EXHIBIT D
MORTGAGE, SECURITY AGREEMENT,
FIXTURE FILING AND FINANCING STATEMENT
This Mortgage,
Security Agreement, Fixture Filing and Financing Statement (the
“Mortgage”) is made and entered into as of December 21,
2007 by Santa Fe Gold Corporation, a Delaware corporation,
(“Mortgagor”) to Sulane Holdings, Inc., a BVI limited
partnership (“Mortgagee”):
1.
Mortgagor is indebted to Mortgagee up to Thirteen Million Five
Hundred Thousand Dollars ($13,500,000), as evidenced by the series
of 7% Senior Secured Convertible Debentures pursuant to that
certain Securities Purchase Agreement dated December 15, 2007
between Mortgagor and Mortgagee in the form attached hereto as
Exhibit G, together with interest on the outstanding principal sum
with principal and interest being payable as more specifically set
forth in the Debentures.
2.
Mortgagor and Mortgagee intend that payment of the Debentures
described in Recital A.1, and of all extensions, renewals and
modifications thereof (collectively the “Debentures”),
be secured by this Mortgage.
3. All
capitalized terms used but not defined herein shall have the
meaning set forth in the Securities Purchase Agreement between
Mortgagor and Mortgagee, dated December 21, 2007 (the
“Securities Purchase Agreement”) and in the
Debentures.
To secure the
payment of the principal, interest, and all obligations of
Mortgagor under the Debentures, and to secure the performance by
Mortgagor of the terms, covenants, agreements and conditions
contained in the Securities Purchase Agreement and this Mortgage
(collectively, the “Obligations”) up to and including
at any one time the maximum amount of $26,000,000 Mortgagor does
hereby grant and mortgage unto Mortgagee, its successors and
assigns, the real estate and grant a security interest in the
personal property in Grant and Hidalgo Counties, New Mexico
described in Exhibits A through F, attached hereto, which
as-extracted collateral from the properties described on Exhibit A
and Exhibit B and fixtures (collectively, the
“Collateral”) wherever located, whether now owned or
existing or hereafter acquired, arising, or existing and all
proceeds, products, additions to, substitutions and replacements
for, and accessions of, any and all Collateral with mortgage
covenants and upon the statutory mortgage condition for the breach
of which it is subject to foreclosure as provided by law.
All obligations
evidenced by this Mortgage are subordinated to all Senior
Indebtedness pursuant to Section 7 of each of the Debentures.
ARTICLE I
WARRANTIES OF MORTGAGOR
Mortgagor hereby
warrants to and covenants with Mortgagee, its successors and
assigns, that:
1.1
Mortgagor has the full right and authority to execute and deliver
to Mortgagee this Mortgage.
1.2
Mortgagor has taken all action required by law or otherwise
necessary to make this Mortgage valid, binding, and legal
obligations of Mortgagor.
1.3 The
lien and security interest created by this Mortgage are and will be
kept a first lien and security interest upon the Collateral,
subject only to the Senior Indebtedness pursuant to Section 7 of
each of the Debentures, and Mortgagor will forever warrant and
defend the same to Mortgagee, its successors and assigns, against
any and all claims whatever.
ARTICLE II
COVENANTS OF MORTGAGOR
Mortgagor does
hereby covenant and agree with Mortgagee, its successors and
assigns, as follows:
2.1
Payment . Mortgagor shall pay the principal and interest
under the Debentures hereby secured, when and as the same shall
become due and payable in accordance with the terms thereof, and
shall perform and observe all of the terms, covenants and
conditions to be performed or observed by Mortgagor in the
Debentures or in this Mortgage.
2.2.
Negative Covenants . Except for (i) the Senior Indebtedness
pursuant to Section 7 of each of the Debentures and (ii) liens or
encumbrances inferior to the lien of the Mortgage securing payment
of indebtedness the proceeds of which are used for betterment of
the Collateral, or of any structures, improvements, equipment or
fixtures thereon, Mortgagor will not, directly or indirectly,
without the prior written consent of Mortgagee create or permit to
exist, any other lien or encumbrance upon the Collateral or any
part thereof or any interest therein other than the Mortgage lien
of Mortgagee created by this Mortgage.
2.3. Affirmative Covenants
.
Subordination. All obligations under this Mortgage are
subordinated to all Senior Indebtedness, to the extent and in the
manner hereinafter set
2
forth, in right of payment to the prior payment
in full of all Mortgagor’s Senior Indebtedness. As used
herein, “Senior Indebtedness” means the principal of
and unpaid accrued interest on all current and future debt of
Mortgagor (i) that is evidenced by one or more outstanding
convertible debentures, and that may be issued in connection with
additional investment rights issued in private placements completed
on March 21, 2006, and September 6, 2006, respectively, as
described in the Mortgagor’s Registration Statement on Form
SB-2, SEC Registration No. 333-141558 and (ii) in the event that
Mortgagee should fail to purchase the Debentures and Warrants as
set forth in the Funding Schedule, all indebtedness that may be
incurred by Mortgagor for working capital and capital expenditures
relating to completion of the Summit Project.
Incorporation of Covenants from Securities Purchase
Agreement . The Covenants set forth in Section 4 (a) through
(w) are hereby incorporated by reference as if set forth in full
herein.
