Exhibit 10.4
SHAREHOLDERS' AGREEMENT
SHAREHOLDERS' AGREEMENT, dated as of the __ day of January 22,
2004 (this "Agreement"), among Patriot Gold Corp, a Nevada corporation (the
"Corporation"), Xxx Blomkamp ("RB"), Xxxxxx Xxxxxxxxx ("RS") and Xxxxxx Xxxxx
("RC"; and together with RB and RS, the "Shareholders" and each individually a
"Shareholder").
W I T N E S S E T H:
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WHEREAS, each of the Shareholders has received 3,000,000
shares of common stock of the Corporation (collectively, the "Shares") from
Xxxxx Xxxxxxxxx, the former officer and director of the Corporation;
WHEREAS, the Shareholders desire to enter into an agreement
with respect to the voting of the Shares, the transfer of the Shares and certain
other matters.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I
VOTING OF THE SHARES
Section 1.1 Board of Directors. At all times during the Term
(as defined below), the Shareholders shall vote their Shares to maintain the
number of persons comprising the Board of Directors of the Corporation (the
"Board") as three (3), who shall be the Shareholders. In connection therewith,
each Shareholder agrees that upon any vote to appoint representatives to the
Board, he shall vote his Shares to vote for the other two (2) Shareholders. If a
Shareholder shall no longer be a shareholder of the Corporation, or the Board or
the shareholders of the Corporation resolve to remove one of the Board members,
or the Shareholder no longer holds any Shares (but remains a shareholder of the
Corporation by virtue of other shares in the Corporation), then the other two
Shareholders agree to vote their Shares together to either maintain the number
of persons comprising the Board as two (2) or to nominate and appoint a third
person to the Board. Notwithstanding anything contained herein to the contrary,
this Agreement only relates to the Shares and to the Shareholders acting in
their capacity as shareholders in the Corporation.
Section 1.2 Other Matters. For all matters in which shares of
common stock of the Corporation are voted, RB, RS and RC agree that they shall
vote the Shares together with all other issued and outstanding voting shares of
the Corporation, as the Shareholders shall determine by the decision of two of
the three Shareholders. The foregoing shall apply to all decisions which are
subject to shareholder vote (other than as provided for in Section 1.1 above),
including without limitation the merger, sale or recapitalization of the
Corporation.
ARTICLE II
RESTRICTIONS ON TRANSFER OF THE SHARES
Section 2.1 No Transfers. A Shareholder shall not, directly or
indirectly, sell, exchange, pledge, transfer, gift, grant an irrevocable proxy
with respect to, devise, assign or in any other way dispose of, encumber or
grant a security interest in (hereinafter referred to as "Transfer"), any Shares
or any interest therein or any certificates representing any Shares, directly or
indirectly, by such Shareholder, nor shall such Shareholder attempt to do so,
except as expressly permitted by this Agreement. The Corporation shall not (i)
transfer on its share register any Shares which shall have been purportedly
Transferred if such Transfer would be in violation of this Agreement or (ii)
treat as owner of such Shares, to accord the right to vote as such owner or to
pay dividends to any purported transferee to whom such Shares shall have
purportedly been so Transferred in violation of this Agreement.
Section 2.2 Rule 144. Each Shareholder is aware of the
provisions of Rule 144, promulgated under the Securities Act of 1933, as
amended, which permit limited public resale of "restricted securities" acquired,
directly or indirectly, from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the Shares, the availability of certain current public information about the
Corporation, the resale occurring not less than one year after the latter of the
date full payment has been made for the securities purchased from the
Corporation or an affiliate of the Corporation, the sale being through a
"broker's transaction" or in transactions directly with a "market maker" (as
such term is defined under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) and the number of securities being sold during any three (3)
month period not exceeding specified limitations stated therein. Each
Shareholder agrees and acknowledges that the Transfer restrictions on the Shares
provided for in this Agreement shall apply in any and all situations during the
Term, including without limitation, the utilization of Rule 144 (including,
without limitation, Rule 144(k)), with respect to a purported sale of the Shares
by the Shareholder. Any purported sale of Shares by a Shareholder pursuant to
Rule 144 or Rule 144(k) shall be invalid and have no force and effect.
