMROCK
	
Eagle Trail Properties Inc.
	
04354
	
09/10/2019
	
20.73
	
Lease

	
SPOT
	
Eagle Trail Properties Inc.
	
04361
	
09/10/2019
	
19.92
	
Lease

	
ARLEP
	
Eagle Trail Properties Inc.
	
04368
	
09/10/2019
	
14.48
	
Lease

	
PHYLLIS
	
Eagle Trail Properties Inc.
	
04369
	
09/10/2019
	
20.26
	
Lease

	
RUB
	
Eagle Trail Properties Inc.
	
55633
	
09/10/2019
	
1.84
	
Lease

	
PUB
	
Eagle Trail Properties Inc.
	
55663
	
09/10/2019
	
1.93
	
Lease

	
SUN DOG
	
Eagle Trail Properties Inc.
	
55665
	
09/10/2019
	
3.20
	
Lease

	
CUB
	
Eagle Trail Properties Inc.
	
55666
	
09/10/2019
	
1.29
	
Lease

	
JAM
	
Eagle Trail Properties Inc.
	
55890
	
09/10/2019
	
11.64
	
Lease

	
PAM
	
Eagle Trail Properties Inc.
	
55892
	
09/10/2019
	
2.64
	
Lease

	
DOME 1
	
Eagle Trail Properties Inc.
	
73537
	
06/02/2014
	
15.10
	
-

	
DOME 2
	
Eagle Trail Properties Inc.
	
73538
	
06/02/2014
	
15.51
	
-

	
DOME 3
	
Eagle Trail Properties Inc.
	
73539
	
06/02/2014
	
17.29
	
-

	
DOME 4
	
Eagle Trail Properties Inc.
	
73540
	
06/02/2014
	
17.98
	
-

	
DOME 6
	
Eagle Trail Properties Inc.
	
73542
	
06/02/2014
	
17.32
	
-

	
DOME 7
	
Eagle Trail Properties Inc.
	
73543
	
06/02/2014
	
25.34
	
-

	
DOME 8
	
Eagle Trail Properties Inc.
	
73694
	
06/02/2014
	
12.47
	
-

	
DOME 14
	
Eagle Trail Properties Inc.
	
73700
	
06/02/2014
	
21.07
	
-

	
DOME 16
	
Eagle Trail Properties Inc.
	
73702
	
06/02/2014
	
20.61
	
-

	
DOME 17
	
Eagle Trail Properties Inc.
	
73703
	
06/02/2014
	
18.41
	
-

	
DOME 18
	
Eagle Trail Properties Inc.
	
73704
	
06/02/2014
	
18.56
	
-

	
DOME 19
	
Eagle Trail Properties Inc.
	
73705
	
06/02/2014
	
16.73
	
-

	
DOME 20
	
Eagle Trail Properties Inc.
	
73706
	
06/02/2014
	
13.42
	
-

	
JOANNE 1
	
Eagle Trail Properties Inc.
	
74283
	
06/02/2014
	
19.79
	
-

	
JOANNE 2
	
Eagle Trail Properties Inc.
	
74284
	
06/02/2014
	
19.51
	
-

	
JOANNE 3
	
Eagle Trail Properties Inc.
	
74285
	
06/02/2014
	
20.36
	
-

	
JOANNE 4
	
Eagle Trail Properties Inc.
	
74286
	
06/02/2014
	
14.78
	
-

	
JOANNE 5
	
Eagle Trail Properties Inc.
	
74287
	
06/02/2014
	
19.83
	
-

	
JOANNE 6
	
Eagle Trail Properties Inc.
	
74288
	
06/02/2014
	
19.69
	
-

	
DOME 25
	
Eagle Trail Properties Inc.
	
77746
	
06/02/2014
	
15.19
	
-

	
DOME 26
	
Eagle Trail Properties Inc.
	
77747
	
06/02/2014
	
22.54
	
-

	
DOME 27
	
Eagle Trail Properties Inc.
	
77748
	
06/02/2014
	
20.32
	
-

	
DOME 28
	
Eagle Trail Properties Inc.
	
77749
	
06/02/2014
	
21.74
	
-

	
DOME 33
	
Eagle Trail Properties Inc.
	
77754
	
06/02/2014
	
25.50
	
-

	
DOME 34
	
Eagle Trail Properties Inc.
	
77755
	
06/02/2014
	
23.29
	
-

	
DOME 35
	
Eagle Trail Properties Inc.
	
