SECURITIES PURCHASE AGREEMENT
EXHIBIT
10.9
THIS SECURITIES PURCHASE AGREEMENT
(this “Agreement”), dated as of December ___, 2008, is entered into by and among
Nevada Gold Holdings, Inc.
(f/k/a Nano Holdings International, Inc.), a Delaware corporation (the
“Company”), and the Buyer(s) set forth on the signature pages affixed hereto
(individually, a “Buyer” or collectively “Buyers”).
WITNESSETH:
WHEREAS, the Company and the
Buyer(s) are executing and delivering this Agreement in reliance upon an
exemption from securities registration pursuant to Section 4(2) and/or
Rule 506 of Regulation D (“Regulation D”) and/or Regulation S (“Regulation
S”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities
Act”);
WHEREAS, the parties desire
that, upon the terms and subject to the conditions contained herein, the Company
shall sell to the Buyers, as provided herein, and the Buyers shall purchase One
Hundred Fifty Thousand Dollars ($150,000) (the “Purchase Price”) principal
amount of Secured Convertible Promissory Notes (the “Notes”), which, at the
option of the Holder and simultaneously upon the closing of any financing,
merger or acquisition, or any other business combination, excluding the Merger
(as defined below), resulting in gross cash proceeds to the Company in excess of
five hundred thousand dollars ($500,000) (the “Financing”), shall be convertible
into shares of the Company’s common stock, par value $0.001 (the “Common Stock”)
at a conversion price of $1.00 per share. The total Purchase Price
shall be allocated among the Buyer(s) in the respective amounts set forth on the
Buyer Counterpart Signature Page(s), affixed hereto (the “Subscription
Amount”);
WHEREAS, all of the total
principal amount of the Notes, subject to the deduction of any and all fees and
expenses, shall be utilized by the Company working capital and other general
corporate purposes;
WHEREAS, the Company is
currently negotiating a reverse triangular merger with Nevada Gold Enterprises,
Inc., a Nevada corporation (“NGE”) (the “Merger”);
WHEREAS, in anticipation of
the Merger, the Company has (i) changed its name to “Nevada Gold Holdings,
Inc.”, (ii) increased its authorized capital stock (the “Recapitalization”) to
300,000,000 shares of Common Stock and 10,000,000 shares of preferred stock,
$0.001 par value per share (“Preferred Stock”), and (iii) conducted a
30.30303-for-1 forward stock split (the “Stock Split”) in the form of a stock
dividend;
WHEREAS, all of the principal
amount of the Notes shall be repaid in full (or converted) simultaneously with
the closing of the Financing (the Merger, the Financing, the Stock
Split and the transactions contemplated thereby are sometimes hereinafter
referred to as the “Transactions”);
WHEREAS, upon the closing of
the Merger, the Company shall issue to the Buyers for each dollar of principal
amount of the Notes one (1) share of Common Stock (the “Bridge Shares”), subject
to adjustment, as set forth in Section 4(i) hereof; and
WHEREAS, the aggregate
proceeds of the sale of the Notes shall be held in escrow pursuant to the terms
of an escrow agreement substantially in the form of the Escrow Agreement among
the Company, the Buyer(s) and the Escrow Agent (as defined below) (the “Escrow
Agreement”).
NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement the Company and the Buyer(s) hereby agree as follows:
1. PURCHASE AND SALE OF
NOTES.
(a) Purchase of
Notes. Subject to the satisfaction (or waiver) of the terms
and conditions of this Agreement, each Buyer agrees, severally and not jointly,
to purchase at Closing (as defined herein below) and the Company agrees to sell
and issue to each Buyer, severally and not jointly, at Closing, Notes in amounts
set forth on the signature pages affixed hereto. Upon execution of
this Agreement on the Buyer Counterpart Signature Page, attached hereto as Annex
A, and completion of the Accredited Investor Certification, the Investor
Profile, and if applicable, the Wire Transfer Authorization (each attached
hereto) by a Buyer, the Buyer shall wire transfer the Subscription Amount set
forth on the signature pages affixed hereto in same-day funds set forth
immediately below, which Subscription Amount shall be held in escrow pursuant to
the terms of the Escrow Agreement and disbursed in accordance
therewith.
Wire
Instructions
|
Bank:
|
Citibank,
N.A.
000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
|
|
ABA
Routing #:
|
000000000
|
|
Swift
Code:
|
XXXXXX00
|
|
Beneficiary:
|
Gottbetter
& Partners, LLP, Attorney Trust Account
|
|
Account
#:
|
00000000
|
|
Reference:
|
“Nevada
Gold Holdings, Inc. – [insert Subscriber’s name]”
|
Gottbetter
& Partners Accounting Contact:
Xxxxxxx
XxXxxxx; telephone: (000) 000-0000; e-mail:
xxx@xxxxxxxxxx.xxx.
(b) Closing
Date. The initial closing of the purchase and sale of the
Notes (the “Closing”) shall take place at 10:00 a.m. Eastern Standard Time on or
before the fifth (5th)
business day following the receipt into escrow of acceptable subscriptions for
at least the Minimum, subject to notification of satisfaction of the conditions
to the Closing set forth herein and in Sections 7 and 8 below (or such later
date as is mutually agreed to by the Company and the Buyer(s)). There
may be multiple Closings until such time as subscriptions for the Maximum are
accepted (the date of any such Closing is hereinafter referred to as a “Closing
Date”). The Closing shall occur on the Closing Date at the offices of
Gottbetter & Partners, LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or
such other place as is mutually agreed to by the Company and the
Buyer(s)).
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(c) Escrow Arrangements; Form of
Payment. Upon execution hereof by the Buyer and pending the
Closing, the Purchase Price shall be deposited in a non-interest bearing escrow
account with PNC Bank on behalf of Gottbetter & Partners, LLP, as escrow
agent (the “Escrow Agent”), pursuant to the terms of the Escrow
Agreement. Subject to the satisfaction of the terms and conditions of
this Agreement, on the Closing Date, (i) the Escrow Agent shall deliver to the
Company in accordance with the terms of the Escrow Agreement the Purchase Price
for the Notes to be issued and sold to the Buyer(s) on such Closing Date, and
(ii) the Company shall deliver to the Buyer(s), the Note, duly executed on
behalf of the Company.
2. BUYER’S REPRESENTATIONS AND
WARRANTIES.
Each
Buyer represents and warrants, severally and not jointly, as to such Buyer,
that:
(a) Investment
Purpose. Each Buyer is acquiring the Notes, and, upon closing
of the Merger, the Buyer will acquire the Bridge Shares (and upon conversion of
the Notes, if applicable, the Conversion Shares), for its own account for
investment only and not with a view towards, or for resale in connection with,
the public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act; provided, however, that by making the
representations herein, such Buyer reserves the right to dispose of the Bridge
Shares (and the Conversion Shares,) at any time in accordance with or pursuant
to an effective registration statement covering such Bridge Shares, and the
Conversion Shares, , or an available exemption under the Securities
Act. The Buyer agrees not to sell, hypothecate or otherwise transfer
the Buyer’s securities unless such securities are registered under the federal
and applicable state securities laws or unless, in the opinion of counsel
satisfactory to the Company, an exemption from such law is
available.
(b) Residence of
Buyer. Each Buyer resides in the jurisdiction set forth on the
signature pages affixed hereto.
