Exhibit 10.1
SHARE ISSUANCE AGREEMENT
SHARE ISSUANCE AGREEMENT dated the 12th day of October, 2009,
BETWEEN:
TOBERMORY HOLDING LTD., a corporation organized under the laws of Nevis, with
registered address on 00, Xxxxxxxxxx Xxxxx, 0000 Xxxxxxxxx (hereinafter, the
"SUBSCRIBER")
AND:
AMERICAN SIERRA GOLD CORP., a Nevada domestic corporation, c/o Nevada Agency and
Transfer Company, 00 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000
(hereinafter, the "COMPANY")
NOW THEREFORE THIS SHARE ISSUANCE AGREEMENT ("AGREEMENT") WITNESSES that the
parties hereto agree as follows:
ARTICLE 1 - INTERPRETATION
SECTION 1.1. DEFINITIONS. When used in this Agreement (including the recitals
and schedules hereto) or in any amendment hereto, the following terms shall,
unless otherwise expressly provided, have the meanings assigned to them herein:
"BANKING DAY" shall mean any day other than a Saturday, Sunday, public holiday
under the laws of the State of Nevada or other day on which banking institutions
are authorized or obligated to close in Nevada.
"CHARTER DOCUMENTS" means constating documents and by-laws, and all amendments
thereto;
"CONSENT" means any permit, license, approval, consent, order, right,
certificate, judgment, writ, injunction, award, determination, direction,
decree, authorization, franchise, privilege, grant, waiver, exemption and other
concession or by-law, rule or regulation;
"UNIT PRICE" means a price equal to 75% of the volume weighted average of the
closing price (the "VWAP") of Common Stock, for the ten (10) Banking Days
immediately preceding the date of the Notice, as quoted on
xxxx://xxx.xxxxxx.xxx/, or other source of stock quotes as agreed to by the
parties; and
"DOLLAR" or "$" means the currency of the United States of America.
ARTICLE 2 - THE SHARE ISSUANCE
SECTION 2.1. SHARE ISSUANCE. The Subscriber shall make available to the Company
in accordance with, and subject to the terms and conditions of, this Agreement,
until December 31, 2011 (the "COMPLETION DATE"), up to $6,000,000 by way of
Advances in accordance with this Sections 2.2, 2.3 and 2.4 of this Agreement.
The Completion Date may be extended for an additional term of up to twelve
months at the option of the Company or the Subscriber upon written notice on or
before the Completion Date in accordance with the notice provisions in Section
of this Agreement.
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SECTION 2.2. THE ADVANCES. On the terms and conditions set forth herein the
Subscriber, from time to time, on any Banking Day, prior to the Completion Date,
agrees to make advances to the Company ("ADVANCES"). Each Advance shall be in an
aggregate amount of not more than $1,000,000 and in integral multiples of
$100,000.
SECTION 2.3. PROCEDURE TO REQUEST ADVANCES. Each Advance shall be made on or
before five Banking Days following notice from the Company. Each such notice
shall be given by a notice to the Subscriber in the form substantially the same
as the form attached hereto in Schedule A (each a "NOTICE").
SECTION 2.4. SUBSCRIPTION AGREEMENT. Upon making each Advance, the Subscriber
shall provide an executed Subscription Agreement, in a form acceptable to both
parties to this Agreement, to the Company.
SECTION 2.5. USE OF PROCEEDS. The Company shall use all Advances to fund
operating expenses, acquisitions, working capital and general corporate
activities.
SECTION 2.6 OPTION. The Subscriber may, at their discretion, take the option to
subscribe up to a further $6,000,000, when the total subscription from this
agreement has been received by the Company.