77756
	
06/02/2014
	
22.39
	
-

 

 

 

33

 

 

 

	
DOME 36
	
Eagle Trail Properties Inc.
	
77757
	
06/02/2014
	
23.97
	
-

	
DOME 37
	
Eagle Trail Properties Inc.
	
77758
	
06/02/2014
	
14.23
	
-

	
DOME 38
	
Eagle Trail Properties Inc.
	
77759
	
06/02/2014
	
18.48
	
-

	
DOME 39
	
Eagle Trail Properties Inc.
	
77760
	
06/02/2014
	
14.95
	
-

	
DOME 40
	
Eagle Trail Properties Inc.
	
77761
	
06/02/2014
	
20.51
	
-

	
DOME 41
	
Eagle Trail Properties Inc.
	
77762
	
06/02/2014
	
20.76
	
-

	
DOME 42
	
Eagle Trail Properties Inc.
	
77763
	
06/02/2014
	
19.93
	
-

	
DOME 43
	
Eagle Trail Properties Inc.
	
77764
	
06/02/2014
	
20.47
	
-

	
DOME 49
	
Eagle Trail Properties Inc.
	
77770
	
06/02/2014
	
8.18
	
-

	
DOME 50
	
Eagle Trail Properties Inc.
	
77771
	
06/02/2014
	
18.83
	
-

	
DOME 51
	
Eagle Trail Properties Inc.
	
77772
	
06/02/2014
	
19.05
	
-

	
DOME 52
	
Eagle Trail Properties Inc.
	
77773
	
06/02/2014
	
21.85
	
-

	
DOME 53
	
Eagle Trail Properties Inc.
	
77774
	
06/02/2014
	
22.80
	
-

	
DOME 54
	
Eagle Trail Properties Inc.
	
77775
	
06/02/2014
	
14.69
	
-

	
DOME 55
	
Eagle Trail Properties Inc.
	
77776
	
06/02/2014
	
13.09
	
-

	
DOME 56
	
Eagle Trail Properties Inc.
	
77777
	
06/02/2014
	
13.35
	
-

	
DOME 57
	
Eagle Trail Properties Inc.
	
77778
	
06/02/2014
	
20.47
	
-

	
DOME 58
	
Eagle Trail Properties Inc.
	
77779
	
06/02/2014
	
19.41
	
-

	
DOME 60
	
Eagle Trail Properties Inc.
	
77781
	
06/02/2014
	
20.06
	
-

	
DOME 61
	
Eagle Trail Properties Inc.
	
77782
	
06/02/2014
	
18.91
	
-

	
DOME 63
	
Eagle Trail Properties Inc.
	
77784
	
06/02/2014
	
22.51
	
-

	
DOME 64
	
Eagle Trail Properties Inc.
	
77785
	
06/02/2014
	
22.88
	
-

	
DOME 65
	
Eagle Trail Properties Inc.
	
77786
	
06/02/2014
	
20.66
	
-

	
DOME 66
	
Eagle Trail Properties Inc.
	
77787
	
06/02/2014
	
21.18
	
-

	
DOME 78
	
Eagle Trail Properties Inc.
	
81842
	
06/02/2014
	
25.41
	
-

	
DOME 79
	
Eagle Trail Properties Inc.
	
81843
	
06/02/2014
	
24.10
	
-

	
DOME 80
	
Eagle Trail Properties Inc.
	
81844
	
06/02/2014
	
24.20
	
-

	
DOME 81
	
Eagle Trail Properties Inc.
	
81845
	
06/02/2014
	
22.52
	
-

	
DOME 82
	
Eagle Trail Properties Inc.
	
81846
	
06/02/2014
	
23.26
	
-

	
DOME 83
	
Eagle Trail Properties Inc.
	
81847
	
06/02/2014
	
18.72
	
-

	
DOME 84
	
Eagle Trail Properties Inc.
	
81848
	
06/02/2014
	
19.37
	
-

	
DOME 86
	
Eagle Trail Properties Inc.
	
81850
	
06/02/2014
	
20.76
	
-

	
HIW 9
	
Eagle Trail Properties Inc.
	
YA23835
	
06/02/2014
	
19.44
	
-

	
HIW 10
	
Eagle Trail Properties Inc.
	
YA23836
	
06/02/2014
	
20.83
	
Fractions

	
HIW 11
	
Eagle Trail Properties Inc.
	
