Exhibit 10.40
UNIT SUBSCRIPTION AGREEMENT
(for Canadian and Non-United States Purchasers only)
To: U.S. Gold Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx X.X.X. 00000-0000
The undersigned (the "Purchaser") hereby irrevocably subscribes for and agrees
to purchase from U.S. Gold Corporation (the "Company") on the terms and
conditions set forth in this Subscription Agreement ("Agreement") that number of
Units set forth in Clause 17 below (the "Units"). The price of each Unit is
US$0.90 and each Unit shall consist of one Common Share, par value US$0.10 (the
"Share"), and one Common Share Purchase Warrant. Each four (4) Purchase Warrants
will entitle the holder to subscribe for one Share of the Company at US$1.25 for
a period of two years from the date of Closing as provided in Exhibit 1 attached
hereto. The Purchaser agrees to pay the purchase price for the Units set forth
in Clause 17 to the Company on or before the Closing Date (hereinafter defined).
1. Conditions of Purchase
The Purchaser acknowledges that the Company's obligation to sell the Units
and issue Units to the Purchaser is subject to, among other things, the
conditions that:
(a) the Purchaser executes and returns to the Company all documents required by
this Agreement, including Schedule B, demonstrating that the Purchaser is
an "accredited investor", as such term is defined in Regulation D
promulgated by the United States Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "1933 Act") and that the
purchaser, if resident in Alberta or British Columbia, is an "accredited
investors" as defined in Canadian Securities Administrators' Multilateral
Instrument 45-103 "Capital Raising Exemptions" ("45-103"), or if resident
in Ontario, is an "accredited investor" as such term is defined in Ontario
Securities Commission Rule 45-501;
(b) all necessary regulatory approvals, if any, being obtained by the Company
prior to the Closing; and
(c) the representations and warranties of the Purchaser being true and correct
as at the Closing
(d) the Company has reviewed the completed Unit Subscription Agreement
submitted by the Purchaser and accepted the subscription. Notwithstanding
this condition, the subscription is irrevocable unless it is rejected by
the Company.
2. Delivery and Payment
The Purchaser agrees that the following shall be delivered to the Company
prior to the Closing:
(a) one completed and duly signed copy of this Agreement;
(b) all other documentation as may be required by applicable securities
legislation, including a duly completed Accredited Investor
certificate in the form of Schedule "B" hereto; and
(c) a certified cheque, bank draft or evidence of a wire transfer in
United States dollars funds payable to U.S. Gold Corporation Trust
Account to Meridian Capital LTD, finder for the Company, representing
the Aggregate Purchase Price shown in Clause 17 hereof. Details
concerning the payment procedure are set out in Schedule "A".
The closing of the Offering pursuant to which this Subscription is made may
be affected by means of a series of closings, each such closing involving
the Company and one or more purchasers of Units. The Purchaser acknowledges
that its subscription may be one of many accepted by the Company until the
Company has sold in the aggregate up to 9,000,000 Units. Delivery by the
Company of the certificates representing the Shares and Warrants, and
payment for the Units by the Purchaser, shall be completed at a closing
(the "Closing") to be held at such time and place as may be mutually agreed
upon by the Company and the Purchaser but not later than March 12, 2004
(the date of the Closing being hereinafter called the "Closing Date").
If the Purchaser chooses not to attend the Closing to receive the Share
certificate(s) and warrant(s), then the Company shall deliver such
certificate(s) and warrant(s) to the Purchaser at the address set forth
below, promptly after the Closing.
3. Purchaser's Acknowledgements
The Purchaser acknowledges and agrees that:
(a) the sale and delivery of the Shares and Warrants to the Purchaser is
conditional upon such sales being made pursuant to the exemption from
registration under the 1933 Act as set forth in Regulation D
("Regulation D") promulgated thereunder;
(b) the Company will be required to disclose to the Commission, and
thereby though public access to Xxxxx filing, the identity of the
beneficial purchasers of the Shares;
(c) neither the Units, the Shares, the Warrants nor the shares underlying
the Warrants have been registered under the 1933 Act, by reason of
their issuance in a transaction that does not require registration
under the 1933 Act (based in part on the accuracy of the
representations and warranties of Purchaser hereto), and that such
Shares must be held unless a subsequent disposition is registered
under the 1933 Act or is exempt from such registration;
(d) the Shares and Warrants shall bear the following or a substantially
equivalent legend, unless same shall have been included in an
effective registration statement under the 1933 Act:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SHARES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED;
(e) it has sufficient knowledge and experience in investing in companies
similar to the Company in terms of the Company's stage of development
so as to be able to evaluate the risks and merits of its investment in
the Company and it is able financially to bear the risks thereof;
(f) no agency, governmental authority, regulatory body, stock exchange or
other entity has made any finding or determination as to the merits
for investment of, nor have any such agencies or governmental
authorities made any recommendation or endorsement with respect to,
the Shares or the Warrants;
(g) the Purchaser has access to and has reviewed to the extent necessary,
via United States Securities and Exchange Commission (the
"Commission") Xxxxx data base, copies of the Company's Form 10-KSB/A
for the year ended December 31, 2002 as filed with the Commission,
together with all subsequently filed Forms 00-XXX, 00-XXX, 0-X, Xxxxx
Xxxxxxxxxx, Registration Statement on Form SB-2 and all amendments
thereto and other publicly available filings made with the Commission
("Commission Reports") and has received from the Company such other
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information concerning its operations, financial condition and other
matters as requested of the Company, and Purchaser has considered all
factors the Purchaser deems material in deciding on the advisability
of investing in the Units;
(h) the Units are being offered for sale only on a "private placement"
basis;
(i) the representations, warranties and covenants contained in this
Agreement are made by the Purchaser with the intent that they may be
relied upon by the Company in determining the Purchaser's eligibility
to purchase the Units, and the Purchaser hereby agrees to indemnify
the Company against all losses, claims, costs, expenses and damages or
liabilities which it may suffer or incur caused or arising from its
reliance thereon. The Purchaser further agrees that by accepting the
Shares and Warrants, the Purchaser represents and warrants that the
foregoing representations and warranties are true as at the Closing
with the same force and effect as if they had been made by the
Purchaser at the Closing and that they shall survive the Closing Date
and shall continue in full force and effect notwithstanding any
subsequent disposition of the Shares or the Warrants;
(j) the Purchaser understands and agrees that the Company will pay a
finder's fee of 8.5% of the amount of the Aggregate Subscription
Amount and finder's warrants to purchase up to 20% of the number of
units sold in the offering to Meridian Capital in connection with this
subscription;
(k) the offer to sell the Shares and Warrants was directly communicated to
the Purchaser and at no time was the Purchaser presented with or