(c) Non-US
Person. If a Buyer is not a person in the United States or a
U.S. Person (as defined in Rule 902(k) of Regulation S) or is not purchasing the
Notes on behalf of a person in the United States or a U.S. Person:
(i) neither
the Buyer nor any disclosed principal is a U.S. Person nor are they subscribing
for the Notes for the account of a U.S. Person or for resale in the United
States and the Buyer confirms that the Notes have not been offered to the Buyer
in the United States and that this Agreement has not been signed in the United
States;
(ii) the
Buyer acknowledges that the Notes have not been registered under the Securities
Act and may not be offered or sold in the United States or to a U.S. Person
unless the securities are registered under the U.S. Securities Act and all
applicable state securities laws or an exemption from such registration
requirements is available, and further agrees that hedging transactions
involving such securities may not be conducted unless in compliance with the
U.S. Securities Act;
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(iii) the
Buyer and if applicable, the disclosed principal for whom the Buyer is acting,
understands that the Company is the seller of the Notes and underlying
securities and that, for purposes of Regulation S, a “distributor” is any
underwriter, dealer or other person who participates pursuant to a contractual
arrangement in the distribution of securities sold in reliance on Regulation S
and that an “affiliate” is any partner, officer, director or any person directly
or indirectly controlling, controlled by or under common control with any person
in question. Except as otherwise permitted by Regulation S, the Buyer and if
applicable, the disclosed principal for whom the Buyer is acting, agrees that it
will not, during a one year distribution compliance period, act as a
distributor, either directly or through any affiliate, or sell, transfer,
hypothecate or otherwise convey the Notes or underlying securities other than to
a non-U.S. Person;
(iv) the
Buyer and if applicable, the disclosed principal for whom the Buyer is acting,
acknowledges and understands that in the event the Notes are offered, sold or
otherwise transferred by the Buyer or if applicable, the disclosed principal for
whom the Buyer is acting, to a non-U.S Person prior to the expiration of a one
year distribution compliance period, the purchaser or transferee must agree not
to resell such securities except in accordance with the provisions of Regulation
S, pursuant to registration under the Securities Act, or pursuant to an
available exemption from registration; and must further agree not to engage in
hedging transactions with regard to such securities unless in compliance with
the Securities Act; and
(v) neither
the Buyer nor any disclosed principal will offer, sell or otherwise dispose of
the Notes or the underlying securities in the United States or to a U.S. Person
unless (A) the Company has consented to such offer, sale or disposition and such
offer, sale or disposition is made in accordance with an exemption from the
registration requirements under the Securities Act and the securities laws of
all applicable states of the United States or (B) the SEC has declared effective
a registration statement in respect of such securities.
(d) Accredited Investor
Status. The Buyer meets the requirements of at least one of
the suitability standards for an “Accredited Investor”
as that term is defined in Rule 501(a)(3) of Regulation D, and as set forth on
the Accredited Investor Certification attached hereto.
(e) Accredited Investor
Qualifications. The Buyer (i) if a natural person, represents
that the Buyer has reached the age of 21 and has full power and authority to
execute and deliver this Agreement and all other related agreements or
certificates and to carry out the provisions hereof and thereof; (ii) if a
corporation, partnership, or limited liability company or partnership, or
association, joint stock company, trust, unincorporated organization or other
entity, represents that such entity was not formed for the specific purpose of
acquiring the Notes, such entity is duly organized, validly existing and in good
standing under the laws of the state of its organization, the consummation of
the transactions contemplated hereby is authorized by, and will not result in a
violation of state law or its charter or other organizational documents, such
entity has full power and authority to execute and deliver this Agreement and
all other related agreements or certificates and to carry out the provisions
hereof and thereof and to purchase and hold the Notes, the execution and
delivery of this Agreement has been duly authorized by all necessary action,
this Agreement has been duly executed and delivered on behalf of such entity and
is a legal, valid and binding obligation of such entity; or (iii) if executing
this Agreement in a representative or fiduciary capacity, represents that it has
full power and authority to execute and deliver this Agreement in such capacity
and on behalf of the subscribing individual, xxxx, partnership, trust, estate,
corporation, or limited liability company or partnership, or other entity for
whom the Buyer is executing this Agreement, and such individual, partnership,
xxxx, trust, estate, corporation, or limited liability company or partnership,
or other entity has full right and power to perform pursuant to this Agreement
and make an investment in the Company, and represents that this Agreement
constitutes a legal, valid and binding obligation of such entity. The
execution and delivery of this Agreement will not violate or be in conflict with
any order, judgment, injunction, agreement or controlling document to which the
Buyer is a party or by which it is bound;
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(f) Solicitation. The
Buyer is unaware of, is in no way relying on, and did not become aware of the
offering of the Notes through or as a result of, any form of general
solicitation or general advertising including, without limitation, any article,
notice, advertisement or other communication published in any newspaper,
magazine or similar media or broadcast over television or radio, in connection
with the offering and sale of the Notes and is not subscribing for the Notes and
did not become aware of the offering of the Notes through or as a result of any
seminar or meeting to which the Buyer was invited by, or any solicitation of a
subscription by, a person not previously known to the Buyer in connection with
investments in securities generally;
(g) Brokerage
Fees. The Buyer has taken no action that would give rise to
any claim by any person for brokerage commissions, finders’ fees or the like
relating to this Agreement or the transaction contemplated hereby;
(h) Buyer’s
Advisors. The Buyer and the Buyer’s attorney, accountant,
purchaser representative and/or tax advisor, if any (collectively, the
“Advisors”), as the case may be, has such knowledge and experience in financial,
tax, and business matters, and, in particular, investments in securities, so as
to enable it to utilize the information made available to it in connection with
the Notes to evaluate the merits and risks of an investment in the Notes and the
Company and to make an informed investment decision with respect
thereto.
(i) Buyer
Liquidity. Each Buyer has adequate means of providing for such
Buyer’s current financial needs and foreseeable contingencies and has no need
for liquidity of its investment in the Notes for an indefinite period of
time.
(j) High Risk Investment; Review
of Risk Factors. The Buyer is aware that an investment in the
Notes, and upon closing of the Merger, the Bridge Shares (and upon conversion of
the Notes, the Conversion Shares), involves a number of very significant risks,
and in particular, acknowledges that the Company’s ability to repay the Notes is
based on the consummation of the Transactions.
(k) Reliance on
Exemptions. Each Buyer understands that the Notes are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Company is relying in part upon the truth and accuracy of, and such Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of such Buyer to acquire
such securities.
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(l) Information. Each
Buyer and its Advisors have been furnished with all written materials relating
to the business, finances and operations of the Company and information it
deemed material to making an informed investment decision regarding its purchase
of the Notes and the underlying Units and the related Bridge Shares, which have
been requested by such Buyer (the “Buyer Materials”). Each Buyer and
its Advisors have been afforded the opportunity to review the Buyer Materials,
as well as the Company’s SEC Filings, as such term is defined below (hard copies
of which were made available to the Buyer upon request to the Company or were
otherwise accessible to the Buyer via the SEC’s XXXXX system), and the
information contained therein. Each Buyer and its Advisors have been
afforded the opportunity to ask questions of the Company and its
management. Neither such inquiries nor any other due diligence
investigations conducted by such Buyer or its Advisors shall modify, amend or
affect such Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. Each Buyer has sought such
accounting, legal and tax advice as it has considered necessary to make an
informed investment decision with respect to its acquisition of the
Notes.
(m) No Other Representations or
Information. In evaluating the suitability of an investment in
the Notes, the Buyer has not relied upon any representation or information (oral
or written) other than as stated in the Buyer Materials or in this
Agreement. No oral or written representations have been made, or oral
or written information furnished, to the Buyer or its Advisors, if any, in
connection with the offering of the Notes which are in any way inconsistent with
the information contained in the Buyer Materials;
(n) No Governmental
Review. Each Buyer understands that no United States federal
or state agency or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Notes or the Bridge Shares (or the
Conversion Shares), or the fairness or suitability of the investment in the
Notes or the Bridge Shares (and the Conversion Shares), nor have such
authorities passed upon or endorsed the merits of the offering of the Notes or
the Bridge Shares (or the Conversion Shares).
(o) Transfer or
Resale. Each Buyer understands that: (i) the Notes have not
been and are not being registered under the Securities Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred
unless (A) subsequently registered thereunder, or (B) such Buyer shall have
delivered to the Company an opinion of counsel, in a generally acceptable form,
to the effect that such securities to be sold, assigned or transferred may be
sold, assigned or transferred pursuant to an exemption from such registration
requirements; (ii) any sale of such securities made in reliance on Rule 144
under the Securities Act (or a successor rule thereto) (“Rule 144”) may
be made only in accordance with the terms of Rule 144 and further, if Rule 144
is not applicable, any resale of such securities under circumstances in which
the seller (or the person through whom the sale is made) may be deemed to
be an underwriter (as that term is defined in the Securities Act) may require
compliance with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) except as otherwise set forth in
this Agreement, neither the Company nor any other person is under any obligation
to register such securities under the Securities Act or any state securities
laws or to comply with the terms and conditions of any exemption
thereunder. The Company reserves the right to place stop transfer
instructions against the shares and certificates for the Bridge Shares (and
Conversion Shares) to the extent specifically set forth under this
Agreement. There can be no assurance that there will be any market or
resale for the Notes or the Bridge Shares (or the Conversion Shares),
nor can there be any assurance that the Notes or the Bridge Shares (or the
Conversion Shares) will be freely transferable at any time in the foreseeable
future.