YA23837
	
06/02/2014
	
21.55
	
Fractions

	
HIW 12
	
Eagle Trail Properties Inc.
	
YA23838
	
06/02/2014
	
19.93
	
Fractions

	
HIW 13
	
Eagle Trail Properties Inc.
	
YA23839
	
06/02/2014
	
20.72
	
-

	
HIW 14
	
Eagle Trail Properties Inc.
	
YA23840
	
06/02/2014
	
19.55
	
-

	
HIW 15
	
Eagle Trail Properties Inc.
	
YA23841
	
06/02/2014
	
20.15
	
-

	
HIW 16
	
Eagle Trail Properties Inc.
	
YA23842
	
06/02/2014
	
19.86
	
-

	
HIW 17
	
Eagle Trail Properties Inc.
	
YA23843
	
06/02/2014
	
19.92
	
-

	
HIW 1
	
Eagle Trail Properties Inc.
	
YA24813
	
06/02/2014
	
4.74
	
Fractions

	
HIW 2
	
Eagle Trail Properties Inc.
	
YA24814
	
06/02/2014
	
5.15
	
Fractions

	
HIW 7
	
Eagle Trail Properties Inc.
	
YA24819
	
06/02/2014
	
3.01
	
Fractions

	
DD 1
	
Eagle Trail Properties Inc.
	
YA59596
	
06/02/2014
	
20.62
	
-

	
DD 2
	
Eagle Trail Properties Inc.
	
YA59597
	
06/02/2014
	
22.35
	
-

 

 

 

34

 

 

 

	
DD 15
	
Eagle Trail Properties Inc.
	
YA59610
	
06/02/2014
	
19.20
	
-

	
DD 16
	
Eagle Trail Properties Inc.
	
YA59611
	
06/02/2014
	
19.21
	
-

	
DD 17
	
Eagle Trail Properties Inc.
	
YA59612
	
06/02/2014
	
19.37
	
-

	
DD 18
	
Eagle Trail Properties Inc.
	
YA59613
	
06/02/2014
	
19.85
	
-

	
DD 19
	
Eagle Trail Properties Inc.
	
YA59614
	
06/02/2014
	
20.17
	
-

	
DD 20
	
Eagle Trail Properties Inc.
	
YA59615
	
06/02/2014
	
19.90
	
-

	
DD 21
	
Eagle Trail Properties Inc.
	
YA59616
	
06/02/2014
	
19.64
	
-

	
DD 22
	
Eagle Trail Properties Inc.
	
YA59617
	
06/02/2014
	
19.17
	
-

	
DD 23
	
Eagle Trail Properties Inc.
	
YA59618
	
06/02/2014
	
18.69
	
-

	
DD 24
	
Eagle Trail Properties Inc.
	
YA59619
	
06/02/2014
	
18.30
	
-

	
DD 25
	
Eagle Trail Properties Inc.
	
YA59620
	
06/02/2014
	
18.18
	
-

	
DD 26
	
Eagle Trail Properties Inc.
	
YA59621
	
06/02/2014
	
17.65
	
-

	
DD 27
	
Eagle Trail Properties Inc.
	
YA59622
	
06/02/2014
	
19.49
	
-

	
DD 28
	
Eagle Trail Properties Inc.
	
YA59623
	
06/02/2014
	
18.71
	
-

	
TBR 1
	
Eagle Trail Properties Inc.
	
YA86690
	
06/02/2014
	
8.92
	
-

	
TBR 2
	
Eagle Trail Properties Inc.
	
YA86691
	
06/02/2014
	
20.16
	
-

	
TBR 3
	
Eagle Trail Properties Inc.
	
YA86692
	
06/02/2014
	
20.03
	
-

	
TBR 4
	
Eagle Trail Properties Inc.
	
YA86693
	
06/02/2014
	
20.84
	
-

	
TBR 5
	
Eagle Trail Properties Inc.
	
YA86694
	
06/02/2014
	
18.34
	
-

	
TBR 6
	
Eagle Trail Properties Inc.
	
YA86695
	
06/02/2014
	
20.92
	
-

	
TBR 7
	
Eagle Trail Properties Inc.
	
YA86696
	
06/02/2014
	
15.96
	
-

	
TBR 8
	
Eagle Trail Properties Inc.
	
YA86697
	
06/02/2014
	
21.79
	
-

	
ONT 38
	
Eagle Trail Properties Inc.
	