Section 2.3 Securities Law Compliance. Any Transfer of Shares
in accordance with the provisions of this Agreement shall be made in full
compliance with applicable federal and state securities law, including without
limitation, to the extent applicable, the rules and regulations promulgated
under the Securities Act of 1933, as amended. Any permitted transferee of Shares
under this Agreement shall provide documentation satisfactory to counsel to the
Corporation that he is acquiring Shares for his own account, for investment
purposes only and not with a view to their resale or distribution, and execute
and deliver to the Corporation any documentation required by counsel to the
Corporation to properly effectuate such Transfer on the books and records of the
Corporation.
Section 2.4 Legend. There shall be noted conspicuously upon
each stock certificate representing Shares, the following statements or
statements with substantially similiar language, and the transfer agent of the
Corporation shall make a notation in the records of the Corporation accordingly:
"The shares represented by this certificate are subject to a certain
Shareholders' Agreement dated as of November __, 2003, a copy of which
is on file at the principal office of the Corporation. Any sale,
pledge, transfer, assignment or any other disposition or encumbrance of
the shares represented by this certificate in violation of said
Agreement shall be invalid."
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or the securities laws of
any state or other jurisdiction. The shares may not be transferred
except pursuant to an effective registration statement under such Act
and other applicable securities laws, or pursuant to an exemption
therefrom."
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Due Execution; No Conflict. Each of the
Shareholders represents and warrants to the Corporation and each other
Shareholder that the execution and delivery of this Agreement by him and the
performance of his obligations hereunder are not in violation of, and do not
conflict with or constitute a default under, any of the terms and provisions of
any agreement, indenture or instrument to which he is bound or any law,
regulation, order, decree or judgment to which he is subject; and that this
Agreement constitutes the valid and binding obligation of such person,
enforceable against him in accordance with the terms hereof.
Section 3.2 Investment Intent. Each Shareholder represents and
warrants to the Corporation that the Shares have been acquired for his own
account for investment purposes only and not with a view to the distribution or
resale thereof. Each Shareholder agrees that he will not distribute, resell or
offer the Shares or any interest therein unless registered pursuant to the
Securities Act of 1933, as amended, and any applicable state securities laws, or
unless an exemption from registration is available thereunder. The Shareholder
agrees and acknowledges that the Shares were given to him in reliance upon
specific exemptions from the registration requirements of United States federal
and state securities laws and that the Corporation is relying upon the truth and
accuracy of, and the Shareholder's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Shareholder
set forth herein in order to determine the availability of such exemptions and
the eligibility of the Shareholder to acquire the Shares.
Section 3.3 Information; Economic Means. Each Shareholder or
the Shareholder's adviser(s) has/have received access to all material and
relevant information necessary to enable Shareholder to make any informed
investment decision. Each Shareholder has had the opportunity to ask questions
of and receive answers from the Corporation and its representatives concerning
the Corporation, its business, both current and proposed, and to obtain from the
Corporation any additional information or requested by the Shareholder. Each
Shareholder has adequate means of providing for the Shareholder's current
financial needs and contingencies, is able to bear the substantial economic
risks of an investment in the Shares for an indefinite period of time, has no
need for liquidity in such investment, and, at the present time, could afford a
complete loss of such investment. The Shareholder is an "accredited investor",
within the meaning of Regulation D of the rules and regulations promulgated
under the Securities Act of 1933, as amended.
Section 3.4 Experience. Each Shareholder has such knowledge
and experience in financial, tax and business matters so as to enable the
Shareholder to utilize the information made available to the Shareholder in
connection with the Shares to evaluate the merits and risks of an investment in
the Shares, and to make an informed investment decision with respect thereto and
the Shareholder is not relying on any other party with respect to the tax and
other economic considerations of an investment in the Shares.
ARTICLE IV
MISCELLANEOUS PROVISIONS
Section 4.1 Term. The term of this Agreement ("Term") shall
commence on the date hereof and shall continue in full force and effect so long
as each Shareholder holds record or beneficial title to a Share.
Section 4.2 Notices. All notices, requests, claims, demands
and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been duly given if delivered in person against written
receipt, by facsimile transmission, overnight courier prepaid, or mailed by
prepaid first class registered or certified mail, postage prepaid, return
receipt requested to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 5.2):
(a) If to the Corporation:
Patriot Gold Corp.