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(p) Legends. Each
Buyer understands that the certificates or other instruments representing the
Notes and the Bridge Shares (and the Conversion Shares) shall bear a restrictive
legend in substantially the following form (and a stop transfer order may be
placed against transfer of such stock certificates):
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES MAY
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) IN COMPLIANCE WITH RULE 144 OR 144A THEREUNDER, IF
AVAILABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, (D) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT, OR (E) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN
OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY
SATISFACTORY TO THE COMPANY. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.
The
legend set forth above shall be removed and the Company within three (3)
business days shall issue a certificate without such legend to the holder of the
Notes and Bridge Shares (and the Conversion Shares) upon which it is stamped,
if, unless otherwise required by state securities laws, (i) the Buyer or its
broker make the necessary representations and warranties to the transfer agent
for the Common Stock that it has complied with the prospectus delivery
requirements in connection with a sale transaction, provided the Note and Bridge
Shares (and the Conversion Shares) are registered under the Securities Act or
(ii) in connection with a sale transaction, after such holder provides the
Company with an opinion of counsel satisfactory to the Company, which opinion
shall be in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale, assignment or
transfer of the Notes and Bridge Shares (or the Conversion Shares) may be made
without registration under the Securities Act.
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(q) Authorization,
Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of such Buyer and is a valid and
binding agreement of such Buyer enforceable in accordance with its terms, except
as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors’ rights and remedies.
(r) Receipt of
Documents. Each Buyer and its counsel have received and read
in their entirety: (i) this Agreement and each representation,
warranty and covenant set forth herein; and (ii) all due diligence and other
information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; each Buyer has received answers to
all questions such Buyer submitted to the Company regarding an investment in the
Company; and each Buyer has relied on the information contained therein and has
not been furnished any other documents, literature, memorandum or
prospectus.
(s) Trading
Activities. The Buyer’s trading activities with respect to the
Company’s Common Stock shall be in compliance with all applicable federal and
state securities laws, rules and regulations and the rules and regulations of
the principal market on which the Company’s Common Stock is listed or
traded. Neither the Buyer nor its affiliates has an open short
position in the Common Stock of the Company and, except as set forth below, the
Buyer shall not, and shall not cause any of its affiliates under common control
with the Buyer, to engage in any short sale as defined in any applicable SEC or
Financial Industry Regulatory Authority (FINRA) rules on any hedging
transactions with respect to the Common Stock until the earlier to occur of (i)
the third anniversary of the Closing Date and (ii) the Buyer(s) no longer own a
principal balance of the Notes. Without limiting the foregoing, the
Buyer agrees not to engage in any naked short transactions in excess of the
amount of shares owned (or an offsetting long position) by the
Buyer.
(t) Regulation
FD. Each Buyer acknowledges and agrees that all of the
information received by it in connection with the transactions contemplated by
this Agreement is of a confidential nature and may be regarded as material
non-public information under Regulation FD promulgated by the SEC and that such
information has been furnished to the Buyer for the sole purpose of enabling the
Buyer to consider and evaluate an investment in the Notes. The Buyer agrees that
it will treat such information in a confidential manner, will not use such
information for any purpose other than evaluating an investment in the Notes,
will not, directly or indirectly, trade or permit the Buyer’s agents,
representatives or affiliates to trade in any securities of the Company while in
possession of such information and will not, directly or indirectly, disclose or
permit the Buyer’s agents, representatives or affiliates to disclose any of such
information without the Company’s prior written consent. The Buyer shall make
its agents, affiliates and representatives aware of the confidential nature of
the information contained herein and the terms of this section including the
Buyer’s agreement to not disclose such information, to not trade in the
Company’s securities while in the possession of such information and to be
responsible for any disclosure or other improper use of such information by such
agents, affiliates or representatives. Likewise, without the Company’s prior
written consent, the Buyer will not, directly or indirectly, make any
statements, public announcements or other release or provision of information in
any form to any trade publication, to the press or to any other person or entity
whose primary business is or includes the publication or dissemination of
information related to the transactions contemplated by this
Agreement. In the event the Merger (or other business combination if
such transaction assumes a different corporate form) is not entered into, the
Company acknowledges that the information covered by this Section 2(u) will no
longer be deemed material, non public information under Regulation
FD.
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(u) No Legal Advice from the
Company. Each Buyer acknowledges that it had the opportunity
to review this Agreement and the transactions contemplated by this Agreement
with its own legal counsel and investment and tax advisors. Each
Buyer is relying solely on such Advisors and not on any statements or
representations of the Company or any of its representatives or agents for
legal, tax or investment advice with respect to this investment, the
transactions contemplated by this Agreement or the securities laws of any
jurisdiction.
(v) No Group
Participation. Each Buyer and its affiliates
is not a member of any group, nor is any Buyer acting in concert with any other
person, including any other Buyer, with respect to its acquisition of the Notes
or Bridge Shares (and the Conversion Shares).
(w) Reliance. Any
information which the Buyer has heretofore furnished or is furnishing herewith
to the Company is complete and accurate and may be relied upon by the Company in
determining the availability of an exemption from registration under federal and
state securities laws in connection with the offering of securities as described
in the Transmittal Letter. The Buyer further represents and warrants
that it will notify and supply corrective information to the Company immediately
upon the occurrence of any change therein occurring prior to the Company’s
issuance of the Notes. Within five (5) days after receipt of a request from the
Company, the Buyer will provide such information and deliver such documents as
may reasonably be necessary to comply with any and all laws and ordinances to
which the Company is subject.
(x) (For
ERISA plans only). The fiduciary of
the ERISA plan represents that such fiduciary has been informed of and
understands the Company’s investment objectives, policies and strategies, and
that the decision to invest “plan assets” (as such term is defined in ERISA) in
the Company is consistent with the provisions of ERISA that require
diversification of plan assets and impose other fiduciary
responsibilities. The Buyer fiduciary or Plan (a) is responsible for
the decision to invest in the Company; (b) is independent of the Company or any
of its affiliates; (c) is qualified to make such investment decision; and (d) in
making such decision, the Buyer fiduciary or Plan has not relied primarily on
any advice or recommendation of the Company or any of its
affiliates;
(y) The
Buyer should check the Office of Foreign Assets Control (“OFAC”) website at
<xxxx://xxx.xxxxx.xxx/xxxx> before making the following representations.
