Exhibit 2.2
STOCK SUBSCRIPTION AGREEMENT
To: U.S. Gold Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx X.X.X. 00000-0000
The undersigned (the "Purchaser") hereby (subject to the terms and
conditions hereof and the Letter Agreement between the parties as of even date
herewith (the "Letter Agreement")) 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 shares of par value
US$0.10 common stock of the Company (the "Shares") set forth in Clause 13 below.
Each Share will be issued at a price of $0.36036 per Share.
1. Conditions of Purchase
The Purchaser acknowledges that the Company's obligation to sell the Shares
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 (the "SEC") under the Securities Act of 1933, as amended
(the "1933 Act");
(b) all necessary regulatory approvals, if any, being obtained by the
Company prior to the Closing;
(c) the representations and warranties of the Purchaser remain true and
correct as at the Closing, and
(d) the Company has reviewed the completed Subscription Agreement
submitted by the Purchaser and accepts the subscription.
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) evidence of a wire transfer in the full amount in United States
dollars payable to U.S. Gold Corporation. Details concerning the
payment procedure are set out in Schedule "A".
Delivery by the Company of the certificates representing the Shares, and
payment for the Shares 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 (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), then the Company shall deliver such certificates 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 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 or Regulation S
promulgated thereunder;
(b) the Company may be required to disclose to the SEC, and thereby though
public access to Xxxxx filing, the identity of the beneficial
purchaser(s) of the Shares;
(c) the Shares have not 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 shall bear the following 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 (based on the Company's representations and warranties to
Purchaser) 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;
(g) the Purchaser has been provided copies of and has reviewed to the
extent he deems necessary, copies of the Company's Form 10-KSB for the
year ended December 31, 2004 as filed with the SEC, together with all
subsequently filed Forms 10-QSB, 8-K, Proxy Statements, Registration
Statement on Form SB-2 and all amendments thereto and other publicly
available filings made with the SEC and has received from the Company
the Company's representations and warranties to Purchaser concerning
its operations, financial condition and other matters as requested of
the Company, and Purchaser has considered these representations and
warranties in deciding on the advisability of investing in the Shares;
(h) the Shares are being offered for sale only on a "private placement"
basis;
(i) the Shares are being acquired by the Purchaser in good faith solely
for the Purchaser's own account, for investment purposes only, and are
not being purchased with a view to, or for the resale or distribution
thereof;
(j) the representations, warranties and covenants contained in this
Agreement made by Purchaser 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 Shares, 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, 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; and
(j) the offer to sell the Shares 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.
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 a resident of the Province of Ontario, Canada, and
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 applicable rules of the SEC,
the Purchaser may be subject to various reporting requirements with
the SEC 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 SEC 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 disclosed in Clause 13(d).
(g) the Purchaser is not an investment club; and
(h) the representations, warranties and covenants of the Purchaser set
forth herein shall survive the closing of the transaction contemplated
hereby.
6. Company's Representations and Warranties
The Company represents and warrants and agrees with the Purchaser (which
representations, warranties and covenants shall survive Closing and continue in
full force and effect) 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, 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
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) 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.
(d) Additional Issuances. There are no outstanding preemptive or similar
rights (or phantom stock or stock appreciation 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, common stock or equity of the Company or other equity interest in
any of the subsidiaries of the Company except as described explicitly
in the Commission Reports (as defined below) or referenced
specifically in the Letter Agreement. To the knowledge of the Company,
there are no agreements among shareholders regarding the voting of the
shares of capital stock of the Company.
(e) 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.
(f) 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) any decree, judgment, order, law,
treaty, rule, regulation or determination applicable to the
Company of 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, (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 Purchaser; 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.
(g) 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.
(h) Information Concerning Company.
(i) The Company has filed all forms, reports, statements, schedules
and other documents with the SEC required to be filed by it since
and including January 1, 2004 pursuant to the federal securities
laws and the SEC rules and regulations thereunder (the
"Commission Reports"). The Commission Reports (i) were prepared
in all material respects in accordance with the requirements of
the 1933 Act, the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the published rules and regulations of
the SEC thereunder, each as applicable to such Commission Reports
and (ii) did not as of the time they were filed contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were and will be made, not misleading. No subsidiary of the
Company is subject to the periodic reporting requirements of the
Exchange Act. As of the date hereof, there are no investigations
or material unresolved comments issued by the staff of the SEC
with respect to any of the Commission Reports.