solicited by any leaflet, newspaper or magazine article, radio or
television advertisement, or any other form of general advertising or
solicited or invited to attend a promotional meeting otherwise than in
connection and concurrently with such communicated offer;
(l) the Purchaser has been independently advised as to the applicable hold
or restricted period imposed in respect of the Shares, Warrants and
Shares issued on the exercise of Warrants by applicable securities
laws and confirms that no representation has been made respecting the
applicable hold or restricted periods for the Shares, Warrants and
Shares issued on the exercise of Warrants and is aware of the risks
and other characteristics of the Shares and Warrants and of the fact
that the Purchaser may not be able to sell the Shares except in
accordance with applicable securities laws and regulatory policies and
agrees to comply with all such resale restrictions;
(m) the Purchaser has not received, nor has it requested, nor does it have
any need to receive, any offering memorandum or any other document
describing the business and affairs of the Company (other than this
Subscription Agreement, the Term Sheet and the Commission Reports),
nor has any document been prepared for delivery to, or review by,
prospective purchasers in order to assist them in making an investment
decision in respect of the Shares and Warrants;
(n) the Purchaser has relied solely upon the term sheet and the Commission
Reports, prepared and issued by the Company and not upon any verbal or
other written representation as to any facts or otherwise made by or
on behalf of the Company or any employee, agent or affiliate thereof;
and
(o) the Company has the right to reject any subscription, in whole or in
part, for any reason, in which case the funds tendered by the
Purchaser shall be refunded in full, without interest or deduction.
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4. Purchaser's Representations and Warranties
The Purchaser hereby represents, warrants and covenants to the Company
(which representations, warranties and covenants shall survive Closing and
continue in full force and effect) that:
(a) the Purchaser is not a resident of the United States of America and
that the Purchaser was offered the Shares outside of the United States
of America;
(b) the Purchaser is an "accredited investor" as that term is defined in
Regulation D promulgated by the 1933 Act by virtue of satisfying the
indicated criterion in paragraph 1 of Schedule "B";
(c) the Purchaser acknowledges that in addition to compliance with the
restrictions on resale applicable under relevant rules of the
Commission, the Purchaser may be subject to various reporting
requirements with the Commission if Purchaser is the owner of 5% or
more of a class of the issued and outstanding stock of the Company;
(d) the Purchaser will execute and deliver all documentation to the
Company as may be required by applicable rules, regulations and
policies of the Commission and to permit the purchase of the Shares on
the terms herein set forth;
(e) this agreement has been duly authorized, executed and delivered by,
and constitutes a legal, valid and binding agreement of, the Purchaser
subject to:
(i) any applicable bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights generally; and
(ii) general principles of equity, including that the granting of
equitable remedies is within the discretion of a court of
competent jurisdiction;
(f) the Purchaser is not, directly or indirectly, the holder of any common
shares in the capital of the Company other than the number of common
shares of the Company included in the Units disclosed in Clause 17(d);
(g) the Units are being acquired by the Purchaser in good faith, for
investment purposes only, are not being purchased with a view to, or
for the resale or distribution thereof and the Purchaser is purchasing
as principal or is deemed to be purchasing as principal by applicable
securities legislation and if the Purchaser is deemed to be purchasing
as a principal, the Purchaser will deliver to the Company prior to
Closing a completed and executed Accredited Investor Certificate in
the form attached hereto as Schedule "B" on behalf of each beneficial
purchaser;
(h) the Purchaser:
(i) if resident in Alberta or British Columbia, is an "accredited
investor" as that term is defined in Canadian Securities
Administrators' Multilateral Instrument 45-103 "Capital Raising
Exemptions" by virtue of satisfying the indicated criterion in
paragraph 6 of Schedule "B"; or
(ii) if resident in Ontario, is an "accredited investor" as that term
is defined in Ontario Securities Commission Rule 45-501 by virtue
of satisfying the indicated criterion in paragraph 7 of Schedule
"B"; or;
(iii) is purchasing the Units and is a resident in the Province of
British Columbia, is purchasing the Units as principal for its
own account and not for the benefit of any other person, and is
purchasing a sufficient number of Units so that the aggregate
acquisition cost to such Purchaser is not less than $97,000; or
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(iv) is a resident of a country (an "International Jurisdiction")
other than Canada or the United States, and
A. the delivery of this Subscription Agreement, the acceptance
this Subscription Agreement by the Company, the issue of the
Shares and Warrants to the Purchaser complies with all
applicable laws of the Purchaser's jurisdiction of residence
and all other applicable laws and will not cause the Company
to become subject to or comply with any disclosure,
prospectus or reporting requirements under any such
applicable laws,
B. the Purchaser is knowledgeable of, or has been independently
advised as to, the applicable securities laws of the
International Jurisdiction which would apply to this
subscription,
C. the Purchaser is purchasing the Units pursuant to exemptions
from the prospectus and registration requirements (or their
equivalent) under the applicable securities laws of that
International Jurisdiction or, if such is not applicable,
each is permitted to purchase the Units under the applicable
securities laws of the International Jurisdiction without
the need to rely on an exemption, and
D. the applicable securities laws do not require the Company to
make any filings or disclosures or seek any approvals of any
kind whatsoever from any regulatory authority of any kind
whatsoever in the International Jurisdiction;
(i) if the Purchaser is not an individual but is a corporation, syndicate,
partnership, trust, association, or any other form of unincorporated
organization or organized group of persons, it has not been created
solely or used primarily to permit a group of persons to purchase
securities without a prospectus in reliance on a prospectus exemption
or, if created for such purpose, every participant in, or member or
beneficiary of, the corporation, syndicate, partnership, trust,
association, unincorporated organization or organized group of
persons, is an accredited investor with the meaning of Regulation D of
the 1933 Act by reason of satisfying one of the requirements
designated in Schedule B and, if resident in British Columbia or
Alberta, is an "accredited investor" as such term is defined in MI
45-103 and such British Columbia or Alberta resident has indicated the
criterion satisfied in paragraph 6 of Schedule "B" attached hereto, or
would each have an aggregate acquisition cost of not less than $97,000
and, if resident in Ontario, is an "accredited investor" as such term
is defined in Ontario Securities Commission Rule 45-501 and such
Ontario resident has indicated the criterion satisfied in paragraph 7
of Schedule "B" attached hereto;
(j) the Purchaser is not an investment club; and
(k) the representations, warranties and covenants of the Purchaser set
forth herein shall survive the closing of the transaction contemplated
hereby.