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to the Subscriber:
(a) Organization and Corporate Power. The Company has been duly
incorporated and organized and is validly subsisting and in good
standing under the laws of its jurisdiction and has full corporate
right, power and authority to enter into and perform its obligations
under the Agreement to which it is or shall be a party and has full
corporate right, power and authority to own and operate its properties
and to carry on its business;
(b) Conflict with Other Instruments. The execution and delivery by the
Company of the Agreement and the performance by the Company of its
obligations thereunder, do not and will not: (i) conflict with or
result in a breach of any of the terms, conditions or provisions of:
(A) the charter documents of the Company; (B) any law applicable to or
binding on the Company; or (C) any contractual restriction binding on
or affecting the Company or its properties the breach of which would
have a material adverse effect on the Company; or (ii) result in, or
require or permit: (A) the imposition of any lien on or with respect
to the properties now owned or hereafter acquired by the Company; or
(B) the acceleration of the maturity of any debt of the Company, under
any contractual provision binding on or affecting the Company;
(c) Consents, Official Body Approvals. The execution and delivery of the
Agreement and the performance by the Company of its obligations
thereunder have been duly authorized by all necessary action on the
part of the Company, and no Consent under any applicable law and no
registration, qualification, designation, declaration or filing with
any official body having jurisdiction over the Company is or was
necessary therefor. The Company possesses all Consents, in full force
and effect, under any applicable Law which are necessary in connection
with the operation of its business, the non-possession of which could
reasonably be expected to have a material adverse effect on the
Company;
(d) Execution of Binding Obligation. The Agreement has been duly executed
and delivered by the Company and, when duly executed by the Company
and delivered for value, the Agreement will constitute legal, valid
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and binding obligations of the Company, enforceable against the
Company, in accordance with its terms;
(e) No Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the Company, after due inquiry, threatened against
or affecting the Company (nor, to the knowledge of the Company, after
due inquiry, any basis therefor) before any official body having
jurisdiction over the Company which purport to or do challenge the
validity or propriety of the transactions contemplated by the Share
Issuance the Company, which if adversely determined could reasonably
be expected to have a material adverse effect on the Company;
(g) Absence of Changes. Since the date of the most recently delivered
financial statements of the Company, the Company has carried on its
business, operations and affairs only in the ordinary and normal
course consistent with past practice.
ARTICLE 4 - COVENANTS OF THE COMPANY
SECTION 4.1. AFFIRMATIVE COVENANTS. Until the Completion Date, the Company
shall:
(a) COMPLIANCE WITH LAWS, ETC. Comply with all applicable laws,
non-compliance with which could have a material adverse effect on the
Company;
(b) PAYMENT OF TAXES AND CLAIMS. Pay and discharge before the same shall
become delinquent: (i) all taxes and assessments; and (ii) all lawful
claims which, if unpaid, might become a lien upon or in respect of the
Company's assets or properties;
(c) MAINTAIN TITLE. Maintain and, as soon as reasonably practicable,
defend and take, all action necessary or advisable at any time, and
from time to time, to maintain, defend, exercise or renew its right,
title and interest in and to all of its property and assets;
(d) PAY OBLIGATIONS TO SUBSCRIBER AND PERFORM OTHER COVENANTS. Make full
and timely payment of its obligations hereunder and duly comply with
the terms and covenants contained in this Agreement, all at the times
and places and in the manner set forth therein;
(e) FURTHER ASSURANCES. At its cost and expense, upon request by the
Subscriber, duly execute and deliver, or cause to be duly executed and
delivered, to the Subscriber, such further instruments and do and
cause to be done such other acts as may be necessary or proper in the
reasonable opinion of the Subscriber to carry out more effectually the
provisions and purposes of this Agreement.
ARTICLE 5 - SHARE ISSUANCE
SECTION 5.1 SHARE ISSUANCE. The Company shall issue, within fifteen (15) Banking
Days following the date of the receipt by the Company of any Advance under this
Agreement, units (each a "UNIT") of the Company at the Unit Price. Each Unit
shall consist of one share (each a "SHARE") of the common stock of the Company
(the "COMMON STOCK") and one share purchase warrant (each a "Warrant"). Each
Warrant shall entitle the Subscriber to purchase one additional share (each a
"WARRANT SHARE") of Common Stock, at an exercise price equal to 175% of the Unit
Price at which the Unit containing the Warrant being exercised was issued, for a
period of two (2) years from the date such Warrant is issued. Upon receipt of
any Advance under this Agreement, the Company shall promptly cause its registrar
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and transfer agent to issue the certificates representing the Shares. If the
Subscriber exercises the Warrants, the Company shall promptly cause its
registrar and transfer agent to issue the certificates representing the Warrant
Shares.