The Buyer represents that the amounts invested by it in the Company in the Notes
were not and are not directly or indirectly derived from activities that
contravene federal, state or international laws and regulations, including
anti-money laundering laws and regulations. Federal regulations and Executive
Orders administered by OFAC prohibit, among other things, the engagement in
transactions with, and the provision of services to, certain foreign countries,
territories, entities and individuals. The lists of OFAC prohibited
countries, territories, persons and entities can be found on the OFAC website at
<xxxx://xxx.xxxxx.xxx/xxxx>. In addition, the programs
administered by OFAC (the “OFAC Programs”) prohibit dealing with
individuals1 or entities in certain countries regardless of
whether such individuals or entities appear on the OFAC lists;
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(z) To
the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any person
controlling or controlled by the Buyer; (3) if the Buyer is a privately-held
entity, any person having a beneficial interest in the Buyer; or (4) any person
for whom the Buyer is acting as agent or nominee in connection with this
investment is a country, territory, individual or entity named on an OFAC list,
or a person or entity prohibited under the OFAC Programs. Please be
advised that the Company may not accept any amounts from a prospective investor
if such prospective investor cannot make the representation set forth in the
preceding paragraph. The Buyer agrees to promptly notify the Company
should the Buyer become aware of any change in the information set forth in
these representations. The Buyer understands and acknowledges that,
by law, the Company may be obligated to “freeze the account” of the Buyer,
either by prohibiting additional subscriptions from the Buyer, declining any
redemption requests and/or segregating the assets in the account in compliance
with governmental regulations. The Buyer further acknowledges that
the Company may, by written notice to the Buyer, suspend the redemption rights,
if any, of the Buyer if the Company reasonably deems it necessary to do so to
comply with anti-money laundering regulations applicable to the Company or any
of the Company’s other service providers. These individuals include
specially designated nationals, specially designated narcotics traffickers and
other parties subject to OFAC sanctions and embargo programs;
(aa) To
the best of the Buyer’s knowledge, none of: (1) the Buyer; (2) any person
controlling or controlled by the Buyer; (3) if the Buyer is a privately-held
entity, any person having a beneficial interest in the Buyer; or (4) any person
for whom the Buyer is acting as agent or nominee in connection with this
investment is a senior foreign political figure2, or
any immediate family3 member or
close associate4 of a
senior foreign political figure, as such terms are defined in the footnotes
below; and
(bb) If
the Buyer is affiliated with a non-U.S. banking institution (a “Foreign Bank”),
or if the Buyer receives deposits from, makes payments on behalf of, or handles
other financial transactions related to a Foreign Bank, the Buyer represents and
warrants to the Company that: (1) the Foreign Bank has a fixed address, other
than solely an electronic address, in a country in which the Foreign Bank is
authorized to conduct banking activities; (2) the Foreign Bank maintains
operating records related to its banking activities; (3) the Foreign Bank is
subject to inspection by the banking authority that licensed the Foreign Bank to
conduct banking activities; and (4) the Foreign Bank does not provide banking
services to any other Foreign Bank that does not have a physical presence in any
country and that is not a regulated affiliate.
3 “Immediate family” of a
senior foreign political figure typically includes the figure’s parents,
siblings, spouse, children and in-laws.
4 A “close associate” of a senior foreign
political figure is a person who is widely and publicly known to maintain an
unusually close relationship with the senior foreign political figure, and
includes a person who is in a position to conduct substantial domestic and
international financial transactions on behalf of the senior foreign political
figure.
10
3. REPRESENTATIONS AND
WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that:
(a) Organization and
Qualification. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of Nevada, and has
the requisite corporate power to own its properties and to carry on its business
as now being conducted. The Company is duly qualified as a foreign
corporation to do business and is in good standing in every jurisdiction in
which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect, as defined
below. The Company has no subsidiaries.
(b) Authorization, Enforcement,
Compliance with Other Instruments. (i) The Company has
the requisite corporate power and authority to enter into and perform this
Agreement and the Escrow Agreement and all other documents necessary or
desirable to effect the transactions contemplated hereby (collectively the
“Transaction Documents”) and to issue the Notes and the Bridge Shares (and
Conversion Shares) in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Notes and the Bridge Shares
(and the Conversion Shares) and the reservation for issuance of the Conversion
Shares, have been duly authorized by the Company’s Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) the Transaction Documents will be duly
executed and delivered by the Company, (iv) the Transaction Documents when
executed will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies.
(c) Capitalization. The
authorized capital stock of the Company, after giving effect to the
Recapitalization, consists of 300,000,000 shares of Common Stock and 10,000,000
shares of Preferred Stock. As of the date hereof, the Company has
119,696,973 shares of Common Stock issued and outstanding (of which it is
anticipated that approximately 106,060,606 shares will be retired in connection
with the Merger) and no shares of preferred stock outstanding. All of
such outstanding shares have been duly authorized, validly issued and are fully
paid and nonassessable. No shares of Common Stock are subject to
preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company. As of the date of this
Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company, or contracts, commitments, understandings or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company, (ii) there are no
outstanding debt securities and (iii) there are no agreements or arrangements
under which the Company is obligated to register the sale of any of its
securities under the Securities Act (except in connection with the Merger and
the Transactions), and (iv) there are no outstanding registration statements and
there are no outstanding comment letters from the SEC or any other regulatory
agency. There are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Notes as described in this Agreement. The Notes and Bridge Shares
(and the Conversion Shares) when issued, will be free and clear of all pledges,
liens, encumbrances and other restrictions (other than those arising under
federal or state securities laws as a result of the issuance of the
Notes). No co-sale right, right of first refusal or other similar
right exists with respect to the Notes and Bridge Shares (or the Conversion
Shares) or the issuance and sale thereof. The issue and sale of the
Notes and Bridge Shares (and the Conversion Shares) will not result in a right
of any holder of Company securities to adjust the exercise, exchange or reset
price under such securities. The Company has made available to the
Buyer true and correct copies of the Company’s Amended and Restated Articles of
Incorporation, and as in effect on the date hereof (the “Articles of
Incorporation”), and the Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities exercisable for Common Stock and the
material rights of the holders thereof in respect thereto other than stock
options issued to employees and consultants.
11
(d) Issuance of
Securities. The Notes are duly authorized and, upon issuance
in accordance with the terms hereof, shall be duly issued, fully paid and
nonassessable, are free from all taxes, liens and charges with respect to the
issue thereof. The Bridge Shares (and the Conversion Shares) have
been duly authorized and reserved for issuance. Upon closing of the
Merger in accordance with the Transaction Documents, the Bridge Shares will be
duly issued, fully paid and nonassessable. Upon conversion or
exercise in accordance with the Transaction Documents, the Conversion Shares
will be duly issued, fully paid and nonassessable.
(e) No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby will not (i) result in a violation of the
Articles of Incorporation, any certificate of designations of any outstanding
series of preferred stock of the Company or the By-laws or (ii) violate or
conflict with, or result in a breach of any provision of, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company is a party, or result in a violation of any law,
rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the OTC
Bulletin Board (the “OTCBB”) on which the Common Stock is quoted) applicable to
the Company or by which any property or asset of the Company is bound or
affected except for those which could not reasonably be expected to have a
material adverse effect on the assets, business, condition (financial or
otherwise), results of operations or future prospects of the Company (a
“Material Adverse Effect”). The Company is not in violation of any
term of or in default under its Articles of Incorporation or
By-laws. Except those which could not reasonably be expected to have
a Material Adverse Effect, the Company is not in violation of any term of or in
default under any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company. The business of the Company is
not being conducted, and shall not be conducted in violation of any material
law, ordinance, or regulation of any governmental entity. Except as
specifically contemplated by this Agreement and as required under the Securities
Act and any applicable state securities laws, the Company is not required to
obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under or contemplated by this
Agreement or the Escrow Agreement in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date
hereof. The Company is unaware of any facts or circumstance, which
might give rise to any of the foregoing.
12
(f) SEC Filings; Financial
Statements. The Company has timely filed (subject to 12b-25
filings with respect to certain periodic filings) all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Exchange Act (as hereinafter defined) (all
of the foregoing and all other documents filed with the SEC prior to the date
hereof and all exhibits included therein and financial statements and schedules
thereto and documents incorporated by reference therein, being hereinafter
referred to herein as the “SEC Filings”). The SEC Filings are
available to the Buyers via the SEC’s XXXXX system. As of their
respective dates, the SEC Filings complied in all material respects with the
requirements of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Filings, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted 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
made, not misleading. As of their respective dates, the financial statements of
the Company included in the Company’s SEC Filings with the SEC (the “Financial
Statements”) for the years ended December 31, 2007 and December 31, 2006 and any
subsequent interim period complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such Financial Statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements), and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the
Company to the Buyer including, without limitation, information referred to in
this Agreement, contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.
(g) Absence of
Litigation. There is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency,
self-regulatory organization or body pending against or affecting the Company or
the Common Stock, wherein an unfavorable decision, ruling or finding would (i)
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any of the
documents contemplated herein, or (ii) have a Material Adverse
Effect.
13
(h) Acknowledgment Regarding
Buyer’s Purchase of the Notes. The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of an arm’s length
purchaser with respect to this Agreement and the transactions contemplated
hereby. The Company further acknowledges that each Buyer is not
acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to this Agreement and the transactions contemplated
hereby and any advice given by such Buyer or any of their respective
representatives or agents in connection with this Agreement and the transactions
contemplated hereby is merely incidental to such Buyer’s purchase of the Notes
or the Bridge Shares (and the Conversion Shares). The Company further
represents to the Buyers that the Company’s decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.