5. Company's Representations and Warranties
The Company represents and warrants and agrees with the Purchaser that:
(a) Due Incorporation. The Company has been organized under the laws of
the State of Colorado, United States of America. The Company and each
of its subsidiaries, if any, is a corporation or limited partnership
or limited liability company duly organized, validly existing and in
good standing under the laws of the respective jurisdictions of their
incorporation or registration and have the requisite corporate or
other power to own their properties and to carry on their business as
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now being conducted. The Company and each of its subsidiaries is duly
qualified as a foreign corporation to do business and is in good
standing in each jurisdiction where the nature of the business
conducted or property owned by it makes such qualification necessary,
other than those jurisdictions in which the failure to so qualify
would not have a material adverse effect on the business, operations
or financial condition of the Company.
(b) Outstanding Stock. All issued and outstanding shares of common stock
of the Company and each of its subsidiaries has been duly authorized
and validly issued and are fully paid and non-assessable.
(c) Reservation of Warrant Shares. The Company undertakes to reserve on
behalf of the purchasers, from its authorized but unissued common
stock, at all times that the Warrants are outstanding, a number of
common shares necessary to allow fully the exercise of all such
Warrant Shares.
(d) Authority; Enforceability. This Agreement and other agreements
delivered together with this Agreement or in connection herewith have
been duly authorized, executed and delivered by the Company and are
valid and binding agreements enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights generally and to general
principles of equity; and the Company has full corporate power and
authority necessary to enter into this Agreement, and such other
agreements and to perform its obligations hereunder and under all
other agreements entered into by the Company relating hereto.
(e) Additional Issuances. There are no outstanding agreements or
preemptive or similar rights affecting the Company's common stock or
equity and no outstanding rights, warrants or options to acquire, or
instruments convertible into or exchangeable for, or agreements or
understandings with respect to the sale or issuance of any shares of
common stock or equity of the Company or other equity interest in any
of the subsidiaries of the Company except as described in the public
reports or otherwise provided to Purchaser.
(f) Consents. No consent, approval, authorization or order of any court,
governmental agency or body or arbitrator having jurisdiction over the
Company, or any of its affiliates, the National Association of
Securities Dealers, Inc. ("NASD") or the Company's shareholders is
required for execution of this Agreement, and all other agreements
entered into by the Company relating thereto, including, without
limitation, the issuance and sale of the Shares, and the performance
of the Company's obligations hereunder.
(g) No Violation or Conflict. Assuming the representations and warranties
of the Purchaser in this Agreement are true and correct and the
Purchaser complies with its obligations under this Agreement, the
issuance and sale of the Shares and the performance of the Company's
obligations under this Agreement will not:
(i) violate, conflict with, result in a breach of, or constitute a
default (or an event which with the giving of notice or the lapse
of time or both would be reasonably likely to constitute a
default) under
(A) the articles of incorporation, charter or bylaws of the
Company,
(B) to the Company's knowledge, any decree, judgment, order,
law, treaty, rule, regulation or determination applicable to
the Company or any court, governmental agency or body, or
arbitrator having jurisdiction over the Company or any of
its affiliates or over the properties or assets of the
Company or any of its affiliates,
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(C) the terms of any bond, debenture, note or any other evidence
of indebtedness, or any agreement, stock option or other
similar plan, indenture, lease, mortgage, deed of trust or
other instrument to which the Company or any of its
affiliates is a party, by which the Company or any of its
affiliates is bound, or to which any of the properties of
the Company or any of its affiliates is subject, or
(D) the terms of any "lock-up" or similar provision of any
underwriting or similar agreement to which the Company, or
any of its affiliates is a party except the violation,
conflict, breach, or default of which would not have a
material adverse effect on the Company; or (ii) result in
the creation or imposition of any lien, charge or
encumbrance upon the Shares or any of the assets of the
Company, its subsidiaries or any of its affiliates.
(h) The Shares. The Shares upon issuance:
(i) are, or will be, free and clear of any security interests, liens,
claims or other encumbrances, but are subject to restrictions
upon transfer under the 1933 Act and state laws;
(ii) have been duly and validly authorized and on the date of
issuance, fully paid and nonassessable;
(iii) will not have been issued or sold in violation of any preemptive
or other similar rights of the holders of any securities of the
Company; and
(iv) will not subject the holders thereof to personal liability by
reason of being such holders. (h) Litigation. There is no pending
or, to the best knowledge of the Company, threatened action,
suit, proceeding or investigation before any court, governmental
agency or body, or arbitrator having jurisdiction over the
Company, or any of its affiliates that would affect the execution
by the Company or the performance by the Company of its
obligations under this Agreement, and all other agreements
entered into by the Company relating hereto. To the best
knowledge of the Company there is no threatened action, suit,
proceeding or investigation before any court, governmental agency
or body, or arbitrator having jurisdiction over the Company, or
any of its affiliates which litigation if adversely determined
could have a material adverse effect on the Company.