YA87204
	
06/02/2014
	
20.26
	
-

	
ONT 40
	
Eagle Trail Properties Inc.
	
YA87206
	
06/02/2014
	
18.34
	
-

	
ONT 42
	
Eagle Trail Properties Inc.
	
YA87208
	
06/02/2014
	
5.73
	
-

	
EEK 1
	
Eagle Trail Properties Inc.
	
YA87210
	
06/02/2014
	
21.07
	
-

	
EEK 2
	
Eagle Trail Properties Inc.
	
YA87211
	
06/02/2014
	
20.08
	
-

	
EEK 3
	
Eagle Trail Properties Inc.
	
YA87212
	
06/02/2014
	
20.70
	
-

	
EEK 4
	
Eagle Trail Properties Inc.
	
YA87213
	
06/02/2014
	
20.68
	
-

	
EEK 5
	
Eagle Trail Properties Inc.
	
YA87214
	
06/02/2014
	
20.80
	
-

	
EEK 6
	
Eagle Trail Properties Inc.
	
YA87215
	
06/02/2014
	
19.58
	
-

	
EEK 7
	
Eagle Trail Properties Inc.
	
YA87216
	
06/02/2014
	
19.97
	
-

	
EEK 8
	
Eagle Trail Properties Inc.
	
YA87217
	
06/02/2014
	
21.91
	
-

	
EEK 9
	
Eagle Trail Properties Inc.
	
YA87218
	
06/02/2014
	
22.64
	
-

	
EEK 14
	
Eagle Trail Properties Inc.
	
YA87223
	
06/02/2014
	
21.36
	
-

	
EEK 15
	
Eagle Trail Properties Inc.
	
YA87224
	
06/02/2014
	
21.22
	
-

	
EEK 16
	
Eagle Trail Properties Inc.
	
YA87225
	
06/02/2014
	
21.76
	
-

	
EEK 17
	
Eagle Trail Properties Inc.
	
YA87226
	
06/02/2014
	
20.01
	
-

	
EEK 18
	
Eagle Trail Properties Inc.
	
YA87227
	
06/02/2014
	
20.74
	
-

	
ONT 44
	
Eagle Trail Properties Inc.
	
YA92655
	
06/02/2014
	
16.80
	
-

	
ONT 45
	
Eagle Trail Properties Inc.
	
YA92656
	
06/02/2014
	
12.91
	
-

	
ONT 46
	
Eagle Trail Properties Inc.
	
YA92657
	
06/02/2014
	
18.48
	
-

	
ONT 47
	
Eagle Trail Properties Inc.
	
YA92658
	
06/02/2014
	
14.41
	
-

	
TAWA 25
	
Eagle Trail Properties Inc.
	
YA95051
	
03/01/2010
	
4.33
	
Fractions

	
TAWA 26
	
Eagle Trail Properties Inc.
	
YA95052
	
03/01/2010
	
5.95
	
Fractions

	
TAWA 27
	
Eagle Trail Properties Inc.
	
YA95151
	
03/01/2010
	
17.11
	
-

 

 

 

35

 

 

 

	
TAWA 28
	
Eagle Trail Properties Inc.
	
YA95152
	
03/01/2010
	
22.34
	
-

	
TAWA 29
	
Eagle Trail Properties Inc.
	
YA95153
	
03/01/2010
	
16.14
	
-

	
TAWA 30
	
Eagle Trail Properties Inc.
	
YA95154
	
03/01/2010
	
20.77
	
-

	
TAWA 31
	
Eagle Trail Properties Inc.
	
YA95155
	
03/01/2010
	
23.90
	
-

	
TAWA 32
	
Eagle Trail Properties Inc.
	
YA95156
	
03/01/2010
	
21.36
	
-

	
TAWA 33
	
Eagle Trail Properties Inc.
	
YA95157
	
03/01/2010
	
12.16
	
-

	
TAWA 34
	
Eagle Trail Properties Inc.
	
YA95158
	
03/01/2010
	
18.45
	
-

	
TAWA 47
	
Eagle Trail Properties Inc.
	
YA95163
	
03/01/2010
	
7.01
	
-

	
TAWA 48
	
Eagle Trail Properties Inc.
	
YA95164
	
03/01/2010
	
8.00
	
-

	
TAWA 49
	
Eagle Trail Properties Inc.
	