(i) No General
Solicitation. Neither the Company, nor any of its affiliates,
nor 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) in
connection with the offer or sale of the Notes or the Bridge
Shares.
(j) No Integrated
Offering. Neither the Company, nor any of its affiliates, nor
any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the Notes or the Bridge
Shares under the Securities Act or cause this offering of the Notes or the
Bridge Shares to be integrated with prior offerings by the Company for purposes
of the Securities Act.
(k) Employee
Relations. The Company is not involved in any labor dispute
nor, to the knowledge of the Company, is any such dispute
threatened. None of the Company’s employees is a member of a union,
and the Company believes that its relations with its one employee is
good.
(l) Intellectual Property
Rights. The Company has no proprietary intellectual
property. The Company has not received any notice of infringement of,
or conflict with, the asserted rights of others with respect to any intellectual
property that it utilizes.
(m) Environmental
Laws.
(i) The
Company has complied with all applicable Environmental Laws (as defined below),
except for violations of Environmental Laws that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect. There is no pending or, to the knowledge of the
Company, threatened civil or criminal litigation, written notice of violation,
formal administrative proceeding, or investigation, inquiry or information
request, relating to any Environmental Law involving the Company, except for
litigation, notices of violations, formal administrative proceedings or
investigations, inquiries or information requests that, individually or in the
aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, “Environmental Law”
means any federal, state or local law, statute, rule or regulation or the common
law relating to the environment or occupational health and safety, including
without limitation any statute, regulation, administrative decision or order
pertaining to (i) treatment, storage, disposal, generation and transportation of
industrial, toxic or hazardous materials or substances or solid or hazardous
waste; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release or threatened release into the environment of
industrial, toxic or hazardous materials or substances, or solid or hazardous
waste, including without limitation emissions, discharges, injections, spills,
escapes or dumping of pollutants, contaminants or chemicals; (v) the protection
of wild life, marine life and wetlands, including without limitation all
endangered and threatened species; (vi) storage tanks, vessels, containers,
abandoned or discarded barrels, and other closed receptacles; (vii) health and
safety of employees and other persons; and (viii) manufacturing, processing,
using, distributing, treating, storing, disposing, transporting or handling of
materials regulated under any law as pollutants, contaminants, toxic or
hazardous materials or substances or oil or petroleum products or solid or
hazardous waste. As used above, the terms “release” and “environment”
shall have the meaning set forth in the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (“CERCLA”).
14
(ii) To
the knowledge of the Company there is no material environmental liability with
respect to any solid or hazardous waste transporter or treatment, storage or
disposal facility that has been used by the Company.
(iii) The
Company (i) has received all permits, licenses or other approvals required of
them under applicable Environmental Laws to conduct its business and (ii) is in
compliance with all terms and conditions of any such permit, license or
approval.
(n) Title. The
Company does not own or lease any real or personal property.
(o) Internal Accounting
Controls. The Company is in material compliance with the
provisions of the Xxxxxxxx-Xxxxx Act of 2002 currently applicable to the
Company. The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset accountability, and (iii) the recorded amounts for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(p) No Material Adverse
Breaches, etc. Except as set forth in the SEC Filings, the
Company is not subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the judgment of the
Company’s officers has or is expected in the future to have a Material Adverse
Effect. Except as set forth in the SEC Filings, the Company is not in
breach of any contract or agreement which breach, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse
Effect.
15
(q) Tax
Status. The Company has made and filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) has paid all taxes and other
governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and has set aside on its books provision
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.
(r) Certain
Transactions. Except as set forth in the SEC Filings, and
except for arm’s length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable than
the Company could obtain from third parties, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
(s) Rights of First
Refusal. The Company is not obligated to offer the securities
offered hereunder on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former stockholders of the
Company, underwriters, brokers, agents or other third parties.
(t) Reliance. The
Company acknowledges that the Buyers are relying on the representations and
warranties made by the Company hereunder and that such representations and
warranties are a material inducement to the Buyer purchasing the
Notes. The Company further acknowledges that without such
representations and warranties of the Company made hereunder, the Buyers would
not enter into this Agreement.
(u) Brokers’
Fees. The Company does not have any liability or obligation to
pay any fees or commissions to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.
4. COVENANTS.
(a) Best
Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 5
and 6 of this Agreement.
(b) Form
D. The Company agrees to file a Form D with respect to the
offer and sale of the Notes as required under Regulation D. The
Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary to qualify the Notes and Bridge Shares
(and the Conversion Shares), or obtain an exemption for the Notes and Bridge
Shares (and the Conversion Shares) for sale to the Buyers at the Closing
pursuant to this Agreement under applicable securities or “Blue Sky” laws of the
states of the United States, and shall provide evidence of any such action so
taken to the Buyers on or prior to the Closing Date.
16
(c) Reporting
Status. Until the earlier of (i) the date as of which the
Buyer(s) may sell all of the Bridge Shares (and the Conversion Shares) without
restriction pursuant to Rule 144 promulgated under the Securities Act (or
successor thereto), or (ii) the date on which (A) the Buyer(s) shall have sold
all the the Bridge Shares (and the Conversion Shares) and (B) none of the Notes
are outstanding, the Company shall file in a timely manner all reports required
to be filed with the SEC pursuant to the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and the regulations of the SEC thereunder, and the
Company shall not terminate its status as an issuer required to file reports
under the Exchange Act even if the Exchange Act or the rules and regulations
thereunder would otherwise permit such termination.
(d) Use of
Proceeds. The Company shall use 100% of the net proceeds from
the sale of the Notes (deducting $______________ payable to Gottbetter &
Partners, LLP, and fees payable to the Escrow Agent) for working capital and
other general corporate purposes.
(e) Reservation of
Shares. The Company shall take all action reasonably necessary
to at all times have authorized, and reserved for the purpose of issuance, that
number of shares of Common Stock equal to equal to the sum of the number of
Bridge Shares and Shares to be issued upon conversion of the Notes.
(f) Listings or
Quotation. The Company shall use its best efforts to maintain
the listing or quotation of its Common Stock upon the OTC Bulletin
Board.
(g) Corporate
Existence. So long as any of the Notes remain outstanding, the
Company shall not directly or indirectly consummate any merger, reorganization,
restructuring, reverse stock split consolidation, sale of all or substantially
all of the Company’s assets, enter into a change of control transaction, or any
similar transaction or related transactions (each such transaction, an
“Organizational Change”), other than the Recapitalization, the Stock Split, the
Financing and the Merger, unless, prior to the consummation of an Organizational
Change, the Company obtains the written consent of each Buyer. In any
such case, the Company will make appropriate provision with respect to such
holders’ rights and interests to insure that the provisions of this Section 4(g)
will thereafter be applicable to the Notes. The provisions of this
Section 4(g) shall be inapplicable with respect to any Organizational Change,
including the Recapitalization and the Stock Split, effected in connection with
the Merger.
(h) Resales
Absent Effective Registration Statement. Each of the Buyers
understands and acknowledges that (i) this Agreement and the agreements
contemplated hereby may require the Company to issue and deliver Bridge Shares
(and the Conversion Shares) to the Buyers with legends restricting their
transferability under the Securities Act, and (ii) it is aware that resales of
such Bridge Shares (or Conversion Shares) may not be made unless, at the time of
resale, there is an effective registration statement under the Securities Act
covering such Buyer’s resale(s) or an applicable exemption from
registration.
17
(i) Issuance of
Bridge Shares. Concurrently upon the closing of
the Merger (or such other business combination if such a transaction assumes a
different corporate form), the Company will issue to the Buyer(s) the Bridge
Shares. The Bridge Shares shall consist of one (1) share of Company Common Stock
for each dollar of principal amount of the Notes
(j) Disclosure of Information in
Form 8-K. Company will disclose in the Form 8-K filed with the SEC
within 4 business days of closing the Merger (or business combination if such
transaction assumes a different corporate form) all of the confidential
information provided to Buyers as described in Section 2(u) of this Agreement so
that Buyers will not be privy to any confidential information not made generally
available to the public (it being understood that information not disclosed in
the Form 8-K filing will no longer be deemed material, non public information
under Regulation FD).