(i) Reporting Company. The Company is a publicly held company subject to
reporting obligations pursuant to Sections 15(d) or 13 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") and has a
class of common shares registered pursuant to Section 12(g) of the
1934 Act. The Company's common stock is quoted for trading on the OTC
Bulletin Board ("Bulletin Board"). Pursuant to the provisions of the
1934 Act, the Company has filed all public reports and other materials
required to be filed thereunder with the Commission during the
preceding twelve months.
(j) Information Concerning Company. The public reports provided to the
Purchaser contain all material information relating to the Company and
its operations and financial condition as of their respective dates
which information is required to be disclosed therein. Since the date
of the most recent financial statements included in public documents,
there has been no material adverse change in the Company's business,
financial condition or affairs not disclosed to the Purchaser. The
public reports, at the time that they were filed, did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances when made.
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(k) Dilution. The Company's executive officers and directors have studied
and fully understand the nature of the Shares being sold hereby and
recognize that they have a potential dilutive effect. The board of
directors of the Company has concluded, in its good faith business
judgment, which such issuance is in the best interests of the Company.
(l) Stop Transfer. The Shares are restricted securities as of the date of
this Agreement. As a result, the Company will be obligated to issue
stop transfer orders to its transfer agent regarding the Shares and
the Warrants, as required by federal securities laws.
(m) Defaults. Neither the Company nor any of its subsidiaries is in
violation of its Articles of Incorporation or ByLaws. Other than as
disclosed in public reports, neither the Company nor any of its
subsidiaries is
(i) in default under or in violation of any other material agreement
or instrument to which it is a party or by which it or any of its
properties are bound or affected, which default or violation
would have a material adverse effect on the Company except as
otherwise disclosed in documents provided or made available to
the Purchaser,
(ii) in default with respect to any order of any court, arbitrator or
governmental body or subject to or party to any order of any
court or governmental authority arising out of any action, suit
or proceeding under any statute or other law respecting
antitrust, monopoly, restraint of trade, unfair competition or
similar matters, or
(iii) to its knowledge in violation of any statute, rule or regulation
of any governmental authority which violation would have a
material adverse effect on the Company.
(n) No General Solicitation. Neither the Company, nor any of its
affiliates, nor to its knowledge, any person acting on its or their
behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D under the Act) in
connection with the offer or sale of the Units.
(o) No Undisclosed Liabilities. The Company has no liabilities or
obligations that are material, individually or in the aggregate, which
are not disclosed in public reports, other than those incurred in the
ordinary course of the Company's businesses since September 30, 2003.
(p) No Undisclosed Events or Circumstances. Since September 30, 2003, no
event or circumstance has occurred or exists with respect to the
Company or its businesses, properties, operations or financial
condition, that, under applicable law, rule or regulation, requires
public disclosure or announcement prior to the date hereof by the
Company but which has not been so publicly announced or disclosed in
the documents provided or made available to Purchaser.
(q) Capitalization. The authorized and outstanding capital stock of the
Company as of the date of this Agreement is 35,000,000 common shares
authorized, of which 19,528,954 common shares are outstanding as of
January 22, 2004 and prior to the issuance of Shares hereunder, and,
additionally warrants for the purchase of 428,572 which may be
exercised through May 30, 2006 are outstanding and there are
outstanding option agreements to purchase 1,367,693 common shares with
executive officers and directors of the Company under the Company's
Non-Qualified Stock Option and Stock Grant Plan. Except as set forth
in public reports, there are no other options, warrants, or rights to
subscribe to, securities, rights or obligations convertible into or
exchangeable for or giving any right to subscribe for any shares of
capital stock of the Company. All of the outstanding shares of Common
Stock of the Company have been duly and validly authorized and issued
and are fully paid and nonassessable.
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(r) Correctness of Representations. The Company represents that the
foregoing representations and warranties are true and correct as of
the date hereof in all material respects. The foregoing
representations and warranties shall survive during the course and
effectiveness of this Agreement.
6. Covenants of the Company
The Company covenants and agrees with the Purchaser as follows:
(a) The Company will advise the Purchaser, promptly after it receives
notice of issuance by the Securities and Exchange Commission, any
state securities commission or any other regulatory authority of any
stop order or of any order preventing or suspending any offering of
any securities of the Company, or of the suspension of the
qualification of the Common Stock of the Company for offering or sale
in any jurisdiction, or the initiation of any proceeding for any such
purpose.
(b) The Company shall promptly secure the listing of the Shares upon each
national securities exchange, or automated quotation system, if any,
upon which shares of common stock of the Company are then listed
(subject to official notice of issuance). The Company will maintain
the listing of its Common Stock on the NASD OTC Bulletin Board (the
"Principal Market")), and will comply in all respects with the
Company's reporting, filing and other obligations under the bylaws or
rules of the National Association of Securities Dealers ("NASD") and
such exchanges, as applicable. The Company will provide the Purchaser
copies of all notices it receives notifying the Company of the
threatened and actual delisting of the Common Stock from any Principal
Market.
(c) The Company shall notify the Commission, NASD, and applicable state
authorities, in accordance with their requirements, if any, of the
transactions contemplated by this Agreement, and shall take all other
necessary action and proceedings as may be required and permitted by
applicable law, rule and regulation, for the legal and valid issuance
of the Shares to the Purchaser and promptly provide copies thereof to
Purchaser.