YA95165
	
03/01/2010
	
21.93
	
-

	
TAWA 50
	
Eagle Trail Properties Inc.
	
YA95166
	
03/01/2010
	
23.59
	
-

	
TAWA 51
	
Eagle Trail Properties Inc.
	
YA95167
	
03/01/2010
	
23.22
	
-

	
TAWA 52
	
Eagle Trail Properties Inc.
	
YA95168
	
03/01/2010
	
23.93
	
-

	
TAWA 53
	
Eagle Trail Properties Inc.
	
YA95169
	
03/01/2010
	
15.03
	
-

	
TAWA 54
	
Eagle Trail Properties Inc.
	
YA95170
	
03/01/2010
	
22.93
	
-

	
TAWA 55
	
Eagle Trail Properties Inc.
	
YA95171
	
03/01/2010
	
5.90
	
-

	
TAWA 56
	
Eagle Trail Properties Inc.
	
YA95172
	
03/01/2010
	
13.37
	
-

	
TAWA 57
	
Eagle Trail Properties Inc.
	
YA95173
	
03/01/2010
	
14.12
	
-

	
TAWA 58
	
Eagle Trail Properties Inc.
	
YA95174
	
03/01/2010
	
16.15
	
-

	
TAWA 59
	
Eagle Trail Properties Inc.
	
YA95175
	
03/01/2010
	
13.35
	
-

	
TAWA 60
	
Eagle Trail Properties Inc.
	
YA95176
	
03/01/2010
	
16.19
	
-

	
TAWA 61
	
Eagle Trail Properties Inc.
	
YA95177
	
03/01/2010
	
12.44
	
-

	
TAWA 62
	
Eagle Trail Properties Inc.
	
YA95178
	
03/01/2010
	
11.28
	
-

	
TAWA 63
	
Eagle Trail Properties Inc.
	
YA95179
	
03/01/2010
	
8.41
	
-

	
TAWA 64
	
Eagle Trail Properties Inc.
	
YA95301
	
03/01/2010
	
18.96
	
-

	
TAWA 65
	
Eagle Trail Properties Inc.
	
YA95302
	
03/01/2010
	
15.20
	
-

	
TAWA 66
	
Eagle Trail Properties Inc.
	
YA95303
	
03/01/2010
	
21.82
	
-

	
TAWA 67
	
Eagle Trail Properties Inc.
	
YA95304
	
03/01/2010
	
22.03
	
-

	
TAWA 68
	
Eagle Trail Properties Inc.
	
YA95305
	
03/01/2010
	
20.61
	
-

	
TAWA 69
	
Eagle Trail Properties Inc.
	
YA95306
	
03/01/2010
	
19.68
	
-

	
TAWA 70
	
Eagle Trail Properties Inc.
	
YA95307
	
03/01/2010
	
19.61
	
-

	
TAWA 71
	
Eagle Trail Properties Inc.
	
YA95308
	
03/01/2010
	
18.94
	
-

	
TAWA 72
	
Eagle Trail Properties Inc.
	
YB06963
	
03/01/2010
	
19.15
	
-

	
TAWA 73
	
Eagle Trail Properties Inc.
	
YB06964
	
03/01/2010
	
18.69
	
-

	
TAWA 74
	
Eagle Trail Properties Inc.
	
YB06965
	
03/01/2010
	
19.02
	
-

	
TAWA 75
	
Eagle Trail Properties Inc.
	
YB06966
	
03/01/2010
	
18.61
	
-

	
TAWA 83
	
Eagle Trail Properties Inc.
	
YB06971
	
03/01/2010
	
19.28
	
-

	
TAWA 84
	
Eagle Trail Properties Inc.
	
YB06972
	
03/01/2010
	
6.48
	
-

	
TAWA 85
	
Eagle Trail Properties Inc.
	
YB06973
	
03/01/2010
	
20.10
	
-

	
TAWA 86
	
Eagle Trail Properties Inc.
	
YB06974
	
03/01/2010
	
21.08
	
-

	
TAWA 87
	
Eagle Trail Properties Inc.
	
YB06975
	
03/01/2010
	
19.83
	
-

	
TAWA 88
	
Eagle Trail Properties Inc.
	
YB06976
	
03/01/2010
	
20.96
	
-

	
TAWA 89
	
Eagle Trail Properties Inc.
	
YB06977
	
03/01/2010
	
19.91
	
-

	
TAWA 90
	
Eagle Trail Properties Inc.
	