000 Xxxxxxx Xxxxxx
Xxxxx Xxxxxxxxx, X.X., Xxxxxx X0X 0X0
Attention: President
Telecopy: ________
(b) If to RB:
Xxx Blomkamp
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Telecopy: ________
(c) If to RS:
Xxxxxx Xxxxxxxxx
================
Telecopy: ________
(c) If to Xxxxxx Xxxxx:
Xxxxxx Xxxxx
================
Telecopy: ________
(d) In either case, copies of all notices shall be
sent to:
Xxxxx Xxxxx, Esq.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
All such notices, requests and other communications will (i) if
delivered personally to the address as provided in this Section, be deemed given
upon delivery, (ii) if delivered by facsimile transmission to the facsimile
number as provided in this Section, be deemed given upon receipt, (iii) if
delivered by overnight courier to the address as provided in this Section, be
deemed given on the earlier of the first business day following the date sent by
such overnight courier or upon receipt or (iv) if delivered by mail in the
manner described above to the address provided in this Section, be deemed given
on the earlier of the third business day following mailing or upon receipt.
Section 4.3 Entire Agreement; Amendment. This Agreement
contains, and is intended as, a complete statement of all of the terms of the
arrangements and understandings between the parties with respect to the matters
provided for, and supersedes any previous agreements and understandings between
the parties with respect to those matters. This Agreement shall not be amended
except by a writing signed by all of the Shareholders and the Corporation.
Section 4.4 No Waiver. No waiver of any breach of any terms
hereof shall be effective unless made in writing signed by the party against
whom enforcement of the waiver is sought, and no such waiver shall be construed
as a waiver of any subsequent breach of that term or of any other term of the
same or different nature.
Section 4.5 Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and the respective
successors, personal representatives, heirs and assigns; provided, however, that
none of the parties hereto may assign any of his rights or obligations under
this Agreement.
Section 4.6 Severability. If any provision of this Agreement
shall be held by any court of competent jurisdiction to be illegal, void or
unenforceable, such provision shall be modified or narrowed so as to avoid such
defect, but the illegality or unenforceability of such provision shall not
impair the enforceability of any other provision of this Agreement.
Section 4.7 Governing Law. This Agreement shall be construed
and enforced in accordance with the internal laws of the State of Nevada.
Section 4.8 Injunctive Relief. In addition to monetary damages
and any other rights and remedies available at law or equity which the
Corporation may have, the Corporation shall have the right to obtain injunctive
or other equitable relief to restrain any breach or threatened breach or
otherwise to specifically enforce the provisions of this Agreement. Each
Shareholder acknowledges that the Corporation and its affiliates will suffer
immediate, irreparable harm upon a breach or threatened breach of any provision
of this Agreement and the Corporation and its affiliates shall be entitled, in
addition to any and all other remedies, to an injunction issued by a court of
competent jurisdiction restraining the aforesaid violations of a Shareholder
without the necessity of posting a bond. Each Shareholder further agrees that
money damages alone would be inadequate to compensate the Corporation and would
be an inadequate remedy for such breach. Such rights and remedies shall however
be cumulative and not exclusive and shall be in addition to any other remedies
which the Corporation may have under this Agreement or at law.
Section 4.9 References; Construction. The headings in this
Agreement are for convenience of reference only and not for any other purpose.
The parties hereto agree that this Agreement is the product of negotiation
between sophisticated parties and individuals, all of whom were represented by
counsel and/or had opportunity to be represented by counsel, and each of whom
had an opportunity to participate in and did participate in, the drafting of
each provision hereof. Words and phrases used herein in the singular shall be
deemed to include the plural and vice versa, and nouns and pronouns used in any
particular gender shall be deemed to include any other gender, unless the
context requires otherwise.
Section 4.10 No Third Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and nothing herein, express or
implied, is intended to or shall confer upon any other person or entity, any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
Section 4.11 Further Assurances. The parties shall execute and
deliver such further instruments and documents as may be required to carry out
the intended purposes of this Agreement and which are required by applicable
laws and regulations, including without limitation, a Schedule 13D with the
Securities and Exchange Commission and Forms 4.
Section 4.12 Counterparts. This Agreement may be executed in
counterparts by facsimile, each of which shall be an original but all of which
shall constitute a single instrument.
[REMAINDER OF PAGE INTENTIONALLY OMITTED;
THE NEXT PAGE IS THE SIGNATURE PAGE]
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Agreement as of the date first written above.
PATRIOT GOLD CORP.
By: /s/ Xxx Blomkamp
Name: Xxx Blomkamp
Title: President
/s/ Xxx Blomkamp
Xxx Blomkamp
/s/ Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