(d) The Company shall use its commercially reasonable efforts to file with
the Commission a Registration Statement on Form SB-2 covering the
resale of all of the Shares hereunder within ninety (90) days of the
Closing date. In the event that Form SB-2 is unavailable for such a
registration, the Company shall use such other form as is available
for such a registration. The foregoing covenant is conditioned on the
Purchaser providing the Company with such information as may be
reasonably requested by the Company in connection with the filing of
the registration statement.
(e) From the date of this Agreement and until at least two (2) years after
the effectiveness of the Registration Statement on Form SB-2 or such
other Registration Statement as provided in Section 6(d) above, the
Company will use its best efforts to (i) cause its Common Stock and
the Share to continue to be registered under Sections 12(b) or 12(g)
of the Exchange Act, (ii) comply with all reporting requirements that
are applicable to an issuer with a class of Shares registered pursuant
to Section 12(g) of the Exchange Act, and (iii) comply with all
requirements related to any registration statement filed pursuant to
this Agreement. The Company will use its best efforts not to take any
action or file any document (whether or not permitted by the Act or
the Exchange Act or the rules thereunder) to terminate or suspend such
registration or to terminate or suspend its reporting and filing
obligations under said Acts until two (2) years after the actual
effective date of the Registration Statement on Form SB-2. Until the
resale of the Shares by the Purchaser, the Company will continue the
listing of the Common Stock on the Bulletin Board and will comply in
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all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of Bulletin Board.
7. Covenants of the Company and Purchaser Regarding Indemnification.
(a) The Company agrees to indemnify, hold harmless, reimburse and defend
Purchaser, Purchaser's officers, directors, agents, affiliates,
control persons, and principal shareholders, against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable
legal fees) of any nature, incurred by or imposed upon Purchaser or
any such person which results, arises out of or is based upon (i) any
material misrepresentation by Company or breach of any warranty by
Company in this Agreement or in any Schedules attached hereto, or
other agreement delivered pursuant hereto; or (ii) after any
applicable notice and/or cure periods, any breach or default in
performance by the Company of any covenant or undertaking to be
performed by the Company hereunder, or any other agreement entered
into by the Company and Purchaser relating hereto.
(b) Purchaser agrees to indemnify, hold harmless, reimburse and defend the
Company and each of the Company's officers, directors, employees,
agents, affiliates and control persons against any claim, cost,
expense, liability, obligation, loss or damage (including reasonable
legal fees) of any nature, incurred by or imposed upon the Company or
any such person which results, arises out of or is based upon (i) any
material misrepresentation by Purchaser in this Agreement or in any
Schedules hereto, or other agreement delivered pursuant hereto; or
(ii) after any applicable notice and/or cure periods, any breach or
default in performance by Purchaser of any covenant or undertaking to
be performed by Purchaser hereunder, or any other agreement entered
into by the Company and Purchasers relating hereto.
8. Anti-Dilution Provisions
In case the Company shall at any time before the Closing Date subdivide or
consolidate its outstanding common shares into a greater or lesser number
of shares, the exercise price of the Warrants and the terms of the Warrants
shall be proportionately increased or reduced, and amended accordingly.
9. Governing Law
This agreement shall be governed by and construed in accordance with the
laws of the State of Colorado and the federal laws of the United States
applicable therein. The Purchaser hereby irrevocably attorns to the
non-exclusive jurisdiction of the courts of the State of Colorado with
respect to any matters arising out of this agreement.
10. Assignment
This agreement is not transferable or assignable by the parties hereto.
12. Entire Agreement
This agreement contains the entire agreement of the parties hereto relating
to the subject matter hereof and there are no representations, covenants or
other agreements relating to the subject matter hereof except as stated or
referred to herein or therein.
13. Successors and Assigns
This agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns,.
14. Currency
All amounts in this agreement are stated and shall be paid in United States
dollar currency.
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15. Time of Essence
Time shall be of the essence of this agreement.
16. Headings
The headings contained herein are for convenience only and shall not affect
the meaning or interpretation of this agreement.
17. Subscription Particulars
(a) The Purchaser hereby agrees to purchase Units as set forth below:
Number of Units: Aggregate Purchase Price: (US$0.90 x number of
Units): US$ Name of Purchaser: Street Address: City and Country:
Postal Code: Contact Name: Alternate Contacts Name: Phone No.: Fax
No.: E-mail:
(b) Registration of the certificates representing the Shares and Warrants
should be made as follows (if space is insufficient, attach a list) -
or leave blank if registration is to be as detailed in sub-clause (a)
above. Name: Registration Address: City and Country: Postal Code:
(c) The certificates representing the Shares and Warrants are to be
delivered as follows (if different from the address set forth in
sub-clause (b) above): Name: Address: City and Country: Postal Code:
Telephone/Contact: (d) Number of common shares of the Company owned by
the Purchaser:
18. Signature of Purchaser
Signature of Purchaser (on its own behalf and, if applicable, on behalf of
each principal for whom it is contracting hereunder).
(Signature or Authorized Signature)
(Name and Official Capacity - please print)
19. Confirmation and Acceptance
This agreement is confirmed and accepted by the Company.