YB06978
	
03/01/2010
	
20.97
	
-

	
Total
	  	  	  	
3136.43
	  

 

 

36

 

 

Mineral Claim Purchase and Sale Agreement -  SCHEDULE “C”

 

NET SMELTER RETURNS

1.           For the purposes of this Agreement, “Net Smelter Returns” or “NSR” shall mean the actual proceeds realized and received by the Purchaser  from the sale of all ores, minerals, metals or concentrates mined or extracted or derived from the Mineral
Claims (“Removed Product”), including premiums, bonuses and subsidies, after deducting therefrom all charges and costs for:

(a)           smelting, refining, selling or other costs and charges charged by the smelter or refinery in respect of the Removed Product;

(b)           loading, transporting and insuring the Removed Product only to the smelter or refinery and thereafter to the mint;

(c)           all appropriate mint charges;

(d)           All royalties, net smelter returns, commissions or other fees payable in respect of the Removed Property pursuant to the Permitted Encumbrances or any other NSR payable pursuant to this Agreement; and

(e)           All taxes (except income taxes) paid or payable by the Purchaser on such Removed Product

2.           In this Schedule, “Purchaser” includes an operator appointed by the Purchaser or a partner, joint venture or other person acting with or on behalf of the Purchaser, to carry out mining operations on the Mineral Claims

3.           Within 90 days following the end of each calendar year, the Purchaser shall deliver to the Vendor a statement of the Net Smelter Returns for the said calendar year, duly certified by an independent chartered accountant appointed by the Purchaser for such purposes, together
with payment of the NSR royalty, if any, determined as aforesaid.  The Vendor shall have the right within a period of 3 months from receipt of the audited statements to conduct an independent audit at its own expense, the right to review the Purchaser’s book and records relating thereto and an opportunity to discover issues raised with the Purchaser’s auditors.

4.           If any portion of the ores, minerals, metals or concentrates mined or extracted or derived from the Mineral Claims are sold to a purchaser or treated by a smelter or refinery owned or controlled by the Purchaser or a party affiliated, related to or not at arm’s length
with the Purchaser, the actual proceeds received shall be deemed to be an amount equal to what could be obtained from a purchaser, smelter or refinery not so owned or controlled by the Purchaser or a party affiliated, related to or not at arm’s length with the Purchaser, in respect of ore, minerals, metals or concentrates, as applicable, of like quality and quantity, after deducting therefrom a charge equal to the transportation cost which would have been incurred had the material been transported to such
arm’s length third party purchaser, smelter or refinery.

 

 

 

37

 

 

SCHEDULE ‘D’

 

MINERAL CLAIM OPTION AGREEMENT TERMS

 

 

BETWEEN:   PRICEWATERHOUSECOOPERS INC.  (the “Vendor”)

 

AND:   101073531 Saskatchewan Ltd.  (the “Purchaser”)

 

WHEREAS:

 

C.       The Vendor owns the mineral claim identified as Dome 12:73698 situate in the Mt. Nansen area in and around the town of Carmacks, Yukon approximately 180 Kilometres north of Whitehorse, Yukon, and 60 kilometers west of the town of Carmacks, Yukon (the “Mineral Claim”); and

D.       The Vendor has agreed to grant to the Purchaser an option to purchase the Mineral Claim and related property on the terms and conditions set out in this Option Agreement.

NOW WHEREFORE in consideration of the mutual promises contained herein, and of other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties covenant and agree with each other as follows:

1.0           DEFINITIONS

1.1           In this Option Agreement, the following expressions have the meanings set out as follows:

 

“Books and Records” means all of B.Y.G.’s books and records (however stored or recorded) relating to the Mineral Claim as are in the possession or under the control of the
Vendor or B.Y.G.

 

“B.Y.G.” means B.Y.G. Natural Resources Inc.

 

“Completion Date” means the fifteenth business day following the Exercise Date of the Option, at which date the Purchased Assets will be transferred to the Purchaser upon
the terms herein contained.

 

 

38

 

 

“Data” means all engineering, geological, geophysical and feasibility reports and studies and all other technical information and data in whatever form (including electronic and hard copies and computer databases) relating to the Mineral Claim and activities thereon as are in the possession or under the control of the Vendor or B.Y.G.

 

“Exercise Date” means the date on which this Option Agreement is exercised by the Purchaser giving written notice to the Vendor of the Purchaser’s intention to exercise the Option pursuant to 3.1 of this Option Agreement.