(k) Perfection of Security
Interest in Lease. Upon the closing of the Merger, the
Company, through its then wholly-owned subsidiary NGE, will acquire a leasehold
interest in that certain Tempo
Mineral Lease dated May 18, 2007 (the “Lease”), by and between Gold Standard
Royalty (Nevada) Inc., successor in interest to Xxxxxx X. Xxxxxxx, Trustee of
the Xxxx X. Xxxxxxxx Trust, as Lessor, and Gold Run, Inc., a Delaware
corporation (“Gold Run”) as Lessee, a memorandum of which Lease was recorded in
the official records of Lander County, Nevada Recorder’s Office on June 11, 2007
as document nos.0247982 in Book 0573 Pages 0653 through 0658, and 0659 through
0664, respectively, and which Lease was assigned by Gold Run to KM Exploration
LTD., a Nevada limited liability company (“KM”) on August 14, 2008 and was
subsequently assigned to the Company as of December 15,
2008. Within 30 days of closing, the Company will take any and
all action necessary in order to grant Buyer a first priority security interest
in all of the Company’s right, title, and interest in and to the
Lease. The parties acknowledge and agree that this subsequent
perfection is a material inducement by the Company to Buyer to advance funds to
Company.
5. CONDITIONS TO THE COMPANY’S
OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Notes to the Buyer(s)
at the Closing is subject to the satisfaction, at or before the Closing Date, of
each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion:
(a) Each
Buyer shall have executed this Agreement and completed and executed the
Accredited Investor Certification and the Investor Profile and delivered them to
the Company.
(b) The
Buyer(s) shall have delivered to the Escrow Agent the Purchase Price for Notes
in respective amounts as set forth on the signature pages affixed hereto and the
Escrow Agent shall have delivered the net proceeds to the Company by wire
transfer of immediately available U.S. funds pursuant to the wire instructions
provided by the Company; it being understood that the sale of the Notes shall
not close unless the Minimum principal amount of Notes (i.e., $150,000) is
subscribed for.
18
(c) The
representations and warranties of the Buyer(s) contained in this Agreement shall
be true and correct in all material respects as of the date when made and as of
the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer(s) shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer(s) at or prior to the Closing Date.
6. CONDITIONS TO THE BUYER’S
OBLIGATION TO PURCHASE.
(a) The
obligation of the Buyer(s) hereunder to purchase the Notes at the Closing is
subject to the satisfaction, at or before the Closing Date, of each of the
following conditions:
(i) The
Company and NGE shall have entered into a security agreement of even date
herewith with the Buyers pursuant to which each of the Company and NGE shall
have granted and conveyed to the Buyers a security interest in all of its
tangible and intangible assets, as security for the full and timely repayment of
the Notes in accordance with the terms of the Notes.
(ii) The
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and warranties shall be
true and correct without further qualification) as of the date when made and as
of the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. The
Company shall have obtained and delivered to the Buyers any and all consents,
permits, approvals, registrations and waivers necessary or appropriate for
consummation of the purchase and sale of the Notes, all of which shall be in
full force and effect. The Buyers shall have received a certificate,
executed by the President of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
the Buyers, including, without limitation, an update as of the Closing Date
regarding the representation contained in Section 3(c) above.
(iii) The
Company shall have executed and delivered to the Buyers the Notes in the
respective amounts set forth on the signature pages affixed hereto and the
Disbursement of Funds Memorandum.
(iv) The
Company shall have reserved out of its authorized and unissued Common Stock,
solely for the purpose of effecting the issuance of the Bridge Shares,
sufficient shares of Common Stock to effect the issuance of the Bridge
Shares.
(v) The
Company shall have delivered to the Buyers a certificate, executed on behalf of
the Company by its Secretary, dated as of the Closing Date, certifying the
resolutions adopted by the Board of Directors of the Company approving the
transactions contemplated by this Agreement and the issuance of the Notes,
certifying the current versions of the Articles of Incorporation and By-laws of
the Company and certifying as to the signatures and authority of persons signing
this Agreement on behalf of the Company. The foregoing certificate
shall only be required to be delivered on the first Closing Date, unless any
information contained in the certificate has changed.
19
(vi) The
Buyer(s) shall have received an opinion from the Company’s counsel, dated as of
the Closing Date, in form and substance reasonably acceptable to the
Buyers.
(vii) The
Buyers shall have completed all legal due diligence on NGE, to the extent
reasonably satisfactory to the Buyers.
(viii) The
Buyers shall have completed their legal due diligence of the Company and FLB to
their satisfaction and received from the Company and FLB all executed documents
necessary to close the contemplated transactions.
(b) INDEMNIFICATION OF
BUYERS. In consideration of the Buyer’s execution and delivery of this
Agreement and acquiring the Notes and the Bridge Shares (and the Conversion
Shares) hereunder, and in addition to all of the Company’s other obligations
under this Agreement, the Company shall defend, protect, indemnify and hold
harmless the Buyer(s) and each other holder of the Notes and the Bridge Shares
(and the Conversion Shares), and all of their officers, directors, employees and
agents (including, without limitation, those retained in connection with
the transactions contemplated by this Agreement) (collectively, the “Buyer
Indemnitees”) from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Buyer Indemnitee is a
party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by the Buyer Indemnitees or any of them as a result of,
or arising out of, or relating to (a) any material misrepresentation made by the
Company in the Buyer Materials, (b) any material breach of any covenant,
agreement or obligation of the Company contained in this Agreement, or (c) any
cause of action, suit or claim brought or made against such Buyer Indemnitee and
arising out of or resulting from the execution, delivery, performance or
enforcement of this Agreement by any of the Buyer Indemnitees. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible under
applicable law.
7. “PIGGYBACK” REGISTRATION
RIGHTS.
(a) Piggyback
Registration. If the Company shall determine to register for sale for
cash any of its Common Stock, for its own account or for the account of others
(other than the any of the Buyers), other than (i) a registration relating
solely to employee benefit plans or securities issued or issuable to employees,
consultants (to the extent the securities owned or to be owned by such
consultants could be registered on Form S-8) or any of their family members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Securities Act Rule 145 transaction or a registration on Form S-4 in
connection with a merger, acquisition, divestiture, reorganization or similar
event, the Company shall promptly give to each of the Buyers written notice
thereof (and in no event shall such notice be given less than 20 calendar days
prior to the filing of such registration statement), and shall include as a
piggyback registration (the “Piggyback
Registration”) all of the Bridge Shares specified in a written
request delivered by each of the Buyers to the Company within 10 calendar days
after receipt of such written notice from the Company. However, the Company may,
without the consent of the Buyers, withdraw such registration statement prior to
its becoming effective if the Company or such other stockholders have elected to
abandon the proposal to register the securities proposed to be registered
thereby. In the event that the SEC limits the number of shares of
Common Stock that may be sold in such registration statement, the Company may
scale back from the registration statement such number of Shares on a pro-rata
basis. In such event, the Company shall give the Buyers prompt notice
of the number of Shares excluded therein.