DATED as of the ____ day of March, 2004
U.S. GOLD CORPORATION
By:
Name:
Title:
00
XXXXXXXX "X"
(Xxx-Xxxxxx Xxxxxx Purchasers)
1. Method of Payment:
Payment for the Subscribed Units shall be made in United States dollars by
bank wire transfer, certified cheque, or bank draft (without deduction of
bank service charges or otherwise) payable to "Meridian Capital LTD Trust
Account". The entire subscription price for all Subscribed Units must be
paid at the time of subscription. In the case of a bank wire transfer,
funds should be wired to:
Meridian Corresponding Bank:
Bank of America, New York, New York
ABA #
TD's Account # at Bank of America:
For further credit to: Meridian Capital LTD, US TRUST ACCOUNT
Bank: Canadian Imperial Bank of Commerce
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X., Xxxxxx
TD's Swift Code:
Transit #:
Account Name Beneficiary: Meridian Capital LTD., Trust Account
Trust Account #:
2. Delivery:
The Company is authorized to deliver the Subscribed Shares and Warrants to:
(Name)
(Address)
Attention:
(Phone Number)
Registration:
The undersigned hereby directs that the certificates representing the
Subscribed Shares and Warrants shall be delivered as indicated above at the
time of the closing and shall be registered as follows:
(Name)
(Address)
SCHEDULE 'B'
Certificate of Accredited Investor
(Words in bold have the meanings set forth in Section 2 of this Schedule)
1. The Purchaser hereby certifies to U.S. Gold Corporation that the Purchaser
is: [Please check the appropriate box.]
__ (a) any bank as defined in Section 3(a)(2) of the 1933 Act, or any savings
and loan association or other institution as defined in Section 3(a)(5)(A)
of the 1933 Act whether acting in its individual capacity or fiduciary
capacity;
__ b) any broker or dealer registered pursuant to Section 15 of the United
States Securities Exchange Act of 1934;
__ (c) any insurance company as defined in Section 2(13) of the 1933 Act;
__ (d) any investment company registered under the Investment Company Act of
1940 or a business development company as defined in Sections 2(a)(48) of
that Act, any Small Business Investment Company licensed by the United
States Small Business Administration under Section 301(c) or (d) of the
United States Small Business Investment Act of 1658;
__ (e) any private business development company as defined in Sections
202(a)(22) of the United States Investment Advisers Act of 1940; any
employee benefit plan company licensed to do business as an insurance
company in any jurisdiction;
__ (f) any organization described in Section 501(c)(3) of the United States
Internal Revenue Code, corporation, or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of US$5,000,000;
__ (g) any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds US$1,000,000;
__ (h) any natural person who had an income in excess of US$200,000 in each of
the last two most recent years or joint income with that person's spouse in
excess of US$300,000 in each of those years and has a reasonable
expectation of reaching the same income level in the current year;
__ (i) any trust, with total assets in excess of US$5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as defined in paragraph
230.506(b)(2)(ii) of Regulation D of the 1933 Act; and
__ (j) any entity in which all of the equity owners are Accredited Purchasers
as provided above.
2. For the purposes hereof:
"company" means any corporation, incorporated association, incorporated
syndicate or other incorporated organization.
"control person" means any person, company or combination of persons or
companies holding a sufficient number of any Shares of the Company to
affect materially the control of the Company, but any holding of any
persons, company or combination of persons or companies holding more than
10 per cent of the outstanding voting Shares of the Company, in the absence
of evidence to the contrary, shall be deemed to affect materially the
control of the Company.
"director" where used in relation to a person, includes a person acting in
a capacity similar to that of a director of a company.
"entity" means a company, syndicate, partnership, trust or unincorporated
organization.
"financial assets" means cash, Shares, or any contract of insurance or
deposit or evidence thereof..
"individual" means a natural person, but does not include a partnership,
unincorporated association, unincorporated organization, trust or a natural
person in his or her capacity as trustee, executor, administrator or other
legal personal representative.
"managed account" means an investment portfolio account of a client
established in writing with a portfolio adviser who makes investment
decisions for the account and has full discretion to trade in shares of the
account without requiring the client's express consent to a transaction.
"mutual fund" includes an issuer of shares that entitle the holder to
receive on demand, or within a specified period after demand, an amount
computed by reference to the value of a proportionate interest in the whole
or in a part of the net assets, including a separate fund of trust account,
of the issuer of the shares.
"non-redeemable investment fund" means an issuer
(aa) whose primary purpose is to invest money provided by its security
holders;
(bb) that does not invest for the purpose of exercising effective
control, seeking to exercise effective control, or being actively
involved in the management of the issuers in which it invests, other
than other mutual funds or non-redeemable investment funds; and
(cc) that is not a mutual fund.
"officer" means the chair, any vice-chair of the board of directors, the
president, any vice president, the secretary, the assistant secretary, the
treasurer, the assistant treasurer, and the general manager of a company,
and any other person designated an officer or a company by by-law or
similar authority, or any individual acting in a similar capacity on behalf
of the Company.
"person" means an individual, partnership, unincorporated association,
unincorporated syndicate, unincorporated organization, trust, trustee,
executor, administrator, or other legal representative.
"portfolio adviser" means
(dd) a portfolio manager; or
(ee) a broker or investment dealer exempted from registration as an
adviser under Section 15 of the United States Securities Exchange Act
of 1934.
"promoter" means (a) a person or company who, acting alone or in
conjunction with one or more other persons, companies or a combination
thereof, directly or indirectly, has taken the initiative in founding,
organizing or substantially reorganizing the business of the Company, or
(b) a person or company who, in connection with the founding, organizing or
substantial reorganizing of the business of the Company, directly or
indirectly, received in consideration of services or property, or both
services and property, 10 per cent or more of any class of shares of the
Company or 10 per cent or more of the proceeds from the sale of any class
of shares of a particular issue, but a person or company who receives such
shares or proceeds either solely as underwriting commissions or solely in
2
consideration of property shall not be deemed a promoter within the meaning
of this definition if such person or company does not otherwise take part
in founding, organizing, or substantially reorganizing the business.
"related liabilities" means liabilities incurred or assumed for the purpose
of financing the acquisition or ownership of financial assets and
liabilities that are secured by financial assets.
"spouse" in relation to an individual, means another individual to whom
that individual is married, or another individual of the opposite sex or
the same sex with whom that individual is living in a conjugal relationship
outside marriage.
Affiliated Entities, Control and Subsidiaries
3. A person or company is considered to be an affiliated entity of another
person or company if one is a subsidiary entity of the other, or if both
are subsidiary entities of the same person or company, or if each of them
is controlled by the same person or company.