 

“Expiry Date” means the date which is thirty days after the Triggering Event.

 

“Option” means the sole and exclusive option to purchase the Purchased Assets created by this Option Agreement.

 

“Option Purchase Price” means $25,000 (Cdn.).

 

“Purchase Agreement” means that certain Agreement of Purchase and Sale dated the date hereof between the Vendor and the Purchaser in respect of various mineral claims.

 

“Purchased Assets” means all of the Vendor’s Interest in and to the Mineral Claim the Books and Records and the Data.

 

“Triggering Event” means the Vendor’s receipt of notice from the Government of Yukon that it has completed the environmental remediation of the core mine site and mill area in the Keno, Galena and Sourdough Hills area in and around the Village of Elsa and Keno City, approximately 350 kilometres north of Whitehorse, Yukon and 50 kilometres
northeast of the Town of Mayo, Yukon.

 

“Vendor’s Interest” means, when used in relation to any property, all the interest of B.Y.G. (if any) and of the Vendor (if any) in connection to such property.

 

2.0           OPTION TO PURCHASE

 

2.1           The Vendor hereby grants to the Purchaser the Option to purchase the Purchased Assets in accordance with the provisions hereof, for the Option Purchase Prices.

 

3.0           EXERCISE OF OPTION

 

3.1           The Option shall be open for exercise and be irrevocable from the Triggering Event up to but not after the Expiry Date and may be exercised by written notice given by the Purchaser to the Vendor during such period.

 

4.0           TERMINATION OF OPTION

 

4.1           This Agreement and the Option shall terminate and the parties hereto shall have no further obligation hereunder if the Triggering Event does not occur on or before October 31, 2018.

  

39

  

 

5.0           TERMS AND CONDITIONS OF PURCHASE

 

5.1           The giving of notice by the Purchaser to the Vendor pursuant to and in accordance with Section 3.1 shall convert this Option into a binding agreement of purchase and sale of the Purchase Assets at the Option Purchase Price as at the Exercise Date and on the following terms
and conditions:

	
  
	
(a)
	
the sale of the Purchased Assets to the Purchaser shall be completed on the Completion Date;

	
  
	
(b)
	
the Option Purchase Price shall be paid by the Purchaser to the Vendor on the Completion Date and is payable in certified funds or bank draft;

	
  
	
(c)
	
the Purchaser shall pay to the Vendor on the Completion Date, in addition to the Option Purchase Price, any and all federal, territorial and other sales, goods and services or territorial sales, land transfer and permit and license transfer taxes and other taxes whatsoever which are payable in connection with the purchase and conveyance of the Purchased Assets and shall be responsible for the payment of all duties,
registration fees or other charges payable or exigible and relating to the conveyance or transfer of the Purchased Assets or will provide the Vendor with appropriate exemption certificates, in form and substance satisfactory to the Vendor in respect of such taxes (collectively, the “Transfer Taxes”). Any Transfer Taxes paid by the Purchaser to the Vendor on Closing shall be promptly remitted by the Vendor to the applicable governmental authority.
The Purchaser will indemnify and hold the Vendor harmless in respect of any Transfer Taxes which may be assessed against the Vendor or B.Y.G. under the Excise Tax Act (Canada), or any comparable law relating to the conveyance of the Purchased Assets or as a result of the failure by the Purchaser to pay all the aforementioned Transfer Taxes exigible in connection with the transactions contemplated by this Agreement (the “Transactions”),
whether arising from reassessment or otherwise;

 

	
  
	
(d)
	
the Vendor shall not be required to furnish or produce any abstract, deed, survey, declaration or other document or evidence of title of the Mineral Claim except those in its possession;

 

 

 

40

 

 

	
  
	
(e)
	
the Purchaser confirms that it has inspected the Purchased Assets prior to the execution of this Option Agreement and that it has entered into this Option Agreement on the basis that the Vendor does not warrant title to the Purchased Assets and the Purchaser acknowledges that it is relying entirely upon its own judgment, investigation and inspection in proceeding with the Transactions. Without limiting the foregoing,
the Purchaser acknowledges and agrees that it is purchasing the Purchased Assets on and “as is, where is” and “without recourse” basis, that it shall accept the Purchased Assets in their then present state, condition and location and that neither the Vendor nor any of its agents, employees, representatives, counsel, officers or directors makes, has made or shall make any representations or warranties (except as expressly provided for in this Option Agreement), and there are no terms, conditions,
understandings or collateral agreements, express or implied, statutory or otherwise, with respect to the title, merchantability, condition, description, fitness for purpose, quality, quantity, accuracy, completeness or any other thing, affecting the Purchased Assets or in respect of any other matter or thing whatsoever except as expressly stated herein;