20
(b) Underwriting. If
a Piggyback Registration is for a registered public offering that is to be made
by an underwriting, the Company shall so advise the Buyers of the Bridge Shares
eligible for inclusion in such registration statement pursuant to Section
7(a). In that event, the right of any Buyer to Piggyback Registration
shall be conditioned upon such Buyer’s participation in such underwriting and
the inclusion of such Buyer’s Shares in the underwriting to the extent provided
herein. The Buyer proposing to sell any of his Shares through such underwriting
shall (together with the Company and any other stockholders of the Company
selling their securities through such underwriting) enter into an underwriting
agreement in customary form with the underwriter selected for such underwriting
by the Company or the selling stockholders, as
applicable. Notwithstanding any other provision of this Section, if
the underwriter or the Company determines that marketing factors require a
limitation on the number of shares of Common Stock or the amount of other
securities to be underwritten, the underwriter may exclude some or all Shares
from such registration and underwriting. The Company shall so advise
the Buyer (unless the Buyer failed to timely elect to include his Shares through
such underwriting or has indicated to the Company his decision not to do so),
and indicate to such Buyer the number of Shares that may be included in the
registration and underwriting, if any. The number of Shares to be included in
such registration and underwriting shall be allocated among all of the Buyers as
follows:
(i) If
the Piggyback Registration was initiated by the Company, the number of shares
that may be included in the registration and underwriting shall be allocated
first to the Company and then, subject to obligations and commitments existing
as of the date hereof, to all selling stockholders, including the Buyers, who
have requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included therein; and
(ii) If
the Piggyback Registration was initiated by the exercise of demand registration
rights by a stockholder or stockholders of the Company (other than the any of
the Buyers), then the number of shares that may be included in the registration
and underwriting shall be allocated first to such selling stockholders who
exercised such demand and then, subject to obligations and commitments existing
as of the date hereof, to all other selling stockholders, including the Buyers,
who have requested to sell in the registration on a pro rata basis according to
the number of shares requested to be included therein.
8. CONFLICT
WAIVER
21
The
Buyers hereby acknowledge that the Collateral Agent is counsel to the Company in
connection with the transactions contemplated and referred to
herein. The Buyers agree that in the event of any dispute arising in
connection with this Agreement, the Pledge Agreement or otherwise in connection
with any transaction or agreement contemplated and referred herein, the
Collateral Agent shall be permitted to continue to represent the Company, and
the Buyers will not seek to disqualify such counsel and waive any objection the
Buyers might have with respect to the Collateral Agent acting as the Collateral
Agent pursuant to this Agreement and the Pledge Agreement.
9. GOVERNING LAW:
MISCELLANEOUS.
(a) Governing
Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York without regard to the
principles of conflict of laws. The parties further agree that any
action between them shall be heard exclusively in federal or state court sitting
in the New York County, New York, and expressly consent to the jurisdiction and
venue of the Supreme Court of New York, sitting in New York County and the
United States District Court for the Southern District of New York for the
adjudication of any civil action asserted pursuant to this
paragraph.
(b) Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other
party. In the event any signature page is delivered by facsimile
transmission, the party using such means of delivery shall cause four (4)
additional original executed signature pages to be physically delivered to the
other party within five (5) days of the execution and delivery
hereof.
(c) Headings. The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.
(d) Severability. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(e) Entire Agreement,
Amendments. This Agreement supersedes all other prior oral or
written agreements between the Buyer(s), the Company, their affiliates and
persons acting on their behalf with respect to the matters discussed herein
(including any term sheet), and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No
provision of this Agreement may be waived or amended other than by an instrument
in writing signed by the party to be charged with enforcement.
(f) Notices. Any
notices, consents, waivers, or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered (i) upon receipt, when delivered personally; (ii) upon
confirmation of receipt, when sent by facsimile; (iii) upon receipt when sent by
U.S. certified mail, return receipt requested, or (iv) one (1) day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
22
|
If
to the Company, to:
|
|
|
0000
Xxxxxxx Xxx
|
|
|
Xxxxxx
Xxxxx, XX 00000
|
|
|
Attention: Xxxxx
Xxxxxx
|
|
|
Telephone: (000)
000-0000
|
|
|
With
a copy to:
|
Gottbetter
& Partners, LLP
|
|
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
|
|
|
Xxx
Xxxx, Xxx Xxxx 00000
|
|
|
Attention: Xxxx
X. Xxxxxxxxxx, Esq.
|
|
|
Telephone: (000)
000-0000
|
|
|
Facsimile: (000)
000-0000
|
If to the
Buyer(s), to its address and facsimile number set forth on the signature pages
affixed hereto. Each party shall provide five (5) days’ prior written
notice to the other party of any change in address or facsimile
number.
(g) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and
assigns. Neither the Company nor any Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.
(h) No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
(i) Survival. Unless
this Agreement is terminated under Section 9(l), the representations and
warranties of the Company and the Buyer(s) contained in Sections 2 and 3, the
agreements and covenants set forth in Sections 4, 5 and 9, and the
indemnification provisions set forth in Section 6, shall survive the Closing for
a period of two (2) years following the date on which the Notes are repaid in
full. The Buyer(s) shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
(j) Publicity. The
Company and the Buyers shall have the right to approve, before issuance any
press release or any other public statement with respect to the transactions
contemplated hereby made by any party; provided, however, that the Company shall
be entitled, without the prior approval of the Buyers, to issue any press
release or other public disclosure with respect to such transactions required
under applicable securities or other laws or regulations (the Company shall use
its best efforts to consult the Buyer(s) in connection with any such press
release or other public disclosure prior to its release and the Buyer(s) shall
be provided with a copy thereof upon release thereof).
23
(k) Further
Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Termination. In
the event that the Closing shall not have occurred with respect to the Buyers on
or before five (5) business days from the date hereof due to the Company’s or
the Buyer’s failure to satisfy the conditions set forth in Sections 5 and 6
above (and the non-breaching party’s failure to waive such unsatisfied
condition(s)), the non-breaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such
date without liability of any party to any other party.
(m) No Strict
Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.
(n) Remedies. In
addition to being entitled to exercise all rights provided herein or granted by
law, including recovery of damages, the Buyer and the Company will be entitled
to specific performance under this Agreement. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations described in the foregoing sentence and
hereby agree to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.
(o) ANTI MONEY LAUNDERING
REQUIREMENTS
|
The
USA PATRIOT Act
|
What
is money laundering?
|
How
big is the problem and why is it important?
|
|
The
USA PATRIOT Act is designed to detect, deter, and punish terrorists in the
United States and abroad. The Act imposes new anti-money
laundering requirements on brokerage firms and financial
institutions. Since April 24, 2002 all brokerage firms have
been required to have new, comprehensive anti-money laundering
programs.
To
help you understand theses efforts, we want to provide you with some
information about money laundering and our steps to implement the USA
PATRIOT Act.
|
Money
laundering is the process of disguising illegally obtained money so that
the funds appear to come from legitimate sources or
activities. Money laundering occurs in connection with a wide
variety of crimes, including illegal arms sales, drug trafficking,
robbery, fraud, racketeering, and terrorism.
|
The
use of the U.S. financial system by criminals to facilitate terrorism or
other crimes could well taint our financial markets. According
to the U.S. State Department, one recent estimate puts the amount of
worldwide money laundering activity at $1 trillion a
year.
|
24
|
What
are we required to do to eliminate money laundering?
|
|
|
Under
new rules required by the USA PATRIOT Act, our anti-money laundering
program must designate a special compliance officer, set up employee
training, conduct independent audits, and establish policies and
procedures to detect and report suspicious transaction and ensure
compliance with the new laws.
|
As
part of our required program, we may ask you to provide various
identification documents or other information. Until you
provide the information or documents we need, we may not be able to effect
any transactions for you.
|
(p) Payment of Fees to Xxxxxx
& Xxxxxxxxx, P.C. The Company shall pay to Xxxxxx &
Xxxxxxxxx, PC at Closing a fee of $3,000 as payment for legal services rendered
on behalf of Buyer, which payment will be withheld by Buyer from the funds
advanced at Closing.
[REMAINDER
PAGE INTENTIONALLY LEFT BLANK]
25
IN WITNESS WHEREOF, the Buyers and the Company
have caused this Securities Purchase Agreement to be duly executed as of the
date first written above.
|
COMPANY:
|
|
|
By:
|
|
|
Name: Xxxxx
Xxxxxx
|
|
|
Title: Chief
Executive Officer
|
|
|
BUYERS:
The
Buyers executing the Signature Page in the form attached hereto as Annex A and
delivering the same to the Company or its agents shall be deemed to have
executed this Agreement and agreed to the terms
hereof.
|
26
[SIGNATURE
PAGE TO SECURITIES PURCHASE AGREEMENT]
Annex
A
Buyer
Counterpart Signature Page
The
undersigned, desiring to: (i) enter into the Securities Purchase Agreement dated
as of _____________5, 200___ (the “Agreement”), between the
undersigned, Nevada Gold Holdings, Inc. (f/k/a Nano Holdings International,
Inc.), a Nevada corporation (the “Company”), and the other parties thereto, in
or substantially in the form furnished to the undersigned and (ii) purchase the
Notes of the Company as set forth below, hereby agrees to purchase such Notes
from the Company and further agrees to join the Agreement as a party thereto,
with all the rights and privileges appertaining thereto, and to be bound in all
respects by the terms and conditions thereof. The undersigned
specifically acknowledges having read the representations section in the
Agreement entitled “Buyer’s Representations and Warranties,” and hereby
represent that the statements contained therein are complete and accurate with
respect to the undersigned as a Buyer.