4. A person or company is considered to be controlled by a person or company
if
(ff) in the case of a person or company,
(i) voting shares of the first mentioned person or company carrying
more than 50 percent of the votes for the election of directors
are held, otherwise than by way of security only, by or for the
benefit of the other person or company, and
(ii) the votes carried by the shares are entitled, if exercised, to
elect a majority of the directors of the first-mentioned person
or company;
(gg) in the case of a partnership that does not have directors, other than
a limited partnership, the second-mentioned person or company holds
more than 50 percent of the interests in the partnership; or
(hh) in the case of a limited partnership, the general partner is the
second-mentioned person or company.
5. A person or company is considered to be a subsidiary entity of another
person or company if
(a) it is controlled by,
(i) that other, or
(ii) that other and one or more persons or companies each of which is
controlled by that other, or
(iii) two or more persons or companies, each of which is controlled by
that other; or
(b) it is a subsidiary entity of a person or company that is the other's
subsidiary entity.
6. The Purchaser, if resident in Alberta or British Columbia, hereby certifies
to U.S. Gold Corporation that the Purchaser, for the purposes of 45-103
satisfies one or more of the following criteria [Please check the
appropriate box]:
Accredited Investor - Individual
__ (a) an individual who, either alone or jointly with a spouse,
beneficially owns, directly or indirectly, Financial Assets (cash and
securities only) having an aggregate realizable value that before
taxes, but net of any Related Liabilities, exceeds $1,000,000;
3
__ (b) an individual whose net income before taxes exceeded $200,000 in
each of the two most recent years or whose net income before taxes
combined with that of a spouse exceeded $300,000 in each of the two
most recent years and who, in either case, reasonably expects to
exceed that net income level in the current year;
__ (c) a person registered under the securities legislation, or under the
securities legislation of another jurisdiction of Canada, as an
adviser or dealer, other than a limited market dealer registered under
the Securities Act (Ontario);
__ (d) an individual registered or formerly registered under the
securities legislation, or under the securities legislation of another
jurisdiction of Canada, as a representative of a person or company
referred to in paragraph (c);
__ (e) a person, that, either alone or with a spouse, has net assets of
at least $5,000,000,
Accredited Investor - Non-Individual
__ (f) a Canadian financial institution, or an authorized foreign bank
listed in Schedule III of the Bank Act (Canada);
__ (g) the Business Development Bank of Canada incorporated under the
Business Development Bank of Canada Act (Canada);
__ (h) an association under the Cooperative Credit Associations Act
(Canada) located in Canada; or a central cooperative credit society
for which an order has been made under subsection 473(1) of that Act,
__ (i) a subsidiary of any person or company referred to in paragraphs
(f) to (h), if the person or company owns all of the voting securities
of the subsidiary, except the voting securities required by law to be
owned by directors of that subsidiary;
__ (j) a company registered under the securities legislation, or under
the securities legislation of another jurisdiction of Canada, as an
adviser or dealer, other than a limited market dealer registered under
the Securities Act (Ontario) or the Securities Act (Newfoundland and
Labrador);]
__ (k) the government of Canada or a province, or any crown corporation
or agency of the government of Canada or a province;
__ (l) a municipality, public board or commission in Canada;
__ (m) any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any agency of that
government;
__ (n) a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a provincial
pension commission or similar regulatory authority of a jurisdiction
of Canada;
__ (o) a person or company, other than a mutual fund or non-redeemable
investment fund, that, either alone or with a spouse, has net assets
of at least $5,000,000, and unless the person or company is an
individual, that amount is shown on its most recently prepared
financial statements
__ (p) a mutual fund or non-redeemable investment fund that, in the local
jurisdiction, distributes its securities only to persons or companies
that are accredited investors;
__ (q) a mutual fund or non-redeemable investment fund that, in the local
jurisdiction, distributes its securities under one or more
prospectuses for which the regulator has issued receipts,
4
__ (r) a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act (Canada) or
under comparable legislation in a jurisdiction of Canada or a foreign
jurisdiction, trading as a trustee or agent on behalf of a fully
managed account,
__ (s) a person or company trading as agent on behalf of a fully managed
account if that person or company is registered or authorized to carry
on business under the securities legislation of a jurisdiction of
Canada or a foreign jurisdiction as a portfolio manager or under an
equivalent category of adviser or is exempt from registration as a
portfolio manager or the equivalent category of adviser,
__ (t) a registered charity under the Income Tax Act (Canada) that, in
regard to the trade, has obtained advice from an eligibility adviser
or other adviser registered to provide advice on the securities being
traded,
__ (u) an entity organized in a foreign jurisdiction that is analogous to
any of the entities referred to in paragraphs (c), (f) through (j) and
paragraph (n) in form and function; or
__ (v) a person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, are persons or
companies that are accredited investors.