 

	
  
	
(f)
	
by completing the Transactions on the Completion Date, the Purchaser shall be deemed to have released, remised and forever discharged each of the Vendor and its directors, officers, employees, servants and agents (collectively the “Releasees”) of and from any and all manner of action, causes of action, suits, debts, dues, accounts, bonds, covenants,
contracts, damages, costs, interest, claims, liabilities, expenses and demands whatsoever, regardless of their nature or basis, known or anticipated, as well as unknown or unanticipated, at law or at equity or under statute, which the Purchaser ever had or then has or may thereafter have, against the Releasees for or by reason of any action, cause or thing whatsoever arising out of or relating to the Transactions, but excluding any obligations arising out of this Option Agreement or any document delivered in
connection therewith;

	
  
	
(g)
	
the Purchased Assets shall be and remain at the risk of the Vendor until the completion of the Transactions; and

	
  
	
(h)
	
the Purchaser shall be entitled to possession of the Purchased Assets on the completion of the Transactions.

 

5.2           DELIVERIES ON COMPLETION DATE

 

At the Completion Date:

	
  
	
(a)
	
The Vendor shall deliver to the Purchaser:

	
  
	
(i)
	
the Approval and Vesting Order (as defined in the Purchase Agreement);

  

41

  

	
  
	
(ii)
	
the books and records (however stored or recorded) relating to the Purchased Assets as are in the possession or under the control of the Vendor or B.Y.G. (the Purchaser acknowledges and agrees that delivery of Such books and records at the Vendor’s office or such other location or Locations as otherwise agreed to between the Vendor and Purchaser, Acting reasonably, shall be sufficient delivery for the purposes
of this Section); and

	
  
	
(iii)
	
a general conveyance of assets transferring to the Purchaser the Vendor’s Interest in the Purchased Assets.

 

When the Vendor has delivered to the Purchaser the foregoing documents, it shall be deemed to have delivered all documents required on its part hereunder to convey the Purchased Assets and otherwise complete the Transactions.

	
  
	
(b)
	
The Purchaser shall deliver to the Vendor:

	
  
	
(i)
	
the Option Purchase Price, in the manner contemplated in Section 5.1 hereof; and

	
  
	
(ii)
	
evidence satisfactory to the Vendor that all Transfer Taxes exigible upon the Transactions have been paid or appropriate exemption certificates have been obtained.

 

6.0           COSTS OF CONVEYANCE

 

6.1           The cost of the conveyance of Purchased Assets to the Purchaser (including any transfer tax payable with such conveyance) shall be borne by the Purchaser.

 

7.0           NO ASSIGNMENT

 

7.1           The Purchaser shall not assign any of its right, title or interest in this Option Agreement without the prior written consent of the Vendor.

 

8.0           TENDER

 

8.1           Any tender of documents or monies may be made upon the respective solicitors for the parties.

9.0           NOTICE

 

9.1           Any notice given by one party to the other shall be given in accordance with the terms of Section 8.1 of the Purchase Agreement.

 

10.0           GENERAL PROVISIONS

 

10.1           Time shall be of the essence of this Option Agreement.

 

 

42

 

 

10.2           This Option Agreement shall be governed by and construed in accordance with the laws of the Yukon and the laws of Canada applicable in the Yukon and shall be treated, in all respects, as a Yukon contract.

 

10.3           The parties agree to execute and deliver all such further assurances, documents and instruments and to do or cause to be done all such further acts and things as may be reasonably necessary to carry out and give full effect to the intent and purposes of this Option Agreement.

 

10.4           This Option Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

 

  IN WITNESS WHEREOF the Parties have executed this Option Agreement as of the date first written above.

 

 

By:

 

/s/ PRICEWATERHOUSECOOPERS INC.,  

Solely in its capacity as court appointed

interim receiver and receiver-manager

of the property and assets of B.Y.G.

and not its personal capacity

 

By:

 

/s/ 101073531 Saskatchewan Ltd.                    

 

 

 

 

 

43

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