The Buyer
hereby elects to purchase $150,000 Notes (to be
completed by the Buyer) under the Securities Purchase Agreement.
Name of
Buyer:
If
an entity:
Print
Name of Entity:
By:
Name:
Title:
If
an individual:
Print
Name:
Signature:
All
Buyers:
Address:
27
Telephone
No.:
Facsimile
No.:
Email
Address:
28
SCHEDULE
I
SCHEDULE OF
BUYERS
|
Name
|
Amount
of Subscription
|
|
$150,000
|
|
ACCREDITED
INVESTOR CERTIFICATION
For
Individual Investors Only
(all
Individual Investors must INITIAL where
appropriate):
|
Initial
_______
|
I
have a net worth (including home, furnishings and automobiles) of at least
$1 million either individually or through aggregating my individual
holdings and those in which I have a joint, community property or other
similar shared ownership interest with my
spouse.
|
|
Initial
_______
|
I
have had an annual gross income for the past two years of at least
$200,000 (or $300,000 jointly with my spouse) and expect my income (or
joint income, as appropriate) to reach the same level in the current
year.
|
|
Initial
_______
|
I
am a director or executive officer of Nevada Gold Holdings, Inc. (f/k/a
Nano Holdings International, Inc.).
|
For
Non-Individual Investors
(all
Non-Individual Investors must INITIAL where
appropriate):
|
Initial
_______
|
The
investor certifies that it is a partnership, corporation, limited
liability company or business trust that is 100% owned by persons who meet
at least one of the criteria for Individual Investors set forth
above.
|
|
Initial
_______
|
The
investor certifies that it is a partnership, corporation, limited
liability company or business trust that has total assets of at least $5
million and was not formed for the purpose of investing the
Company.
|
|
Initial
_______
|
The
investor certifies that it is an employee benefit plan whose investment
decision is made by a plan fiduciary (as defined in ERISA §3(21)) that is
a bank, savings and loan association, insurance company or registered
investment advisor.
|
|
Initial
_______
|
The
investor certifies that it is an employee benefit plan whose total assets
exceed $5,000,000 as of the date of this
Agreement.
|
|
Initial
_______
|
The
undersigned certifies that it is a self-directed employee benefit plan
whose investment decisions are made solely by persons who meet at lease
one of the criteria for Individual
Investors.
|
|
Initial
_______
|
The
investor certifies that it is a U.S. bank, U.S. savings and loan
association or other similar U.S. institution acting in its individual or
fiduciary capacity.
|
|
Initial
_______
|
The
undersigned certifies that it is a broker-dealer registered pursuant to
§15 of the Securities Exchange Act of
1934.
|
|
Initial
_______
|
The
investor certifies that it is an organization described in §501(c)(3) of
the Internal Revenue Code with total assets exceeding $5,000,000 and not
formed for the specific purpose of investing in the
Company.
|
|
Initial
_______
|
The
investor certifies that it is a trust with total assets of at least
$5,000,000, not formed for the specific purpose of investing in the
Company, and whose purchase is directed by a person with such knowledge
and experience in financial and business matters that such person is
capable of evaluating the merits and risks of the prospective
investment.
|
|
Initial
_______
|
The
investor certifies that it is a plan established and maintained by a state
or its political subdivisions, or any agency or instrumentality thereof,
for the benefit of its employees, and which has total assets in excess of
$5,000,000.
|
|
Initial
_______
|
The
investor certifies that it is an insurance company as defined in §2(13) of
the Securities Act of 1933, or a registered investment
company.
|
Investor
Profile
(Must
be completed by Investor)
Section A - Personal
Investor Information
|
Investor
Name(s):
|
||||
|
Individual
executing Profile or Trustee:
|
||||
|
Social
Security Numbers / Federal I.D. Number:
|
||||
|
Date
of Birth:
|
Marital
Status:
|
|||
|
Joint
Party Date of Birth:
|
Investment
Experience (Years):
|
|||
|
Annual
Income:
|
Liquid
Net Worth:
|
|||
|
Net
Worth:
|
||||
|
Tax
Bracket:
|
_____
15% or below
|
_____
25% - 27.5%
|
_____
Over 27.5%
|
|
|
Investment
Objectives (circle one
or more):
|
Preservation
of Capital, Income, Capital Appreciation, Trading Profits, Speculation or
Other (please specify) * See definitions on following
page
|
|||
|
Home
Street Address:
|
||||
|
Home
City, State & Zip Code:
|
||||
|
Home
Phone:
|
Home
Fax:
|
Home
Email:
|
||
|
Employer:
|
||||
|
Employer
Street Address:
|
||||
|
Employer
City, State & Zip Code:
|
||||
|
Bus.
Phone:
|
Bus.
Fax:
|
Bus.
Email:
|
||
|
Type
of Business:
|
||||
|
Outside
Broker/Dealer:
|
||||
Section B – Certificate
Delivery Instructions
____
Please deliver certificate to the Employer Address listed in Section
A.
____
Please deliver certificate to the Home Address listed in Section A.
____
Please deliver certificate to the following address:
Section C – Form of Payment
– Check or Wire Transfer
____
Check payable to [__________],
As Agent for Nevada Gold
Holdings, Inc..
____ Wire
funds from my outside account according to Section 1(a) of the Securities
Purchase Agreement.
____ The
funds for this investment are rolled over, tax deferred from __________ within
the allowed 60 day window.
Please
check if you are a FINRA member or affiliate of a FINRA member firm:
____
|
|
|
|
|
Investor
Signature
|
Date
|
Investment Objectives: The
typical investment listed with each objective are only some examples of the
kinds of investments that have historically been consistent with the listed
objectives. However, Nevada Gold Holdings, Inc. cannot assure that
any investment will achieve your intended objective. You must make
your own investment decisions and determine for yourself if the investments you
select are appropriate and consistent with your investment
objectives.
Nevada
Gold Holdings, Inc. does not assume responsibility to you for determining if the
investments you selected are suitable for you.
Preservation of Capital: An
investment objective of Preservation of Capital
indicates you seek to maintain the principal value of your investments and are
interested in investments that have historically demonstrated a very low degree
of risk of loss of principal value. Some examples of typical
investments might include money market funds and high quality, short-term fixed
income products.
Income: An
investment objective of Income
indicates you seek to generate from investments and are interested in
investments that have historically demonstrated a low degree of risk of loss of
principal value. Some examples of typical investments might include
high quality, short and medium-term fixed income products, short-term bond funds
and covered call options.
Capital
Appreciation: An investment objective of Capital Appreciation
indicates you seek to grow the principal value of your investments over time and
are willing to invest in securities that have historically demonstrated a
moderate to above average degree of risk of loss of principal value to pursue
this objective. Some examples of typical investments might include
common stocks, lower quality, medium-term fixed income products, equity mutual
funds and index funds.
Trading Profits: An investment
objective of Trading
Profits indicates you seek to take advantage of short-term trading
opportunities, which may involve establishing and liquidating positions
quickly. Some examples of typical investments might include
short-term purchases and sales of volatile or low prices common stocks, put or
call options, spreads, straddles and/or combinations on equities or
indexes. This is a high-risk strategy.
Speculation: An
investment objective of Speculation indicates you
seek a significant increase in the principal value of your investments and are
willing to accept a corresponding greater degree of risk by investing in
securities that have historically demonstrated a high degree of risk of loss of
principal value to pursue this objective. Some examples of typical
investments might include lower quality, long-term fixed income products,
initial public offerings, volatile or low priced common stocks, the purchase or
sale of put or call options, spreads, straddles and/or combinations on equities
or indexes, and the use of short-term or day trading strategies.
Other: Please
specify.