7. The Purchaser, if resident in Ontario, hereby certifies to U.S. Gold
Corporation that the Purchaser, for the purposes of 45-501 satisfies one or
more of the following criteria [Please check the appropriate box]:
__ (a) A bank listed in Schedule I or II of the Bank Act (Canada), or an
authorized foreign bank listed in Schedule III of that Act;
__ (b) The Business Development Bank incorporated under the Business
Development Bank Act (Canada);
__ (c) A loan corporation or trust corporation registered under the Loan
and Trust Corporations Act (Ontario) or under the Trust and Loan
Companies Act (Canada), or under comparable legislation in any other
jurisdiction;
__ (d) A co-operative credit society, credit union central, federation of
caisse populaire, credit union or league, or regional caisse
populaire, or an association under the Cooperative Credit Associations
Act (Canada), in each case, located in Canada;
__ (e) A company licensed to do business as an insurance company in any
jurisdiction;
__ (f) A subsidiary of any company referred to in paragraph (a), (b),
(c), (d) or (e), where the company owns all of the voting shares of
the subsidiary;
__ (g) A person or company registered under the Securities Act (Ontario)
or securities legislation in another jurisdiction as an adviser or
dealer, other than a limited market dealer;
__ (h) The government of Canada or of any jurisdiction, or any crown
corporation, instrumentality or agency of a Canadian federal,
provincial or territorial government;
__ (i) Any Canadian municipality or any Canadian provincial or
territorial capital city;
__ (j) Any national, federal, state, provincial, territorial or municipal
government of or in any foreign jurisdiction, or any instrumentality
or agency thereof;
5
__ (k) A pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a provincial
pension commission or similar regulatory authority;
__ (l) A registered charity under the Income Tax Act (Canada);
__ (m) An individual who beneficially owns, or who together with a spouse
beneficially own, financial assets having an aggregate realizable
value that, before taxes but net of any related liabilities, exceeds
$1,000,000;
__ (n) An individual whose net income before taxes exceeded $200,000 in
each of the two most recent years or whose net income before taxes
combined with that of a spouse exceeded $300,000 in each of those
years and who, in either case, has a reasonable expectation of
exceeding the same net income level in the current year;
__ (o)An individual who has been granted registration under the
Securities Act (Ontario) or securities legislation in another
jurisdiction as a representative of a person or company referred to in
paragraph (g), whether or not the individuals registration is still in
effect;
__ (p) A promoter of the issuer or an affiliated entity of a promoter of
the Company;
__ (q) A spouse, parent, grandparent or child of an officer, director or
promoter of the Company;
__ (r) A person or company that, in relation to the issuer, is an
affiliated entity or a person or company referred to in clause (c) of
the definition of distribution in subsection 1(1) of the Securities
Act (Ontario);
__ (s) An issuer that is acquiring securities of its own issue;
__ (t) A company, limited partnership, limited liability partnership,
trust or estate, other than a mutual fund or non-redeemable investment
fund, that had net assets of at least $5,000,000 as reflected in its
most recently prepared financial statements;
__ (u) A person or company that is recognized by the Ontario Securities
Commission as an accredited investor;
__ (v) A mutual fund or non-redeemable investment fund that, in Ontario,
distributes its securities only to persons or companies that are
accredited investors;
__ (w) A mutual fund or non-redeemable investment fund that, in Ontario,
distributes its securities under a prospectus for which a receipt has
been granted by the Director;
__ (x) A managed account if it is acquiring a security that is not a
security of a mutual fund or non-redeemable investment fund;
__ (y) An account that is fully managed by a trust corporation registered
under the Loan and Trust Corporations Act (Ontario);
__ (z) An entity organized outside of Canada that is analogous to any of
the entities referred to in paragraphs (a) through (g) and paragraph
(k) in form and function; and
__ (aa) A person or company in respect of which all of the owners of
interests, direct or indirect, legal or beneficial, are persons or
companies that are accredited investors.
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The foregoing representations and warranties included in the Unit Subscription
Agreement and the designation in this Schedule B are true and accurate as of the
date of this certificate and will be true and accurate as of the Closing Date of
the offering of the Units as set out in this Subscription Agreement. If any such
representations or warranties will not be true and accurate prior to Closing
Date, the undersigned will give immediate written notice of such fact to the
Company.
Dated:
Signed:
Witness (If Investor is an Individual)
Print Name of Beneficial Purchaser
Print Name of Witness
If Investor is a Partnership, print Name and Title of Authorized Signing Officer
Address of Beneficial Purchaser
7
EXHIBIT 1 (Form of Warrant)
No.__ U.S. GOLD CORPORTION (the "Company") _,___,___
COMMON SHARE PURCHASE WARRANTS TO PURCHASE COMMON SHARES OF THE COMPANY
March __, 2004
This is to certify that, FOR VALUE RECEIVED, (Purchaser) (the "Registered
Holder") holder of these Common Share Purchase Warrants (the "Warrants") is
entitled to subscribe for and purchase upon and subject to the terms and
conditions contained in the Subscription Agreement, fully-paid and
non-assessable shares of common stock of the Company, as such common shares are
constituted on the date set out below (the "Issue Date"), upon surrender hereof
with the subscription form on the reverse side hereof duly completed and upon
payment to the Company of US$1.25 (the "Exercise Price") per common share of
Company exercised and subscribed for hereunder on or prior to March __, 2006
(the "Expiry Date").
The Warrants may be exercised only at the offices of the Company at 0000 Xxxxxxx
Xxxxxx, xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000-0000, U.S.A., or other address with
notification thereof as provided in writing to Investor by the Company. The
Warrants are issued subject to the terms and conditions governing the holding of
Warrants as set forth in the Subscription Agreement annexed hereto. All
capitalized terms used in the Subscription Agreement I shall have the meaning
set out therein.
The Warrants shall become wholly void and shall terminate and lapse at 4:00
p.m., Lakewood, Colorado time, on the Expiry Date and thereafter shall be of no
further force and effect.
THIS WARRANT AND THE SECURITIES ACQUIRED UPON THE EXERCISE THEREOF HAVE NOT BEEN
REGISTERED UNDER THE ACT OR UNDER ANY APPLICABLE UNITED STATES STATE SECURITIES
LAWS. THE WARRANT SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENSE OF ANY
EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION UNDER THE ACT AND ANY
APPLICABLE UNITED STATES STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
ACCEPTABLE TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED. THE WARRANT
AND THE SECURITIES ACQUIRED UPON THE EXERCISE THEREOF HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
IN WITNESS WHEREOF the Company has caused this Warrant to be executed by the
signature of its proper officers. ISSUED this __ day of Xxxxx, 0000.
U.S. GOLD CORPORATION
/s/ Xxxxxxx X. Xxxx
------------------------------------------------------
Xxxxxxx X. Xxxx, President and Chief Executive Officer