ARTICLE III
EVENTS OF DEFAULT: REMEDIES
3.1
Events of Default; Acceleration . If any one or more of the
following events (hereinafter defined and designated as
“Events of Default”) shall occur:
(a)
failure to make any payment as and when due under the terms of the
Debentures, or payment of any other sum due under this Mortgage
when due and payable and such failure continues for ten (10) days
after written notice thereof to Mortgagor; or
(b) any
warranty or representation made by Mortgagor in the Debentures,
this Mortgage, or in any statement or certificate furnished
pursuant to any of the foregoing, shall be false, materially
misleading or inaccurate and such continues for a period of thirty
(30) days after written notice thereof to Mortgagor provided,
however, if any such default is of a nature that cannot be remedied
or cured within the thirty (30) day period, Mortgagor may have such
additional time as is reasonably necessary to remedy or cure the
default if Mortgagor commences to remedy or cure such default
within the thirty (30) day period and thereafter continues with due
diligence to remedy or cure the same; or
(c)
failure in the due observance or performance of any other covenant,
condition, or agreement on the part of Mortgagor to be observed or
performed pursuant to the provisions of the Debentures or this
Mortgage and such failure continues for a period of thirty (30)
days after written notice thereof to Mortgagor; provided, however,
if any such default is of a nature that cannot be remedied or cured
within the thirty (30) day period, Mortgagor may have such
additional time as is reasonably necessary to remedy or cure the
default if Mortgagor commences to remedy or cure such
3
default within the thirty (30) day period and
thereafter continues with due diligence to remedy or cure the same;
or
(d) any
judgment shall be recovered against Mortgagor or any attachment or
other court process shall issue, which shall become or create a
lien upon the Collateral or any part thereof and such judgment,
attachment or other court process shall not be discharged or
effectually secured or execution thereon stayed within sixty (60)
days from the entry thereof;
then and in any such case, Mortgagee may declare
the then outstanding principal of the Debentures to be forthwith
due and payable, and upon such declaration, the principal, together
with interest accrued thereon, shall become due and payable
forthwith at the place of payment specified in the Debentures,
anything in this Mortgage or in the Debentures to the contrary
notwithstanding. In addition, Mortgagee may proceed to protect and
enforce its rights under the Debentures and the Mortgage by
foreclosure proceedings as against all or any part of the
Collateral.
3.2
Receiver . At any time after an Event of Default, Mortgagee
shall be entitled, as a matter of right, without notice and without
either Mortgagee or the Receiver giving bond or other security and
without regard to the solvency or insolvency of Mortgagor or any
person liable for any indebtedness hereby secured or to the value
of the Collateral, to have a receiver appointed for all or any part
of the Collateral and to collect the income, issues, profits,
royalties and revenues thereof with such powers as the court making
such appointment shall confer, and Mortgagor does hereby
irrevocably consent to such appointment.
3.3
Possession by Mortgagee . At any time after an Event of
Default, Mortgagee, either itself or by its agents or attorneys,
may, in its discretion, enter upon and take possession of the
Collateral, or any part or parts thereof, and may exclude Mortgagor
and its agents and employees wholly therefrom, and having and
holding the same, and may use, operate, manage, and control the
Collateral or any part thereof, and conduct the business thereof,
either personally or by agents, employees and attorneys, and may
maintain and restore and may insure and keep insured, the
structures, improvements, fixtures, and other property, real and
personal, comprising the Collateral. After paying the expense of
operating the Collateral, including a reasonable commission,
Mortgagee shall apply the monies arising therefrom to the amount
then due on the Debenture.
3.4
Foreclosure and Sale . At any time after an Event of
Default, Mortgagee may institute an action in any court of
competent jurisdiction to judicially foreclose the lien of this
Mortgage in a manner as provided by law and cause to be sold to the
highest bidder all or any part of the Collateral, and all right,
title, interest, claim and demand therein in one lot as an
entirety, or in separate lots, as Mortgagee may elect, and in one
sale or in any number of separate sales, held at one time or at any
number of times.
4
3.5
Purchase by Mortgagee . At any sale of the Collateral
pursuant to any judgment or decree of any court in connection with
the enforcement of any of the terms of this Mortgage, Mortgagee,
its successors or assigns, may become the purchaser, and if
Mortgagee, its successors or assigns is a purchaser at such sale,
it shall be entitled to use and apply all or any portion of the
judgment or decree entered in its favor in the foreclosure action
in settlement or payment of all or any portion of the purchase
price of the property so purchased.
3.6
Payment of Other Expenses . If Mortgagee commences any
proceeding to foreclose this Mortgage or any other appropriate
proceeding to enforce its rights under the Debenture or this
Mortgage, Mortgagor covenants and agrees to pay to Mortgagee all
costs and expenses (including reasonable attorneys' fees) paid or
incurred by Mortgagee in connection therewith, which costs and
expenses may be included in any judgment in Mortgagee's favor in
any such suit, action or proceeding.
3.7
Redemption Period . If this Mortgage is foreclosed, the
redemption period after judicial sale shall be one (1) month in
lieu of nine (9) months.
3.8
Remedies Cumulative . No remedy herein conferred upon or
otherwise available to Mortgagee is intended to be or shall be
construed to be exclusive of any other remedy or remedies; but each
and every such remedy shall be cumulative and shall be in addition
to every other remedy given hereunder and under this Mortgage and
now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right or power accruing upon any
default shall impair any such right or power, or shall be construed
to be a waiver of any such default, or an acquiescence therein; nor
shall the giving, taking or enforcement against any other or
additional security, collateral or guaranty for the payment of the
indebtedness secured under this Mortga
|