(ii) Each of the consolidated financial statements (including, in each
case, any notes thereto) of the Company included in the
Commission Reports has been prepared in all material respects in
accordance with the published rules and regulations of the SEC
(including Regulation S-X) and in accordance with United States
generally accepted accounting principles applied on a consistent
basis throughout the periods indicated (except as otherwise
stated in such financial statements, including the related notes)
and each fairly presents, in all material respects, the
consolidated financial position, results of operations and cash
flows of the Company and its consolidated subsidiaries as of the
respective dates thereof and for the respective periods indicated
therein, except as otherwise set forth in the notes thereto
(subject, in the case of unaudited statements, to the inclusion
of full notes thereto and to normal and recurring year-end
adjustments).
(iii) At the date of the most recent interim (March 31, 2005)
financial statements of the Company included in the Commission
Reports, neither the Company nor any of its subsidiaries had, and
since such date neither the Company nor any of its subsidiaries
has incurred, any liabilities or obligations of any nature
(whether accrued, absolute, contingent, determinable or
otherwise) which, individually or in the aggregate, are material
to the Company or which have had or could have, individually or
in the aggregate, a material adverse effect on the Company or its
assets.
(iv) Except as disclosed in the next sentence, none of the Company or
any of its subsidiaries is indebted to any director or officer of
the Company or any of its subsidiaries (except for amounts due as
normal salaries and bonuses, in reimbursement of ordinary
business expenses and directors' fees) and no such person is
indebted to the Company or any of its subsidiaries, and there
have been no other transactions of the type required to be
disclosed pursuant to Items 402 or 404 of Regulation S-K
promulgated by the SEC. As a result of the termination of the
Management (as defined in the Letter Agreement), the Company will
owe, in aggregate, the following amount to the Management as
severance and for other obligations, all as required by currently
existing contractual obligations of the Company that have been
explicitly disclosed in the Commission Reports: $2,0123,331.
(v) The Company has heretofore furnished or made available to XxXxxx
a complete and correct copy of any amendments or modifications
which have not yet been filed with the SEC to Commission Reports
which previously had been filed by the Company with the SEC
pursuant to the 1933 Act and the rules and regulations
promulgated thereunder or the Exchange Act and the rules and
regulations promulgated thereunder.
(vi) Since the date of the most recent financial statements included
in the Commission Reports, there has been no material adverse
change in the Company's business, financial condition or affairs
not explicitly disclosed to the Purchaser. The Company has good
and unencumbered title to all assets attributed to it in the
Commission Reports (except to the extent encumbered as disclosed
explicitly in the Commission Reports). The Company, directly or
through its direct and indirect wholly-owned subsidiaries, owns
100% of all economic and voting interests in Tonkin Springs LLC.
(vii) Except as disclosed in writing to the Purchaser on the date
hereof, the transactions contemplated by this Agreement and the
Letter Agreement will not constitute a "change of control" under,
require the consent from or the giving of notice to a third party
pursuant to, permit a third party to terminate or accelerate
vesting or repurchase rights, or create any other material
detriment under the terms, conditions or provisions of any
contract or obligation to which the Company or any of its
subsidiaries is a party or by which any of them or any of their
properties or assets may be bound.