SECTION 5.2 FRACTIONAL SHARES. Notwithstanding any other provisions of this
Agreement, no certificate for fractional shares of the Shares or the Warrant
Shares shall be issued to the Subscriber. In lieu of any such fractional shares,
if the Subscriber would otherwise be entitled to receive a fraction of a share
of the Shares or Warrant Shares following a Share Issuance or exercise of a
Warrant, as applicable, the Subscriber shall be entitled to receive from the
Company a stock certificate representing the nearest whole number of shares of
the Company.
ARTICLE 6 - MISCELLANEOUS
SECTION 6.1. NOTICES, ETC. Except as otherwise expressly provided herein, all
notices, requests, demands, directions and communications by one party to the
other shall be sent by hand delivery or registered mail or fax, and shall be
effective when hand delivered or when delivered by the relevant postal service
or when faxed and confirmed, as the case may be. All such notices shall be
addressed to the President of the notified party at its address given on the
signature page of this Agreement, or in accordance with any unrevoked written
direction from such party to the other party.
SECTION 6.2. NO WAIVER; REMEDIES. No failure on the part of the Subscriber or
the Company to exercise, and no delay in exercising, any right under this
Agreement shall operate as a waiver thereof. The remedies herein provided are
cumulative and not exclusive of any remedies provided by Law.
SECTION 6.3. JURISDICTION. (1) Each of the parties hereby irrevocably attorns to
the non-exclusive jurisdiction of the Courts of the State of Nevada in any
action or proceeding arising out of or relating to this Agreement. The Company
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by Law; and (2) nothing in this Section 6.3 shall
affect the right of the Subscriber to serve legal process in any other manner
permitted by Law or affect the right of the Subscriber to bring any action or
proceeding against the Company or its property in the courts of other
jurisdictions.
SECTION 6.4. SUCCESSORS AND ASSIGNS. The Company shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Subscriber, which consent may be arbitrarily withheld.
SECTION 6.5. SEVERABILITY. If one or more provisions of this Agreement be or
become invalid, or unenforceable in whole or in part in any jurisdiction, the
validity of the remaining provisions of this Agreement shall not be affected.
The parties hereto undertake to replace any such invalid provision without delay
with a valid provision which as nearly as possible duplicates the economic
intent of the invalid provision.
SECTION 6.6. COUNTERPARTS. This Agreement may be executed in counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed an original and all of which, taken together, shall constitute one and
the same instrument.
SECTION 6.7. SYNDICATION/PARTICIPATION. The Subscriber may not sell, transfer,
assign, participate, syndicate or negotiate to one or more third parties, in
whole or in part, the Commitment and its rights under this Agreement, without
the prior written consent of the Company, which consent may not be arbitrarily
withheld.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE SUBSCRIBER THE COMPANY
TOBERMORY HOLDING LTD. AMERICAN SIERRA GOLD CORP.
By: By:
----------------------------- -----------------------------
Authorized Signing Officer Authorized Signing Officer
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SCHEDULE A
NOTICE
To: TOBERMORY HOLDING LTD. (the "Subscriber")
The undersigned, AMERICAN SIERRA GOLD CORP. (the "Company") hereby requests an
advance of $________________ , in accordance with the terms and conditions set
forth in the Share Issuance agreement dated October 12, 2009 , between the
Subscriber and the Company and as of the Date of Notice written below.
DATE OF NOTICE: -----------------------------
Remaining amount to be advanced under
the Share Issuance:
-----------------------------
AMERICAN SIERRA GOLD CORP.
Per:
--------------------------------------------
Authorized Signatory
The Subscriber hereby acknowledges receipt of this Notice and agrees with the
amounts set out above as of this Notice.
TOBERMORY HOLDING LTD.
Per:
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Authorized Signatory
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