(viii) Since January 1, 2004, the Company and each of its subsidiaries
has had in place "disclosure controls and procedures" (as defined
in Rules 13a-14(c) and 15d-14(c) of the Exchange Act) designed
and maintained to ensure in all material respects that (a)
transactions are executed in accordance with management's general
or specific authorizations, (b) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principals and to
maintain accountability for assets, (c) access to assets is
permitted only in accordance with management's general or
specific authorization, (d) the recorded accountability for
assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences, (e) all information (both financial and
non-financial) required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC and (f) all
such information is accumulated and communicated to the Company's
management as appropriate to allow timely decisions regarding
required disclosure and to make the certifications of the Chief
Executive Officer and Chief Financial Officer of the Company
required under the Exchange Act with respect to such reports. The
Company's disclosure controls and procedures ensure that
information required to be disclosed by the Company in the
reports filed with the SEC under the Exchange Act is recorded,
processed, summarized and reported within the time periods
specified in the SEC's rules and forms. None of the Company's or
its subsidiaries' records, systems, controls, data or information
are recorded, stored, maintained, operated or otherwise wholly or
partly dependent on or held by any means (including any
electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto
and therefrom) are not under the exclusive ownership and direct
control of the Company or its subsidiaries or accountants. As of
the date of this Agreement, to the knowledge of the Company, (i)
there is no reason that it will not be able, on a timely basis,
to complete and include in the Company's Annual Report on Form
10-K for the year ending December 31, 2005, management's
assessment of the Company's internal controls and procedures for
financial reporting in accordance with Section 404 of the
Xxxxxxxx-Xxxxx Act and (ii) there is no material weakness,
significant deficiency or control deficiency, in each case as
such term is defined in PCAOB Auditing Std. No. 2.
(ix) The Company has not granted any other person the right (whether
or not contingent or inchoate) to merge with, or purchase assets
from, the Company, and is not obligated to continue negotiations
with any other person with respect to any such transaction or
with respect to any issuance of the Company's capital stock. All
previously announced merger, acquisition or capital-raising
transactions have been terminated without any liability to the
Company. Any xxxxxxx money and other amounts paid to the Company
in connection with the foregoing have been forfeited to the
Company.
(i) Defaults. Neither the Company nor any of its subsidiaries is in
violation of its Articles of Incorporation or ByLaws, except that no
annual meeting of shareholders has yet been held for 2005 and none was
held in 2004. Other than as explicitly disclosed in the Commission
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, (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) in violation of
any statute, rule or regulation of any governmental authority which
violation would have a material adverse effect on the Company.
(j) 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 Shares.
(k) Reliance on Representation and Warranties. The representations,
warranties and covenants contained in this Agreement and in the Letter
Agreement made by the Company are made by the Company with the intent
that they may be relied upon by the Purchaser (without regard to its
own investigations, if any) in determining the whether or not to
purchase the Shares, and the Company hereby agrees to indemnify the
Purchaser against all losses, claims, costs, expenses and damages or
liabilities which it may suffer or incur caused or arising from its
reliance thereon in accordance with the indemnity terms of the Letter
Agreement. The Company further agrees that by issuing the Shares, 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 Company 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.
(l) Capitalization. The authorized capital stock of the Company as of the
date of this Agreement is 35,000,000 common shares, of which
22,196,810 common shares are outstanding as of July 29, 2005 and prior
to the issuance of Shares hereunder, and no warrants nor stock option
agreements are outstanding. Except as explicitly set forth in the
Commission Reports, there are no other options, warrants, or rights to
subscribe to, securities, rights or obligations (including without
limitation phantom stock or stock appreciation rights) 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.
7. 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.
8. Assignment
This agreement is not transferable or assignable by the parties hereto.
9. Entire Agreement
This agreement, together with the Letter 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.
10. 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, subject to
the hold period restrictions that may be applicable to the Shares.
11. Currency
All amounts in this agreement are stated and shall be paid in United States
dollar currency.
12. Time of Essence
Time shall be of the essence of this agreement.
13. Headings
The headings contained herein are for convenience only and shall not affect
the meaning or interpretation of this agreement.
14. Subscription Particulars
(a) The Purchaser hereby agrees to purchase Shares as set forth below:
Number of Shares: 11,100,000
Aggregate Purchase Price: $0.36036
($0.36036 x 11,100,000 Shares): $4,000,000
Name of Purchaser: Xxx XxXxxx
Federal Tax ID No. or SS No:__________________________________________
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 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) Number of common shares of the Company owned by the Purchaser:
________________________
15. 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)
16. Confirmation and Acceptance
This agreement is confirmed and accepted by the Company.
DATED as of the 29th day of July, 2005
U.S. GOLD CORPORATION
By: /s/ Xxxx X. Goth
---------------------------------
Name: Xxxx X. Goth
Title: Director
